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How to file 1040ez online for free 4. How to file 1040ez online for free   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. How to file 1040ez online for free  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. How to file 1040ez online for free For more information, see Publication 505. How to file 1040ez online for free Reminders Estimated tax safe harbor for higher income taxpayers. How to file 1040ez online for free  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. How to file 1040ez online for free Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. How to file 1040ez online for free In general, the federal income tax is a pay-as-you-go tax. How to file 1040ez online for free There are two ways to pay as you go. How to file 1040ez online for free Withholding. How to file 1040ez online for free If you are an employee, your employer probably withholds income tax from your pay. How to file 1040ez online for free Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. How to file 1040ez online for free The amount withheld is paid to the IRS in your name. How to file 1040ez online for free Estimated tax. How to file 1040ez online for free If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. How to file 1040ez online for free People who are in business for themselves generally will have to pay their tax this way. How to file 1040ez online for free Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. How to file 1040ez online for free Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. How to file 1040ez online for free This chapter explains these methods. How to file 1040ez online for free In addition, it also explains the following. How to file 1040ez online for free Credit for withholding and estimated tax. How to file 1040ez online for free When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. How to file 1040ez online for free , and for the estimated tax you paid for 2013. How to file 1040ez online for free Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). How to file 1040ez online for free Underpayment penalty. How to file 1040ez online for free If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. How to file 1040ez online for free In most cases, the IRS can figure this penalty for you. How to file 1040ez online for free See Underpayment Penalty for 2013 at the end of this chapter. How to file 1040ez online for free Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. How to file 1040ez online for free This section explains the rules for withholding tax from each of these types of income. 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How to file 1040ez online for free You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. How to file 1040ez online for free If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . How to file 1040ez online for free Military retirees. How to file 1040ez online for free   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. How to file 1040ez online for free Household workers. How to file 1040ez online for free   If you are a household worker, you can ask your employer to withhold income tax from your pay. How to file 1040ez online for free A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. How to file 1040ez online for free   Tax is withheld only if you want it withheld and your employer agrees to withhold it. How to file 1040ez online for free If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . How to file 1040ez online for free Farmworkers. How to file 1040ez online for free   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. How to file 1040ez online for free Differential wage payments. How to file 1040ez online for free    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. How to file 1040ez online for free Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. How to file 1040ez online for free The wages and withholding will be reported on Form W-2, Wage and Tax Statement. How to file 1040ez online for free   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. How to file 1040ez online for free Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. How to file 1040ez online for free The amount you earn in each payroll period. How to file 1040ez online for free The information you give your employer on Form W-4. How to file 1040ez online for free Form W-4 includes four types of information that your employer will use to figure your withholding. How to file 1040ez online for free Whether to withhold at the single rate or at the lower married rate. How to file 1040ez online for free How many withholding allowances you claim (each allowance reduces the amount withheld). How to file 1040ez online for free Whether you want an additional amount withheld. How to file 1040ez online for free Whether you are claiming an exemption from withholding in 2014. How to file 1040ez online for free See Exemption From Withholding , later. How to file 1040ez online for free Note. How to file 1040ez online for free You must specify a filing status and a number of withholding allowances on Form W-4. How to file 1040ez online for free You cannot specify only a dollar amount of withholding. How to file 1040ez online for free New Job When you start a new job, you must fill out Form W-4 and give it to your employer. How to file 1040ez online for free Your employer should have copies of the form. How to file 1040ez online for free If you need to change the information later, you must fill out a new form. How to file 1040ez online for free If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. How to file 1040ez online for free You may be able to avoid overwithholding if your employer agrees to use the part-year method. How to file 1040ez online for free See Part-Year Method in chapter 1 of Publication 505 for more information. How to file 1040ez online for free Employee also receiving pension income. How to file 1040ez online for free   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. How to file 1040ez online for free However, you can choose to split your withholding allowances between your pension and job in any manner. How to file 1040ez online for free Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. How to file 1040ez online for free When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. How to file 1040ez online for free If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. How to file 1040ez online for free Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. How to file 1040ez online for free Changing your withholding for 2015. How to file 1040ez online for free   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. How to file 1040ez online for free If the event occurs in December 2014, submit a new Form W-4 within 10 days. How to file 1040ez online for free Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. How to file 1040ez online for free If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. How to file 1040ez online for free You should try to have your withholding match your actual tax liability. How to file 1040ez online for free If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. How to file 1040ez online for free If too much tax is withheld, you will lose the use of that money until you get your refund. How to file 1040ez online for free Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. How to file 1040ez online for free Note. How to file 1040ez online for free You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. How to file 1040ez online for free Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. How to file 1040ez online for free The worksheets are for your own records. How to file 1040ez online for free Do not give them to your employer. How to file 1040ez online for free Multiple jobs. How to file 1040ez online for free   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. How to file 1040ez online for free Then split your allowances between the Forms W-4 for each job. How to file 1040ez online for free You cannot claim the same allowances with more than one employer at the same time. How to file 1040ez online for free You can claim all your allowances with one employer and none with the other(s), or divide them any other way. How to file 1040ez online for free Married individuals. How to file 1040ez online for free   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. How to file 1040ez online for free Use only one set of worksheets. How to file 1040ez online for free You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. How to file 1040ez online for free   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. How to file 1040ez online for free Alternative method of figuring withholding allowances. How to file 1040ez online for free   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. How to file 1040ez online for free For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. How to file 1040ez online for free Personal Allowances Worksheet. How to file 1040ez online for free   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. How to file 1040ez online for free Deduction and Adjustments Worksheet. How to file 1040ez online for free   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. How to file 1040ez online for free Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. How to file 1040ez online for free Two-Earners/Multiple Jobs Worksheet. How to file 1040ez online for free   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. How to file 1040ez online for free Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. How to file 1040ez online for free Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. How to file 1040ez online for free You accurately complete all the Form W-4 worksheets that apply to you. How to file 1040ez online for free You give your employer a new Form W-4 when changes occur. How to file 1040ez online for free But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. How to file 1040ez online for free This is most likely to happen in the following situations. How to file 1040ez online for free You are married and both you and your spouse work. How to file 1040ez online for free You have more than one job at a time. How to file 1040ez online for free You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. How to file 1040ez online for free You will owe additional amounts with your return, such as self-employment tax. How to file 1040ez online for free Your withholding is based on obsolete Form W-4 information for a substantial part of the year. How to file 1040ez online for free Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. How to file 1040ez online for free You work only part of the year. How to file 1040ez online for free You change the number of your withholding allowances during the year. How to file 1040ez online for free Cumulative wage method. How to file 1040ez online for free   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. How to file 1040ez online for free You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. How to file 1040ez online for free You must ask your employer in writing to use this method. How to file 1040ez online for free   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. How to file 1040ez online for free ) since the beginning of the year. How to file 1040ez online for free Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. How to file 1040ez online for free It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. How to file 1040ez online for free It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. 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How to file 1040ez online for free Your employer cannot repay any of the tax previously withheld. How to file 1040ez online for free Instead, claim the full amount withheld when you file your tax return. How to file 1040ez online for free   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. How to file 1040ez online for free Your employer can repay the amount that was withheld incorrectly. How to file 1040ez online for free If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. How to file 1040ez online for free Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. How to file 1040ez online for free The exemption applies only to income tax, not to social security or Medicare tax. How to file 1040ez online for free You can claim exemption from withholding for 2014 only if both of the following situations apply. How to file 1040ez online for free For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. How to file 1040ez online for free For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. How to file 1040ez online for free Students. How to file 1040ez online for free   If you are a student, you are not automatically exempt. How to file 1040ez online for free See chapter 1 to find out if you must file a return. How to file 1040ez online for free If you work only part time or only during the summer, you may qualify for exemption from withholding. How to file 1040ez online for free Age 65 or older or blind. How to file 1040ez online for free   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. How to file 1040ez online for free Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. How to file 1040ez online for free Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. How to file 1040ez online for free Claiming exemption from withholding. How to file 1040ez online for free   To claim exemption, you must give your employer a Form W-4. How to file 1040ez online for free Do not complete lines 5 and 6. How to file 1040ez online for free Enter “Exempt” on line 7. How to file 1040ez online for free   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. How to file 1040ez online for free If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. How to file 1040ez online for free   Your claim of exempt status may be reviewed by the IRS. How to file 1040ez online for free An exemption is good for only 1 year. How to file 1040ez online for free   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. How to file 1040ez online for free Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. How to file 1040ez online for free The payer can figure withholding on supplemental wages using the same method used for your regular wages. How to file 1040ez online for free However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. How to file 1040ez online for free Expense allowances. How to file 1040ez online for free   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. How to file 1040ez online for free   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. How to file 1040ez online for free   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. How to file 1040ez online for free Penalties You may have to pay a penalty of $500 if both of the following apply. How to file 1040ez online for free You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. How to file 1040ez online for free You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. How to file 1040ez online for free There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. How to file 1040ez online for free The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. How to file 1040ez online for free These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. How to file 1040ez online for free A simple error or an honest mistake will not result in one of these penalties. How to file 1040ez online for free For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. How to file 1040ez online for free Tips The tips you receive while working on your job are considered part of your pay. How to file 1040ez online for free You must include your tips on your tax return on the same line as your regular pay. How to file 1040ez online for free However, tax is not withheld directly from tip income, as it is from your regular pay. How to file 1040ez online for free Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. How to file 1040ez online for free See chapter 6 for information on reporting your tips to your employer. How to file 1040ez online for free For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. How to file 1040ez online for free How employer figures amount to withhold. How to file 1040ez online for free   The tips you report to your employer are counted as part of your income for the month you report them. How to file 1040ez online for free Your employer can figure your withholding in either of two ways. How to file 1040ez online for free By withholding at the regular rate on the sum of your pay plus your reported tips. How to file 1040ez online for free By withholding at the regular rate on your pay plus a percentage of your reported tips. How to file 1040ez online for free Not enough pay to cover taxes. How to file 1040ez online for free   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. How to file 1040ez online for free See Giving your employer money for taxes in chapter 6. How to file 1040ez online for free Allocated tips. How to file 1040ez online for free   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. How to file 1040ez online for free Withholding is based only on your pay plus your reported tips. How to file 1040ez online for free Your employer should refund to you any incorrectly withheld tax. How to file 1040ez online for free See Allocated Tips in chapter 6 for more information. How to file 1040ez online for free Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. How to file 1040ez online for free Your employer generally must withhold income tax on these benefits from your regular pay. How to file 1040ez online for free For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. How to file 1040ez online for free Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. How to file 1040ez online for free Your employer must notify you if this choice is made. How to file 1040ez online for free For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. How to file 1040ez online for free Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. How to file 1040ez online for free To qualify as sick pay, it must be paid under a plan to which your employer is a party. How to file 1040ez online for free If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. How to file 1040ez online for free An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. How to file 1040ez online for free However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. How to file 1040ez online for free See Form W-4S , later. How to file 1040ez online for free If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. How to file 1040ez online for free Union agreements. How to file 1040ez online for free   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. How to file 1040ez online for free See your union representative or your employer for more information. How to file 1040ez online for free Form W-4S. How to file 1040ez online for free   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. How to file 1040ez online for free Its instructions contain a worksheet you can use to figure the amount you want withheld. How to file 1040ez online for free They also explain restrictions that may apply. How to file 1040ez online for free   Give the completed form to the payer of your sick pay. How to file 1040ez online for free The payer must withhold according to your directions on the form. How to file 1040ez online for free Estimated tax. How to file 1040ez online for free   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. How to file 1040ez online for free If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. How to file 1040ez online for free See Underpayment Penalty for 2013 at the end of this chapter. How to file 1040ez online for free Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. How to file 1040ez online for free This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. How to file 1040ez online for free The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). How to file 1040ez online for free Income tax withholding from an ERD is mandatory. How to file 1040ez online for free More information. How to file 1040ez online for free   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. How to file 1040ez online for free For information on IRAs, see chapter 17. How to file 1040ez online for free For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. How to file 1040ez online for free Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. How to file 1040ez online for free Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. How to file 1040ez online for free Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. How to file 1040ez online for free Any other wager, if the proceeds are at least 300 times the amount of the bet. How to file 1040ez online for free It does not matter whether your winnings are paid in cash, in property, or as an annuity. How to file 1040ez online for free Winnings not paid in cash are taken into account at their fair market value. How to file 1040ez online for free Exception. How to file 1040ez online for free   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. How to file 1040ez online for free However, you may need to provide the payer with a social security number to avoid withholding. How to file 1040ez online for free See Backup withholding on gambling winnings in chapter 1 of Publication 505. How to file 1040ez online for free If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. How to file 1040ez online for free See Estimated Tax for 2014 , later. How to file 1040ez online for free If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file 1040ez online for free See Underpayment Penalty for 2013 at the end of this chapter. How to file 1040ez online for free Form W-2G. How to file 1040ez online for free   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. How to file 1040ez online for free Report the tax withheld on line 62 of Form 1040. How to file 1040ez online for free Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. How to file 1040ez online for free To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. How to file 1040ez online for free All unemployment compensation is taxable. How to file 1040ez online for free So, if you do not have income tax withheld, you may have to pay estimated tax. How to file 1040ez online for free See Estimated Tax for 2014 , later. How to file 1040ez online for free If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file 1040ez online for free For information, see Underpayment Penalty for 2013 at the end of this chapter. How to file 1040ez online for free Federal Payments You can choose to have income tax withheld from certain federal payments you receive. How to file 1040ez online for free These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. How to file 1040ez online for free S. How to file 1040ez online for free C. How to file 1040ez online for free 1421 et. How to file 1040ez online for free seq. How to file 1040ez online for free ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. How to file 1040ez online for free To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. How to file 1040ez online for free If you do not choose to have income tax withheld, you may have to pay estimated tax. How to file 1040ez online for free See Estimated Tax for 2014 , later. How to file 1040ez online for free If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file 1040ez online for free For information, see Underpayment Penalty for 2013 at the end of this chapter. How to file 1040ez online for free More information. How to file 1040ez online for free   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. How to file 1040ez online for free Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. How to file 1040ez online for free Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. How to file 1040ez online for free The information return shows how much you were paid during the year. How to file 1040ez online for free It also includes your name and taxpayer identification number (TIN). How to file 1040ez online for free TINs are explained in chapter 1 under Social Security Number (SSN) . How to file 1040ez online for free These payments generally are not subject to withholding. How to file 1040ez online for free However, “backup” withholding is required in certain situations. How to file 1040ez online for free Backup withholding can apply to most kinds of payments that are reported on Form 1099. How to file 1040ez online for free The payer must withhold at a flat 28% rate in the following situations. How to file 1040ez online for free You do not give the payer your TIN in the required manner. How to file 1040ez online for free The IRS notifies the payer that the TIN you gave is incorrect. How to file 1040ez online for free You are required, but fail, to certify that you are not subject to backup withholding. How to file 1040ez online for free The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. How to file 1040ez online for free The IRS will do this only after it has mailed you four notices over at least a 210-day period. How to file 1040ez online for free See Backup Withholding in chapter 1 of Publication 505 for more information. How to file 1040ez online for free Penalties. How to file 1040ez online for free   There are civil and criminal penalties for giving false information to avoid backup withholding. How to file 1040ez online for free The civil penalty is $500. How to file 1040ez online for free The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. How to file 1040ez online for free Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. How to file 1040ez online for free This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. How to file 1040ez online for free You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. How to file 1040ez online for free Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. How to file 1040ez online for free If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file 1040ez online for free If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. How to file 1040ez online for free For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. How to file 1040ez online for free Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. How to file 1040ez online for free To do this, give a new Form W-4 to your employer. How to file 1040ez online for free See chapter 1 of Publication 505. How to file 1040ez online for free Estimated tax not required. How to file 1040ez online for free   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. How to file 1040ez online for free You had no tax liability for 2013. How to file 1040ez online for free You were a U. How to file 1040ez online for free S. How to file 1040ez online for free citizen or resident alien for the whole year. How to file 1040ez online for free Your 2013 tax year covered a 12-month period. How to file 1040ez online for free   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. How to file 1040ez online for free For the definition of “total tax” for 2013, see Publication 505, chapter 2. How to file 1040ez online for free Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. How to file 1040ez online for free You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. How to file 1040ez online for free General rule. How to file 1040ez online for free   In most cases, you must pay estimated tax for 2014 if both of the following apply. How to file 1040ez online for free You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. How to file 1040ez online for free You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). How to file 1040ez online for free Your 2013 tax return must cover all 12 months. How to file 1040ez online for free    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. How to file 1040ez online for free Special rules for farmers, fishermen, and higher income taxpayers. How to file 1040ez online for free   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. How to file 1040ez online for free If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. How to file 1040ez online for free See Figure 4-A and Publication 505, chapter 2 for more information. How to file 1040ez online for free Figure 4-A. How to file 1040ez online for free Do You Have To Pay Estimated Tax? Please click here for the text description of the image. How to file 1040ez online for free Figure 4-A Do You Have To Pay Estimated Tax? Aliens. How to file 1040ez online for free   Resident and nonresident aliens also may have to pay estimated tax. How to file 1040ez online for free Resident aliens should follow the rules in this chapter unless noted otherwise. How to file 1040ez online for free Nonresident aliens should get Form 1040-ES (NR), U. How to file 1040ez online for free S. How to file 1040ez online for free Estimated Tax for Nonresident Alien Individuals. How to file 1040ez online for free   You are an alien if you are not a citizen or national of the United States. How to file 1040ez online for free You are a resident alien if you either have a green card or meet the substantial presence test. How to file 1040ez online for free For more information about the substantial presence test, see Publication 519, U. How to file 1040ez online for free S. How to file 1040ez online for free Tax Guide for Aliens. How to file 1040ez online for free Married taxpayers. How to file 1040ez online for free   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. How to file 1040ez online for free   You and your spouse can make joint estimated tax payments even if you are not living together. How to file 1040ez online for free   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). How to file 1040ez online for free   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. How to file 1040ez online for free Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. How to file 1040ez online for free 2013 separate returns and 2014 joint return. How to file 1040ez online for free   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. How to file 1040ez online for free You filed a separate return if you filed as single, head of household, or married filing separately. How to file 1040ez online for free 2013 joint return and 2014 separate returns. How to file 1040ez online for free   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. How to file 1040ez online for free You file a separate return if you file as single, head of household, or married filing separately. How to file 1040ez online for free   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. How to file 1040ez online for free Then multiply the tax on the joint return by the following fraction. How to file 1040ez online for free     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. How to file 1040ez online for free Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. How to file 1040ez online for free Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. How to file 1040ez online for free For 2014, they plan to file married filing separately. How to file 1040ez online for free Joe figures his share of the tax on the 2013 joint return as follows. How to file 1040ez online for free   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. How to file 1040ez online for free 6%     Joe's share of tax on joint return  ($6,386 × 87. How to file 1040ez online for free 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. How to file 1040ez online for free When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. How to file 1040ez online for free Use your 2013 federal tax return as a guide. How to file 1040ez online for free You can use Form 1040-ES and Publication 505 to figure your estimated tax. How to file 1040ez online for free Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). How to file 1040ez online for free You must make adjustments both for changes in your own situation and for recent changes in the tax law. How to file 1040ez online for free For a discussion of these changes, visit IRS. How to file 1040ez online for free gov. How to file 1040ez online for free For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. How to file 1040ez online for free When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. How to file 1040ez online for free Each period has a specific payment due date. How to file 1040ez online for free If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. How to file 1040ez online for free The payment periods and due dates for estimated tax payments are shown next. How to file 1040ez online for free   For the period: Due date:*     Jan. How to file 1040ez online for free 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. How to file 1040ez online for free 15     Sept. How to file 1040ez online for free 1– Dec. How to file 1040ez online for free 31 Jan. How to file 1040ez online for free 15, next year     *See Saturday, Sunday, holiday rule and January payment . How to file 1040ez online for free Saturday, Sunday, holiday rule. How to file 1040ez online for free   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. How to file 1040ez online for free January payment. How to file 1040ez online for free   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. How to file 1040ez online for free Fiscal year taxpayers. How to file 1040ez online for free   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. How to file 1040ez online for free When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. How to file 1040ez online for free If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. How to file 1040ez online for free You can pay all your estimated tax at that time, or you can pay it in installments. How to file 1040ez online for free If you choose to pay in installments, make your first payment by the due date for the first payment period. How to file 1040ez online for free Make your remaining installment payments by the due dates for the later periods. How to file 1040ez online for free No income subject to estimated tax during first period. How to file 1040ez online for free    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. How to file 1040ez online for free You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. How to file 1040ez online for free The following chart shows when to make installment payments. How to file 1040ez online for free If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. How to file 1040ez online for free 15 Jan. How to file 1040ez online for free 15 next year April 1–May 31 June 16 Sept. How to file 1040ez online for free 15 Jan. How to file 1040ez online for free 15 next year June 1–Aug. How to file 1040ez online for free 31 Sept. How to file 1040ez online for free 15 Jan. How to file 1040ez online for free 15 next year After Aug. How to file 1040ez online for free 31 Jan. How to file 1040ez online for free 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . How to file 1040ez online for free How much to pay to avoid a penalty. How to file 1040ez online for free   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. How to file 1040ez online for free How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. How to file 1040ez online for free You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. How to file 1040ez online for free These methods are described in chapter 2 of Publication 505. How to file 1040ez online for free If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. How to file 1040ez online for free If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. How to file 1040ez online for free Underpayment penalty. How to file 1040ez online for free   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. How to file 1040ez online for free Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. How to file 1040ez online for free See chapter 4 of Publication 505 for more information. How to file 1040ez online for free Change in estimated tax. How to file 1040ez online for free   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. How to file 1040ez online for free Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. How to file 1040ez online for free Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. How to file 1040ez online for free You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. How to file 1040ez online for free How To Pay Estimated Tax There are several ways to pay estimated tax. How to file 1040ez online for free Credit an overpayment on your 2013 return to your 2014 estimated tax. How to file 1040ez online for free Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. How to file 1040ez online for free Send in your payment (check or money order) with a payment voucher from Form 1040-ES. How to file 1040ez online for free Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. How to file 1040ez online for free On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. How to file 1040ez online for free Take the amount you have credited into account when figuring your estimated tax payments. How to file 1040ez online for free You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. How to file 1040ez online for free You also cannot use that overpayment in any other way. How to file 1040ez online for free Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. How to file 1040ez online for free You can pay using either of the following electronic payment methods. How to file 1040ez online for free Direct transfer from your bank account. How to file 1040ez online for free Credit or debit card. How to file 1040ez online for free To pay your taxes online or for more information, go to www. How to file 1040ez online for free irs. How to file 1040ez online for free gov/e-pay. How to file 1040ez online for free Pay by Phone Paying by phone is another safe and secure method of paying electronically. How to file 1040ez online for free Use one of the following methods. How to file 1040ez online for free Direct transfer from your bank account. How to file 1040ez online for free Credit or debit card. How to file 1040ez online for free To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). How to file 1040ez online for free People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. How to file 1040ez online for free To pay using a credit or debit card, you can call one of the following service providers. How to file 1040ez online for free There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. How to file 1040ez online for free WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. How to file 1040ez online for free payUSAtax. How to file 1040ez online for free com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. How to file 1040ez online for free officialpayments. How to file 1040ez online for free com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. How to file 1040ez online for free PAY1040. How to file 1040ez online for free com For the latest details on how to pay by phone, go to www. How to file 1040ez online for free irs. How to file 1040ez online for free gov/e-pay. How to file 1040ez online for free Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. How to file 1040ez online for free During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. How to file 1040ez online for free The enclosed payment vouchers will be preprinted with your name, address, and social security number. How to file 1040ez online for free Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. How to file 1040ez online for free Use the window envelopes that came with your Form 1040-ES package. How to file 1040ez online for free If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. How to file 1040ez online for free Note. How to file 1040ez online for free These criteria can change without notice. How to file 1040ez online for free If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. How to file 1040ez online for free irs. How to file 1040ez online for free gov and print a copy of Form 1040-ES which includes four blank payment vouchers. How to file 1040ez online for free Complete one of these and make your payment timely to avoid penalties for paying late. How to file 1040ez online for free Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. How to file 1040ez online for free If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. How to file 1040ez online for free gov. How to file 1040ez online for free Follow the instructions to make sure you use the vouchers correctly. How to file 1040ez online for free Joint estimated tax payments. How to file 1040ez online for free   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. How to file 1040ez online for free Change of address. How to file 1040ez online for free   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. How to file 1040ez online for free Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. How to file 1040ez online for free Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. How to file 1040ez online for free Also take credit for the estimated tax you paid for 2013. How to file 1040ez online for free These credits are subtracted from your total tax. How to file 1040ez online for free Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. How to file 1040ez online for free Two or more employers. How to file 1040ez online for free   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. How to file 1040ez online for free You may be able to claim the excess as a credit against your income tax when you file your return. How to file 1040ez online for free See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. How to file 1040ez online for free Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. How to file 1040ez online for free Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. How to file 1040ez online for free Forms W-2 and W-2G. How to file 1040ez online for free   If you file a paper return, always file Form W-2 with your income tax return. How to file 1040ez online for free File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. How to file 1040ez online for free   You should get at least two copies of each form. How to file 1040ez online for free If you file a paper return, attach one copy to the front of your federal income tax return. How to file 1040ez online for free Keep one copy for your records. How to file 1040ez online for free You also should receive copies to file with your state and local returns. How to file 1040ez online for free Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. How to file 1040ez online for free You should receive a separate Form W-2 from each employer you worked for. How to file 1040ez online for free If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. How to file 1040ez online for free However, your employer must provide or send it to you by January 31, 2014. How to file 1040ez online for free If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. How to file 1040ez online for free If you have not received your Form W-2 by January 31, you should ask your employer for it. How to file 1040ez online for free If you do not receive it by February 15, call the IRS. How to file 1040ez online for free Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. How to file 1040ez online for free Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. How to file 1040ez online for free In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. How to file 1040ez online for free Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. How to file 1040ez online for free If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. How to file 1040ez online for free Report the amounts you won on line 21 of Form 1040. How to file 1040ez online for free Take credit for the tax withheld on line 62 of Form 1040. How to file 1040ez online for free If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. How to file 1040ez online for free The 1099 Series Most forms in the 1099 series are not filed with your return. How to file 1040ez online for free These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). How to file 1040ez online for free Unless instructed to file any of these forms with your return, keep them for your records. How to file 1040ez online for free There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. How to file 1040ez online for free ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. How to file 1040ez online for free If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. How to file 1040ez online for free See the instructions to these forms for details. How to file 1040ez online for free Form 1099-R. How to file 1040ez online for free   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. How to file 1040ez online for free Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. How to file 1040ez online for free You cannot use Form 1040EZ if you received payments reported on Form 1099-R. How to file 1040ez online for free Backup withholding. How to file 1040ez online for free   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. How to file 1040ez online for free Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. How to file 1040ez online for free Call the telephone number or write to the address given for the payer on the form. How to file 1040ez online for free The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. How to file 1040ez online for free A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. How to file 1040ez online for free In certain situations, you will receive two forms in place of the original incorrect form. How to file 1040ez online for free This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). How to file 1040ez online for free One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. How to file 1040ez online for free This form will have an “X” in the “CORRECTED” box at the top of the form. How to file 1040ez online for free The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). How to file 1040ez online for free Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. How to file 1040ez online for free S. How to file 1040ez online for free Individual Income Tax Return. How to file 1040ez online for free Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. How to file 1040ez online for free Do not include any amount withheld from your spouse's income. How to file 1040ez online for free However, different rules may apply if you live in a community property state. How to file 1040ez online for free Community property states are listed in chapter 2. How to file 1040ez online for free For more information on these rules, and some exceptions, see Publication 555, Community Property. How to file 1040ez online for free Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. How to file 1040ez online for free For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. How to file 1040ez online for free Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. How to file 1040ez online for free Include any overpayment from 2012 that you had credited to your 2013 estimated tax. How to file 1040ez online for free You must use Form 1040 or Form 1040A if you paid estimated tax. How to file 1040ez online for free You cannot use Form 1040EZ. How to file 1040ez online for free Name changed. How to file 1040ez online for free   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. How to file 1040ez online for free The statement should cover payments you made jointly with your spouse as well as any you made separately. How to file 1040ez online for free   Be sure to report the change to the Social Security Administration. How to file 1040ez online for free This prevents delays in processing your return and issuing any refunds. How to file 1040ez online for free Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. How to file 1040ez online for free If you made joint estimated tax payments, you must decide how to divide the payments between your returns. How to file 1040ez online for free One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. How to file 1040ez online for free If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. How to file 1040ez online for free Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. How to file 1040ez online for free If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. How to file 1040ez online for free If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. How to file 1040ez online for free If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. How to file 1040ez online for free Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. How to file 1040ez online for free Generally, you will not have to pay a penalty for 2013 if any of the following apply. How to file 1040ez online for free The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. How to file 1040ez online for free The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. How to file 1040ez online for free Your total 2013 tax minus your withholding and refundable credits is less than $1,000. How to file 1040ez online for free You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. How to file 1040ez online for free See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. How to file 1040ez online for free Farmers and fishermen. How to file 1040ez online for free   Special rules apply if you are a farmer or fisherman. How to file 1040ez online for free See Farmers and Fishermen in chapter 4 of Publication 505 for more information. How to file 1040ez online for free IRS can figure the penalty for you. How to file 1040ez online for free   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. How to file 1040ez online for free Generally, the IRS will figure the penalty for you and send you a bill. How to file 1040ez online for free However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. How to file 1040ez online for free See chapter 4 of Publication 505. How to file 1040ez online for free Prev  Up  Next   Home   More Online Publications
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The How To File 1040ez Online For Free

How to file 1040ez online for free 11. How to file 1040ez online for free   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. How to file 1040ez online for free Nondeductible losses. How to file 1040ez online for free Family pet. How to file 1040ez online for free Progressive deterioration. How to file 1040ez online for free Decline in market value of stock. How to file 1040ez online for free Mislaid or lost property. How to file 1040ez online for free Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. How to file 1040ez online for free Related persons. How to file 1040ez online for free Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. How to file 1040ez online for free Covered disaster area. How to file 1040ez online for free Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. How to file 1040ez online for free A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. How to file 1040ez online for free A theft occurs when property is stolen. How to file 1040ez online for free A condemnation occurs when private property is legally taken for public use without the owner's consent. How to file 1040ez online for free A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. How to file 1040ez online for free You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. How to file 1040ez online for free An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. How to file 1040ez online for free If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. How to file 1040ez online for free For more information, see Postponing Gain , later. How to file 1040ez online for free Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. How to file 1040ez online for free Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. How to file 1040ez online for free If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. How to file 1040ez online for free Casualty. How to file 1040ez online for free   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. How to file 1040ez online for free A sudden event is one that is swift, not gradual or progressive. How to file 1040ez online for free An unexpected event is one that is ordinarily unanticipated and unintended. How to file 1040ez online for free An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. How to file 1040ez online for free Deductible losses. How to file 1040ez online for free   Deductible casualty losses can result from a number of different causes, including the following. How to file 1040ez online for free Airplane crashes. How to file 1040ez online for free Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. How to file 1040ez online for free Earthquakes. How to file 1040ez online for free Fires (but see Nondeductible losses next for exceptions). How to file 1040ez online for free Floods. How to file 1040ez online for free Freezing. How to file 1040ez online for free Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, in Publication 547. How to file 1040ez online for free Lightning. How to file 1040ez online for free Storms, including hurricanes and tornadoes. How to file 1040ez online for free Terrorist attacks. How to file 1040ez online for free Vandalism. How to file 1040ez online for free Volcanic eruptions. How to file 1040ez online for free Nondeductible losses. How to file 1040ez online for free   A casualty loss is not deductible if the damage or destruction is caused by the following. How to file 1040ez online for free Accidentally breaking articles such as glassware or china under normal conditions. How to file 1040ez online for free A family pet (explained below). How to file 1040ez online for free A fire if you willfully set it, or pay someone else to set it. How to file 1040ez online for free A car, truck, or farm equipment accident if your willful negligence or willful act caused it. How to file 1040ez online for free The same is true if the willful act or willful negligence of someone acting for you caused the accident. How to file 1040ez online for free Progressive deterioration (explained below). How to file 1040ez online for free Family pet. How to file 1040ez online for free   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. How to file 1040ez online for free Example. How to file 1040ez online for free You keep your horse in your yard. How to file 1040ez online for free The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. How to file 1040ez online for free Some of the trees were completely girdled and died. How to file 1040ez online for free Because the damage was not unexpected or unusual, the loss is not deductible. How to file 1040ez online for free Progressive deterioration. How to file 1040ez online for free   Loss of property due to progressive deterioration is not deductible as a casualty loss. How to file 1040ez online for free This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. How to file 1040ez online for free Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. How to file 1040ez online for free However, weather-related conditions or disease may cause another type of involuntary conversion. How to file 1040ez online for free See Other Involuntary Conversions , later. How to file 1040ez online for free Theft. How to file 1040ez online for free   A theft is the taking and removing of money or property with the intent to deprive the owner of it. How to file 1040ez online for free The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. How to file 1040ez online for free You do not need to show a conviction for theft. How to file 1040ez online for free   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. How to file 1040ez online for free The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. How to file 1040ez online for free Decline in market value of stock. How to file 1040ez online for free   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. How to file 1040ez online for free However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. How to file 1040ez online for free You report a capital loss on Schedule D (Form 1040). How to file 1040ez online for free For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. How to file 1040ez online for free Mislaid or lost property. How to file 1040ez online for free   The simple disappearance of money or property is not a theft. How to file 1040ez online for free However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. How to file 1040ez online for free Example. How to file 1040ez online for free A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. How to file 1040ez online for free The diamond falls from the ring and is never found. How to file 1040ez online for free The loss of the diamond is a casualty. How to file 1040ez online for free Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. How to file 1040ez online for free The following is a discussion of some losses you can deduct and some you cannot deduct. How to file 1040ez online for free Livestock or produce bought for resale. How to file 1040ez online for free   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. How to file 1040ez online for free If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. How to file 1040ez online for free You cannot take a separate deduction. How to file 1040ez online for free Livestock, plants, produce, and crops raised for sale. How to file 1040ez online for free   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. How to file 1040ez online for free You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. How to file 1040ez online for free   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. How to file 1040ez online for free You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. How to file 1040ez online for free The uniform capitalization rules are discussed in chapter 6. How to file 1040ez online for free   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. How to file 1040ez online for free You get the deduction by omitting the item from your inventory at the close of your tax year. How to file 1040ez online for free You cannot take a separate casualty or theft deduction. How to file 1040ez online for free Income loss. How to file 1040ez online for free   A loss of future income is not deductible. How to file 1040ez online for free Example. How to file 1040ez online for free A severe flood destroyed your crops. How to file 1040ez online for free Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . How to file 1040ez online for free You estimate that the crop loss will reduce your farm income by $25,000. How to file 1040ez online for free This loss of future income is also not deductible. How to file 1040ez online for free Loss of timber. How to file 1040ez online for free   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. How to file 1040ez online for free If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. How to file 1040ez online for free See Postponing Gain , later. How to file 1040ez online for free Property used in farming. How to file 1040ez online for free   Casualty and theft losses of property used in your farm business usually result in deductible losses. How to file 1040ez online for free If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. How to file 1040ez online for free See How To Figure a Loss , later. How to file 1040ez online for free Raised draft, breeding, dairy, or sporting animals. How to file 1040ez online for free   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. How to file 1040ez online for free However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. How to file 1040ez online for free You use inventories to determine your income and you included the animals in your inventory. How to file 1040ez online for free You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. How to file 1040ez online for free When you include livestock in inventory, its last inventory value is its basis. How to file 1040ez online for free When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. How to file 1040ez online for free You cannot take a separate deduction. How to file 1040ez online for free How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. How to file 1040ez online for free Farm property. How to file 1040ez online for free   Farm property is the property you use in your farming business. How to file 1040ez online for free If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. How to file 1040ez online for free   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. How to file 1040ez online for free However, the deduction limits, discussed later, do not apply to farm property. How to file 1040ez online for free Personal-use property. How to file 1040ez online for free   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. How to file 1040ez online for free The following items are examples of personal-use property: Your main home. How to file 1040ez online for free Furniture and electronics used in your main home and not used in a home office or for business purposes. How to file 1040ez online for free Clothing and jewelry. How to file 1040ez online for free An automobile used for nonbusiness purposes. How to file 1040ez online for free You figure the casualty or theft loss on this property by taking the following steps. How to file 1040ez online for free Determine your adjusted basis in the property before the casualty or theft. How to file 1040ez online for free Determine the decrease in fair market value of the property as a result of the casualty or theft. How to file 1040ez online for free From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. How to file 1040ez online for free You must apply the deduction limits, discussed later, to determine your deductible loss. How to file 1040ez online for free    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. How to file 1040ez online for free It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. How to file 1040ez online for free Adjusted basis. How to file 1040ez online for free   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. How to file 1040ez online for free For more information about adjusted basis, see chapter 6. How to file 1040ez online for free Decrease in fair market value (FMV). How to file 1040ez online for free   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. How to file 1040ez online for free FMV is defined in chapter 10 under Payments Received or Considered Received . How to file 1040ez online for free Appraisal. How to file 1040ez online for free   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. How to file 1040ez online for free But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. How to file 1040ez online for free   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. How to file 1040ez online for free The appraiser must recognize the effects of any general market decline that may occur along with the casualty. How to file 1040ez online for free This information is needed to limit any deduction to the actual loss resulting from damage to the property. How to file 1040ez online for free Cost of cleaning up or making repairs. How to file 1040ez online for free   The cost of cleaning up after a casualty is not part of a casualty loss. How to file 1040ez online for free Neither is the cost of repairing damaged property after a casualty. How to file 1040ez online for free But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. How to file 1040ez online for free The repairs are actually made. How to file 1040ez online for free The repairs are necessary to bring the property back to its condition before the casualty. How to file 1040ez online for free The amount spent for repairs is not excessive. How to file 1040ez online for free The repairs fix the damage only. How to file 1040ez online for free The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. How to file 1040ez online for free Related expenses. How to file 1040ez online for free   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. How to file 1040ez online for free However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. How to file 1040ez online for free Separate computations for more than one item of property. How to file 1040ez online for free   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. How to file 1040ez online for free Then combine the losses to determine your total loss. How to file 1040ez online for free    There is an exception to this rule for personal-use real property. How to file 1040ez online for free See Exception for personal-use real property, later. How to file 1040ez online for free Example. How to file 1040ez online for free A fire on your farm damaged a tractor and the barn in which it was stored. How to file 1040ez online for free The tractor had an adjusted basis of $3,300. How to file 1040ez online for free Its FMV was $28,000 just before the fire and $10,000 immediately afterward. How to file 1040ez online for free The barn had an adjusted basis of $28,000. How to file 1040ez online for free Its FMV was $55,000 just before the fire and $25,000 immediately afterward. How to file 1040ez online for free You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. How to file 1040ez online for free Figure your deductible casualty loss separately for the two items of property. How to file 1040ez online for free     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. How to file 1040ez online for free   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. How to file 1040ez online for free Figure the loss using the smaller of the following. How to file 1040ez online for free The decrease in FMV of the entire property. How to file 1040ez online for free The adjusted basis of the entire property. How to file 1040ez online for free Example. How to file 1040ez online for free You bought a farm in 1990 for $160,000. How to file 1040ez online for free The adjusted basis of the residential part is now $128,000. How to file 1040ez online for free In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. How to file 1040ez online for free The adjusted basis of the residential part includes the $7,500. How to file 1040ez online for free The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. How to file 1040ez online for free The trees were not covered by insurance. How to file 1040ez online for free 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. How to file 1040ez online for free   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. How to file 1040ez online for free You do not have a casualty or theft loss to the extent you are reimbursed. How to file 1040ez online for free   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. How to file 1040ez online for free You must reduce your loss even if you do not receive payment until a later tax year. How to file 1040ez online for free    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. How to file 1040ez online for free You may have to include a portion of these payments in your income. How to file 1040ez online for free See Insurance payments for living expenses in Publication 547 for details. How to file 1040ez online for free Disaster relief. How to file 1040ez online for free   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. How to file 1040ez online for free Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. How to file 1040ez online for free   Generally, disaster relief grants received under the Robert T. How to file 1040ez online for free Stafford Disaster Relief and Emergency Assistance Act are not included in your income. How to file 1040ez online for free See Federal disaster relief grants , later, under Disaster Area Losses . How to file 1040ez online for free   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. How to file 1040ez online for free See Qualified disaster relief payments , later, under Disaster Area Losses . How to file 1040ez online for free Reimbursement received after deducting loss. How to file 1040ez online for free   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. How to file 1040ez online for free Actual reimbursement less than expected. How to file 1040ez online for free   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. How to file 1040ez online for free Actual reimbursement more than expected. How to file 1040ez online for free   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. How to file 1040ez online for free However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. How to file 1040ez online for free Do not refigure your tax for the year you claimed the deduction. How to file 1040ez online for free See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. How to file 1040ez online for free If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. How to file 1040ez online for free See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. How to file 1040ez online for free Actual reimbursement same as expected. How to file 1040ez online for free   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. How to file 1040ez online for free Lump-sum reimbursement. How to file 1040ez online for free   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. How to file 1040ez online for free Figure the gain or loss separately for each asset that has a separate basis. How to file 1040ez online for free Adjustments to basis. How to file 1040ez online for free   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. How to file 1040ez online for free The result is your adjusted basis in the property. How to file 1040ez online for free Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. How to file 1040ez online for free See Adjusted Basis in chapter 6 for more information. How to file 1040ez online for free Example. How to file 1040ez online for free You built a new silo for $25,000. How to file 1040ez online for free This is the basis in your silo because that is the total cost you incurred to build it. How to file 1040ez online for free During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. How to file 1040ez online for free In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. How to file 1040ez online for free Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). How to file 1040ez online for free Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). How to file 1040ez online for free There are two limits on the deduction for casualty or theft loss of personal-use property. How to file 1040ez online for free You figure these limits on Form 4684. How to file 1040ez online for free $100 rule. How to file 1040ez online for free   You must reduce each casualty or theft loss on personal-use property by $100. How to file 1040ez online for free This rule applies after you have subtracted any reimbursement. How to file 1040ez online for free 10% rule. How to file 1040ez online for free   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. How to file 1040ez online for free Apply this rule after you reduce each loss by $100. How to file 1040ez online for free Adjusted gross income is on line 38 of Form 1040. How to file 1040ez online for free Example. How to file 1040ez online for free In June, you discovered that your house had been burglarized. How to file 1040ez online for free Your loss after insurance reimbursement was $2,000. How to file 1040ez online for free Your adjusted gross income for the year you discovered the burglary is $57,000. How to file 1040ez online for free Figure your theft loss deduction as follows: 1. How to file 1040ez online for free Loss after insurance $2,000 2. How to file 1040ez online for free Subtract $100 100 3. How to file 1040ez online for free Loss after $100 rule $1,900 4. How to file 1040ez online for free Subtract 10% (. How to file 1040ez online for free 10) × $57,000 AGI $5,700 5. How to file 1040ez online for free Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). How to file 1040ez online for free    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. How to file 1040ez online for free See 10% Rule in Publication 547. How to file 1040ez online for free When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. How to file 1040ez online for free You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. How to file 1040ez online for free However, losses in federally declared disaster areas are subject to different rules. How to file 1040ez online for free See Disaster Area Losses , later, for an exception. How to file 1040ez online for free If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. How to file 1040ez online for free Leased property. How to file 1040ez online for free   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. How to file 1040ez online for free This is true even if the loss occurred or the liability was paid in a different year. How to file 1040ez online for free You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. How to file 1040ez online for free Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. How to file 1040ez online for free Example. How to file 1040ez online for free Robert leased a tractor from First Implement, Inc. How to file 1040ez online for free , for use in his farm business. How to file 1040ez online for free The tractor was destroyed by a tornado in June 2012. How to file 1040ez online for free The loss was not insured. How to file 1040ez online for free First Implement billed Robert for the fair market value of the tractor on the date of the loss. How to file 1040ez online for free Robert disagreed with the bill and refused to pay it. How to file 1040ez online for free First Implement later filed suit in court against Robert. How to file 1040ez online for free In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. How to file 1040ez online for free Robert paid $20,000 in June 2013. How to file 1040ez online for free He can claim the $20,000 as a loss on his 2013 tax return. How to file 1040ez online for free Net operating loss (NOL). How to file 1040ez online for free   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. How to file 1040ez online for free An NOL can be carried back or carried forward and deducted from income in other years. How to file 1040ez online for free See Publication 536 for more information on NOLs. How to file 1040ez online for free Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. How to file 1040ez online for free You must have records to support the amount you claim for the loss. How to file 1040ez online for free Casualty loss proof. How to file 1040ez online for free   For a casualty loss, your records should show all the following information. How to file 1040ez online for free The type of casualty (car accident, fire, storm, etc. How to file 1040ez online for free ) and when it occurred. How to file 1040ez online for free That the loss was a direct result of the casualty. How to file 1040ez online for free That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. How to file 1040ez online for free Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. How to file 1040ez online for free Theft loss proof. How to file 1040ez online for free   For a theft loss, your records should show all the following information. How to file 1040ez online for free When you discovered your property was missing. How to file 1040ez online for free That your property was stolen. How to file 1040ez online for free That you were the owner of the property. How to file 1040ez online for free Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. How to file 1040ez online for free Figuring a Gain A casualty or theft may result in a taxable gain. How to file 1040ez online for free If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. How to file 1040ez online for free You generally report your gain as income in the year you receive the reimbursement. How to file 1040ez online for free However, depending on the type of property you receive, you may not have to report your gain. How to file 1040ez online for free See Postponing Gain , later. How to file 1040ez online for free Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. How to file 1040ez online for free Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. How to file 1040ez online for free Amount you receive. How to file 1040ez online for free   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. How to file 1040ez online for free It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. How to file 1040ez online for free Example. How to file 1040ez online for free A tornado severely damaged your barn. How to file 1040ez online for free The adjusted basis of the barn was $25,000. How to file 1040ez online for free Your insurance company reimbursed you $40,000 for the damaged barn. How to file 1040ez online for free However, you had legal expenses of $2,000 to collect that insurance. How to file 1040ez online for free Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. How to file 1040ez online for free 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. How to file 1040ez online for free Some of these are discussed in the following paragraphs. How to file 1040ez online for free Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. How to file 1040ez online for free You report the gain or deduct the loss on your tax return for the year you realize it. How to file 1040ez online for free However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. How to file 1040ez online for free See Postponing Gain , later. How to file 1040ez online for free Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. How to file 1040ez online for free The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. How to file 1040ez online for free The owner receives a condemnation award (money or property) in exchange for the property taken. How to file 1040ez online for free A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. How to file 1040ez online for free Threat of condemnation. How to file 1040ez online for free   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. How to file 1040ez online for free Main home condemned. How to file 1040ez online for free   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. How to file 1040ez online for free For information on this exclusion, see Publication 523. How to file 1040ez online for free If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. How to file 1040ez online for free See Postponing Gain , later. How to file 1040ez online for free (You cannot deduct a loss from the condemnation of your main home. How to file 1040ez online for free ) More information. How to file 1040ez online for free   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. How to file 1040ez online for free Also see Postponing Gain , later, to find out if you can postpone reporting the gain. How to file 1040ez online for free Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. How to file 1040ez online for free Livestock Losses Diseased livestock. How to file 1040ez online for free   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. How to file 1040ez online for free If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . How to file 1040ez online for free Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. How to file 1040ez online for free If you replace the livestock, you may be able to postpone reporting the gain. How to file 1040ez online for free See Postponing Gain below. How to file 1040ez online for free Reporting dispositions of diseased livestock. How to file 1040ez online for free   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. How to file 1040ez online for free You must also include other information on this statement. How to file 1040ez online for free See How To Postpone Gain , later, under Postponing Gain . How to file 1040ez online for free Weather-related sales of livestock. How to file 1040ez online for free   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. How to file 1040ez online for free Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. How to file 1040ez online for free Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. How to file 1040ez online for free If you replace the livestock, you may be able to postpone reporting the gain. How to file 1040ez online for free See Postponing Gain below. How to file 1040ez online for free Example. How to file 1040ez online for free It is your usual business practice to sell five of your dairy animals during the year. How to file 1040ez online for free This year you sold 20 dairy animals because of drought. How to file 1040ez online for free The sale of 15 animals is treated as an involuntary conversion. How to file 1040ez online for free    If you do not replace the livestock, you may be able to report the gain in the following year's income. How to file 1040ez online for free This rule also applies to other livestock (including poultry). How to file 1040ez online for free See Sales Caused by Weather-Related Conditions in chapter 3. How to file 1040ez online for free Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. How to file 1040ez online for free Treat the loss as a loss from an involuntary conversion. How to file 1040ez online for free The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. How to file 1040ez online for free You deduct the loss on the return for the year the seedlings died. How to file 1040ez online for free Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. How to file 1040ez online for free Your basis in the new property is generally the same as your adjusted basis in the property it replaces. How to file 1040ez online for free You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. How to file 1040ez online for free However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. How to file 1040ez online for free If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. How to file 1040ez online for free To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. How to file 1040ez online for free If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. How to file 1040ez online for free Example 1. How to file 1040ez online for free In 1985, you constructed a barn to store farm equipment at a cost of $20,000. How to file 1040ez online for free In 1987, you added a silo to the barn at a cost of $15,000 to store grain. How to file 1040ez online for free In May of this year, the property was worth $100,000. How to file 1040ez online for free In June the barn and silo were destroyed by a tornado. How to file 1040ez online for free At the time of the tornado, you had an adjusted basis of $0 in the property. How to file 1040ez online for free You received $85,000 from the insurance company. How to file 1040ez online for free You had a gain of $85,000 ($85,000 – $0). How to file 1040ez online for free You spent $80,000 to rebuild the barn and silo. How to file 1040ez online for free Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. How to file 1040ez online for free Example 2. How to file 1040ez online for free In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. How to file 1040ez online for free You made no further improvements or additions to it. How to file 1040ez online for free When a storm destroyed the cabin this January, the cabin was worth $250,000. How to file 1040ez online for free You received $146,000 from the insurance company in March. How to file 1040ez online for free You had a gain of $128,000 ($146,000 − $18,000). How to file 1040ez online for free You spent $144,000 to rebuild the cabin. How to file 1040ez online for free Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. How to file 1040ez online for free Buying replacement property from a related person. How to file 1040ez online for free   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). How to file 1040ez online for free This rule applies to the following taxpayers. How to file 1040ez online for free C corporations. How to file 1040ez online for free Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. How to file 1040ez online for free Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. How to file 1040ez online for free For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. How to file 1040ez online for free If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. How to file 1040ez online for free If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. How to file 1040ez online for free Exception. How to file 1040ez online for free   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. How to file 1040ez online for free Related persons. How to file 1040ez online for free   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. How to file 1040ez online for free For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. How to file 1040ez online for free Death of a taxpayer. How to file 1040ez online for free   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. How to file 1040ez online for free The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. How to file 1040ez online for free Replacement Property You must buy replacement property for the specific purpose of replacing your property. How to file 1040ez online for free Your replacement property must be similar or related in service or use to the property it replaces. How to file 1040ez online for free You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. How to file 1040ez online for free If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. How to file 1040ez online for free Property you acquire by gift or inheritance does not qualify as replacement property. How to file 1040ez online for free Owner-user. How to file 1040ez online for free   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. How to file 1040ez online for free Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. How to file 1040ez online for free A grinding mill that replaces a tractor does not qualify. How to file 1040ez online for free Neither does a breeding or draft animal that replaces a dairy cow. How to file 1040ez online for free Soil or other environmental contamination. How to file 1040ez online for free   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. How to file 1040ez online for free Weather-related conditions. How to file 1040ez online for free   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. How to file 1040ez online for free Example. How to file 1040ez online for free Each year you normally sell 25 cows from your beef herd. How to file 1040ez online for free However, this year you had to sell 50 cows. How to file 1040ez online for free This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. How to file 1040ez online for free Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. How to file 1040ez online for free Standing crop destroyed by casualty. How to file 1040ez online for free   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. How to file 1040ez online for free The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). How to file 1040ez online for free In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. How to file 1040ez online for free Timber loss. How to file 1040ez online for free   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. How to file 1040ez online for free If you bought the standing timber within the replacement period, you can postpone reporting the gain. How to file 1040ez online for free Business or income-producing property located in a federally declared disaster area. How to file 1040ez online for free   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. How to file 1040ez online for free For more information, see Disaster Area Losses in Publication 547. How to file 1040ez online for free Substituting replacement property. How to file 1040ez online for free   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. How to file 1040ez online for free This is true even if you acquire the other property within the replacement period. How to file 1040ez online for free However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. How to file 1040ez online for free Basis of replacement property. How to file 1040ez online for free   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. How to file 1040ez online for free In this way, tax on the gain is postponed until you dispose of the replacement property. How to file 1040ez online for free Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. How to file 1040ez online for free This is the replacement period. How to file 1040ez online for free The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. How to file 1040ez online for free The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. How to file 1040ez online for free Example. How to file 1040ez online for free You are a calendar year taxpayer. How to file 1040ez online for free While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. How to file 1040ez online for free You discovered the theft when you returned to your farm on November 11, 2012. How to file 1040ez online for free Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. How to file 1040ez online for free You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. How to file 1040ez online for free Main home in disaster area. How to file 1040ez online for free   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. How to file 1040ez online for free See Disaster Area Losses , later. How to file 1040ez online for free Property in the Midwestern disaster areas. How to file 1040ez online for free   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. How to file 1040ez online for free This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. How to file 1040ez online for free Property in the Kansas disaster area. How to file 1040ez online for free   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. How to file 1040ez online for free This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. How to file 1040ez online for free Property in the Hurricane Katrina disaster area. How to file 1040ez online for free   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. How to file 1040ez online for free This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. How to file 1040ez online for free Weather-related sales of livestock in an area eligible for federal assistance. How to file 1040ez online for free   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. How to file 1040ez online for free The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. How to file 1040ez online for free   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. How to file 1040ez online for free R. How to file 1040ez online for free B. How to file 1040ez online for free 529, available at  www. How to file 1040ez online for free irs. How to file 1040ez online for free gov/irb/2006-39_IRB/ar11. How to file 1040ez online for free html. How to file 1040ez online for free For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. How to file 1040ez online for free gov. How to file 1040ez online for free Condemnation. How to file 1040ez online for free   The replacement period for a condemnation begins on the earlier of the following dates. How to file 1040ez online for free The date on which you disposed of the condemned property. How to file 1040ez online for free The date on which the threat of condemnation began. How to file 1040ez online for free The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. How to file 1040ez online for free But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. How to file 1040ez online for free Business or investment real property. How to file 1040ez online for free   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. How to file 1040ez online for free Extension. How to file 1040ez online for free   You can apply for an extension of the replacement period. How to file 1040ez online for free Send your written application to the Internal Revenue Service Center where you file your tax return. How to file 1040ez online for free See your tax return instructions for the address. How to file 1040ez online for free Include all the details about your need for an extension. How to file 1040ez online for free Make your application before the end of the replacement period. How to file 1040ez online for free However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. How to file 1040ez online for free You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. How to file 1040ez online for free How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. How to file 1040ez online for free You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. How to file 1040ez online for free Required statement. How to file 1040ez online for free   You should attach a statement to your return for the year you have the gain. How to file 1040ez online for free This statement should include all the following information. How to file 1040ez online for free The date and details of the casualty, theft, or other involuntary conversion. How to file 1040ez online for free The insurance or other reimbursement you received. How to file 1040ez online for free How you figured the gain. How to file 1040ez online for free Replacement property acquired before return filed. How to file 1040ez online for free   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. How to file 1040ez online for free The replacement property. How to file 1040ez online for free The postponed gain. How to file 1040ez online for free The basis adjustment that reflects the postponed gain. How to file 1040ez online for free Any gain you are reporting as income. How to file 1040ez online for free Replacement property acquired after return filed. How to file 1040ez online for free   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. How to file 1040ez online for free   You should then attach another statement to your return for the year in which you buy the replacement property. How to file 1040ez online for free This statement should contain detailed information on the replacement property. How to file 1040ez online for free If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. How to file 1040ez online for free Include in the statement detailed information on the replacement property bought in that year. How to file 1040ez online for free Reporting weather-related sales of livestock. How to file 1040ez online for free   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. How to file 1040ez online for free Evidence of the weather-related conditions that forced the sale or exchange of the livestock. How to file 1040ez online for free The gain realized on the sale or exchange. How to file 1040ez online for free The number and kind of livestock sold or exchanged. How to file 1040ez online for free The number of livestock of each kind you would have sold or exchanged under your usual business practice. How to file 1040ez online for free   Show all the following information and the preceding information on the return for the year in which you replace the livestock. How to file 1040ez online for free The dates you bought the replacement property. How to file 1040ez online for free The cost of the replacement property. How to file 1040ez online for free Description of the replacement property (for example, the number and kind of the replacement livestock). How to file 1040ez online for free Amended return. How to file 1040ez online for free   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. How to file 1040ez online for free You do not acquire replacement property within the replacement period, plus extensions. How to file 1040ez online for free On this amended return, you must report the gain and pay any additional tax due. How to file 1040ez online for free You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. How to file 1040ez online for free On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. How to file 1040ez online for free Disaster Area Losses Special rules apply to federally declared disaster area losses. How to file 1040ez online for free A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. How to file 1040ez online for free Stafford Disaster Relief and Emergency Assistance Act. How to file 1040ez online for free It includes a major disaster or emergency declaration under the act. How to file 1040ez online for free A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. How to file 1040ez online for free fema. How to file 1040ez online for free gov. How to file 1040ez online for free This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. How to file 1040ez online for free For other special rules, see Disaster Area Losses in Publication 547. How to file 1040ez online for free When to deduct the loss. How to file 1040ez online for free   You generally must deduct a casualty loss in the year it occurred. How to file 1040ez online for free However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. How to file 1040ez online for free If you make this choice, the loss is treated as having occurred in the preceding year. How to file 1040ez online for free    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. How to file 1040ez online for free   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. How to file 1040ez online for free The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. How to file 1040ez online for free The due date (with extensions) for the return for the preceding tax year. How to file 1040ez online for free Federal disaster relief grants. How to file 1040ez online for free   Do not include post-disaster relief grants received under the Robert T. How to file 1040ez online for free Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. How to file 1040ez online for free Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. How to file 1040ez online for free If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. How to file 1040ez online for free Unemployment assistance payments under the Act are taxable unemployment compensation. How to file 1040ez online for free Qualified disaster relief payments. How to file 1040ez online for free   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. How to file 1040ez online for free These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). How to file 1040ez online for free No withholding applies to these payments. How to file 1040ez online for free   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. How to file 1040ez online for free Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. How to file 1040ez online for free Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. How to file 1040ez online for free (A personal residence can be a rented residence or one you own. How to file 1040ez online for free ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. How to file 1040ez online for free   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. How to file 1040ez online for free    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. How to file 1040ez online for free Qualified disaster mitigation payments. How to file 1040ez online for free   Qualified disaster mitigation payments made under the Robert T. How to file 1040ez online for free Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. How to file 1040ez online for free These are payments you, as a property owner, receive to reduce the risk of future damage to your property. How to file 1040ez online for free You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. How to file 1040ez online for free Sale of property under hazard mitigation program. How to file 1040ez online for free   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. How to file 1040ez online for free You report the gain or deduct the loss on your tax return for the year you realize it. How to file 1040ez online for free (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. How to file 1040ez online for free ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. How to file 1040ez online for free See Postponing Gain , earlier, for the rules that apply. How to file 1040ez online for free Other federal assistance programs. How to file 1040ez online for free    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. How to file 1040ez online for free Postponed tax deadlines. How to file 1040ez online for free   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. How to file 1040ez online for free The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. How to file 1040ez online for free   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). How to file 1040ez online for free Go to http://www. How to file 1040ez online for free irs. How to file 1040ez online for free gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. How to file 1040ez online for free Who is eligible. How to file 1040ez online for free   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. How to file 1040ez online for free Any individual whose main home is located in a covered disaster area (defined next). How to file 1040ez online for free Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. How to file 1040ez online for free Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. How to file 1040ez online for free Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. How to file 1040ez online for free The main home or principal place of business does not have to be located in the covered disaster area. How to file 1040ez online for free Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. How to file 1040ez online for free The spouse on a joint return with a taxpayer who is eligible for postponements. How to file 1040ez online for free Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. How to file 1040ez online for free Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. How to file 1040ez online for free Any other person determined by the IRS to be affected by a federally declared disaster. How to file 1040ez online for free Covered disaster area. How to file 1040ez online for free   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. How to file 1040ez online for free Abatement of interest and penalties. How to file 1040ez online for free   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. How to file 1040ez online for free Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. How to file 1040ez online for free Form 4684. How to file 1040ez online for free   Use this form to report your gains and losses from casualties and thefts. How to file 1040ez online for free Form 4797. How to file 1040ez online for free   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. How to file 1040ez online for free Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. How to file 1040ez online for free Form 8949. How to file 1040ez online for free   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. How to file 1040ez online for free Schedule A (Form 1040). How to file 1040ez online for free   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. How to file 1040ez online for free Schedule D (Form 1040). How to file 1040ez online for free   Use this form to carry over the following gains. How to file 1040ez online for free Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. How to file 1040ez online for free Net gain shown on Form 4684 from the casualty or theft of personal-use property. How to file 1040ez online for free    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. How to file 1040ez online for free Schedule F (Form 1040). How to file 1040ez online for free   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. How to file 1040ez online for free Prev  Up  Next   Home   More Online Publications