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How To Prepare An Amended Tax Return

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How To Prepare An Amended Tax Return

How to prepare an amended tax return Accelerated Cost Recovery System (ACRS) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: ACRS Defined What Can and Cannot Be Depreciated Under ACRSRecovery Property Nonrecovery Property How To Figure the DeductionUnadjusted Basis Classes of Recovery Property Recovery Periods Alternate ACRS Method (Modified Straight Line Method) ACRS Deduction in Short Tax Year DispositionsEarly dispositions of ACRS property other than 15-, 18-, or 19-year real property. How to prepare an amended tax return Dispositions — mass asset accounts. How to prepare an amended tax return Early dispositions — 15-year real property. How to prepare an amended tax return Early dispositions — 18- and 19-year real property. How to prepare an amended tax return Depreciation Recapture Topics - This chapter discusses: The definition of ACRS What can and cannot be depreciated under ACRS How to figure the deduction Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization The Accelerated Cost Recovery System (ACRS) applies to property first used before 1987. How to prepare an amended tax return It is the name given to tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. How to prepare an amended tax return These rules are mandatory and generally apply to tangible property placed in service after 1980 and before 1987. How to prepare an amended tax return If you placed property in service during this period, you must continue to figure your depreciation under ACRS. How to prepare an amended tax return If you used listed property placed in service after June 18, 1984, less than 50% for business in 1995, see Predominant Use Test in chapter 3. How to prepare an amended tax return Listed property includes cars, other means of transportation, and certain computers. How to prepare an amended tax return Any additions or improvements placed in service after 1986, including any components of a building (such as plumbing, wiring, storm windows, etc. How to prepare an amended tax return ), are depreciated using MACRS, discussed in chapter 3 of Publication 946. How to prepare an amended tax return It does not matter that the underlying property is depreciated under ACRS or one of the other methods. How to prepare an amended tax return ACRS Defined ACRS consists of accelerated depreciation methods and an alternate ACRS method that could have been elected. How to prepare an amended tax return The alternate ACRS method used a recovery percentage based on a modified straight line method. How to prepare an amended tax return The law prescribes fixed percentages to be uses for each class of property. How to prepare an amended tax return Property depreciable under ACRS is called recovery property. How to prepare an amended tax return The recovery class of property determines the recovery period. How to prepare an amended tax return Generally, the class life of property places it in a 3-year, 5-year, 10-year, 15-year, 18-year, or 19-year recovery class. How to prepare an amended tax return Under ACRS, the prescribed percentages are used to recover the unadjusted basis of recovery property. How to prepare an amended tax return To figure a depreciation deduction, you multiply the prescribed percentage for the recovery class by the unadjusted basis of the recovery property. How to prepare an amended tax return You must continue to figure your depreciation under ACRS for property placed in service after 1980 and before 1987. How to prepare an amended tax return For property you placed in service after 1986, you must use MACRS, discussed in chapter 3 of Publication 946. How to prepare an amended tax return What Can and Cannot Be Depreciated Under ACRS ACRS applies to most depreciable tangible property placed in service after 1980 and before 1987. How to prepare an amended tax return It includes new or used and real or personal property. How to prepare an amended tax return The property must be for use in a trade or business or for the production of income. How to prepare an amended tax return Property you acquired before 1981 or after 1986 is not ACRS recovery property. How to prepare an amended tax return For information on depreciating property acquired before 1981, see chapter 2. How to prepare an amended tax return For information on depreciating property acquired after 1986, see chapter 3 of Publication 946. How to prepare an amended tax return Recovery Property Recovery property under ACRS is tangible depreciable property placed in service after 1980 and before 1987. How to prepare an amended tax return It generally includes new or used property that you acquired after 1980 and before 1987 for use in your trade or business or for the production of income. How to prepare an amended tax return Nonrecovery Property You cannot use ACRS for property you placed in service before 1981 or after 1986. How to prepare an amended tax return Nonrecovery property also includes: Intangible property, Property you elected to exclude from ACRS that is properly depreciated under a method of depreciation that is not based on a term of years, Certain public utility property, and Certain property acquired and excluded from ACRS because of the antichurning rules. How to prepare an amended tax return Intangible property. How to prepare an amended tax return   Intangible property is not depreciated under ACRS. How to prepare an amended tax return Property depreciated under methods not expressed in a term of years. How to prepare an amended tax return   Certain property depreciated under a method not expressed in a term of years is not depreciated under ACRS. How to prepare an amended tax return This included any property: If you made an irrevocable election to exclude such property, and In the first year that you could have claimed depreciation, you properly used the unit-of-production method or any method of depreciation not expressed in a term of years (not including the retirement-replacement-betterment method). How to prepare an amended tax return Public utility property. How to prepare an amended tax return   Public utility property for which the taxpayer does not use a normalization method of accounting is excluded from ACRS and is subject to depreciation under a special rule. How to prepare an amended tax return Additions or improvements to ACRS property after 1986. How to prepare an amended tax return   Any additions or improvements placed in service after 1986, including any components of a building (plumbing, wiring, storm windows, etc. How to prepare an amended tax return ) are depreciated using MACRS, discussed in chapter 3 of Publication 946. How to prepare an amended tax return It does not matter that the underlying property is depreciated under ACRS or one of the other methods. How to prepare an amended tax return How To Figure the Deduction After you determine that your property can be depreciated under ACRS, you are ready to figure your deduction. How to prepare an amended tax return Because the conventions are built into the percentage table rates, you only need to know the following: The unadjusted basis of your recovery property, The classes of recovery property, The recovery periods, and Whether to use the prescribed percentages based on accelerated methods or percentages based on using the alternate ACRS method. How to prepare an amended tax return Unadjusted Basis To figure your ACRS deduction, you multiply the unadjusted basis in your recovery property by its applicable percentage for the year. How to prepare an amended tax return Unadjusted basis is the same amount you would use to figure gain on a sale, but it is figured without taking into account any depreciation taken in earlier years. How to prepare an amended tax return However, reduce your original basis by the amount of amortization taken on the property and by any section 179 deduction claimed as discussed in chapter 2 of Publication 946. How to prepare an amended tax return If you buy property, your unadjusted basis is usually its cost minus any amortized amount and minus any section 179 deduction elected. How to prepare an amended tax return If you acquire property in some other way, such as by inheriting it, getting it as a gift, or building it yourself, you figure your unadjusted basis under other rules. How to prepare an amended tax return See Publication 551. How to prepare an amended tax return Classes of Recovery Property All recovery property under ACRS is in one of the following classes. How to prepare an amended tax return The class for your property was determined when you began to depreciate it. How to prepare an amended tax return 3-Year Property 3-year property includes automobiles, light-duty trucks (actual unloaded weight less than 13,000 pounds), and tractor units for use over-the-road. How to prepare an amended tax return Race horses over 2 years old when placed in service are 3-year property. How to prepare an amended tax return Any other horses over 12 years old when you placed them in service are also included in the 3-year property class. How to prepare an amended tax return The ACRS percentages for 3-year recovery property are: Recovery Period Percentage 1st year 25% 2nd year 38% 3rd year 37% If you used the percentages above to depreciate your 3-year recovery property, your property, except for certain passenger automobiles, is fully depreciated. How to prepare an amended tax return You cannot claim depreciation for this property after 1988. How to prepare an amended tax return 5-Year Property 5-year property includes computers, copiers, and equipment, such as office furniture and fixtures. How to prepare an amended tax return It also includes single purpose agricultural or horticultural structures and petroleum storage facilities (other than buildings and their structural components). How to prepare an amended tax return The ACRS percentages for 5-year recovery property are: Recovery period Percentage 1st year 15% 2nd year 22% 3rd through 5th year 21% If you used the percentages above to depreciate your 5-year recovery property, it is fully depreciated. How to prepare an amended tax return You cannot claim depreciation for this property after 1990. How to prepare an amended tax return 10-Year Property 10-year property includes certain real property such as theme-park structures and certain public utility property. How to prepare an amended tax return Manufactured homes (including mobile homes) and railroad tank cars are also 10-year property. How to prepare an amended tax return You do not treat a building, and its structural components, as 10-year property by reason of a change in use after you placed the property in service. How to prepare an amended tax return For example, a building (15-year real property) that was placed in service in 1981 and was converted to a theme-park structure in 1986 remains 15-year real property. How to prepare an amended tax return The ACRS percentages for 10-year recovery property are: Recovery Period Percentage 1st year 8% 2nd year 14% 3rd year 12% 4th through 6th year 10% 7th through 10th year 9% If you used the percentages above, you cannot claim depreciation for this property after 1995. How to prepare an amended tax return Example. How to prepare an amended tax return On April 21, 1986, you bought and placed in service a new mobile home for $26,000 to be used as rental property. How to prepare an amended tax return You paid $10,000 cash and signed a note for $16,000 giving you an unadjusted basis of $26,000. How to prepare an amended tax return On June 8, 1986, you bought and placed in service a used mobile home for use as rental property at a total cost of $11,500. How to prepare an amended tax return The total unadjusted basis of your 10-year recovery property placed in service in 1986 was $37,500 ($26,000 + $11,500). How to prepare an amended tax return Your ACRS deduction was $3,000 (8% × $37,500). How to prepare an amended tax return In 1987, your ACRS deduction was $5,250 (14% × $37,500). How to prepare an amended tax return In 1988, your ACRS deduction was $4,500 (12% × $37,500). How to prepare an amended tax return In 1989, 1990, and 1991, your ACRS deduction was $3,750 (10% × $37,500). How to prepare an amended tax return In 1992, 1993, 1994, and 1995 your deduction for each year is $3,375 (9% × $37,500). How to prepare an amended tax return 15-Year Real Property 15-year real property is real property that is recovery property placed in service before March 16, 1984. How to prepare an amended tax return It includes all real property, such as buildings, other than that designated as 5-year or 10-year property. How to prepare an amended tax return Unlike the 3-, 5-, or 10-year classes of property, the percentages for 15-year real property depend on when you placed the property in service during your tax year. How to prepare an amended tax return You could group 15-year real property by month and year placed in service. How to prepare an amended tax return In Table 1, at the end of this publication in the Appendix, find the month in your tax year that you placed the property in service in your trade or business or for the production of income. How to prepare an amended tax return You use the percentages listed under that month for each year of the recovery period to determine your depreciation deduction each year. How to prepare an amended tax return Example. How to prepare an amended tax return On March 5, 1984, you placed an apartment building in service in your business. How to prepare an amended tax return It is 15-year real property. How to prepare an amended tax return After subtracting the value of the land, your unadjusted basis in the building is $250,000. How to prepare an amended tax return You use the calendar year as your tax year. How to prepare an amended tax return March is the third month of your tax year. How to prepare an amended tax return Your ACRS deduction for 1984 was $25,000 (10% × $250,000). How to prepare an amended tax return For 1985, the percentage for the third month of the second year of the recovery period is 11%. How to prepare an amended tax return Your deduction was $27,500 (11% × $250,000). How to prepare an amended tax return For the third, fourth, and fifth years of the recovery period (1986, 1987, and 1988), the percentages are 9%, 8%, and 7%. How to prepare an amended tax return For 1989 through 1992, the percentage for the third month is 6%. How to prepare an amended tax return Your deduction each year is $15,000 (6% × $250,000). How to prepare an amended tax return For 1993, 1994, and 1995, the percentage for the third month is 5%. How to prepare an amended tax return Your depreciation deduction is $12,500 (5% × $250,000) for 1993, 1994, and 1995. How to prepare an amended tax return Low-Income Housing Low-income housing that was assigned a 15-year recovery period under ACRS includes the following types of property: Federally assisted housing projects where the mortgage is insured under section 221(d)(3) or 236 of the National Housing Act, or housing financed or assisted by direct loan or tax abatement under similar provisions of state or local laws. How to prepare an amended tax return Low-income rental housing for which a depreciation deduction for rehabilitation expenditures is allowed. How to prepare an amended tax return Low-income rental housing held for occupancy by families or individuals eligible to receive subsidies under section 8 of the United States Housing Act of 1937, as amended, or under the provisions of state or local laws that authorize similar subsidies for low-income families. How to prepare an amended tax return Housing financed or assisted by direct loan or insured under Title V of the Housing Act of 1949. How to prepare an amended tax return The ACRS percentages for low-income housing real property, like the regular 15-year real property percentages, depend on when you placed the property in service. How to prepare an amended tax return Find the month in your tax year in Table 2 or 3 at the end of this publication in the Appendix that you first placed the property in service as rental housing. How to prepare an amended tax return Use the percentages listed under that month for each year of the recovery period. How to prepare an amended tax return Table 2 shows percentages for low-income housing placed in service before May 9, 1985. How to prepare an amended tax return Table 3 shows percentages for low-income housing placed in service after May 8, 1985, and before 1987. How to prepare an amended tax return Example. How to prepare an amended tax return In May 1986, you acquired and placed in service a house that qualified as low-income rental housing under item 3) of the above listing. How to prepare an amended tax return You use the calendar year as your tax year. How to prepare an amended tax return You use Table C–3 because the property was placed in service after May 8, 1985. How to prepare an amended tax return Your unadjusted basis for the property, not including the land, was $59,000. How to prepare an amended tax return Your deduction for 1986 through 2001 is shown in the following table. How to prepare an amended tax return Year Rate Deduction 1986 8. How to prepare an amended tax return 9% $5,251 1987 12. How to prepare an amended tax return 1% 7,139 1988 10. How to prepare an amended tax return 5% 6,195 1989 9. How to prepare an amended tax return 1% 5,369 1990 7. How to prepare an amended tax return 9% 4,661 1991 6. How to prepare an amended tax return 9% 4,071 1992 5. How to prepare an amended tax return 9% 3,481 1993 5. How to prepare an amended tax return 2% 3,068 1994 4. How to prepare an amended tax return 6% 2,714 1995 4. How to prepare an amended tax return 6% 2,714 1996 4. How to prepare an amended tax return 6% 2,714 1997 4. How to prepare an amended tax return 6% 2,714 1998 4. How to prepare an amended tax return 6% 2,714 1999 4. How to prepare an amended tax return 5% 2,655 2000 4. How to prepare an amended tax return 5% 2,655 2001 1. How to prepare an amended tax return 5% 885 18-Year Real Property 18-year real property is real property that is recovery property placed in service after March 15, 1984, and before May 9, 1985. How to prepare an amended tax return It includes real property, such as buildings, other than that designated as 5-year, 10-year, 15-year real property, or low-income housing. How to prepare an amended tax return The ACRS percentages for 18-year real property depend on when you placed the property in service in your trade or business or for the production of income during your tax year. How to prepare an amended tax return There are also tables for 18-year real property in the Appendix. How to prepare an amended tax return Table 4 shows the percentages for 18-year real property you placed in service after June 22, 1984, and before May 9, 1985. How to prepare an amended tax return Table 5 is for 18-year real property placed in service after March 15, 1984, and before June 23, 1984. How to prepare an amended tax return Find the month in your tax year that you placed the property in service in a trade or business or for the production of income. How to prepare an amended tax return Use the percentages listed under that month for each year of the recovery period. How to prepare an amended tax return Example. How to prepare an amended tax return On April 28, 1985, you bought and placed in service a rental house. How to prepare an amended tax return The house, not including the land, cost $95,000. How to prepare an amended tax return This is your unadjusted basis for the house. How to prepare an amended tax return You use the calendar year as your tax year. How to prepare an amended tax return Because the house was placed in service after June 22, 1984, and before May 9, 1985, it is 18-year real property. How to prepare an amended tax return You use Table 4 to figure your deduction for the house. How to prepare an amended tax return April is the fourth month of your tax year. How to prepare an amended tax return Your deduction for 1985 through 2003 is shown in the following table. How to prepare an amended tax return Year Rate Deduction 1985 7. How to prepare an amended tax return 0% $6,650 1986 9. How to prepare an amended tax return 0% 8,550 1987 8. How to prepare an amended tax return 0% 7,600 1988 7. How to prepare an amended tax return 0% 6,650 1989 7. How to prepare an amended tax return 0% 6,650 1990 6. How to prepare an amended tax return 0% 5,700 1991 5. How to prepare an amended tax return 0% 4,750 1992 5. How to prepare an amended tax return 0% 4,750 1993 5. How to prepare an amended tax return 0% 4,750 1994 5. How to prepare an amended tax return 0% 4,750 1995 5. How to prepare an amended tax return 0% 4,750 1996 5. How to prepare an amended tax return 0% 4,750 1997 5. How to prepare an amended tax return 0% 4,750 1998 4. How to prepare an amended tax return 0% 3,800 1999 4. How to prepare an amended tax return 0% 3,800 2000 4. How to prepare an amended tax return 0% 3,800 2001 4. How to prepare an amended tax return 0% 3,800 2002 4. How to prepare an amended tax return 0% 3,800 2003 1. How to prepare an amended tax return 0% 950 19-Year Real Property 19-year real property is real property that is recovery property placed in service after May 8, 1985, and before 1987. How to prepare an amended tax return It includes all real property, other than that designated as 5-year, 10-year, 15-year, or 18-year real property, or low-income housing. How to prepare an amended tax return The ACRS percentages for 19-year real property depend on when you placed the property in service in a trade or business or for the production of income during your tax year. How to prepare an amended tax return Table 6 shows the percentages for 19-year real property. How to prepare an amended tax return You find the month in your tax year that you placed the property in service. How to prepare an amended tax return You use the percentages listed under that month for each year of the recovery period. How to prepare an amended tax return Recovery Periods Each item of recovery property is assigned to a class of property. How to prepare an amended tax return The classes of recovery property establish the recovery periods over which the unadjusted basis of items in a class is recovered. How to prepare an amended tax return The classes of property are: 3-Year property 5-Year property 10-Year property 15-Year real property Low-income housing 18-Year real property 19-Year real property Alternate ACRS Method (Modified Straight Line Method) ACRS provides an alternate ACRS method that could be elected. How to prepare an amended tax return This alternate ACRS method uses a recovery percentage based on a modified straight line method. How to prepare an amended tax return This alternate ACRS method generally uses percentages other than those from the tables. How to prepare an amended tax return If you elected the alternate ACRS method, you determine the recovery period by using the following schedule. How to prepare an amended tax return This schedule is for other than 18- and 19-year real property and low-income housing: In the case of: You could have elected a recovery period of: 3-year property 3, 5, or 12 years 5-year property 5, 12, or 25 years 15-year real property 15, 35, or 45 years Percentages. How to prepare an amended tax return   The straight-line percentages for the alternate ACRS method are: Recovery Period Percentage 5 years 20. How to prepare an amended tax return 00% 10 years 10. How to prepare an amended tax return 00% 12 years 8. How to prepare an amended tax return 333% 15 years 6. How to prepare an amended tax return 667% 25 years 4. How to prepare an amended tax return 00% 35 years 2. How to prepare an amended tax return 857%   You apply the percentage to the unadjusted basis(defined earlier) of the property to figure your ACRS deduction. How to prepare an amended tax return There are tables for 18- and 19-year real property later in this publication in the Appendix. How to prepare an amended tax return For 15-year real property, see 15-year real property, later. How to prepare an amended tax return 3-, 5-, and 10-year property. How to prepare an amended tax return   If you elected to use an alternate recovery percentage, you have to use the same recovery percentage for all property in that class that you placed in service in that tax year. How to prepare an amended tax return This applies throughout the recovery period you selected. How to prepare an amended tax return Half-year convention. How to prepare an amended tax return   If you elected the alternate method, only a half-year of depreciation was deducted for the year you placed the property in service. How to prepare an amended tax return This applied regardless of when in the tax year you placed the property in service. How to prepare an amended tax return For each of the remaining years in the recovery period, you take a full year's deduction. How to prepare an amended tax return If you hold the property for the entire recovery period, a half-year of depreciation is allowable for the year following the end of the recovery period. How to prepare an amended tax return Example. How to prepare an amended tax return You operate a small upholstery business. How to prepare an amended tax return On March 19, 1986, you bought and placed in service a $13,000 light-duty panel truck to be used in your business and a $500 electric saw. How to prepare an amended tax return You elected to use the alternate ACRS method. How to prepare an amended tax return You did not elect to take a section 179 deduction. How to prepare an amended tax return You decided to recover the cost of the truck, which is 3-year recovery property, over 5 years. How to prepare an amended tax return The saw is 5-year property, but you decided to recover its cost over 12 years. How to prepare an amended tax return For 1986, your ACRS deduction reflected the half-year convention. How to prepare an amended tax return In the first year, you deducted half of the amount determined for a full year. How to prepare an amended tax return Your ACRS deduction for 1986 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. How to prepare an amended tax return 00     Electric saw   12 years straight line = 8. How to prepare an amended tax return 333% 8. How to prepare an amended tax return 333% ÷ $500 = $41. How to prepare an amended tax return 67 Half-year convention -½ of $41. How to prepare an amended tax return 67= 20. How to prepare an amended tax return 84 Total ACRS deduction for 1986 $1,320. How to prepare an amended tax return 84       You take a full year of depreciation for both the truck and the saw for the years 1987 through 1990. How to prepare an amended tax return Your ACRS deduction for each of those years is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600     Electric saw     12 years straight line = 8. How to prepare an amended tax return 333% 8. How to prepare an amended tax return 333% ÷ $500 = $41. How to prepare an amended tax return 67 Total annual ACRS deduction for 1987 through 1990 $2,641. How to prepare an amended tax return 67       In 1991, you take a half-year of depreciation for the truck and a full year of depreciation for the saw. How to prepare an amended tax return Your ACRS deduction for 1991 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. How to prepare an amended tax return 00     Electric saw   12 years straight line = 8. How to prepare an amended tax return 333% 8. How to prepare an amended tax return 333% ÷ $500 = $41. How to prepare an amended tax return 67 Total ACRS deduction for 1991 $1,341. How to prepare an amended tax return 67       The truck is fully depreciated after 1991. How to prepare an amended tax return You take a full year of depreciation for the saw for the years 1992 through 1997. How to prepare an amended tax return Your ACRS deduction for each of those years is as follows: Electric saw     12 years straight line = 8. How to prepare an amended tax return 333% 8. How to prepare an amended tax return 333% ÷ $500 = $41. How to prepare an amended tax return 67 Total annual ACRS deduction for 1992 through 1997 $41. How to prepare an amended tax return 67       You take a half-year of depreciation for the saw for 1998. How to prepare an amended tax return Your ACRS deduction for 1998 is as follows: Electric saw   12 years straight line = 8. How to prepare an amended tax return 333% 8. How to prepare an amended tax return 333% ÷ $500 = $41. How to prepare an amended tax return 67 Half-year convention -½ of $41. How to prepare an amended tax return 67= 20. How to prepare an amended tax return 84 Total ACRS deduction for 1998 $20. How to prepare an amended tax return 84       The saw is fully depreciated after 1998. How to prepare an amended tax return 15-year real property. How to prepare an amended tax return   Under ACRS, you could also elect to use the alternate ACRS method for 15-year real property. How to prepare an amended tax return The alternate ACRS method allows you to depreciate your 15-year real property using the straight line ACRS method over the alternate recovery periods of 15, 35, or 45 years. How to prepare an amended tax return If you selected a 15-year recovery period, you use the percentage (6. How to prepare an amended tax return 667%) from the schedule above. How to prepare an amended tax return You prorate this percentage for the number of months the property was in service in the first year. How to prepare an amended tax return If you selected a 35- or 45-year recovery period, you use either Table 11 or 15. How to prepare an amended tax return Alternate periods for 18-year real property. How to prepare an amended tax return   For 18-year real property, the alternate recovery periods are 18, 35, or 45 years. How to prepare an amended tax return The percentages for 18-year real property under the alternate method are in Tables 7, 8, 10, 11, 14, and 15 in the Appendix. How to prepare an amended tax return There are two tables for each alternate recovery period. How to prepare an amended tax return One table shows the percentage for property placed in service after June 22, 1984. How to prepare an amended tax return The other table has the percentages for property placed in service after March 15, 1984, and before June 23, 1984. How to prepare an amended tax return Alternate periods for 19-year real property. How to prepare an amended tax return   For 19-year real property, the alternate recovery periods are 19, 35, or 45 years. How to prepare an amended tax return If you selected a 19-year recovery period, use Table 9 to determine your deduction. How to prepare an amended tax return If you select a 35- or 45-year recovery period, use either Table 13 or 14. How to prepare an amended tax return Example. How to prepare an amended tax return You placed in service an apartment building on August 3, 1986. How to prepare an amended tax return The building is 19-year real property. How to prepare an amended tax return The sales contract allocated $300,000 to the building and $100,000 to the land. How to prepare an amended tax return You use the calendar year as your tax year. How to prepare an amended tax return You chose the alternate ACRS method over a recovery period of 35 years. How to prepare an amended tax return For 1986, you figure your ACRS deduction usingTable 13. How to prepare an amended tax return August is the eighth month of your tax year. How to prepare an amended tax return The percentage from Table 13 for the eighth month is 1. How to prepare an amended tax return 1%. How to prepare an amended tax return Your deduction was $3,300 ($300,000 ÷ 1. How to prepare an amended tax return 1%). How to prepare an amended tax return The deduction rate from ACRS Table 13 for years 2 through 20 is 2. How to prepare an amended tax return 9% so that your deduction in 1987 through 2005 is $8,700 ($300,000 ÷ 2. How to prepare an amended tax return 9%). How to prepare an amended tax return Alternate periods for low-income housing. How to prepare an amended tax return   For low-income housing, the alternate recovery periods are 15, 35, or 45 years. How to prepare an amended tax return If you selected a 15-year period for this property, use 6. How to prepare an amended tax return 667% as the percentage. How to prepare an amended tax return If you selected a 35- or 45-year period, use either Table 11, 12, or 15. How to prepare an amended tax return Election. How to prepare an amended tax return   You had to make the election to use the alternate ACRS method by the return due date (including extensions) for the tax year you placed the property in service. How to prepare an amended tax return Revocation of election. How to prepare an amended tax return   Your election to use an alternate ACRS method, once made, can be changed only with the consent of the Commissioner. How to prepare an amended tax return The Commissioner grants consent only in extraordinary circumstances. How to prepare an amended tax return Any request for a revocation will be considered a request for a ruling. How to prepare an amended tax return ACRS Deduction in Short Tax Year For a tax year that is less than 12 months, the ACRS deduction is prorated on a 12-month basis. How to prepare an amended tax return Figure the amount of the ACRS deduction for a short tax year as follows: First, you figure the ACRS deduction for a full year. How to prepare an amended tax return You figure this by multiplying the unadjusted basis by the recovery percentage. How to prepare an amended tax return You then multiply the ACRS deduction determined for a full tax year by a fraction. How to prepare an amended tax return The numerator (top number) of the fraction is the number of months in the short tax year and the denominator (bottom number) is 12. How to prepare an amended tax return For example, a corporation placed in service in June 1986 an item of 3-year property with an unadjusted basis of $10,000. How to prepare an amended tax return The corporation files a tax return, because of a change in its accounting period, for the 6-month short tax year ending June 30, 1986. How to prepare an amended tax return The full year's ACRS deduction for this item is $2,500 ($10,000 ÷ 25%), the first year percentage from the 3-year table. How to prepare an amended tax return The ACRS deduction for the short tax year is $1,250 ($2,500 ÷ 6/12). How to prepare an amended tax return You use the full ACRS percentages during the remaining years of the recovery period. How to prepare an amended tax return For the first tax year after the recovery period, the unrecovered basis will be deductible. How to prepare an amended tax return Exception. How to prepare an amended tax return   For the tax year in which you placed 15-, 18-, or 19-year real property in service or in the tax year you dispose of it, you compute the ACRS deduction for the number of months that the property is in service during that tax year. How to prepare an amended tax return You compute the number of months using either a full month or mid-month convention. How to prepare an amended tax return This is true regardless of the number of months in the tax year and the recovery period and method used. How to prepare an amended tax return Dispositions A disposition is the permanent withdrawal of property from use in your trade or business or in the production of income. How to prepare an amended tax return You can make a withdrawal by sale, exchange, retirement, abandonment, or destruction. How to prepare an amended tax return You generally recognize gain or loss on the disposition of an asset by sale. How to prepare an amended tax return However, nonrecognition rules can allow you to postpone some gain. How to prepare an amended tax return See Publication 544. How to prepare an amended tax return If you physically abandon property, you can deduct as a loss the adjusted basis of the asset at the time of its abandonment. How to prepare an amended tax return Your intent must be to discard the asset so that you will not use it again or retrieve it for sale, exchange, or other disposition. How to prepare an amended tax return Early dispositions. How to prepare an amended tax return   The disposal of an asset before the end of its specified recovery period, is referred to as an early disposition. How to prepare an amended tax return When an early disposition occurs, the depreciation deduction in the year of disposition depends on the class of property involved. How to prepare an amended tax return Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. How to prepare an amended tax return   Generally, you get no ACRS deduction for the tax year in which you dispose of or retire recovery property, except for 15-, 18-, and 19-year real property. How to prepare an amended tax return This means there is no depreciation deduction under ACRS in the year you dispose of or retire any of your 3-, 5-, or 10-year recovery property. How to prepare an amended tax return Dispositions — mass asset accounts. How to prepare an amended tax return   The law provides a special rule to avoid the calculation of gain on the disposition of assets from mass asset accounts. How to prepare an amended tax return A mass asset account includes items usually minor in value in relation to the group, numerous in quantity, impractical to separately identify, and not usually accounted for on a separate basis, but on a total dollar value. How to prepare an amended tax return Examples of mass assets include minor items of office, plant, and store furniture and fixtures. How to prepare an amended tax return   Under the special rule, if you elected to use a mass asset account, you recognize gain to the extent of the proceeds from the disposition of the asset. How to prepare an amended tax return You leave the unadjusted basis of the property in the account until recovered in future years. How to prepare an amended tax return If you did this, include the total proceeds realized from the disposition in income on the tax return for the year of disposition. How to prepare an amended tax return Early dispositions — 15-year real property. How to prepare an amended tax return   If you dispose of 15-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. How to prepare an amended tax return You use a full-month convention. How to prepare an amended tax return For a disposition at any time during a particular month before the end of the recovery period, no deduction is allowed for the month of disposition. How to prepare an amended tax return This applies whether you use the regular ACRS method or elected the alternate ACRS method. How to prepare an amended tax return Example. How to prepare an amended tax return You purchased and placed in service a rental house on March 2, 1984, for $98,000 (not including the cost of land). How to prepare an amended tax return You file your return based on a calendar year. How to prepare an amended tax return Your rate from Table 1 for the third month is 10%. How to prepare an amended tax return Your ACRS deduction for 1984 was $9,800 ($98. How to prepare an amended tax return 000 ÷ 10%). How to prepare an amended tax return For 1985 through 1988, you figured your ACRS deductions using 11%, 9%, 8%, and 7% ÷ $98,000. How to prepare an amended tax return For 1989 through 1992, you figured your ACRS deductions using 6% for each year. How to prepare an amended tax return The deduction each year was $98,000 ÷ 6%. How to prepare an amended tax return For 1993 and 1994, the ACRS deduction is ($98,000 ÷ 5%) $4,900 for each year. How to prepare an amended tax return You sell the house on June 1, 1995. How to prepare an amended tax return You figure your ACRS deduction for 1995 for the full year and then prorate that amount for the months of use. How to prepare an amended tax return The full ACRS deduction for 1995 is $4,900 ($98,000 ÷ 5%). How to prepare an amended tax return You then prorate this amount to the 5 months in 1995 during which it was rented. How to prepare an amended tax return Your ACRS deduction for 1995 is $2,042 ($4,900 ÷ 5/12). How to prepare an amended tax return Early dispositions — 18- and 19-year real property. How to prepare an amended tax return   If you dispose of 18- or 19-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. How to prepare an amended tax return For 18-year property placed in service before June 23, 1984, use a full-month convention on a disposition. How to prepare an amended tax return For 18-year property placed in service after June 22, 1984, and for 19-year property, determine the number of months in use by using the mid-month convention. How to prepare an amended tax return Under the mid-month convention,treat real property disposed of any time during a month as disposed of in the middle of that month. How to prepare an amended tax return Count the month of disposition as half a month of use. How to prepare an amended tax return Example. How to prepare an amended tax return You purchased and placed in service a rental house on July 2, 1984, for $100,000 (not including the cost of land). How to prepare an amended tax return You file your return based on a calendar year. How to prepare an amended tax return Your rate from Table 4 for the seventh month is 4%. How to prepare an amended tax return You figured your ACRS deduction for 1984 was $4,000 ($100,000 ÷ 4%). How to prepare an amended tax return In 1985 through 1994, your ACRS deductions were 9%, 8%, 8%, 7%, 6%, 6%, 5%, 5%, and 5% ÷ $100,000. How to prepare an amended tax return You sell the house on September 24, 1995. How to prepare an amended tax return Figure your ACRS deduction for 1995 for the months of use. How to prepare an amended tax return The full ACRS deduction for 1995 is $5,000 ($100,000 ÷ 5%). How to prepare an amended tax return Prorate this amount for the 8. How to prepare an amended tax return 5 months in 1995 that you held the property. How to prepare an amended tax return Under the mid-month convention, you count September as half a month. How to prepare an amended tax return Your ACRS deduction for 1995 is $3,542 ($5,000 ÷ 8. How to prepare an amended tax return 5/12). How to prepare an amended tax return Depreciation Recapture If you dispose of property depreciated under ACRS that is section 1245 recovery property, you will generally recognize gain or loss. How to prepare an amended tax return Gain recognized on a disposition is ordinary income to the extent of prior depreciation deductions taken. How to prepare an amended tax return This recapture rule applies to all personal property in the 3-year, 5-year, and 10-year classes. How to prepare an amended tax return You recapture gain on manufactured homes and theme park structures in the 10-year class as section 1245 property. How to prepare an amended tax return Section 1245 property generally includes all personal property. How to prepare an amended tax return See Section 1245 property in chapter 4 of Publication 544 for more information. How to prepare an amended tax return You treat dispositions of section 1250 real property on which you have a gain as section 1245 recovery property. How to prepare an amended tax return You recognize gain on this property as ordinary income to the extent of prior depreciation deductions taken. How to prepare an amended tax return Section 1250 property includes most real property. How to prepare an amended tax return See Section 1250 property in chapter 4 of Publication 544 for more information. How to prepare an amended tax return This rule applies to all section 1250 real property except the following property: Any 15-, 18-, or 19-year real property that is residential rental property. How to prepare an amended tax return Any 15-, 18-, or 19-year real property that you elected to depreciate using the alternate ACRS method. How to prepare an amended tax return Any 15-, 18-, or 19-year real property that is subsidized low-income housing. How to prepare an amended tax return For these recapture rules, you treat the section 179 deduction and 50% of the investment credit that reduced your basis as depreciation. How to prepare an amended tax return See Publication 544 for further discussion of dispositions of section 1245 and 1250 property. How to prepare an amended tax return Prev  Up  Next   Home   More Online Publications
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The How To Prepare An Amended Tax Return

How to prepare an amended tax return 7. How to prepare an amended tax return   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. How to prepare an amended tax return Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. How to prepare an amended tax return Useful Items - You may want to see: Forms (and Instructions) 1040 U. How to prepare an amended tax return S. How to prepare an amended tax return Individual Income Tax Return 1040A U. How to prepare an amended tax return S. How to prepare an amended tax return Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. How to prepare an amended tax return S. How to prepare an amended tax return Nonresident Alien Income Tax Return 1040NR-EZ U. How to prepare an amended tax return S. How to prepare an amended tax return Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. How to prepare an amended tax return What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. How to prepare an amended tax return Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. How to prepare an amended tax return The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). How to prepare an amended tax return Under U. How to prepare an amended tax return S. How to prepare an amended tax return immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. How to prepare an amended tax return Extensions of time to file. How to prepare an amended tax return   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. How to prepare an amended tax return You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). How to prepare an amended tax return Use Form 4868 to get the extension to October 15. How to prepare an amended tax return In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). How to prepare an amended tax return To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. How to prepare an amended tax return Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. How to prepare an amended tax return   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. How to prepare an amended tax return S. How to prepare an amended tax return citizens and resident aliens abroad who expect to qualify for special tax treatment). How to prepare an amended tax return    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. How to prepare an amended tax return You may be able to file your return electronically. How to prepare an amended tax return See IRS e-file in your form instructions. How to prepare an amended tax return Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. How to prepare an amended tax return If you are any of the following, you must file a return. How to prepare an amended tax return A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. How to prepare an amended tax return (But see Exceptions , later. How to prepare an amended tax return ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. How to prepare an amended tax return S. How to prepare an amended tax return sources, or Your income is exempt from income tax. How to prepare an amended tax return A nonresident alien individual not engaged in a trade or business in the United States with U. How to prepare an amended tax return S. How to prepare an amended tax return income on which the tax liability was not satisfied by the withholding of tax at the source. How to prepare an amended tax return A representative or agent responsible for filing the return of an individual described in (1) or (2). How to prepare an amended tax return A fiduciary for a nonresident alien estate or trust. How to prepare an amended tax return You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. How to prepare an amended tax return For example, if you have no U. How to prepare an amended tax return S. How to prepare an amended tax return business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. How to prepare an amended tax return For information on what is timely, see When to file for deductions and credits under When To File, later. How to prepare an amended tax return Exceptions. How to prepare an amended tax return   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. How to prepare an amended tax return Your only U. How to prepare an amended tax return S. How to prepare an amended tax return trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. How to prepare an amended tax return You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. How to prepare an amended tax return Even if you have left the United States and filed a Form 1040-C, U. How to prepare an amended tax return S. How to prepare an amended tax return Departing Alien Income Tax Return, on departure, you still must file an annual U. How to prepare an amended tax return S. How to prepare an amended tax return income tax return. How to prepare an amended tax return If you are married and both you and your spouse are required to file, you must each file a separate return. How to prepare an amended tax return Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. How to prepare an amended tax return You do not claim any dependents. How to prepare an amended tax return You cannot be claimed as a dependent on someone else's U. How to prepare an amended tax return S. How to prepare an amended tax return tax return. How to prepare an amended tax return If you were married, you do not claim an exemption for your spouse. How to prepare an amended tax return Your taxable income is less than $100,000. How to prepare an amended tax return The only itemized deduction you can claim is for state and local income taxes. How to prepare an amended tax return Note. How to prepare an amended tax return Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. How to prepare an amended tax return See chapter 5. How to prepare an amended tax return Your only U. How to prepare an amended tax return S. How to prepare an amended tax return source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. How to prepare an amended tax return (If you had taxable interest or dividend income, you cannot use this form. How to prepare an amended tax return ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. How to prepare an amended tax return You are not claiming any tax credits. How to prepare an amended tax return This is not an “expatriation return. How to prepare an amended tax return ” See Expatriation Tax in chapter 4. How to prepare an amended tax return The only taxes you owe are: The income tax from the Tax Table. How to prepare an amended tax return The social security and Medicare tax from Form 4137 or Form 8919. How to prepare an amended tax return You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. How to prepare an amended tax return You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. How to prepare an amended tax return If you do not meet all of the above conditions, you must file Form 1040NR. How to prepare an amended tax return When To File If you are an employee and you receive wages subject to U. How to prepare an amended tax return S. How to prepare an amended tax return income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. How to prepare an amended tax return For the 2013 calendar year, file your return by April 15, 2014. How to prepare an amended tax return If you are not an employee who receives wages subject to U. How to prepare an amended tax return S. How to prepare an amended tax return income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. How to prepare an amended tax return For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. How to prepare an amended tax return ) Extensions of time to file. How to prepare an amended tax return   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. How to prepare an amended tax return For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). How to prepare an amended tax return You must file the extension by the regular due date of your return. How to prepare an amended tax return   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). How to prepare an amended tax return To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. How to prepare an amended tax return Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. How to prepare an amended tax return When to file for deductions and credits. How to prepare an amended tax return   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. How to prepare an amended tax return For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. How to prepare an amended tax return However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. How to prepare an amended tax return The allowance of the following credits is not affected by this time requirement. How to prepare an amended tax return Credit for withheld taxes. How to prepare an amended tax return Credit for excise tax on certain uses of gasoline and special fuels. How to prepare an amended tax return Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. How to prepare an amended tax return Protective return. How to prepare an amended tax return   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. How to prepare an amended tax return S. How to prepare an amended tax return trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. How to prepare an amended tax return By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. How to prepare an amended tax return You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. How to prepare an amended tax return   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. How to prepare an amended tax return To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. How to prepare an amended tax return   You can follow the same procedure if you believe you have no U. How to prepare an amended tax return S. How to prepare an amended tax return tax liability because of a U. How to prepare an amended tax return S. How to prepare an amended tax return tax treaty. How to prepare an amended tax return Be sure to also complete item L on page 5 of Form 1040NR. How to prepare an amended tax return Waiver of filing deadline. How to prepare an amended tax return   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. How to prepare an amended tax return S. How to prepare an amended tax return income tax return (including a protective return) and you cooperate with the IRS in determining your U. How to prepare an amended tax return S. How to prepare an amended tax return income tax liability for the tax year for which you did not file a return. How to prepare an amended tax return Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. How to prepare an amended tax return  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. How to prepare an amended tax return O. How to prepare an amended tax return Box 1303 Charlotte, NC 28201-1303 Aliens from the U. How to prepare an amended tax return S. How to prepare an amended tax return Virgin Islands. How to prepare an amended tax return    If you are a bona fide resident of the U. How to prepare an amended tax return S. How to prepare an amended tax return Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. How to prepare an amended tax return S. How to prepare an amended tax return Virgin Islands and file your income tax returns at the following address. How to prepare an amended tax return Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. How to prepare an amended tax return Thomas, VI 00802   Report all income from U. How to prepare an amended tax return S. How to prepare an amended tax return sources, as well as income from other sources, on your return. How to prepare an amended tax return For information on filing U. How to prepare an amended tax return S. How to prepare an amended tax return Virgin Islands returns, contact the U. How to prepare an amended tax return S. How to prepare an amended tax return Virgin Islands Bureau of Internal Revenue. How to prepare an amended tax return   Chapter 8 discusses withholding from U. How to prepare an amended tax return S. How to prepare an amended tax return wages of U. How to prepare an amended tax return S. How to prepare an amended tax return Virgin Islanders. How to prepare an amended tax return Aliens from Guam or the Commonwealth of the Northern Mariana Islands. How to prepare an amended tax return   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. How to prepare an amended tax return Report all income, including income from U. How to prepare an amended tax return S. How to prepare an amended tax return sources, on your return. How to prepare an amended tax return It is not necessary to file a separate U. How to prepare an amended tax return S. How to prepare an amended tax return income tax return. How to prepare an amended tax return    Bona fide residents of Guam should file their Guam returns at the following address. How to prepare an amended tax return   Department of Revenue and Taxation Government of Guam P. How to prepare an amended tax return O. How to prepare an amended tax return Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. How to prepare an amended tax return   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. How to prepare an amended tax return O. How to prepare an amended tax return Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. How to prepare an amended tax return 570, Tax Guide for Individuals With Income From U. How to prepare an amended tax return S. How to prepare an amended tax return Possessions, for information on where to file your return. How to prepare an amended tax return Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. How to prepare an amended tax return S. How to prepare an amended tax return Individual Income Tax Return. How to prepare an amended tax return Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. How to prepare an amended tax return If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. How to prepare an amended tax return ) to Form 1040X. How to prepare an amended tax return Print “Amended” across the top. How to prepare an amended tax return Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. How to prepare an amended tax return A return filed before the final due date is considered to have been filed on the due date. How to prepare an amended tax return Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. How to prepare an amended tax return FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. How to prepare an amended tax return The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. How to prepare an amended tax return The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. How to prepare an amended tax return However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. How to prepare an amended tax return A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. How to prepare an amended tax return Filing requirements. How to prepare an amended tax return   FinCEN Form 105 filing requirements follow. How to prepare an amended tax return Recipients. How to prepare an amended tax return   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. How to prepare an amended tax return Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. How to prepare an amended tax return   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. How to prepare an amended tax return Travelers. How to prepare an amended tax return   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. How to prepare an amended tax return Penalties. How to prepare an amended tax return   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. How to prepare an amended tax return Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. How to prepare an amended tax return More information. How to prepare an amended tax return   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. How to prepare an amended tax return Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. How to prepare an amended tax return A resident alien of the United States for any part of the tax year. How to prepare an amended tax return A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. How to prepare an amended tax return S. How to prepare an amended tax return income tax treaty. How to prepare an amended tax return See Effect of Tax Treaties in chapter 1. How to prepare an amended tax return A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. How to prepare an amended tax return See chapter 1 for information about this election. How to prepare an amended tax return A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. How to prepare an amended tax return See Publication 570, Tax Guide for Individuals With Income From U. How to prepare an amended tax return S. How to prepare an amended tax return Possessions, for a definition of bona fide resident. How to prepare an amended tax return You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). How to prepare an amended tax return The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. How to prepare an amended tax return Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. How to prepare an amended tax return S. How to prepare an amended tax return person. How to prepare an amended tax return You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. How to prepare an amended tax return More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. How to prepare an amended tax return Penalties The law provides penalties for failure to file returns or pay taxes as required. How to prepare an amended tax return Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. How to prepare an amended tax return You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. How to prepare an amended tax return If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. How to prepare an amended tax return Filing late. How to prepare an amended tax return   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. How to prepare an amended tax return The penalty is based on the tax not paid by the due date (without regard to extensions). How to prepare an amended tax return The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. How to prepare an amended tax return Fraud. How to prepare an amended tax return   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. How to prepare an amended tax return Return over 60 days late. How to prepare an amended tax return   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. How to prepare an amended tax return Exception. How to prepare an amended tax return   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. How to prepare an amended tax return Paying tax late. How to prepare an amended tax return   You will have to pay a failure-to-pay penalty of ½ of 1% (. How to prepare an amended tax return 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. How to prepare an amended tax return This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. How to prepare an amended tax return   The monthly rate of the failure-to-pay penalty is half the usual rate (. How to prepare an amended tax return 25% instead of . How to prepare an amended tax return 50%) if an installment agreement is in effect for that month. How to prepare an amended tax return You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. How to prepare an amended tax return   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. How to prepare an amended tax return If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. How to prepare an amended tax return   This penalty cannot be more than 25% of your unpaid tax. How to prepare an amended tax return You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. How to prepare an amended tax return Combined penalties. How to prepare an amended tax return   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. How to prepare an amended tax return However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. How to prepare an amended tax return Accuracy-related penalty. How to prepare an amended tax return   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. How to prepare an amended tax return The penalty is equal to 20% of the underpayment. How to prepare an amended tax return The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. How to prepare an amended tax return The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. How to prepare an amended tax return Negligence or disregard. How to prepare an amended tax return   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. How to prepare an amended tax return Negligence also includes failure to keep adequate books and records. How to prepare an amended tax return You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. How to prepare an amended tax return   The term “disregard” includes any careless, reckless, or intentional disregard. How to prepare an amended tax return Adequate disclosure. How to prepare an amended tax return   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. How to prepare an amended tax return See Disclosure statement , later. How to prepare an amended tax return   This exception will not apply to an item that is attributable to a tax shelter. How to prepare an amended tax return In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. How to prepare an amended tax return Substantial understatement of income tax. How to prepare an amended tax return   You understate your tax if the tax shown on your return is less than the correct tax. How to prepare an amended tax return The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. How to prepare an amended tax return However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. How to prepare an amended tax return   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. How to prepare an amended tax return However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. How to prepare an amended tax return Substantial authority. How to prepare an amended tax return   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. How to prepare an amended tax return Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. How to prepare an amended tax return Disclosure statement. How to prepare an amended tax return   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. How to prepare an amended tax return You must also have a reasonable basis for treating the item the way you did. How to prepare an amended tax return   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. How to prepare an amended tax return   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. How to prepare an amended tax return Transaction lacking economic substance. How to prepare an amended tax return   For more information on economic substance, see section 7701(o). How to prepare an amended tax return Foreign financial asset. How to prepare an amended tax return   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. How to prepare an amended tax return Reasonable cause. How to prepare an amended tax return   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. How to prepare an amended tax return You must also show that you acted in good faith. How to prepare an amended tax return This does not apply to a transaction that lacks economic substance. How to prepare an amended tax return Filing erroneous claim for refund or credit. How to prepare an amended tax return   You may have to pay a penalty if you file an erroneous claim for refund or credit. How to prepare an amended tax return The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. How to prepare an amended tax return However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. How to prepare an amended tax return The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged. How to prepare an amended tax return Frivolous tax submission. How to prepare an amended tax return   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. How to prepare an amended tax return A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. How to prepare an amended tax return For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 IRB 609 available at www. How to prepare an amended tax return irs. How to prepare an amended tax return gov/irb/2010-17_irb/ar13. How to prepare an amended tax return html. How to prepare an amended tax return   You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. How to prepare an amended tax return This includes altering or striking out the preprinted language above the space provided for your signature. How to prepare an amended tax return   This penalty is added to any other penalty provided by law. How to prepare an amended tax return Fraud. How to prepare an amended tax return   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax. How to prepare an amended tax return Failure to supply taxpayer identification number. How to prepare an amended tax return   If you do not include your social security number (SSN) or individual taxpayer identification number (ITIN) or the SSN or ITIN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. How to prepare an amended tax return You will also be subject to a penalty of $50 if you do not give your SSN or ITIN to another person when it is required on a return, statement, or other document. How to prepare an amended tax return   For example, if you have a bank account that earns interest, you must give your SSN or ITIN to the bank. How to prepare an amended tax return The number must be shown on the Form 1099-INT or other statement the bank sends you. How to prepare an amended tax return If you do not give the bank your SSN or ITIN, you will be subject to the $50 penalty. How to prepare an amended tax return (You also may be subject to “backup” withholding of income tax. How to prepare an amended tax return )   You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect. How to prepare an amended tax return Criminal Penalties You may be subject to criminal prosecution (brought to trial) for actions such as: Tax evasion, Willful failure to file a return, supply information, or pay any tax due, Fraud and false statements, or Preparing and filing a fraudulent return. 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