Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Irs Amended Return Form

Free State And Federal Tax Filing OnlineHow Do I Amend My 2011 Tax ReturnHow Do I File A Amended Tax ReturnFederal Tax Extension FormInstructions For Form 1040ezHr Block For MilitaryIrs Gov FormsFiling 1040 OnlineHr Block ComTaxact2012Irs Free File Fillable FormsExtension FormMilitary Tax ServiceIrsgov ComH And R Block For MilitaryFile Tax Return For 2011Amended Tax Returns More:label_amended_20tax_20returns More:taxesWhere Can I File 2011 Taxes For FreeTax Planning Us 1040xIrs Amendments1040ez Calculator2010 Amended Tax ReturnFile State Tax2012 Irs Tax Forms 1040aHow To File An Amended Tax Return For 2012Irs Gov E File1040x Where To FileFree Online Tax PreparationHow Do I Amend My State Tax ReturnFree Tax AmendmentFree 2012 Tax SoftwareIncome Tax PreparationFree Turbotax For MilitaryTurbo Tax Free File2010 Tax Preparation SoftwareIrs1040ezformFree State Tax Filing Only State ReturnsFree 1040ez FormInstructions For Form 1040ezFillable State Tax Forms

Irs Amended Return Form

Irs amended return form 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. Irs amended return form Dispositions — mass asset accounts. Irs amended return form Early dispositions — 15-year real property. Irs amended return form Early dispositions — 18- and 19-year real property. Irs amended return form 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. Irs amended return form 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. Irs amended return form These rules are mandatory and generally apply to tangible property placed in service after 1980 and before 1987. Irs amended return form If you placed property in service during this period, you must continue to figure your depreciation under ACRS. Irs amended return form 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. Irs amended return form Listed property includes cars, other means of transportation, and certain computers. Irs amended return form Any additions or improvements placed in service after 1986, including any components of a building (such as plumbing, wiring, storm windows, etc. Irs amended return form ), are depreciated using MACRS, discussed in chapter 3 of Publication 946. Irs amended return form It does not matter that the underlying property is depreciated under ACRS or one of the other methods. Irs amended return form ACRS Defined ACRS consists of accelerated depreciation methods and an alternate ACRS method that could have been elected. Irs amended return form The alternate ACRS method used a recovery percentage based on a modified straight line method. Irs amended return form The law prescribes fixed percentages to be uses for each class of property. Irs amended return form Property depreciable under ACRS is called recovery property. Irs amended return form The recovery class of property determines the recovery period. Irs amended return form 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. Irs amended return form Under ACRS, the prescribed percentages are used to recover the unadjusted basis of recovery property. Irs amended return form To figure a depreciation deduction, you multiply the prescribed percentage for the recovery class by the unadjusted basis of the recovery property. Irs amended return form You must continue to figure your depreciation under ACRS for property placed in service after 1980 and before 1987. Irs amended return form For property you placed in service after 1986, you must use MACRS, discussed in chapter 3 of Publication 946. Irs amended return form What Can and Cannot Be Depreciated Under ACRS ACRS applies to most depreciable tangible property placed in service after 1980 and before 1987. Irs amended return form It includes new or used and real or personal property. Irs amended return form The property must be for use in a trade or business or for the production of income. Irs amended return form Property you acquired before 1981 or after 1986 is not ACRS recovery property. Irs amended return form For information on depreciating property acquired before 1981, see chapter 2. Irs amended return form For information on depreciating property acquired after 1986, see chapter 3 of Publication 946. Irs amended return form Recovery Property Recovery property under ACRS is tangible depreciable property placed in service after 1980 and before 1987. Irs amended return form 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. Irs amended return form Nonrecovery Property You cannot use ACRS for property you placed in service before 1981 or after 1986. Irs amended return form 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. Irs amended return form Intangible property. Irs amended return form   Intangible property is not depreciated under ACRS. Irs amended return form Property depreciated under methods not expressed in a term of years. Irs amended return form   Certain property depreciated under a method not expressed in a term of years is not depreciated under ACRS. Irs amended return form 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). Irs amended return form Public utility property. Irs amended return form   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. Irs amended return form Additions or improvements to ACRS property after 1986. Irs amended return form   Any additions or improvements placed in service after 1986, including any components of a building (plumbing, wiring, storm windows, etc. Irs amended return form ) are depreciated using MACRS, discussed in chapter 3 of Publication 946. Irs amended return form It does not matter that the underlying property is depreciated under ACRS or one of the other methods. Irs amended return form How To Figure the Deduction After you determine that your property can be depreciated under ACRS, you are ready to figure your deduction. Irs amended return form 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. Irs amended return form Unadjusted Basis To figure your ACRS deduction, you multiply the unadjusted basis in your recovery property by its applicable percentage for the year. Irs amended return form 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. Irs amended return form 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. Irs amended return form If you buy property, your unadjusted basis is usually its cost minus any amortized amount and minus any section 179 deduction elected. Irs amended return form 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. Irs amended return form See Publication 551. Irs amended return form Classes of Recovery Property All recovery property under ACRS is in one of the following classes. Irs amended return form The class for your property was determined when you began to depreciate it. Irs amended return form 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. Irs amended return form Race horses over 2 years old when placed in service are 3-year property. Irs amended return form Any other horses over 12 years old when you placed them in service are also included in the 3-year property class. Irs amended return form 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. Irs amended return form You cannot claim depreciation for this property after 1988. Irs amended return form 5-Year Property 5-year property includes computers, copiers, and equipment, such as office furniture and fixtures. Irs amended return form It also includes single purpose agricultural or horticultural structures and petroleum storage facilities (other than buildings and their structural components). Irs amended return form 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. Irs amended return form You cannot claim depreciation for this property after 1990. Irs amended return form 10-Year Property 10-year property includes certain real property such as theme-park structures and certain public utility property. Irs amended return form Manufactured homes (including mobile homes) and railroad tank cars are also 10-year property. Irs amended return form 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. Irs amended return form 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. Irs amended return form 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. Irs amended return form Example. Irs amended return form On April 21, 1986, you bought and placed in service a new mobile home for $26,000 to be used as rental property. Irs amended return form You paid $10,000 cash and signed a note for $16,000 giving you an unadjusted basis of $26,000. Irs amended return form 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. Irs amended return form The total unadjusted basis of your 10-year recovery property placed in service in 1986 was $37,500 ($26,000 + $11,500). Irs amended return form Your ACRS deduction was $3,000 (8% × $37,500). Irs amended return form In 1987, your ACRS deduction was $5,250 (14% × $37,500). Irs amended return form In 1988, your ACRS deduction was $4,500 (12% × $37,500). Irs amended return form In 1989, 1990, and 1991, your ACRS deduction was $3,750 (10% × $37,500). Irs amended return form In 1992, 1993, 1994, and 1995 your deduction for each year is $3,375 (9% × $37,500). Irs amended return form 15-Year Real Property 15-year real property is real property that is recovery property placed in service before March 16, 1984. Irs amended return form It includes all real property, such as buildings, other than that designated as 5-year or 10-year property. Irs amended return form 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. Irs amended return form You could group 15-year real property by month and year placed in service. Irs amended return form 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. Irs amended return form You use the percentages listed under that month for each year of the recovery period to determine your depreciation deduction each year. Irs amended return form Example. Irs amended return form On March 5, 1984, you placed an apartment building in service in your business. Irs amended return form It is 15-year real property. Irs amended return form After subtracting the value of the land, your unadjusted basis in the building is $250,000. Irs amended return form You use the calendar year as your tax year. Irs amended return form March is the third month of your tax year. Irs amended return form Your ACRS deduction for 1984 was $25,000 (10% × $250,000). Irs amended return form For 1985, the percentage for the third month of the second year of the recovery period is 11%. Irs amended return form Your deduction was $27,500 (11% × $250,000). Irs amended return form For the third, fourth, and fifth years of the recovery period (1986, 1987, and 1988), the percentages are 9%, 8%, and 7%. Irs amended return form For 1989 through 1992, the percentage for the third month is 6%. Irs amended return form Your deduction each year is $15,000 (6% × $250,000). Irs amended return form For 1993, 1994, and 1995, the percentage for the third month is 5%. Irs amended return form Your depreciation deduction is $12,500 (5% × $250,000) for 1993, 1994, and 1995. Irs amended return form 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. Irs amended return form Low-income rental housing for which a depreciation deduction for rehabilitation expenditures is allowed. Irs amended return form 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. Irs amended return form Housing financed or assisted by direct loan or insured under Title V of the Housing Act of 1949. Irs amended return form 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. Irs amended return form 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. Irs amended return form Use the percentages listed under that month for each year of the recovery period. Irs amended return form Table 2 shows percentages for low-income housing placed in service before May 9, 1985. Irs amended return form Table 3 shows percentages for low-income housing placed in service after May 8, 1985, and before 1987. Irs amended return form Example. Irs amended return form 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. Irs amended return form You use the calendar year as your tax year. Irs amended return form You use Table C–3 because the property was placed in service after May 8, 1985. Irs amended return form Your unadjusted basis for the property, not including the land, was $59,000. Irs amended return form Your deduction for 1986 through 2001 is shown in the following table. Irs amended return form Year Rate Deduction 1986 8. Irs amended return form 9% $5,251 1987 12. Irs amended return form 1% 7,139 1988 10. Irs amended return form 5% 6,195 1989 9. Irs amended return form 1% 5,369 1990 7. Irs amended return form 9% 4,661 1991 6. Irs amended return form 9% 4,071 1992 5. Irs amended return form 9% 3,481 1993 5. Irs amended return form 2% 3,068 1994 4. Irs amended return form 6% 2,714 1995 4. Irs amended return form 6% 2,714 1996 4. Irs amended return form 6% 2,714 1997 4. Irs amended return form 6% 2,714 1998 4. Irs amended return form 6% 2,714 1999 4. Irs amended return form 5% 2,655 2000 4. Irs amended return form 5% 2,655 2001 1. Irs amended return form 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. Irs amended return form It includes real property, such as buildings, other than that designated as 5-year, 10-year, 15-year real property, or low-income housing. Irs amended return form 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. Irs amended return form There are also tables for 18-year real property in the Appendix. Irs amended return form Table 4 shows the percentages for 18-year real property you placed in service after June 22, 1984, and before May 9, 1985. Irs amended return form Table 5 is for 18-year real property placed in service after March 15, 1984, and before June 23, 1984. Irs amended return form 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. Irs amended return form Use the percentages listed under that month for each year of the recovery period. Irs amended return form Example. Irs amended return form On April 28, 1985, you bought and placed in service a rental house. Irs amended return form The house, not including the land, cost $95,000. Irs amended return form This is your unadjusted basis for the house. Irs amended return form You use the calendar year as your tax year. Irs amended return form Because the house was placed in service after June 22, 1984, and before May 9, 1985, it is 18-year real property. Irs amended return form You use Table 4 to figure your deduction for the house. Irs amended return form April is the fourth month of your tax year. Irs amended return form Your deduction for 1985 through 2003 is shown in the following table. Irs amended return form Year Rate Deduction 1985 7. Irs amended return form 0% $6,650 1986 9. Irs amended return form 0% 8,550 1987 8. Irs amended return form 0% 7,600 1988 7. Irs amended return form 0% 6,650 1989 7. Irs amended return form 0% 6,650 1990 6. Irs amended return form 0% 5,700 1991 5. Irs amended return form 0% 4,750 1992 5. Irs amended return form 0% 4,750 1993 5. Irs amended return form 0% 4,750 1994 5. Irs amended return form 0% 4,750 1995 5. Irs amended return form 0% 4,750 1996 5. Irs amended return form 0% 4,750 1997 5. Irs amended return form 0% 4,750 1998 4. Irs amended return form 0% 3,800 1999 4. Irs amended return form 0% 3,800 2000 4. Irs amended return form 0% 3,800 2001 4. Irs amended return form 0% 3,800 2002 4. Irs amended return form 0% 3,800 2003 1. Irs amended return form 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. Irs amended return form 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. Irs amended return form 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. Irs amended return form Table 6 shows the percentages for 19-year real property. Irs amended return form You find the month in your tax year that you placed the property in service. Irs amended return form You use the percentages listed under that month for each year of the recovery period. Irs amended return form Recovery Periods Each item of recovery property is assigned to a class of property. Irs amended return form The classes of recovery property establish the recovery periods over which the unadjusted basis of items in a class is recovered. Irs amended return form 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. Irs amended return form This alternate ACRS method uses a recovery percentage based on a modified straight line method. Irs amended return form This alternate ACRS method generally uses percentages other than those from the tables. Irs amended return form If you elected the alternate ACRS method, you determine the recovery period by using the following schedule. Irs amended return form 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. Irs amended return form   The straight-line percentages for the alternate ACRS method are: Recovery Period Percentage 5 years 20. Irs amended return form 00% 10 years 10. Irs amended return form 00% 12 years 8. Irs amended return form 333% 15 years 6. Irs amended return form 667% 25 years 4. Irs amended return form 00% 35 years 2. Irs amended return form 857%   You apply the percentage to the unadjusted basis(defined earlier) of the property to figure your ACRS deduction. Irs amended return form There are tables for 18- and 19-year real property later in this publication in the Appendix. Irs amended return form For 15-year real property, see 15-year real property, later. Irs amended return form 3-, 5-, and 10-year property. Irs amended return form   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. Irs amended return form This applies throughout the recovery period you selected. Irs amended return form Half-year convention. Irs amended return form   If you elected the alternate method, only a half-year of depreciation was deducted for the year you placed the property in service. Irs amended return form This applied regardless of when in the tax year you placed the property in service. Irs amended return form For each of the remaining years in the recovery period, you take a full year's deduction. Irs amended return form 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. Irs amended return form Example. Irs amended return form You operate a small upholstery business. Irs amended return form 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. Irs amended return form You elected to use the alternate ACRS method. Irs amended return form You did not elect to take a section 179 deduction. Irs amended return form You decided to recover the cost of the truck, which is 3-year recovery property, over 5 years. Irs amended return form The saw is 5-year property, but you decided to recover its cost over 12 years. Irs amended return form For 1986, your ACRS deduction reflected the half-year convention. Irs amended return form In the first year, you deducted half of the amount determined for a full year. Irs amended return form 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. Irs amended return form 00     Electric saw   12 years straight line = 8. Irs amended return form 333% 8. Irs amended return form 333% ÷ $500 = $41. Irs amended return form 67 Half-year convention -½ of $41. Irs amended return form 67= 20. Irs amended return form 84 Total ACRS deduction for 1986 $1,320. Irs amended return form 84       You take a full year of depreciation for both the truck and the saw for the years 1987 through 1990. Irs amended return form 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. Irs amended return form 333% 8. Irs amended return form 333% ÷ $500 = $41. Irs amended return form 67 Total annual ACRS deduction for 1987 through 1990 $2,641. Irs amended return form 67       In 1991, you take a half-year of depreciation for the truck and a full year of depreciation for the saw. Irs amended return form 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. Irs amended return form 00     Electric saw   12 years straight line = 8. Irs amended return form 333% 8. Irs amended return form 333% ÷ $500 = $41. Irs amended return form 67 Total ACRS deduction for 1991 $1,341. Irs amended return form 67       The truck is fully depreciated after 1991. Irs amended return form You take a full year of depreciation for the saw for the years 1992 through 1997. Irs amended return form Your ACRS deduction for each of those years is as follows: Electric saw     12 years straight line = 8. Irs amended return form 333% 8. Irs amended return form 333% ÷ $500 = $41. Irs amended return form 67 Total annual ACRS deduction for 1992 through 1997 $41. Irs amended return form 67       You take a half-year of depreciation for the saw for 1998. Irs amended return form Your ACRS deduction for 1998 is as follows: Electric saw   12 years straight line = 8. Irs amended return form 333% 8. Irs amended return form 333% ÷ $500 = $41. Irs amended return form 67 Half-year convention -½ of $41. Irs amended return form 67= 20. Irs amended return form 84 Total ACRS deduction for 1998 $20. Irs amended return form 84       The saw is fully depreciated after 1998. Irs amended return form 15-year real property. Irs amended return form   Under ACRS, you could also elect to use the alternate ACRS method for 15-year real property. Irs amended return form 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. Irs amended return form If you selected a 15-year recovery period, you use the percentage (6. Irs amended return form 667%) from the schedule above. Irs amended return form You prorate this percentage for the number of months the property was in service in the first year. Irs amended return form If you selected a 35- or 45-year recovery period, you use either Table 11 or 15. Irs amended return form Alternate periods for 18-year real property. Irs amended return form   For 18-year real property, the alternate recovery periods are 18, 35, or 45 years. Irs amended return form The percentages for 18-year real property under the alternate method are in Tables 7, 8, 10, 11, 14, and 15 in the Appendix. Irs amended return form There are two tables for each alternate recovery period. Irs amended return form One table shows the percentage for property placed in service after June 22, 1984. Irs amended return form The other table has the percentages for property placed in service after March 15, 1984, and before June 23, 1984. Irs amended return form Alternate periods for 19-year real property. Irs amended return form   For 19-year real property, the alternate recovery periods are 19, 35, or 45 years. Irs amended return form If you selected a 19-year recovery period, use Table 9 to determine your deduction. Irs amended return form If you select a 35- or 45-year recovery period, use either Table 13 or 14. Irs amended return form Example. Irs amended return form You placed in service an apartment building on August 3, 1986. Irs amended return form The building is 19-year real property. Irs amended return form The sales contract allocated $300,000 to the building and $100,000 to the land. Irs amended return form You use the calendar year as your tax year. Irs amended return form You chose the alternate ACRS method over a recovery period of 35 years. Irs amended return form For 1986, you figure your ACRS deduction usingTable 13. Irs amended return form August is the eighth month of your tax year. Irs amended return form The percentage from Table 13 for the eighth month is 1. Irs amended return form 1%. Irs amended return form Your deduction was $3,300 ($300,000 ÷ 1. Irs amended return form 1%). Irs amended return form The deduction rate from ACRS Table 13 for years 2 through 20 is 2. Irs amended return form 9% so that your deduction in 1987 through 2005 is $8,700 ($300,000 ÷ 2. Irs amended return form 9%). Irs amended return form Alternate periods for low-income housing. Irs amended return form   For low-income housing, the alternate recovery periods are 15, 35, or 45 years. Irs amended return form If you selected a 15-year period for this property, use 6. Irs amended return form 667% as the percentage. Irs amended return form If you selected a 35- or 45-year period, use either Table 11, 12, or 15. Irs amended return form Election. Irs amended return form   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. Irs amended return form Revocation of election. Irs amended return form   Your election to use an alternate ACRS method, once made, can be changed only with the consent of the Commissioner. Irs amended return form The Commissioner grants consent only in extraordinary circumstances. Irs amended return form Any request for a revocation will be considered a request for a ruling. Irs amended return form 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. Irs amended return form Figure the amount of the ACRS deduction for a short tax year as follows: First, you figure the ACRS deduction for a full year. Irs amended return form You figure this by multiplying the unadjusted basis by the recovery percentage. Irs amended return form You then multiply the ACRS deduction determined for a full tax year by a fraction. Irs amended return form The numerator (top number) of the fraction is the number of months in the short tax year and the denominator (bottom number) is 12. Irs amended return form For example, a corporation placed in service in June 1986 an item of 3-year property with an unadjusted basis of $10,000. Irs amended return form 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. Irs amended return form The full year's ACRS deduction for this item is $2,500 ($10,000 ÷ 25%), the first year percentage from the 3-year table. Irs amended return form The ACRS deduction for the short tax year is $1,250 ($2,500 ÷ 6/12). Irs amended return form You use the full ACRS percentages during the remaining years of the recovery period. Irs amended return form For the first tax year after the recovery period, the unrecovered basis will be deductible. Irs amended return form Exception. Irs amended return form   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. Irs amended return form You compute the number of months using either a full month or mid-month convention. Irs amended return form This is true regardless of the number of months in the tax year and the recovery period and method used. Irs amended return form Dispositions A disposition is the permanent withdrawal of property from use in your trade or business or in the production of income. Irs amended return form You can make a withdrawal by sale, exchange, retirement, abandonment, or destruction. Irs amended return form You generally recognize gain or loss on the disposition of an asset by sale. Irs amended return form However, nonrecognition rules can allow you to postpone some gain. Irs amended return form See Publication 544. Irs amended return form If you physically abandon property, you can deduct as a loss the adjusted basis of the asset at the time of its abandonment. Irs amended return form 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. Irs amended return form Early dispositions. Irs amended return form   The disposal of an asset before the end of its specified recovery period, is referred to as an early disposition. Irs amended return form When an early disposition occurs, the depreciation deduction in the year of disposition depends on the class of property involved. Irs amended return form Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. Irs amended return form   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. Irs amended return form 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. Irs amended return form Dispositions — mass asset accounts. Irs amended return form   The law provides a special rule to avoid the calculation of gain on the disposition of assets from mass asset accounts. Irs amended return form 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. Irs amended return form Examples of mass assets include minor items of office, plant, and store furniture and fixtures. Irs amended return form   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. Irs amended return form You leave the unadjusted basis of the property in the account until recovered in future years. Irs amended return form If you did this, include the total proceeds realized from the disposition in income on the tax return for the year of disposition. Irs amended return form Early dispositions — 15-year real property. Irs amended return form   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. Irs amended return form You use a full-month convention. Irs amended return form 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. Irs amended return form This applies whether you use the regular ACRS method or elected the alternate ACRS method. Irs amended return form Example. Irs amended return form You purchased and placed in service a rental house on March 2, 1984, for $98,000 (not including the cost of land). Irs amended return form You file your return based on a calendar year. Irs amended return form Your rate from Table 1 for the third month is 10%. Irs amended return form Your ACRS deduction for 1984 was $9,800 ($98. Irs amended return form 000 ÷ 10%). Irs amended return form For 1985 through 1988, you figured your ACRS deductions using 11%, 9%, 8%, and 7% ÷ $98,000. Irs amended return form For 1989 through 1992, you figured your ACRS deductions using 6% for each year. Irs amended return form The deduction each year was $98,000 ÷ 6%. Irs amended return form For 1993 and 1994, the ACRS deduction is ($98,000 ÷ 5%) $4,900 for each year. Irs amended return form You sell the house on June 1, 1995. Irs amended return form You figure your ACRS deduction for 1995 for the full year and then prorate that amount for the months of use. Irs amended return form The full ACRS deduction for 1995 is $4,900 ($98,000 ÷ 5%). Irs amended return form You then prorate this amount to the 5 months in 1995 during which it was rented. Irs amended return form Your ACRS deduction for 1995 is $2,042 ($4,900 ÷ 5/12). Irs amended return form Early dispositions — 18- and 19-year real property. Irs amended return form   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. Irs amended return form For 18-year property placed in service before June 23, 1984, use a full-month convention on a disposition. Irs amended return form 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. Irs amended return form Under the mid-month convention,treat real property disposed of any time during a month as disposed of in the middle of that month. Irs amended return form Count the month of disposition as half a month of use. Irs amended return form Example. Irs amended return form You purchased and placed in service a rental house on July 2, 1984, for $100,000 (not including the cost of land). Irs amended return form You file your return based on a calendar year. Irs amended return form Your rate from Table 4 for the seventh month is 4%. Irs amended return form You figured your ACRS deduction for 1984 was $4,000 ($100,000 ÷ 4%). Irs amended return form In 1985 through 1994, your ACRS deductions were 9%, 8%, 8%, 7%, 6%, 6%, 5%, 5%, and 5% ÷ $100,000. Irs amended return form You sell the house on September 24, 1995. Irs amended return form Figure your ACRS deduction for 1995 for the months of use. Irs amended return form The full ACRS deduction for 1995 is $5,000 ($100,000 ÷ 5%). Irs amended return form Prorate this amount for the 8. Irs amended return form 5 months in 1995 that you held the property. Irs amended return form Under the mid-month convention, you count September as half a month. Irs amended return form Your ACRS deduction for 1995 is $3,542 ($5,000 ÷ 8. Irs amended return form 5/12). Irs amended return form Depreciation Recapture If you dispose of property depreciated under ACRS that is section 1245 recovery property, you will generally recognize gain or loss. Irs amended return form Gain recognized on a disposition is ordinary income to the extent of prior depreciation deductions taken. Irs amended return form This recapture rule applies to all personal property in the 3-year, 5-year, and 10-year classes. Irs amended return form You recapture gain on manufactured homes and theme park structures in the 10-year class as section 1245 property. Irs amended return form Section 1245 property generally includes all personal property. Irs amended return form See Section 1245 property in chapter 4 of Publication 544 for more information. Irs amended return form You treat dispositions of section 1250 real property on which you have a gain as section 1245 recovery property. Irs amended return form You recognize gain on this property as ordinary income to the extent of prior depreciation deductions taken. Irs amended return form Section 1250 property includes most real property. Irs amended return form See Section 1250 property in chapter 4 of Publication 544 for more information. Irs amended return form 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. Irs amended return form Any 15-, 18-, or 19-year real property that you elected to depreciate using the alternate ACRS method. Irs amended return form Any 15-, 18-, or 19-year real property that is subsidized low-income housing. Irs amended return form For these recapture rules, you treat the section 179 deduction and 50% of the investment credit that reduced your basis as depreciation. Irs amended return form See Publication 544 for further discussion of dispositions of section 1245 and 1250 property. Irs amended return form Prev  Up  Next   Home   More Online Publications
Español

Oops! We can't find the file

Official information and services from the U.S. government

We're sorry, but the page you're looking for might have been removed, had its name changed, or is temporarily unavailable.

What should you do?

  • If you typed the page url, check the spelling.
  • Go to our home page and browse through our topics for the information you want.
  • Go to our site index, and look through the alphabetical listing for links to the page you want.
  • If you need help finding government information, please contact us.
  • Use our search engine to find the information you want.

The Irs Amended Return Form

Irs amended return form 10. Irs amended return form   Self-Employment (SE) Tax Table of Contents Who Must Pay SE Tax?Special Rules and Exceptions Figuring Earnings Subject to SE Tax Farm Optional Method Using Both Optional Methods Reporting Self-Employment Tax The SE tax rules apply no matter how old you are and even if you are already receiving social security and Medicare benefits. Irs amended return form Who Must Pay SE Tax? Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. Irs amended return form Use Schedule SE to figure net earnings from self-employment. Irs amended return form Sole proprietor or independent contractor. Irs amended return form   If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ (Form 1040) to figure your earnings subject to SE tax. Irs amended return form SE tax rate. Irs amended return form    For 2013, the SE tax rate on net earnings is 15. Irs amended return form 3% (12. Irs amended return form 4% social security tax plus 2. Irs amended return form 9% Medicare tax). Irs amended return form Maximum earnings subject to self-employment tax. Irs amended return form    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. Irs amended return form 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. Irs amended return form   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. Irs amended return form 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. Irs amended return form   If your wages and tips are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. Irs amended return form 4% social security part of the SE tax on any of your net earnings. Irs amended return form However, you must pay the 2. Irs amended return form 9% Medicare part of the SE tax on all your net earnings. Irs amended return form Special Rules and Exceptions Aliens. Irs amended return form   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. Irs amended return form S. Irs amended return form citizens. Irs amended return form Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. Irs amended return form S. Irs amended return form social security system. Irs amended return form However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. Irs amended return form S. Irs amended return form residents for self-employment tax purposes. Irs amended return form For more information on aliens, see Publication 519, U. Irs amended return form S. Irs amended return form Tax Guide for Aliens. Irs amended return form Child employed by parent. Irs amended return form   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. Irs amended return form Church employee. Irs amended return form    If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108. Irs amended return form 28 or more in wages from the church or organization. Irs amended return form For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Irs amended return form Fishing crew member. Irs amended return form   If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. Irs amended return form You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. Irs amended return form The pay is not more than $100 per trip. Irs amended return form The pay is received only if there is a minimum catch. Irs amended return form The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. Irs amended return form You get a share of the catch or a share of the proceeds from the sale of the catch. Irs amended return form Your share depends on the amount of the catch. Irs amended return form The boat's operating crew normally numbers fewer than 10 individuals. Irs amended return form (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10. Irs amended return form ) Notary public. Irs amended return form   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ but are not subject to self-employment tax (see the Instructions for Schedule SE (Form 1040)). Irs amended return form State or local government employee. Irs amended return form   You are subject to SE tax if you are an employee of a state or local government, are paid solely on a fee basis, and your services are not covered under a federal-state social security agreement. Irs amended return form Foreign government or international organization employee. Irs amended return form   You are subject to SE tax if both the following conditions are true. Irs amended return form You are a U. Irs amended return form S. Irs amended return form citizen employed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Virgin Islands by: A foreign government, A wholly-owned agency of a foreign government, or An international organization. Irs amended return form Your employer is not required to withhold social security and Medicare taxes from your wages. Irs amended return form U. Irs amended return form S. Irs amended return form citizen or resident alien residing abroad. Irs amended return form    If you are a self-employed U. Irs amended return form S. Irs amended return form citizen or resident alien living outside the United States, in most cases you must pay SE tax. Irs amended return form Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. Irs amended return form Exception. Irs amended return form    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. Irs amended return form Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. Irs amended return form The country to which you must pay the tax will issue a certificate which serves as proof of exemption from social security tax in the other country. Irs amended return form   For more information, see the Instructions for Schedule SE (Form 1040). Irs amended return form More Than One Business If you have earnings subject to SE tax from more than one trade, business, or profession, you must combine the net profit (or loss) from each to determine your total earnings subject to SE tax. Irs amended return form A loss from one business reduces your profit from another business. Irs amended return form Community Property Income If any of the income from a trade or business, other than a partnership, is community property income under state law, it is included in the earnings subject to SE tax of the spouse carrying on the trade or business. Irs amended return form Gain or Loss Do not include in earnings subject to SE tax a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. Irs amended return form It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. Irs amended return form Lost Income Payments If you are self-employed and reduce or stop your business activities, any payment you receive from insurance or other sources for the lost business income is included in earnings subject to SE tax. Irs amended return form If you are not working when you receive the payment, it still relates to your business and is included in earnings subject to SE tax, even though your business is temporarily inactive. Irs amended return form Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. Irs amended return form The regular method. Irs amended return form The nonfarm optional method. Irs amended return form The farm optional method. Irs amended return form You must use the regular method unless you are eligible to use one or both of the optional methods. Irs amended return form Why use an optional method?    You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. Irs amended return form You want to receive credit for social security benefit coverage. Irs amended return form You incurred child or dependent care expenses for which you could claim a credit. Irs amended return form (An optional method may increase your earned income, which could increase your credit. Irs amended return form ) You are entitled to the earned income credit. Irs amended return form (An optional method may increase your earned income, which could increase your credit. Irs amended return form ) You are entitled to the additional child tax credit. Irs amended return form (An optional method may increase your earned income, which could increase your credit. Irs amended return form ) Effects of using an optional method. Irs amended return form   Using an optional method could increase your SE tax. Irs amended return form Paying more SE tax could result in your getting higher benefits when you retire. Irs amended return form   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller tax or no tax using the regular method. Irs amended return form   The optional methods may be used only to figure your SE tax. Irs amended return form To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. Irs amended return form Regular Method Multiply your total earnings subject to SE tax by 92. Irs amended return form 35% (. Irs amended return form 9235) to get your net earnings under the regular method. Irs amended return form See Short Schedule SE, line 4, or Long Schedule SE, line 4a. Irs amended return form Net earnings figured using the regular method are also called actual net earnings. Irs amended return form Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. Irs amended return form You may use this method if you meet all the following tests. Irs amended return form You are self-employed on a regular basis. Irs amended return form This means that your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. Irs amended return form The net earnings can be from either farm or nonfarm earnings or both. Irs amended return form You have used this method less than 5 years. Irs amended return form (There is a 5-year lifetime limit. Irs amended return form ) The years do not have to be one after another. Irs amended return form Your net nonfarm profits were: Less than $5,024, and Less than 72. Irs amended return form 189% of your gross nonfarm income. Irs amended return form Net nonfarm profits. Irs amended return form   Net nonfarm profit generally is the total of the amounts from: Line 31, Schedule C (Form 1040), Line 3, Schedule C-EZ (Form 1040), Box 14, code A, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J1, Schedule K-1 (Form 1065-B). Irs amended return form   However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. Irs amended return form Gross nonfarm income. Irs amended return form   Your gross nonfarm income generally is the total of the amounts from: Line 7, Schedule C (Form 1040), Line 1, Schedule C-EZ (Form 1040), Box 14, code C, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J2, Schedule K-1 (Form 1065-B). Irs amended return form Figuring Nonfarm Net Earnings If you meet the three tests explained earlier, use the following table to figure your net earnings from self-employment under the nonfarm optional method. Irs amended return form Table 10-1. Irs amended return form Figuring Nonfarm Net Earnings IF your gross nonfarm income is. Irs amended return form . Irs amended return form . Irs amended return form THEN your net earnings are equal to. Irs amended return form . Irs amended return form . Irs amended return form $6,960 or less Two-thirds of your gross nonfarm income. Irs amended return form More than $6,960 $4,640 Actual net earnings. Irs amended return form   Your actual net earnings are 92. Irs amended return form 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. Irs amended return form 35% (. Irs amended return form 9235) to get actual net earnings). Irs amended return form Actual net earnings are equivalent to net earnings figured using the regular method. Irs amended return form Optional net earnings less than actual net earnings. Irs amended return form   You cannot use this method to report an amount less than your actual net earnings from self-employment. Irs amended return form Gross nonfarm income of $6,960 or less. Irs amended return form   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. Irs amended return form Example 1. Irs amended return form Net nonfarm profit less than $5,024 and less than 72. Irs amended return form 189% of gross nonfarm income. Irs amended return form Ann Green runs a craft business. Irs amended return form Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. Irs amended return form She meets the test for being self-employed on a regular basis. Irs amended return form She has used the nonfarm optional method less than 5 years. Irs amended return form Her gross income and net profit in 2013 are as follows: Gross nonfarm income $5,400 Net nonfarm profit $1,200 Ann's actual net earnings for 2013 are $1,108 ($1,200 × . Irs amended return form 9235). Irs amended return form Because her net profit is less than $5,024 and less than 72. Irs amended return form 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). Irs amended return form Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. Irs amended return form Example 2. Irs amended return form Net nonfarm profit less than $5,024 but not less than 72. Irs amended return form 189% of gross nonfarm income. Irs amended return form Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. Irs amended return form She must use the regular method to figure her net earnings. Irs amended return form She cannot use the nonfarm optional method because her net profit is not less than 72. Irs amended return form 189% of her gross income. Irs amended return form Example 3. Irs amended return form Net loss from a nonfarm business. Irs amended return form Assume that in Example 1 Ann has a net loss of $700. Irs amended return form She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. Irs amended return form Example 4. Irs amended return form Nonfarm net earnings less than $400. Irs amended return form Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. Irs amended return form In this situation, she would not pay any SE tax under either the regular method or the nonfarm optional method because her net earnings under both methods are less than $400. Irs amended return form Gross nonfarm income of more than $6,960. Irs amended return form   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. Irs amended return form Example 1. Irs amended return form Net nonfarm profit less than $5,024 and less than 72. Irs amended return form 189% of gross nonfarm income. Irs amended return form John White runs an appliance repair shop. Irs amended return form His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. Irs amended return form He meets the test for being self-employed on a regular basis. Irs amended return form He has used the nonfarm optional method less than 5 years. Irs amended return form His gross income and net profit in 2013 are as follows: Gross nonfarm income $12,000 Net nonfarm profit $1,200 John's actual net earnings for 2013 are $1,108 ($1,200 × . Irs amended return form 9235). Irs amended return form Because his net profit is less than $5,024 and less than 72. Irs amended return form 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. Irs amended return form Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. Irs amended return form Example 2. Irs amended return form Net nonfarm profit not less than $5,024. Irs amended return form Assume that in Example 1 John's net profit is $5,400. Irs amended return form He must use the regular method. Irs amended return form He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. Irs amended return form Example 3. Irs amended return form Net loss from a nonfarm business. Irs amended return form Assume that in Example 1 John has a net loss of $700. Irs amended return form He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. Irs amended return form Farm Optional Method Use the farm optional method only for earnings from a farming business. Irs amended return form See Publication 225 for information about this method. Irs amended return form Using Both Optional Methods If you have both farm and nonfarm earnings, you may be able to use both optional methods to determine your net earnings from self-employment. Irs amended return form To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. Irs amended return form Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. Irs amended return form Add the net earnings figured under each method to arrive at your total net earnings from self-employment. Irs amended return form You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. Irs amended return form If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. Irs amended return form Example. Irs amended return form You are a self-employed farmer. Irs amended return form You also operate a retail grocery store. Irs amended return form Your gross income, actual net earnings from self-employment, and optional farm and optional nonfarm net earnings from self-employment are shown in Table 10-2. Irs amended return form Table 10-2. Irs amended return form Example—Farm and Nonfarm Earnings Income and Earnings Farm Nonfarm Gross income $3,000 $6,000 Actual net earnings $900 $500 Optional net earnings (2/3 of gross income) $2,000 $4,000 Table 10-3 shows four methods or combinations of methods you can use to figure net earnings from self-employment using the farm and nonfarm gross income and actual net earnings shown in Table 10-2. Irs amended return form Method 1. Irs amended return form Using the regular method for both farm and nonfarm income. Irs amended return form Method 2. Irs amended return form Using the optional method for farm income and the regular method for nonfarm income. Irs amended return form Method 3. Irs amended return form Using the regular method for farm income and the optional method for nonfarm income. Irs amended return form Method 4. Irs amended return form Using the optional method for both farm and nonfarm income. Irs amended return form Note. Irs amended return form Actual net earnings is the same as net earnings figured using the regular method. Irs amended return form Table 10-3. Irs amended return form Example—Net Earnings Net Earnings 1 2 3 4 Actual  farm $ 900   $ 900   Optional  farm   $ 2,000   $ 2,000 Actual nonfarm $ 500 $ 500     Optional nonfarm     $4,000 $4,000 Amount you can report: $1,400 $2,500 $4,900 $4,640* *Limited to $4,640 because you used both optional methods. Irs amended return form Fiscal Year Filer If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. Irs amended return form Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. Irs amended return form Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. Irs amended return form Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. Irs amended return form Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. Irs amended return form However, certain taxpayers must use Section B—Long Schedule SE. Irs amended return form If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. Irs amended return form Joint return. Irs amended return form   Even if you file a joint return, you cannot file a joint Schedule SE. Irs amended return form This is true whether one spouse or both spouses have earnings subject to SE tax. Irs amended return form If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. Irs amended return form However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. Irs amended return form Attach both schedules to the joint return. Irs amended return form More than one business. Irs amended return form   If you have more than one trade or business, you must combine the net profit (or loss) from each business to figure your SE tax. Irs amended return form A loss from one business will reduce your profit from another business. Irs amended return form File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. Irs amended return form Example. Irs amended return form You are the sole proprietor of two separate businesses. Irs amended return form You operate a restaurant that made a net profit of $25,000. Irs amended return form You also have a cabinetmaking business that had a net loss of $500. Irs amended return form You must file a Schedule C for the restaurant showing your net profit of $25,000 and another Schedule C for the cabinetmaking business showing your net loss of $500. Irs amended return form You file Schedule SE showing total earnings subject to SE tax of $24,500. Irs amended return form Prev  Up  Next   Home   More Online Publications