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Irs Gov Free File Federal State Taxes

Irs gov free file federal state taxes Publication 908 - Main Content Table of Contents Bankruptcy Code Tax Compliance RequirementsTax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases Tax Returns Due After the Bankruptcy Filing Individuals in Chapter 12 or 13 Individuals in Chapter 7 or 11Debtor's Election To End Tax Year – Form 1040 Taxes and the Bankruptcy Estate Bankruptcy Estate – Income, Deductions, and Credits Tax Reporting – Chapter 11 Cases Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Tax Return Example – Form 1041 Partnerships and CorporationsFiling Requirements Partnerships Corporations Receiverships Determination of TaxPrompt Determination Requests Court Jurisdiction Over Tax MattersBankruptcy Court Tax Court Federal Tax ClaimsUnsecured Tax Claims Discharge of Unpaid Tax Debt CancellationExclusions Reduction of Tax Attributes Partnerships Corporations Tax Attribute Reduction Example How To Get Tax HelpTaxpayer Advocacy Panel (TAP). Irs gov free file federal state taxes Low Income Taxpayer Clinics (LITCs). Irs gov free file federal state taxes Bankruptcy Code Tax Compliance Requirements Tax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases The Bankruptcy Code requires chapter 13 debtors to file all required tax returns for tax periods ending within 4 years of the debtor's bankruptcy filing. Irs gov free file federal state taxes All such federal tax returns must be filed with the IRS before the date first set for the first meeting of creditors. Irs gov free file federal state taxes The debtor may request the trustee to hold the meeting open for an additional 120 days to enable the debtor to file the returns (or until the day the returns are due under an automatic IRS extension, if later). Irs gov free file federal state taxes After notice and hearing, the bankruptcy court may extend the period for another 30 days. Irs gov free file federal state taxes Failure to timely file the returns can prevent confirmation of a chapter 13 plan and result in either dismissal of the chapter 13 case or conversion to a chapter 7 case. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes Individual debtors should use their home address when filing Form 1040 with the IRS. Irs gov free file federal state taxes Returns should not be filed “in care of” the trustee's address. Irs gov free file federal state taxes Ordering tax transcripts and copies of returns. Irs gov free file federal state taxes   Trustees may require the debtor to submit copies or transcripts of the debtor's returns as proof of filing. Irs gov free file federal state taxes The debtor can request free transcripts of the debtor's income tax returns by filing Form 4506-T, Request for Transcript of Tax Return, with the IRS or by placing a request on the IRS's free Automated Delivery Service (ADS), available by calling 1-800-829-1040. Irs gov free file federal state taxes If requested through ADS, the transcript will be mailed to the debtor's most current address according to the IRS's records. Irs gov free file federal state taxes Transcripts requested using Form 4506-T may be mailed to any address, including to the attention of the trustee in the debtor's bankruptcy case. Irs gov free file federal state taxes Transcripts are normally mailed within 10 to 15 days of receipt of the request by the IRS. Irs gov free file federal state taxes A transcript contains most of the information on the debtor's filed return, but it is not a copy of the return. Irs gov free file federal state taxes To request a copy of the debtor's filed return, file Form 4506, Request for Copy of Tax Return. Irs gov free file federal state taxes It may take up to 60 days for the IRS to provide the copies after receipt of the debtor's request, and there is a fee of $57. Irs gov free file federal state taxes 00 per tax return for copies of the returns. Irs gov free file federal state taxes Tax Returns Due After the Bankruptcy Filing For debtors filing bankruptcy under all chapters (chapters 7, 11, 12, or 13), the Bankruptcy Code provides that if the debtor does not file a tax return that becomes due after the commencement of the bankruptcy case, or obtain an extension for filing the return before the due date, the taxing authority may request that the bankruptcy court either dismiss the case or convert the case to a case under another chapter of the Bankruptcy Code. Irs gov free file federal state taxes If the debtor does not file the required return or obtain an extension within 90 days after the request is made, the bankruptcy court must dismiss or convert the case. Irs gov free file federal state taxes Tax returns and payment of taxes in chapter 11 cases. Irs gov free file federal state taxes   The Bankruptcy Code provides that a chapter 11 debtor's failure to timely file tax returns and pay taxes owed after the date of the “order for relief” (the bankruptcy petition date in voluntary cases) is cause for dismissal of the chapter 11 case, conversion to a chapter 7 case, or appointment of a chapter 11 trustee. Irs gov free file federal state taxes Disclosure of debtor's return information to trustee. Irs gov free file federal state taxes   In bankruptcy cases filed under chapter 7 or 11 by individuals, the debtor's income tax returns for the year the bankruptcy case begins and for earlier years are, upon written request, open to inspection by or disclosure to the trustee. Irs gov free file federal state taxes If the bankruptcy case was not voluntary, disclosure cannot be made before the bankruptcy court has entered an order for relief, unless the court rules that the disclosure is needed for determining whether relief should be ordered. Irs gov free file federal state taxes    In bankruptcy cases other than those of individuals filing under chapter 7 or 11, the debtor's income tax returns for the current and prior years are, upon written request, open to inspection by or disclosure to the trustee, but only if the IRS finds that the trustee has a material interest that will be affected by information on the return. Irs gov free file federal state taxes Material interest is generally defined as a financial or monetary interest. Irs gov free file federal state taxes Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. Irs gov free file federal state taxes   However, the U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Trustee (an officer of the Department of Justice, responsible for maintaining and supervising a panel of private trustees for chapter 7 bankruptcy cases) and the standing chapter 13 trustee (the administrator of chapter 13 cases in a specific geographic region) generally do not have a material interest in the debtor’s return or return information. Irs gov free file federal state taxes Disclosure of bankruptcy estate's return information to debtor. Irs gov free file federal state taxes    The bankruptcy estate's tax return(s) are open, upon written request, to inspection by or disclosure to the individual debtor in a chapter 7 or 11 bankruptcy. Irs gov free file federal state taxes Disclosure of the estate's return to the debtor may be necessary to enable the debtor to determine the amount and nature of the tax attributes, if any, that the debtor assumes when the bankruptcy estate terminates. Irs gov free file federal state taxes Individuals in Chapter 12 or 13 Only individuals may file a chapter 13 bankruptcy. Irs gov free file federal state taxes Chapter 13 relief is not available to corporations or partnerships. Irs gov free file federal state taxes The bankruptcy estate is not treated as a separate entity for tax purposes when an individual files a petition under chapter 12 (Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income) or 13 (Adjustment of Debts of an Individual with Regular Income) of the Bankruptcy Code. Irs gov free file federal state taxes In these cases the individual continues to file the same federal income tax returns that were filed prior to the bankruptcy petition, Form 1040, U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Individual Income Tax Return. Irs gov free file federal state taxes On the debtor's individual tax return, Form 1040, report all income received during the entire year and deduct all allowable expenses. Irs gov free file federal state taxes Do not include in income the amount from any debt canceled due to the debtor's bankruptcy. Irs gov free file federal state taxes To the extent the debtor has any losses, credits, or basis in property that were previously reduced as a result of canceled debt, these reductions must be included on the debtor's return. Irs gov free file federal state taxes See Debt Cancellation, later. Irs gov free file federal state taxes Interest on trust accounts in chapter 13 cases. Irs gov free file federal state taxes   In chapter 13 proceedings, do not include interest earned on amounts held by the trustee in trust accounts as income on the debtor's return. Irs gov free file federal state taxes This interest is not available to either the debtor or creditors, it is available only to the trustee for use by the U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Trustee system. Irs gov free file federal state taxes The interest is also not taxable to the trustee as income. Irs gov free file federal state taxes Individuals in Chapter 7 or 11 When an individual debtor files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code, the bankruptcy estate is treated as a new taxable entity, separate from the individual taxpayer. Irs gov free file federal state taxes The bankruptcy estate in a chapter 7 case is represented by a trustee. Irs gov free file federal state taxes The trustee is appointed to administer the estate and liquidate any nonexempt assets. Irs gov free file federal state taxes In chapter 11 cases, the debtor often remains in control of the assets as a “debtor-in-possession” and acts as the bankruptcy trustee. Irs gov free file federal state taxes However, the bankruptcy court, for cause, may appoint a trustee if such appointment is in the best interests of the creditors and the estate. Irs gov free file federal state taxes During the chapter 7 or 11 bankruptcy, the debtor continues to file an individual tax return on Form 1040. Irs gov free file federal state taxes The bankruptcy trustee files a Form 1041 for the bankruptcy estate. Irs gov free file federal state taxes However, when a debtor in a chapter 11 bankruptcy case remains a debtor-in-possession, he or she must file both a Form 1040 individual return and a Form 1041 estate return for the bankruptcy estate (if return filing requirements are met). Irs gov free file federal state taxes Although a husband and wife may file a joint bankruptcy petition whose bankruptcy estates are jointly administered, the estates are be treated as two separate entities for tax purposes. Irs gov free file federal state taxes Two separate bankruptcy estate income tax returns must be filed (if each spouse separately meets the filing requirements). Irs gov free file federal state taxes For information about determining the tax due and paying tax for a chapter 7 or 11 bankruptcy estate, see Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. Irs gov free file federal state taxes Debtor's Election To End Tax Year – Form 1040 Short tax years. Irs gov free file federal state taxes   An individual debtor in a chapter 7 or 11 case may elect to close the debtor's tax year for the year in which the bankruptcy petition is filed, as of the day before the date on which the bankruptcy case commences. Irs gov free file federal state taxes If the debtor makes this election, the debtor's tax year is divided into 2 short tax years of less than 12 months each. Irs gov free file federal state taxes The first tax year ends on the day before the commencement date and the second tax year begins on the commencement date. Irs gov free file federal state taxes   If the election is made, the debtor's federal income tax liability for the first short tax year becomes an allowable claim against the bankruptcy estate arising before the bankruptcy filing. Irs gov free file federal state taxes Also, the tax liability for the first short tax year is not subject to discharge under the Bankruptcy Code. Irs gov free file federal state taxes    If the debtor does not make an election to end the tax year, the commencement of the bankruptcy case does not affect the debtor's tax year. Irs gov free file federal state taxes Also, no part of the debtor's income tax liability for the year in which the bankruptcy case commences can be collected from the bankruptcy estate. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The debtor cannot make a short tax year election if no assets, other than exempt property, are in the bankruptcy estate. Irs gov free file federal state taxes Making the Election - Filing Requirements First short tax year. Irs gov free file federal state taxes   The debtor can elect to end the debtor's tax year by filing a return on Form 1040 for the first short tax year. Irs gov free file federal state taxes The return must be filed on or before the 15th day of the fourth full month after the end of that first tax year. Irs gov free file federal state taxes Second short tax year. Irs gov free file federal state taxes   If the debtor elects to end the tax year on the day before filing the bankruptcy case, the debtor must file the return for the first short tax year in the manner discussed above. Irs gov free file federal state taxes   If the debtor makes this election, the debtor must also file a separate Form 1040 for the second short tax year by the regular due date. Irs gov free file federal state taxes To avoid delays in processing the return, write “Second Short Year Return After Section 1398 Election” at the top of the return. Irs gov free file federal state taxes Example. Irs gov free file federal state taxes Jane Doe, an individual calendar year taxpayer, filed a bankruptcy petition under chapter 7 or 11 on May 8, 2012. Irs gov free file federal state taxes If Jane elected to close her tax year at the commencement of her case, Jane's first short year for 2012 runs from January 1 through May 7, 2012. Irs gov free file federal state taxes Jane's second short year runs from May 8, 2012, through December 31, 2012. Irs gov free file federal state taxes To have a timely filed election for the first short year, Jane must file Form 1040 (or an extension of time to file) for the period January 1 through May 7 by September 15. Irs gov free file federal state taxes To avoid delays in processing the return, write “Section 1398 Election” at the top of the return. Irs gov free file federal state taxes The debtor may also make the election by attaching a statement to Form 4868, Automatic Extension of Time to File an U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Individual Tax Return. Irs gov free file federal state taxes The statement must state that the debtor elects under IRC section 1398(d)(2) to close the debtor's tax year on the day before filing the bankruptcy case. Irs gov free file federal state taxes The debtor must file Form 4868 by the due date of the return for the first short tax year. Irs gov free file federal state taxes The debtor's spouse may also elect to close his or her tax year, see Election by debtor's spouse, below. Irs gov free file federal state taxes Election by debtor's spouse. Irs gov free file federal state taxes   If the debtor is married, the debtor's spouse may join in the election to end the tax year. Irs gov free file federal state taxes If the debtor and spouse make a joint election, the debtor must file a joint return for the first short tax year. Irs gov free file federal state taxes The debtor must elect by the due date for filing the return for the first short tax year. Irs gov free file federal state taxes Once the election is made, it cannot be revoked for the first short tax year. Irs gov free file federal state taxes However, the election does not prevent the debtor and the spouse from filing separate returns for the second short tax year. Irs gov free file federal state taxes Later bankruptcy of spouse. Irs gov free file federal state taxes    If the debtor's spouse files for bankruptcy later in the same year, he or she may also choose to end his or her tax year, regardless of whether he or she joined in the election to end the debtor's tax year. Irs gov free file federal state taxes   As each spouse has a separate bankruptcy, one or both of them may have 3 short tax years in the same calendar year. Irs gov free file federal state taxes If the debtor's spouse joined the debtor's election or if the debtor had not made the election to end the tax year, the debtor can join in the spouse's election. Irs gov free file federal state taxes However, if the debtor made an election and the spouse did not join that election, the debtor cannot then join the spouse's later election. Irs gov free file federal state taxes The debtor and the spouse are precluded from this election because they have different tax years. Irs gov free file federal state taxes This results because the debtor does not have a tax year ending the day before the spouse's filing for bankruptcy, and the debtor cannot file a joint return for a year ending on the day before the spouse's filing of bankruptcy. Irs gov free file federal state taxes Example 1. Irs gov free file federal state taxes Paul and Mary Harris are calendar-year taxpayers. Irs gov free file federal state taxes Paul's voluntary chapter 7 bankruptcy case begins on March 4. Irs gov free file federal state taxes If Paul does not make an election, his tax year does not end on March 3. Irs gov free file federal state taxes If he makes an election, Paul's first tax year is January 1–March 3, and his second tax year begins on March 4. Irs gov free file federal state taxes Mary could join in Paul's election as long as they file a joint return for the tax year January 1–March 3. Irs gov free file federal state taxes They must make the election by July 15, the due date for filing the joint return. Irs gov free file federal state taxes Example 2. Irs gov free file federal state taxes Fred and Ethel Barnes are calendar-year taxpayers. Irs gov free file federal state taxes Fred's voluntary chapter 7 bankruptcy case begins on May 6, and Ethel's bankruptcy case begins on November 1 of the same year. Irs gov free file federal state taxes Ethel could elect to end her tax year on October 31. Irs gov free file federal state taxes If Fred did not elect to end his tax year on May 5, or if he elected to do so but Ethel had not joined in his election, Ethel would have 2 tax years in the same calendar year if she decided to close her tax year. Irs gov free file federal state taxes Her first tax year is January 1–October 31, and her second year is November 1–December 31. Irs gov free file federal state taxes If Fred did not end his tax year as of May 5, he could join in Ethel's election to close her tax year on October 31, but only if they file a joint return for the tax year January 1–October 31. Irs gov free file federal state taxes If Fred elected to end his tax year on May 5, but Ethel did not join in Fred's election, Fred cannot join in Ethel's election to end her tax year on October 31. Irs gov free file federal state taxes Fred and Ethel cannot file a joint return for that short tax year because their tax years preceding October 31 were not the same. Irs gov free file federal state taxes Example 3. Irs gov free file federal state taxes Jack and Karen Thomas are calendar-year taxpayers. Irs gov free file federal state taxes Karen's voluntary chapter 7 bankruptcy case began on April 10, and Jack's voluntary chapter 7 bankruptcy case began on October 3 of the same year. Irs gov free file federal state taxes Karen elected to close her tax year on April 9 and Jack joins in Karen's election. Irs gov free file federal state taxes Under these facts, Jack would have 3 tax years for the same calendar year if he makes the election relating to his own bankruptcy case. Irs gov free file federal state taxes The first tax year would be January 1–April 9; the second, April 10–October 2; and the third, October 3–December 31. Irs gov free file federal state taxes Karen may join in Jack's election if they file a joint return for the second short tax year (April 10–October 2). Irs gov free file federal state taxes If Karen does join in, she would have the same 3 short tax years as Jack. Irs gov free file federal state taxes Also, if Karen joins in Jack's election, they may file a joint return for the third tax year (October 3–December 31), but they are not required to do so. Irs gov free file federal state taxes Annualizing taxable income. Irs gov free file federal state taxes   If the debtor elects to close the tax year, the debtor must annualize taxable income for each short tax year in the same manner a change in annual accounting period is calculated. Irs gov free file federal state taxes See Short Tax Year in Publication 538, for information on how to annualize the debtor's income and to figure the tax for the short tax year. Irs gov free file federal state taxes Dismissal of bankruptcy case. Irs gov free file federal state taxes   If the bankruptcy court later dismisses an individual chapter 7 or 11 case, the bankruptcy estate is no longer treated as a separate taxable entity. Irs gov free file federal state taxes It is as if no bankruptcy estate was created for tax purposes. Irs gov free file federal state taxes In this situation, the debtor must file amended tax returns on Form 1040X, to replace all full or short year individual returns (Form 1040) and bankruptcy estate returns (Form 1041) filed as a result of the bankruptcy case. Irs gov free file federal state taxes Income, deductions, and credits previously reported by the bankruptcy estate must be reported on the debtor's amended returns. Irs gov free file federal state taxes Attach a statement to the amended returns explaining why the debtor is filing an amended return. Irs gov free file federal state taxes Taxes and the Bankruptcy Estate Property of the bankruptcy estate. Irs gov free file federal state taxes   At the commencement of a bankruptcy case a bankruptcy estate is created. Irs gov free file federal state taxes Bankruptcy law determines which of the debtor's assets become part of a bankruptcy estate. Irs gov free file federal state taxes This estate generally includes all of the debtor's legal and equitable interests in property as of the commencement date. Irs gov free file federal state taxes However, there are exceptions and certain property is exempted or excluded from the bankruptcy estate. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes Exempt property and abandoned property are initially part of the bankruptcy estate, but are subsequently removed from the estate. Irs gov free file federal state taxes Excluded property is never included in the estate. Irs gov free file federal state taxes Transfer of assets between debtor and bankruptcy estate. Irs gov free file federal state taxes   The transfer (other than by sale or exchange) of an asset from the debtor to the bankruptcy estate is not treated as a disposition for income tax purposes. Irs gov free file federal state taxes The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits. Irs gov free file federal state taxes For example, the transfer of an installment obligation to the estate would not accelerate gain under the rules for reporting installment sales. Irs gov free file federal state taxes The estate assumes the same basis, holding period, and character of the transferred assets. Irs gov free file federal state taxes Also, the estate generally accounts for the transferred assets in the same manner as debtor. Irs gov free file federal state taxes   When the bankruptcy estate is terminated or dissolved, any resulting transfer (other than by sale or exchange) of the estate's assets back to the debtor is also not treated as a disposition for tax purposes. Irs gov free file federal state taxes The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits to the estate. Irs gov free file federal state taxes Abandoned property. Irs gov free file federal state taxes    The abandonment of property by the estate to the debtor is a nontaxable disposition of property. Irs gov free file federal state taxes If the debtor received abandoned property from the bankruptcy estate, the debtor assumes the same basis in the property that the bankruptcy estate had. Irs gov free file federal state taxes Separate taxable entity. Irs gov free file federal state taxes   When an individual files a bankruptcy petition under chapter 7 or 11, the bankruptcy estate is treated as a separate taxable entity from the debtor. Irs gov free file federal state taxes The court appointed trustee or the debtor-in-possession is responsible for preparing and filing all of the bankruptcy estate's tax returns, including its income tax return on Form 1041, U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Income Tax Return for Estates and Trusts, and paying its taxes. Irs gov free file federal state taxes The debtor remains responsible for filing his or her own returns on Form 1040, U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Individual Income Tax Return, and paying taxes on income that does not belong to the estate. Irs gov free file federal state taxes Employer identification number. Irs gov free file federal state taxes   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. Irs gov free file federal state taxes The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. Irs gov free file federal state taxes See Employer identification number, under Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. Irs gov free file federal state taxes    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. Irs gov free file federal state taxes Income, deductions, and credits – Form 1040. Irs gov free file federal state taxes   In an individual chapter 7 or 11 bankruptcy case, do not include the income, deductions, and credits that belong to the bankruptcy estate on the debtor's individual income tax return (Form 1040). Irs gov free file federal state taxes Also, do not include as income on the debtor's return the amount of any debt canceled by reason of the bankruptcy discharge. Irs gov free file federal state taxes The bankruptcy estate must reduce certain losses, credits, and the basis in property (to the extent of these items) by the amount of canceled debt. Irs gov free file federal state taxes See Debt Cancellation, below. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The debtor may not be able to claim certain deductions available to the bankruptcy estate such as administrative expenses. Irs gov free file federal state taxes Additionally, the bankruptcy exclusion cannot be used to exclude income from a cancelled debt if the discharge of indebtedness was not within the bankruptcy case, even though the debtor was under the bankruptcy court's protection at the time. Irs gov free file federal state taxes However, other exclusions, such as the insolvency exclusion, may apply. Irs gov free file federal state taxes Bankruptcy Estate – Income, Deductions, and Credits Bankruptcy Estate Income Income of the estate in individual chapter 7 cases. Irs gov free file federal state taxes    The gross income of the bankruptcy estate includes gross income of the debtor to which the estate is entitled under the Bankruptcy Code. Irs gov free file federal state taxes Gross income also includes income generated by the bankruptcy estate from property of the estate after the commencement of the case. Irs gov free file federal state taxes   Gross income of the bankruptcy estate does not include amounts received or accrued by the debtor before the commencement of the case. Irs gov free file federal state taxes Additionally, in chapter 7 cases, gross income of the bankruptcy estate does not include any income that the debtor earns after the date of the bankruptcy petition. Irs gov free file federal state taxes Income of the estate in individual chapter 11 cases. Irs gov free file federal state taxes    In chapter 11 cases, under IRC section 1398(e)(1), gross income of the bankruptcy estate includes income that the debtor earns for services performed after the bankruptcy petition date. Irs gov free file federal state taxes Also, earnings from services performed by an individual debtor after the commencement of the chapter 11 case are property of the bankruptcy estate under section 1115 of the Bankruptcy Code (11 U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes C. Irs gov free file federal state taxes section 1115). Irs gov free file federal state taxes Note. Irs gov free file federal state taxes A debtor-in-possession may be compensated by the estate for managing or operating a trade or business that the debtor conducted before the commencement of the bankruptcy case. Irs gov free file federal state taxes Such payments should be reported by the debtor as miscellaneous income on his or her individual income tax return (Form 1040). Irs gov free file federal state taxes Amounts paid by the estate to the debtor-in-possession for managing or operating the trade or business may qualify as administrative expenses of the estate. Irs gov free file federal state taxes See Administrative expenses, below. Irs gov free file federal state taxes Conversion or dismissal of chapter 11 cases. Irs gov free file federal state taxes   If a chapter 11 case is converted to a chapter 13 case, the chapter 13 estate is not a separate taxable entity and earnings from post-conversion services and income from property of the estate realized after the conversion to chapter 13 are taxed to the debtor. Irs gov free file federal state taxes If the chapter 11 case is converted to a chapter 7 case, 11 U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes C. Irs gov free file federal state taxes section 1115 does not apply after conversion and: Earnings from post-conversion services will be taxed to the debtor, rather than the estate, and The property of the chapter 11 estate will become property of the chapter 7 estate. Irs gov free file federal state taxes Any income on this property will be taxed to the estate even if the income is realized after the conversion to chapter 7. Irs gov free file federal state taxes If a chapter 11 case is dismissed, the debtor is treated as if the bankruptcy case had never been filed and as if no bankruptcy estate had been created. Irs gov free file federal state taxes Bankruptcy Estate Deductions and Credits A bankruptcy estate deducts expenses incurred in a trade, business, or activity, and uses credits in the same way the debtor would have deducted or credited them had he or she continued operations. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes Expenses may be disallowed under other provisions of the IRC (such as the disallowance of certain capital expenditures or expenses relating to tax-exempt interest). Irs gov free file federal state taxes Administrative expenses. Irs gov free file federal state taxes   Allowable expenses include administrative expenses. Irs gov free file federal state taxes    Administrative expenses can only be deducted by the estate, never by the debtor. Irs gov free file federal state taxes   The bankruptcy estate is allowed deductions for bankruptcy administrative expenses and fees, including accounting fees, attorney fees, and court costs. Irs gov free file federal state taxes These expenses are deductible on Form 1040, Schedule A as miscellaneous itemized deductions not subject to the 2% floor on miscellaneous itemized deductions, because they would not have been incurred if property had not been held by the bankruptcy estate. Irs gov free file federal state taxes See IRC section 67(e). Irs gov free file federal state taxes Administrative expenses of the bankruptcy estate attributable to conducting a trade or business for the production of estate rents or royalties are deductible in arriving at adjusted gross income on Form 1040, Schedules C, E, and F. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The bankruptcy estate uses Form 1041 as a transmittal for the tax return prepared using Form 1040 and its schedules. Irs gov free file federal state taxes See Transmittal for Form 1040 under Tax Return Filing Requirements and Payment of Tax, later. Irs gov free file federal state taxes Administrative expense loss. Irs gov free file federal state taxes   If the administrative expenses of the bankruptcy estate are more than its gross income for a tax year, the excess amount may be carried back 3 years and forward 7 years. Irs gov free file federal state taxes The amounts can only be carried to a tax year of the estate and never to a debtor's tax year. Irs gov free file federal state taxes The excess amount to be carried back or forward is treated like a net operating loss (NOL) and must first be carried back to the earliest year possible. Irs gov free file federal state taxes For a discussion of NOLs, see Publication 536. Irs gov free file federal state taxes Attribute carryovers. Irs gov free file federal state taxes   The bankruptcy estate may use its tax attributes the same way that the debtor would have used them. Irs gov free file federal state taxes These items are determined as of the first day of the debtor's tax year in which the bankruptcy case begins. Irs gov free file federal state taxes The bankruptcy estate assumes the following tax attributes from the debtor: NOL carryovers, Carryovers of excess charitable contributions, Recovery of tax benefit items, Credit carryovers, Capital loss carryovers, Basis, holding period, and character of assets, Method of accounting, Passive activity loss and credit carryovers, Unused at-risk deductions, and Other tax attributes provided in the regulations. Irs gov free file federal state taxes   Certain tax attributes of the bankruptcy estate must be reduced by the amount of income that was previously excluded as a result of cancellation of debt during the bankruptcy proceeding. Irs gov free file federal state taxes See Debt Cancellation, later. Irs gov free file federal state taxes   When the bankruptcy estate is terminated (for example, when the case ends), the debtor assumes any remaining tax attributes previously taken over by the bankruptcy estate. Irs gov free file federal state taxes The debtor also generally assumes any of the tax attributes, listed above, that arose during the administration of the bankruptcy estate. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The debtor does not assume the bankruptcy estate's administrative expense losses because they cannot be used by an individual taxpayer filing Form 1040. Irs gov free file federal state taxes See Administrative expense loss, above. Irs gov free file federal state taxes Passive and at-risk activities. Irs gov free file federal state taxes   For bankruptcy cases beginning after November 8, 1992, passive activity carryover losses and credits and unused at-risk deductions are treated as tax attributes passing from the debtor to the bankruptcy estate, which the estate then passes back to the debtor when the bankruptcy estate terminates. Irs gov free file federal state taxes Additionally, transfers to the debtor (other than by sale or exchange) of interests in passive or at-risk activities are treated as non-taxable exchanges. Irs gov free file federal state taxes These transfers include the return of exempt property and abandonment of estate property to the debtor. Irs gov free file federal state taxes Carrybacks from the debtor's activities. Irs gov free file federal state taxes   The debtor cannot carry back any NOL or credit carryback from a tax year ending after the bankruptcy case has begun to any tax year ending before the case began. Irs gov free file federal state taxes Carrybacks from the bankruptcy estate. Irs gov free file federal state taxes   If the bankruptcy estate has an NOL that did not pass to the estate from the debtor under the attribute carryover rules, the estate can carry the loss back not only to its own earlier tax years but also to the debtor's tax years before the year the bankruptcy case began. Irs gov free file federal state taxes The estate may also carry back excess credits, such as the general business credit, to the pre-bankruptcy tax years. Irs gov free file federal state taxes Tax Reporting – Chapter 11 Cases Allocation of income and credits on information returns and required statement for returns for individual chapter 11 cases. Irs gov free file federal state taxes    In chapter 11 cases, when an employer issues a Form W-2 reporting all of the debtor's wages, salary, or other compensation for a calendar year, and a portion of the earnings represent post-petition services includible in the estate's gross income, the Form W-2 amounts must be allocated between the estate and the debtor. Irs gov free file federal state taxes The debtor-in-possession or trustee must allocate the income amount reported in box 1 and the income tax withheld reported in box 2 between the debtor and the estate. Irs gov free file federal state taxes These allocations must reflect that the debtor's gross earnings from post-petition services and gross income from post-petition property are, generally, includible in the estate's gross income and not the debtor's gross income. Irs gov free file federal state taxes The debtor and trustee may use a simple percentage method to allocate income and income tax withheld. Irs gov free file federal state taxes The same method must be used to allocate the income and the withheld tax. Irs gov free file federal state taxes Example. Irs gov free file federal state taxes If 20% of the wages reported on Form W-2 for a calendar year were earned after the commencement of the case and are included in the estate's gross income, 20% of the withheld income tax reported on Form W-2 must also be claimed as a credit on the estate's income tax return. Irs gov free file federal state taxes Likewise, 80% of wages must be reported by the debtor and 80% of the income tax withheld must be claimed as a credit on the debtor's income tax return. Irs gov free file federal state taxes See IRC section 31(a). Irs gov free file federal state taxes   If information returns are issued to the debtor for gross income, gross proceeds, or other reportable payments that should have been reported to the bankruptcy estate, the debtor-in-possession or trustee must allocate the improperly reported income in a reasonable manner between the debtor and the estate. Irs gov free file federal state taxes In general, the allocation must ensure that any income and income tax withheld attributable to the post-petition period is reported on the estate's return, and any income and income tax withheld attributable to the pre-petition period is reported on the debtor's return. Irs gov free file federal state taxes    IRS Notice 2006-83 requires the debtor to attach a statement to his or her individual income tax return (Form 1040) stating that the return is filed subject to a chapter 11 bankruptcy case. Irs gov free file federal state taxes The statement must also: Show the allocations of income and income tax withheld, Describe the method used to allocate income and income tax withheld, and List the filing date of the bankruptcy case, the bankruptcy court in which the case is pending, the bankruptcy court case number, and the bankruptcy estate's EIN. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The debtor-in-possession or trustee must attach a similar statement to the bankruptcy estate's income tax return (Form 1041). Irs gov free file federal state taxes   The model Notice 2006-83 Statement, shown above, may be used by debtors, debtors-in-possession, and trustees to satisfy the reporting requirement. Irs gov free file federal state taxes Self-employment taxes in individual chapter 11 cases. Irs gov free file federal state taxes   IRC section 1401 imposes a tax upon the self-employment income, that is, the net earnings from self-employment of an individual. Irs gov free file federal state taxes Net earnings from self-employment are equal to the gross income derived by an individual from any trade or business carried on by such individual, less deductions attributable to the business. Irs gov free file federal state taxes   Neither section 1115 of the Bankruptcy Code nor IRC section 1398 addresses the application of self-employment tax to the post-petition earnings of the individual debtor. Irs gov free file federal state taxes Therefore, if the debtor continues to derive gross income from the performance of services as a self-employed individual after the commencement of the bankruptcy case, the debtor must continue to report the debtor's self-employment income on Schedule SE (Form 1040) of the debtor's income tax return. Irs gov free file federal state taxes This schedule includes self-employment income earned post-petition and the attributable deductions. Irs gov free file federal state taxes The debtor must pay any self-employment tax imposed by IRC section 1401. Irs gov free file federal state taxes Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. Irs gov free file federal state taxes   In chapter 11 cases, post-petition wages earned by a debtor are generally treated as gross income of the estate. Irs gov free file federal state taxes However, section 1115 of the Bankruptcy Code (11 U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes C. Irs gov free file federal state taxes section 1115) does not affect the determination of what are deemed wages for Federal Insurance Contributions Act (FICA) tax, Federal Unemployment Tax Act (FUTA) tax, or Federal Income Tax Withholding purposes. Irs gov free file federal state taxes See Notice 2006-83. Irs gov free file federal state taxes   The reporting and withholding obligations of a debtor's employer also do not change. Irs gov free file federal state taxes An employer should continue to report the wages and tax withholding on a Form W-2 issued under the debtor's name and social security number. Irs gov free file federal state taxes Notice to persons required to file information returns (other than Form W-2, Wage and Tax Statement) in individual chapter 11 cases. Irs gov free file federal state taxes   Within a reasonable time after the commencement of a chapter 11 bankruptcy case, the trustee or debtor-in-possession should provide notification of the bankruptcy estate's EIN to all persons (or entities) that are required to file information returns for the bankruptcy estate's gross income, gross proceeds, or other types of reportable payments. Irs gov free file federal state taxes See IRC section 6109(a)(2). Irs gov free file federal state taxes As these payments are the property of the estate under section 1115 of the Bankruptcy Code, the payors should report the gross income, gross proceeds, or other reportable payments on the appropriate information return using the estate's name and EIN as required under the IRC and regulations (see IRC sections 6041 through 6049). Irs gov free file federal state taxes   The trustee or debtor-in-possession should not, however, provide the EIN to a person (or entity) filing Form W-2 reporting the debtor's wages or other compensation, as section 1115 of the Bankruptcy Code does not affect the determination of what constitutes wages for purposes of federal income tax withholding or FICA. Irs gov free file federal state taxes See Notice 2006-83. Irs gov free file federal state taxes An employer should continue to report all wage income and tax withholding, both pre-petition and post-petition, on a Form W-2 to the debtor under the debtor's social security number. Irs gov free file federal state taxes   The debtor in a chapter 11 case is not required to file a new Form W-4 with an employer solely because the debtor filed a chapter 11 case and the post-petition wages are includible in the estate's income and not the debtor's income. Irs gov free file federal state taxes However, a new Form W-4 may be necessary if the debtor is no longer entitled to claim the same number of allowances previously claimed because certain deductions or credits now belong to the estate. Irs gov free file federal state taxes See Employment Tax Regulations section 31. Irs gov free file federal state taxes 3402(f)(2)-1. Irs gov free file federal state taxes Additionally, the debtor may wish to file a new Form W-4 to increase the income tax withheld from post-petition wages allocated to the estate to avoid having to make estimated tax payments for the estate. Irs gov free file federal state taxes See IRC section 6654(a). Irs gov free file federal state taxes Notice required in converted and dismissed cases. Irs gov free file federal state taxes   When a chapter 11 bankruptcy case is closed, dismissed, or converted to a chapter 12 or 13 case, the bankruptcy estate ends as a separate taxable entity. Irs gov free file federal state taxes The debtor should, within a reasonable time, send notice of such event to the persons (or entities) previously notified of the bankruptcy case. Irs gov free file federal state taxes This helps to ensure that gross income, proceeds, and other reportable payments realized after the event are reported to the debtor under the correct TIN rather than to the estate. Irs gov free file federal state taxes   When a chapter 11 case is converted to a chapter 7 case, the bankruptcy estate will continue to exist as a separate taxable entity. Irs gov free file federal state taxes Gross income (other than post-conversion income from the debtor's services), gross proceeds, or other reportable payments should continue to be reported to the estate if they are property of the chapter 7 estate. Irs gov free file federal state taxes However, income from services performed by the debtor after conversion of the case to chapter 7 is not property of the chapter 7 estate. Irs gov free file federal state taxes After the conversion, the debtor should notify payors required to report the debtor's nonemployee compensation that compensation earned after the conversion should be reported using the debtor's name and TIN, not the estate's name and EIN. Irs gov free file federal state taxes Employment taxes. Irs gov free file federal state taxes   The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. Irs gov free file federal state taxes See Publication 15, Circular E, Employer's Tax Guide, for details on employer tax responsibilities. Irs gov free file federal state taxes   The trustee also has the duty to prepare and file Forms W-2 for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. Irs gov free file federal state taxes For a further discussion of employment taxes, see Employment Taxes, later. Irs gov free file federal state taxes Notice 2006-83 Statement Pending Bankruptcy Case The taxpayer, , filed a bankruptcy petition under chapter 11 of the Bankruptcy Code in the bankruptcy court for the District of . Irs gov free file federal state taxes The bankruptcy court case number is . Irs gov free file federal state taxes Gross income, and withheld federal income tax, reported on Form W-2, Forms 1099, Schedule K-1, and other information returns received under the taxpayer's name and social security number (or other taxpayer identification number) are allocated between the taxpayer's TIN and the bankruptcy estate's EIN as follows, using [describe allocation method]:. Irs gov free file federal state taxes   Year Taxpayer   Estate 1. Irs gov free file federal state taxes Form W-2, Payor: $   $     Withheld income tax shown on Form W-2 $   $   2. Irs gov free file federal state taxes Form 1099-INT Payor: $   $     Withheld income tax (if any) shown on Form 1099-INT $   $   3. Irs gov free file federal state taxes Form 1099-DIV Payor: $   $     Withheld income tax (if any) shown on Form 1099-DIV $   $   4. Irs gov free file federal state taxes Form 1099-MISC Payor: $   $     Withheld income tax (if any) shown on Form 1099-MISC $   $   Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Filing Requirements Filing threshold. Irs gov free file federal state taxes   If the bankruptcy estate has gross income that meets or exceeds the minimum amount required for filing, the trustee or debtor-in-possession must file an income tax return on Form 1041. Irs gov free file federal state taxes This amount is equal to the sum of the personal exemption amount plus the basic standard deduction for a married individual filing separately. Irs gov free file federal state taxes   For 2012, the threshold filing amount for a bankruptcy estate is $9,750 (the sum of the $3,800 personal exemption plus the $5,950 standard deduction for married individuals filing separately). Irs gov free file federal state taxes   These amounts are generally adjusted annually. Irs gov free file federal state taxes See the present year Form 1041 Instructions at www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/form1041 for the current dollar amounts. Irs gov free file federal state taxes Accounting period. Irs gov free file federal state taxes   A bankruptcy estate may have a fiscal year. Irs gov free file federal state taxes However, this period cannot be longer than 12 months. Irs gov free file federal state taxes Change of accounting period. Irs gov free file federal state taxes   The bankruptcy estate may change its accounting period (tax year) once without IRS approval. Irs gov free file federal state taxes This rule allows the bankruptcy trustee to close the estate's tax year early, before the expected termination of the bankruptcy estate. Irs gov free file federal state taxes The trustee can then file a return for the first short tax year to get a quick determination of the estate's tax liability. Irs gov free file federal state taxes Employer identification number. Irs gov free file federal state taxes   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. Irs gov free file federal state taxes The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. Irs gov free file federal state taxes    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. Irs gov free file federal state taxes   Obtain an EIN for a bankruptcy estate by applying: Online by clicking on the EIN link at www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/businesses/small. Irs gov free file federal state taxes The EIN is issued immediately once the application information is validated. Irs gov free file federal state taxes By telephone at 1-800-829-4933 from 7:00 a. Irs gov free file federal state taxes m. Irs gov free file federal state taxes to 7:00 p. Irs gov free file federal state taxes m. Irs gov free file federal state taxes in the trustee's or debtor-in-possession's local time zone. Irs gov free file federal state taxes Assistance provided to callers from Alaska and Hawaii will be based on the hours of operation in the Pacific time zone, or By mailing or faxing Form SS-4, Application for Employer Identification Number. Irs gov free file federal state taxes   If the trustee or debtor-in-possession has not received the bankruptcy estate's EIN by the time the return is due, write “Applied for” and the date you applied in the space for the EIN. Irs gov free file federal state taxes For more details, see Pub. Irs gov free file federal state taxes 583, Starting a Business and Keeping Records. Irs gov free file federal state taxes   Trustees representing ten or more bankruptcy estates (other than estates that will be filing employment or excise tax returns) may request a series or block of EINs. Irs gov free file federal state taxes Figuring tax due. Irs gov free file federal state taxes   The bankruptcy estate figures its taxable income the same way an individual figures taxable income. Irs gov free file federal state taxes However, the estate uses the tax rates for a married individual filing separately to calculate the tax on its taxable income. Irs gov free file federal state taxes The estate is entitled to one personal exemption and may either itemize deductions or take the basic standard deduction for a married individual filing a separate return. Irs gov free file federal state taxes The estate cannot take the higher standard deduction allowed for married persons filing separately who are 65 or older or blind. Irs gov free file federal state taxes Tax rate schedule. Irs gov free file federal state taxes The tax on income for bankruptcy estates is calculated using the tax rate schedule for Married Individuals Filing Separately not the Estates and Trusts tax rate schedule. Irs gov free file federal state taxes When to file. Irs gov free file federal state taxes   Calendar year bankruptcy estates must file Form 1041 by April 15th. Irs gov free file federal state taxes Fiscal year bankruptcy estates must file on or before the 15th day of the 4th month following the close of its tax year. Irs gov free file federal state taxes For example, an estate that has a tax year that ends on June 30th must file Form 1041 by October 15th of the tax year. Irs gov free file federal state taxes If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The bankruptcy estate is allowed an automatic 6-month extension of time to file the bankruptcy estate tax return upon filing the required application, Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Irs gov free file federal state taxes Transmittal for Form 1040. Irs gov free file federal state taxes   Form 1041 is used as a transmittal for Form 1040. Irs gov free file federal state taxes If a return is required, the trustee or debtor-in-possession must complete the identification area at the top of Form 1041 and indicate the chapter under which the bankruptcy estate filed, either chapter 7 or chapter 11. Irs gov free file federal state taxes   Prepare the bankruptcy estate's return by completing Form 1040. Irs gov free file federal state taxes In the top margin of Form 1040, write “Attachment to Form 1041 —DO NOT DETACH. Irs gov free file federal state taxes ” Then, attach Form 1040 to the Form 1041 transmittal. Irs gov free file federal state taxes Enter the tax and payment amounts on lines 23 through 29 of Form 1041, then sign and date the return. Irs gov free file federal state taxes An example of a bankruptcy estate's tax return is prepared below. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The filing of the bankruptcy estate's tax return does not relieve a debtor from the requirement to file his or her individual tax return on Form 1040. Irs gov free file federal state taxes Payment of Tax Due Payment methods. Irs gov free file federal state taxes   Payment of tax due may be made by check or money order or by credit or debit card. Irs gov free file federal state taxes For information on how to make payments electronically by credit or debit card, go to irs. Irs gov free file federal state taxes gov/e-pay. Irs gov free file federal state taxes      Payments may also be made electronically using the Electronic Federal Tax Payment System (EFTPS), a free tax payment system that allows you to make payments online or by phone. Irs gov free file federal state taxes To enroll in EFTPS, go to eftps. Irs gov free file federal state taxes gov or call 1-800-555-4477. Irs gov free file federal state taxes For more information see Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. Irs gov free file federal state taxes Payment voucher – Form 1041-V. Irs gov free file federal state taxes   Form 1041-V accompanies payments made by check or money order for Form 1041. Irs gov free file federal state taxes The voucher includes information about the bankruptcy estate, including the name of the bankruptcy estate, trustee, EIN, and amount due. Irs gov free file federal state taxes Using Form 1041-V assists the IRS in processing the payment more accurately and efficiently. Irs gov free file federal state taxes We recommend the use of Form 1041-V; however, there is no penalty if the voucher is not used. Irs gov free file federal state taxes Estimated tax – Form 1041-ES. Irs gov free file federal state taxes   In most cases, the trustee or debtor-in-possession must pay any required estimated tax due for the bankruptcy estate. Irs gov free file federal state taxes See the Form 1041-ES Instructions for information on the minimum threshold amount required for filing Form 1041-ES, paying the estimated tax, and exceptions to filing. Irs gov free file federal state taxes Employment Taxes The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. Irs gov free file federal state taxes Until these employment taxes are deposited as required by the IRC, they should be set aside in a separate bank account to ensure that funds are available to satisfy the liability. Irs gov free file federal state taxes If the employment taxes are not paid as required, the trustee may be held personally liable for payment of the taxes. Irs gov free file federal state taxes   See Publication 15, (Circular E), Employer's Tax Guide, for details on employer tax responsibilities. Irs gov free file federal state taxes Also see IRS Notice 931, Deposit Requirements for Employment Taxes, for details on the deposit rules, including the requirement that federal employment tax deposits be made by electronic funds transfer. Irs gov free file federal state taxes The trustee also has a duty to prepare and file Forms W-2, Wage and Tax Statement, for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. Irs gov free file federal state taxes If the debtor fails to prepare and file Forms W-2 for wages paid before bankruptcy, the trustee should instruct the employees to file a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Irs gov free file federal state taxes , with their individual income tax returns. Irs gov free file federal state taxes Tax Return Example – Form 1041 This publication is not revised annually. Irs gov free file federal state taxes Future changes to the forms and their instructions may not be reflected in this example. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes The following return was prepared for tax year 2011. Irs gov free file federal state taxes In 2011, the threshold filing amount for a bankruptcy estate was $9,500 (the sum of the $3,700 personal exemption plus the $5,800 standard deduction for married individuals filing separately). Irs gov free file federal state taxes Facts and circumstances. Irs gov free file federal state taxes   On December 15, 2010, Thomas Smith filed a bankruptcy petition under chapter 7. Irs gov free file federal state taxes Joan Black was appointed trustee to administer the bankruptcy estate and to distribute the assets. Irs gov free file federal state taxes   The estate received the following assets from Mr. Irs gov free file federal state taxes Smith: A $100,000 certificate of deposit, Commercial rental real estate with a fair market value (FMV) of $280,000, and His personal residence with an FMV of $200,000. Irs gov free file federal state taxes   Also, the estate received a $251,500 capital loss carryover. Irs gov free file federal state taxes   Mr. Irs gov free file federal state taxes Smith's bankruptcy case was closed on December 31, 2011. Irs gov free file federal state taxes During 2011, Mr. Irs gov free file federal state taxes Smith was relieved of $70,000 of debt by the bankruptcy court. Irs gov free file federal state taxes The estate chose a calendar year as its tax year. Irs gov free file federal state taxes Joan, the trustee, reviews the estate's transactions and reports the taxable events on the estate's final return. Irs gov free file federal state taxes Schedule B (Form 1040). Irs gov free file federal state taxes    The certificate of deposit earned $5,500 of interest during 2011. Irs gov free file federal state taxes Joan reports this interest on Schedule B. Irs gov free file federal state taxes She completes this schedule and enters the result on Form 1040. Irs gov free file federal state taxes Form 4562. Irs gov free file federal state taxes   Joan enters the depreciation allowed on Form 4562. Irs gov free file federal state taxes She completes the form and enters the result on Schedule E. Irs gov free file federal state taxes Schedule E (Form 1040). Irs gov free file federal state taxes   The commercial real estate was rented through the date of sale. Irs gov free file federal state taxes Joan reports the income and expenses on Schedule E. Irs gov free file federal state taxes She enters the net income on Form 1040. Irs gov free file federal state taxes Form 4797. Irs gov free file federal state taxes   The commercial real estate was sold on July 1, 2011, for $280,000. Irs gov free file federal state taxes The property was purchased in 2001 at a cost of $250,000. Irs gov free file federal state taxes The total depreciation allowable as of the date of sale was $120,000. Irs gov free file federal state taxes Additionally, $25,000 of selling expenses were incurred. Irs gov free file federal state taxes Joan reports the gain or loss from the sale on Form 4797. Irs gov free file federal state taxes She completes the form and enters the gain on Schedule D (Form 1040). Irs gov free file federal state taxes   Mr. Irs gov free file federal state taxes Smith's former residence was sold on September 30, 2011. Irs gov free file federal state taxes The sale price was $200,000, the selling expenses were $20,000, and his adjusted basis was $130,000. Irs gov free file federal state taxes This sale is excluded from gross income under IRC section 121. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes Gains from the sale of personal residences are excluded from gross income up to $250,000 under IRC section 121 ($500,000 for married couples filing a joint return). Irs gov free file federal state taxes Bankruptcy estates succeed to this exclusion at the commencement of the case. Irs gov free file federal state taxes See Regulation section 1. Irs gov free file federal state taxes 1398-3. Irs gov free file federal state taxes Schedule D (Form 1040). Irs gov free file federal state taxes   Joan completes Schedule D, taking into account the $250,000 capital loss carryover from 2010 ($251,500 transferred to the estate minus $1,500 used on the estate's 2010 return). Irs gov free file federal state taxes She enters the results on Form 1040. Irs gov free file federal state taxes Form 1040, page 1. Irs gov free file federal state taxes   Joan completes page 1 of the Form 1040 and enters the adjusted gross income on the first line of Form 1040, page 2. Irs gov free file federal state taxes Schedule A (Form 1040). Irs gov free file federal state taxes   During 2011, the estate paid mortgage interest and real property tax on Mr. Irs gov free file federal state taxes Smith's former residence. Irs gov free file federal state taxes It also paid income tax to the state. Irs gov free file federal state taxes Joan enters the mortgage interest, real estate tax, and income tax on Schedule A. Irs gov free file federal state taxes Also, she reports the bankruptcy estate's administrative expenses as a miscellaneous deduction not subject to the 2% floor on miscellaneous itemized deductions. Irs gov free file federal state taxes She completes the Schedule A and enters the result on page 2 of Form 1040. Irs gov free file federal state taxes Form 1040, page 2. Irs gov free file federal state taxes   Joan determines the estate's taxable income and figures its tax using the tax rate schedule for married filing separately. Irs gov free file federal state taxes She then enters the estate's estimated tax payments and figures the amount the estate still owes. Irs gov free file federal state taxes Form 982. Irs gov free file federal state taxes   Joan completes the Schedule D Tax Worksheet to figure the capital loss carryover. Irs gov free file federal state taxes Because $70,000 of debt was canceled, Joan must reduce the tax attributes of the estate by the amount of the canceled debt. Irs gov free file federal state taxes See Debt Cancellation, later. Irs gov free file federal state taxes After the bankruptcy case ends, Mr. Irs gov free file federal state taxes Smith will assume the estate's tax attributes. Irs gov free file federal state taxes Mr. Irs gov free file federal state taxes Smith will assume a capital loss carryover of $53,500 ($123,500 carryover minus the $70,000 attribute reduction) for use in preparation of his individual tax return (Form 1040). Irs gov free file federal state taxes Note. Irs gov free file federal state taxes If the bankruptcy estate had continued, the capital loss carryover would be available to the bankruptcy estate for the 2012 tax year. Irs gov free file federal state taxes Form 1041. Irs gov free file federal state taxes   Joan enters the total tax, estimated tax payments, and tax due from Form 1040 on Form 1041. Irs gov free file federal state taxes She completes the identification area at the top of Form 1041, then signs and dates the return as the trustee on behalf of the bankruptcy estate. Irs gov free file federal state taxes This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Form 1040 - page 1 This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Form 1040 - page 2 This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Schedule A This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Schedule B This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Schedule D This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Schedule E This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Form 4797 - page 1 This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Form 2119 This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Form 4797 - page 2 This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Form 4562 This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Capital Loss Carryover Worksheet This image is too large to be displayed in the current screen. Irs gov free file federal state taxes Please click the link to view the image. Irs gov free file federal state taxes Sample Form 982 Capital Loss Carryover Worksheet—Lines 6 and 14 Use this worksheet to figure your capital loss carryovers from 2010 to 2011 if your 2010 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2010 Schedule D, line 16, or (b) the amount on your 2010 Form 1040, line 41 (or your 2010 Form 1040NR, line 38, if applicable) is less than zero. Irs gov free file federal state taxes Otherwise, you do not have any carryovers. Irs gov free file federal state taxes 1. Irs gov free file federal state taxes Enter the amount from your 2010 Form 1040, line 41, or Form 1040NR, line 38. Irs gov free file federal state taxes If a loss, enclose the amount in parentheses 1. Irs gov free file federal state taxes 19,880   2. Irs gov free file federal state taxes Enter the loss from your 2010 Schedule D, line 21, as a positive amount 2. Irs gov free file federal state taxes 1,500   3. Irs gov free file federal state taxes Combine lines 1 and 2. Irs gov free file federal state taxes If zero or less, enter -0- 3. Irs gov free file federal state taxes 21,380   4. Irs gov free file federal state taxes Enter the smaller of line 2 or line 3 4. Irs gov free file federal state taxes 1,500     If line 7 of your 2010 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9. Irs gov free file federal state taxes       5. Irs gov free file federal state taxes Enter the loss from your 2010 Schedule D, line 7, as a positive amount 5. Irs gov free file federal state taxes 0   6. Irs gov free file federal state taxes Enter any gain from your 2010 Schedule D, line 15. Irs gov free file federal state taxes If a loss, enter -0- 6. Irs gov free file federal state taxes         7. Irs gov free file federal state taxes Add lines 4 and 6 7. Irs gov free file federal state taxes 1,500   8. Irs gov free file federal state taxes Short-term capital loss carryover for 2011. Irs gov free file federal state taxes Subtract line 7 from line 5. Irs gov free file federal state taxes If zero or less, enter -0-. Irs gov free file federal state taxes If more than zero, also enter this amount on Schedule D, line 6 8. Irs gov free file federal state taxes 0     If line 15 of your 2010 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13. Irs gov free file federal state taxes       9. Irs gov free file federal state taxes Enter the loss from your 2010 Schedule D, line 15, as a positive amount 9. Irs gov free file federal state taxes 251,500   10. Irs gov free file federal state taxes Enter any gain from your 2010 Schedule D, line 7. Irs gov free file federal state taxes If a loss, enter -0- 10. Irs gov free file federal state taxes 0       11. Irs gov free file federal state taxes Subtract line 5 from line 4. Irs gov free file federal state taxes If zero or less, enter -0- 11. Irs gov free file federal state taxes 1,500       12. Irs gov free file federal state taxes Add lines 10 and 11 12. Irs gov free file federal state taxes 1,500   13. Irs gov free file federal state taxes Long-term capital loss carryover for 2011. Irs gov free file federal state taxes Subtract line 12 from line 9. Irs gov free file federal state taxes If zero or less, enter -0-. Irs gov free file federal state taxes If more than zero, also enter this amount on Schedule D, line 14 13. Irs gov free file federal state taxes 250,000                       Partnerships and Corporations Filing Requirements A separate taxable estate is not created when a partnership or corporation files a bankruptcy petition and their tax return filing requirements do not change. Irs gov free file federal state taxes The debtor-in-possession, court appointed trustee, assignee, or receiver must file the entity's income tax returns on Form 1065, Form 1120 or, Form 1120S. Irs gov free file federal state taxes In cases where a trustee or receiver is not appointed, the debtor-in-possession continues business operations and remains in possession of the business' property during the bankruptcy proceeding. Irs gov free file federal state taxes The debtor-in-possession, rather than the general partner of a partnership or corporate officer of a corporation, assumes the fiduciary responsibility to file the business' tax returns. Irs gov free file federal state taxes Partnerships The filing requirements for a partnership in a bankruptcy proceeding do not change. Irs gov free file federal state taxes However, the responsibility to file the required returns becomes that of the court appointed trustee, receiver, or debtor-in-possession. Irs gov free file federal state taxes A partnership's debt that is canceled as a result of the bankruptcy proceeding is not included in the partnership's income. Irs gov free file federal state taxes However, It may or may not be included in the individual partners' income. Irs gov free file federal state taxes See Partnerships, below under Debt Cancellation. Irs gov free file federal state taxes Corporations The filing requirements for a corporation in a bankruptcy proceeding also do not change. Irs gov free file federal state taxes A bankruptcy trustee, receiver, or debtor-in-possession, having possession of or holding title to substantially all of the property or business operations of the debtor corporation, must file the debtor's corporate income tax return for the tax year. Irs gov free file federal state taxes The following discussion only highlights bankruptcy tax rules applying to corporations. Irs gov free file federal state taxes The complex details of corporate bankruptcy reorganizations are beyond the scope of this publication. Irs gov free file federal state taxes Therefore, you may wish to seek the help of a professional tax advisor. Irs gov free file federal state taxes See Corporations under Debt Cancellation for information about a corporation's debt canceled in a bankruptcy proceeding. Irs gov free file federal state taxes Tax-Free Reorganizations The tax-free reorganization provisions of the Internal Revenue Code allow a corporation to transfer all or part of its assets to another corporation in a bankruptcy under title 11 of the United States Code or in a similar case. Irs gov free file federal state taxes However, under the reorganization plan, the stock or securities of the corporation to which the assets are transferred must be distributed in a transaction that qualifies under IRC section 354, 355, or 356. Irs gov free file federal state taxes A “similar case” includes a receivership, foreclosure, or other similar proceeding in a federal or state court. Irs gov free file federal state taxes In these cases, any party to the reorganization must be under the jurisdiction of the court and the transfer of assets under the plan of reorganization must be approved by the court. Irs gov free file federal state taxes In a receivership, foreclosure, or similar proceeding before a federal or state agency involving certain financial institutions, the agency is treated as a court. Irs gov free file federal state taxes Generally, IRC section 354 provides that no gain or loss is recognized if a corporation's stock is exchanged solely for stock or securities in a corporation that is a party to the reorganization under a qualifying reorganization plan. Irs gov free file federal state taxes In this case, shareholders in the bankrupt corporation would recognize no gain or loss if they exchange their stock solely for stock or securities of the corporation acquiring the bankrupt corporation's assets. Irs gov free file federal state taxes IRC section 355 generally provides that no gain or loss is recognized by a shareholder if a corporation distributes solely stock or securities of another corporation that the distributing corporation controls immediately before the distribution. Irs gov free file federal state taxes IRC section 356 allows tax-free exchanges in situations that would qualify under IRC section 354 or 355, except that other property or money, in addition to the permitted stock or securities, is received by the shareholder. Irs gov free file federal state taxes In this situation, gain is recognized by the shareholder, but only to the extent of the money and the FMV of the other property received. Irs gov free file federal state taxes No loss is recognized in this situation. Irs gov free file federal state taxes Exemption from tax return filing A trustee, receiver, or assignee of a corporation in bankruptcy, receivership, or in the process of dissolving, may apply to the IRS for relief from filing federal income tax returns for the corporation. Irs gov free file federal state taxes To qualify, the corporation must have ceased business operations and have no assets nor income for the tax year. Irs gov free file federal state taxes The exemption request must be submitted to the local IRS Insolvency Office handling the case. Irs gov free file federal state taxes The request to the IRS must include the name, address, and EIN of the corporation and a statement of the facts (with any supporting documents) showing why the debtor needs relief from the filing requirements. Irs gov free file federal state taxes The request must also include the following statement: “I hereby request relief from filing federal income tax returns for tax years ending _____ for the above-named corporation and declare under penalties of perjury that to the best of my knowledge and belief the information contained herein is correct. Irs gov free file federal state taxes ” The statement must be signed by the trustee, receiver or assignee. Irs gov free file federal state taxes The statement must also include notice of appointment to act on behalf of the corporation (this is not required for bankruptcy trustees or debtors-in-possession). Irs gov free file federal state taxes The IRS will act on your request within 90 days. Irs gov free file federal state taxes Disclosure of return information to trustee. Irs gov free file federal state taxes   Upon written request, current and earlier returns of the debtor are open to inspection by or disclosure to the trustee or receiver. Irs gov free file federal state taxes However, in bankruptcy cases other than those of individuals filing under chapter 7 or 11, such as a corporate bankruptcy, the IRS must find that the trustee has a material interest that will be affected by information on the return. Irs gov free file federal state taxes Material interest is generally defined as a financial or monetary interest. Irs gov free file federal state taxes Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. Irs gov free file federal state taxes Receiverships Court-established receiverships sometimes arise in connection with bankruptcies. Irs gov free file federal state taxes Certain court-established receiverships should be treated as qualified settlement funds ("QSFs") for purposes of IRC section 468B and the underlying Treasury Regulations. Irs gov free file federal state taxes QSFs are required to file an annual income tax return, Form 1120-SF, U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Income Tax Return for Settlement Funds. Irs gov free file federal state taxes More information about QSFs may be found in Treasury Regulation sections 1. Irs gov free file federal state taxes 468B-1 through -5. Irs gov free file federal state taxes Determination of Tax The determination of the proper amount of tax due for a tax year begins with the bankruptcy estate's filing of Form 1041, and the individual debtor's filing of Form 1040, or for bankrupt entities filing Forms 1065, 1120, or 1120S. Irs gov free file federal state taxes After a return is filed, the IRS will either accept the return as filed or select the return for examination. Irs gov free file federal state taxes Under examination the IRS may redetermine the tax liability shown on the return. Irs gov free file federal state taxes If the bankruptcy estate or debtor disagrees with the redetermined tax due, the tax as redetermined by the IRS may be contested in the bankruptcy court, or Tax Court, as applicable. Irs gov free file federal state taxes See Court Jurisdiction over Tax Matters, later. Irs gov free file federal state taxes Prompt Determination Requests Pursuant to Rev. Irs gov free file federal state taxes Proc. Irs gov free file federal state taxes 2006-24, 2006-22 I. Irs gov free file federal state taxes R. Irs gov free file federal state taxes B. Irs gov free file federal state taxes 943, www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/irb/2006-22_IRB/ar12, as modified by Announcement 2011-77, www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/irb/2011-51_IRB/ar13, the bankruptcy trustee may request a determination of any unpaid tax liability incurred by the bankruptcy estate during the administration of the case, by filing a tax return and a request for such determination with the IRS. Irs gov free file federal state taxes Unless the return is fraudulent or contains a material misrepresentation, the estate, trustee, debtor, and any successor to the debtor are discharged from liability upon payment of the tax: As determined by the IRS, As determined by the bankruptcy court, after completion of the IRS examination, or As shown on the return, if the IRS does not: Notify the trustee within 60 days after the request for determination that the return has been selected for examination, or Complete the examination and notify the trustee of any tax due within 180 days after the request (or any additional time permitted by the bankruptcy court). Irs gov free file federal state taxes Making the request for determination. Irs gov free file federal state taxes   As detailed in Rev. Irs gov free file federal state taxes Proc. Irs gov free file federal state taxes 2006-24, as modified by Announcement 2011-77, to request a prompt determination of any unpaid tax liability of the estate, the trustee must file a signed written request, in duplicate, with the Internal Revenue Service, Centralized Insolvency Operation, P. Irs gov free file federal state taxes O. Irs gov free file federal state taxes Box 7346, Philadelphia, PA 19101–7346 (marked “Request for Prompt Determination”). Irs gov free file federal state taxes   The request must be submitted in duplicate and must be executed under penalties of perjury. Irs gov free file federal state taxes In addition, the trustee must submit along with the request an exact copy of the return(s) filed by the trustee with the IRS for each completed tax period. Irs gov free file federal state taxes The request must contain the following information: A statement indicating that it is a Request for Prompt Determination of Tax Liability, specifying the type of return and tax period for each return being filed. Irs gov free file federal state taxes The name and location of the office where the return was filed. Irs gov free file federal state taxes The name of the debtor. Irs gov free file federal state taxes Debtor's social security number, TIN, or EIN. Irs gov free file federal state taxes Type of bankruptcy estate. Irs gov free file federal state taxes Bankruptcy case number. Irs gov free file federal state taxes Court where the bankruptcy case is pending. Irs gov free file federal state taxes   The copy of the return(s) submitted with the request must be an exact copy of a valid return. Irs gov free file federal state taxes A request for prompt determination will be considered incomplete and returned to the trustee if it is filed with a copy of a document that does not qualify as a valid return. Irs gov free file federal state taxes    To qualify as valid, a return must meet certain criteria, including a signature under penalties of perjury. Irs gov free file federal state taxes A document filed by the trustee with the jurat stricken, deleted, or modified will not qualify as a valid return. Irs gov free file federal state taxes Examination of return. Irs gov free file federal state taxes   The IRS will notify the trustee within 60 days from receipt of the request whether the return filed by the trustee has been selected for examination or has been accepted as filed. Irs gov free file federal state taxes If the return is selected for examination, it will be examined as soon as possible. Irs gov free file federal state taxes The IRS will notify the trustee of any tax due within 180 days from receipt of the application or within any additional time permitted by the bankruptcy court. Irs gov free file federal state taxes   If a prompt determination request is incomplete, all the documents received by the IRS will be returned to the trustee by the assigned Field Insolvency Office with an explanation identifying the missing item(s) and instructions to re-file the request once corrected. Irs gov free file federal state taxes   Once corrected, the request must be filed with the IRS at the Field Insolvency Office address specified in the correspondence accompanying the returned incomplete request. Irs gov free file federal state taxes   In the case of an incomplete request submitted with a copy of an invalid return document, the trustee must file a valid original return with the appropriate IRS office and submit a copy of that return with the corrected request when the request is re-filed. Irs gov free file federal state taxes Note. Irs gov free file federal state taxes An incomplete request includes those submitted with a copy of a return form, the original of which does not qualify as a valid return. Irs gov free file federal state taxes   The 60-day period to notify the trustee whether the return is accepted as filed or has been selected for examination does not begin to run until a complete request package is recei
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The Irs Gov Free File Federal State Taxes

Irs gov free file federal state taxes Publication 15-A - Introductory Material Table of Contents Future Developments What's New Reminders Introduction Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 15-A, such as legislation enacted after it was published, go to www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/pub15a. Irs gov free file federal state taxes What's New Social security and Medicare tax for 2014. Irs gov free file federal state taxes  The social security tax rate is 6. Irs gov free file federal state taxes 2% each for the employee and employer, unchanged from 2013. Irs gov free file federal state taxes The social security wage base limit is $117,000. Irs gov free file federal state taxes The Medicare tax rate is 1. Irs gov free file federal state taxes 45% each for the employee and employer, unchanged from 2013. Irs gov free file federal state taxes There is no wage base limit for Medicare tax. Irs gov free file federal state taxes Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Irs gov free file federal state taxes Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. Irs gov free file federal state taxes Withholding allowance. Irs gov free file federal state taxes  The 2014 amount for one withholding allowance on an annual basis is $3,950. Irs gov free file federal state taxes Same-sex marriage. Irs gov free file federal state taxes  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Irs gov free file federal state taxes For more information, see Revenue Ruling 2013-17, 2013-38 I. Irs gov free file federal state taxes R. Irs gov free file federal state taxes B. Irs gov free file federal state taxes 201, available at www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/irb/2013-38_IRB/ar07. Irs gov free file federal state taxes html. Irs gov free file federal state taxes Notice 2013-61 provides special administrative procedures for employers to make claims for refunds or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Irs gov free file federal state taxes Notice 2013-61, 2013-44 I. Irs gov free file federal state taxes R. Irs gov free file federal state taxes B. Irs gov free file federal state taxes 432, is available at www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/irb/2013-44_IRB/ar10. Irs gov free file federal state taxes html. Irs gov free file federal state taxes Reminders Additional Medicare Tax withholding. Irs gov free file federal state taxes . Irs gov free file federal state taxes  In addition to withholding Medicare tax at 1. Irs gov free file federal state taxes 45%, you must withhold a 0. Irs gov free file federal state taxes 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Irs gov free file federal state taxes You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Irs gov free file federal state taxes Additional Medicare Tax is only imposed on the employee. Irs gov free file federal state taxes There is no employer share of Additional Medicare Tax. Irs gov free file federal state taxes All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Irs gov free file federal state taxes For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. Irs gov free file federal state taxes For more information on Additional Medicare Tax, visit IRS. Irs gov free file federal state taxes gov and enter “Additional Medicare Tax” in the search box. Irs gov free file federal state taxes Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Irs gov free file federal state taxes  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. Irs gov free file federal state taxes Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Irs gov free file federal state taxes For more information, visit IRS. Irs gov free file federal state taxes gov and enter “work opportunity tax credit” in the search box. Irs gov free file federal state taxes COBRA premium assistance credit. Irs gov free file federal state taxes  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. Irs gov free file federal state taxes For more information, see COBRA premium assistance credit in Publication 15 (Circular E). Irs gov free file federal state taxes Federal tax deposits must be made by electronic funds transfer. Irs gov free file federal state taxes  You must use electronic funds transfer to make all federal tax deposits. Irs gov free file federal state taxes Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Irs gov free file federal state taxes If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Irs gov free file federal state taxes Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Irs gov free file federal state taxes EFTPS is a free service provided by the Department of Treasury. Irs gov free file federal state taxes Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Irs gov free file federal state taxes For more information on making federal tax deposits, see How To Deposit in Publication 15 (Circular E). Irs gov free file federal state taxes To get more information about EFTPS or to enroll in EFTPS, visit www. Irs gov free file federal state taxes eftps. Irs gov free file federal state taxes gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Irs gov free file federal state taxes Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Irs gov free file federal state taxes You must receive written notice from the IRS to file Form 944. Irs gov free file federal state taxes  If you have been filing Forms 941, Employer's QUARTERLY Federal Tax Return (or Forms 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U. Irs gov free file federal state taxes S. Irs gov free file federal state taxes Virgin Islands, or Formularios 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono), and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941, you must contact the IRS to request to file Form 944. Irs gov free file federal state taxes You must receive written notice from the IRS to file Form 944 instead of Forms 941 before you may file this form. Irs gov free file federal state taxes For more information on requesting to file Form 944, visit IRS. Irs gov free file federal state taxes gov and enter “file employment taxes annually” in the search box. Irs gov free file federal state taxes Employers can request to file Forms 941 instead of Form 944. Irs gov free file federal state taxes  If you received notice from the IRS and have been filing Form 944 but would like to file Forms 941 instead, you must contact the IRS to request to file Forms 941. Irs gov free file federal state taxes You must receive written notice from the IRS to file Forms 941 instead of Form 944 before you may file these forms. Irs gov free file federal state taxes For more information on requesting to file Form 944, visit IRS. Irs gov free file federal state taxes gov and enter “file employment taxes annually” in the search box. Irs gov free file federal state taxes Aggregate Form 941 filers. Irs gov free file federal state taxes  Agents must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941. Irs gov free file federal state taxes Aggregate Forms 941 can only be filed by agents approved by the IRS under section 3504 of the Internal Revenue Code. Irs gov free file federal state taxes To request approval to act as an agent for an employer, the agent must file Form 2678, Employer/Payer Appointment of Agent, with the IRS. Irs gov free file federal state taxes Aggregate Form 940 filers. Irs gov free file federal state taxes  Agents must complete Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Irs gov free file federal state taxes Aggregate Forms 940 may only be filed by agents acting on behalf of home care service recipients who receive home care services through a program administered by a federal, state, or local government. Irs gov free file federal state taxes To request approval to act as an agent on behalf of home care service recipients, the agent must file Form 2678 with the IRS. Irs gov free file federal state taxes Electronic filing and payment. Irs gov free file federal state taxes  Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Irs gov free file federal state taxes Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and payment easier. Irs gov free file federal state taxes Spend less time and worry about taxes and more time running your business. Irs gov free file federal state taxes Use e-file and the Electronic Federal Tax Payment System (EFTPS) to your benefit. Irs gov free file federal state taxes For e-file, visit www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/efile for additional information. Irs gov free file federal state taxes For EFTPS, visit www. Irs gov free file federal state taxes eftps. Irs gov free file federal state taxes gov or call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD). Irs gov free file federal state taxes Electronic submission of Forms W-4, W-4P, W-4S and W-4V. Irs gov free file federal state taxes  You may set up a system to electronically receive any or all of the following forms (and their Spanish versions, if available) from an employee or payee. Irs gov free file federal state taxes Form W-4, Employee's Withholding Allowance Certificate. Irs gov free file federal state taxes Form W-4P, Withholding Certificate for Pension or Annuity Payments. Irs gov free file federal state taxes Form W-4S, Request for Federal Income Tax Withholding From Sick Pay. Irs gov free file federal state taxes Form W-4V, Voluntary Withholding Request. Irs gov free file federal state taxes For each form that you establish an electronic submission system for, you must meet each of the following five requirements. Irs gov free file federal state taxes The electronic system must ensure that the information received by the payer is the information sent by the payee. Irs gov free file federal state taxes The system must document all occasions of user access that result in a submission. Irs gov free file federal state taxes In addition, the design and operation of the electronic system, including access procedures, must make it reasonably certain that the person accessing the system and submitting the form is the person identified on the form. Irs gov free file federal state taxes The electronic system must provide exactly the same information as the paper form. Irs gov free file federal state taxes The electronic submission must be signed with an electronic signature by the payee whose name is on the form. Irs gov free file federal state taxes The electronic signature must be the final entry in the submission. Irs gov free file federal state taxes Upon request, you must furnish a hard copy of any completed electronic form to the IRS and a statement that, to the best of the payer's knowledge, the electronic form was submitted by the named payee. Irs gov free file federal state taxes The hard copy of the electronic form must provide exactly the same information as, but need not be a facsimile of, the paper form. Irs gov free file federal state taxes For Form W-4, the signature must be under penalty of perjury, and must contain the same language that appears on the paper version of the form. Irs gov free file federal state taxes The electronic system must inform the employee that he or she must make a declaration contained in the perjury statement and that the declaration is made by signing the Form W-4. Irs gov free file federal state taxes You must also meet all recordkeeping requirements that apply to the paper forms. Irs gov free file federal state taxes For more information, see: Regulations sections 31. Irs gov free file federal state taxes 3402(f)(5)-1(c) (for Form W-4), and Announcement 99-6 (for Forms W-4P, W-4S, and W-4V). Irs gov free file federal state taxes You can find Announcement 99-6 on page 24 of Internal Revenue Bulletin 1999-4 at www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/pub/irs-irbs/irb99-04. Irs gov free file federal state taxes pdf. Irs gov free file federal state taxes Additional employment tax information. Irs gov free file federal state taxes  Visit the IRS website at www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/businesses and click on the Employment Taxes link under Businesses Topics. Irs gov free file federal state taxes Telephone help. Irs gov free file federal state taxes  You can call the IRS Business and Specialty Tax Line with your employment tax questions at 1-800-829-4933. Irs gov free file federal state taxes Help for people with disabilities. Irs gov free file federal state taxes  You may call 1-800-829-4059 (TDD/TTY for persons who are deaf, heard of hearing, or have a speech disability) with any tax question or to order forms and publications. Irs gov free file federal state taxes You may also use this number for assistance with unresolved tax problems. Irs gov free file federal state taxes Furnishing Form W-2 to employees electronically. Irs gov free file federal state taxes  You may set up a system to furnish Form W-2, Wage and Tax Statement, electronically. Irs gov free file federal state taxes Each employee participating must consent (either electronically or by paper document) to receive his or her Form W-2 electronically, and you must notify the employee of all hardware and software requirements to receive the form. Irs gov free file federal state taxes You may not send a Form W-2 electronically to any employee who does not consent or who has revoked consent previously provided. Irs gov free file federal state taxes To furnish Forms W-2 electronically, you must meet the following disclosure requirements and provide a clear and conspicuous statement of each requirement to your employees. Irs gov free file federal state taxes The employee must be informed that he or she will receive a paper Form W-2 if consent is not given to receive it electronically. Irs gov free file federal state taxes The employee must be informed of the scope and duration of the consent. Irs gov free file federal state taxes The employee must be informed of any procedure for obtaining a paper copy of his or her Form W-2 and whether or not the request for a paper statement is treated as a withdrawal of his or her consent to receiving his or her Form W-2 electronically. Irs gov free file federal state taxes The employee must be notified about how to withdraw a consent and the effective date and manner by which the employer will confirm the withdrawn consent. Irs gov free file federal state taxes The employee must also be notified that the withdrawn consent does not apply to the previously issued Forms W-2. Irs gov free file federal state taxes The employee must be informed about any conditions under which electronic Forms W-2 will no longer be furnished (for example, termination of employment). Irs gov free file federal state taxes The employee must be informed of any procedures for updating his or her contact information that enables the employer to provide electronic Forms W-2. Irs gov free file federal state taxes The employer must notify the employee of any changes to the employer's contact information. Irs gov free file federal state taxes You must furnish electronic Forms W-2 by the same due date as the paper Forms W-2. Irs gov free file federal state taxes For more information on furnishing Form W-2 to employees electronically, see Regulations section 31. Irs gov free file federal state taxes 6051-1(j). Irs gov free file federal state taxes Photographs of missing children. Irs gov free file federal state taxes  The IRS is a proud partner with the National Center for Missing and Exploited Children. Irs gov free file federal state taxes Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Irs gov free file federal state taxes You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Irs gov free file federal state taxes Introduction This publication supplements Publication 15 (Circular E). Irs gov free file federal state taxes It contains specialized and detailed employment tax information supplementing the basic information provided in Publication 15 (Circular E). Irs gov free file federal state taxes This publication also contains tables for withholding on distributions of Indian gaming profits to tribal members. Irs gov free file federal state taxes Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment of various types of noncash compensation. Irs gov free file federal state taxes Ordering publications and forms. Irs gov free file federal state taxes   See Ordering Employer Tax Forms and Publications in Publication 15 (Circular E) and How To Get Tax Help , later, for more information on how to obtain forms and publications. Irs gov free file federal state taxes Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 505 Tax Withholding and Estimated Tax 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 583 Starting a Business and Keeping Records 1635 Employer Identification Number: Understanding Your EIN Comments and suggestions. Irs gov free file federal state taxes   We welcome your comments about this publication and your suggestions for future editions. Irs gov free file federal state taxes    You can write to us at the following address: Internal Revenue Service Tax Forms & Publications Division 1111 Constitution Ave. Irs gov free file federal state taxes NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Irs gov free file federal state taxes Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Irs gov free file federal state taxes   You can also send us comments from www. Irs gov free file federal state taxes irs. Irs gov free file federal state taxes gov/formspubs. Irs gov free file federal state taxes Click on More Information and then click on Comment on Tax Forms and Publications. Irs gov free file federal state taxes   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. 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