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Irs Tax Form 1120 For 2012

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Irs Tax Form 1120 For 2012

Irs tax form 1120 for 2012 12. Irs tax form 1120 for 2012   Other Income Table of Contents Introduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. Irs tax form 1120 for 2012 Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. Irs tax form 1120 for 2012 Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. Irs tax form 1120 for 2012 Method 2. Irs tax form 1120 for 2012 RoyaltiesDepletion. Irs tax form 1120 for 2012 Coal and iron ore. Irs tax form 1120 for 2012 Sale of property interest. Irs tax form 1120 for 2012 Part of future production sold. Irs tax form 1120 for 2012 Unemployment BenefitsTypes of unemployment compensation. Irs tax form 1120 for 2012 Governmental program. Irs tax form 1120 for 2012 Repayment of unemployment compensation. Irs tax form 1120 for 2012 Tax withholding. Irs tax form 1120 for 2012 Repayment of benefits. Irs tax form 1120 for 2012 Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. Irs tax form 1120 for 2012 Deduction for costs involved in unlawful discrimination suits. Irs tax form 1120 for 2012 Energy conservation measure. Irs tax form 1120 for 2012 Dwelling unit. Irs tax form 1120 for 2012 Current income required to be distributed. Irs tax form 1120 for 2012 Current income not required to be distributed. Irs tax form 1120 for 2012 How to report. Irs tax form 1120 for 2012 Losses. Irs tax form 1120 for 2012 Grantor trust. Irs tax form 1120 for 2012 Nonemployee compensation. Irs tax form 1120 for 2012 Corporate director. Irs tax form 1120 for 2012 Personal representatives. Irs tax form 1120 for 2012 Manager of trade or business for bankruptcy estate. Irs tax form 1120 for 2012 Notary public. Irs tax form 1120 for 2012 Election precinct official. Irs tax form 1120 for 2012 Difficulty-of-care payments. Irs tax form 1120 for 2012 Maintaining space in home. Irs tax form 1120 for 2012 Reporting taxable payments. Irs tax form 1120 for 2012 Lotteries and raffles. Irs tax form 1120 for 2012 Form W-2G. Irs tax form 1120 for 2012 Reporting winnings and recordkeeping. Irs tax form 1120 for 2012 Inherited pension or IRA. Irs tax form 1120 for 2012 Employee awards or bonuses. Irs tax form 1120 for 2012 Pulitzer, Nobel, and similar prizes. Irs tax form 1120 for 2012 Payment for services. Irs tax form 1120 for 2012 VA payments. Irs tax form 1120 for 2012 Prizes. Irs tax form 1120 for 2012 Strike and lockout benefits. Irs tax form 1120 for 2012 Introduction You must include on your return all items of income you receive in the form of money, property, and services unless the tax law states that you do not include them. Irs tax form 1120 for 2012 Some items, however, are only partly excluded from income. Irs tax form 1120 for 2012 This chapter discusses many kinds of income and explains whether they are taxable or nontaxable. Irs tax form 1120 for 2012 Income that is taxable must be reported on your tax return and is subject to tax. Irs tax form 1120 for 2012 Income that is nontaxable may have to be shown on your tax return but is not taxable. Irs tax form 1120 for 2012 This chapter begins with discussions of the following income items. Irs tax form 1120 for 2012 Bartering. Irs tax form 1120 for 2012 Canceled debts. Irs tax form 1120 for 2012 Sales parties at which you are the host or hostess. Irs tax form 1120 for 2012 Life insurance proceeds. Irs tax form 1120 for 2012 Partnership income. Irs tax form 1120 for 2012 S Corporation income. Irs tax form 1120 for 2012 Recoveries (including state income tax refunds). Irs tax form 1120 for 2012 Rents from personal property. Irs tax form 1120 for 2012 Repayments. Irs tax form 1120 for 2012 Royalties. Irs tax form 1120 for 2012 Unemployment benefits. Irs tax form 1120 for 2012 Welfare and other public assistance benefits. Irs tax form 1120 for 2012 These discussions are followed by brief discussions of other income items. Irs tax form 1120 for 2012 Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 544 Sales and Other Dispositions of Assets 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Bartering Bartering is an exchange of property or services. Irs tax form 1120 for 2012 You must include in your income, at the time received, the fair market value of property or services you receive in bartering. Irs tax form 1120 for 2012 If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise. Irs tax form 1120 for 2012 Generally, you report this income on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Irs tax form 1120 for 2012 However, if the barter involves an exchange of something other than services, such as in Example 3 below, you may have to use another form or schedule instead. Irs tax form 1120 for 2012 Example 1. Irs tax form 1120 for 2012 You are a self-employed attorney who performs legal services for a client, a small corporation. Irs tax form 1120 for 2012 The corporation gives you shares of its stock as payment for your services. Irs tax form 1120 for 2012 You must include the fair market value of the shares in your income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) in the year you receive them. Irs tax form 1120 for 2012 Example 2. Irs tax form 1120 for 2012 You are self-employed and a member of a barter club. Irs tax form 1120 for 2012 The club uses “credit units” as a means of exchange. Irs tax form 1120 for 2012 It adds credit units to your account for goods or services you provide to members, which you can use to purchase goods or services offered by other members of the barter club. Irs tax form 1120 for 2012 The club subtracts credit units from your account when you receive goods or services from other members. Irs tax form 1120 for 2012 You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year. Irs tax form 1120 for 2012 Example 3. Irs tax form 1120 for 2012 You own a small apartment building. Irs tax form 1120 for 2012 In return for 6 months rent-free use of an apartment, an artist gives you a work of art she created. Irs tax form 1120 for 2012 You must report as rental income on Schedule E (Form 1040), Supplemental Income and Loss, the fair market value of the artwork, and the artist must report as income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) the fair rental value of the apartment. Irs tax form 1120 for 2012 Form 1099-B from barter exchange. Irs tax form 1120 for 2012   If you exchanged property or services through a barter exchange, Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a similar statement from the barter exchange should be sent to you by February 18, 2014. Irs tax form 1120 for 2012 It should show the value of cash, property, services, credits, or scrip you received from exchanges during 2013. Irs tax form 1120 for 2012 The IRS also will receive a copy of Form 1099-B. Irs tax form 1120 for 2012 Canceled Debts In most cases, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. Irs tax form 1120 for 2012 You have no income from the canceled debt if it is intended as a gift to you. Irs tax form 1120 for 2012 A debt includes any indebtedness for which you are liable or which attaches to property you hold. Irs tax form 1120 for 2012 If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. Irs tax form 1120 for 2012 If it is a business debt, report the amount on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer). Irs tax form 1120 for 2012 Form 1099-C. Irs tax form 1120 for 2012   If a Federal Government agency, financial institution, or credit union cancels or forgives a debt you owe of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. Irs tax form 1120 for 2012 The amount of the canceled debt is shown in box 2. Irs tax form 1120 for 2012 Interest included in canceled debt. Irs tax form 1120 for 2012   If any interest is forgiven and included in the amount of canceled debt in box 2, the amount of interest also will be shown in box 3. Irs tax form 1120 for 2012 Whether or not you must include the interest portion of the canceled debt in your income depends on whether the interest would be deductible when you paid it. Irs tax form 1120 for 2012 See Deductible debt under Exceptions, later. Irs tax form 1120 for 2012   If the interest would not be deductible (such as interest on a personal loan), include in your income the amount from Form 1099-C, box 2. Irs tax form 1120 for 2012 If the interest would be deductible (such as on a business loan), include in your income the net amount of the canceled debt (the amount shown in box 2 less the interest amount shown in box 3). Irs tax form 1120 for 2012 Discounted mortgage loan. Irs tax form 1120 for 2012   If your financial institution offers a discount for the early payment of your mortgage loan, the amount of the discount is canceled debt. Irs tax form 1120 for 2012 You must include the canceled amount in your income. Irs tax form 1120 for 2012 Mortgage relief upon sale or other disposition. Irs tax form 1120 for 2012   If you are personally liable for a mortgage (recourse debt), and you are relieved of the mortgage when you dispose of the property, you may realize gain or loss up to the fair market value of the property. Irs tax form 1120 for 2012 To the extent the mortgage discharge exceeds the fair market value of the property, it is income from discharge of indebtedness unless it qualifies for exclusion under Excluded debt , later. Irs tax form 1120 for 2012 Report any income from discharge of indebtedness on nonbusiness debt that does not qualify for exclusion as other income on Form 1040, line 21. Irs tax form 1120 for 2012    You may be able to exclude part of the mortgage relief on your principal residence. Irs tax form 1120 for 2012 See Excluded debt, later. Irs tax form 1120 for 2012   If you are not personally liable for a mortgage (nonrecourse debt), and you are relieved of the mortgage when you dispose of the property (such as through foreclosure), that relief is included in the amount you realize. Irs tax form 1120 for 2012 You may have a taxable gain if the amount you realize exceeds your adjusted basis in the property. Irs tax form 1120 for 2012 Report any gain on nonbusiness property as a capital gain. Irs tax form 1120 for 2012   See Publication 4681 for more information. Irs tax form 1120 for 2012 Stockholder debt. Irs tax form 1120 for 2012   If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution that is generally dividend income to you. Irs tax form 1120 for 2012 For more information, see Publication 542, Corporations. Irs tax form 1120 for 2012   If you are a stockholder in a corporation and you cancel a debt owed to you by the corporation, you generally do not realize income. Irs tax form 1120 for 2012 This is because the canceled debt is considered as a contribution to the capital of the corporation equal to the amount of debt principal that you canceled. Irs tax form 1120 for 2012 Repayment of canceled debt. Irs tax form 1120 for 2012   If you included a canceled amount in your income and later pay the debt, you may be able to file a claim for refund for the year the amount was included in income. Irs tax form 1120 for 2012 You can file a claim on Form 1040X if the statute of limitations for filing a claim is still open. Irs tax form 1120 for 2012 The statute of limitations generally does not end until 3 years after the due date of your original return. Irs tax form 1120 for 2012 Exceptions There are several exceptions to the inclusion of canceled debt in income. Irs tax form 1120 for 2012 These are explained next. Irs tax form 1120 for 2012 Student loans. Irs tax form 1120 for 2012   Certain student loans contain a provision that all or part of the debt incurred to attend the qualified educational institution will be canceled if you work for a certain period of time in certain professions for any of a broad class of employers. Irs tax form 1120 for 2012   You do not have income if your student loan is canceled after you agreed to this provision and then performed the services required. Irs tax form 1120 for 2012 To qualify, the loan must have been made by: The Federal Government, a state or local government, or an instrumentality, agency, or subdivision thereof, A tax-exempt public benefit corporation that has assumed control of a state, county, or municipal hospital, and whose employees are considered public employees under state law, or An educational institution: Under an agreement with an entity described in (1) or (2) that provided the funds to the institution to make the loan, or As part of a program of the institution designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or a tax-exempt organization described in section 501(c)(3). Irs tax form 1120 for 2012   A loan to refinance a qualified student loan also will qualify if it was made by an educational institution or a qualified tax-exempt organization under its program designed as described in (3)(b) above. Irs tax form 1120 for 2012 Education loan repayment assistance. Irs tax form 1120 for 2012   Education loan repayments made to you by the National Health Service Corps Loan Repayment Program (NHSC Loan Repayment Program), a state education loan repayment program eligible for funds under the Public Health Service Act, or any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health services in underserved or health professional shortage areas are not taxable. Irs tax form 1120 for 2012    The provision relating to the “other state loan repayment or loan forgiveness program” was added to this exclusion for amounts received in tax years beginning after December 31, 2008. Irs tax form 1120 for 2012 If you included these amounts in income in 2010, 2011, or 2012, you should file an amended tax return to exclude this income. Irs tax form 1120 for 2012 See Form 1040X and its instructions for details on filing. Irs tax form 1120 for 2012 Deductible debt. Irs tax form 1120 for 2012   You do not have income from the cancellation of a debt if your payment of the debt would be deductible. Irs tax form 1120 for 2012 This exception applies only if you use the cash method of accounting. Irs tax form 1120 for 2012 For more information, see chapter 5 of Publication 334, Tax Guide for Small Business. Irs tax form 1120 for 2012 Price reduced after purchase. Irs tax form 1120 for 2012   In most cases, if the seller reduces the amount of debt you owe for property you purchased, you do not have income from the reduction. Irs tax form 1120 for 2012 The reduction of the debt is treated as a purchase price adjustment and reduces your basis in the property. Irs tax form 1120 for 2012 Excluded debt. Irs tax form 1120 for 2012   Do not include a canceled debt in your gross income in the following situations. Irs tax form 1120 for 2012 The debt is canceled in a bankruptcy case under title 11 of the U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 Code. Irs tax form 1120 for 2012 See Publication 908, Bankruptcy Tax Guide. Irs tax form 1120 for 2012 The debt is canceled when you are insolvent. Irs tax form 1120 for 2012 However, you cannot exclude any amount of canceled debt that is more than the amount by which you are insolvent. Irs tax form 1120 for 2012 See Publication 908. Irs tax form 1120 for 2012 The debt is qualified farm debt and is canceled by a qualified person. Irs tax form 1120 for 2012 See chapter 3 of Publication 225, Farmer's Tax Guide. Irs tax form 1120 for 2012 The debt is qualified real property business debt. Irs tax form 1120 for 2012 See chapter 5 of Publication 334. Irs tax form 1120 for 2012 The cancellation is intended as a gift. Irs tax form 1120 for 2012 The debt is qualified principal residence indebtedness. Irs tax form 1120 for 2012 See Publication 525 for additional information. Irs tax form 1120 for 2012 Host or Hostess If you host a party or event at which sales are made, any gift or gratuity you receive for giving the event is a payment for helping a direct seller make sales. Irs tax form 1120 for 2012 You must report this item as income at its fair market value. Irs tax form 1120 for 2012 Your out-of-pocket party expenses are subject to the 50% limit for meal and entertainment expenses. Irs tax form 1120 for 2012 These expenses are deductible as miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A (Form 1040), but only up to the amount of income you receive for giving the party. Irs tax form 1120 for 2012 For more information about the 50% limit for meal and entertainment expenses, see chapter 26. Irs tax form 1120 for 2012 Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Irs tax form 1120 for 2012 This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Irs tax form 1120 for 2012 However, interest income received as a result of life insurance proceeds may be taxable. Irs tax form 1120 for 2012 Proceeds not received in installments. Irs tax form 1120 for 2012   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Irs tax form 1120 for 2012 If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Irs tax form 1120 for 2012 Proceeds received in installments. Irs tax form 1120 for 2012   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Irs tax form 1120 for 2012   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Irs tax form 1120 for 2012 Include anything over this excluded part in your income as interest. Irs tax form 1120 for 2012 Surviving spouse. Irs tax form 1120 for 2012   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude up to $1,000 a year of the interest included in the installments. Irs tax form 1120 for 2012 If you remarry, you can continue to take the exclusion. Irs tax form 1120 for 2012 Surrender of policy for cash. Irs tax form 1120 for 2012   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Irs tax form 1120 for 2012 In most cases, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Irs tax form 1120 for 2012    You should receive a Form 1099-R showing the total proceeds and the taxable part. Irs tax form 1120 for 2012 Report these amounts on lines 16a and 16b of Form 1040 or lines 12a and 12b of Form 1040A. Irs tax form 1120 for 2012 More information. Irs tax form 1120 for 2012   For more information, see Life Insurance Proceeds in Publication 525. Irs tax form 1120 for 2012 Endowment Contract Proceeds An endowment contract is a policy under which you are paid a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Irs tax form 1120 for 2012 Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Irs tax form 1120 for 2012 To determine your cost, subtract any amount that you previously received under the contract and excluded from your income from the total premiums (or other consideration) paid for the contract. Irs tax form 1120 for 2012 Include the part of the lump sum payment that is more than your cost in your income. Irs tax form 1120 for 2012 Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are excluded from income if the insured is terminally or chronically ill. Irs tax form 1120 for 2012 Viatical settlement. Irs tax form 1120 for 2012   This is the sale or assignment of any part of the death benefit under a life insurance contract to a viatical settlement provider. Irs tax form 1120 for 2012 A viatical settlement provider is a person who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill and who meets the requirements of section 101(g)(2)(B) of the Internal Revenue Code. Irs tax form 1120 for 2012 Exclusion for terminal illness. Irs tax form 1120 for 2012    Accelerated death benefits are fully excludable if the insured is a terminally ill individual. Irs tax form 1120 for 2012 This is a person who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death within 24 months from the date of the certification. Irs tax form 1120 for 2012 Exclusion for chronic illness. Irs tax form 1120 for 2012    If the insured is a chronically ill individual who is not terminally ill, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Irs tax form 1120 for 2012 Accelerated death benefits paid on a per diem or other periodic basis are excludable up to a limit. Irs tax form 1120 for 2012 This limit applies to the total of the accelerated death benefits and any periodic payments received from long-term care insurance contracts. Irs tax form 1120 for 2012 For information on the limit and the definitions of chronically ill individual, qualified long-term care services, and long-term care insurance contracts, see Long-Term Care Insurance Contracts under Sickness and Injury Benefits in Publication 525. Irs tax form 1120 for 2012 Exception. Irs tax form 1120 for 2012   The exclusion does not apply to any amount paid to a person (other than the insured) who has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the person, or Has a financial interest in the person's business. Irs tax form 1120 for 2012 Form 8853. Irs tax form 1120 for 2012   To claim an exclusion for accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Irs tax form 1120 for 2012 You do not have to file Form 8853 to exclude accelerated death benefits paid on the basis of actual expenses incurred. Irs tax form 1120 for 2012 Public Safety Officer Killed in the Line of Duty If you are a survivor of a public safety officer who was killed in the line of duty, you may be able to exclude from income certain amounts you receive. Irs tax form 1120 for 2012 For this purpose, the term public safety officer includes law enforcement officers, firefighters, chaplains, and rescue squad and ambulance crew members. Irs tax form 1120 for 2012 For more information, see Publication 559, Survivors, Executors, and Administrators. Irs tax form 1120 for 2012 Partnership Income A partnership generally is not a taxable entity. Irs tax form 1120 for 2012 The income, gains, losses, deductions, and credits of a partnership are passed through to the partners based on each partner's distributive share of these items. Irs tax form 1120 for 2012 Schedule K-1 (Form 1065). Irs tax form 1120 for 2012    Although a partnership generally pays no tax, it must file an information return on Form 1065, U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 Return of Partnership Income, and send Schedule K-1 (Form 1065) to each partner. Irs tax form 1120 for 2012 In addition, the partnership will send each partner a copy of the Partner's Instructions for Schedule K-1 (Form 1065) to help each partner report his or her share of the partnership's income, deductions, credits, and tax preference items. Irs tax form 1120 for 2012 Keep Schedule K-1 (Form 1065) for your records. Irs tax form 1120 for 2012 Do not attach it to your Form 1040, unless you are specifically required to do so. Irs tax form 1120 for 2012 For more information on partnerships, see Publication 541, Partnerships. Irs tax form 1120 for 2012 Qualified joint venture. Irs tax form 1120 for 2012   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Irs tax form 1120 for 2012 To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Irs tax form 1120 for 2012 For further information on how to make the election and which schedule(s) to file, see the instructions for your individual tax return. Irs tax form 1120 for 2012 S Corporation Income In most cases, an S corporation does not pay tax on its income. Irs tax form 1120 for 2012 Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder's pro rata share. Irs tax form 1120 for 2012 Schedule K-1 (Form 1120S). Irs tax form 1120 for 2012   An S corporation must file a return on Form 1120S, U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 Income Tax Return for an S Corporation, and send Schedule K-1 (Form 1120S) to each shareholder. Irs tax form 1120 for 2012 In addition, the S corporation will send each shareholder a copy of the Shareholder's Instructions for Schedule K-1 (Form 1120S) to help each shareholder report his or her share of the S corporation's income, losses, credits, and deductions. Irs tax form 1120 for 2012 Keep Schedule K-1 (Form 1120S) for your records. Irs tax form 1120 for 2012 Do not attach it to your Form 1040, unless you are specifically required to do so. Irs tax form 1120 for 2012 For more information on S corporations and their shareholders, see the Instructions for Form 1120S. Irs tax form 1120 for 2012 Recoveries A recovery is a return of an amount you deducted or took a credit for in an earlier year. Irs tax form 1120 for 2012 The most common recoveries are refunds, reimbursements, and rebates of deductions itemized on Schedule A (Form 1040). Irs tax form 1120 for 2012 You also may have recoveries of non-itemized deductions (such as payments on previously deducted bad debts) and recoveries of items for which you previously claimed a tax credit. Irs tax form 1120 for 2012 Tax benefit rule. Irs tax form 1120 for 2012   You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. Irs tax form 1120 for 2012 For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year. Irs tax form 1120 for 2012 For more information, see Publication 525. Irs tax form 1120 for 2012 Federal income tax refund. Irs tax form 1120 for 2012   Refunds of federal income taxes are not included in your income because they are never allowed as a deduction from income. Irs tax form 1120 for 2012 State tax refund. Irs tax form 1120 for 2012   If you received a state or local income tax refund (or credit or offset) in 2013, you generally must include it in income if you deducted the tax in an earlier year. Irs tax form 1120 for 2012 The payer should send Form 1099-G, Certain Government Payments, to you by January 31, 2014. Irs tax form 1120 for 2012 The IRS also will receive a copy of the Form 1099-G. Irs tax form 1120 for 2012 If you file Form 1040, use the State and Local Income Tax Refund Worksheet in the 2013 Form 1040 instructions for line 10 to figure the amount (if any) to include in your income. Irs tax form 1120 for 2012 See Publication 525 for when you must use another worksheet. Irs tax form 1120 for 2012   If you could choose to deduct for a tax year either: State and local income taxes, or State and local general sales taxes, then the maximum refund that you may have to include in income is limited to the excess of the tax you chose to deduct for that year over the tax you did not choose to deduct for that year. Irs tax form 1120 for 2012 For examples, see Publication 525. Irs tax form 1120 for 2012 Mortgage interest refund. Irs tax form 1120 for 2012    If you received a refund or credit in 2013 of mortgage interest paid in an earlier year, the amount should be shown in box 3 of your Form 1098, Mortgage Interest Statement. Irs tax form 1120 for 2012 Do not subtract the refund amount from the interest you paid in 2013. Irs tax form 1120 for 2012 You may have to include it in your income under the rules explained in the following discussions. Irs tax form 1120 for 2012 Interest on recovery. Irs tax form 1120 for 2012   Interest on any of the amounts you recover must be reported as interest income in the year received. Irs tax form 1120 for 2012 For example, report any interest you received on state or local income tax refunds on Form 1040, line 8a. Irs tax form 1120 for 2012 Recovery and expense in same year. Irs tax form 1120 for 2012   If the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income. Irs tax form 1120 for 2012 Recovery for 2 or more years. Irs tax form 1120 for 2012   If you receive a refund or other recovery that is for amounts you paid in 2 or more separate years, you must allocate, on a pro rata basis, the recovered amount between the years in which you paid it. Irs tax form 1120 for 2012 This allocation is necessary to determine the amount of recovery from any earlier years and to determine the amount, if any, of your allowable deduction for this item for the current year. Irs tax form 1120 for 2012 For information on how to compute the allocation, see Recoveries in Publication 525. Irs tax form 1120 for 2012 Itemized Deduction Recoveries If you recover any amount that you deducted in an earlier year on Schedule A (Form 1040), you generally must include the full amount of the recovery in your income in the year you receive it. Irs tax form 1120 for 2012 Where to report. Irs tax form 1120 for 2012   Enter your state or local income tax refund on Form 1040, line 10, and the total of all other recoveries as other income on Form 1040, line 21. Irs tax form 1120 for 2012 You cannot use Form 1040A or Form 1040EZ. Irs tax form 1120 for 2012 Standard deduction limit. Irs tax form 1120 for 2012   You generally are allowed to claim the standard deduction if you do not itemize your deductions. Irs tax form 1120 for 2012 Only your itemized deductions that are more than your standard deduction are subject to the recovery rule (unless you are required to itemize your deductions). Irs tax form 1120 for 2012 If your total deductions on the earlier year return were not more than your income for that year, include in your income this year the lesser of: Your recoveries, or The amount by which your itemized deductions exceeded the standard deduction. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 For 2012, you filed a joint return. Irs tax form 1120 for 2012 Your taxable income was $60,000 and you were not entitled to any tax credits. Irs tax form 1120 for 2012 Your standard deduction was $11,900, and you had itemized deductions of $14,000. Irs tax form 1120 for 2012 In 2013, you received the following recoveries for amounts deducted on your 2012 return: Medical expenses $200 State and local income tax refund 400 Refund of mortgage interest 325 Total recoveries $925 None of the recoveries were more than the deductions taken for 2012. Irs tax form 1120 for 2012 The difference between the state and local income tax you deducted and your local general sales tax was more than $400. Irs tax form 1120 for 2012 Your total recoveries are less than the amount by which your itemized deductions exceeded the standard deduction ($14,000 − 11,900 = $2,100), so you must include your total recoveries in your income for 2013. Irs tax form 1120 for 2012 Report the state and local income tax refund of $400 on Form 1040, line 10, and the balance of your recoveries, $525, on Form 1040, line 21. Irs tax form 1120 for 2012 Standard deduction for earlier years. Irs tax form 1120 for 2012   To determine if amounts recovered in 2013 must be included in your income, you must know the standard deduction for your filing status for the year the deduction was claimed. Irs tax form 1120 for 2012 Look in the instructions for your tax return from prior years to locate the standard deduction for the filing status for that prior year. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 You filed a joint return on Form 1040 for 2012 with taxable income of $45,000. Irs tax form 1120 for 2012 Your itemized deductions were $12,350. Irs tax form 1120 for 2012 The standard deduction that you could have claimed was $11,900. Irs tax form 1120 for 2012 In 2013, you recovered $2,100 of your 2012 itemized deductions. Irs tax form 1120 for 2012 None of the recoveries were more than the actual deductions for 2012. Irs tax form 1120 for 2012 Include $450 of the recoveries in your 2013 income. Irs tax form 1120 for 2012 This is the smaller of your recoveries ($2,100) or the amount by which your itemized deductions were more than the standard deduction ($12,350 − $11,900 = $450). Irs tax form 1120 for 2012 Recovery limited to deduction. Irs tax form 1120 for 2012   You do not include in your income any amount of your recovery that is more than the amount you deducted in the earlier year. Irs tax form 1120 for 2012 The amount you include in your income is limited to the smaller of: The amount deducted on Schedule A (Form 1040), or The amount recovered. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 During 2012 you paid $1,700 for medical expenses. Irs tax form 1120 for 2012 From this amount you subtracted $1,500, which was 7. Irs tax form 1120 for 2012 5% of your adjusted gross income. Irs tax form 1120 for 2012 Your actual medical expense deduction was $200. Irs tax form 1120 for 2012 In 2013, you received a $500 reimbursement from your medical insurance for your 2012 expenses. Irs tax form 1120 for 2012 The only amount of the $500 reimbursement that must be included in your income for 2013 is $200—the amount actually deducted. Irs tax form 1120 for 2012 Other recoveries. Irs tax form 1120 for 2012   See Recoveries in Publication 525 if: You have recoveries of items other than itemized deductions, or You received a recovery for an item for which you claimed a tax credit (other than investment credit or foreign tax credit) in a prior year. Irs tax form 1120 for 2012 Rents from Personal Property If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is in most cases determined by: Whether or not the rental activity is a business, and Whether or not the rental activity is conducted for profit. Irs tax form 1120 for 2012 In most cases, if your primary purpose is income or profit and you are involved in the rental activity with continuity and regularity, your rental activity is a business. Irs tax form 1120 for 2012 See Publication 535, Business Expenses, for details on deducting expenses for both business and not-for-profit activities. Irs tax form 1120 for 2012 Reporting business income and expenses. Irs tax form 1120 for 2012    If you are in the business of renting personal property, report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Irs tax form 1120 for 2012 The form instructions have information on how to complete them. Irs tax form 1120 for 2012 Reporting nonbusiness income. Irs tax form 1120 for 2012   If you are not in the business of renting personal property, report your rental income on Form 1040, line 21. Irs tax form 1120 for 2012 List the type and amount of the income on the dotted line next to line 21. Irs tax form 1120 for 2012 Reporting nonbusiness expenses. Irs tax form 1120 for 2012   If you rent personal property for profit, include your rental expenses in the total amount you enter on Form 1040, line 36. Irs tax form 1120 for 2012 Also enter the amount and “PPR” on the dotted line next to line 36. Irs tax form 1120 for 2012   If you do not rent personal property for profit, your deductions are limited and you cannot report a loss to offset other income. Irs tax form 1120 for 2012 See Activity not for profit , under Other Income, later. Irs tax form 1120 for 2012 Repayments If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Irs tax form 1120 for 2012 Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. Irs tax form 1120 for 2012 Generally, you can claim a deduction or credit only if the repayment qualifies as an expense or loss incurred in your trade or business or in a for-profit transaction. Irs tax form 1120 for 2012 Type of deduction. Irs tax form 1120 for 2012   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Irs tax form 1120 for 2012 You generally deduct the repayment on the same form or schedule on which you previously reported it as income. Irs tax form 1120 for 2012 For example, if you reported it as self-employment income, deduct it as a business expense on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Irs tax form 1120 for 2012 If you reported it as a capital gain, deduct it as a capital loss as explained in the Instructions for Schedule D (Form 1040). Irs tax form 1120 for 2012 If you reported it as wages, unemployment compensation, or other nonbusiness income, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040). Irs tax form 1120 for 2012 Repaid social security benefits. Irs tax form 1120 for 2012   If you repaid social security benefits or equivalent railroad retirement benefits, see Repayment of benefits in chapter 11. Irs tax form 1120 for 2012 Repayment of $3,000 or less. Irs tax form 1120 for 2012   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Irs tax form 1120 for 2012 If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 23. Irs tax form 1120 for 2012 Repayment over $3,000. Irs tax form 1120 for 2012   If the amount you repaid was more than $3,000, you can deduct the repayment (as explained under Type of deduction , earlier). Irs tax form 1120 for 2012 However, you can choose instead to take a tax credit for the year of repayment if you included the income under a claim of right. Irs tax form 1120 for 2012 This means that at the time you included the income, it appeared that you had an unrestricted right to it. Irs tax form 1120 for 2012 If you qualify for this choice, figure your tax under both methods and compare the results. Irs tax form 1120 for 2012 Use the method (deduction or credit) that results in less tax. Irs tax form 1120 for 2012 When determining whether the amount you repaid was more or less than $3,000, consider the total amount being repaid on the return. Irs tax form 1120 for 2012 Each instance of repayment is not considered separately. Irs tax form 1120 for 2012 Method 1. Irs tax form 1120 for 2012   Figure your tax for 2013 claiming a deduction for the repaid amount. Irs tax form 1120 for 2012 If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 28. Irs tax form 1120 for 2012 Method 2. Irs tax form 1120 for 2012   Figure your tax for 2013 claiming a credit for the repaid amount. Irs tax form 1120 for 2012 Follow these steps. Irs tax form 1120 for 2012 Figure your tax for 2013 without deducting the repaid amount. Irs tax form 1120 for 2012 Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Irs tax form 1120 for 2012 Subtract the tax in (2) from the tax shown on your return for the earlier year. Irs tax form 1120 for 2012 This is the credit. Irs tax form 1120 for 2012 Subtract the answer in (3) from the tax for 2013 figured without the deduction (Step 1). Irs tax form 1120 for 2012   If method 1 results in less tax, deduct the amount repaid. Irs tax form 1120 for 2012 If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 71, by adding the amount of the credit to any other credits on this line, and entering “I. Irs tax form 1120 for 2012 R. Irs tax form 1120 for 2012 C. Irs tax form 1120 for 2012 1341” in the column to the right of line 71. Irs tax form 1120 for 2012   An example of this computation can be found in Publication 525. Irs tax form 1120 for 2012 Repaid wages subject to social security and Medicare taxes. Irs tax form 1120 for 2012   If you had to repay an amount that you included in your wages or compensation in an earlier year on which social security, Medicare, or tier 1 RRTA taxes were paid, ask your employer to refund the excess amount to you. Irs tax form 1120 for 2012 If the employer refuses to refund the taxes, ask for a statement indicating the amount of the overcollection to support your claim. Irs tax form 1120 for 2012 File a claim for refund using Form 843, Claim for Refund and Request for Abatement. Irs tax form 1120 for 2012 Repaid wages subject to Additional Medicare Tax. Irs tax form 1120 for 2012   Employers cannot make an adjustment or file a claim for refund for Additional Medicare Tax withholding when there is a repayment of wages received by an employee in a prior year because the employee determines liability for Additional Medicare Tax on the employee's income tax return for the prior year. Irs tax form 1120 for 2012 If you had to repay an amount that you included in your wages or compensation in an earlier year, and on which Additional Medicare Tax was paid, you may be able to recover the Additional Medicare Tax paid on the amount. Irs tax form 1120 for 2012 To recover Additional Medicare Tax on the repaid wages or compensation, you must file Form 1040X, Amended U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 Individual Income Tax Return, for the prior year in which the wages or compensation were originally received. Irs tax form 1120 for 2012 See the Instructions for Form 1040X. Irs tax form 1120 for 2012 Royalties Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. Irs tax form 1120 for 2012 In most cases you report royalties in Part I of Schedule E (Form 1040). Irs tax form 1120 for 2012 However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc. Irs tax form 1120 for 2012 , report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Irs tax form 1120 for 2012 Copyrights and patents. Irs tax form 1120 for 2012   Royalties from copyrights on literary, musical, or artistic works, and similar property, or from patents on inventions, are amounts paid to you for the right to use your work over a specified period of time. Irs tax form 1120 for 2012 Royalties generally are based on the number of units sold, such as the number of books, tickets to a performance, or machines sold. Irs tax form 1120 for 2012 Oil, gas, and minerals. Irs tax form 1120 for 2012   Royalty income from oil, gas, and mineral properties is the amount you receive when natural resources are extracted from your property. Irs tax form 1120 for 2012 The royalties are based on units, such as barrels, tons, etc. Irs tax form 1120 for 2012 , and are paid to you by a person or company who leases the property from you. Irs tax form 1120 for 2012 Depletion. Irs tax form 1120 for 2012   If you are the owner of an economic interest in mineral deposits or oil and gas wells, you can recover your investment through the depletion allowance. Irs tax form 1120 for 2012 For information on this subject, see chapter 9 of Publication 535. Irs tax form 1120 for 2012 Coal and iron ore. Irs tax form 1120 for 2012   Under certain circumstances, you can treat amounts you receive from the disposal of coal and iron ore as payments from the sale of a capital asset, rather than as royalty income. Irs tax form 1120 for 2012 For information about gain or loss from the sale of coal and iron ore, see Publication 544. Irs tax form 1120 for 2012 Sale of property interest. Irs tax form 1120 for 2012   If you sell your complete interest in oil, gas, or mineral rights, the amount you receive is considered payment for the sale of property used in a trade or business under section 1231, not royalty income. Irs tax form 1120 for 2012 Under certain circumstances, the sale is subject to capital gain or loss treatment as explained in the Instructions for Schedule D (Form 1040). Irs tax form 1120 for 2012 For more information on selling section 1231 property, see chapter 3 of Publication 544. Irs tax form 1120 for 2012   If you retain a royalty, an overriding royalty, or a net profit interest in a mineral property for the life of the property, you have made a lease or a sublease, and any cash you receive for the assignment of other interests in the property is ordinary income subject to a depletion allowance. Irs tax form 1120 for 2012 Part of future production sold. Irs tax form 1120 for 2012   If you own mineral property but sell part of the future production, in most cases you treat the money you receive from the buyer at the time of the sale as a loan from the buyer. Irs tax form 1120 for 2012 Do not include it in your income or take depletion based on it. Irs tax form 1120 for 2012   When production begins, you include all the proceeds in your income, deduct all the production expenses, and deduct depletion from that amount to arrive at your taxable income from the property. Irs tax form 1120 for 2012 Unemployment Benefits The tax treatment of unemployment benefits you receive depends on the type of program paying the benefits. Irs tax form 1120 for 2012 Unemployment compensation. Irs tax form 1120 for 2012   You must include in income all unemployment compensation you receive. Irs tax form 1120 for 2012 You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you. Irs tax form 1120 for 2012 In most cases, you enter unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Irs tax form 1120 for 2012 Types of unemployment compensation. Irs tax form 1120 for 2012   Unemployment compensation generally includes any amount received under an unemployment compensation law of the United States or of a state. Irs tax form 1120 for 2012 It includes the following benefits. Irs tax form 1120 for 2012 Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund. Irs tax form 1120 for 2012 State unemployment insurance benefits. Irs tax form 1120 for 2012 Railroad unemployment compensation benefits. Irs tax form 1120 for 2012 Disability payments from a government program paid as a substitute for unemployment compensation. Irs tax form 1120 for 2012 (Amounts received as workers' compensation for injuries or illness are not unemployment compensation. Irs tax form 1120 for 2012 See chapter 5 for more information. Irs tax form 1120 for 2012 ) Trade readjustment allowances under the Trade Act of 1974. Irs tax form 1120 for 2012 Unemployment assistance under the Disaster Relief and Emergency Assistance Act. Irs tax form 1120 for 2012 Unemployment assistance under the Airline Deregulation Act of 1974 Program. Irs tax form 1120 for 2012 Governmental program. Irs tax form 1120 for 2012   If you contribute to a governmental unemployment compensation program and your contributions are not deductible, amounts you receive under the program are not included as unemployment compensation until you recover your contributions. Irs tax form 1120 for 2012 If you deducted all of your contributions to the program, the entire amount you receive under the program is included in your income. Irs tax form 1120 for 2012 Repayment of unemployment compensation. Irs tax form 1120 for 2012   If you repaid in 2013 unemployment compensation you received in 2013, subtract the amount you repaid from the total amount you received and enter the difference on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Irs tax form 1120 for 2012 On the dotted line next to your entry enter “Repaid” and the amount you repaid. Irs tax form 1120 for 2012 If you repaid unemployment compensation in 2013 that you included in income in an earlier year, you can deduct the amount repaid on Schedule A (Form 1040), line 23, if you itemize deductions. Irs tax form 1120 for 2012 If the amount is more than $3,000, see Repayments , earlier. Irs tax form 1120 for 2012 Tax withholding. Irs tax form 1120 for 2012   You can choose to have federal income tax withheld from your unemployment compensation. Irs tax form 1120 for 2012 To make this choice, complete Form W-4V, Voluntary Withholding Request, and give it to the paying office. Irs tax form 1120 for 2012 Tax will be withheld at 10% of your payment. Irs tax form 1120 for 2012    If you do not choose to have tax withheld from your unemployment compensation, you may be liable for estimated tax. Irs tax form 1120 for 2012 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Irs tax form 1120 for 2012 For more information on estimated tax, see chapter 4. Irs tax form 1120 for 2012 Supplemental unemployment benefits. Irs tax form 1120 for 2012   Benefits received from an employer-financed fund (to which the employees did not contribute) are not unemployment compensation. Irs tax form 1120 for 2012 They are taxable as wages and are subject to withholding for income tax. Irs tax form 1120 for 2012 They may be subject to social security and Medicare taxes. Irs tax form 1120 for 2012 For more information, see Supplemental Unemployment Benefits in section 5 of Publication 15-A, Employer's Supplemental Tax Guide. Irs tax form 1120 for 2012 Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Irs tax form 1120 for 2012 Repayment of benefits. Irs tax form 1120 for 2012   You may have to repay some of your supplemental unemployment benefits to qualify for trade readjustment allowances under the Trade Act of 1974. Irs tax form 1120 for 2012 If you repay supplemental unemployment benefits in the same year you receive them, reduce the total benefits by the amount you repay. Irs tax form 1120 for 2012 If you repay the benefits in a later year, you must include the full amount of the benefits received in your income for the year you received them. Irs tax form 1120 for 2012   Deduct the repayment in the later year as an adjustment to gross income on Form 1040. Irs tax form 1120 for 2012 (You cannot use Form 1040A or Form 1040EZ. Irs tax form 1120 for 2012 ) Include the repayment on Form 1040, line 36, and enter “Sub-Pay TRA” and the amount on the dotted line next to line 36. Irs tax form 1120 for 2012 If the amount you repay in a later year is more than $3,000, you may be able to take a credit against your tax for the later year instead of deducting the amount repaid. Irs tax form 1120 for 2012 For more information on this, see Repayments , earlier. Irs tax form 1120 for 2012 Private unemployment fund. Irs tax form 1120 for 2012   Unemployment benefit payments from a private (nonunion) fund to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. Irs tax form 1120 for 2012 Report the taxable amount on Form 1040, line 21. Irs tax form 1120 for 2012 Payments by a union. Irs tax form 1120 for 2012   Benefits paid to you as an unemployed member of a union from regular union dues are included in your income on Form 1040, line 21. Irs tax form 1120 for 2012 However, if you contribute to a special union fund and your payments to the fund are not deductible, the unemployment benefits you receive from the fund are includible in your income only to the extent they are more than your contributions. Irs tax form 1120 for 2012 Guaranteed annual wage. Irs tax form 1120 for 2012   Payments you receive from your employer during periods of unemployment, under a union agreement that guarantees you full pay during the year, are taxable as wages. Irs tax form 1120 for 2012 Include them on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Irs tax form 1120 for 2012 State employees. Irs tax form 1120 for 2012   Payments similar to a state's unemployment compensation may be made by the state to its employees who are not covered by the state's unemployment compensation law. Irs tax form 1120 for 2012 Although the payments are fully taxable, do not report them as unemployment compensation. Irs tax form 1120 for 2012 Report these payments on Form 1040, line 21. Irs tax form 1120 for 2012 Welfare and Other Public Assistance Benefits Do not include in your income governmental benefit payments from a public welfare fund based upon need, such as payments to blind individuals under a state public assistance law. Irs tax form 1120 for 2012 Payments from a state fund for the victims of crime should not be included in the victims' incomes if they are in the nature of welfare payments. Irs tax form 1120 for 2012 Do not deduct medical expenses that are reimbursed by such a fund. Irs tax form 1120 for 2012 You must include in your income any welfare payments that are compensation for services or that are obtained fraudulently. Irs tax form 1120 for 2012 Reemployment Trade Adjustment Assistance (RTAA) payments. Irs tax form 1120 for 2012   RTAA payments received from a state must be included in your income. Irs tax form 1120 for 2012 The state must send you Form 1099-G to advise you of the amount you should include in income. Irs tax form 1120 for 2012 The amount should be reported on Form 1040, line 21. Irs tax form 1120 for 2012 Persons with disabilities. Irs tax form 1120 for 2012   If you have a disability, you must include in income compensation you receive for services you perform unless the compensation is otherwise excluded. Irs tax form 1120 for 2012 However, you do not include in income the value of goods, services, and cash that you receive, not in return for your services, but for your training and rehabilitation because you have a disability. Irs tax form 1120 for 2012 Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, and services to help individuals with an intellectual disability do their work. Irs tax form 1120 for 2012 Disaster relief grants. Irs tax form 1120 for 2012    Do not include post-disaster grants received under the Robert T. Irs tax form 1120 for 2012 Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, child care, or funeral expenses. Irs tax form 1120 for 2012 Do not deduct casualty losses or medical expenses that are specifically reimbursed by these disaster relief grants. Irs tax form 1120 for 2012 If you have deducted a casualty loss for the loss of your personal residence and you later receive a disaster relief grant for the loss of the same residence, you may have to include part or all of the grant in your taxable income. Irs tax form 1120 for 2012 See Recoveries , earlier. Irs tax form 1120 for 2012 Unemployment assistance payments under the Act are taxable unemployment compensation. Irs tax form 1120 for 2012 See Unemployment compensation under Unemployment Benefits, earlier. Irs tax form 1120 for 2012 Disaster relief payments. Irs tax form 1120 for 2012   You can exclude from income any amount you receive that is a qualified disaster relief payment. Irs tax form 1120 for 2012 A qualified disaster relief payment is an amount paid to you: To reimburse or pay reasonable and necessary personal, family, living, or funeral expenses that result from a qualified disaster; To reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of your home or repair or replacement of its contents to the extent it is due to a qualified disaster; By a person engaged in the furnishing or sale of transportation as a common carrier because of the death or personal physical injuries incurred as a result of a qualified disaster; or By a federal, state, or local government, or agency, or instrumentality in connection with a qualified disaster in order to promote the general welfare. Irs tax form 1120 for 2012 You can exclude this amount only to the extent any expense it pays for is not paid for by insurance or otherwise. Irs tax form 1120 for 2012 The exclusion does not apply if you were a participant or conspirator in a terrorist action or a representative of one. Irs tax form 1120 for 2012   A qualified disaster is: A disaster which results from a terrorist or military action; A federally declared disaster; or A disaster which results from an accident involving a common carrier, or from any other event, which is determined to be catastrophic by the Secretary of the Treasury or his or her delegate. Irs tax form 1120 for 2012   For amounts paid under item (4), a disaster is qualified if it is determined by an applicable federal, state, or local authority to warrant assistance from the federal, state, or local government, agency, or instrumentality. Irs tax form 1120 for 2012 Disaster mitigation payments. Irs tax form 1120 for 2012   You also can exclude from income any amount you receive that is a qualified disaster mitigation payment. Irs tax form 1120 for 2012 Qualified disaster mitigation payments are also most commonly paid to you in the period immediately following damage to property as a result of a natural disaster. Irs tax form 1120 for 2012 However, disaster mitigation payments are used to mitigate (reduce the severity of) potential damage from future natural disasters. Irs tax form 1120 for 2012 They are paid to you through state and local governments based on the provisions of the Robert T. Irs tax form 1120 for 2012 Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act. Irs tax form 1120 for 2012   You cannot increase the basis or adjusted basis of your property for improvements made with nontaxable disaster mitigation payments. Irs tax form 1120 for 2012 Home Affordable Modification Program (HAMP). Irs tax form 1120 for 2012   If you benefit from Pay-for-Performance Success Payments under HAMP, the payments are not taxable. Irs tax form 1120 for 2012 Mortgage assistance payments under section 235 of the National Housing Act. Irs tax form 1120 for 2012   Payments made under section 235 of the National Housing Act for mortgage assistance are not included in the homeowner's income. Irs tax form 1120 for 2012 Interest paid for the homeowner under the mortgage assistance program cannot be deducted. Irs tax form 1120 for 2012 Medicare. Irs tax form 1120 for 2012   Medicare benefits received under title XVIII of the Social Security Act are not includible in the gross income of the individuals for whom they are paid. Irs tax form 1120 for 2012 This includes basic (part A (Hospital Insurance Benefits for the Aged)) and supplementary (part B (Supplementary Medical Insurance Benefits for the Aged)). Irs tax form 1120 for 2012 Old-age, survivors, and disability insurance benefits (OASDI). Irs tax form 1120 for 2012   Generally, OASDI payments under section 202 of title II of the Social Security Act are not includible in the gross income of the individuals to whom they are paid. Irs tax form 1120 for 2012 This applies to old-age insurance benefits, and insurance benefits for wives, husbands, children, widows, widowers, mothers and fathers, and parents, as well as the lump-sum death payment. Irs tax form 1120 for 2012 Nutrition Program for the Elderly. Irs tax form 1120 for 2012    Food benefits you receive under the Nutrition Program for the Elderly are not taxable. Irs tax form 1120 for 2012 If you prepare and serve free meals for the program, include in your income as wages the cash pay you receive, even if you are also eligible for food benefits. Irs tax form 1120 for 2012 Payments to reduce cost of winter energy. Irs tax form 1120 for 2012   Payments made by a state to qualified people to reduce their cost of winter energy use are not taxable. Irs tax form 1120 for 2012 Other Income The following brief discussions are arranged in alphabetical order. Irs tax form 1120 for 2012 Other income items briefly discussed below are referenced to publications which provide more topical information. Irs tax form 1120 for 2012 Activity not for profit. Irs tax form 1120 for 2012   You must include on your return income from an activity from which you do not expect to make a profit. Irs tax form 1120 for 2012 An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. Irs tax form 1120 for 2012 Enter this income on Form 1040, line 21. Irs tax form 1120 for 2012 Deductions for expenses related to the activity are limited. Irs tax form 1120 for 2012 They cannot total more than the income you report and can be taken only if you itemize deductions on Schedule A (Form 1040). Irs tax form 1120 for 2012 See Not-for-Profit Activities in chapter 1 of Publication 535 for information on whether an activity is considered carried on for a profit. Irs tax form 1120 for 2012 Alaska Permanent Fund dividend. Irs tax form 1120 for 2012   If you received a payment from Alaska's mineral income fund (Alaska Permanent Fund dividend), report it as income on line 21 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Irs tax form 1120 for 2012 The state of Alaska sends each recipient a document that shows the amount of the payment with the check. Irs tax form 1120 for 2012 The amount also is reported to IRS. Irs tax form 1120 for 2012 Alimony. Irs tax form 1120 for 2012   Include in your income on Form 1040, line 11, any alimony payments you receive. Irs tax form 1120 for 2012 Amounts you receive for child support are not income to you. Irs tax form 1120 for 2012 Alimony and child support payments are discussed in chapter 18. Irs tax form 1120 for 2012 Bribes. Irs tax form 1120 for 2012   If you receive a bribe, include it in your income. Irs tax form 1120 for 2012 Campaign contributions. Irs tax form 1120 for 2012   These contributions are not income to a candidate unless they are diverted to his or her personal use. Irs tax form 1120 for 2012 To be exempt from tax, the contributions must be spent for campaign purposes or kept in a fund for use in future campaigns. Irs tax form 1120 for 2012 However, interest earned on bank deposits, dividends received on contributed securities, and net gains realized on sales of contributed securities are taxable and must be reported on Form 1120-POL, U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 Income Tax Return for Certain Political Organizations. Irs tax form 1120 for 2012 Excess campaign funds transferred to an office account must be included in the officeholder's income on Form 1040, line 21, in the year transferred. Irs tax form 1120 for 2012 Car pools. Irs tax form 1120 for 2012   Do not include in your income amounts you receive from the passengers for driving a car in a car pool to and from work. Irs tax form 1120 for 2012 These amounts are considered reimbursement for your expenses. Irs tax form 1120 for 2012 However, this rule does not apply if you have developed car pool arrangements into a profit-making business of transporting workers for hire. Irs tax form 1120 for 2012 Cash rebates. Irs tax form 1120 for 2012   A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 You buy a new car for $24,000 cash and receive a $2,000 rebate check from the manufacturer. Irs tax form 1120 for 2012 The $2,000 is not income to you. Irs tax form 1120 for 2012 Your basis in the car is $22,000. Irs tax form 1120 for 2012 This is the basis on which you figure gain or loss if you sell the car and depreciation if you use it for business. Irs tax form 1120 for 2012 Casualty insurance and other reimbursements. Irs tax form 1120 for 2012   You generally should not report these reimbursements on your return unless you are figuring gain or loss from the casualty or theft. Irs tax form 1120 for 2012 See chapter 25 for more information. Irs tax form 1120 for 2012 Child support payments. Irs tax form 1120 for 2012   You should not report these payments on your return. Irs tax form 1120 for 2012 See chapter 18 for more information. Irs tax form 1120 for 2012 Court awards and damages. Irs tax form 1120 for 2012   To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. Irs tax form 1120 for 2012 The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. Irs tax form 1120 for 2012 Include the following as ordinary income. Irs tax form 1120 for 2012 Interest on any award. Irs tax form 1120 for 2012 Compensation for lost wages or lost profits in most cases. Irs tax form 1120 for 2012 Punitive damages, in most cases. Irs tax form 1120 for 2012 It does not matter if they relate to a physical injury or physical sickness. Irs tax form 1120 for 2012 Amounts received in settlement of pension rights (if you did not contribute to the plan). Irs tax form 1120 for 2012 Damages for: Patent or copyright infringement, Breach of contract, or Interference with business operations. Irs tax form 1120 for 2012 Back pay and damages for emotional distress received to satisfy a claim under title VII of the Civil Rights Act of 1964. Irs tax form 1120 for 2012 Attorney fees and costs (including contingent fees) where the underlying recovery is included in gross income. Irs tax form 1120 for 2012   Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments). Irs tax form 1120 for 2012 Emotional distress. Irs tax form 1120 for 2012   Emotional distress itself is not a physical injury or physical sickness, but damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. Irs tax form 1120 for 2012 Do not include them in your income. Irs tax form 1120 for 2012   If the emotional distress is due to a personal injury that is not due to a physical injury or sickness (for example, employment discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Irs tax form 1120 for 2012 Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders. Irs tax form 1120 for 2012 Deduction for costs involved in unlawful discrimination suits. Irs tax form 1120 for 2012   You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. Irs tax form 1120 for 2012 For more information, see Publication 525. Irs tax form 1120 for 2012 Credit card insurance. Irs tax form 1120 for 2012   In most cases, if you receive benefits under a credit card disability or unemployment insurance plan, the benefits are taxable to you. Irs tax form 1120 for 2012 These plans make the minimum monthly payment on your credit card account if you cannot make the payment due to injury, illness, disability, or unemployment. Irs tax form 1120 for 2012 Report on Form 1040, line 21, the amount of benefits you received during the year that is more than the amount of the premiums you paid during the year. Irs tax form 1120 for 2012 Down payment assistance. Irs tax form 1120 for 2012   If you purchase a home and receive assistance from a nonprofit corporation to make the down payment, that assistance is not included in your income. Irs tax form 1120 for 2012 If the corporation qualifies as a tax-exempt charitable organization, the assistance is treated as a gift and is included in your basis of the house. Irs tax form 1120 for 2012 If the corporation does not qualify, the assistance is treated as a rebate or reduction of the purchase price and is not included in your basis. Irs tax form 1120 for 2012 Employment agency fees. Irs tax form 1120 for 2012   If you get a job through an employment agency, and the fee is paid by your employer, the fee is not includible in your income if you are not liable for it. Irs tax form 1120 for 2012 However, if you pay it and your employer reimburses you for it, it is includible in your income. Irs tax form 1120 for 2012 Energy conservation subsidies. Irs tax form 1120 for 2012   You can exclude from gross income any subsidy provided, either directly or indirectly, by public utilities for the purchase or installation of an energy conservation measure for a dwelling unit. Irs tax form 1120 for 2012 Energy conservation measure. Irs tax form 1120 for 2012   This includes installations or modifications that are primarily designed to reduce consumption of electricity or natural gas, or improve the management of energy demand. Irs tax form 1120 for 2012 Dwelling unit. Irs tax form 1120 for 2012   This includes a house, apartment, condominium, mobile home, boat, or similar property. Irs tax form 1120 for 2012 If a building or structure contains both dwelling and other units, any subsidy must be properly allocated. Irs tax form 1120 for 2012 Estate and trust income. Irs tax form 1120 for 2012    An estate or trust, unlike a partnership, may have to pay federal income tax. Irs tax form 1120 for 2012 If you are a beneficiary of an estate or trust, you may be taxed on your share of its income distributed or required to be distributed to you. Irs tax form 1120 for 2012 However, there is never a double tax. Irs tax form 1120 for 2012 Estates and trusts file their returns on Form 1041, U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 Income Tax Return for Estates and Trusts, and your share of the income is reported to you on Schedule K-1 (Form 1041). Irs tax form 1120 for 2012 Current income required to be distributed. Irs tax form 1120 for 2012   If you are the beneficiary of an estate or trust that must distribute all of its current income, you must report your share of the distributable net income, whether or not you actually received it. Irs tax form 1120 for 2012 Current income not required to be distributed. Irs tax form 1120 for 2012    If you are the beneficiary of an estate or trust and the fiduciary has the choice of whether to distribute all or part of the current income, you must report: All income that is required to be distributed to you, whether or not it is actually distributed, plus All other amounts actually paid or credited to you, up to the amount of your share of distributable net income. Irs tax form 1120 for 2012 How to report. Irs tax form 1120 for 2012   Treat each item of income the same way that the estate or trust would treat it. Irs tax form 1120 for 2012 For example, if a trust's dividend income is distributed to you, you report the distribution as dividend income on your return. Irs tax form 1120 for 2012 The same rule applies to distributions of tax-exempt interest and capital gains. Irs tax form 1120 for 2012   The fiduciary of the estate or trust must tell you the type of items making up your share of the estate or trust income and any credits you are allowed on your individual income tax return. Irs tax form 1120 for 2012 Losses. Irs tax form 1120 for 2012   Losses of estates and trusts generally are not deductible by the beneficiaries. Irs tax form 1120 for 2012 Grantor trust. Irs tax form 1120 for 2012   Income earned by a grantor trust is taxable to the grantor, not the beneficiary, if the grantor keeps certain control over the trust. Irs tax form 1120 for 2012 (The grantor is the one who transferred property to the trust. Irs tax form 1120 for 2012 ) This rule applies if the property (or income from the property) put into the trust will or may revert (be returned) to the grantor or the grantor's spouse. Irs tax form 1120 for 2012   Generally, a trust is a grantor trust if the grantor has a reversionary interest valued (at the date of transfer) at more than 5% of the value of the transferred property. Irs tax form 1120 for 2012 Expenses paid by another. Irs tax form 1120 for 2012   If your personal expenses are paid for by another person, such as a corporation, the payment may be taxable to you depending upon your relationship with that person and the nature of the payment. Irs tax form 1120 for 2012 But if the payment makes up for a loss caused by that person, and only restores you to the position you were in before the loss, the payment is not includible in your income. Irs tax form 1120 for 2012 Fees for services. Irs tax form 1120 for 2012   Include all fees for your services in your income. Irs tax form 1120 for 2012 Examples of these fees are amounts you receive for services you perform as: A corporate director, An executor, administrator, or personal representative of an estate, A manager of a trade or business you operated before declaring Chapter 11 bankruptcy, A notary public, or An election precinct official. Irs tax form 1120 for 2012 Nonemployee compensation. Irs tax form 1120 for 2012   If you are not an employee and the fees for your services from the same payer total $600 or more for the year, you may receive a Form 1099-MISC. Irs tax form 1120 for 2012 You may need to report your fees as self-employment income. Irs tax form 1120 for 2012 See Self-Employed Persons , in chapter 1, for a discussion of when you are considered self-employed. Irs tax form 1120 for 2012 Corporate director. Irs tax form 1120 for 2012   Corporate director fees are self-employment income. Irs tax form 1120 for 2012 Report these payments on Schedule C or Schedule C-EZ (Form 1040). Irs tax form 1120 for 2012 Personal representatives. Irs tax form 1120 for 2012   All personal representatives must include in their gross income fees paid to them from an estate. Irs tax form 1120 for 2012 If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on Form 1040, line 21. Irs tax form 1120 for 2012 If you are in the trade or business of being an executor, report these fees as self-employment income on Schedule C or Schedule C-EZ (Form 1040). Irs tax form 1120 for 2012 The fee is not includible in income if it is waived. Irs tax form 1120 for 2012 Manager of trade or business for bankruptcy estate. Irs tax form 1120 for 2012   Include in your income all payments received from your bankruptcy estate for managing or operating a trade or business that you operated before you filed for bankruptcy. Irs tax form 1120 for 2012 Report this income on Form 1040, line 21. Irs tax form 1120 for 2012 Notary public. Irs tax form 1120 for 2012    Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). Irs tax form 1120 for 2012 These payments are not subject to self-employment tax. Irs tax form 1120 for 2012 See the separate instructions for Schedule SE (Form 1040) for details. Irs tax form 1120 for 2012 Election precinct official. Irs tax form 1120 for 2012    You should receive a Form W-2 showing payments for services performed as an election official or election worker. Irs tax form 1120 for 2012 Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Irs tax form 1120 for 2012 Foster care providers. Irs tax form 1120 for 2012   Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. Irs tax form 1120 for 2012 However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty-of-care payments. Irs tax form 1120 for 2012   A qualified foster individual is a person who: Is living in a foster family home, and Was placed there by: An agency of a state or one of its political subdivisions, or A qualified foster care placement agency. Irs tax form 1120 for 2012 Difficulty-of-care payments. Irs tax form 1120 for 2012   These are additional payments that are designated by the payer as compensation for providing the additional care that is required for physically, mentally, or emotionally handicapped qualified foster individuals. Irs tax form 1120 for 2012 A state must determine that the additional compensation is needed, and the care for which the payments are made must be provided in your home. Irs tax form 1120 for 2012   You must include in your income difficulty-of-care payments received for more than: 10 qualified foster individuals under age 19, or 5 qualified foster individuals age 19 or older. Irs tax form 1120 for 2012 Maintaining space in home. Irs tax form 1120 for 2012   If you are paid to maintain space in your home for emergency foster care, you must include the payment in your income. Irs tax form 1120 for 2012 Reporting taxable payments. Irs tax form 1120 for 2012    If you receive payments that you must include in your income, you are in business as a foster care provider and you are self-employed. Irs tax form 1120 for 2012 Report the payments on Schedule C or Schedule C-EZ (Form 1040). Irs tax form 1120 for 2012 See Publication 587, Business Use of Your Home, to help you determine the amount you can deduct for the use of your home. Irs tax form 1120 for 2012 Found property. Irs tax form 1120 for 2012   If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession. Irs tax form 1120 for 2012 Free tour. Irs tax form 1120 for 2012   If you received a free tour from a travel agency for organizing a group of tourists, you must include its value in your income. Irs tax form 1120 for 2012 Report the fair market value of the tour on Form 1040, line 21, if you are not in the trade or business of organizing tours. Irs tax form 1120 for 2012 You cannot deduct your expenses in serving as the voluntary leader of the group at the group's request. Irs tax form 1120 for 2012 If you organize tours as a trade or business, report the tour's value on Schedule C or Schedule C-EZ (Form 1040). Irs tax form 1120 for 2012 Gambling winnings. Irs tax form 1120 for 2012   You must include your gambling winnings in income on Form 1040, line 21. Irs tax form 1120 for 2012 If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings. Irs tax form 1120 for 2012 Lotteries and raffles. Irs tax form 1120 for 2012   Winnings from lotteries and raffles are gambling winnings. Irs tax form 1120 for 2012 In addition to cash winnings, you must include in your income the fair market value of bonds, cars, houses, and other noncash prizes. Irs tax form 1120 for 2012    If you win a state lottery prize payable in installments, see Publication 525 for more information. Irs tax form 1120 for 2012 Form W-2G. Irs tax form 1120 for 2012   You may have received a Form W-2G, Certain Gambling Winnings, showing the amount of your gambling winnings and any tax taken out of them. Irs tax form 1120 for 2012 Include the amount from box 1 on Form 1040, line 21. Irs tax form 1120 for 2012 Include the amount shown in box 4 on Form 1040, line 62, as federal income tax withheld. Irs tax form 1120 for 2012 Reporting winnings and recordkeeping. Irs tax form 1120 for 2012   For more information on reporting gam
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More Taxpayers Filing from Home Computers in 2014, Many Taxpayers Eligible to Use Free File

IR-2014-28, March 13, 2014

WASHINGTON — More than 27 million taxpayers have filed their tax returns from home computers so far this year, an increase of almost 6 percent compared to last year.

These 27 million taxpayers used a variety of software products to prepare and e-file their own returns. However, the IRS reminds people that they can prepare and e-file their federal tax returns online for free through Free File at IRS.gov. Free File has an option for almost everyone, either through brand-name software or online fillable forms.

The Free File program is a public-private partnership between the IRS and the Free File Alliance, LLC. The Alliance is a consortium of 14 leading tax software providers who make their products available exclusively at IRS.gov. All Free File members meet security requirements and use the latest in encryption technology to protect taxpayer information.

Seventy percent of taxpayers are eligible for easy-to-use Free File software because their income was $58,000 or less in 2013. People who made more than $58,000 and who are comfortable preparing their own returns can use Free File Fillable Forms, the electronic version of IRS paper forms.

Each Free File software provider sets its own criteria for eligibility, generally based on income, age, state residency or military service. However, taxpayers can quickly find a match by using the “help me find Free File software” tool. Or, taxpayers can review all providers and their offers. Some software providers also offer state tax software and display on their landing pages whether it is free or if there is a fee.   

Free File Fillable Forms is more basic, similar to completing a paper Form 1040. The program performs some math calculations and provides links to some IRS publications. It also can be filed electronically for free. However, it does not support any state tax returns.

The total number of individual income tax returns e-filed so far this year is 62.2 million. E-file includes both returns filed from home computers and returns e-filed by professional tax return preparers.  [The filing season statistics table follows.]

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2014 FILING SEASON STATISTICS

Cumulative statistics comparing 3/08/13 and 3/07/14

Individual Income Tax Returns:

2013

2014

% Change

Total Receipts

67,143,000

67,183,000

0.1

Total Processed

60,944,000

65,662,000

 7.7

 

 

 

 

E-filing Receipts:

 

 

 

TOTAL           

61,488,000

62,213,000

1.2

Tax Professionals

35,585,000

34,816,000

-2.2

Self-prepared

25,903,000

27,397,000

5.8

 

 

 

 

Web Usage:

 

 

 

Visits to IRS.gov

197,651,780

181,196,235

-8.3

 

 

 

 

Total Refunds:

 

 

 

Number

53,447,000

55,434,000

3.7

Amount

$154.696

Billion

$164.586

Billion

6.4

Average refund

$2,894

$2,969

2.6

 

 

 

 

Direct Deposit Refunds:

 

 

 

Number

47,177,000

47,976,000

1.7

Amount

$142.861

Billion

$146.305

Billion

2.4

Average refund

$3,028

$3,050

0.7

 

Page Last Reviewed or Updated: 13-Mar-2014

The Irs Tax Form 1120 For 2012

Irs tax form 1120 for 2012 4. Irs tax form 1120 for 2012   Underpayment Penalty for 2013 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: General RuleFarmers and fishermen. Irs tax form 1120 for 2012 Higher income taxpayers. Irs tax form 1120 for 2012 Minimum required for higher income taxpayers. Irs tax form 1120 for 2012 Estate or trust payments of estimated tax. Irs tax form 1120 for 2012 Lowering or eliminating the penalty. Irs tax form 1120 for 2012 ExceptionsLess Than $1,000 Due No Tax Liability Last Year Figuring Your Required Annual Payment (Part I) Short Method for Figuring the Penalty (Part III) Regular Method for Figuring the Penalty (Part IV)Figuring Your Underpayment (Part IV, Section A) Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Annualized Income Installment Method (Schedule AI) Farmers and Fishermen Waiver of PenaltyFarmers and fishermen. Irs tax form 1120 for 2012 Introduction If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty. Irs tax form 1120 for 2012 You may understand this chapter better if you can refer to a copy of your latest federal income tax return. Irs tax form 1120 for 2012 No penalty. Irs tax form 1120 for 2012   Generally, you will not have to pay a penalty for 2013 if any of the following apply. Irs tax form 1120 for 2012 The total of your withholding and timely estimated tax payments was at least as much as your 2012 tax. Irs tax form 1120 for 2012 (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen. Irs tax form 1120 for 2012 ) The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Irs tax form 1120 for 2012 Your total tax for 2013 (defined later) minus your withholding is less than $1,000. Irs tax form 1120 for 2012 You did not have a tax liability for 2012. Irs tax form 1120 for 2012 You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. Irs tax form 1120 for 2012 IRS can figure the penalty for you. Irs tax form 1120 for 2012   If you think you owe the penalty, but you do not want to figure it yourself when you file your tax return, you may not have to. Irs tax form 1120 for 2012 Generally, the IRS will figure the penalty for you and send you a bill. Irs tax form 1120 for 2012   You only need to figure your penalty in the following three situations. Irs tax form 1120 for 2012 You are requesting a waiver of part, but not all, of the penalty. Irs tax form 1120 for 2012 You are using the annualized income installment method to figure the penalty. Irs tax form 1120 for 2012 You are treating the federal income tax withheld from your income as paid on the dates actually withheld. Irs tax form 1120 for 2012 However, if these situations do not apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. Irs tax form 1120 for 2012 See Form 2210 , later. Irs tax form 1120 for 2012 Topics - This chapter discusses: The general rule for the underpayment penalty, Special rules for certain individuals, Exceptions to the underpayment penalty, How to figure your underpayment and the amount of your penalty on Form 2210, and How to ask the IRS to waive the penalty. Irs tax form 1120 for 2012 Useful Items - You may want to see: Form (and Instructions) 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 5 for information about getting these forms. Irs tax form 1120 for 2012 General Rule In general, you may owe a penalty for 2013 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2013 tax, or 100% of your 2012 tax. Irs tax form 1120 for 2012 (Your 2012 tax return must cover a 12-month period. Irs tax form 1120 for 2012 ) Your 2013 tax, for this purpose, is defined under Total tax for 2013 , later. Irs tax form 1120 for 2012 Special rules for certain individuals. Irs tax form 1120 for 2012   There are special rules for farmers and fishermen and certain higher income taxpayers. Irs tax form 1120 for 2012 Farmers and fishermen. Irs tax form 1120 for 2012   If at least two-thirds of your gross income for 2012 or 2013 is from farming or fishing, substitute  662/3% for 90% in (1) above. Irs tax form 1120 for 2012   See Farmers and Fishermen , later. Irs tax form 1120 for 2012 Higher income taxpayers. Irs tax form 1120 for 2012   If your AGI for 2012 was more than $150,000 ($75,000 if your 2013 filing status is married filing a separate return), substitute 110% for 100% in (2) under General Rule . Irs tax form 1120 for 2012 This rule does not apply to farmers or fishermen. Irs tax form 1120 for 2012   For 2012, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Irs tax form 1120 for 2012 Penalty figured separately for each period. Irs tax form 1120 for 2012   Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. Irs tax form 1120 for 2012 This is true even if you are due a refund when you file your income tax return. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 You did not make estimated tax payments for 2013 because you thought you had enough tax withheld from your wages. Irs tax form 1120 for 2012 Early in January 2014, you made an estimate of your total 2013 tax. Irs tax form 1120 for 2012 Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax. Irs tax form 1120 for 2012 On January 10, you made an estimated tax payment of $3,000, which is the difference between your withholding and your estimate of your total tax. Irs tax form 1120 for 2012 Your final return shows your total tax to be $50 less than your estimate, so you are due a refund. Irs tax form 1120 for 2012 You do not owe a penalty for your payment due January 15, 2014. Irs tax form 1120 for 2012 However, you may owe a penalty through January 10, 2014, the day you made the $3,000 payment, for your underpayments for the earlier payment periods. Irs tax form 1120 for 2012 Minimum required each period. Irs tax form 1120 for 2012   You will owe a penalty for any 2013 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of: 22. Irs tax form 1120 for 2012 5% of your 2013 tax, or 25% of your 2012 tax. Irs tax form 1120 for 2012 (Your 2012 tax return must cover a 12-month period. Irs tax form 1120 for 2012 ) Minimum required for higher income taxpayers. Irs tax form 1120 for 2012   If you are subject to the rule for higher income taxpayers, discussed above, substitute 27. Irs tax form 1120 for 2012 5% for 25% in (2) under General Rule . Irs tax form 1120 for 2012 When penalty is charged. Irs tax form 1120 for 2012   If you miss a payment or you paid less than the minimum required in a period, you may be charged an underpayment penalty from the date the amount was due to the date the payment is made. Irs tax form 1120 for 2012 If a payment is mailed, the date of the U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 postmark is considered the date of payment. Irs tax form 1120 for 2012   If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc. Irs tax form 1120 for 2012 ) is considered to be the date of payment. Irs tax form 1120 for 2012 Estate or trust payments of estimated tax. Irs tax form 1120 for 2012   If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2014. Irs tax form 1120 for 2012 Amended returns. Irs tax form 1120 for 2012    If you file an amended return by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. Irs tax form 1120 for 2012 If you file an amended return after the due date of the original return, use the tax shown on the original return. Irs tax form 1120 for 2012   However, if you and your spouse file a joint return after the due date to replace separate returns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. Irs tax form 1120 for 2012 This rule applies only if both original separate returns were filed on time. Irs tax form 1120 for 2012 2012 separate returns and 2013 joint return. Irs tax form 1120 for 2012    If you file a joint return with your spouse for 2013, but you filed separate returns for 2012, your 2012 tax is the total of the tax shown on your separate returns. Irs tax form 1120 for 2012 You filed a separate return if you filed as single, head of household, or married filing separately. Irs tax form 1120 for 2012 2012 joint return and 2013 separate returns. Irs tax form 1120 for 2012    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, your 2012 tax is your share of the tax on the joint return. Irs tax form 1120 for 2012 You are filing a separate return if you file as single, head of household, or married filing separately. Irs tax form 1120 for 2012   To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2012 using the same filing status as for 2013. Irs tax form 1120 for 2012 Then multiply the tax on the joint return by the following fraction. Irs tax form 1120 for 2012   The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Irs tax form 1120 for 2012 Lisa and Paul filed a joint return for 2012 showing taxable income of $49,000 and a tax of $6,484. Irs tax form 1120 for 2012 Of the $49,000 taxable income, $41,000 was Lisa's and the rest was Paul's. Irs tax form 1120 for 2012 For 2013, they file married filing separately. Irs tax form 1120 for 2012 Lisa figures her share of the tax on the 2012 joint return as follows. Irs tax form 1120 for 2012 2012 tax on $41,000 based on a separate return $ 6,286 2012 tax on $8,000 based on a  separate return 803 Total $ 7,089 Lisa's percentage of total tax  ($6,286 ÷ $ 7,089) 88. Irs tax form 1120 for 2012 67% Lisa's part of tax on joint return ($6,484 × 88. Irs tax form 1120 for 2012 67%) $ 5,749 Form 2210. Irs tax form 1120 for 2012   In most cases, you do not need to file Form 2210. Irs tax form 1120 for 2012 The IRS will figure the penalty for you and send you a bill. Irs tax form 1120 for 2012 If you want us to figure the penalty for you, leave the penalty line on your return blank. Irs tax form 1120 for 2012 Do not file Form 2210. Irs tax form 1120 for 2012   To determine if you should file Form 2210, see Part II of Form 2210. Irs tax form 1120 for 2012 If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210. Irs tax form 1120 for 2012 If you use Form 2210, you cannot file Form 1040EZ. Irs tax form 1120 for 2012   On Form 1040, enter the amount of your penalty on line 77. Irs tax form 1120 for 2012 If you owe tax on line 76, add the penalty to your tax due and show your total payment on line 76. Irs tax form 1120 for 2012 If you are due a refund, subtract the penalty from the overpayment and enter the result on line 73. Irs tax form 1120 for 2012   On Form 1040A, enter the amount of your penalty on line 46. Irs tax form 1120 for 2012 If you owe tax on line 45, add the penalty to your tax due and show your total payment on line 45. Irs tax form 1120 for 2012 If you are due a refund, subtract the penalty from the overpayment and enter the result on line 42. Irs tax form 1120 for 2012 Lowering or eliminating the penalty. Irs tax form 1120 for 2012    You may be able to lower or eliminate your penalty if you file Form 2210. Irs tax form 1120 for 2012 You must file Form 2210 with your return if any of the following applies. Irs tax form 1120 for 2012 You request a waiver. Irs tax form 1120 for 2012 See Waiver of Penalty , later. Irs tax form 1120 for 2012 You use the annualized income installment method. Irs tax form 1120 for 2012 See the explanation of this method under Annualized Income Installment Method (Schedule AI) . Irs tax form 1120 for 2012 You use your actual withholding for each payment period for estimated tax purposes. Irs tax form 1120 for 2012 See Actual withholding method under Figuring Your Underpayment (Part IV, Section A). Irs tax form 1120 for 2012 You base any of your required installments on the tax shown on your 2012 return and you filed or are filing a joint return for either 2012 or 2013, but not for both years. Irs tax form 1120 for 2012 Exceptions Generally, you do not have to pay an underpayment penalty if either: Your total tax is less than $1,000, or You had no tax liability last year. Irs tax form 1120 for 2012 Less Than $1,000 Due You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000. Irs tax form 1120 for 2012 Total tax for 2013. Irs tax form 1120 for 2012   For 2013, your total tax on Form 1040 is the amount on line 61 reduced by the following. Irs tax form 1120 for 2012    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Irs tax form 1120 for 2012 Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Irs tax form 1120 for 2012 The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Irs tax form 1120 for 2012 Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line 71. Irs tax form 1120 for 2012   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Irs tax form 1120 for 2012   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. Irs tax form 1120 for 2012 Note. Irs tax form 1120 for 2012 When figuring the amount on line 60, include household employment taxes only if you had federal income tax withheld from your income or you would owe the penalty even if you did not include those taxes. Irs tax form 1120 for 2012 Paid through withholding. Irs tax form 1120 for 2012    For 2013, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 69. Irs tax form 1120 for 2012 Add to that any write-in amount on line 72 identified as “Form 8689. Irs tax form 1120 for 2012 ” On Form 1040A, the amount you paid through withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included on line 41. Irs tax form 1120 for 2012 On Form 1040EZ, it is the amount on line 7. Irs tax form 1120 for 2012 No Tax Liability Last Year You do not owe a penalty if you had no tax liability last year and you were a U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 citizen or resident for the whole year. Irs tax form 1120 for 2012 For this rule to apply, your tax year must have included all 12 months of the year. Irs tax form 1120 for 2012 You had no tax liability for 2012 if your total tax was zero or you were not required to file an income tax return. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 Ray, who is single and 22 years old, was unemployed for a few months during 2012. Irs tax form 1120 for 2012 He earned $6,700 in wages before he was laid off, and he received $1,400 in unemployment compensation afterwards. Irs tax form 1120 for 2012 He had no other income. Irs tax form 1120 for 2012 Even though he had gross income of $8,100, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($9,750 for 2012). Irs tax form 1120 for 2012 He filed a return only to have his withheld income tax refunded to him. Irs tax form 1120 for 2012 In 2013, Ray began regular work as an independent contractor. Irs tax form 1120 for 2012 Ray made no estimated tax payments in 2013. Irs tax form 1120 for 2012 Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2013 because he had no tax liability in 2012. Irs tax form 1120 for 2012 Total tax for 2012. Irs tax form 1120 for 2012   For 2012, your total tax on Form 1040 is the amount on line 61 reduced by the following. Irs tax form 1120 for 2012    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Irs tax form 1120 for 2012 Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Irs tax form 1120 for 2012 The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Irs tax form 1120 for 2012 Any refundable credit amounts listed on lines 64a, 65, 66, 70, and credits from Forms 8801 (line 27 only), and 8885 included on line 71. Irs tax form 1120 for 2012   If you filed Form 1040A, your 2012 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Irs tax form 1120 for 2012   If you filed Form 1040EZ, your 2012 total tax is the amount on line 11 reduced by the amount on line 8a. Irs tax form 1120 for 2012 Figuring Your Required Annual Payment (Part I) Figure your required annual payment in Part I of Form 2210, following the line-by-line instructions. Irs tax form 1120 for 2012 If you rounded the entries on your tax return to whole dollars, you can round on Form 2210. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 The tax on Lori Lane's 2012 return was $12,400. Irs tax form 1120 for 2012 Her AGI was not more than $150,000 for either 2012 or 2013. Irs tax form 1120 for 2012 The tax on her 2013 return (Form 1040, line 55) is $13,044. Irs tax form 1120 for 2012 Line 56 (self-employment tax) is $8,902. Irs tax form 1120 for 2012 Her 2013 total tax is $21,946. Irs tax form 1120 for 2012 For 2013, Lori had $1,600 income tax withheld and made four equal estimated tax payments ($1,000 each). Irs tax form 1120 for 2012 90% of her 2013 tax is $19,751. Irs tax form 1120 for 2012 Because she paid less than her 2012 tax ($12,400) and less than 90% of her 2013 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for underpayment of estimated tax. Irs tax form 1120 for 2012 The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return. Irs tax form 1120 for 2012 Lori's required annual payment is $12,400 (100% of 2012 tax) because that is smaller than 90% of her 2013 tax. Irs tax form 1120 for 2012 Different 2012 filing status. Irs tax form 1120 for 2012    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, see 2012 joint return and 2013 separate returns , earlier, to figure the amount to enter as your 2012 tax on line 8 of Form 2210. Irs tax form 1120 for 2012 Short Method for Figuring the Penalty (Part III) You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. Irs tax form 1120 for 2012 If you qualify to use this method, it will result in the same penalty amount as the regular method. Irs tax form 1120 for 2012 However, either the annualized income installment method or the actual withholding method, explained later, may result in a smaller penalty. Irs tax form 1120 for 2012 You can use the short method only if you meet one of the following requirements. Irs tax form 1120 for 2012 You made no estimated tax payments for 2013 (it does not matter whether you had income tax withholding). Irs tax form 1120 for 2012 You paid the same amount of estimated tax on each of the four payment due dates. Irs tax form 1120 for 2012 If you do not meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions. Irs tax form 1120 for 2012 Note. Irs tax form 1120 for 2012 If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. Irs tax form 1120 for 2012 However, if the payment was only a few days early, the difference is likely to be small. Irs tax form 1120 for 2012 You cannot use the short method if any of the following apply. Irs tax form 1120 for 2012 You made any estimated tax payments late. Irs tax form 1120 for 2012 You checked box C or D in Part II of Form 2210. Irs tax form 1120 for 2012 You are filing Form 1040NR or 1040NR-EZ and you did not receive wages as an employee subject to U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 income tax withholding. Irs tax form 1120 for 2012 If you use the short method, you cannot use the annualized income installment method to figure your underpayment for each payment period. Irs tax form 1120 for 2012 Also, you cannot use your actual withholding during each period to figure your payments for each period. Irs tax form 1120 for 2012 These methods, which may give you a smaller penalty amount, are explained under Figuring Your Underpayment (Part IV, Section A). Irs tax form 1120 for 2012 Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210. Irs tax form 1120 for 2012 Regular Method for Figuring the Penalty (Part IV) You can use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date. Irs tax form 1120 for 2012 You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you. Irs tax form 1120 for 2012 You paid one or more estimated tax payments on a date after the due date. Irs tax form 1120 for 2012 You paid at least one, but less than four, installments of estimated tax. Irs tax form 1120 for 2012 You paid estimated tax payments in un- equal amounts. Irs tax form 1120 for 2012 You use the annualized income installment method to figure your underpayment for each payment period. Irs tax form 1120 for 2012 You use your actual withholding during each payment period to figure your payments. Irs tax form 1120 for 2012 Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. Irs tax form 1120 for 2012 Enter the results on line 27 of Section B. Irs tax form 1120 for 2012 Figuring Your Underpayment (Part IV, Section A) Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. Irs tax form 1120 for 2012 Complete lines 20 through 26 of the first column before going to line 20 of the next column. Irs tax form 1120 for 2012 Required installments—line 18. Irs tax form 1120 for 2012   Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). Irs tax form 1120 for 2012 This method—the regular method—is the one to use if you received your income evenly throughout the year. Irs tax form 1120 for 2012   However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Irs tax form 1120 for 2012 First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. Irs tax form 1120 for 2012 See Annualized Income Installment Method (Schedule AI), later. Irs tax form 1120 for 2012 Payments made—line 19. Irs tax form 1120 for 2012   Enter in each column the total of: Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and One-fourth of your withholding. Irs tax form 1120 for 2012 For special rules for figuring your payments, see Form 2210 instructions for line 19. Irs tax form 1120 for 2012   If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 69. Irs tax form 1120 for 2012 If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line 41. Irs tax form 1120 for 2012 Actual withholding method. Irs tax form 1120 for 2012    Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. Irs tax form 1120 for 2012 You can make this choice separately for the tax withheld from your wages and for all other withholding. Irs tax form 1120 for 2012 This includes any excess social security and tier 1 RRTA tax withheld. Irs tax form 1120 for 2012   Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year. Irs tax form 1120 for 2012   If you use your actual withholding, you must check box D in Form 2210, Part II. Irs tax form 1120 for 2012 Then complete Form 2210 using the regular method (Part IV) and file it with your return. Irs tax form 1120 for 2012 Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. Irs tax form 1120 for 2012 The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid. Irs tax form 1120 for 2012 For 2013, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2014 through April 15, 2014. Irs tax form 1120 for 2012 A 3% rate applies to all four periods. Irs tax form 1120 for 2012 Payments. Irs tax form 1120 for 2012    Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. Irs tax form 1120 for 2012 For example, if you had an underpayment for the first payment period, list your payments after April 15, 2013. Irs tax form 1120 for 2012 You can use the table in the Form 2210 instructions to make your list. Irs tax form 1120 for 2012 Follow those instructions for listing income tax withheld and payments made with your return. Irs tax form 1120 for 2012 Use the list to determine when each underpayment was paid. Irs tax form 1120 for 2012   If you mail your estimated tax payments, use the date of the U. Irs tax form 1120 for 2012 S. Irs tax form 1120 for 2012 postmark as the date of payment. Irs tax form 1120 for 2012 Line 1b. Irs tax form 1120 for 2012   Apply the payments listed to underpayment balance in the first column until it is fully paid. Irs tax form 1120 for 2012 Apply payments in the order made. Irs tax form 1120 for 2012 Figuring the penalty. Irs tax form 1120 for 2012   If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. Irs tax form 1120 for 2012 On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. Irs tax form 1120 for 2012 On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. Irs tax form 1120 for 2012 If no payments are applied, figure the penalty on the amount on line 1a. Irs tax form 1120 for 2012 Aid for counting days. Irs tax form 1120 for 2012    Table 4-1 provides a simple method for counting the number of days between a due date and a payment date. Irs tax form 1120 for 2012 Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date. Irs tax form 1120 for 2012 In the same manner, find the number for the date the payment was made. Irs tax form 1120 for 2012 Subtract the due date “number” from the payment date “number. Irs tax form 1120 for 2012 ”   For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late. Irs tax form 1120 for 2012 Table 4-1. Irs tax form 1120 for 2012 Calendar To Determine the Number of Days a Payment Is Late Instructions. Irs tax form 1120 for 2012 Use this table with Form 2210 if you are completing Part IV, Section B. Irs tax form 1120 for 2012 First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Irs tax form 1120 for 2012 Then, in the same manner, find the number for the date the payment was made. Irs tax form 1120 for 2012 Finally, subtract the due date number from the payment date number. Irs tax form 1120 for 2012 The result is the number of days the payment is late. Irs tax form 1120 for 2012 Example. Irs tax form 1120 for 2012 The payment due date is June 15 (61). Irs tax form 1120 for 2012 The payment was made on November 4 (203). Irs tax form 1120 for 2012 The payment is 142 days late (203 – 61). Irs tax form 1120 for 2012 Tax Year 2013 Day of 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Month April May June July Aug. Irs tax form 1120 for 2012 Sept. Irs tax form 1120 for 2012 Oct. Irs tax form 1120 for 2012 Nov. Irs tax form 1120 for 2012 Dec. Irs tax form 1120 for 2012 Jan. Irs tax form 1120 for 2012 Feb. Irs tax form 1120 for 2012 Mar. Irs tax form 1120 for 2012 Apr. Irs tax form 1120 for 2012 1   16 47 77 108 139 169 200 230 261 292 320 351 2   17 48 78 109 140 170 201 231 262 293 321 352 3   18 49 79 110 141 171 202 232 263 294 322 353 4   19 50 80 111 142 172 203 233 264 295 323 354 5   20 51 81 112 143 173 204 234 265 296 324 355 6   21 52 82 113 144 174 205 235 266 297 325 356 7   22 53 83 114 145 175 206 236 267 298 326 357 8   23 54 84 115 146 176 207 237 268 299 327 358 9   24 55 85 116 147 177 208 238 269 300 328 359 10   25 56 86 117 148 178 209 239 270 301 329 360 11   26 57 87 118 149 179 210 240 271 302 330 361 12   27 58 88 119 150 180 211 241 272 303 331 362 13   28 59 89 120 151 181 212 242 273 304 332 363 14   29 60 90 121 152 182 213 243 274 305 333 364 15 0 30 61 91 122 153 183 214 244 275 306 334 365 16 1 31 62 92 123 154 184 215 245 276 307 335   17 2 32 63 93 124 155 185 216 246 277 308 336   18 3 33 64 94 125 156 186 217 247 278 309 337   19 4 34 65 95 126 157 187 218 248 279 310 338   20 5 35 66 96 127 158 188 219 249 280 311 339   21 6 36 67 97 128 159 189 220 250 281 312 340   22 7 37 68 98 129 160 190 221 251 282 313 341   23 8 38 69 99 130 161 191 222 252 283 314 342   24 9 39 70 100 131 162 192 223 253 284 315 343   25 10 40 71 101 132 163 193 224 254 285 316 344   26 11 41 72 102 133 164 194 225 255 286 317 345   27 12 42 73 103 134 165 195 226 256 287 318 346   28 13 43 74 104 135 166 196 227 257 288 319 347   29 14 44 75 105 136 167 197 228 258 289   348   30 15 45 76 106 137 168 198 229 259 290   349   31   46   107 138   199   260 291   350   Annualized Income Installment Method (Schedule AI) If you did not receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Irs tax form 1120 for 2012 Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment. Irs tax form 1120 for 2012 To figure your underpayment using this method, complete Form 2210, Schedule AI. Irs tax form 1120 for 2012 Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. Irs tax form 1120 for 2012 If you use the annualized income installment method, you must check box C in Part II of Form 2210. Irs tax form 1120 for 2012 Also, you must attach Form 2210 and Schedule AI to your return. Irs tax form 1120 for 2012 If you use Schedule AI for any payment due date, you must use it for all payment due dates. Irs tax form 1120 for 2012 Completing Schedule AI. Irs tax form 1120 for 2012   Follow the Form 2210 instructions to complete Schedule AI. Irs tax form 1120 for 2012 For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. Irs tax form 1120 for 2012 If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period. Irs tax form 1120 for 2012 Note. Irs tax form 1120 for 2012 Each period includes amounts from the previous period(s). Irs tax form 1120 for 2012 Period (a) includes items for January 1 through March 31. Irs tax form 1120 for 2012 Period (b) includes items for January 1 through May 31. Irs tax form 1120 for 2012 Period (c) includes items for January 1 through August 31. Irs tax form 1120 for 2012 Period (d) includes items for the entire year. Irs tax form 1120 for 2012 Farmers and Fishermen If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you. Irs tax form 1120 for 2012 The penalty for underpaying your 2013 estimated tax will not apply if you file your return and pay all the tax due by March 3, 2014. Irs tax form 1120 for 2012 If you are a fiscal year taxpayer, the penalty will not apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year. Irs tax form 1120 for 2012 Any penalty you owe for underpaying your 2013 estimated tax will be figured from one payment due date, January 15, 2014. Irs tax form 1120 for 2012 The underpayment penalty for 2013 is figured on the difference between the amount of 2013 withholding plus estimated tax paid by the due date and the smaller of: 662/3% (rather than 90%) of your 2013 tax, or 100% of the tax shown on your 2012 return. Irs tax form 1120 for 2012 Even if these special rules apply to you, you will not owe the penalty if you meet either of the two conditions discussed under Exceptions . Irs tax form 1120 for 2012 See Who Must Pay Estimated Tax in chapter 2 for the definition of a farmer or fisherman who is eligible for these special rules. Irs tax form 1120 for 2012 Form 2210-F. Irs tax form 1120 for 2012   Use Form 2210-F to figure any underpayment penalty. Irs tax form 1120 for 2012 Do not attach it to your return unless you check a box in Part I. Irs tax form 1120 for 2012 However, if none of the boxes apply to you and you owe a penalty, you do not need to attach Form 2210-F. Irs tax form 1120 for 2012 Enter the amount from line 16 on Form 1040, line 77 and add the penalty to any balance due on your return or subtract it from your refund. Irs tax form 1120 for 2012 Keep your filled-in Form 2210-F for your records. Irs tax form 1120 for 2012    If none of the boxes on Form 2210-F apply to you and you owe a penalty, the IRS can figure your penalty and send you a bill. Irs tax form 1120 for 2012 Waiver of Penalty The IRS can waive the penalty for underpayment if either of the following applies. Irs tax form 1120 for 2012 You did not make a payment because of a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty. Irs tax form 1120 for 2012 You retired (after reaching age 62) or became disabled in 2012 or 2013 and both the following requirements are met. Irs tax form 1120 for 2012 You had a reasonable cause for not making the payment. Irs tax form 1120 for 2012 Your underpayment was not due to willful neglect. Irs tax form 1120 for 2012 How to request a waiver. Irs tax form 1120 for 2012   To request a waiver, see the Instructions for Form 2210. Irs tax form 1120 for 2012 Farmers and fishermen. Irs tax form 1120 for 2012   To request a waiver, see the Instructions for Form 2210-F. Irs tax form 1120 for 2012 Federally declared disaster. Irs tax form 1120 for 2012   Certain estimated tax payment deadlines for taxpayers who reside or have a business in a federally declared disaster area are postponed for a period during and after the disaster. Irs tax form 1120 for 2012 During the processing of your tax return, the IRS automatically identifies taxpayers located in a covered disaster area (by county or parish) and applies the appropriate penalty relief. Irs tax form 1120 for 2012 Do not file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. Irs tax form 1120 for 2012 If you still owe a penalty after the automatic waiver is applied, we will send you a bill. Irs tax form 1120 for 2012   Individuals, estates, and trusts not in a covered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. Irs tax form 1120 for 2012 Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. Irs tax form 1120 for 2012 If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 1-866-562-5227 and identify yourself as eligible for this relief. Irs tax form 1120 for 2012   Details on the applicable disaster postponement period can be found at IRS. Irs tax form 1120 for 2012 gov. Irs tax form 1120 for 2012 Enter Tax Relief in Disaster Situations. Irs tax form 1120 for 2012 Select the federally declared disaster that affected you. Irs tax form 1120 for 2012    Worksheet 4-1. Irs tax form 1120 for 2012 2013 Form 2210, Schedule AI—Line 12 Qualified Dividends and Capital Gain Tax Worksheet Note. Irs tax form 1120 for 2012 To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the  annualization amount on line 2 of Schedule AI for the same period. Irs tax form 1120 for 2012                   1. Irs tax form 1120 for 2012 Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 1. Irs tax form 1120 for 2012       2. Irs tax form 1120 for 2012 Enter your annualized qualified dividends for the period 2. Irs tax form 1120 for 2012           3. Irs tax form 1120 for 2012 Are you filing Schedule D?               □ Yes. Irs tax form 1120 for 2012 Enter the smaller of your annualized amount from line 15 or line 16 of Schedule D. Irs tax form 1120 for 2012 If either line 15 or line 16 is blank or a loss, enter -0-. Irs tax form 1120 for 2012 3. Irs tax form 1120 for 2012             □ No. Irs tax form 1120 for 2012 Enter your annualized capital gain distributions from Form 1040, line 13             4. Irs tax form 1120 for 2012 Add lines 2 and 3   4. Irs tax form 1120 for 2012           5. Irs tax form 1120 for 2012 If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. Irs tax form 1120 for 2012 Otherwise, enter -0-   5. Irs tax form 1120 for 2012           6. Irs tax form 1120 for 2012 Subtract line 5 from line 4. Irs tax form 1120 for 2012 If zero or less, enter -0- 6. Irs tax form 1120 for 2012       7. Irs tax form 1120 for 2012 Subtract line 6 from line 1. Irs tax form 1120 for 2012 If zero or less, enter -0- 7. Irs tax form 1120 for 2012       8. Irs tax form 1120 for 2012 Enter: $36,900 if single or married filing separately, $73,800 if married filing jointly or qualifying widow(er), $49,400 if head of household. Irs tax form 1120 for 2012 8. Irs tax form 1120 for 2012       9. Irs tax form 1120 for 2012 Enter the smaller of line 1 or line 8 9. Irs tax form 1120 for 2012       10. Irs tax form 1120 for 2012 Enter the smaller of line 7 or line 9 10. Irs tax form 1120 for 2012       11. Irs tax form 1120 for 2012 Subtract line 10 from line 9. Irs tax form 1120 for 2012 This amount is taxed at 0% 11. Irs tax form 1120 for 2012       12. Irs tax form 1120 for 2012 Enter the smaller of line 1 or line 6 12. Irs tax form 1120 for 2012       13. Irs tax form 1120 for 2012 Enter the amount from line 11 13. Irs tax form 1120 for 2012       14. Irs tax form 1120 for 2012 Subtract line 13 from line 12 14. Irs tax form 1120 for 2012       15. Irs tax form 1120 for 2012 Multiply line 14 by 15% (. Irs tax form 1120 for 2012 15) 15. Irs tax form 1120 for 2012   16. Irs tax form 1120 for 2012 Figure the tax on the amount on line 7. Irs tax form 1120 for 2012 If the amount on line 7 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Irs tax form 1120 for 2012 If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 16. Irs tax form 1120 for 2012   17. Irs tax form 1120 for 2012 Add lines 15 and 16 17. Irs tax form 1120 for 2012   18. Irs tax form 1120 for 2012 Figure the tax on the amount on line 1. Irs tax form 1120 for 2012 If the amount on line 1 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Irs tax form 1120 for 2012 If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 18. Irs tax form 1120 for 2012   19. Irs tax form 1120 for 2012 Tax on all taxable income. Irs tax form 1120 for 2012 Enter the smaller of line 17 or line 18. Irs tax form 1120 for 2012 Also enter this amount on line 12 of Schedule AI in the appropriate column. Irs tax form 1120 for 2012 However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2, line 4 19. Irs tax form 1120 for 2012   Worksheet 4-2. Irs tax form 1120 for 2012 2013 Form 2210, Schedule AI—Line 12 Foreign Earned Income Tax Worksheet Before you begin:If Schedule AI, line 11, is zero for the period, do not complete this worksheet. Irs tax form 1120 for 2012             1. Irs tax form 1120 for 2012 Enter the amount from line 11 of Schedule AI for the period 1. Irs tax form 1120 for 2012   2. Irs tax form 1120 for 2012 Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from  Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1  of Schedule AI 2. Irs tax form 1120 for 2012   3. Irs tax form 1120 for 2012 Add lines 1 and 2 3. Irs tax form 1120 for 2012   4. Irs tax form 1120 for 2012 Tax on the amount on line 3. Irs tax form 1120 for 2012 Use the Tax Table, Tax Computation Worksheet, Form 8615**, Qualified Dividends and Capital Gain Tax Worksheet***, or Schedule D Tax Worksheet***, whichever applies. Irs tax form 1120 for 2012 See the 2013 Instructions for Form 1040, line 44, to find out which tax computation method to use. Irs tax form 1120 for 2012 (Note. Irs tax form 1120 for 2012 You do not have to use the same method for each period on Schedule AI. Irs tax form 1120 for 2012 ) 4. Irs tax form 1120 for 2012   5. Irs tax form 1120 for 2012 Tax on the amount on line 2. Irs tax form 1120 for 2012 If the amount on line 2 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Irs tax form 1120 for 2012 If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 5. Irs tax form 1120 for 2012   6. Irs tax form 1120 for 2012 Subtract line 5 from line 4. Irs tax form 1120 for 2012 Enter the result here and on line 12 of Schedule AI. Irs tax form 1120 for 2012 If zero or less,  enter -0- 6. Irs tax form 1120 for 2012             * To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period. Irs tax form 1120 for 2012     ** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. Irs tax form 1120 for 2012 If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. Irs tax form 1120 for 2012 Complete the rest of Form 8615 according to its instructions. Irs tax form 1120 for 2012 Then complete lines 5 and 6 above. Irs tax form 1120 for 2012     *** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. Irs tax form 1120 for 2012 Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). Irs tax form 1120 for 2012 Next, determine if you have a capital gain excess. Irs tax form 1120 for 2012     Figuring capital gain excess. Irs tax form 1120 for 2012 To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). Irs tax form 1120 for 2012 If the result is more than zero, that amount is your capital gain excess. Irs tax form 1120 for 2012     No capital gain excess. Irs tax form 1120 for 2012 If you do not have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. Irs tax form 1120 for 2012 Then complete lines 5 and 6 above. Irs tax form 1120 for 2012     Capital gain excess. Irs tax form 1120 for 2012 If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Irs tax form 1120 for 2012 Then complete lines 5 and 6 above. Irs tax form 1120 for 2012     Make the modifications below only for purposes of filling out Worksheet 4-2 above. Irs tax form 1120 for 2012     a. Irs tax form 1120 for 2012 Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess. Irs tax form 1120 for 2012     b. Irs tax form 1120 for 2012 Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above. Irs tax form 1120 for 2012     c. Irs tax form 1120 for 2012 Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess. Irs tax form 1120 for 2012     d. Irs tax form 1120 for 2012 Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2013 Instructions for Schedule D (Form 1040). 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