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Tax Return 2012

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Tax Return 2012

Tax return 2012 31. Tax return 2012   Tax on Unearned Income of Certain Children Table of Contents What's New Introduction Useful Items - You may want to see: Which Parent's Return To UseParents Who Do Not File a Joint Return Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, lines A–C) Step 1. Tax return 2012 Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Tax return 2012 Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Tax return 2012 Figuring the Child's Tax (Form 8615, Part III) What's New Net Investment Income Tax. Tax return 2012 . Tax return 2012  For tax years beginning after December 31, 2012, a child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax (NIIT). Tax return 2012 NIIT is a 3. Tax return 2012 8% tax on the lesser of the net investment income or the excess of the child's modified adjusted gross income (MAGI) over the threshold amount. Tax return 2012 Use Form 8960, Net Investment Income Tax, to figure this tax. Tax return 2012 For more information on NIIT, go to www. Tax return 2012 irs. Tax return 2012 gov and enter “Net Investment Income Tax” in the search box. Tax return 2012 Introduction This chapter discusses the following two rules that may affect the tax on unearned income of certain children. Tax return 2012 If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. Tax return 2012 (See Parent's Election To Report Child's Interest and Dividends , later. Tax return 2012 ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Tax return 2012 (See Tax for Certain Children Who Have Unearned Income , later. Tax return 2012 ) For these rules, the term “child” includes a legally adopted child and a stepchild. Tax return 2012 These rules apply whether or not the child is a dependent. Tax return 2012 Useful Items - You may want to see: Publication 929 Tax Rules for Children and Dependents Form (and Instructions) 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. Tax return 2012 The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . Tax return 2012 Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. Tax return 2012 Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Tax return 2012 Parents are married. Tax return 2012   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Tax return 2012 Parents not living together. Tax return 2012   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. Tax return 2012 If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Tax return 2012   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in chapter 2. Tax return 2012 Parents are divorced. Tax return 2012   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. Tax return 2012 Custodial parent remarried. Tax return 2012   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Tax return 2012 Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Tax return 2012 Do not use the return of the noncustodial parent. Tax return 2012   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Tax return 2012 If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Tax return 2012 Parents never married. Tax return 2012   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. Tax return 2012 If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Tax return 2012 Widowed parent remarried. Tax return 2012   If a widow or widower remarries, the new spouse is treated as the child's other parent. Tax return 2012 The rules explained earlier under Custodial parent remarried apply. Tax return 2012 Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. Tax return 2012 If you do, your child will not have to file a return. Tax return 2012 You can make this election only if all the following conditions are met. Tax return 2012 Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Tax return 2012 Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Tax return 2012 The child's gross income was less than $10,000. Tax return 2012 The child is required to file a return unless you make this election. Tax return 2012 The child does not file a joint return for the year. Tax return 2012 No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. Tax return 2012 No federal income tax was taken out of your child's income under the backup withholding rules. Tax return 2012 You are the parent whose return must be used when applying the special tax rules for children. Tax return 2012 (See Which Parent's Return To Use , earlier. Tax return 2012 ) These conditions are also shown in Figure 31-A. Tax return 2012 Certain January 1 birthdays. Tax return 2012   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Tax return 2012 You cannot make this election for such a child unless the child was a full-time student. Tax return 2012   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Tax return 2012 You cannot make this election for such a child. Tax return 2012 Full-time student. Tax return 2012   A full-time student is a child who during some part of each of any 5 calendar months of the year was enrolled as a full-time student at a school, or took a full-time on-farm training course given by a school or a state, county, or local government agency. Tax return 2012 A school includes a technical, trade, or mechanical school. Tax return 2012 It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Tax return 2012 How to make the election. Tax return 2012   Make the election by attaching Form 8814 to your Form 1040. Tax return 2012 (If you make this election, you cannot file Form 1040A or Form 1040EZ. Tax return 2012 ) Attach a separate Form 8814 for each child for whom you make the election. Tax return 2012 You can make the election for one or more children and not for others. Tax return 2012 Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Tax return 2012 Rate may be higher. Tax return 2012   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. Tax return 2012 This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Tax return 2012 However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. Tax return 2012 Deductions you cannot take. Tax return 2012   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. Tax return 2012 The additional standard deduction if the child is blind. Tax return 2012 The deduction for a penalty on an early withdrawal of your child's savings. Tax return 2012 Itemized deductions (such as your child's investment expenses or charitable contributions). Tax return 2012 Reduced deductions or credits. Tax return 2012   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return including the following. Tax return 2012 Deduction for contributions to a traditional individual retirement arrangement (IRA). Tax return 2012 Deduction for student loan interest. Tax return 2012 Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Tax return 2012 Credit for child and dependent care expenses. Tax return 2012 Child tax credit. Tax return 2012 Education tax credits. Tax return 2012 Earned income credit. Tax return 2012 Penalty for underpayment of estimated tax. Tax return 2012   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. Tax return 2012 If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. Tax return 2012 See chapter 4 for more information. Tax return 2012 Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Tax return 2012 Only the amount over $2,000 is added to your income. Tax return 2012 The amount over $2,000 is shown on Form 8814, line 6. Tax return 2012 Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Tax return 2012 Include the amount from Form 8814, line 12, on Form 1040, line 21. Tax return 2012 Enter “Form 8814” on the dotted line next to line 21. Tax return 2012 If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040, line 21. Tax return 2012 Capital gain distributions and qualified dividends. Tax return 2012   If your child's dividend income included any capital gain distributions, see Capital gain distributions under Figuring Child's Income in Publication 929, Part 2. Tax return 2012 If your child's dividend income included any qualified dividends, see Qualified dividends under Figuring Child's Income in Publication 929, Part 2. Tax return 2012 Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. Tax return 2012 This tax is added to the tax figured on your income. Tax return 2012 This additional tax is the smaller of: 10% × (your child's gross income − $1,000), or $100. Tax return 2012 Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44. Tax return 2012 Check box a on Form 1040, line 44. Tax return 2012 Figure 31-A. Tax return 2012 Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Tax return 2012 Figure 31–A. Tax return 2012 Can You Include Your Child's Income On Your Tax Return? Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Tax return 2012 If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Tax return 2012 Attach the completed form to the child's Form 1040 or Form 1040A. Tax return 2012 When Form 8615 must be filed. Tax return 2012   Form 8615 must be filed for a child if all of the following statements are true. Tax return 2012 The child's investment income was more than $2,000. Tax return 2012 The child is required to file a return for 2013. Tax return 2012 The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. Tax return 2012 At least one of the child's parents was alive at the end of 2013. Tax return 2012 The child does not file a joint return for 2013. Tax return 2012 These conditions are also shown in  Figure 31-B. Tax return 2012 Earned income. Tax return 2012   Earned income includes salaries, wages, tips, and other payments received for personal services performed. Tax return 2012 It does not include unearned income as defined later in this chapter. Tax return 2012 Support. Tax return 2012   Your child's support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Tax return 2012 To figure your child's support, count support provided by you, your child, and others. Tax return 2012 However, a scholarship received by your child is not considered support if your child is a full-time student. Tax return 2012 See chapter 3 for details about support. Tax return 2012 Certain January 1 birthdays. Tax return 2012   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Tax return 2012 Figure 31-B. Tax return 2012 Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Tax return 2012 Figure 31-B. Tax return 2012 Do You Have To Use Form 8615 To Figure Your Child's Tax?    IF a child was born on. Tax return 2012 . Tax return 2012 . Tax return 2012 THEN, at the end of 2013, the child is considered to be. Tax return 2012 . Tax return 2012 . Tax return 2012 January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Tax return 2012 The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Tax return 2012  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. Tax return 2012  ***Do not use Form 8615 for this child. Tax return 2012 Providing Parental Information (Form 8615, lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Tax return 2012 (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Tax return 2012 ) On line C, check the box for the parent's filing status. Tax return 2012 See Which Parent's Return To Use at the beginning of this chapter for information on which parent's return information must be used on Form 8615. Tax return 2012 Parent with different tax year. Tax return 2012   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. Tax return 2012 Parent's return information not known timely. Tax return 2012   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. Tax return 2012   You can use any reasonable estimate. Tax return 2012 This includes using information from last year's return. Tax return 2012 If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Tax return 2012    When you get the correct information, file an amended return on Form 1040X, Amended U. Tax return 2012 S. Tax return 2012 Individual Income Tax Return. Tax return 2012   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Tax return 2012 S. Tax return 2012 Individual Income Tax Return. Tax return 2012 Extensions are discussed in chapter 1. Tax return 2012 Step 1. Tax return 2012 Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. Tax return 2012 To do that, use Form 8615, Part I. Tax return 2012 Line 1 (unearned income). Tax return 2012   If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Tax return 2012 Adjusted gross income is shown on Form 1040, line 38, or Form 1040A, line 22. Tax return 2012 Form 1040EZ cannot be used if Form 8615 must be filed. Tax return 2012   If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. Tax return 2012   However, if the child has: excluded any foreign earned income, deducted either a loss from self-employment, or deducted a net operating loss from another year, then use the Alternate Worksheet for Form 8615, Line 1, in Publication 929 to figure the amount to enter on Form 8615, line 1. Tax return 2012 Unearned income defined. Tax return 2012   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually done. Tax return 2012 It includes taxable interest, dividends (including capital gain distributions), capital gains, unemployment compensation, the taxable part of social security and pension payments, and certain distributions from trusts. Tax return 2012 Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). Tax return 2012 Nontaxable income. Tax return 2012   For this purpose, unearned income includes only amounts the child must include in total income. Tax return 2012 Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Tax return 2012 Income from property received as a gift. Tax return 2012   A child's unearned income includes all income produced by property belonging to the child. Tax return 2012 This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. Tax return 2012   A child's unearned income includes income produced by property given as a gift to the child. Tax return 2012 This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Tax return 2012 Example. Tax return 2012 Amanda Black, age 13, received the following income. Tax return 2012 Dividends — $800 Wages — $2,100 Taxable interest — $1,200 Tax-exempt interest — $100 Net capital gains — $100 The dividends were qualified dividends on stock given to her by her grandparents. Tax return 2012 Amanda's unearned income is $2,100. Tax return 2012 This is the total of the dividends ($800), taxable interest ($1,200), and net capital gains ($100). Tax return 2012 Her wages are earned (not unearned) income because they are received for work actually done. Tax return 2012 Her tax-exempt interest is not included because it is nontaxable. Tax return 2012 Trust income. Tax return 2012   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. Tax return 2012   However, for purposes of completing Form 8615, a taxable distribution from a qualified disability trust is considered earned income, not unearned income. Tax return 2012 Line 2 (deductions). Tax return 2012   If the child does not itemize deductions on Schedule A (Form 1040), enter $2,000 on line 2. Tax return 2012   If the child does itemize deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29, that are directly connected with the production of unearned income entered on line 1, or $2,000. Tax return 2012 Directly connected. Tax return 2012   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. Tax return 2012 These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Tax return 2012   These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Tax return 2012 Only the amount greater than 2% of the child's adjusted gross income can be deducted. Tax return 2012 See chapter 28 for more information. Tax return 2012 Example 1. Tax return 2012 Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2% limit) that are directly connected with his unearned income. Tax return 2012 His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Tax return 2012 Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly connected itemized deductions of $300. Tax return 2012 Example 2. Tax return 2012 Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Tax return 2012 She has no other income. Tax return 2012 She has itemized deductions of $1,050 (net of the 2% limit) that are directly connected with the production of her unearned income. Tax return 2012 Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Tax return 2012 The amount on line 2 is $2,050. Tax return 2012 This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Tax return 2012 Line 3. Tax return 2012   Subtract line 2 from line 1 and enter the result on this line. Tax return 2012 If zero or less, do not complete the rest of the form. Tax return 2012 However, you must still attach Form 8615 to the child's tax return. Tax return 2012 Figure the tax on the child's taxable income in the normal manner. Tax return 2012 Line 4 (child's taxable income). Tax return 2012   Enter on line 4 the child's taxable income from Form 1040, line 43, or Form 1040A, line 27. Tax return 2012   However, if the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, see the Form 8615 instructions or Pub. Tax return 2012 929. Tax return 2012 Line 5 (net unearned income). Tax return 2012   A child's net unearned income cannot be more than his or her taxable income. Tax return 2012 Enter on Form 8615, line 5, the smaller of line 3 or line 4. Tax return 2012 This is the child's net unearned income. Tax return 2012   If zero or less, do not complete the rest of the form. Tax return 2012 However, you must still attach Form 8615 to the child's tax return. Tax return 2012 Figure the tax on the child's taxable income in the normal manner. Tax return 2012 Step 2. Tax return 2012 Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. Tax return 2012 The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. Tax return 2012 When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. Tax return 2012 For example, do not refigure the medical expense deduction. Tax return 2012 Figure the tentative tax on Form 8615, lines 6 through 13. Tax return 2012 Note. Tax return 2012 If the child or parent has any capital gains or losses, get Publication 929 for help in completing Form 8615, Part II. Tax return 2012 Line 6 (parent's taxable income). Tax return 2012   Enter on line 6 the parent's taxable income from Form 1040, line 43, Form 1040A, line 27, or Form 1040EZ, line 6. Tax return 2012   If the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) was used to figure the parent's tax, enter the amount from line 3 of that worksheet instead of the parent's taxable income. Tax return 2012 Line 7 (net unearned income of other children). Tax return 2012   If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Tax return 2012 Do not include the amount from line 5 of the Form 8615 being completed. Tax return 2012 Example. Tax return 2012 Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Tax return 2012 The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon — $800 Jerry — $600 Mike — $1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. Tax return 2012 Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Tax return 2012 Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Tax return 2012 Other children's information not available. Tax return 2012   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Tax return 2012 See Parent's return information not known timely , earlier. Tax return 2012 Line 11 (tentative tax). Tax return 2012   Subtract line 10 from line 9 and enter the result on this line. Tax return 2012 This is the tentative tax. Tax return 2012   If line 7 is blank, skip lines 12a and 12b and enter the amount from line 11 on line 13. Tax return 2012 Also skip the discussion for lines 12a and 12b that follows. Tax return 2012 Lines 12a and 12b (dividing the tentative tax). Tax return 2012   If an amount is entered on line 7, divide the tentative tax shown on line 11 among the children according to each child's share of the total net unearned income. Tax return 2012 This is done on lines 12a, 12b, and 13. Tax return 2012 Add the amount on line 7 to the amount on line 5 and enter the total on line 12a. Tax return 2012 Divide the amount on line 5 by the amount on line 12a and enter the result, as a decimal, on line 12b. Tax return 2012 Example. Tax return 2012 In the earlier example under Line 7 (net unearned income of other children), Sharon's Form 8615 shows $1,600 on line 7. Tax return 2012 The amount entered on line 12a is $2,400, the total of the amounts on lines 5 and 7 ($800 + $1,600). Tax return 2012 The decimal on line 12b is  . Tax return 2012 333, figured as follows and rounded to three places. Tax return 2012   $800 = . Tax return 2012 333     $2,400   Step 3. Tax return 2012 Figuring the Child's Tax (Form 8615, Part III) The final step in figuring a child's tax using Form 8615 is to determine the larger of: The total of: The child's share of the tentative tax based on the parent's tax rate, plus The tax on the child's taxable income in excess of net unearned income, figured at the child's tax rate, or The tax on the child's taxable income, figured at the child's tax rate. Tax return 2012 This is the child's tax. Tax return 2012 It is figured on Form 8615, lines 14 through 18. Tax return 2012 Alternative minimum tax. Tax return 2012   A child may be subject to alternative minimum tax (AMT) if he or she has certain items given preferential treatment under the tax law. Tax return 2012 See Alternative Minimum Tax (AMT) in chapter 30. Tax return 2012    For more information on who is liable for AMT and how to figure it, see Form 6251, Alternative Minimum Tax—Individuals. Tax return 2012 For information on special limits that apply to a child who files Form 6251, see Certain Children Under Age 24 in the Instructions for Form 6251. Tax return 2012 Prev  Up  Next   Home   More Online Publications
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The Tax Return 2012

Tax return 2012 14. Tax return 2012   Penalties and Interest Table of Contents Penalties and interest may result from any of the following acts. Tax return 2012 Failing to collect and pay over tax as the collecting agent (see Trust fund recovery penalty, later). Tax return 2012 Failing to keep adequate records. Tax return 2012 Failing to file returns. Tax return 2012 Failing to pay taxes. Tax return 2012 Filing returns late. Tax return 2012 Filing false or fraudulent returns. Tax return 2012 Paying taxes late. Tax return 2012 Failing to make deposits. Tax return 2012 Depositing taxes late. Tax return 2012 Making false statements relating to tax. Tax return 2012 Failing to register. Tax return 2012 Misrepresenting that tax is excluded from the price of an article. Tax return 2012 Failure to register. Tax return 2012   The penalty for failure to register if you are required to register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. Tax return 2012 Claims. Tax return 2012   There are criminal penalties for false or fraudulent claims. Tax return 2012 In addition, any person who files a refund claim, discussed earlier, for an excessive amount (without reasonable cause) may have to pay a penalty. Tax return 2012 An excessive amount is the amount claimed that is more than the allowable amount. Tax return 2012 The penalty is the greater of two times the excessive amount or $10. Tax return 2012 Trust fund recovery penalty. Tax return 2012   If you provide taxable communications, air transportation services, or indoor tanning services, you have to collect excise taxes (as discussed earlier) from those persons who pay you for those services. Tax return 2012 You must pay over these taxes to the U. Tax return 2012 S. Tax return 2012 Government. Tax return 2012   If you willfully fail to collect or pay over these taxes, or if you evade or defeat them in any way, the trust fund recovery penalty may apply. Tax return 2012 Willfully means voluntarily, consciously, and intentionally. Tax return 2012 The trust fund recovery penalty equals 100% of the taxes not collected or not paid over to the U. Tax return 2012 S. Tax return 2012 Government. Tax return 2012   The trust fund recovery penalty may be imposed on any person responsible for collecting, accounting for, and paying over these taxes. Tax return 2012 If this person knows that these required actions are not taking place for whatever reason, the person is acting willfully. Tax return 2012 Paying other expenses of the business instead of paying the taxes is willful behavior. Tax return 2012   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, or any other person who had responsibility for certain aspects of the business and financial affairs of the employer (or business). Tax return 2012 This may include accountants, trustees in bankruptcy, members of a board, banks, insurance companies, or sureties. Tax return 2012 The responsible person could even be another corporation—in other words, anyone who has the duty and the ability to direct, account for, or pay over the money. Tax return 2012 Having signature power on the business checking account could be a significant factor in determining responsibility. Tax return 2012 Prev  Up  Next   Home   More Online Publications