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Where To File 2012 Federal Income Tax Return

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Where To File 2012 Federal Income Tax Return

Where to file 2012 federal income tax return 3. Where to file 2012 federal income tax return   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. Where to file 2012 federal income tax return Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. Where to file 2012 federal income tax return Certain contracts held by a charitable remainder trust. Where to file 2012 federal income tax return Excise Taxes. Where to file 2012 federal income tax return Indoor tanning services. Where to file 2012 federal income tax return Application for Recognition of ExemptionPolitical activity. Where to file 2012 federal income tax return Private delivery service. Where to file 2012 federal income tax return Amendments to organizing documents required. Where to file 2012 federal income tax return How to show reasonable action and good faith. Where to file 2012 federal income tax return Not acting reasonably and in good faith. Where to file 2012 federal income tax return Prejudicing the interest of the Government. Where to file 2012 federal income tax return Procedure for requesting extension. Where to file 2012 federal income tax return More information. Where to file 2012 federal income tax return Organizations Not Required To File Form 1023 Articles of OrganizationOrganizational Test Dedication and Distribution of Assets Educational Organizations and Private SchoolsEducational Organizations Private Schools Organizations Providing InsuranceCharitable Risk Pools Other Section 501(c)(3) OrganizationsCharitable Organizations Religious Organizations Scientific Organizations Literary Organizations Amateur Athletic Organizations Prevention of Cruelty to Children or Animals Private Foundations and Public CharitiesPrivate Foundations Public Charities Private Operating Foundations Lobbying ExpendituresLobbying expenditures. Where to file 2012 federal income tax return Grass roots expenditures. Where to file 2012 federal income tax return Lobbying nontaxable amount. Where to file 2012 federal income tax return Grass roots nontaxable amount. Where to file 2012 federal income tax return Organization that no longer qualifies. Where to file 2012 federal income tax return Tax on organization. Where to file 2012 federal income tax return Tax on managers. Where to file 2012 federal income tax return Taxes on organizations. Where to file 2012 federal income tax return Taxes on managers. Where to file 2012 federal income tax return Political expenditures. Where to file 2012 federal income tax return Correction of expenditure. Where to file 2012 federal income tax return Introduction An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes. Where to file 2012 federal income tax return Religious. Where to file 2012 federal income tax return Charitable. Where to file 2012 federal income tax return Scientific. Where to file 2012 federal income tax return Testing for public safety. Where to file 2012 federal income tax return Literary. Where to file 2012 federal income tax return Educational. Where to file 2012 federal income tax return Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment; however, see Amateur Athletic Organizations , later in this chapter). Where to file 2012 federal income tax return The prevention of cruelty to children or animals. Where to file 2012 federal income tax return To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. Where to file 2012 federal income tax return A trust is a fund or foundation and will qualify. Where to file 2012 federal income tax return However, an individual or a partnership will not qualify. Where to file 2012 federal income tax return Examples. Where to file 2012 federal income tax return   Qualifying organizations include: Nonprofit old-age homes, Parent-teacher associations, Charitable hospitals or other charitable organizations, Alumni associations, Schools, Chapters of the Red Cross, Boys' or Girls' Clubs, and Churches. Where to file 2012 federal income tax return Child care organizations. Where to file 2012 federal income tax return   The term educational purposes includes providing for care of children away from their homes if substantially all the care provided is to enable individuals (the parents) to be gainfully employed and the services are available to the general public. Where to file 2012 federal income tax return Instrumentalities. Where to file 2012 federal income tax return   A state or municipal instrumentality may qualify under section 501(c)(3) if it is organized as a separate entity from the governmental unit that created it and if it otherwise meets the organizational and operational tests of section 501(c)(3). Where to file 2012 federal income tax return Examples of a qualifying instrumentality might include state schools, universities, or hospitals. Where to file 2012 federal income tax return However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. Where to file 2012 federal income tax return A state or municipality itself does not qualify for exemption. Where to file 2012 federal income tax return Topics - This chapter discusses: Contributions to 501(c)(3) organizations, Applications for recognition of exemption, Articles of Organization, Educational organizations and private schools, Organizations providing insurance, Other section 501(c)(3) organizations, Private foundations and public charities, and Lobbying expenditures. Where to file 2012 federal income tax return Useful Items - You may want to see: Forms (and Instructions) 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code See chapter 6 for information about getting publications and forms. Where to file 2012 federal income tax return Contributions to 501(c)(3) Organizations Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return. Where to file 2012 federal income tax return Fundraising events. Where to file 2012 federal income tax return   If the donor receives something of value in return for the contribution, a common occurrence with fundraising efforts, part or all of the contribution may not be deductible. Where to file 2012 federal income tax return This may apply to fundraising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. Where to file 2012 federal income tax return   If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. Where to file 2012 federal income tax return If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. Where to file 2012 federal income tax return You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fundraising event or solicit their contributions, how much is deductible and how much is for the goods or services. Where to file 2012 federal income tax return See Disclosure of Quid Pro Quo Contributions in chapter 2. Where to file 2012 federal income tax return Exemption application not filed. Where to file 2012 federal income tax return   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. Where to file 2012 federal income tax return Separate fund—contributions that are deductible. Where to file 2012 federal income tax return   An organization that is exempt from federal income tax other than as an organization described in section 501(c)(3) can, if it desires, establish a fund, separate and apart from its other funds, exclusively for religious, charitable, scientific, literary, or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. Where to file 2012 federal income tax return   If the fund is organized and operated exclusively for these purposes, it may qualify for exemption as an organization described in section 501(c)(3), and contributions made to it will be deductible as provided by section 170. Where to file 2012 federal income tax return A fund with these characteristics must be organized in such a manner as to prohibit the use of its funds upon dissolution, or otherwise, for the general purposes of the organization creating it. Where to file 2012 federal income tax return Personal benefit contracts. Where to file 2012 federal income tax return   Generally, charitable deductions will not be allowed for a transfer to, or for the use of, a section 501(c)(3) or (c)(4) organization if in connection with the transfer: The organization directly or indirectly pays, or previously paid, a premium on a personal benefit contract for the transferor, or There is an understanding or expectation that anyone will directly or indirectly pay a premium on a personal benefit contract for the transferor. Where to file 2012 federal income tax return   A personal benefit contract with respect to the transferor is any life insurance, annuity, or endowment contract, if any direct or indirect beneficiary under the contract is the transferor, any member of the transferor's family, or any other person designated by the transferor. Where to file 2012 federal income tax return Certain annuity contracts. Where to file 2012 federal income tax return   If an organization incurs an obligation to pay a charitable gift annuity, and the organization purchases an annuity contract to fund the obligation, individuals receiving payments under the charitable gift annuity will not be treated as indirect beneficiaries if the organization owns all of the incidents of ownership under the contract, is entitled to all payments under the contract, and the timing and amount of the payments are substantially the same as the timing and amount of payments to each person under the obligation (as such obligation is in effect at the time of the transfer). Where to file 2012 federal income tax return Certain contracts held by a charitable remainder trust. Where to file 2012 federal income tax return   An individual will not be considered an indirect beneficiary under a life insurance, annuity, or endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust solely by reason of being entitled to the payment if the trust owns all of the incidents of ownership under the contract, and the trust is entitled to all payments under the contract. Where to file 2012 federal income tax return Excise tax. Where to file 2012 federal income tax return   If the premiums are paid in connection with a transfer for which a deduction is not allowable under the deduction denial rule, without regard to when the transfer to the charitable organization was made, an excise tax will be applied that is equal to the amount of the premiums paid by the organization on any life insurance, annuity, or endowment contract. Where to file 2012 federal income tax return The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. Where to file 2012 federal income tax return Excise Taxes. Where to file 2012 federal income tax return   A charitable organization liable for excise taxes must file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. Where to file 2012 federal income tax return Generally, the due date for filing Form 4720 occurs on the fifteenth day of the fifth month following the close of the organization's tax year. Where to file 2012 federal income tax return Indoor tanning services. Where to file 2012 federal income tax return   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. Where to file 2012 federal income tax return For more information, go to IRS. Where to file 2012 federal income tax return gov and select Affordable Care Act Tax Provisions. Where to file 2012 federal income tax return Application for Recognition of Exemption This discussion describes certain information to be provided upon application for recognition of exemption by all organizations created for any of the purposes described earlier in this chapter. Where to file 2012 federal income tax return For example, the application must include a conformed copy of the organization's articles of incorporation, as discussed under Articles of Organization , later in this chapter. Where to file 2012 federal income tax return See the organization headings that follow for specific information your organization may need to provide. Where to file 2012 federal income tax return Form 1023. Where to file 2012 federal income tax return   Your organization must file its application for recognition of exemption on Form 1023. Where to file 2012 federal income tax return See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. Where to file 2012 federal income tax return Some organizations are not required to file Form 1023. Where to file 2012 federal income tax return See Organizations Not Required To File Form 1023, later. Where to file 2012 federal income tax return    Additional information to help you complete your application can be found online. Where to file 2012 federal income tax return Go to Exemption Requirement – Section 501(c)(3) Organizations and select the link at the bottom of the Web page for step by step help with the application process. Where to file 2012 federal income tax return See Exemption Requirements - Section 501(c)(3) Organizations. Where to file 2012 federal income tax return   Form 1023 and accompanying statements must show that all of the following are true. Where to file 2012 federal income tax return The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. Where to file 2012 federal income tax return ) specified in the introduction to this chapter. Where to file 2012 federal income tax return No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. Where to file 2012 federal income tax return You must establish that your organization will not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. Where to file 2012 federal income tax return The organization will not, as a substantial part of its activities, attempt to influence legislation (unless it elects to come under the provisions allowing certain lobbying expenditures) or participate to any extent in a political campaign for or against any candidate for public office. Where to file 2012 federal income tax return See Political activity, next, and Lobbying Expenditures , near the end of this chapter. Where to file 2012 federal income tax return Political activity. Where to file 2012 federal income tax return   If any of the activities (whether or not substantial) of your organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization will not qualify for tax-exempt status under section 501(c)(3). Where to file 2012 federal income tax return Such participation or intervention includes the publishing or distributing of statements. Where to file 2012 federal income tax return   Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. Where to file 2012 federal income tax return Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c)(3), while other so-called voter education activities may be prohibited. Where to file 2012 federal income tax return Effective date of exemption. Where to file 2012 federal income tax return   Most organizations described in this chapter that were organized after October 9, 1969, will not be treated as tax exempt unless they apply for recognition of exemption by filing Form 1023. Where to file 2012 federal income tax return These organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. Where to file 2012 federal income tax return If the organization files the application within this 27-month period, the organization's exemption will be recognized retroactively to the date it was organized. Where to file 2012 federal income tax return Otherwise, exemption will be recognized only from the date of receipt. Where to file 2012 federal income tax return The date of receipt is the date of the U. Where to file 2012 federal income tax return S. Where to file 2012 federal income tax return postmark on the cover in which an exemption application is mailed or, if no postmark appears on the cover, the date the application is stamped as received by the IRS. Where to file 2012 federal income tax return Private delivery service. Where to file 2012 federal income tax return   If a private delivery service designated by the IRS, rather than the U. Where to file 2012 federal income tax return S. Where to file 2012 federal income tax return Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. Where to file 2012 federal income tax return The following private delivery services have been designated by the IRS. Where to file 2012 federal income tax return DHL Express (DHL): DHL “Same Day” Service. Where to file 2012 federal income tax return Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Where to file 2012 federal income tax return United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Where to file 2012 federal income tax return M. Where to file 2012 federal income tax return , UPS Worldwide Express Plus, and UPS Worldwide Express. Where to file 2012 federal income tax return Amendments to organizing documents required. Where to file 2012 federal income tax return   If an organization is required to alter its activities or to make substantive amendments to its organizing document, the ruling or determination letter recognizing its exempt status will be effective as of the date the changes are made. Where to file 2012 federal income tax return If only a nonsubstantive amendment is made, exempt status will be effective as of the date it was organized, if the application was filed within the 15-month period, or the date the application was filed. Where to file 2012 federal income tax return Extensions of time for filing. Where to file 2012 federal income tax return   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. Where to file 2012 federal income tax return Automatic 12-month extension. Where to file 2012 federal income tax return Organizations will receive an automatic 12-month extension if they file an application for recognition of exemption with the IRS within 12 months of the original deadline. Where to file 2012 federal income tax return To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. Where to file 2012 federal income tax return 9100-2. Where to file 2012 federal income tax return ” Discretionary extensions. Where to file 2012 federal income tax return An organization that fails to file a Form 1023 within the extended 12-month period will be granted an extension to file if it submits evidence (including affidavits) to establish that: It acted reasonably and in good faith, and Granting a discretionary extension will not prejudice the interests of the government. Where to file 2012 federal income tax return How to show reasonable action and good faith. Where to file 2012 federal income tax return   An organization acted reasonably and showed good faith if at least one of the following is true. Where to file 2012 federal income tax return The organization requests relief before its failure to file is discovered by the IRS. Where to file 2012 federal income tax return The organization failed to file because of intervening events beyond its control. Where to file 2012 federal income tax return The organization exercised reasonable diligence (taking into account the complexity of the return or issue and the organization's experience in these matters) but was not aware of the filing requirement. Where to file 2012 federal income tax return The organization reasonably relied upon the written advice of the IRS. Where to file 2012 federal income tax return The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. Where to file 2012 federal income tax return An organization cannot rely on the advice of a tax professional if it knows or should know that he or she is not competent to render advice on filing exemption applications or is not aware of all the relevant facts. Where to file 2012 federal income tax return Not acting reasonably and in good faith. Where to file 2012 federal income tax return   An organization has not acted reasonably and in good faith under the following circumstances. Where to file 2012 federal income tax return It seeks to change a return position for which an accuracy-related penalty has been or could be imposed at the time the relief is requested. Where to file 2012 federal income tax return It was informed of the requirement to file and related tax consequences, but chose not to file. Where to file 2012 federal income tax return It uses hindsight in requesting relief. Where to file 2012 federal income tax return The IRS will not ordinarily grant an extension if specific facts have changed since the due date that makes filing an application advantageous to an organization. Where to file 2012 federal income tax return Prejudicing the interest of the Government. Where to file 2012 federal income tax return   Prejudice to the interest of the Government results if granting an extension of time to file to an organization results in a lower total tax liability for the years to which the filing applies than would have been the case if the organization had filed on time. Where to file 2012 federal income tax return Before granting an extension, the IRS can require the organization requesting it to submit a statement from an independent auditor certifying that no prejudice will result if the extension is granted. Where to file 2012 federal income tax return The interests of the Government are ordinarily prejudiced if the tax year in which the application should have been filed (or any tax year that would have been affected had the filing been timely) are closed by the statute of limitations before relief is granted. Where to file 2012 federal income tax return The IRS can condition a grant of relief on the organization providing the IRS with a statement from an independent auditor certifying that the interests of the Government are not prejudiced. Where to file 2012 federal income tax return Procedure for requesting extension. Where to file 2012 federal income tax return   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. Where to file 2012 federal income tax return A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. Where to file 2012 federal income tax return Any documents relevant to the application. Where to file 2012 federal income tax return An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. Where to file 2012 federal income tax return If the organization relied on a tax professional's advice, the affidavit must describe the engagement and responsibilities of the professional and the extent to which the organization relied on him or her. Where to file 2012 federal income tax return This affidavit must be accompanied by a dated declaration, signed by an individual who has personal knowledge of the facts and circumstances, who is authorized to act for the organization, which states, “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Where to file 2012 federal income tax return ” Detailed affidavits from individuals having knowledge or information about the events that led to the failure to make the application and to the discovery of that failure. Where to file 2012 federal income tax return This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. Where to file 2012 federal income tax return The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. Where to file 2012 federal income tax return These affidavits must include the name, current address, and taxpayer identification number of the individual, and be accompanied by a dated declaration, signed by the individual, which states: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Where to file 2012 federal income tax return ” The organization must state whether the returns for the tax year in which the application should have been filed or any tax years that would have been affected by the application had it been timely made are being examined by the IRS, an appeals office, or a federal court. Where to file 2012 federal income tax return The organization must notify the IRS office considering the request for relief if the IRS starts an examination of any such return while the organization's request for relief is pending. Where to file 2012 federal income tax return The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. Where to file 2012 federal income tax return   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. Where to file 2012 federal income tax return Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. Where to file 2012 federal income tax return More information. Where to file 2012 federal income tax return   For more information about these procedures, see Regulations sections 301. Where to file 2012 federal income tax return 9100-1, 301. Where to file 2012 federal income tax return 9100-2, 301. Where to file 2012 federal income tax return 9100-3, Revenue Procedure 2013-4, section 6. Where to file 2012 federal income tax return 04, 2013-1 I. Where to file 2012 federal income tax return R. Where to file 2012 federal income tax return B. Where to file 2012 federal income tax return 126, and Revenue Procedure 2013-8, 2013-1 I. Where to file 2012 federal income tax return R. Where to file 2012 federal income tax return B. Where to file 2012 federal income tax return 237. Where to file 2012 federal income tax return See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. Where to file 2012 federal income tax return Notification from the IRS. Where to file 2012 federal income tax return   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. Where to file 2012 federal income tax return Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. Where to file 2012 federal income tax return These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group. Where to file 2012 federal income tax return Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). Where to file 2012 federal income tax return These organizations are exempt automatically if they meet the requirements of section 501(c)(3). Where to file 2012 federal income tax return Filing Form 1023 to establish exemption. Where to file 2012 federal income tax return   If the organization wants to establish its exemption with the IRS and receive a ruling or determination letter recognizing its exempt status, it should file Form 1023. Where to file 2012 federal income tax return By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. Where to file 2012 federal income tax return A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. Where to file 2012 federal income tax return Private foundations. Where to file 2012 federal income tax return   See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation. Where to file 2012 federal income tax return Gross receipts test. Where to file 2012 federal income tax return   For purposes of the gross receipts test, an organization normally does not have more than $5,000 annually in gross receipts if: During its first tax year the organization received gross receipts of $7,500 or less, During its first 2 years the organization had a total of $12,000 or less in gross receipts, and In the case of an organization that has been in existence for at least 3 years, the total gross receipts received by the organization during the immediately preceding 2 years, plus the current year, are $15,000 or less. Where to file 2012 federal income tax return   An organization with gross receipts more than the amounts in the gross receipts test, unless otherwise exempt from filing Form 1023, must file a Form 1023 within 90 days after the end of the period in which the amounts are exceeded. Where to file 2012 federal income tax return For example, an organization's gross receipts for its first tax year were less than $7,500, but at the end of its second tax year its gross receipts for the 2-year period were more than $12,000. Where to file 2012 federal income tax return The organization must file Form 1023 within 90 days after the end of its second tax year. Where to file 2012 federal income tax return   If the organization had existed for at least 3 tax years and had met the gross receipts test for all prior tax years but fails to meet the requirement for the current tax year, its tax-exempt status for the prior years will not be lost even if Form 1023 is not filed within 90 days after the close of the current tax year. Where to file 2012 federal income tax return However, the organization will not be treated as a section 501(c)(3) organization for the period beginning with the current tax year and ending with the filing of Form 1023. Where to file 2012 federal income tax return Example. Where to file 2012 federal income tax return   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. Where to file 2012 federal income tax return It was incorporated on January 1, 2009, and files returns on a calendar-year basis. Where to file 2012 federal income tax return It did not file a Form 1023. Where to file 2012 federal income tax return The organization's gross receipts during the years 2009 through 2012 were as follows: 2009 $3,600 2010 2,900 2011 400 2012 12,600   The organization's total gross receipts for 2009, 2010, and 2011 were $6,900. Where to file 2012 federal income tax return Therefore, it did not have to file Form 1023 and is exempt for those years. Where to file 2012 federal income tax return However, for 2010, 2011, and 2012 the total gross receipts were $15,900. Where to file 2012 federal income tax return Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. Where to file 2012 federal income tax return If it does not file within this time period, it will not be exempt under section 501(c)(3) for the period beginning with tax year 2012 ending when the Form 1023 is received by the IRS. Where to file 2012 federal income tax return The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. Where to file 2012 federal income tax return   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. Where to file 2012 federal income tax return See the procedures for this extension discussed earlier. Where to file 2012 federal income tax return Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. Where to file 2012 federal income tax return This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. Where to file 2012 federal income tax return Organizational Test The articles of organization must limit the organization's purposes to one or more of those described at the beginning of this chapter and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. Where to file 2012 federal income tax return These conditions for exemption are referred to as the organizational test. Where to file 2012 federal income tax return Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. Where to file 2012 federal income tax return Therefore, the organizational test may be met if the purposes stated in the articles of organization are limited in some way by reference to section 501(c)(3). Where to file 2012 federal income tax return The requirement that your organization's purposes and powers must be limited by the articles of organization is not satisfied if the limit is contained only in the bylaws or other rules or regulations. Where to file 2012 federal income tax return Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. Where to file 2012 federal income tax return Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. Where to file 2012 federal income tax return In interpreting an organization's articles, the law of the state where the organization was created is controlling. Where to file 2012 federal income tax return If an organization contends that the terms of its articles have a different meaning under state law than their generally accepted meaning, such meaning must be established by a clear and convincing reference to relevant court decisions, opinions of the state attorney general, or other appropriate state authorities. Where to file 2012 federal income tax return The following are examples illustrating the organizational test. Where to file 2012 federal income tax return Example 1. Where to file 2012 federal income tax return Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). Where to file 2012 federal income tax return These articles appropriately limit the organization's purposes. Where to file 2012 federal income tax return The organization meets the organizational test. Where to file 2012 federal income tax return Example 2. Where to file 2012 federal income tax return An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. Where to file 2012 federal income tax return The organization will not be properly limited as to its purposes since all research is not scientific. Where to file 2012 federal income tax return The organization does not meet the organizational test. Where to file 2012 federal income tax return Example 3. Where to file 2012 federal income tax return An organization's articles state that its purpose is to receive contributions and pay them over to organizations that are described in section 501(c)(3) and exempt from taxation under section 501(a). Where to file 2012 federal income tax return The organization meets the organizational test. Where to file 2012 federal income tax return Example 4. Where to file 2012 federal income tax return If a stated purpose in the articles is the conduct of a school of adult education and its manner of operation is described in detail, such a purpose will be satisfactorily limited. Where to file 2012 federal income tax return Example 5. Where to file 2012 federal income tax return If the articles state the organization is formed for charitable purposes, without any further description, such language ordinarily will be sufficient since the term charitable has a generally accepted legal meaning. Where to file 2012 federal income tax return On the other hand, if the purposes are stated to be charitable, philanthropic, and benevolent, the organizational requirement will not be met since the terms philanthropic and benevolent have no generally accepted legal meaning and, therefore, the stated purposes may, under the laws of the state, permit activities that are broader than those intended by the exemption law. Where to file 2012 federal income tax return Example 6. Where to file 2012 federal income tax return If the articles state an organization is formed to promote American ideals, or to foster the best interests of the people, or to further the common welfare and well-being of the community, without any limitation or provision restricting such purposes to accomplishment only in a charitable manner, the purposes will not be sufficiently limited. Where to file 2012 federal income tax return Such purposes are vague and may be accomplished other than in an exempt manner. Where to file 2012 federal income tax return Example 7. Where to file 2012 federal income tax return A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. Where to file 2012 federal income tax return A hospital may or may not be exempt depending on the manner in which it is operated. Where to file 2012 federal income tax return Example 8. Where to file 2012 federal income tax return An organization that is expressly empowered by its articles to carry on social activities will not be sufficiently limited as to its power, even if its articles state that it is organized and will be operated exclusively for charitable purposes. Where to file 2012 federal income tax return Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. Where to file 2012 federal income tax return This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the Federal Government or to a state or local government for a public purpose. Where to file 2012 federal income tax return If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. Where to file 2012 federal income tax return Dedication. Where to file 2012 federal income tax return   To establish that your organization's assets will be permanently dedicated to an exempt purpose, the articles of organization should contain a provision ensuring their distribution for an exempt purpose in the event of dissolution. Where to file 2012 federal income tax return Although reliance can be placed upon state law to establish permanent dedication of assets for exempt purposes, your organization's application probably can be processed much more rapidly if its articles of organization include a provision ensuring permanent dedication of assets for exempt purposes. Where to file 2012 federal income tax return Distribution. Where to file 2012 federal income tax return   Revenue Procedure 82-2, 1982-1 C. Where to file 2012 federal income tax return B. Where to file 2012 federal income tax return 367, identifies the states and circumstances in which the IRS will not require an express provision for the distribution of assets upon dissolution in the articles of organization. Where to file 2012 federal income tax return The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. Where to file 2012 federal income tax return   If a named beneficiary is to be the distributee, it must be one that would qualify and would be exempt within the meaning of section 501(c)(3) at the time the dissolution takes place. Where to file 2012 federal income tax return Since the named beneficiary at the time of dissolution may not be qualified, may not be in existence, or may be unwilling or unable to accept the assets of the dissolving organization, a provision should be made for distribution of the assets for one or more of the purposes specified in this chapter in the event of any such contingency. Where to file 2012 federal income tax return Sample articles of organization. Where to file 2012 federal income tax return   See sample articles of organization in the Appendix in the back of this publication. Where to file 2012 federal income tax return Educational Organizations and Private Schools If your organization wants to obtain recognition of exemption as an educational organization, you must submit complete information as to how your organization carries on or plans to carry on its educational activities, such as by conducting a school, by panels, discussions, lectures, forums, radio and television programs, or through various cultural media such as museums, symphony orchestras, or art exhibits. Where to file 2012 federal income tax return In each instance, you must explain by whom and where these activities are or will be conducted and the amount of admission fees, if any. Where to file 2012 federal income tax return You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. Where to file 2012 federal income tax return If you are organized to conduct a school, you must submit full information regarding your tuition charges, number of faculty members, number of full-time and part-time students enrolled, courses of study and degrees conferred, together with a copy of your school catalog. Where to file 2012 federal income tax return See also Private Schools , discussed later. Where to file 2012 federal income tax return Educational Organizations The term educational relates to: The instruction or training of individuals for the purpose of improving or developing their capabilities, or The instruction of the public on subjects useful to individuals and beneficial to the community. Where to file 2012 federal income tax return Advocacy of a position. Where to file 2012 federal income tax return   Advocacy of a particular position or viewpoint may be educational if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the public to form an independent opinion or conclusion. Where to file 2012 federal income tax return The mere presentation of unsupported opinion is not educational. Where to file 2012 federal income tax return Method not educational. Where to file 2012 federal income tax return   The method used by an organization to develop and present its views is a factor in determining if an organization qualifies as educational within the meaning of section 501(c)(3). Where to file 2012 federal income tax return The following factors may indicate that the method is not educational. Where to file 2012 federal income tax return The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. Where to file 2012 federal income tax return The facts that purport to support the viewpoint are distorted. Where to file 2012 federal income tax return The organization's presentations make substantial use of inflammatory and disparaging terms and express conclusions more on the basis of emotion than of objective evaluations. Where to file 2012 federal income tax return The approach used is not aimed at developing an understanding on the part of the audience because it does not consider their background or training. Where to file 2012 federal income tax return   Exceptional circumstances, however, may exist where an organization's advocacy may be educational even if one or more of the factors listed above are present. Where to file 2012 federal income tax return Qualifying organizations. Where to file 2012 federal income tax return   The following types of organizations may qualify as educational: An organization, such as a primary or secondary school, a college, or a professional or trade school, that has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled student body in attendance at a place where the educational activities are regularly carried on, An organization whose activities consist of conducting public discussion groups, forums, panels, lectures, or other similar programs, An organization that presents a course of instruction by correspondence or through the use of television or radio, A museum, zoo, planetarium, symphony orchestra, or other similar organization, A nonprofit children's day-care center, and A credit counseling organization. Where to file 2012 federal income tax return College book stores, cafeterias, restaurants, etc. Where to file 2012 federal income tax return   These and other on-campus organizations should submit information to show that they are controlled by and operated for the convenience of the faculty and student body or by whom they are controlled and whom they serve. Where to file 2012 federal income tax return Alumni association. Where to file 2012 federal income tax return   An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. Where to file 2012 federal income tax return If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs . Where to file 2012 federal income tax return Athletic organization. Where to file 2012 federal income tax return   This type of organization must submit evidence that it is engaged in activities such as directing and controlling interscholastic athletic competitions, conducting tournaments, and prescribing eligibility rules for contestants. Where to file 2012 federal income tax return If it is not so engaged, your organization may be exempt as a social club described in chapter 4. Where to file 2012 federal income tax return Raising funds to be used for travel and other activities to interview and persuade prospective students with outstanding athletic ability to attend a particular university does not show an exempt purpose. Where to file 2012 federal income tax return If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. Where to file 2012 federal income tax return Private Schools Every private school filing an application for recognition of tax-exempt status must supply the IRS (on Schedule B, Form 1023) with the following information. Where to file 2012 federal income tax return The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. Where to file 2012 federal income tax return (This information also must be projected, so far as may be feasible, for the next academic year. Where to file 2012 federal income tax return ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. Where to file 2012 federal income tax return A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. Where to file 2012 federal income tax return A statement indicating whether any of the organizations described in item (3) above have an objective of maintaining segregated public or private school education at the time the application is filed and, if so, whether any of the individuals described in item (3) are officers or active members of those organizations at the time the application is filed. Where to file 2012 federal income tax return The public school district and county in which the school is located. Where to file 2012 federal income tax return How to determine racial composition. Where to file 2012 federal income tax return   The racial composition of the student body, faculty, and administrative staff can be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit to the school information that the school otherwise does not require. Where to file 2012 federal income tax return Nevertheless, a statement of the method by which the racial composition was determined must be supplied. Where to file 2012 federal income tax return The identity of individual students or members of the faculty and administrative staff should not be included with this information. Where to file 2012 federal income tax return   A school that is a state or municipal instrumentality (see Instrumentalities , near the beginning of this chapter), whether or not it qualifies for exemption under section 501(c)(3), is not considered to be a private school for purposes of the following discussion. Where to file 2012 federal income tax return Racially Nondiscriminatory Policy To qualify as an organization exempt from federal income tax, a private school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and that it does not discriminate against applicants and students on the basis of race, color, or national or ethnic origin. Where to file 2012 federal income tax return Also, the school must circulate information that clearly states the school's admission policies. Where to file 2012 federal income tax return A racially nondiscriminatory policy toward students means that the school admits the students of any race to all the rights, privileges, programs, and activities generally accorded or made available to students at that school and that the school does not discriminate on the basis of race in administering its educational policies, admission policies, scholarship and loan programs, and athletic and other school-administered programs. Where to file 2012 federal income tax return The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. Where to file 2012 federal income tax return The existence of a racially discriminatory policy with respect to the employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. Where to file 2012 federal income tax return Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. Where to file 2012 federal income tax return A policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance is not discrimination on the basis of race when the purpose and effect of this policy is to promote establishing and maintaining the school's nondiscriminatory policy. Where to file 2012 federal income tax return A school that selects students on the basis of membership in a religious denomination or unit is not discriminating if membership in the denomination or unit is open to all on a racially nondiscriminatory basis. Where to file 2012 federal income tax return Policy statement. Where to file 2012 federal income tax return   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. Where to file 2012 federal income tax return Also, the school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses to inform prospective students of its programs. Where to file 2012 federal income tax return Publicity requirement. Where to file 2012 federal income tax return   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. Where to file 2012 federal income tax return Selective communication of a racially nondiscriminatory policy that a school provides solely to leaders of racial groups will not be considered an effective means of communication to make the policy known to all segments of the community. Where to file 2012 federal income tax return To satisfy this requirement, the school must use one of the following two methods. Where to file 2012 federal income tax return Method one. Where to file 2012 federal income tax return   The school can publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. Where to file 2012 federal income tax return Such publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Where to file 2012 federal income tax return When more than one community is served by a school, the school can publish the notice in those newspapers that are reasonably likely to be read by all racial segments in the communities that the school serves. Where to file 2012 federal income tax return If this method is used, the notice must meet the following printing requirements. Where to file 2012 federal income tax return It must appear in a section of the newspaper likely to be read by prospective students and their families. Where to file 2012 federal income tax return It must occupy at least 3 column inches. Where to file 2012 federal income tax return It must have its title printed in at least 12 point bold face type. Where to file 2012 federal income tax return It must have the remaining text printed in at least 8 point type. Where to file 2012 federal income tax return The following is an acceptable example of the notice:   NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS     The M School admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. Where to file 2012 federal income tax return It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs. Where to file 2012 federal income tax return   Method two. Where to file 2012 federal income tax return   The school can use the broadcast media to publicize its racially nondiscriminatory policy if this use makes the policy known to all segments of the general community the school serves. Where to file 2012 federal income tax return If the school uses this method, it must provide documentation showing that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. Where to file 2012 federal income tax return In this case, appropriate documentation would include copies of the tapes or scripts used and records showing that there was an adequate number of announcements. Where to file 2012 federal income tax return The documentation also would include proof that these announcements were made during hours when they were likely to be communicated to all segments of the general community, that they were long enough to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. Where to file 2012 federal income tax return Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Where to file 2012 federal income tax return Exceptions. Where to file 2012 federal income tax return   The publicity requirements will not apply in the following situations. Where to file 2012 federal income tax return First, if for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school can make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit uses in the communities from which the students are drawn. Where to file 2012 federal income tax return These newspapers and circulars can be distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. Where to file 2012 federal income tax return If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and the second exception (discussed next) does not apply to the school, then it must comply with either of the publicity requirements explained earlier. Where to file 2012 federal income tax return Second, if a school customarily draws a substantial percentage of its students nationwide, worldwide, from a large geographic section or sections of the United States, or from local communities, and if the school follows a racially nondiscriminatory policy as to its students, the school may satisfy the publicity requirement by complying with the instructions explained earlier under Policy statement . Where to file 2012 federal income tax return   The school can demonstrate that it follows a racially nondiscriminatory policy either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, except for local community schools, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. Where to file 2012 federal income tax return The question as to whether a school demonstrates such a policy satisfactorily will be determined on the basis of the facts and circumstances of each case. Where to file 2012 federal income tax return   The IRS recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy when there are relatively few or no such students in these communities. Where to file 2012 federal income tax return Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or are otherwise expressly obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any federal agency was a party. Where to file 2012 federal income tax return   The IRS encourages schools to satisfy the publicity requirement by using either of the methods described earlier, even though a school considers itself to be within one of the Exceptions. Where to file 2012 federal income tax return The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. Where to file 2012 federal income tax return In this regard, it is each school's responsibility to determine whether either of the exceptions applies. Where to file 2012 federal income tax return Such responsibility will prepare the school, if it is audited by the IRS, to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with either one of the publicity requirements was justified by one of the exceptions. Where to file 2012 federal income tax return Also, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official was aware of these statements. Where to file 2012 federal income tax return Facilities and programs. Where to file 2012 federal income tax return   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. Where to file 2012 federal income tax return Scholarship and loan programs. Where to file 2012 federal income tax return   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. Where to file 2012 federal income tax return This must be known throughout the general community being served by the school and should be referred to in its publicity. Where to file 2012 federal income tax return Financial assistance programs, as well as scholarships and loans made under financial assistance programs, that favor members of one or more racial minority groups and that do not significantly detract from or are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. Where to file 2012 federal income tax return Certification. Where to file 2012 federal income tax return   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students must certify annually, under penalties of perjury, on Schedule E (Form 990 or 990-EZ) or Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax, whichever applies, that to the best of his or her knowledge and belief the school has satisfied all requirements that apply, as previously explained. Where to file 2012 federal income tax return   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. Where to file 2012 federal income tax return Recordkeeping requirements. Where to file 2012 federal income tax return With certain exceptions, given later, each exempt private school must maintain the following records for a minimum period of 3 years, beginning with the year after the year of compilation or acquisition. Where to file 2012 federal income tax return Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. Where to file 2012 federal income tax return Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. Where to file 2012 federal income tax return Copies of all materials used by or on behalf of the school to solicit contributions. Where to file 2012 federal income tax return Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. Where to file 2012 federal income tax return (Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed. Where to file 2012 federal income tax return ) The racial composition of the student body, faculty, and administrative staff can be determined in the same manner as that described at the beginning of this section. Where to file 2012 federal income tax return However, a school cannot discontinue maintaining a system of records that reflect the racial composition of its students, faculty, and administrative staff used on November 6, 1975, unless it substitutes a different system that compiles substantially the same information, without advance approval of the IRS. Where to file 2012 federal income tax return The IRS does not require that a school release any personally identifiable records or personal information except in accordance with the requirements of the Family Educational Rights and Privacy Act of 1974. Where to file 2012 federal income tax return Similarly, the IRS does not require a school to keep records prohibited under state or federal law. Where to file 2012 federal income tax return Exceptions. Where to file 2012 federal income tax return   The school does not have to independently maintain these records for IRS use if both of the following are true. Where to file 2012 federal income tax return Substantially the same information has been included in a report or reports filed with an agency or agencies of federal, state, or local governments, and this information is current within 1 year. Where to file 2012 federal income tax return The school maintains copies of these reports from which this information is readily obtainable. Where to file 2012 federal income tax return If these reports do not include all of the information required, as discussed earlier, records providing such remaining information must be maintained by the school for IRS use. Where to file 2012 federal income tax return Failure to maintain records. Where to file 2012 federal income tax return   Failure to maintain or to produce the required records and information, upon proper request, will create a presumption that the organization has failed to comply with these guidelines. Where to file 2012 federal income tax return Organizations Providing Insurance An organization described in sections 501(c)(3) or 501(c)(4) may be exempt from tax only if no substantial part of its activities consists of providing commercial-type insurance. Where to file 2012 federal income tax return However, this rule does not apply to state-sponsored organizations described in sections 501(c)(26) or 501(c)(27), which are discussed in chapter 4, or to charitable risk pools, discussed next. Where to file 2012 federal income tax return Charitable Risk Pools A charitable risk pool is treated as organized and operated exclusively for charitable purposes if it: Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management, Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a), Is organized under state law authorizing this type of risk pooling, Is exempt from state income tax (or will be after qualifying as a section 501(c)(3) organization), Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, Is controlled by a board of directors elected by its members, and Is organized under documents requiring that: Each member be a section 501(c)(3) organization exempt from tax under section 501(a), Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and Each insurance policy issued by the pool provide that it will not cover events occurring after a final determination described in (b). Where to file 2012 federal income tax return Other Section 501(c)(3) Organizations In addition to the information required for all organizations, as described earlier, you should include any other information described in this section. Where to file 2012 federal income tax return Charitable Organizations If your organization is applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest. Where to file 2012 federal income tax return Some examples of this type of organization are those organized for: Relief of the poor, the distressed, or the underprivileged, Advancement of religion, Advancement of education or science, Erection or maintenance of public buildings, monuments, or works, Lessening the burdens of government, Lessening of neighborhood tensions, Elimination of prejudice and discrimination, Defense of human and civil rights secured by law, and Combating community deterioration and juvenile delinquency. Where to file 2012 federal income tax return The rest of this section contains a description of the information to be provided by certain specific organizations. Where to file 2012 federal income tax return This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. Where to file 2012 federal income tax return Each of the following organizations must submit the information described. Where to file 2012 federal income tax return Charitable organization supporting education. Where to file 2012 federal income tax return   Submit information showing how your organization supports education — for example, contributes to an existing educational institution, endows a professorial chair, contributes toward paying teachers' salaries, or contributes to an educational institution to enable it to carry on research. Where to file 2012 federal income tax return Scholarships. Where to file 2012 federal income tax return   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. Where to file 2012 federal income tax return Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. Where to file 2012 federal income tax return How and by whom the recipients are or will be selected. Where to file 2012 federal income tax return If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. Where to file 2012 federal income tax return If awards are or will be made to recipients of a particular class, for example, children of employees of a particular employer— Whether any preference is or will be accorded an applicant by reason of the parent's position, length of employment, or salary, Whether as a condition of the award the recipient must upon graduation accept employment with the company, and Whether the award will be continued even if the parent's employment ends. Where to file 2012 federal income tax return A copy of the scholarship application form and any brochures or literature describing the scholarship program. Where to file 2012 federal income tax return Hospital. Where to file 2012 federal income tax return   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. Where to file 2012 federal income tax return   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. Where to file 2012 federal income tax return You must attach a list showing: The names of the active and courtesy staff members of the proprietary hospital, as well as the names of your medical staff members after the transfer to nonprofit ownership, and The names of any doctors who continued to lease office space in the hospital after its transfer to nonprofit ownership and the amount of rent paid. Where to file 2012 federal income tax return Submit also an appraisal showing the fair rental value of the rented space. Where to file 2012 federal income tax return Clinic. Where to file 2012 federal income tax return   If you are organized to operate a clinic, attach a statement including: A description of the facilities and services, To whom the services are offered, such as the public at large or a specific group, How charges are determined, such as on a profit basis, to recover costs, or at less than cost, By whom administered and controlled, Whether any of the professional staff (that is, those who perform or will perform the clinical services) also serve or will serve in an administrative capacity, and How compensation paid the professional staff is or will be determined. Where to file 2012 federal income tax return Home for the aged. Where to file 2012 federal income tax return   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. Where to file 2012 federal income tax return Community nursing bureau. Where to file 2012 federal income tax return   If you provide a nursing register or community nursing bureau, provide information showing that your organization will be operated as a community project and will receive its primary support from public contributions to maintain a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses for the benefit of hospitals, health agencies, doctors, and individuals. Where to file 2012 federal income tax return Organization providing loans. Where to file 2012 federal income tax return   If you make, or will make, loans for charitable and educational purposes, submit the following information. Where to file 2012 federal income tax return An explanation of the circumstances under which such loans are, or will be, made. Where to file 2012 federal income tax return Criteria for selection, including the rules of eligibility. Where to file 2012 federal income tax return How and by whom the recipients are or will be selected. Where to file 2012 federal income tax return Manner of repayment of the loan. Where to file 2012 federal income tax return Security required, if any. Where to file 2012 federal income tax return Interest charged, if any, and when payable. Where to file 2012 federal income tax return Copies in duplicate of the loan application and any brochures or literature describing the loan program. Where to file 2012 federal income tax return Public-interest law firms. Where to file 2012 federal income tax return   If your organization was formed to litigate in the public interest (as opposed to providing legal services to the poor), such as in the area of protection of the environment, you should submit the following information. Where to file 2012 federal income tax return How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. Where to file 2012 federal income tax return Whether the organization will accept fees for its services. Where to file 2012 federal income tax return A description of the cases litigated or to be litigated and how they benefit the public generally. Where to file 2012 federal income tax return Whether the policies and program of the organization are the responsibility of a board or committee representative of the public interest, which is neither controlled by employees or persons who litigate on behalf of the organization nor by any organization that is not itself an organization described in this chapter. Where to file 2012 federal income tax return Whether the organization is operated, through sharing of office space or otherwise, in a way to create identification or confusion with a particular private law firm. Where to file 2012 federal income tax return Whether there is an arrangement to provide, directly or indirectly, a deduction for the cost of litigation that is for the private benefit of the donor. Where to file 2012 federal income tax return Acceptance of attorneys' fees. Where to file 2012 federal income tax return   A nonprofit public-interest law firm can accept attorneys' fees in public-interest cases if the fees are paid directly by its clients and the fees are not more than the actual costs incurred in the case. Where to file 2012 federal income tax return Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. Where to file 2012 federal income tax return   Firms can accept fees awarded or approved by a court or an administrative agency and paid by an opposing party if the firms do not use the likelihood or probability of fee awards as a consideration in the selection of cases. Where to file 2012 federal income tax return All fee awards must be paid to the organization and not to its individual staff attorneys. Where to file 2012 federal income tax return Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. Where to file 2012 federal income tax return Private attorneys, whose services are retained by the firm to assist it in particular cases, can be compensated by the firm, but only on a fixed fee or salary basis. Where to file 2012 federal income tax return   The total amount of all attorneys' fees (court awarded and those received from clients) must not be more than 50% of the total cost of operations of the organization's legal functions, calculated over a 5-year period. Where to file 2012 federal income tax return   If, in order to carry out its program, an organization violates applicable canons of ethics, disrupts the judicial system, or engages in any illegal action, the organization will jeopardize its exemption. Where to file 2012 federal income tax return Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. Where to file 2012 federal income tax return That the particular religious beliefs of the organization are truly and sincerely held. Where to file 2012 federal income tax return That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. Where to file 2012 federal income tax return Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. Where to file 2012 federal income tax return If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs. Where to file 2012 federal income tax return Churches. Where to file 2012 federal income tax return   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. Where to file 2012 federal income tax return In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church. Where to file 2012 federal income tax return   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. Where to file 2012 federal income tax return Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. Where to file 2012 federal income tax return The IRS considers the facts and circumstances of each organization applying for church status. Where to file 2012 federal income tax return Convention or association of churches. Where to file 2012 federal income tax return   Any organization that is otherwise a convention or association of churches will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization. Where to file 2012 federal income tax return Integrated auxiliaries. Where to file 2012 federal income tax return   An organization is an integrated auxiliary of a church if all the following are true. Where to file 2012 federal income tax return The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). Where to file 2012 federal income tax return It is affiliated with a church or a convention or association of churches. Where to file 2012 federal income tax return It is internally supported. Where to file 2012 federal income tax return An organization is internally supported unless both of the following are true. Where to file 2012 federal income tax return It offers admissions, goods, services, or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for a small part of the cost). Where to file 2012 federal income tax return It normally gets more than 50% of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses. Where to file 2012 federal income tax return Special rule. Where to file 2012 federal income tax return   Men's and women's organizations, seminaries, mission societies, and youth groups that satisfy (1) and (2) shown earlier are integrated auxiliaries of a church even if they are not internally supported. Where to file 2012 federal income tax return   In order for an organization (including a church and religious organization) to qualify for tax exemption, no part of its net earnings can inure to any individual. Where to file 2012 federal income tax return   Although an individual is entitled to a charitable deduction for contributions to a church, the assignment or similar transfer of compensation for personal services to a church generally does not relieve a taxpayer of federal income tax liability on the compensation, regardless of the motivation behind the transfer. Where to file 2012 federal income tax return Scientific Organizations You must show that your organization's research will be carried on in the public interest. Where to file 2012 federal income tax return Scientific research will be considered to be in the public interest if the results of the research (including any patents, copyrights, processes, or formulas) are made available to the public on a nondiscriminatory basis; if the research is performed for the United States or a state, county, or municipal government; or if the research is carried on for one of the following purposes. Where to file 2012 federal income tax return Aiding in the scientific education of college or university students. Where to file 2012 federal income tax return Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th
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The Where To File 2012 Federal Income Tax Return

Where to file 2012 federal income tax return Publication 969 - Main Content Table of Contents Health Savings Accounts (HSAs)Qualifying for an HSA Contributions to an HSA Distributions From an HSA Balance in an HSA Death of HSA Holder Filing Form 8889 Employer Participation Medical Savings Accounts (MSAs)Archer MSAs Contributions to an MSA Distributions From an MSA Balance in an Archer MSA Death of the Archer MSA Holder Filing Form 8853 Employer Participation Medicare Advantage MSAs Flexible Spending Arrangements (FSAs)Qualifying for an FSA Contributions to an FSA Distributions From an FSA Balance in an FSA Employer Participation Health Reimbursement Arrangements (HRAs)Qualifying for an HRA Contributions to an HRA Distributions From an HRA Balance in an HRA Employer Participation How To Get Tax HelpLow Income Taxpayer Clinics Health Savings Accounts (HSAs) A health savings account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. Where to file 2012 federal income tax return You must be an eligible individual to qualify for an HSA. Where to file 2012 federal income tax return No permission or authorization from the IRS is necessary to establish an HSA. Where to file 2012 federal income tax return You set up an HSA with a trustee. Where to file 2012 federal income tax return A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. Where to file 2012 federal income tax return The HSA can be established through a trustee that is different from your health plan provider. Where to file 2012 federal income tax return Your employer may already have some information on HSA trustees in your area. Where to file 2012 federal income tax return If you have an Archer MSA, you can generally roll it over into an HSA tax free. Where to file 2012 federal income tax return See Rollovers, later. Where to file 2012 federal income tax return What are the benefits of an HSA?   You may enjoy several benefits from having an HSA. Where to file 2012 federal income tax return You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040. Where to file 2012 federal income tax return Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income. Where to file 2012 federal income tax return The contributions remain in your account until you use them. Where to file 2012 federal income tax return The interest or other earnings on the assets in the account are tax free. Where to file 2012 federal income tax return Distributions may be tax free if you pay qualified medical expenses. Where to file 2012 federal income tax return See Qualified medical expenses , later. Where to file 2012 federal income tax return An HSA is “portable. Where to file 2012 federal income tax return ” It stays with you if you change employers or leave the work force. Where to file 2012 federal income tax return Qualifying for an HSA To be an eligible individual and qualify for an HSA, you must meet the following requirements. Where to file 2012 federal income tax return You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month. Where to file 2012 federal income tax return You have no other health coverage except what is permitted under Other health coverage , later. Where to file 2012 federal income tax return You are not enrolled in Medicare. Where to file 2012 federal income tax return You cannot be claimed as a dependent on someone else's 2013 tax return. Where to file 2012 federal income tax return Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers). Where to file 2012 federal income tax return If you meet these requirements, you are an eligible individual even if your spouse has non-HDHP family coverage, provided your spouse's coverage does not cover you. Where to file 2012 federal income tax return If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an HSA contribution. Where to file 2012 federal income tax return This is true even if the other person does not actually claim your exemption. Where to file 2012 federal income tax return Each spouse who is an eligible individual who wants an HSA must open a separate HSA. Where to file 2012 federal income tax return You cannot have a joint HSA. Where to file 2012 federal income tax return High deductible health plan (HDHP). Where to file 2012 federal income tax return   An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Where to file 2012 federal income tax return Out-of-pocket expenses include copayments and other amounts, but do not include premiums. Where to file 2012 federal income tax return   An HDHP may provide preventive care benefits without a deductible or with a deductible less than the minimum annual deductible. Where to file 2012 federal income tax return Preventive care includes, but is not limited to, the following. Where to file 2012 federal income tax return Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals. Where to file 2012 federal income tax return Routine prenatal and well-child care. Where to file 2012 federal income tax return Child and adult immunizations. Where to file 2012 federal income tax return Tobacco cessation programs. Where to file 2012 federal income tax return Obesity weight-loss programs. Where to file 2012 federal income tax return Screening services. Where to file 2012 federal income tax return This includes screening services for the following: Cancer. Where to file 2012 federal income tax return Heart and vascular diseases. Where to file 2012 federal income tax return Infectious diseases. Where to file 2012 federal income tax return Mental health conditions. Where to file 2012 federal income tax return Substance abuse. Where to file 2012 federal income tax return Metabolic, nutritional, and endocrine conditions. Where to file 2012 federal income tax return Musculoskeletal disorders. Where to file 2012 federal income tax return Obstetric and gynecological conditions. Where to file 2012 federal income tax return Pediatric conditions. Where to file 2012 federal income tax return Vision and hearing disorders. Where to file 2012 federal income tax return For more information on screening services, see Notice 2004-23, 2004-15 I. Where to file 2012 federal income tax return R. Where to file 2012 federal income tax return B. Where to file 2012 federal income tax return 725 available at www. Where to file 2012 federal income tax return irs. Where to file 2012 federal income tax return gov/irb/2004-15_IRB/ar10. Where to file 2012 federal income tax return html. Where to file 2012 federal income tax return     The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2013. Where to file 2012 federal income tax return      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,250 $12,500 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Where to file 2012 federal income tax return Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. Where to file 2012 federal income tax return    The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2014. Where to file 2012 federal income tax return      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,350 $12,700 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Where to file 2012 federal income tax return Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. Where to file 2012 federal income tax return   Self-only HDHP coverage is an HDHP covering only an eligible individual. Where to file 2012 federal income tax return Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual). Where to file 2012 federal income tax return Example. Where to file 2012 federal income tax return An eligible individual and his dependent child are covered under an “employee plus one” HDHP offered by the individual's employer. Where to file 2012 federal income tax return This is family HDHP coverage. Where to file 2012 federal income tax return Family plans that do not meet the high deductible rules. Where to file 2012 federal income tax return   There are some family plans that have deductibles for both the family as a whole and for individual family members. Where to file 2012 federal income tax return Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. Where to file 2012 federal income tax return If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. Where to file 2012 federal income tax return Example. Where to file 2012 federal income tax return You have family health insurance coverage in 2013. Where to file 2012 federal income tax return The annual deductible for the family plan is $3,500. Where to file 2012 federal income tax return This plan also has an individual deductible of $1,500 for each family member. Where to file 2012 federal income tax return The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($2,500) for family coverage. Where to file 2012 federal income tax return Other health coverage. Where to file 2012 federal income tax return   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. Where to file 2012 federal income tax return However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. Where to file 2012 federal income tax return    You can have additional insurance that provides benefits only for the following items. Where to file 2012 federal income tax return Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property. Where to file 2012 federal income tax return A specific disease or illness. Where to file 2012 federal income tax return A fixed amount per day (or other period) of hospitalization. Where to file 2012 federal income tax return   You can also have coverage (whether provided through insurance or otherwise) for the following items. Where to file 2012 federal income tax return Accidents. Where to file 2012 federal income tax return Disability. Where to file 2012 federal income tax return Dental care. Where to file 2012 federal income tax return Vision care. Where to file 2012 federal income tax return Long-term care. Where to file 2012 federal income tax return    Plans in which substantially all of the coverage is through the items listed earlier are not HDHPs. Where to file 2012 federal income tax return For example, if your plan provides coverage substantially all of which is for a specific disease or illness, the plan is not an HDHP for purposes of establishing an HSA. Where to file 2012 federal income tax return Prescription drug plans. Where to file 2012 federal income tax return   You can have a prescription drug plan, either as part of your HDHP or a separate plan (or rider), and qualify as an eligible individual if the plan does not provide benefits until the minimum annual deductible of the HDHP has been met. Where to file 2012 federal income tax return If you can receive benefits before that deductible is met, you are not an eligible individual. Where to file 2012 federal income tax return Other employee health plans. Where to file 2012 federal income tax return   An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses generally cannot make contributions to an HSA. Where to file 2012 federal income tax return Health FSAs and HRAs are discussed later. Where to file 2012 federal income tax return   However, an employee can make contributions to an HSA while covered under an HDHP and one or more of the following arrangements. Where to file 2012 federal income tax return Limited-purpose health FSA or HRA. Where to file 2012 federal income tax return These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. Where to file 2012 federal income tax return Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible. Where to file 2012 federal income tax return Suspended HRA. Where to file 2012 federal income tax return Before the beginning of an HRA coverage period, you can elect to suspend the HRA. Where to file 2012 federal income tax return The HRA does not pay or reimburse, at any time, the medical expenses incurred during the suspension period except preventive care and items listed under Other health coverage. Where to file 2012 federal income tax return When the suspension period ends, you are no longer eligible to make contributions to an HSA. Where to file 2012 federal income tax return Post-deductible health FSA or HRA. Where to file 2012 federal income tax return These arrangements do not pay or reimburse any medical expenses incurred before the minimum annual deductible amount is met. Where to file 2012 federal income tax return The deductible for these arrangements does not have to be the same as the deductible for the HDHP, but benefits may not be provided before the minimum annual deductible amount is met. Where to file 2012 federal income tax return Retirement HRA. Where to file 2012 federal income tax return This arrangement pays or reimburses only those medical expenses incurred after retirement. Where to file 2012 federal income tax return After retirement you are no longer eligible to make contributions to an HSA. Where to file 2012 federal income tax return Health FSA – grace period. Where to file 2012 federal income tax return   Coverage during a grace period by a general purpose health FSA is allowed if the balance in the health FSA at the end of its prior year plan is zero. Where to file 2012 federal income tax return See Flexible Spending Arrangements (FSAs) , later. Where to file 2012 federal income tax return Contributions to an HSA Any eligible individual can contribute to an HSA. Where to file 2012 federal income tax return For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. Where to file 2012 federal income tax return For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Where to file 2012 federal income tax return Family members or any other person may also make contributions on behalf of an eligible individual. Where to file 2012 federal income tax return Contributions to an HSA must be made in cash. Where to file 2012 federal income tax return Contributions of stock or property are not allowed. Where to file 2012 federal income tax return Limit on Contributions The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. Where to file 2012 federal income tax return For 2013, if you have self-only HDHP coverage, you can contribute up to $3,250. Where to file 2012 federal income tax return If you have family HDHP coverage, you can contribute up to $6,450. Where to file 2012 federal income tax return For 2014, if you have self-only HDHP coverage, you can contribute up to $3,300. Where to file 2012 federal income tax return If you have family HDHP coverage you can contribute up to $6,550. Where to file 2012 federal income tax return If you were, or were considered (under the last-month rule, discussed later), an eligible individual for the entire year and did not change your type of coverage, you can contribute the full amount based on your type of coverage. Where to file 2012 federal income tax return However, if you were not an eligible individual for the entire year or changed your coverage during the year, your contribution limit is the greater of: The limitation shown on the Line 3 Limitation Chart and Worksheetin the Instructions for Form 8889, Health Savings Accounts (HSAs), or The maximum annual HSA contribution based on your HDHP coverage (self-only or family) on the first day of the last month of your tax year. Where to file 2012 federal income tax return If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2013 is $6,450 even if you changed coverage during the year. Where to file 2012 federal income tax return Last-month rule. Where to file 2012 federal income tax return   Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. Where to file 2012 federal income tax return You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month. Where to file 2012 federal income tax return Testing period. Where to file 2012 federal income tax return   If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. Where to file 2012 federal income tax return For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. Where to file 2012 federal income tax return For example, December 1, 2013, through December 31, 2014. Where to file 2012 federal income tax return   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule. Where to file 2012 federal income tax return You include this amount in your income in the year in which you fail to be an eligible individual. Where to file 2012 federal income tax return This amount is also subject to a 10% additional tax. Where to file 2012 federal income tax return The income and additional tax are shown on Form 8889, Part III. Where to file 2012 federal income tax return Example 1. Where to file 2012 federal income tax return Chris, age 53, becomes an eligible individual on December 1, 2013. Where to file 2012 federal income tax return He has family HDHP coverage on that date. Where to file 2012 federal income tax return Under the last-month rule, he contributes $6,450 to his HSA. Where to file 2012 federal income tax return Chris fails to be an eligible individual in June 2014. Where to file 2012 federal income tax return Because Chris did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), he must include in his 2014 income the contributions made in 2013 that would not have been made except for the last-month rule. Where to file 2012 federal income tax return Chris uses the worksheet in the Form 8889 instructions to determine this amount. Where to file 2012 federal income tax return January -0- February -0- March -0- April -0- May -0- June -0- July -0- August -0- September -0- October -0- November -0- December $6,450. Where to file 2012 federal income tax return 00 Total for all months $6,450. Where to file 2012 federal income tax return 00 Limitation. Where to file 2012 federal income tax return Divide the total by 12 $537. Where to file 2012 federal income tax return 50 Chris would include $5,912. Where to file 2012 federal income tax return 50 ($6,450. Where to file 2012 federal income tax return 00 – $537. Where to file 2012 federal income tax return 50) in his gross income on his 2014 tax return. Where to file 2012 federal income tax return Also, a 10% additional tax applies to this amount. Where to file 2012 federal income tax return Example 2. Where to file 2012 federal income tax return Erika, age 39, has self-only HDHP coverage on January 1, 2013. Where to file 2012 federal income tax return Erika changes to family HDHP coverage on November 1, 2013. Where to file 2012 federal income tax return Because Erika has family HDHP coverage on December 1, 2013, she contributes $6,450 for 2013. Where to file 2012 federal income tax return Erika fails to be an eligible individual in March 2014. Where to file 2012 federal income tax return Because she did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), she must include in income the contribution made that would not have been made except for the last-month rule. Where to file 2012 federal income tax return Erika uses the worksheet in the Form 8889 instructions to determine this amount. Where to file 2012 federal income tax return January $3,250. Where to file 2012 federal income tax return 00 February $3,250. Where to file 2012 federal income tax return 00 March $3,250. Where to file 2012 federal income tax return 00 April $3,250. Where to file 2012 federal income tax return 00 May $3,250. Where to file 2012 federal income tax return 00 June $3,250. Where to file 2012 federal income tax return 00 July $3,250. Where to file 2012 federal income tax return 00 August $3,250. Where to file 2012 federal income tax return 00 September $3,250. Where to file 2012 federal income tax return 00 October $3,250. Where to file 2012 federal income tax return 00 November $6,450. Where to file 2012 federal income tax return 00 December $6,450. Where to file 2012 federal income tax return 00 Total for all months $45,400. Where to file 2012 federal income tax return 00 Limitation. Where to file 2012 federal income tax return Divide the total by 12 $3,783. Where to file 2012 federal income tax return 34 Erika would include $2,666. Where to file 2012 federal income tax return 67 ($6,450 – $3,783. Where to file 2012 federal income tax return 34) in her gross income on her 2014 tax return. Where to file 2012 federal income tax return Also, a 10% additional tax applies to this amount. Where to file 2012 federal income tax return Additional contribution. Where to file 2012 federal income tax return   If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. Where to file 2012 federal income tax return For example, if you have self-only coverage, you can contribute up to $4,250 (the contribution limit for self-only coverage ($3,250) plus the additional contribution of $1,000). Where to file 2012 federal income tax return However, see Enrolled in Medicare , later. Where to file 2012 federal income tax return If you have more than one HSA in 2013, your total contributions to all the HSAs cannot be more than the limits discussed earlier. Where to file 2012 federal income tax return Reduction of contribution limit. Where to file 2012 federal income tax return   You must reduce the amount that can be contributed (including any additional contribution) to your HSA by the amount of any contribution made to your Archer MSA (including employer contributions) for the year. Where to file 2012 federal income tax return A special rule applies to married people, discussed next, if each spouse has family coverage under an HDHP. Where to file 2012 federal income tax return Rules for married people. Where to file 2012 federal income tax return   If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. Where to file 2012 federal income tax return If each spouse has family coverage under a separate plan, the contribution limit for 2013 is $6,450. Where to file 2012 federal income tax return You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. Where to file 2012 federal income tax return After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. Where to file 2012 federal income tax return The rules for married people apply only if both spouses are eligible individuals. Where to file 2012 federal income tax return If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. Where to file 2012 federal income tax return If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,450. Where to file 2012 federal income tax return Each spouse must make the additional contribution to his or her own HSA. Where to file 2012 federal income tax return Example. Where to file 2012 federal income tax return For 2013, Mr. Where to file 2012 federal income tax return Auburn and his wife are both eligible individuals. Where to file 2012 federal income tax return They each have family coverage under separate HDHPs. Where to file 2012 federal income tax return Mr. Where to file 2012 federal income tax return Auburn is 58 years old and Mrs. Where to file 2012 federal income tax return Auburn is 53. Where to file 2012 federal income tax return Mr. Where to file 2012 federal income tax return and Mrs. Where to file 2012 federal income tax return Auburn can split the family contribution limit ($6,450) equally or they can agree on a different division. Where to file 2012 federal income tax return If they split it equally, Mr. Where to file 2012 federal income tax return Auburn can contribute $4,225 to an HSA (one-half the maximum contribution for family coverage ($3,225) + $1,000 additional contribution) and Mrs. Where to file 2012 federal income tax return Auburn can contribute $3,225 to an HSA. Where to file 2012 federal income tax return Employer contributions. Where to file 2012 federal income tax return   You must reduce the amount you, or any other person, can contribute to your HSA by the amount of any contributions made by your employer that are excludable from your income. Where to file 2012 federal income tax return This includes amounts contributed to your account by your employer through a cafeteria plan. Where to file 2012 federal income tax return Enrolled in Medicare. Where to file 2012 federal income tax return   Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. Where to file 2012 federal income tax return Example. Where to file 2012 federal income tax return You turned age 65 in July 2013 and enrolled in Medicare. Where to file 2012 federal income tax return You had an HDHP with self-only coverage and are eligible for an additional contribution of $1,000. Where to file 2012 federal income tax return Your contribution limit is $2,125 ($4,250 × 6 ÷ 12). Where to file 2012 federal income tax return Qualified HSA funding distribution. Where to file 2012 federal income tax return   A qualified HSA funding distribution may be made from your traditional IRA or Roth IRA to your HSA. Where to file 2012 federal income tax return This distribution cannot be made from an ongoing SEP IRA or SIMPLE IRA. Where to file 2012 federal income tax return For this purpose, a SEP IRA or SIMPLE IRA is ongoing if an employer contribution is made for the plan year ending with or within your tax year in which the distribution would be made. Where to file 2012 federal income tax return   The maximum qualified HSA funding distribution depends on the HDHP coverage (self-only or family) you have on the first day of the month in which the contribution is made and your age as of the end of the tax year. Where to file 2012 federal income tax return The distribution must be made directly by the trustee of the IRA to the trustee of the HSA. Where to file 2012 federal income tax return The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. Where to file 2012 federal income tax return The qualified HSA funding distribution is shown on Form 8889 for the year in which the distribution is made. Where to file 2012 federal income tax return   You can make only one qualified HSA funding distribution during your lifetime. Where to file 2012 federal income tax return However, if you make a distribution during a month when you have self-only HDHP coverage, you can make another qualified HSA funding distribution in a later month in that tax year if you change to family HDHP coverage. Where to file 2012 federal income tax return The total qualified HSA funding distribution cannot be more than the contribution limit for family HDHP coverage plus any additional contribution to which you are entitled. Where to file 2012 federal income tax return Example. Where to file 2012 federal income tax return In 2013, you are an eligible individual, age 57, with self-only HDHP coverage. Where to file 2012 federal income tax return You can make a qualified HSA funding distribution of $4,250 ($3,250 plus $1,000 additional contribution). Where to file 2012 federal income tax return Funding distribution – testing period. Where to file 2012 federal income tax return   You must remain an eligible individual during the testing period. Where to file 2012 federal income tax return For a qualified HSA funding distribution, the testing period begins with the month in which the qualified HSA funding distribution is contributed and ends on the last day of the 12th month following that month. Where to file 2012 federal income tax return For example, if a qualified HSA funding distribution is contributed to your HSA on August 10, 2013, your testing period begins in August 2013, and ends on August 31, 2014. Where to file 2012 federal income tax return   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the qualified HSA funding distribution. Where to file 2012 federal income tax return You include this amount in income in the year in which you fail to be an eligible individual. Where to file 2012 federal income tax return This amount is also subject to a 10% additional tax. Where to file 2012 federal income tax return The income and the additional tax are shown on Form 8889, Part III. Where to file 2012 federal income tax return   Each qualified HSA funding distribution allowed has its own testing period. Where to file 2012 federal income tax return For example, you are an eligible individual, age 45, with self-only HDHP coverage. Where to file 2012 federal income tax return On June 18, 2013, you make a qualified HSA funding distribution of $3,250. Where to file 2012 federal income tax return On July 27, 2013, you enroll in family HDHP coverage and on August 17, 2013, you make a qualified HSA funding distribution of $3,200. Where to file 2012 federal income tax return Your testing period for the first distribution begins in June 2013 and ends on June 30, 2014. Where to file 2012 federal income tax return Your testing period for the second distribution begins in August 2013 and ends on August 31, 2014. Where to file 2012 federal income tax return   The testing period rule that applies under the last-month rule (discussed earlier) does not apply to amounts contributed to an HSA through a qualified HSA funding distribution. Where to file 2012 federal income tax return If you remain an eligible individual during the entire funding distribution testing period, then no amount of that distribution is included in income and will not be subject to the additional tax for failing to meet the last-month rule testing period. Where to file 2012 federal income tax return Rollovers A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit. Where to file 2012 federal income tax return Archer MSAs and other HSAs. Where to file 2012 federal income tax return   You can roll over amounts from Archer MSAs and other HSAs into an HSA. Where to file 2012 federal income tax return You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. Where to file 2012 federal income tax return Rollover contributions do not need to be in cash. Where to file 2012 federal income tax return Rollovers are not subject to the annual contribution limits. Where to file 2012 federal income tax return   You must roll over the amount within 60 days after the date of receipt. Where to file 2012 federal income tax return You can make only one rollover contribution to an HSA during a 1-year period. Where to file 2012 federal income tax return Note. Where to file 2012 federal income tax return If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer is not considered a rollover. Where to file 2012 federal income tax return There is no limit on the number of these transfers. Where to file 2012 federal income tax return Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889. Where to file 2012 federal income tax return When To Contribute You can make contributions to your HSA for 2013 until April 15, 2014. Where to file 2012 federal income tax return If you fail to be an eligible individual during 2013, you can still make contributions, up until April 15, 2014, for the months you were an eligible individual. Where to file 2012 federal income tax return Your employer can make contributions to your HSA between January 1, 2014, and April 15, 2014, that are allocated to 2013. Where to file 2012 federal income tax return Your employer must notify you and the trustee of your HSA that the contribution is for 2013. Where to file 2012 federal income tax return The contribution will be reported on your 2014 Form W-2. Where to file 2012 federal income tax return Reporting Contributions on Your Return Contributions made by your employer are not included in your income. Where to file 2012 federal income tax return Contributions to an employee's account by an employer using the amount of an employee's salary reduction through a cafeteria plan are treated as employer contributions. Where to file 2012 federal income tax return Generally, you can claim contributions you made and contributions made by any other person, other than your employer, on your behalf, as an adjustment to income. Where to file 2012 federal income tax return Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Where to file 2012 federal income tax return The contributions are treated as a distribution of money and are not included in the partner's gross income. Where to file 2012 federal income tax return Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are deductible by the partnership and includible in the partner's gross income. Where to file 2012 federal income tax return In both situations, the partner can deduct the contribution made to the partner's HSA. Where to file 2012 federal income tax return Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are deductible by the S corporation and includible in the shareholder-employee's gross income. Where to file 2012 federal income tax return The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Where to file 2012 federal income tax return Form 8889. Where to file 2012 federal income tax return   Report all contributions to your HSA on Form 8889 and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return You should include all contributions made for 2013, including those made by April 15, 2014, that are designated for 2013. Where to file 2012 federal income tax return Contributions made by your employer and qualified HSA funding distributions are also shown on the form. Where to file 2012 federal income tax return   You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount contributed to your HSA during the year. Where to file 2012 federal income tax return Your employer's contributions also will be shown in box 12 of Form W-2, Wage and Tax Statement, with code W. Where to file 2012 federal income tax return Follow the instructions for Form 8889. Where to file 2012 federal income tax return Report your HSA deduction on Form 1040 or Form 1040NR. Where to file 2012 federal income tax return Excess contributions. Where to file 2012 federal income tax return   You will have excess contributions if the contributions to your HSA for the year are greater than the limits discussed earlier. Where to file 2012 federal income tax return Excess contributions are not deductible. Where to file 2012 federal income tax return Excess contributions made by your employer are included in your gross income. Where to file 2012 federal income tax return If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. Where to file 2012 federal income tax return   Generally, you must pay a 6% excise tax on excess contributions. Where to file 2012 federal income tax return See Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. Where to file 2012 federal income tax return The excise tax applies to each tax year the excess contribution remains in the account. Where to file 2012 federal income tax return   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. Where to file 2012 federal income tax return You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made. Where to file 2012 federal income tax return You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. Where to file 2012 federal income tax return If you fail to remain an eligible individual during any of the testing periods, discussed earlier, the amount you have to include in income is not an excess contribution. Where to file 2012 federal income tax return If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later. Where to file 2012 federal income tax return Deducting an excess contribution in a later year. Where to file 2012 federal income tax return   You may be able to deduct excess contributions for previous years that are still in your HSA. Where to file 2012 federal income tax return The excess contribution you can deduct for the current year is the lesser of the following two amounts. Where to file 2012 federal income tax return Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year. Where to file 2012 federal income tax return The total excess contributions in your HSA at the beginning of the year. Where to file 2012 federal income tax return   Amounts contributed for the year include contributions by you, your employer, and any other person. Where to file 2012 federal income tax return They also include any qualified HSA funding distribution made to your HSA. Where to file 2012 federal income tax return Any excess contribution remaining at the end of a tax year is subject to the excise tax. Where to file 2012 federal income tax return See Form 5329. Where to file 2012 federal income tax return Distributions From an HSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. Where to file 2012 federal income tax return When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your HSA to send you a distribution from your HSA. Where to file 2012 federal income tax return You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. Where to file 2012 federal income tax return If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. Where to file 2012 federal income tax return You do not have to make distributions from your HSA each year. Where to file 2012 federal income tax return If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. Where to file 2012 federal income tax return Generally, a distribution is money you get from your health savings account. Where to file 2012 federal income tax return Your total distributions include amounts paid with a debit card that restricts payments to health care and amounts withdrawn from the HSA by other individuals that you have designated. Where to file 2012 federal income tax return The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Where to file 2012 federal income tax return Qualified medical expenses. Where to file 2012 federal income tax return   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. Where to file 2012 federal income tax return These are explained in Publication 502, Medical and Dental Expenses. Where to file 2012 federal income tax return   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for HSA purposes. Where to file 2012 federal income tax return A medicine or drug will be a qualified medical expense for HSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. Where to file 2012 federal income tax return   For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. Where to file 2012 federal income tax return State law determines when an HSA is established. Where to file 2012 federal income tax return An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established. Where to file 2012 federal income tax return   If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical expenses. Where to file 2012 federal income tax return   Qualified medical expenses are those incurred by the following persons. Where to file 2012 federal income tax return You and your spouse. Where to file 2012 federal income tax return All dependents you claim on your tax return. Where to file 2012 federal income tax return Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Where to file 2012 federal income tax return    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. Where to file 2012 federal income tax return You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA. Where to file 2012 federal income tax return Insurance premiums. Where to file 2012 federal income tax return   You cannot treat insurance premiums as qualified medical expenses unless the premiums are for: Long-term care insurance. Where to file 2012 federal income tax return Health care continuation coverage (such as coverage under COBRA). Where to file 2012 federal income tax return Health care coverage while receiving unemployment compensation under federal or state law. Where to file 2012 federal income tax return Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap). Where to file 2012 federal income tax return   The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. Where to file 2012 federal income tax return See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040). Where to file 2012 federal income tax return   Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. Where to file 2012 federal income tax return For item (4), if you, the account beneficiary, are not 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally are not qualified medical expenses. Where to file 2012 federal income tax return Health coverage tax credit. Where to file 2012 federal income tax return   You cannot claim this credit for premiums that you pay with a tax-free distribution from your HSA. Where to file 2012 federal income tax return See Publication 502 for more information on this credit. Where to file 2012 federal income tax return Deemed distributions from HSAs. Where to file 2012 federal income tax return   The following situations result in deemed taxable distributions from your HSA. Where to file 2012 federal income tax return You engaged in any transaction prohibited by section 4975 with respect to any of your HSAs, at any time in 2013. Where to file 2012 federal income tax return Your account ceases to be an HSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8889. Where to file 2012 federal income tax return You used any portion of any of your HSAs as security for a loan at any time in 2013. Where to file 2012 federal income tax return You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. Where to file 2012 federal income tax return   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the HSA, Lending of money between you and the HSA, Furnishing goods, services, or facilities between you and the HSA, and Transfer to or use by you, or for your benefit, of any assets of the HSA. Where to file 2012 federal income tax return   Any deemed distribution will not be treated as used to pay qualified medical expenses. Where to file 2012 federal income tax return These distributions are included in your income and are subject to the additional 20% tax, discussed later. Where to file 2012 federal income tax return Recordkeeping. Where to file 2012 federal income tax return You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. Where to file 2012 federal income tax return Do not send these records with your tax return. Where to file 2012 federal income tax return Keep them with your tax records. Where to file 2012 federal income tax return Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). Where to file 2012 federal income tax return If you use a distribution from your HSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8889. Where to file 2012 federal income tax return However, the distribution of an excess contribution taken out after the due date, including extensions, of your return is subject to tax even if used for qualified medical expenses. Where to file 2012 federal income tax return Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. Where to file 2012 federal income tax return Report the amount on Form 8889 and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return You may have to pay an additional 20% tax on your taxable distribution. Where to file 2012 federal income tax return HSA administration and maintenance fees withdrawn by the trustee are not reported as distributions from the HSA. Where to file 2012 federal income tax return Additional tax. Where to file 2012 federal income tax return   There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. Where to file 2012 federal income tax return Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return Exceptions. Where to file 2012 federal income tax return   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. Where to file 2012 federal income tax return Balance in an HSA An HSA is generally exempt from tax. Where to file 2012 federal income tax return You are permitted to take a distribution from your HSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. Where to file 2012 federal income tax return Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). Where to file 2012 federal income tax return Earnings on amounts in an HSA are not included in your income while held in the HSA. Where to file 2012 federal income tax return Death of HSA Holder You should choose a beneficiary when you set up your HSA. Where to file 2012 federal income tax return What happens to that HSA when you die depends on whom you designate as the beneficiary. Where to file 2012 federal income tax return Spouse is the designated beneficiary. Where to file 2012 federal income tax return   If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse's HSA after your death. Where to file 2012 federal income tax return Spouse is not the designated beneficiary. Where to file 2012 federal income tax return   If your spouse is not the designated beneficiary of your HSA: The account stops being an HSA, and The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die. Where to file 2012 federal income tax return If your estate is the beneficiary, the value is included on your final income tax return. Where to file 2012 federal income tax return The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. Where to file 2012 federal income tax return Filing Form 8889 You must file Form 8889 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your HSA during the year. Where to file 2012 federal income tax return You must file the form even if only your employer or your spouse's employer made contributions to the HSA. Where to file 2012 federal income tax return If, during the tax year, you are the beneficiary of two or more HSAs or you are a beneficiary of an HSA and you have your own HSA, you must complete a separate Form 8889 for each HSA. Where to file 2012 federal income tax return Enter “statement” at the top of each Form 8889 and complete the form as instructed. Where to file 2012 federal income tax return Next, complete a controlling Form 8889 combining the amounts shown on each of the statement Forms 8889. Where to file 2012 federal income tax return Attach the statements to your tax return after the controlling Form 8889. Where to file 2012 federal income tax return Employer Participation This section contains the rules that employers must follow if they decide to make HSAs available to their employees. Where to file 2012 federal income tax return Unlike the previous discussions, “you” refers to the employer and not to the employee. Where to file 2012 federal income tax return Health plan. Where to file 2012 federal income tax return   If you want your employees to be able to have an HSA, they must have an HDHP. Where to file 2012 federal income tax return You can provide no additional coverage other than those exceptions listed previously under Other health coverage . Where to file 2012 federal income tax return Contributions. Where to file 2012 federal income tax return   You can make contributions to your employees' HSAs. Where to file 2012 federal income tax return You deduct the contributions on your business income tax return for the year in which you make the contributions. Where to file 2012 federal income tax return If the contribution is allocated to the prior year, you still deduct it in the year in which you made the contribution. Where to file 2012 federal income tax return   For more information on employer contributions, see Notice 2008-59, 2008-29 I. Where to file 2012 federal income tax return R. Where to file 2012 federal income tax return B. Where to file 2012 federal income tax return 123, questions 23 through 27, available at www. Where to file 2012 federal income tax return irs. Where to file 2012 federal income tax return gov/irb/2008-29_IRB/ar11. Where to file 2012 federal income tax return html. Where to file 2012 federal income tax return Comparable contributions. Where to file 2012 federal income tax return   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' HSAs. Where to file 2012 federal income tax return Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. Where to file 2012 federal income tax return The comparability rules do not apply to contributions made through a cafeteria plan. Where to file 2012 federal income tax return Comparable participating employees. Where to file 2012 federal income tax return   Comparable participating employees: Are covered by your HDHP and are eligible to establish an HSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (part-time, full-time, or former employees). Where to file 2012 federal income tax return   To meet the comparability requirements for eligible employees who have not established an HSA by December 31 or have not notified you that they have an HSA, you must meet a notice requirement and a contribution requirement. Where to file 2012 federal income tax return   You will meet the notice requirement if by January 15 of the following calendar year you provide a written notice to all such employees. Where to file 2012 federal income tax return The notice must state that each eligible employee who, by the last day of February, establishes an HSA and notifies you that they have established an HSA will receive a comparable contribution to the HSA for the prior year. Where to file 2012 federal income tax return For a sample of the notice, see Regulation 54. Where to file 2012 federal income tax return 4980G-4 A-14(c). Where to file 2012 federal income tax return You will meet the contribution requirement for these employees if by April 15, 2014, you contribute comparable amounts plus reasonable interest to the employee's HSA for the prior year. Where to file 2012 federal income tax return Note. Where to file 2012 federal income tax return For purposes of making contributions to HSAs of non-highly compensated employees, highly compensated employees shall not be treated as comparable participating employees. Where to file 2012 federal income tax return Excise tax. Where to file 2012 federal income tax return   If you made contributions to your employees' HSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. Where to file 2012 federal income tax return Employment taxes. Where to file 2012 federal income tax return   Amounts you contribute to your employees' HSAs are generally not subject to employment taxes. Where to file 2012 federal income tax return You must report the contributions in box 12 of the Form W-2 you file for each employee. Where to file 2012 federal income tax return This includes the amounts the employee elected to contribute through a cafeteria plan. Where to file 2012 federal income tax return Enter code “W” in box 12. Where to file 2012 federal income tax return Medical Savings Accounts (MSAs) Archer MSAs were created to help self-employed individuals and employees of certain small employers meet the medical care costs of the account holder, the account holder's spouse, or the account holder's dependent(s). Where to file 2012 federal income tax return After December 31, 2007, you cannot be treated as an eligible individual for Archer MSA purposes unless: You were an active participant for any tax year ending before January 1, 2008, or You became an active participant for a tax year ending after December 31, 2007, by reason of coverage under a high deductible health plan (HDHP) of an Archer MSA participating employer. Where to file 2012 federal income tax return A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder who is eligible for Medicare. Where to file 2012 federal income tax return Archer MSAs An Archer MSA is a tax-exempt trust or custodial account that you set up with a U. Where to file 2012 federal income tax return S. Where to file 2012 federal income tax return financial institution (such as a bank or an insurance company) in which you can save money exclusively for future medical expenses. Where to file 2012 federal income tax return What are the benefits of an Archer MSA?   You may enjoy several benefits from having an Archer MSA. Where to file 2012 federal income tax return You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040 or Form 1040NR. Where to file 2012 federal income tax return The interest or other earnings on the assets in your Archer MSA are tax free. Where to file 2012 federal income tax return Distributions may be tax free if you pay qualified medical expenses. Where to file 2012 federal income tax return See Qualified medical expenses , later. Where to file 2012 federal income tax return The contributions remain in your Archer MSA from year to year until you use them. Where to file 2012 federal income tax return An Archer MSA is “portable” so it stays with you if you change employers or leave the work force. Where to file 2012 federal income tax return Qualifying for an Archer MSA To qualify for an Archer MSA, you must be either of the following. Where to file 2012 federal income tax return An employee (or the spouse of an employee) of a small employer (defined later) that maintains a self-only or family HDHP for you (or your spouse). Where to file 2012 federal income tax return A self-employed person (or the spouse of a self-employed person) who maintains a self-only or family HDHP. Where to file 2012 federal income tax return You can have no other health or Medicare coverage except what is permitted under Other health coverage , later. Where to file 2012 federal income tax return You must be an eligible individual on the first day of a given month to get an Archer MSA deduction for that month. Where to file 2012 federal income tax return If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an Archer MSA contribution. Where to file 2012 federal income tax return This is true even if the other person does not actually claim your exemption. Where to file 2012 federal income tax return Small employer. Where to file 2012 federal income tax return   A small employer is generally an employer who had an average of 50 or fewer employees during either of the last 2 calendar years. Where to file 2012 federal income tax return The definition of small employer is modified for new employers and growing employers. Where to file 2012 federal income tax return Growing employer. Where to file 2012 federal income tax return   A small employer may begin HDHPs and Archer MSAs for his or her employees and then grow beyond 50 employees. Where to file 2012 federal income tax return The employer will continue to meet the requirement for small employers if he or she: Had 50 or fewer employees when the Archer MSAs began, Made a contribution that was excludable or deductible as an Archer MSA for the last year he or she had 50 or fewer employees, and Had an average of 200 or fewer employees each year after 1996. Where to file 2012 federal income tax return Changing employers. Where to file 2012 federal income tax return   If you change employers, your Archer MSA moves with you. Where to file 2012 federal income tax return However, you may not make additional contributions unless you are otherwise eligible. Where to file 2012 federal income tax return High deductible health plan (HDHP). Where to file 2012 federal income tax return   To be eligible for an Archer MSA, you must be covered under an HDHP. Where to file 2012 federal income tax return An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the annual out-of-pocket medical expenses that you must pay for covered expenses. Where to file 2012 federal income tax return Limits. Where to file 2012 federal income tax return   The following table shows the limits for annual deductibles and the maximum out-of-pocket expenses for HDHPs for 2013. Where to file 2012 federal income tax return   Self-only coverage Family coverage Minimum annual deductible $2,150 $4,300 Maximum annual deductible $3,200 $6,450 Maximum annual out-of-pocket expenses $4,300 $7,850 Family plans that do not meet the high deductible rules. Where to file 2012 federal income tax return   There are some family plans that have deductibles for both the family as a whole and for individual family members. Where to file 2012 federal income tax return Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. Where to file 2012 federal income tax return If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. Where to file 2012 federal income tax return Example. Where to file 2012 federal income tax return You have family health insurance coverage in 2013. Where to file 2012 federal income tax return The annual deductible for the family plan is $5,500. Where to file 2012 federal income tax return This plan also has an individual deductible of $2,000 for each family member. Where to file 2012 federal income tax return The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($4,300) for family coverage. Where to file 2012 federal income tax return Other health coverage. Where to file 2012 federal income tax return   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. Where to file 2012 federal income tax return However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. Where to file 2012 federal income tax return However, you can have additional insurance that provides benefits only for the following items. Where to file 2012 federal income tax return Liabilities incurred under workers' compensation laws, torts, or ownership or use of property. Where to file 2012 federal income tax return A specific disease or illness. Where to file 2012 federal income tax return A fixed amount per day (or other period) of hospitalization. Where to file 2012 federal income tax return You can also have coverage (whether provided through insurance or otherwise) for the following items. Where to file 2012 federal income tax return Accidents. Where to file 2012 federal income tax return Disability. Where to file 2012 federal income tax return Dental care. Where to file 2012 federal income tax return Vision care. Where to file 2012 federal income tax return Long-term care. Where to file 2012 federal income tax return Contributions to an MSA Contributions to an Archer MSA must be made in cash. Where to file 2012 federal income tax return You cannot contribute stock or other property to an Archer MSA. Where to file 2012 federal income tax return Who can contribute to my Archer MSA?   If you are an employee, your employer may make contributions to your Archer MSA. Where to file 2012 federal income tax return (You do not pay tax on these contributions. Where to file 2012 federal income tax return ) If your employer does not make contributions to your Archer MSA, or you are self-employed, you can make your own contributions to your Archer MSA. Where to file 2012 federal income tax return Both you and your employer cannot make contributions to your Archer MSA in the same year. Where to file 2012 federal income tax return You do not have to make contributions to your Archer MSA every year. Where to file 2012 federal income tax return    If your spouse is covered by your HDHP and an excludable amount is contributed by your spouse's employer to an Archer MSA belonging to your spouse, you cannot make contributions to your own Archer MSA that year. Where to file 2012 federal income tax return Limits There are two limits on the amount you or your employer can contribute to your Archer MSA: The annual deductible limit. Where to file 2012 federal income tax return An income limit. Where to file 2012 federal income tax return Annual deductible limit. Where to file 2012 federal income tax return   You (or your employer) can contribute up to 75% of the annual deductible of your HDHP (65% if you have a self-only plan) to your Archer MSA. Where to file 2012 federal income tax return You must have the HDHP all year to contribute the full amount. Where to file 2012 federal income tax return If you do not qualify to contribute the full amount for the year, determine your annual deductible limit by using the worksheet in the Instructions for Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Where to file 2012 federal income tax return Example 1. Where to file 2012 federal income tax return You have an HDHP for your family all year in 2013. Where to file 2012 federal income tax return The annual deductible is $5,000. Where to file 2012 federal income tax return You can contribute up to $3,750 ($5,000 × 75%) to your Archer MSA for the year. Where to file 2012 federal income tax return Example 2. Where to file 2012 federal income tax return You have an HDHP for your family for the entire months of July through December 2013 (6 months). Where to file 2012 federal income tax return The annual deductible is $5,000. Where to file 2012 federal income tax return You can contribute up to $1,875 ($5,000 × 75% ÷ 12 × 6) to your Archer MSA for the year. Where to file 2012 federal income tax return If you and your spouse each have a family plan, you are treated as having family coverage with the lower annual deductible of the two health plans. Where to file 2012 federal income tax return The contribution limit is split equally between you unless you agree on a different division. Where to file 2012 federal income tax return Income limit. Where to file 2012 federal income tax return   You cannot contribute more than you earned for the year from the employer through whom you have your HDHP. Where to file 2012 federal income tax return   If you are self-employed, you cannot contribute more than your net self-employment income. Where to file 2012 federal income tax return This is your income from self-employment minus expenses (including the deductible part of self-employment tax). Where to file 2012 federal income tax return Example 1. Where to file 2012 federal income tax return Noah Paul earned $25,000 from ABC Company in 2013. Where to file 2012 federal income tax return Through ABC, he had an HDHP for his family for the entire year. Where to file 2012 federal income tax return The annual deductible was $5,000. Where to file 2012 federal income tax return He can contribute up to $3,750 to his Archer MSA (75% × $5,000). Where to file 2012 federal income tax return He can contribute the full amount because he earned more than $3,750 at ABC. Where to file 2012 federal income tax return Example 2. Where to file 2012 federal income tax return Westley Lawrence is self-employed. Where to file 2012 federal income tax return He had an HDHP for his family for the entire year in 2013. Where to file 2012 federal income tax return The annual deductible was $5,000. Where to file 2012 federal income tax return Based on the annual deductible, the maximum contribution to his Archer MSA would have been $3,750 (75% × $5,000). Where to file 2012 federal income tax return However, after deducting his business expenses, Joe's net self-employment income is $2,500 for the year. Where to file 2012 federal income tax return Therefore, he is limited to a contribution of $2,500. Where to file 2012 federal income tax return Individuals enrolled in Medicare. Where to file 2012 federal income tax return   Beginning with the first month you are enrolled in Medicare, you cannot contribute to an Archer MSA. Where to file 2012 federal income tax return However, you may be eligible for a Medicare Advantage MSA, discussed later. Where to file 2012 federal income tax return When To Contribute You can make contributions to your Archer MSA for 2013 until April 15, 2014. Where to file 2012 federal income tax return Reporting Contributions on Your Return Report all contributions to your Archer MSA on Form 8853 and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return You should include all contributions you, or your employer, made for 2013, including those made by April 15, 2014, that are designated for 2013. Where to file 2012 federal income tax return You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount you (or your employer) contributed during the year. Where to file 2012 federal income tax return Your employer's contributions should be shown in box 12 of Form W-2, Wage and Tax Statement, with code R. Where to file 2012 federal income tax return Follow the instructions for Form 8853 and complete the worksheet in the instructions. Where to file 2012 federal income tax return Report your Archer MSA deduction on Form 1040 or Form 1040NR. Where to file 2012 federal income tax return Excess contributions. Where to file 2012 federal income tax return   You will have excess contributions if the contributions to your Archer MSA for the year are greater than the limits discussed earlier. Where to file 2012 federal income tax return Excess contributions are not deductible. Where to file 2012 federal income tax return Excess contributions made by your employer are included in your gross income. Where to file 2012 federal income tax return If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. Where to file 2012 federal income tax return   Generally, you must pay a 6% excise tax on excess contributions. Where to file 2012 federal income tax return See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. Where to file 2012 federal income tax return The excise tax applies to each tax year the excess contribution remains in the account. Where to file 2012 federal income tax return   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. Where to file 2012 federal income tax return You withdraw the excess contributions by the due date, including extensions, of your tax return. Where to file 2012 federal income tax return You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. Where to file 2012 federal income tax return Deducting an excess contribution in a later year. Where to file 2012 federal income tax return   You may be able to deduct excess contributions for previous years that are still in your Archer MSA. Where to file 2012 federal income tax return The excess contribution you can deduct in the current year is the lesser of the following two amounts. Where to file 2012 federal income tax return Your maximum Archer MSA contribution limit for the year minus any amounts contributed to your Archer MSA for the year. Where to file 2012 federal income tax return The total excess contributions in your Archer MSA at the beginning of the year. Where to file 2012 federal income tax return   Any excess contributions remaining at the end of a tax year are subject to the excise tax. Where to file 2012 federal income tax return See Form 5329. Where to file 2012 federal income tax return Distributions From an MSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. Where to file 2012 federal income tax return When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your Archer MSA to send you a distribution from your Archer MSA. Where to file 2012 federal income tax return You can receive tax-free distributions from your Archer MSA to pay for qualified medical expenses (discussed later). Where to file 2012 federal income tax return If you receive distributions for other reasons, the amount will be subject to income tax and may be subject to an additional 20% tax as well. Where to file 2012 federal income tax return You do not have to make withdrawals from your Archer MSA each year. Where to file 2012 federal income tax return If you no longer qualify to make contributions, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. Where to file 2012 federal income tax return A distribution is money you get from your Archer MSA. Where to file 2012 federal income tax return The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Where to file 2012 federal income tax return Qualified medical expenses. Where to file 2012 federal income tax return   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. Where to file 2012 federal income tax return These are explained in Publication 502. Where to file 2012 federal income tax return   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for MSA purposes. Where to file 2012 federal income tax return A medicine or drug will be a qualified medical expense for MSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. Where to file 2012 federal income tax return   Qualified medical expenses are those incurred by the following persons. Where to file 2012 federal income tax return You and your spouse. Where to file 2012 federal income tax return All dependents you claim on your tax return. Where to file 2012 federal income tax return Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Where to file 2012 federal income tax return    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. Where to file 2012 federal income tax return    You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your Archer MSA. Where to file 2012 federal income tax return Special rules for insurance premiums. Where to file 2012 federal income tax return   Generally, you cannot treat insurance premiums as qualified medical expenses for Archer MSAs. Where to file 2012 federal income tax return You can, however, treat premiums for long-term care coverage, health care coverage while you receive unemployment benefits, or health care continuation coverage required under any federal law as qualified medical expenses for Archer MSAs. Where to file 2012 federal income tax return Health coverage tax credit. Where to file 2012 federal income tax return   You cannot claim this credit for premiums that you pay with a tax-free distribution from your Archer MSA. Where to file 2012 federal income tax return See Publication 502 for information on this credit. Where to file 2012 federal income tax return Deemed distributions from Archer MSAs. Where to file 2012 federal income tax return   The following situations result in deemed taxable distributions from your Archer MSA. Where to file 2012 federal income tax return You engaged in any transaction prohibited by section 4975 with respect to any of your Archer MSAs at any time in 2013. Where to file 2012 federal income tax return Your account ceases to be an Archer MSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8853. Where to file 2012 federal income tax return You used any portion of any of your Archer MSAs as security for a loan at any time in 2013. Where to file 2012 federal income tax return You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. Where to file 2012 federal income tax return   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the Archer MSA, Lending of money between you and the Archer MSA, Furnishing goods, services, or facilities between you and the Archer MSA, and Transfer to or use by you, or for your benefit, of any assets of the Archer MSA. Where to file 2012 federal income tax return   Any deemed distribution will not be treated as used to pay qualified medical expenses. Where to file 2012 federal income tax return These distributions are included in your income and are subject to the additional 20% tax, discussed later. Where to file 2012 federal income tax return Recordkeeping. Where to file 2012 federal income tax return You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. Where to file 2012 federal income tax return Do not send these records with your tax return. Where to file 2012 federal income tax return Keep them with your tax records. Where to file 2012 federal income tax return Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). Where to file 2012 federal income tax return If you use a distribution from your Archer MSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8853. Where to file 2012 federal income tax return Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return If you do not use a distribution from your Archer MSA for qualified medical expenses, you must pay tax on the distribution. Where to file 2012 federal income tax return Report the amount on Form 8853 and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return You may have to pay an additional 20% tax, discussed later, on your taxable distribution. Where to file 2012 federal income tax return If an amount (other than a rollover) is contributed to your Archer MSA this year (by you or your employer), you also must report and pay tax on a distribution you receive from your Archer MSA this year that is used to pay medical expenses of someone who is not covered by an HDHP, or is also covered by another health plan that is not an HDHP, at the time the expenses are incurred. Where to file 2012 federal income tax return Rollovers. Where to file 2012 federal income tax return   Generally, any distribution from an Archer MSA that you roll over into another Archer MSA or an HSA is not taxable if you complete the rollover within 60 days. Where to file 2012 federal income tax return An Archer MSA and an HSA can only receive one rollover contribution during a 1-year period. Where to file 2012 federal income tax return See the Form 8853 instructions for more information. Where to file 2012 federal income tax return Additional tax. Where to file 2012 federal income tax return   There is a 20% additional tax on the part of your distributions not used for qualified medical expenses. Where to file 2012 federal income tax return Figure the tax on Form 8853 and file it with your Form 1040 or Form 1040NR. Where to file 2012 federal income tax return Report the additional tax in the total on Form 1040 or Form 1040NR. Where to file 2012 federal income tax return Exceptions. Where to file 2012 federal income tax return   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. Where to file 2012 federal income tax return Balance in an Archer MSA An Archer MSA is generally exempt from tax. Where to file 2012 federal income tax return You are permitted to take a distribution from your Archer MSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. Where to file 2012 federal income tax return Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). Where to file 2012 federal income tax return Earnings on amounts in an Archer MSA are not included in your income while held in the Archer MSA. Where to file 2012 federal income tax return Death of the Archer MSA Holder You should choose a beneficiary when you set up your Archer MSA. Where to file 2012 federal income tax return What happens to that Archer MSA when you die depends on whom you designate as the beneficiary. Where to file 2012 federal income tax return Spouse is the designated beneficiary. Where to file 2012 federal income tax return   If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death. Where to file 2012 federal income tax return Spouse is not the designated beneficiary. Where to file 2012 federal income tax return   If your spouse is not the designated beneficiary of your Archer MSA: The account stops being an Archer MSA, and The fair market value of the Archer MSA becomes taxable to the beneficiary in the year in which you die. Where to file 2012 federal income tax return   If your estate is the beneficiary, the fair market value of the Archer MSA will be included on your final income tax return. Where to file 2012 federal income tax return The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. Where to file 2012 federal income tax return Filing Form 8853 You must file Form 8853 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your Archer MSA during the year. Where to file 2012 federal income tax return You must file the form even if only your employer or your spouse's employer made contributions to the Archer MSA. Where to file 2012 federal income tax return If, during the tax year, you are the beneficiary of two or more Archer MSAs or you are a beneficiary of an Archer MSA and you have your own Archer MSA, you must complete a separate Form 8853 for each MSA. Where to file 2012 federal income tax return Enter “statement” at the top of each Form 8853 and complete the form as instructed. Where to file 2012 federal income tax return Next, complete a controlling Form 8853 combining the amounts shown on each of the statement Forms 8853. Where to file 2012 federal income tax return Attach the statements to your tax return after the controlling Form 8853. Where to file 2012 federal income tax return Employer Participation This section contains the rules that employers must follow if they decide to make Archer MSAs available to their employees. Where to file 2012 federal income tax return Unlike the previous discussions, “you” refers to the employer and not to the employee. Where to file 2012 federal income tax return Health plan. Where to file 2012 federal income tax return   If you want your employees to be able to have an Archer MSA, you must make an HDHP available to them. Where to file 2012 federal income tax return You can provide no additional coverage other than those exceptions listed previously under Other health coverage . Where to file 2012 federal income tax return Contributions. Where to file 2012 federal income tax return   You can make contributions to your employees' Archer MSAs. Where to file 2012 federal income tax return You deduct the contributions on the “Employee benefit programs” line of your business income tax return for the year in which you make the contributions. Where to file 2012 federal income tax return If you are filing Form 1040, Schedule C, this is Part II, line 14. Where to file 2012 federal income tax return Comparable contributions. Where to file 2012 federal income tax return   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' Archer MSAs. Where to file 2012 federal income tax return Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. Where to file 2012 federal income tax return Comparable participating employees. Where to file 2012 federal income tax return   Comparable participating employees: Are covered by your HDHP and are eligible to establish an Archer MSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (either part-time or full-time). Where to file 2012 federal income tax return Excise tax. Where to file 2012 federal income tax return   If you made contributions to your employees' Archer MSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. Where to file 2012 federal income tax return Employment taxes. Where to file 2012 federal income tax return   Amounts you contribute to your employees' Archer MSAs are generally not subject to employment taxes. Where to file 2012 federal income tax return You must report the contributions in box 12 of the Form W-2 you file for each employee. Where to file 2012 federal income tax return Enter code “R” in box 12. Where to file 2012 federal income tax return Medicare Advantage MSAs A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. Where to file 2012 federal income tax return To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare and have a high deductible health plan (HDHP) that meets the Medicare guidelines. Where to file 2012 federal income tax return A Medicare Advantage MSA is a tax-exempt trust or custodial savings account that you set up with a financial institution (such as a bank or an insurance company) in which the Medicare program can deposit money for qualified medical expenses. Where to file 2012 federal income tax return The money in your account is not taxed if it is used for qualified medical expenses, and it may earn interest or dividends. Where to file 2012 federal income tax return An HDHP is a special health insurance policy that has a high deductible. Where to file 2012 federal income tax return You choose the policy you want to use as part of your Medicare Advantage MSA plan. Where to file 2012 federal income tax return However, the policy must be approved by the Medicare program. Where to file 2012 federal income tax return Medicare Advantage MSAs are administered through the federal Medicare program. Where to file 2012 federal income tax return You can get information by calling 1-800-Medicare (1-800-633-4227) or through the Internet at www. Where to file 2012 federal income tax return medicare. Where to file 2012 federal income tax return gov. Where to file 2012 federal income tax return Note. Where to file 2012 federal income tax return You must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your tax return if you have a Medicare Advantage MSA. Where to file 2012 federal income tax return Flexible Spending Arrangements (FSAs) A health flexible spending arrangement (FSA) allows employees to be reimbursed for medical expenses. Where to file 2012 federal income tax return FSAs are usually funded through voluntary salary reduction agreements with your employer. Where to file 2012 federal income tax return No employment or federal income taxes are deducted from your contribution. Where to file 2012 federal income tax return The employer may also contribute. Where to file 2012 federal income tax return Note. Where to file 2012 federal income tax return Unlike HSAs or Archer MSAs which must be reported on Form 1040 or Form 1040NR, there are no reporting requirements for FSAs on your income tax return. Where to file 2012 federal income tax return For information on the interaction between a health FSA and an HSA, see Other employee health plans under Qualifying for an HSA, earlier. Where to file 2012 federal income tax return What are the benefits of an FSA?   You may enjoy several benefits from having an FSA. Where to file 2012 federal income tax return Contributions made by your employer can be excluded from your gross income. Where to file 2012 federal income tax return No employment or federal income taxes are deducted from the contributions. Where to file 2012 federal income tax return Withdrawals may be tax free if you pay qualified medical expenses. Where to file 2012 federal income tax return See Qualified medical expenses , later. Where to file 2012 federal income tax return You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account. Where to file 2012 federal income tax return Qualifying for an FSA Health FSAs are employer-established benefit plans. Where to file 2012 federal income tax return These may be offered in conjunction with other employer-provided benefits as part of a cafeteria plan. Where to file 2012 federal income tax return Employers have complete flexibility to offer various combinations of benefits in designing their plan. Where to file 2012 federal income tax return You do not have to be covered under any other health care plan to participate. Where to file 2012 federal income tax return Self-employed persons are not eligible for an FSA. Where to file 2012 federal income tax return Certain limitations may apply if you are a highly compensated participant or a key employee. Where to file 2012 federal income tax return Contributions to an FSA You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. Where to file 2012 federal income tax return This is sometimes called a salary reduction agreement. Where to file 2012 federal income tax return The employer may also contribute to your FSA if specified in the plan. Where to file 2012 federal income tax return You do not pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. Where to file 2012 federal income tax return However, contributions made by your employer to provide coverage for long-term care insurance must be included in income. Where to file 2012 federal income tax return When To Contribute At the