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Where To File Federal Tax Return 2012

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Where To File Federal Tax Return 2012

Where to file federal tax return 2012 16. Where to file federal tax return 2012   Reporting Gains and Losses Table of Contents What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. Where to file federal tax return 2012 Exception 2. Where to file federal tax return 2012 File Form 1099-B or Form 1099-S with the IRS. Where to file federal tax return 2012 Capital Losses Capital Gain Tax Rates What's New Maximum capital gain rates. Where to file federal tax return 2012 . Where to file federal tax return 2012  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Where to file federal tax return 2012 Introduction This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Form 8949 and Schedule D (Form 1040). Where to file federal tax return 2012 The discussion includes the following topics. Where to file federal tax return 2012 How to report short-term gains and losses. Where to file federal tax return 2012 How to report long-term gains and losses. Where to file federal tax return 2012 How to figure capital loss carryovers. Where to file federal tax return 2012 How to figure your tax on a net capital gain. Where to file federal tax return 2012 If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D (Form 1040). Where to file federal tax return 2012 Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income 8582 Passive Activity Loss Limitations 8949 Sales and Other Dispositions of Capital Assets Schedule D (Form 1040) Capital Gains and Losses Reporting Capital Gains and Losses Generally, report capital gains and losses on Form 8949. Where to file federal tax return 2012 Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D (Form 1040). Where to file federal tax return 2012 Use Form 8949 to report: The sale or exchange of a capital asset not reported on another form or schedule; Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit; and Nonbusiness bad debts. Where to file federal tax return 2012 Use Schedule D (Form 1040): To figure the overall gain or loss from transactions reported on Form 8949; To report a gain from Form 6252 or Part I of Form 4797; To report a gain or loss from Form 4684, 6781, or 8824; To report capital gain distributions not reported directly on Form 1040 or Form 1040A; To report a capital loss carryover from the previous tax year to the current tax year; To report your share of a gain or (loss) from a partnership, S corporation, estate, or trust; To report transactions reported to you on a Form 1099-B (or substitute statement) showing basis was reported to the IRS and to which none of the Form 8949 adjustments or codes apply; and To report undistributed long-term capital gains from Form 2439. Where to file federal tax return 2012 On Form 8949, enter all sales and exchanges of capital assets, including stocks, bonds, etc. Where to file federal tax return 2012 , and real estate (if not reported on Form 4684, 4797, 6252, 6781, 8824, or line 1a or 8a of Schedule D). Where to file federal tax return 2012 Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. Where to file federal tax return 2012 Report short-term gains or losses in Part I. Where to file federal tax return 2012 Report long-term gains or losses in Part II. Where to file federal tax return 2012 Use as many Forms 8949 as you need. Where to file federal tax return 2012 Exceptions to filing Form 8949 and Schedule D (Form 1040). Where to file federal tax return 2012   There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040). Where to file federal tax return 2012 Exception 1. Where to file federal tax return 2012   You do not have to file Form 8949 or Schedule D (Form 1040) if you have no capital losses and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements). Where to file federal tax return 2012 (If any Form(s) 1099-DIV (or substitute statements) you receive have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain), you do not qualify for this exception. Where to file federal tax return 2012 ) If you qualify for this exception, report your capital gain distributions directly on line 13 of Form 1040 (and check the box on line 13). Where to file federal tax return 2012 Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax. Where to file federal tax return 2012 You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if none of the Forms 1099-DIV (or substitute statements) you received have an amount in box 2b, 2c, or 2d, and you do not have to file Form 1040. Where to file federal tax return 2012 Exception 2. Where to file federal tax return 2012   You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are: Capital gain distributions; A capital loss carryover; A gain from Form 2439 or 6252 or Part I of Form 4797; A gain or loss from Form 4684, 6781, or 8824; A gain or loss from a partnership, S corporation, estate, or trust; or Gains and losses from transactions for which you received a Form 1099-B (or substitute statement) that shows the basis was reported to the IRS and for which you do not need to make any adjustments in column (g) of Form 8949 or enter any codes in column (f) of Form 8949. Where to file federal tax return 2012 Installment sales. Where to file federal tax return 2012   You cannot use the installment method to report a gain from the sale of stock or securities traded on an established securities market. Where to file federal tax return 2012 You must report the entire gain in the year of sale (the year in which the trade date occurs). Where to file federal tax return 2012 Passive activity gains and losses. Where to file federal tax return 2012    If you have gains or losses from a passive activity, you may also have to report them on Form 8582. Where to file federal tax return 2012 In some cases, the loss may be limited under the passive activity rules. Where to file federal tax return 2012 Refer to Form 8582 and its instructions for more information about reporting capital gains and losses from a passive activity. Where to file federal tax return 2012 Form 1099-B transactions. Where to file federal tax return 2012   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B or substitute statement from the broker. Where to file federal tax return 2012 Use the Form 1099-B or the substitute statement to complete Form 8949. Where to file federal tax return 2012 If you sold a covered security in 2013, your broker should send you a Form 1099-B (or substitute statement) that shows your basis. Where to file federal tax return 2012 This will help you complete Form 8949. Where to file federal tax return 2012 Generally, a covered security is a security you acquired after 2010. Where to file federal tax return 2012   Report the gross proceeds shown in box 2a of Form 1099-B as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Where to file federal tax return 2012 However, if the broker advises you, in box 2a of Form 1099-B, that gross proceeds (sales price) less commissions and option premiums were reported to the IRS, enter that net sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Where to file federal tax return 2012    Include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Where to file federal tax return 2012 If you include an expense of sale in column (g), enter “E” in column (f). Where to file federal tax return 2012 Form 1099-CAP transactions. Where to file federal tax return 2012   If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP or a substitute statement from the corporation. Where to file federal tax return 2012 Use the Form 1099-CAP or substitute statement to fill in Form 8949. Where to file federal tax return 2012 If your computations show that you would have a loss because of the change, do not enter any amounts on Form 8949 or Schedule D (Form 1040). Where to file federal tax return 2012 You cannot claim a loss on Schedule D (Form 1040) as a result of this transaction. Where to file federal tax return 2012   Report the aggregate amount received shown in box 2 of Form 1099-CAP as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Where to file federal tax return 2012 Form 1099-S transactions. Where to file federal tax return 2012   If you sold or traded reportable real estate, you generally should receive from the real estate reporting person a Form 1099-S showing the gross proceeds. Where to file federal tax return 2012    “Reportable real estate” is defined as any present or future ownership interest in any of the following: Improved or unimproved land, including air space; Inherently permanent structures, including any residential, commercial, or industrial building; A condominium unit and its accessory fixtures and common elements, including land; and Stock in a cooperative housing corporation (as defined in section 216 of the Internal Revenue Code). Where to file federal tax return 2012   A “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. Where to file federal tax return 2012   Your Form 1099-S will show the gross proceeds from the sale or exchange in box 2. Where to file federal tax return 2012 See the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040) for how to report these transactions and include them in Part I or Part II of Form 8949 as appropriate. Where to file federal tax return 2012 However, report like-kind exchanges on Form 8824 instead. Where to file federal tax return 2012   It is unlawful for any real estate reporting person to separately charge you for complying with the requirement to file Form 1099-S. Where to file federal tax return 2012 Nominees. Where to file federal tax return 2012   If you receive gross proceeds as a nominee (that is, the gross proceeds are in your name but actually belong to someone else), see the Instructions for Form 8949 for how to report these amounts on Form 8949. Where to file federal tax return 2012 File Form 1099-B or Form 1099-S with the IRS. Where to file federal tax return 2012   If you received gross proceeds as a nominee in 2013, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. Where to file federal tax return 2012 Send the Form 1099-B or Form 1099-S with a Form 1096, Annual Summary and Transmittal of U. Where to file federal tax return 2012 S. Where to file federal tax return 2012 Information Returns, to your Internal Revenue Service Center by February 28, 2014 (March 31, 2014, if you file Form 1099-B or Form 1099-S electronically). Where to file federal tax return 2012 Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 18, 2014. Where to file federal tax return 2012 On Form 1099-B, you should be listed as the “Payer. Where to file federal tax return 2012 ” The other owner should be listed as the “Recipient. Where to file federal tax return 2012 ” On Form 1099-S, you should be listed as the “Filer. Where to file federal tax return 2012 ” The other owner should be listed as the “Transferor. Where to file federal tax return 2012 ” You do not have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. Where to file federal tax return 2012 For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns. Where to file federal tax return 2012 If you are filing electronically see Publication 1220. Where to file federal tax return 2012 Sale of property bought at various times. Where to file federal tax return 2012   If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on one row in Part I of Form 8949, and the long-term gain or loss on one row in Part II of Form 8949. Where to file federal tax return 2012 Write “Various” in column (b) for the “Date acquired. Where to file federal tax return 2012 ” Sale expenses. Where to file federal tax return 2012    On Form 8949, include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Where to file federal tax return 2012 If you include an expense of sale in column (g), enter “E” in column (f). Where to file federal tax return 2012   For more information about adjustments to basis, see chapter 13. Where to file federal tax return 2012 Short-term gains and losses. Where to file federal tax return 2012   Capital gain or loss on the sale or trade of investment property held 1 year or less is a short-term capital gain or loss. Where to file federal tax return 2012 You report it in Part I of Form 8949. Where to file federal tax return 2012   You combine your share of short-term capital gain or loss from partnerships, S corporations, estates, and trusts, and any short-term capital loss carryover, with your other short-term capital gains and losses to figure your net short-term capital gain or loss on line 7 of Schedule D (Form 1040). Where to file federal tax return 2012 Long-term gains and losses. Where to file federal tax return 2012    A capital gain or loss on the sale or trade of investment property held more than 1 year is a long-term capital gain or loss. Where to file federal tax return 2012 You report it in Part II of Form 8949. Where to file federal tax return 2012   You report the following in Part II of Schedule D (Form 1040): Undistributed long-term capital gains from a mutual fund (or other regulated investment company) or real estate investment trust (REIT); Your share of long-term capital gains or losses from partnerships, S corporations, estates, and trusts; All capital gain distributions from mutual funds and REITs not reported directly on line 10 of Form 1040A or line 13 of Form 1040; and Long-term capital loss carryovers. Where to file federal tax return 2012    The result after combining these items with your other long-term capital gains and losses is your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Where to file federal tax return 2012 Total net gain or loss. Where to file federal tax return 2012   To figure your total net gain or loss, combine your net short-term capital gain or loss (Schedule D (Form 1040), line 7) with your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Where to file federal tax return 2012 Enter the result on Schedule D (Form 1040), Part III, line 16. Where to file federal tax return 2012 If your losses are more than your gains, see Capital Losses , next. Where to file federal tax return 2012 If both lines 15 and 16 of your Schedule D (Form 1040) are gains and your taxable income on your Form 1040 is more than zero, see Capital Gain Tax Rates , later. Where to file federal tax return 2012 Capital Losses If your capital losses are more than your capital gains, you can claim a capital loss deduction. Where to file federal tax return 2012 Report the amount of the deduction on line 13 of Form 1040, in parentheses. Where to file federal tax return 2012 Limit on deduction. Where to file federal tax return 2012   Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of: $3,000 ($1,500 if you are married and file a separate return); or Your total net loss as shown on line 16 of Schedule D (Form 1040). Where to file federal tax return 2012   You can use your total net loss to reduce your income dollar for dollar, up to the $3,000 limit. Where to file federal tax return 2012 Capital loss carryover. Where to file federal tax return 2012   If you have a total net loss on line 16 of Schedule D (Form 1040) that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. Where to file federal tax return 2012 If part of the loss is still unused, you can carry it over to later years until it is completely used up. Where to file federal tax return 2012   When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. Where to file federal tax return 2012   When you carry over a loss, it remains long term or short term. Where to file federal tax return 2012 A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains. Where to file federal tax return 2012 Figuring your carryover. Where to file federal tax return 2012   The amount of your capital loss carryover is the amount of your total net loss that is more than the lesser of: Your allowable capital loss deduction for the year; or Your taxable income increased by your allowable capital loss deduction for the year and your deduction for personal exemptions. Where to file federal tax return 2012   If your deductions are more than your gross income for the tax year, use your negative taxable income in computing the amount in item (2). Where to file federal tax return 2012    Complete the Capital Loss Carryover Worksheet in the Instructions for Schedule D or Publication 550 to determine the part of your capital loss that you can carry over. Where to file federal tax return 2012 Example. Where to file federal tax return 2012 Bob and Gloria sold securities in 2013. Where to file federal tax return 2012 The sales resulted in a capital loss of $7,000. Where to file federal tax return 2012 They had no other capital transactions. Where to file federal tax return 2012 Their taxable income was $26,000. Where to file federal tax return 2012 On their joint 2013 return, they can deduct $3,000. Where to file federal tax return 2012 The unused part of the loss, $4,000 ($7,000 − $3,000), can be carried over to 2014. Where to file federal tax return 2012 If their capital loss had been $2,000, their capital loss deduction would have been $2,000. Where to file federal tax return 2012 They would have no carryover. Where to file federal tax return 2012 Use short-term losses first. Where to file federal tax return 2012   When you figure your capital loss carryover, use your short-term capital losses first, even if you incurred them after a long-term capital loss. Where to file federal tax return 2012 If you have not reached the limit on the capital loss deduction after using the short-term capital losses, use the long-term capital losses until you reach the limit. Where to file federal tax return 2012 Decedent's capital loss. Where to file federal tax return 2012    A capital loss sustained by a decedent during his or her last tax year (or carried over to that year from an earlier year) can be deducted only on the final income tax return filed for the decedent. Where to file federal tax return 2012 The capital loss limits discussed earlier still apply in this situation. Where to file federal tax return 2012 The decedent's estate cannot deduct any of the loss or carry it over to following years. Where to file federal tax return 2012 Joint and separate returns. Where to file federal tax return 2012   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. Where to file federal tax return 2012 However, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. Where to file federal tax return 2012 Capital Gain Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Where to file federal tax return 2012 These lower rates are called the maximum capital gain rates. Where to file federal tax return 2012 The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Where to file federal tax return 2012 For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Where to file federal tax return 2012 See Table 16-1 for details. Where to file federal tax return 2012 If you figure your tax using the maximum capital gain rate and the regular tax computation results in a lower tax, the regular tax computation applies. Where to file federal tax return 2012 Example. Where to file federal tax return 2012 All of your net capital gain is from selling collectibles, so the capital gain rate would be 28%. Where to file federal tax return 2012 If you are otherwise subject to a rate lower than 28%, the 28% rate does not apply. Where to file federal tax return 2012 Investment interest deducted. Where to file federal tax return 2012   If you claim a deduction for investment interest, you may have to reduce the amount of your net capital gain that is eligible for the capital gain tax rates. Where to file federal tax return 2012 Reduce it by the amount of the net capital gain you choose to include in investment income when figuring the limit on your investment interest deduction. Where to file federal tax return 2012 This is done on the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet. Where to file federal tax return 2012 For more information about the limit on investment interest, see Interest Expenses in chapter 3 of Publication 550. Where to file federal tax return 2012 Table 16-1. Where to file federal tax return 2012 What Is Your Maximum Capital Gain Rate? IF your net capital gain is from . Where to file federal tax return 2012 . Where to file federal tax return 2012 . Where to file federal tax return 2012 THEN your  maximum capital gain rate is . Where to file federal tax return 2012 . Where to file federal tax return 2012 . Where to file federal tax return 2012 a collectibles gain 28% an eligible gain on qualified small business stock minus the section 1202 exclusion 28% an unrecaptured section 1250 gain 25% other gain1 and the regular tax rate that would apply is 39. Where to file federal tax return 2012 6% 20% other gain1 and the regular tax rate that would apply is 25%, 28%, 33%, or 35% 15% other gain1 and the regular tax rate that would apply is 10% or 15% 0% 1 Other gain means any gain that is not collectibles gain, gain on qualified small business stock, or unrecaptured section 1250 gain. Where to file federal tax return 2012     Collectibles gain or loss. Where to file federal tax return 2012   This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year. Where to file federal tax return 2012   Collectibles gain includes gain from sale of an interest in a partnership, S corporation, or trust due to unrealized appreciation of collectibles. Where to file federal tax return 2012 Gain on qualified small business stock. Where to file federal tax return 2012    If you realized a gain from qualified small business stock that you held more than 5 years, you generally can exclude some or all of your gain under section 1202. Where to file federal tax return 2012 The eligible gain minus your section 1202 exclusion is a 28% rate gain. Where to file federal tax return 2012 See Gains on Qualified Small Business Stock in chapter 4 of Publication 550. Where to file federal tax return 2012 Unrecaptured section 1250 gain. Where to file federal tax return 2012    Generally, this is any part of your capital gain from selling section 1250 property (real property) that is due to depreciation (but not more than your net section 1231 gain), reduced by any net loss in the 28% group. Where to file federal tax return 2012 Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D (Form 1040) instructions to figure your unrecaptured section 1250 gain. Where to file federal tax return 2012 For more information about section 1250 property and section 1231 gain, see chapter 3 of Publication 544. Where to file federal tax return 2012 Tax computation using maximum capital gain rates. Where to file federal tax return 2012   Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet (whichever applies) to figure your tax if you have qualified dividends or net capital gain. Where to file federal tax return 2012 You have net capital gain if Schedule D (Form 1040), lines 15 and 16, are both gains. Where to file federal tax return 2012 Schedule D Tax Worksheet. Where to file federal tax return 2012   Use the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions to figure your tax if: You have to file Schedule D (Form 1040); and Schedule D (Form 1040), line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain), is more than zero. Where to file federal tax return 2012 Qualified Dividends and Capital Gain Tax Worksheet. Where to file federal tax return 2012   If you do not have to use the Schedule D Tax Worksheet (as explained above) and any of the following apply, use the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040 or Form 1040A (whichever you file) to figure your tax. Where to file federal tax return 2012 You received qualified dividends. Where to file federal tax return 2012 (See Qualified Dividends in chapter 8. Where to file federal tax return 2012 ) You do not have to file Schedule D (Form 1040) and you received capital gain distributions. Where to file federal tax return 2012 (See Exceptions to filing Form 8949 and Schedule D (Form 1040) , earlier. Where to file federal tax return 2012 ) Schedule D (Form 1040), lines 15 and 16, are both more than zero. Where to file federal tax return 2012 Alternative minimum tax. Where to file federal tax return 2012   These capital gain rates are also used in figuring alternative minimum tax. Where to file federal tax return 2012 Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats - Controlled Foreign Corporations

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  • Data are taken from Form 5471 - Information Return of U.S. Persons With Respect to Certain Foreign Corporations.
  • For U.S. income tax purposes, a foreign corporation is "controlled" if U.S. shareholders own more than 50% of its outstanding voting stock.
  • Data are also available for the One-Time Dividend Received Deduction reported on Form 8895.

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U.S. Corporations and Their Controlled Foreign Corporations
     Data Presented: Number, Assets, Receipts, Earnings, Taxes, Distributions, Subpart F Income, and Related Party Transactions
     Classified by: Selected NAICS Industrial Sector*
     Tax Years: 2008     2006     2004   
 
     Classified by: Selected Country of Incorporation
     Tax Years: 2008     2006     2004   
 
     Classified by: Selected Country of Incorporation and NAICS Industrial Sector*
     Tax Years: 2008     2006     2004   
 
U.S. Corporations with Total Assets of $500 Million or More and Their 7,500 Largest Controlled Foreign Corporations
     Data Presented: Number, Assets, Receipts, Earnings, Taxes, Distributions, and Subpart F Income
     Classified by: Selected NAICS Industrial Sector*
     Tax Years: 2002   2000   1998   1996   1994   1992   1988
 
     Classified by: Selected Country of Incorporation
     Tax Years: 2002   2000   1998   1996   1994   1992   1988
 
     Classified by: Selected Country of Incorporation and NAICS Industrial Sector*
     Tax Years: 2002   2000   1998   1996   1994   1988


 

U.S. Corporations with Total Assets of $500 Million or More and Their 7,500 Largest Controlled Foreign Corporations
     Data Presented: Number, Assets, Receipts, and Earnings, Standard Industrial Classification (SIC) and North American Industry Classification System (NAICS)
     Classified by: Selected NAICS Industrial Sector
     Tax Year: 1998


*Note:  For Tax Years prior to 1998, industry data are presented by Standard Industry Classification (SIC).  Industry data for Tax Years 1998 to present are presented by North American Industry Classification System (NAICS)


SOI Bulletin Articles

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The Where To File Federal Tax Return 2012

Where to file federal tax return 2012 32. Where to file federal tax return 2012   Child and Dependent Care Credit Table of Contents Reminders Introduction Useful Items - You may want to see: Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. Where to file federal tax return 2012 Employment Taxes for Household Employers Reminders Taxpayer identification number needed for each qualifying person. Where to file federal tax return 2012  You must include on line 2 of Form 2441 the name and taxpayer identification number (generally the social security number) of each qualifying person. Where to file federal tax return 2012 See Taxpayer identification number under Qualifying Person Test, later. Where to file federal tax return 2012 You may have to pay employment taxes. Where to file federal tax return 2012  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. Where to file federal tax return 2012 Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. Where to file federal tax return 2012 See Employment Taxes for Household Employers , later. Where to file federal tax return 2012 Introduction This chapter discusses the credit for child and dependent care expenses and covers the following topics. Where to file federal tax return 2012 Tests you must meet to claim the credit. Where to file federal tax return 2012 How to figure the credit. Where to file federal tax return 2012 How to claim the credit. Where to file federal tax return 2012 Employment taxes you may have to pay as a household employer. Where to file federal tax return 2012 You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. Where to file federal tax return 2012 The credit can be up to 35% of your expenses. Where to file federal tax return 2012 To qualify, you must pay these expenses so you can work or look for work. Where to file federal tax return 2012 This credit should not be confused with the child tax credit discussed in chapter 34. Where to file federal tax return 2012 Dependent care benefits. Where to file federal tax return 2012   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. Where to file federal tax return 2012 You must complete Form 2441, Part III, before you can figure the amount of your credit. Where to file federal tax return 2012 See Dependent Care Benefits under How To Figure the Credit, later. Where to file federal tax return 2012 Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 503 Child and Dependent Care Expenses 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-7 Application for IRS Individual Taxpayer Identification Number W-10 Dependent Care Provider's Identification and Certification Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040 or Form 1040A, not Form 1040EZ, and meet all the following tests. Where to file federal tax return 2012 The care must be for one or more qualifying persons who are identified on Form 2441. Where to file federal tax return 2012 (See Qualifying Person Test . Where to file federal tax return 2012 ) You (and your spouse if filing jointly) must have earned income during the year. Where to file federal tax return 2012 (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. Where to file federal tax return 2012 ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. Where to file federal tax return 2012 (See Work-Related Expense Test , later. Where to file federal tax return 2012 ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. Where to file federal tax return 2012 If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. Where to file federal tax return 2012 You cannot make payments to: Your spouse, or The parent of your qualifying person if your qualifying person is your child and under age 13. Where to file federal tax return 2012 (See Payments to Relatives or Dependents under Work-Related Expense Test, later. Where to file federal tax return 2012 ) Your filing status may be single, head of household, or qualifying widow(er) with dependent child. Where to file federal tax return 2012 If you are married, you must file a joint return, unless an exception applies to you. Where to file federal tax return 2012 (See Joint Return Test , later. Where to file federal tax return 2012 ) You must identify the care provider on your tax return. Where to file federal tax return 2012 (See Provider Identification Test , later. Where to file federal tax return 2012 ) If you exclude or deduct dependent care benefits provided by a dependent care benefits plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). Where to file federal tax return 2012 (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. Where to file federal tax return 2012 See Reduced Dollar Limit under How To Figure the Credit, later. Where to file federal tax return 2012 ) These tests are presented in Figure 32-A and are also explained in detail in this chapter. Where to file federal tax return 2012 Figure 32-A. Where to file federal tax return 2012 Can You Claim the Credit? Please click here for the text description of the image. Where to file federal tax return 2012 Figure 32-A Can You Claim the Credit? Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. Where to file federal tax return 2012 A qualifying person is: Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later), Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Where to file federal tax return 2012 Dependent defined. Where to file federal tax return 2012   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. Where to file federal tax return 2012 To be your dependent, a person must be your qualifying child (or your qualifying relative). Where to file federal tax return 2012 Qualifying child. Where to file federal tax return 2012   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. Where to file federal tax return 2012 More information. Where to file federal tax return 2012   For more information about who is a dependent or a qualifying child, see chapter 3. Where to file federal tax return 2012 Physically or mentally not able to care for oneself. Where to file federal tax return 2012   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. Where to file federal tax return 2012 Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. Where to file federal tax return 2012 Person qualifying for part of year. Where to file federal tax return 2012   You determine a person's qualifying status each day. Where to file federal tax return 2012 For example, if the person for whom you pay child and dependent care expenses no longer qualifies on September 16, count only those expenses through September 15. Where to file federal tax return 2012 Also see Yearly limit under Dollar Limit, later. Where to file federal tax return 2012 Birth or death of otherwise qualifying person. Where to file federal tax return 2012   In determining whether a person is a qualifying person, a person who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the person's home for more than half the time he or she was alive in 2013. Where to file federal tax return 2012 Taxpayer identification number. Where to file federal tax return 2012   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). Where to file federal tax return 2012 If the correct information is not shown, the credit may be reduced or disallowed. Where to file federal tax return 2012 Individual taxpayer identification number (ITIN) for aliens. Where to file federal tax return 2012   If your qualifying person is a nonresident or resident alien who does not have and cannot get a social security number (SSN), use that person's ITIN. Where to file federal tax return 2012 The ITIN is entered wherever an SSN is requested on a tax return. Where to file federal tax return 2012 To apply for an ITIN, see Form W-7. Where to file federal tax return 2012   An ITIN is for tax use only. Where to file federal tax return 2012 It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. Where to file federal tax return 2012 S. Where to file federal tax return 2012 law. Where to file federal tax return 2012 Adoption taxpayer identification number (ATIN). Where to file federal tax return 2012   If your qualifying person is a child who was placed in your home for adoption and for whom you do not have an SSN, you must get an ATIN for the child. Where to file federal tax return 2012 File Form W-7A, Application for Taxpayer Identification Number for Pending U. Where to file federal tax return 2012 S. Where to file federal tax return 2012 Adoptions. Where to file federal tax return 2012 Child of divorced or separated parents or parents living apart. Where to file federal tax return 2012   Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if: The child was under age 13 or was not physically or mentally able to care for himself or herself, The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year, The child was in the custody of one or both parents for more than half the year, and You were the child's custodial parent. Where to file federal tax return 2012   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. Where to file federal tax return 2012 If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. Where to file federal tax return 2012 For details and an exception for a parent who works at night, see Pub. Where to file federal tax return 2012 501. Where to file federal tax return 2012   The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. Where to file federal tax return 2012 Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. Where to file federal tax return 2012 Earned income. Where to file federal tax return 2012   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. Where to file federal tax return 2012 A net loss from self-employment reduces earned income. Where to file federal tax return 2012 Earned income also includes strike benefits and any disability pay you report as wages. Where to file federal tax return 2012   Generally, only taxable compensation is included. Where to file federal tax return 2012 However, you can elect to include nontaxable combat pay in earned income. Where to file federal tax return 2012 If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Where to file federal tax return 2012 (In other words, if one of you makes the election, the other one can also make it but does not have to. Where to file federal tax return 2012 ) You should figure your credit both ways and make the election if it gives you a greater tax benefit. Where to file federal tax return 2012 Members of certain religious faiths opposed to social security. Where to file federal tax return 2012   Certain income earned by persons who are members of certain religious faiths that are opposed to participation in Social Security Act programs and have an IRS-approved form that exempts certain income from social security and Medicare taxes may not be considered earned income for this purpose. Where to file federal tax return 2012 See Earned Income Test in Publication 503. Where to file federal tax return 2012 Not earned income. Where to file federal tax return 2012   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarship or fellowship grants, except for those reported on a Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received by you, Income of nonresident aliens that is not effectively connected with a U. Where to file federal tax return 2012 S. Where to file federal tax return 2012 trade or business, or Any amount received for work while an inmate in a penal institution. Where to file federal tax return 2012 Rule for student-spouse or spouse not able to care for self. Where to file federal tax return 2012   Your spouse is treated as having earned income for any month that he or she is: A full-time student, or Physically or mentally not able to care for himself or herself. Where to file federal tax return 2012 (Your spouse also must live with you for more than half the year. Where to file federal tax return 2012 )   If you are filing a joint return, this rule also applies to you. Where to file federal tax return 2012 You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. Where to file federal tax return 2012   Figure the earned income of the nonworking spouse described under (1) or (2) above as explained under Earned Income Limit , later. Where to file federal tax return 2012   This rule applies to only one spouse for any one month. Where to file federal tax return 2012 If, in the same month, both you and your spouse do not work and are either full-time students or not physically or mentally able to care for yourselves, only one of you can be treated as having earned income in that month. Where to file federal tax return 2012 Full-time student. Where to file federal tax return 2012   You are a full-time student if you are enrolled at a school for the number of hours or classes that the school considers full time. Where to file federal tax return 2012 You must have been a full-time student for some part of each of 5 calendar months during the year. Where to file federal tax return 2012 (The months need not be consecutive. Where to file federal tax return 2012 ) School. Where to file federal tax return 2012   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. Where to file federal tax return 2012 A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Where to file federal tax return 2012 Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. Where to file federal tax return 2012 Expenses are considered work-related only if both of the following are true. Where to file federal tax return 2012 They allow you (and your spouse if filing jointly) to work or look for work. Where to file federal tax return 2012 They are for a qualifying person's care. Where to file federal tax return 2012 Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. Where to file federal tax return 2012 If you are married, generally both you and your spouse must work or look for work. Where to file federal tax return 2012 One spouse is treated as working during any month he or she is a full-time student or is not physically or mentally able to care for himself or herself. Where to file federal tax return 2012 Your work can be for others or in your own business or partnership. Where to file federal tax return 2012 It can be either full time or part time. Where to file federal tax return 2012 Work also includes actively looking for work. Where to file federal tax return 2012 However, if you do not find a job and have no earned income for the year, you cannot take this credit. Where to file federal tax return 2012 See Earned Income Test , earlier. Where to file federal tax return 2012 An expense is not considered work-related merely because you had it while you were working. Where to file federal tax return 2012 The purpose of the expense must be to allow you to work. Where to file federal tax return 2012 Whether your expenses allow you to work or look for work depends on the facts. Where to file federal tax return 2012 Example 1. Where to file federal tax return 2012 The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. Where to file federal tax return 2012 Example 2. Where to file federal tax return 2012 You work during the day. Where to file federal tax return 2012 Your spouse works at night and sleeps during the day. Where to file federal tax return 2012 You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. Where to file federal tax return 2012 Your expenses are considered work-related. Where to file federal tax return 2012 Volunteer work. Where to file federal tax return 2012    For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. Where to file federal tax return 2012 Work for part of year. Where to file federal tax return 2012   If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. Where to file federal tax return 2012 For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work-related. Where to file federal tax return 2012 However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2½ months × $250). Where to file federal tax return 2012 Temporary absence from work. Where to file federal tax return 2012   You do not have to figure your expenses for each day during a short, temporary absence from work, such as for vacation or a minor illness, if you have to pay for care anyway. Where to file federal tax return 2012 Instead, you can figure your credit including the expenses you paid for the period of absence. Where to file federal tax return 2012   An absence of 2 weeks or less is a short, temporary absence. Where to file federal tax return 2012 An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. Where to file federal tax return 2012 Example. Where to file federal tax return 2012 You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. Where to file federal tax return 2012 You become ill and miss 4 months of work but receive sick pay. Where to file federal tax return 2012 You continue to pay the nanny to care for the children while you are ill. Where to file federal tax return 2012 Your absence is not a short, temporary absence, and your expenses are not considered work-related. Where to file federal tax return 2012 Part-time work. Where to file federal tax return 2012   If you work part-time, you generally must figure your expenses for each day. Where to file federal tax return 2012 However, if you have to pay for care weekly, monthly, or in another way that includes both days worked and days not worked, you can figure your credit including the expenses you paid for days you did not work. Where to file federal tax return 2012 Any day when you work at least 1 hour is a day of work. Where to file federal tax return 2012 Example 1. Where to file federal tax return 2012 You work 3 days a week. Where to file federal tax return 2012 While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. Where to file federal tax return 2012 You can pay the center $150 for any 3 days a week or $250 for 5 days a week. Where to file federal tax return 2012 Your child attends the center 5 days a week. Where to file federal tax return 2012 Your work-related expenses are limited to $150 a week. Where to file federal tax return 2012 Example 2. Where to file federal tax return 2012 The facts are the same as in Example 1 except the center does not offer a 3-day option. Where to file federal tax return 2012 The entire $250 weekly fee may be a work-related expense. Where to file federal tax return 2012 Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. Where to file federal tax return 2012 You do not have to choose the least expensive way of providing care. Where to file federal tax return 2012 The cost of a paid care provider may be an expense for the care of a qualifying person even if another care provider is available at no cost. Where to file federal tax return 2012 Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. Where to file federal tax return 2012 Expenses for household services qualify if part of the services is for the care of qualifying persons. Where to file federal tax return 2012 See Household services , later. Where to file federal tax return 2012 Expenses not for care. Where to file federal tax return 2012   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. Where to file federal tax return 2012 However, you can include small amounts paid for these items if they are incidental to and cannot be separated from the cost of caring for the qualifying person. Where to file federal tax return 2012   Child support payments are not for care and do not qualify for the credit. Where to file federal tax return 2012 Education. Where to file federal tax return 2012   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. Where to file federal tax return 2012 Expenses to attend kindergarten or a higher grade are not expenses for care. Where to file federal tax return 2012 Do not use these expenses to figure your credit. Where to file federal tax return 2012   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. Where to file federal tax return 2012   Summer school and tutoring programs are not for care. Where to file federal tax return 2012 Example 1. Where to file federal tax return 2012 You take your 3-year-old child to a nursery school that provides lunch and educational activities as a part of its preschool childcare service. Where to file federal tax return 2012 The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. Where to file federal tax return 2012 You can count the total cost when you figure the credit. Where to file federal tax return 2012 Example 2. Where to file federal tax return 2012 You place your 10-year-old child in a boarding school so you can work full time. Where to file federal tax return 2012 Only the part of the boarding school expense that is for the care of your child is a work-related expense. Where to file federal tax return 2012 You can count that part of the expense in figuring your credit if it can be separated from the cost of education. Where to file federal tax return 2012 You cannot count any part of the amount you pay the school for your child's education. Where to file federal tax return 2012 Care outside your home. Where to file federal tax return 2012   You can count the cost of care provided outside your home if the care is for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours each day in your home. Where to file federal tax return 2012 Dependent care center. Where to file federal tax return 2012   You can count care provided outside your home by a dependent care center only if the center complies with all state and local regulations that apply to these centers. Where to file federal tax return 2012   A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center is not run for profit. Where to file federal tax return 2012 Camp. Where to file federal tax return 2012   The cost of sending your child to an overnight camp is not considered a work-related expense. Where to file federal tax return 2012 The cost of sending your child to a day camp may be a work-related expense, even if the camp specializes in a particular activity, such as computers or soccer. Where to file federal tax return 2012 Transportation. Where to file federal tax return 2012   If a care provider takes a qualifying person to or from a place where care is provided, that transportation is for the care of the qualifying person. Where to file federal tax return 2012 This includes transportation by bus, subway, taxi, or private car. Where to file federal tax return 2012 However, transportation not provided by a care provider is not for the care of a qualifying person. Where to file federal tax return 2012 Also, if you pay the transportation cost for the care provider to come to your home, that expense is not for care of a qualifying person. Where to file federal tax return 2012 Fees and deposits. Where to file federal tax return 2012   Fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work-related expenses if you have to pay them to get care, even though they are not directly for care. Where to file federal tax return 2012 However, a forfeited deposit is not for the care of a qualifying person if care is not provided. Where to file federal tax return 2012 Example 1. Where to file federal tax return 2012 You paid a fee to an agency to get the services of the nanny who cares for your 2-year-old daughter while you work. Where to file federal tax return 2012 The fee you paid is a work-related expense. Where to file federal tax return 2012 Example 2. Where to file federal tax return 2012 You placed a deposit with a preschool to reserve a place for your 3-year-old child. Where to file federal tax return 2012 You later sent your child to a different preschool and forfeited the deposit. Where to file federal tax return 2012 The forfeited deposit is not for care and so is not a work-related expense. Where to file federal tax return 2012 Household services. Where to file federal tax return 2012   Expenses you pay for household services meet the work-related expense test if they are at least partly for the well-being and protection of a qualifying person. Where to file federal tax return 2012   Household services are ordinary and usual services done in and around your home that are necessary to run your home. Where to file federal tax return 2012 They include the services of a housekeeper, maid, or cook. Where to file federal tax return 2012 However, they do not include the services of a chauffeur, bartender, or gardener. Where to file federal tax return 2012 See Household Services in Publication 503 for more information. Where to file federal tax return 2012   In this chapter, the term housekeeper refers to any household employee whose services include the care of a qualifying person. Where to file federal tax return 2012 Taxes paid on wages. Where to file federal tax return 2012   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. Where to file federal tax return 2012 See Employment Taxes for Household Employers , later. Where to file federal tax return 2012 Payments to Relatives or Dependents You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. Where to file federal tax return 2012 However, do not count any amounts you pay to: A dependent for whom you (or your spouse if filing jointly) can claim an exemption, Your child who was under age 19 at the end of the year, even if he or she is not your dependent, A person who was your spouse any time during the year, or The parent of your qualifying person if your qualifying person is your child and under age 13. Where to file federal tax return 2012 Joint Return Test Generally, married couples must file a joint return to take the credit. Where to file federal tax return 2012 However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. Where to file federal tax return 2012 Legally separated. Where to file federal tax return 2012   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. Where to file federal tax return 2012 You may be eligible to take the credit on your return using head of household filing status. Where to file federal tax return 2012 Married and living apart. Where to file federal tax return 2012   You are not considered married and are eligible to take the credit if all the following apply. Where to file federal tax return 2012 You file a return apart from your spouse. Where to file federal tax return 2012 Your home is the home of a qualifying person for more than half the year. Where to file federal tax return 2012 You pay more than half the cost of keeping up your home for the year. Where to file federal tax return 2012 Your spouse does not live in your home for the last 6 months of the year. Where to file federal tax return 2012 Costs of keeping up a home. Where to file federal tax return 2012   The costs of keeping up a home normally include property taxes, mortgage interest, rent, utility charges, home repairs, insurance on the home, and food eaten at home. Where to file federal tax return 2012   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. Where to file federal tax return 2012   They also do not include the purchase, permanent improvement, or replacement of property. Where to file federal tax return 2012 For example, you cannot include the cost of replacing a water heater. Where to file federal tax return 2012 However, you can include the cost of repairing a water heater. Where to file federal tax return 2012 Death of spouse. Where to file federal tax return 2012   If your spouse died during the year and you do not remarry before the end of the year, you generally must file a joint return to take the credit. Where to file federal tax return 2012 If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's return. Where to file federal tax return 2012 Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. Where to file federal tax return 2012 Use Form 2441, Part I, to show the information. Where to file federal tax return 2012 If you do not have any care providers and you are filing Form 2441 only to report taxable income in Part III, enter “none” in line 1, column (a). Where to file federal tax return 2012 Information needed. Where to file federal tax return 2012   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. Where to file federal tax return 2012   If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. Where to file federal tax return 2012 If the care provider is an organization, then it is the employer identification number (EIN). Where to file federal tax return 2012   You do not have to show the taxpayer identification number if the care provider is a tax-exempt organization (such as a church or school). Where to file federal tax return 2012 In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. Where to file federal tax return 2012   If you cannot provide all of the information or if the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. Where to file federal tax return 2012 Getting the information. Where to file federal tax return 2012   You can use Form W-10 to request the required information from the care provider. Where to file federal tax return 2012 If you do not use Form W-10, you can get the information from one of the other sources listed in the instructions for Form W-10 including: A copy of the provider's social security card, A copy of the provider's completed Form W-4 if he or she is your household employee, A copy of the statement furnished by your employer if the provider is your employer's dependent care plan, or A letter or invoice from the provider if it shows the information. Where to file federal tax return 2012    You should keep this information with your tax records. Where to file federal tax return 2012 Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. Where to file federal tax return 2012 Due diligence. Where to file federal tax return 2012   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. Where to file federal tax return 2012 However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. Where to file federal tax return 2012   You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. Where to file federal tax return 2012 Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. Where to file federal tax return 2012 Provider refusal. Where to file federal tax return 2012   If the provider refuses to give you their identifying information, you should report on Form 2441 whatever information you have (such as the name and address). Where to file federal tax return 2012 Enter “See Attached Statement” in the columns calling for the information you do not have. Where to file federal tax return 2012 Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. Where to file federal tax return 2012 Be sure to write your name and social security number on this statement. Where to file federal tax return 2012 The statement will show that you used due diligence in trying to furnish the necessary information. Where to file federal tax return 2012 U. Where to file federal tax return 2012 S. Where to file federal tax return 2012 citizens and resident aliens living abroad. Where to file federal tax return 2012   If you are living abroad, your care provider may not have, and may not be required to get, a U. Where to file federal tax return 2012 S. Where to file federal tax return 2012 taxpayer identification number (for example, an SSN or EIN). Where to file federal tax return 2012 If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. Where to file federal tax return 2012 How To Figure the Credit Your credit is a percentage of your work-related expenses. Where to file federal tax return 2012 Your expenses are subject to the earned income limit and the dollar limit. Where to file federal tax return 2012 The percentage is based on your adjusted gross income. Where to file federal tax return 2012 Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. Where to file federal tax return 2012 Expenses prepaid in an earlier year. Where to file federal tax return 2012   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. Where to file federal tax return 2012 Claim the expenses for the later year as if they were actually paid in that later year. Where to file federal tax return 2012 Expenses not paid until the following year. Where to file federal tax return 2012   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. Where to file federal tax return 2012 You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. Where to file federal tax return 2012 See Payments for prior year's expenses under Amount of Credit in Publication 503. Where to file federal tax return 2012    If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. Where to file federal tax return 2012 You may be able to claim a credit for them on your 2014 return. Where to file federal tax return 2012 Expenses reimbursed. Where to file federal tax return 2012   If a state social services agency pays you a nontaxable amount to reimburse you for some of your child and dependent care expenses, you cannot count the expenses that are reimbursed as work-related expenses. Where to file federal tax return 2012 Example. Where to file federal tax return 2012 You paid work-related expenses of $3,000. Where to file federal tax return 2012 You are reimbursed $2,000 by a state social services agency. Where to file federal tax return 2012 You can use only $1,000 to figure your credit. Where to file federal tax return 2012 Medical expenses. Where to file federal tax return 2012   Some expenses for the care of qualifying persons who are not able to care for themselves may qualify as work-related expenses and also as medical expenses. Where to file federal tax return 2012 You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. Where to file federal tax return 2012   If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. Where to file federal tax return 2012 However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. Where to file federal tax return 2012    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. Where to file federal tax return 2012 Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. Where to file federal tax return 2012 See Reduced Dollar Limit , later. Where to file federal tax return 2012 But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. Where to file federal tax return 2012 Dependent care benefits. Where to file federal tax return 2012   Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. Where to file federal tax return 2012 Your salary may have been reduced to pay for these benefits. Where to file federal tax return 2012 If you received benefits as an employee, they should be shown in box 10 of your Form W-2. Where to file federal tax return 2012 See Statement for employee , later. Where to file federal tax return 2012 Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. Where to file federal tax return 2012 Enter the amount of these benefits on Form 2441, Part III, line 12. Where to file federal tax return 2012 Exclusion or deduction. Where to file federal tax return 2012   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Where to file federal tax return 2012 Your employer can tell you whether your benefit plan qualifies. Where to file federal tax return 2012 To claim the exclusion, you must complete Part III of Form 2441. Where to file federal tax return 2012 You cannot use Form 1040EZ. Where to file federal tax return 2012   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. Where to file federal tax return 2012 Therefore, you would not get an exclusion from wages. Where to file federal tax return 2012 Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. Where to file federal tax return 2012 To claim the deduction, you must use Form 2441. Where to file federal tax return 2012   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). Where to file federal tax return 2012 The definition of earned income for the exclusion or deduction is the same as the definition used when figuring the credit except that earned income for the exclusion or deduction does not include any dependent care benefits you receive. Where to file federal tax return 2012 See Earned Income Limit, later. Where to file federal tax return 2012    You can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit or the credit for child and dependent care expenses. Where to file federal tax return 2012 Statement for employee. Where to file federal tax return 2012   Your employer must give you a Form W-2 (or similar statement) showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. Where to file federal tax return 2012 Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. Where to file federal tax return 2012 Effect of exclusion on credit. Where to file federal tax return 2012   If you exclude dependent care benefits from your income, the amount of the excluded benefits: Is not included in your work-related expenses, and Reduces the dollar limit, discussed later. Where to file federal tax return 2012 Earned Income Limit The amount of work-related expenses you use to figure your credit cannot be more than: Your earned income for the year if you are single at the end of the year, or The smaller of your or your spouse's earned income for the year if you are married at the end of the year. Where to file federal tax return 2012 Earned income is defined under Earned Income Test , earlier. Where to file federal tax return 2012 For purposes of item (2), use your spouse's earned income for the entire year, even if you were married for only part of the year. Where to file federal tax return 2012 Separated spouse. Where to file federal tax return 2012   If you are legally separated or married and living apart from your spouse (as described under Joint Return Test , earlier), you are not considered married for purposes of the earned income limit. Where to file federal tax return 2012 Use only your income in figuring the earned income limit. Where to file federal tax return 2012 Surviving spouse. Where to file federal tax return 2012   If your spouse died during the year and you file a joint return as a surviving spouse, you may, but are not required to, take into account the earned income of your spouse who died during the year. Where to file federal tax return 2012 Community property laws. Where to file federal tax return 2012   You should disregard community property laws when you figure earned income for this credit. Where to file federal tax return 2012 You or your spouse is a student or not able to care for self. Where to file federal tax return 2012   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. Where to file federal tax return 2012 His or her earned income for each month is considered to be at least $250 if there is one qualifying person in your home, or at least $500 if there are two or more. Where to file federal tax return 2012 Spouse works. Where to file federal tax return 2012   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. Where to file federal tax return 2012 Spouse qualifies for part of month. Where to file federal tax return 2012    If your spouse is a full-time student or not able to care for himself or herself for only part of a month, the full $250 (or $500) still applies for that month. Where to file federal tax return 2012 You are a student or not able to care for self. Where to file federal tax return 2012   These rules also apply if you are a student or not able to care for yourself and you are filing a joint return. Where to file federal tax return 2012 For each month or part of a month you are a student or not able to care for yourself, your earned income is considered to be at least $250 (or $500). Where to file federal tax return 2012 If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. Where to file federal tax return 2012 Both spouses qualify. Where to file federal tax return 2012   If, in the same month, both you and your spouse are either full-time students or not able to care for yourselves, only one spouse can be considered to have this earned income of $250 (or $500) for that month. Where to file federal tax return 2012 Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. Where to file federal tax return 2012 This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. Where to file federal tax return 2012 If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. Where to file federal tax return 2012 This $6,000 limit does not need to be divided equally among them. Where to file federal tax return 2012 For example, if your work-related expenses for the care of one qualifying person are $3,200 and your work-related expenses for another qualifying person are $2,800, you can use the total, $6,000, when figuring the credit. Where to file federal tax return 2012 Yearly limit. Where to file federal tax return 2012   The dollar limit is a yearly limit. Where to file federal tax return 2012 The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. Where to file federal tax return 2012 Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. Where to file federal tax return 2012 Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. Where to file federal tax return 2012 Reduced Dollar Limit If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you. Where to file federal tax return 2012 Your reduced dollar limit is figured on Form 2441, Part III. Where to file federal tax return 2012 See Dependent Care Benefits , earlier, for information on excluding or deducting these benefits. Where to file federal tax return 2012 Example 1. Where to file federal tax return 2012 George is a widower with one child and earns $24,000 a year. Where to file federal tax return 2012 He pays work-related expenses of $2,900 for the care of his 4-year-old child and qualifies to claim the credit for child and dependent care expenses. Where to file federal tax return 2012 His employer pays an additional $1,000 under a dependent care benefit plan. Where to file federal tax return 2012 This $1,000 is excluded from George's income. Where to file federal tax return 2012 Although the dollar limit for his work-related expenses is $3,000 (one qualifying person), George figures his credit on only $2,000 of the $2,900 work-related expenses he paid. Where to file federal tax return 2012 This is because his dollar limit is reduced as shown next. Where to file federal tax return 2012   George's Reduced Dollar Limit 1) Maximum allowable expenses for one qualifying person $3,000 2) Minus: Dependent care benefits George excludes from income −1,000 3) Reduced dollar limit on expenses George can use for the credit $2,000 Example 2. Where to file federal tax return 2012 Randall is married and both he and his wife are employed. Where to file federal tax return 2012 Each has earned income in excess of $6,000. Where to file federal tax return 2012 They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. Where to file federal tax return 2012 Randall's work-related expenses are $6,000 for the year. Where to file federal tax return 2012 Randall's employer has a dependent care assistance program as part of its cafeteria plan, which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. Where to file federal tax return 2012 Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. Where to file federal tax return 2012 Although the dollar limit for his work- related expenses is $6,000 (two or more qualifying persons), Randall figures his credit on only $1,000 of the $6,000 work-related expense paid. Where to file federal tax return 2012 This is because his dollar limit is reduced as shown next. Where to file federal tax return 2012   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits Randall selects from employer's cafeteria plan and excludes from income −5,000 3) Reduced dollar limit on expenses Randall can use for the credit $1,000 Amount of Credit To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. Where to file federal tax return 2012 This percentage depends on your adjusted gross income shown on Form 1040, line 38, or Form 1040A, line 22. Where to file federal tax return 2012 The following table shows the percentage to use based on adjusted gross income. Where to file federal tax return 2012   IF your adjusted gross income is: THEN the percentage is:       Over   But not over         $0   $15,000   35%       15,000   17,000   34%       17,000   19,000   33%       19,000   21,000   32%       21,000   23,000   31%       23,000   25,000   30%       25,000   27,000   29%       27,000   29,000   28%       29,000   31,000   27%       31,000   33,000   26%       33,000   35,000   25%       35,000   37,000   24%       37,000   39,000   23%       39,000   41,000   22%       41,000   43,000   21%       43,000   No limit   20%   How To Claim the Credit To claim the credit, you can file Form 1040 or Form 1040A. Where to file federal tax return 2012 You cannot claim the credit on Form 1040EZ. Where to file federal tax return 2012 Form 1040 or 1040A. Where to file federal tax return 2012   You must complete Form 2441 and attach it to your Form 1040 or 1040A. Where to file federal tax return 2012 Enter the credit on Form 1040, line 48, or Form 1040A, line 29. Where to file federal tax return 2012 Limit on credit. Where to file federal tax return 2012   The amount of credit you can claim is generally limited to the amount of your tax. Where to file federal tax return 2012 For more information, see the Instructions for Form 2441. Where to file federal tax return 2012 Tax credit not refundable. Where to file federal tax return 2012   You cannot get a refund for any part of the credit that is more than this limit. Where to file federal tax return 2012 Recordkeeping. Where to file federal tax return 2012 You should keep records of your work-related expenses. Where to file federal tax return 2012 Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and the length of the disability. Where to file federal tax return 2012 Other records you should keep to support your claim for the credit are described earlier under Provider Identification Test . Where to file federal tax return 2012 Employment Taxes for Household Employers If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. Where to file federal tax return 2012 If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. Where to file federal tax return 2012 If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. Where to file federal tax return 2012 Self-employed persons who are in business for themselves are not household employees. Where to file federal tax return 2012 Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. Where to file federal tax return 2012 If you use a placement agency that exercises control over what work is done and how it will be done by a babysitter or companion who works in your home, the worker is not your employee. Where to file federal tax return 2012 This control could include providing rules of conduct and appearance and requiring regular reports. Where to file federal tax return 2012 In this case, you do not have to pay employment taxes. Where to file federal tax return 2012 But, if an agency merely gives you a list of sitters and you hire one from that list, and pay the sitter directly, the sitter may be your employee. Where to file federal tax return 2012 If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. Where to file federal tax return 2012 Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. Where to file federal tax return 2012 Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. Where to file federal tax return 2012 Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. Where to file federal tax return 2012 For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. Where to file federal tax return 2012 State employment tax. Where to file federal tax return 2012   You may also have to pay state unemployment tax. Where to file federal tax return 2012 Contact your state unemployment tax office for information. Where to file federal tax return 2012 You should also find out whether you need to pay or collect other state employment taxes or carry workers' compensation insurance. Where to file federal tax return 2012 For a list of state unemployment tax agencies, visit the U. Where to file federal tax return 2012 S. Where to file federal tax return 2012 Department of Labor's website. Where to file federal tax return 2012 A link to that website is in Publication 926, or you can find it with an online search. Where to file federal tax return 2012 Prev  Up  Next   Home   More Online Publications