Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Where To Send 1040x

How Do I File 2012 TaxesFiling Taxes As A College Student1040ez Form And InstructionsTax Forms 1040ezThere Previous Years Tax Software That FreeIrs 1040ez InstructionsFederal Tax Form 1040ez1040x HrblockEz Form 1040Irs Forms 1040ezI Want To File My 2012 TaxesHow Do You File An Amended Federal Tax Return1040ez Form For 2012Turbo Tax 2010 20111040 Tax Form Worksheet1040nr Instructions 2012Freefilefillableforms ComForm 1040ezState Tax Return Online2012 Irs Tax Return FormsNj Tax Form 1040xCollege Students TaxesFree 2012 E FileHr Block Tax CutFile 2011 Taxes OnlineFile Tax Extension Electronically For FreeFree State Income Tax FormsState Franchise Tax FormsFree State Taxes Online1040ez FormOhio Tax Form 1040ezFederal Tax Form 1040aHow To Fill Out A 1040xHow To File 1040x ElectronicallyHow To Amend A Tax Return 20121040 Ez Tax Form 20121040ezAmended Michigan Tax Return2011 1040ezState Taxes Free Online

Where To Send 1040x

Where to send 1040x 5. Where to send 1040x   How To Get Tax Help Table of Contents Low Income Taxpayer Clinics Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Where to send 1040x Free help with your tax return. Where to send 1040x   You can get free help preparing your return nationwide from IRS-certified volunteers. Where to send 1040x The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Where to send 1040x The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Where to send 1040x Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Where to send 1040x In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Where to send 1040x To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Where to send 1040x gov, download the IRS2Go app, or call 1-800-906-9887. Where to send 1040x   As part of the TCE program, AARP offers the Tax-Aide counseling program. Where to send 1040x To find the nearest AARP Tax-Aide site, visit AARP's website at www. Where to send 1040x aarp. Where to send 1040x org/money/taxaide or call 1-888-227-7669. Where to send 1040x For more information on these programs, go to IRS. Where to send 1040x gov and enter “VITA” in the search box. Where to send 1040x Internet. Where to send 1040x    IRS. Where to send 1040x gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Where to send 1040x Download the free IRS2Go app from the iTunes app store or from Google Play. Where to send 1040x Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Where to send 1040x Check the status of your 2013 refund with the Where's My Refund? application on IRS. Where to send 1040x gov or download the IRS2Go app and select the Refund Status option. Where to send 1040x The IRS issues more than 9 out of 10 refunds in less than 21 days. Where to send 1040x Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Where to send 1040x You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Where to send 1040x The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Where to send 1040x Use the Interactive Tax Assistant (ITA) to research your tax questions. Where to send 1040x No need to wait on the phone or stand in line. Where to send 1040x The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Where to send 1040x When you reach the response screen, you can print the entire interview and the final response for your records. Where to send 1040x New subject areas are added on a regular basis. Where to send 1040x  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Where to send 1040x gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Where to send 1040x You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Where to send 1040x The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Where to send 1040x When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Where to send 1040x Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Where to send 1040x You can also ask the IRS to mail a return or an account transcript to you. Where to send 1040x Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Where to send 1040x gov or by calling 1-800-908-9946. Where to send 1040x Tax return and tax account transcripts are generally available for the current year and the past three years. Where to send 1040x Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Where to send 1040x Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Where to send 1040x If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Where to send 1040x Check the status of your amended return using Where's My Amended Return? Go to IRS. Where to send 1040x gov and enter Where's My Amended Return? in the search box. Where to send 1040x You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Where to send 1040x It can take up to 3 weeks from the date you mailed it to show up in our system. Where to send 1040x Make a payment using one of several safe and convenient electronic payment options available on IRS. Where to send 1040x gov. Where to send 1040x Select the Payment tab on the front page of IRS. Where to send 1040x gov for more information. Where to send 1040x Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Where to send 1040x Figure your income tax withholding with the IRS Withholding Calculator on IRS. Where to send 1040x gov. Where to send 1040x Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Where to send 1040x Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Where to send 1040x gov. Where to send 1040x Request an Electronic Filing PIN by going to IRS. Where to send 1040x gov and entering Electronic Filing PIN in the search box. Where to send 1040x Download forms, instructions and publications, including accessible versions for people with disabilities. Where to send 1040x Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Where to send 1040x gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Where to send 1040x An employee can answer questions about your tax account or help you set up a payment plan. Where to send 1040x Before you visit, check the Office Locator on IRS. Where to send 1040x gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Where to send 1040x If you have a special need, such as a disability, you can request an appointment. Where to send 1040x Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Where to send 1040x Apply for an Employer Identification Number (EIN). Where to send 1040x Go to IRS. Where to send 1040x gov and enter Apply for an EIN in the search box. Where to send 1040x Read the Internal Revenue Code, regulations, or other official guidance. Where to send 1040x Read Internal Revenue Bulletins. Where to send 1040x Sign up to receive local and national tax news and more by email. Where to send 1040x Just click on “subscriptions” above the search box on IRS. Where to send 1040x gov and choose from a variety of options. Where to send 1040x Phone. Where to send 1040x    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Where to send 1040x Download the free IRS2Go app from the iTunes app store or from Google Play. Where to send 1040x Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Where to send 1040x gov, or download the IRS2Go app. Where to send 1040x Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Where to send 1040x The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Where to send 1040x Most VITA and TCE sites offer free electronic filing. Where to send 1040x Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Where to send 1040x Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Where to send 1040x Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Where to send 1040x If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Where to send 1040x The IRS issues more than 9 out of 10 refunds in less than 21 days. Where to send 1040x Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Where to send 1040x Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Where to send 1040x The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Where to send 1040x Note, the above information is for our automated hotline. Where to send 1040x Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Where to send 1040x Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Where to send 1040x You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Where to send 1040x It can take up to 3 weeks from the date you mailed it to show up in our system. Where to send 1040x Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Where to send 1040x You should receive your order within 10 business days. Where to send 1040x Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Where to send 1040x If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Where to send 1040x Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Where to send 1040x The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Where to send 1040x These individuals can also contact the IRS through relay services such as the Federal Relay Service. Where to send 1040x Walk-in. Where to send 1040x   You can find a selection of forms, publications and services — in-person. Where to send 1040x Products. Where to send 1040x You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Where to send 1040x Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Where to send 1040x Services. Where to send 1040x You can walk in to your local TAC for face-to-face tax help. Where to send 1040x An employee can answer questions about your tax account or help you set up a payment plan. Where to send 1040x Before visiting, use the Office Locator tool on IRS. Where to send 1040x gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Where to send 1040x Mail. Where to send 1040x   You can send your order for forms, instructions, and publications to the address below. Where to send 1040x You should receive a response within 10 business days after your request is received. Where to send 1040x Internal Revenue Service 1201 N. Where to send 1040x Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Where to send 1040x The Taxpayer Advocate Service (TAS) is your voice at the IRS. Where to send 1040x Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Where to send 1040x   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Where to send 1040x We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Where to send 1040x You face (or your business is facing) an immediate threat of adverse action. Where to send 1040x You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Where to send 1040x   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Where to send 1040x Here's why we can help: TAS is an independent organization within the IRS. Where to send 1040x Our advocates know how to work with the IRS. Where to send 1040x Our services are free and tailored to meet your needs. Where to send 1040x We have offices in every state, the District of Columbia, and Puerto Rico. Where to send 1040x   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Where to send 1040x   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Where to send 1040x If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Where to send 1040x Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Where to send 1040x Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Where to send 1040x Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Where to send 1040x Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Tax Relief for Victims of Hurricane Irene in New Jersey

E-file to Remain Open for Hurricane Irene Victims through Oct. 31

Updated 9/7/11 to add the following counties: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Salem, Sussex, Union and Warren.

NJ-2011-42, Sept. 1, 2011

MOUNTAINSIDE, N.J. — Victims of Hurricane Irene that began on Aug. 27, 2011 in parts of New Jersey may qualify for tax relief from the Internal Revenue Service.

The President has declared the following counties a federal disaster area: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 27, and on or before Oct. 31, have been postponed to Oct. 31, 2011. This includes corporations and other businesses that previously obtained an extension until Sept. 15 to file their 2010 returns, and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter, normally due Sept. 15.  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 27, and on or before Sept. 12, as long as the deposits are made by Sept. 12, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Oct. 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 27 and on or before Oct. 31.

The IRS also gives affected taxpayers until Oct. 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 27 and on or before Oct. 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 27 and on or before Sept. 12 provided the taxpayer makes these deposits by Sept. 12.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.
Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “New Jersey/Hurricane Irene” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 24-Mar-2014

The Where To Send 1040x

Where to send 1040x 1. Where to send 1040x   Deducting Business Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: What Can I Deduct?Cost of Goods Sold Capital Expenses Capital versus Deductible Expenses Personal versus Business Expenses How Much Can I Deduct?Not-for-profit limits. Where to send 1040x At-risk limits. Where to send 1040x Passive activities. Where to send 1040x Net operating loss. Where to send 1040x When Can I Deduct an Expense?Economic performance. Where to send 1040x Not-for-Profit ActivitiesGross Income Limit on Deductions What's New Optional safe harbor method to determine the business use of a home deduction. Where to send 1040x  Beginning in 2013, you can use the optional safe harbor method to determine the deduction for the business use of your home. Where to send 1040x See Optional safe harbor method under Business use of your home , later. Where to send 1040x Introduction This chapter covers the general rules for deducting business expenses. Where to send 1040x Business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit. Where to send 1040x Topics - This chapter discusses: What you can deduct How much you can deduct When you can deduct Not-for-profit activities Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 538 Accounting Periods and Methods 542 Corporations 547 Casualties, Disasters, and Thefts 587 Business Use of Your Home 925 Passive Activity and At-Risk Rules 936 Home Mortgage Interest Deduction 946 How To Depreciate Property Form (and Instructions) Sch A (Form 1040) Itemized Deductions 5213 Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit See chapter 12 for information about getting publications and forms. Where to send 1040x What Can I Deduct? To be deductible, a business expense must be both ordinary and necessary. Where to send 1040x An ordinary expense is one that is common and accepted in your industry. Where to send 1040x A necessary expense is one that is helpful and appropriate for your trade or business. Where to send 1040x An expense does not have to be indispensable to be considered necessary. Where to send 1040x Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year you paid or incurred it. Where to send 1040x In some cases you may not be allowed to deduct the expense at all. Where to send 1040x Therefore, it is important to distinguish usual business expenses from expenses that include the following. Where to send 1040x The expenses used to figure cost of goods sold, Capital expenses, and Personal expenses. Where to send 1040x Cost of Goods Sold If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Where to send 1040x Some of your business expenses may be included in figuring cost of goods sold. Where to send 1040x Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. Where to send 1040x If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense. Where to send 1040x The following are types of expenses that go into figuring cost of goods sold. Where to send 1040x The cost of products or raw materials, including freight. Where to send 1040x Storage. Where to send 1040x Direct labor (including contributions to pension or annuity plans) for workers who produce the products. Where to send 1040x Factory overhead. Where to send 1040x Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Where to send 1040x Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs. Where to send 1040x This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million. Where to send 1040x For more information, see the following sources. Where to send 1040x Cost of goods sold—chapter 6 of Publication 334. Where to send 1040x Inventories—Publication 538. Where to send 1040x Uniform capitalization rules—Publication 538 and section 263A of the Internal Revenue Code and the related regulations. Where to send 1040x Capital Expenses You must capitalize, rather than deduct, some costs. Where to send 1040x These costs are a part of your investment in your business and are called “capital expenses. Where to send 1040x ” Capital expenses are considered assets in your business. Where to send 1040x In general, you capitalize three types of costs. Where to send 1040x Business start-up costs (See Tip below). Where to send 1040x Business assets. Where to send 1040x Improvements. Where to send 1040x You can elect to deduct or amortize certain business start-up costs. Where to send 1040x See chapters 7 and 8. Where to send 1040x Cost recovery. Where to send 1040x   Although you generally cannot take a current deduction for a capital expense, you may be able to recover the amount you spend through depreciation, amortization, or depletion. Where to send 1040x These recovery methods allow you to deduct part of your cost each year. Where to send 1040x In this way, you are able to recover your capital expense. Where to send 1040x See Amortization (chapter 8) and Depletion (chapter 9) in this publication. Where to send 1040x A taxpayer can elect to deduct a portion of the costs of certain depreciable property as a section 179 deduction. Where to send 1040x A greater portion of these costs can be deducted if the property is qualified disaster assistance property. Where to send 1040x See Publication 946 for details. Where to send 1040x Going Into Business The costs of getting started in business, before you actually begin business operations, are capital expenses. Where to send 1040x These costs may include expenses for advertising, travel, or wages for training employees. Where to send 1040x If you go into business. Where to send 1040x   When you go into business, treat all costs you had to get your business started as capital expenses. Where to send 1040x   Usually you recover costs for a particular asset through depreciation. Where to send 1040x Generally, you cannot recover other costs until you sell the business or otherwise go out of business. Where to send 1040x However, you can choose to amortize certain costs for setting up your business. Where to send 1040x See Starting a Business in chapter 8 for more information on business start-up costs. Where to send 1040x If your attempt to go into business is unsuccessful. Where to send 1040x   If you are an individual and your attempt to go into business is not successful, the expenses you had in trying to establish yourself in business fall into two categories. Where to send 1040x The costs you had before making a decision to acquire or begin a specific business. Where to send 1040x These costs are personal and nondeductible. Where to send 1040x They include any costs incurred during a general search for, or preliminary investigation of, a business or investment possibility. Where to send 1040x The costs you had in your attempt to acquire or begin a specific business. Where to send 1040x These costs are capital expenses and you can deduct them as a capital loss. Where to send 1040x   If you are a corporation and your attempt to go into a new trade or business is not successful, you may be able to deduct all investigatory costs as a loss. Where to send 1040x   The costs of any assets acquired during your unsuccessful attempt to go into business are a part of your basis in the assets. Where to send 1040x You cannot take a deduction for these costs. Where to send 1040x You will recover the costs of these assets when you dispose of them. Where to send 1040x Business Assets There are many different kinds of business assets; for example, land, buildings, machinery, furniture, trucks, patents, and franchise rights. Where to send 1040x You must fully capitalize the cost of these assets, including freight and installation charges. Where to send 1040x Certain property you produce for use in your trade or business must be capitalized under the uniform capitalization rules. Where to send 1040x See Regulations section 1. Where to send 1040x 263A-2 for information on these rules. Where to send 1040x Improvements Improvements are generally major expenditures. Where to send 1040x Some examples are: new electric wiring, a new roof, a new floor, new plumbing, bricking up windows to strengthen a wall, and lighting improvements. Where to send 1040x The costs of making improvements to a business asset are capital expenses if the improvements add to the value of the asset, appreciably lengthen the time you can use it, or adapt it to a different use. Where to send 1040x Beginning in 2014, you must capitalize as improvements costs that are for the betterment of a unit of property, restore the unit of property, or adapt the unit of property to a new or different use. Where to send 1040x Temporary regulations allow you to capitalize costs meeting the above criteria for tax years beginning after 2011. Where to send 1040x However, you can currently deduct repairs that keep your property in a normal efficient operating condition as a business expense. Where to send 1040x Treat as repairs amounts paid to replace parts of a machine that only keep it in a normal operating condition. Where to send 1040x Restoration plan. Where to send 1040x   Capitalize the cost of reconditioning, improving, or altering your property as part of a general restoration plan to make it suitable for your business. Where to send 1040x This applies even if some of the work would by itself be classified as repairs. Where to send 1040x Capital versus Deductible Expenses To help you distinguish between capital and deductible expenses, different examples are given below. Where to send 1040x Motor vehicles. Where to send 1040x   You usually capitalize the cost of a motor vehicle you use in your business. Where to send 1040x You can recover its cost through annual deductions for depreciation. Where to send 1040x   There are dollar limits on the depreciation you can claim each year on passenger automobiles used in your business. Where to send 1040x See Publication 463. Where to send 1040x   Generally, repairs you make to your business vehicle are currently deductible. Where to send 1040x However, amounts you pay to recondition and overhaul a business vehicle are capital expenses and are recovered through depreciation. Where to send 1040x Roads and driveways. Where to send 1040x    The cost of building a private road on your business property and the cost of replacing a gravel driveway with a concrete one are capital expenses you may be able to depreciate. Where to send 1040x The cost of maintaining a private road on your business property is a deductible expense. Where to send 1040x Tools. Where to send 1040x   Unless the uniform capitalization rules apply, amounts spent for tools used in your business are deductible expenses if the tools have a life expectancy of less than 1 year or their cost is minor. Where to send 1040x Machinery parts. Where to send 1040x   Unless the uniform capitalization rules apply, the cost of replacing short-lived parts of a machine to keep it in good working condition, but not add to its life, is a deductible expense. Where to send 1040x Heating equipment. Where to send 1040x   The cost of changing from one heating system to another is a capital expense. Where to send 1040x Personal versus Business Expenses Generally, you cannot deduct personal, living, or family expenses. Where to send 1040x However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. Where to send 1040x You can deduct the business part. Where to send 1040x For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you generally can deduct 70% of the interest as a business expense. Where to send 1040x The remaining 30% is personal interest and generally is not deductible. Where to send 1040x See chapter 4 for information on deducting interest and the allocation rules. Where to send 1040x Business use of your home. Where to send 1040x   If you use part of your home for business, you may be able to deduct expenses for the business use of your home. Where to send 1040x These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Where to send 1040x   To qualify to claim expenses for the business use of your home, you must meet both of the following tests. Where to send 1040x The business part of your home must be used exclusively and regularly for your trade or business. Where to send 1040x The business part of your home must be: Your principal place of business, or A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) used in connection with your trade or business. Where to send 1040x   You generally do not have to meet the exclusive use test for the part of your home that you regularly use either for the storage of inventory or product samples, or as a daycare facility. Where to send 1040x   Your home office qualifies as your principal place of business if you meet the following requirements. Where to send 1040x You use the office exclusively and regularly for administrative or management activities of your trade or business. Where to send 1040x You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Where to send 1040x   If you have more than one business location, determine your principal place of business based on the following factors. Where to send 1040x The relative importance of the activities performed at each location. Where to send 1040x If the relative importance factor does not determine your principal place of business, consider the time spent at each location. Where to send 1040x Optional safe harbor method. Where to send 1040x   Beginning in 2013, individual taxpayers can use the optional safe harbor method to determine the amount of deductible expenses attributable to certain business use of a residence during the tax year. Where to send 1040x This method is an alternative to the calculation, allocation, and substantiation of actual expenses. Where to send 1040x   The deduction under the optional method is limited to $1,500 per year based on $5 a square foot for up to 300 square feet. Where to send 1040x Under this method, you claim your allowable mortgage interest, real estate taxes, and casualty losses on the home as itemized deductions on Schedule A (Form 1040). Where to send 1040x You are not required to allocate these deductions between personal and business use, as is required under the regular method. Where to send 1040x If you use the optional method, you cannot depreciate the portion of your home used in a trade or business. Where to send 1040x   Business expenses unrelated to the home, such as advertising, supplies, and wages paid to employees, are still fully deductible. Where to send 1040x All of the requirements discussed earlier under Business use of your home still apply. Where to send 1040x   For more information on the deduction for business use of your home, including the optional safe harbor method, see Publication 587. Where to send 1040x    If you were entitled to deduct depreciation on the part of your home used for business, you cannot exclude the part of the gain from the sale of your home that equals any depreciation you deducted (or could have deducted) for periods after May 6, 1997. Where to send 1040x Business use of your car. Where to send 1040x   If you use your car exclusively in your business, you can deduct car expenses. Where to send 1040x If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Where to send 1040x Generally, commuting expenses between your home and your business location, within the area of your tax home, are not deductible. Where to send 1040x   You can deduct actual car expenses, which include depreciation (or lease payments), gas and oil, tires, repairs, tune-ups, insurance, and registration fees. Where to send 1040x Or, instead of figuring the business part of these actual expenses, you may be able to use the standard mileage rate to figure your deduction. Where to send 1040x Beginning in 2013, the standard mileage rate is 56. Where to send 1040x 5 cents per mile. Where to send 1040x   If you are self-employed, you can also deduct the business part of interest on your car loan, state and local personal property tax on the car, parking fees, and tolls, whether or not you claim the standard mileage rate. Where to send 1040x   For more information on car expenses and the rules for using the standard mileage rate, see Publication 463. Where to send 1040x How Much Can I Deduct? Generally, you can deduct the full amount of a business expense if it meets the criteria of ordinary and necessary and it is not a capital expense. Where to send 1040x Recovery of amount deducted (tax benefit rule). Where to send 1040x   If you recover part of an expense in the same tax year in which you would have claimed a deduction, reduce your current year expense by the amount of the recovery. Where to send 1040x If you have a recovery in a later year, include the recovered amount in income in that year. Where to send 1040x However, if part of the deduction for the expense did not reduce your tax, you do not have to include that part of the recovered amount in income. Where to send 1040x   For more information on recoveries and the tax benefit rule, see Publication 525. Where to send 1040x Payments in kind. Where to send 1040x   If you provide services to pay a business expense, the amount you can deduct is limited to your out-of-pocket costs. Where to send 1040x You cannot deduct the cost of your own labor. Where to send 1040x   Similarly, if you pay a business expense in goods or other property, you can deduct only what the property costs you. Where to send 1040x If these costs are included in the cost of goods sold, do not deduct them again as a business expense. Where to send 1040x Limits on losses. Where to send 1040x   If your deductions for an investment or business activity are more than the income it brings in, you have a loss. Where to send 1040x There may be limits on how much of the loss you can deduct. Where to send 1040x Not-for-profit limits. Where to send 1040x   If you carry on your business activity without the intention of making a profit, you cannot use a loss from it to offset other income. Where to send 1040x See Not-for-Profit Activities , later. Where to send 1040x At-risk limits. Where to send 1040x   Generally, a deductible loss from a trade or business or other income-producing activity is limited to the investment you have “at risk” in the activity. Where to send 1040x You are at risk in any activity for the following. Where to send 1040x The money and adjusted basis of property you contribute to the activity. Where to send 1040x Amounts you borrow for use in the activity if: You are personally liable for repayment, or You pledge property (other than property used in the activity) as security for the loan. Where to send 1040x For more information, see Publication 925. Where to send 1040x Passive activities. Where to send 1040x   Generally, you are in a passive activity if you have a trade or business activity in which you do not materially participate, or a rental activity. Where to send 1040x In general, deductions for losses from passive activities only offset income from passive activities. Where to send 1040x You cannot use any excess deductions to offset other income. Where to send 1040x In addition, passive activity credits can only offset the tax on net passive income. Where to send 1040x Any excess loss or credits are carried over to later years. Where to send 1040x Suspended passive losses are fully deductible in the year you completely dispose of the activity. Where to send 1040x For more information, see Publication 925. Where to send 1040x Net operating loss. Where to send 1040x   If your deductions are more than your income for the year, you may have a “net operating loss. Where to send 1040x ” You can use a net operating loss to lower your taxes in other years. Where to send 1040x See Publication 536 for more information. Where to send 1040x   See Publication 542 for information about net operating losses of corporations. Where to send 1040x When Can I Deduct an Expense? When you can deduct an expense depends on your accounting method. Where to send 1040x An accounting method is a set of rules used to determine when and how income and expenses are reported. Where to send 1040x The two basic methods are the cash method and the accrual method. Where to send 1040x Whichever method you choose must clearly reflect income. Where to send 1040x For more information on accounting methods, see Publication 538. Where to send 1040x Cash method. Where to send 1040x   Under the cash method of accounting, you generally deduct business expenses in the tax year you pay them. Where to send 1040x Accrual method. Where to send 1040x   Under an accrual method of accounting, you generally deduct business expenses when both of the following apply. Where to send 1040x The all-events test has been met. Where to send 1040x The test is met when: All events have occurred that fix the fact of liability, and The liability can be determined with reasonable accuracy. Where to send 1040x Economic performance has occurred. Where to send 1040x Economic performance. Where to send 1040x   You generally cannot deduct or capitalize a business expense until economic performance occurs. Where to send 1040x If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided, or the property is used. Where to send 1040x If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. Where to send 1040x Example. Where to send 1040x Your tax year is the calendar year. Where to send 1040x In December 2013, the Field Plumbing Company did some repair work at your place of business and sent you a bill for $600. Where to send 1040x You paid it by check in January 2014. Where to send 1040x If you use the accrual method of accounting, deduct the $600 on your tax return for 2013 because all events have occurred to “fix” the fact of liability (in this case the work was completed), the liability can be determined, and economic performance occurred in that year. Where to send 1040x If you use the cash method of accounting, deduct the expense on your 2014 return. Where to send 1040x Prepayment. Where to send 1040x   You generally cannot deduct expenses in advance, even if you pay them in advance. Where to send 1040x This rule applies to both the cash and accrual methods. Where to send 1040x It applies to prepaid interest, prepaid insurance premiums, and any other expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Where to send 1040x Example. Where to send 1040x In 2013, you sign a 10-year lease and immediately pay your rent for the first 3 years. Where to send 1040x Even though you paid the rent for 2013, 2014, and 2015, you can only deduct the rent for 2013 on your 2013 tax return. Where to send 1040x You can deduct the rent for 2014 and 2015 on your tax returns for those years. Where to send 1040x Contested liability. Where to send 1040x   Under the cash method, you can deduct a contested liability only in the year you pay the liability. Where to send 1040x Under the accrual method, you can deduct contested liabilities such as taxes (except foreign or U. Where to send 1040x S. Where to send 1040x possession income, war profits, and excess profits taxes) either in the tax year you pay the liability (or transfer money or other property to satisfy the obligation) or in the tax year you settle the contest. Where to send 1040x However, to take the deduction in the year of payment or transfer, you must meet certain conditions. Where to send 1040x See Regulations section 1. Where to send 1040x 461-2. Where to send 1040x Related person. Where to send 1040x   Under an accrual method of accounting, you generally deduct expenses when you incur them, even if you have not yet paid them. Where to send 1040x However, if you and the person you owe are related and that person uses the cash method of accounting, you must pay the expense before you can deduct it. Where to send 1040x Your deduction is allowed when the amount is includible in income by the related cash method payee. Where to send 1040x See Related Persons in Publication 538. Where to send 1040x Not-for-Profit Activities If you do not carry on your business or investment activity to make a profit, you cannot use a loss from the activity to offset other income. Where to send 1040x Activities you do as a hobby, or mainly for sport or recreation, are often not entered into for profit. Where to send 1040x The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. Where to send 1040x It does not apply to corporations other than S corporations. Where to send 1040x In determining whether you are carrying on an activity for profit, several factors are taken into account. Where to send 1040x No one factor alone is decisive. Where to send 1040x Among the factors to consider are whether: You carry on the activity in a businesslike manner, The time and effort you put into the activity indicate you intend to make it profitable, You depend on the income for your livelihood, Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), You change your methods of operation in an attempt to improve profitability, You (or your advisors) have the knowledge needed to carry on the activity as a successful business, You were successful in making a profit in similar activities in the past, The activity makes a profit in some years, and You can expect to make a future profit from the appreciation of the assets used in the activity. Where to send 1040x Presumption of profit. Where to send 1040x   An activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. Where to send 1040x Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. Where to send 1040x The activity must be substantially the same for each year within this period. Where to send 1040x You have a profit when the gross income from an activity exceeds the deductions. Where to send 1040x   If a taxpayer dies before the end of the 5-year (or 7-year) period, the “test” period ends on the date of the taxpayer's death. Where to send 1040x   If your business or investment activity passes this 3- (or 2-) years-of-profit test, the IRS will presume it is carried on for profit. Where to send 1040x This means the limits discussed here will not apply. Where to send 1040x You can take all your business deductions from the activity, even for the years that you have a loss. Where to send 1040x You can rely on this presumption unless the IRS later shows it to be invalid. Where to send 1040x Using the presumption later. Where to send 1040x   If you are starting an activity and do not have 3 (or 2) years showing a profit, you can elect to have the presumption made after you have the 5 (or 7) years of experience allowed by the test. Where to send 1040x   You can elect to do this by filing Form 5213. Where to send 1040x Filing this form postpones any determination that your activity is not carried on for profit until 5 (or 7) years have passed since you started the activity. Where to send 1040x   The benefit gained by making this election is that the IRS will not immediately question whether your activity is engaged in for profit. Where to send 1040x Accordingly, it will not restrict your deductions. Where to send 1040x Rather, you will gain time to earn a profit in the required number of years. Where to send 1040x If you show 3 (or 2) years of profit at the end of this period, your deductions are not limited under these rules. Where to send 1040x If you do not have 3 (or 2) years of profit, the limit can be applied retroactively to any year with a loss in the 5-year (or 7-year) period. Where to send 1040x   Filing Form 5213 automatically extends the period of limitations on any year in the 5-year (or 7-year) period to 2 years after the due date of the return for the last year of the period. Where to send 1040x The period is extended only for deductions of the activity and any related deductions that might be affected. Where to send 1040x    You must file Form 5213 within 3 years after the due date of your return (determined without extensions) for the year in which you first carried on the activity, or, if earlier, within 60 days after receiving written notice from the Internal Revenue Service proposing to disallow deductions attributable to the activity. Where to send 1040x Gross Income Gross income from a not-for-profit activity includes the total of all gains from the sale, exchange, or other disposition of property, and all other gross receipts derived from the activity. Where to send 1040x Gross income from the activity also includes capital gains and rents received for the use of property which is held in connection with the activity. Where to send 1040x You can determine gross income from any not-for-profit activity by subtracting the cost of goods sold from your gross receipts. Where to send 1040x However, if you determine gross income by subtracting cost of goods sold from gross receipts, you must do so consistently, and in a manner that follows generally accepted methods of accounting. Where to send 1040x Limit on Deductions If your activity is not carried on for profit, take deductions in the following order and only to the extent stated in the three categories. Where to send 1040x If you are an individual, these deductions may be taken only if you itemize. Where to send 1040x These deductions may be taken on Schedule A (Form 1040). Where to send 1040x Category 1. Where to send 1040x   Deductions you can take for personal as well as for business activities are allowed in full. Where to send 1040x For individuals, all nonbusiness deductions, such as those for home mortgage interest, taxes, and casualty losses, belong in this category. Where to send 1040x Deduct them on the appropriate lines of Schedule A (Form 1040). Where to send 1040x For tax years beginning after December 31, 2008, you can deduct a casualty loss on property you own for personal use only to the extent it is more than $500 and exceeds 10% of your adjusted gross income (AGI). Where to send 1040x The 10% AGI limitation does not apply to net disaster losses resulting from federally declared disasters in 2008 and 2009, and individuals are allowed to claim the net disaster losses even if they do not itemize their deductions. Where to send 1040x The reduction amount returns to $100 for tax years beginning after December 31, 2009. Where to send 1040x See Publication 547 for more information on casualty losses. Where to send 1040x For the limits that apply to home mortgage interest, see Publication 936. Where to send 1040x Category 2. Where to send 1040x   Deductions that do not result in an adjustment to the basis of property are allowed next, but only to the extent your gross income from the activity is more than your deductions under the first category. Where to send 1040x Most business deductions, such as those for advertising, insurance premiums, interest, utilities, and wages, belong in this category. Where to send 1040x Category 3. Where to send 1040x   Business deductions that decrease the basis of property are allowed last, but only to the extent the gross income from the activity exceeds the deductions you take under the first two categories. Where to send 1040x Deductions for depreciation, amortization, and the part of a casualty loss an individual could not deduct in category (1) belong in this category. Where to send 1040x Where more than one asset is involved, allocate depreciation and these other deductions proportionally. Where to send 1040x    Individuals must claim the amounts in categories (2) and (3) as miscellaneous deductions on Schedule A (Form 1040). Where to send 1040x They are subject to the 2%-of-adjusted-gross-income limit. Where to send 1040x See Publication 529 for information on this limit. Where to send 1040x Example. Where to send 1040x Adriana is engaged in a not-for-profit activity. Where to send 1040x The income and expenses of the activity are as follows. Where to send 1040x Gross income $3,200 Subtract:     Real estate taxes $700   Home mortgage interest 900   Insurance 400   Utilities 700   Maintenance 200   Depreciation on an automobile 600   Depreciation on a machine 200 3,700 Loss $(500)   Adriana must limit her deductions to $3,200, the gross income she earned from the activity. Where to send 1040x The limit is reached in category (3), as follows. Where to send 1040x Limit on deduction $3,200 Category 1: Taxes and interest $1,600   Category 2: Insurance, utilities, and maintenance 1,300 2,900 Available for Category 3 $ 300   The $800 of depreciation is allocated between the automobile and machine as follows. Where to send 1040x $600 $800 x $300 = $225 depreciation for the automobile             $200 $800 x $300 = $75 depreciation for the machine The basis of each asset is reduced accordingly. Where to send 1040x Adriana includes the $3,200 of gross income on line 21 (other income) of Form 1040. Where to send 1040x The $1,600 for category (1) is deductible in full on the appropriate lines for taxes and interest on Schedule A (Form 1040). Where to send 1040x Adriana deducts the remaining $1,600 ($1,300 for category (2) and $300 for category (3)) as other miscellaneous deductions on Schedule A (Form 1040) subject to the 2%-of-adjusted-gross-income limit. Where to send 1040x Partnerships and S corporations. Where to send 1040x   If a partnership or S corporation carries on a not-for-profit activity, these limits apply at the partnership or S corporation level. Where to send 1040x They are reflected in the individual shareholder's or partner's distributive shares. Where to send 1040x More than one activity. Where to send 1040x   If you have several undertakings, each may be a separate activity or several undertakings may be combined. Where to send 1040x The following are the most significant facts and circumstances in making this determination. Where to send 1040x The degree of organizational and economic interrelationship of various undertakings. Where to send 1040x The business purpose that is (or might be) served by carrying on the various undertakings separately or together in a business or investment setting. Where to send 1040x The similarity of the undertakings. Where to send 1040x   The IRS will generally accept your characterization if it is supported by facts and circumstances. Where to send 1040x    If you are carrying on two or more different activities, keep the deductions and income from each one separate. Where to send 1040x Figure separately whether each is a not-for-profit activity. Where to send 1040x Then figure the limit on deductions and losses separately for each activity that is not for profit. Where to send 1040x Prev  Up  Next   Home   More Online Publications