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1040ez Form Free File

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1040ez Form Free File

1040ez form free file 5. 1040ez form free file   Additional Rules for Listed Property Table of Contents Introduction Useful Items - You may want to see: What Is Listed Property?Passenger Automobiles Other Property Used for Transportation Computers and Related Peripheral Equipment Can Employees Claim a Deduction? What Is the Business-Use Requirement?How To Allocate Use Qualified Business Use Recapture of Excess Depreciation Lessee's Inclusion Amount Do the Passenger Automobile Limits Apply?Maximum Depreciation Deduction Deductions After the Recovery Period Deductions For Passenger Automobiles Acquired in a Trade-in What Records Must Be Kept?Adequate Records How Is Listed Property Information Reported? Introduction This chapter discusses the deduction limits and other special rules that apply to certain listed property. 1040ez form free file Listed property includes cars and other property used for transportation, property used for entertainment, and certain computers. 1040ez form free file Deductions for listed property (other than certain leased property) are subject to the following special rules and limits. 1040ez form free file Deduction for employees. 1040ez form free file If your use of the property is not for your employer's convenience or is not required as a condition of your employment, you cannot deduct depreciation or rent expenses for your use of the property as an employee. 1040ez form free file Business-use requirement. 1040ez form free file If the property is not used predominantly (more than 50%) for qualified business use, you cannot claim the section 179 deduction or a special depreciation allowance. 1040ez form free file In addition, you must figure any depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS) using the straight line method over the ADS recovery period. 1040ez form free file You may also have to recapture (include in income) any excess depreciation claimed in previous years. 1040ez form free file A similar inclusion amount applies to certain leased property. 1040ez form free file Passenger automobile limits and rules. 1040ez form free file Annual limits apply to depreciation deductions (including section 179 deductions and any special depreciation allowance) for certain passenger automobiles. 1040ez form free file You can continue to deduct depreciation for the unrecovered basis resulting from these limits after the end of the recovery period. 1040ez form free file This chapter defines listed property and explains the special rules and depreciation deduction limits that apply, including the special inclusion amount rule for leased property. 1040ez form free file It also discusses the recordkeeping rules for listed property and explains how to report information about the property on your tax return. 1040ez form free file Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 6 for information about getting publications and forms. 1040ez form free file What Is Listed Property? Listed property is any of the following. 1040ez form free file Passenger automobiles (as defined later). 1040ez form free file Any other property used for transportation, unless it is an excepted vehicle. 1040ez form free file Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video-recording equipment). 1040ez form free file Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the establishment. 1040ez form free file A regular business establishment includes a portion of a dwelling unit that is used both regularly and exclusively for business as discussed in Publication 587. 1040ez form free file Improvements to listed property. 1040ez form free file   An improvement made to listed property that must be capitalized is treated as a new item of depreciable property. 1040ez form free file The recovery period and method of depreciation that apply to the listed property as a whole also apply to the improvement. 1040ez form free file For example, if you must depreciate the listed property using the straight line method, you also must depreciate the improvement using the straight line method. 1040ez form free file Passenger Automobiles A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (6,000 pounds or less of gross vehicle weight for trucks and vans). 1040ez form free file It includes any part, component, or other item physically attached to the automobile at the time of purchase or usually included in the purchase price of an automobile. 1040ez form free file The following vehicles are not considered passenger automobiles for these purposes. 1040ez form free file An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business. 1040ez form free file A vehicle used directly in the trade or business of transporting persons or property for pay or hire. 1040ez form free file A truck or van that is a qualified nonpersonal use vehicle. 1040ez form free file Qualified nonpersonal use vehicles. 1040ez form free file   Qualified nonpersonal use vehicles are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. 1040ez form free file They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation , next. 1040ez form free file They also include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name. 1040ez form free file For a detailed discussion of passenger automobiles, including leased passenger automobiles, see  Publication 463. 1040ez form free file Other Property Used for Transportation Although vehicles used to transport persons or property for pay or hire and vehicles rated at more than the 6,000-pound threshold are not passenger automobiles, they are still “other property used for transportation” and are subject to the special rules for listed property. 1040ez form free file Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods. 1040ez form free file Excepted vehicles. 1040ez form free file   Other property used for transportation does not include the following qualified nonpersonal use vehicles (defined earlier under Passenger Automobiles ). 1040ez form free file Clearly marked police and fire vehicles. 1040ez form free file Unmarked vehicles used by law enforcement officers if the use is officially authorized. 1040ez form free file Ambulances used as such and hearses used as such. 1040ez form free file Any vehicle with a loaded gross vehicle weight of over 14,000 pounds that is designed to carry cargo. 1040ez form free file Bucket trucks (cherry pickers), cement mixers, dump trucks (including garbage trucks), flatbed trucks, and refrigerated trucks. 1040ez form free file Combines, cranes and derricks, and forklifts. 1040ez form free file Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat. 1040ez form free file Qualified moving vans. 1040ez form free file Qualified specialized utility repair trucks. 1040ez form free file School buses used in transporting students and employees of schools. 1040ez form free file Other buses with a capacity of at least 20 passengers that are used as passenger buses. 1040ez form free file Tractors and other special purpose farm vehicles. 1040ez form free file Clearly marked police and fire vehicle. 1040ez form free file   A clearly marked police or fire vehicle is a vehicle that meets all the following requirements. 1040ez form free file It is owned or leased by a governmental unit or an agency or instrumentality of a governmental unit. 1040ez form free file It is required to be used for commuting by a police officer or fire fighter who, when not on a regular shift, is on call at all times. 1040ez form free file It is prohibited from being used for personal use (other than commuting) outside the limit of the police officer's arrest powers or the fire fighter's obligation to respond to an emergency. 1040ez form free file It is clearly marked with painted insignia or words that make it readily apparent that it is a police or fire vehicle. 1040ez form free file A marking on a license plate is not a clear marking for these purposes. 1040ez form free file Qualified moving van. 1040ez form free file   A qualified moving van is any truck or van used by a professional moving company for moving household or business goods if the following requirements are met. 1040ez form free file No personal use of the van is allowed other than for travel to and from a move site or for minor personal use, such as a stop for lunch on the way from one move site to another. 1040ez form free file Personal use for travel to and from a move site happens no more than five times a month on average. 1040ez form free file Personal use is limited to situations in which it is more convenient to the employer, because of the location of the employee's residence in relation to the location of the move site, for the van not to be returned to the employer's business location. 1040ez form free file Qualified specialized utility repair truck. 1040ez form free file   A truck is a qualified specialized utility repair truck if it is not a van or pickup truck and all the following apply. 1040ez form free file The truck was specifically designed for and is used to carry heavy tools, testing equipment, or parts. 1040ez form free file Shelves, racks, or other permanent interior construction has been installed to carry and store the tools, equipment, or parts and would make it unlikely that the truck would be used, other than minimally, for personal purposes. 1040ez form free file The employer requires the employee to drive the truck home in order to be able to respond in emergency situations for purposes of restoring or maintaining electricity, gas, telephone, water, sewer, or steam utility services. 1040ez form free file Computers and Related Peripheral Equipment A computer is a programmable, electronically activated device capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention. 1040ez form free file It consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. 1040ez form free file Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. 1040ez form free file The following are neither computers nor related peripheral equipment. 1040ez form free file Any equipment that is an integral part of other property that is not a computer. 1040ez form free file Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment. 1040ez form free file Equipment of a kind used primarily for the user's amusement or entertainment, such as video games. 1040ez form free file Can Employees Claim a Deduction? If you are an employee, you can claim a depreciation deduction for the use of your listed property (whether owned or rented) in performing services as an employee only if your use is a business use. 1040ez form free file The use of your property in performing services as an employee is a business use only if both the following requirements are met. 1040ez form free file The use is for your employer's convenience. 1040ez form free file The use is required as a condition of your employment. 1040ez form free file If these requirements are not met, you cannot deduct depreciation (including the section 179 deduction) or rent expenses for your use of the property as an employee. 1040ez form free file Employer's convenience. 1040ez form free file   Whether the use of listed property is for your employer's convenience must be determined from all the facts. 1040ez form free file The use is for your employer's convenience if it is for a substantial business reason of the employer. 1040ez form free file The use of listed property during your regular working hours to carry on your employer's business generally is for the employer's convenience. 1040ez form free file Condition of employment. 1040ez form free file   Whether the use of listed property is a condition of your employment depends on all the facts and circumstances. 1040ez form free file The use of property must be required for you to perform your duties properly. 1040ez form free file Your employer does not have to require explicitly that you use the property. 1040ez form free file However, a mere statement by the employer that the use of the property is a condition of your employment is not sufficient. 1040ez form free file Example 1. 1040ez form free file Virginia Sycamore is employed as a courier with We Deliver, which provides local courier services. 1040ez form free file She owns and uses a motorcycle to deliver packages to downtown offices. 1040ez form free file We Deliver explicitly requires all delivery persons to own a car or motorcycle for use in their employment. 1040ez form free file Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. 1040ez form free file Example 2. 1040ez form free file Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. 1040ez form free file He must travel to these sites on a regular basis. 1040ez form free file Uplift does not furnish an automobile or explicitly require him to use his own automobile. 1040ez form free file However, it pays him for any costs he incurs in traveling to the various sites. 1040ez form free file The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. 1040ez form free file Example 3. 1040ez form free file Assume the same facts as in Example 2 except that Uplift furnishes a car to Bill, who chooses to use his own car and receive payment for using it. 1040ez form free file The use of his own car is neither for the convenience of Uplift nor required as a condition of employment. 1040ez form free file Example 4. 1040ez form free file Marilyn Lee is a pilot for Y Company, a small charter airline. 1040ez form free file Y requires pilots to obtain 80 hours of flight time annually in addition to flight time spent with the airline. 1040ez form free file Pilots usually can obtain these hours by flying with the Air Force Reserve or by flying part-time with another airline. 1040ez form free file Marilyn owns her own airplane. 1040ez form free file The use of her airplane to obtain the required flight hours is neither for the convenience of the employer nor required as a condition of employment. 1040ez form free file Example 5. 1040ez form free file David Rule is employed as an engineer with Zip, an engineering contracting firm. 1040ez form free file He occasionally takes work home at night rather than work late in the office. 1040ez form free file He owns and uses a home computer which is virtually identical to the office model. 1040ez form free file His use of the computer is neither for the convenience of his employer nor required as a condition of employment. 1040ez form free file What Is the Business-Use Requirement? You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciate listed property using GDS and a declining balance method if the property meets the business-use requirement. 1040ez form free file To meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified business use. 1040ez form free file If this requirement is not met, the following rules apply. 1040ez form free file Property not used predominantly for qualified business use during the year it is placed in service does not qualify for the section 179 deduction. 1040ez form free file Property not used predominantly for qualified business use during the year it is placed in service does not qualify for a special depreciation allowance. 1040ez form free file Any depreciation deduction under MACRS for property not used predominantly for qualified business use during any year must be figured using the straight line method over the ADS recovery period. 1040ez form free file This rule applies each year of the recovery period. 1040ez form free file Excess depreciation on property previously used predominantly for qualified business use must be recaptured (included in income) in the first year in which it is no longer used predominantly for qualified business use. 1040ez form free file A lessee must add an inclusion amount to income in the first year in which the leased property is not used predominantly for qualified business use. 1040ez form free file Being required to use the straight line method for an item of listed property not used predominantly for qualified business use is not the same as electing the straight line method. 1040ez form free file It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. 1040ez form free file Exception for leased property. 1040ez form free file   The business-use requirement generally does not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. 1040ez form free file   You are considered regularly engaged in the business of leasing listed property only if you enter into contracts for the leasing of listed property with some frequency over a continuous period of time. 1040ez form free file This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of your business in its entirety. 1040ez form free file Occasional or incidental leasing activity is insufficient. 1040ez form free file For example, if you lease only one passenger automobile during a tax year, you are not regularly engaged in the business of leasing automobiles. 1040ez form free file An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. 1040ez form free file How To Allocate Use To determine whether the business-use requirement is met, you must allocate the use of any item of listed property used for more than one purpose during the year among its various uses. 1040ez form free file For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. 1040ez form free file You determine the percentage of qualified business use by dividing the number of miles you drove the vehicle for business purposes during the year by the total number of miles you drove the vehicle for all purposes (including business miles) during the year. 1040ez form free file For other listed property, allocate the property's use on the basis of the most appropriate unit of time the property is actually used (rather than merely being available for use). 1040ez form free file For example, you can determine the percentage of business use of a computer by dividing the number of hours you used the computer for business purposes during the year by the total number of hours you used the computer for all purposes (including business use) during the year. 1040ez form free file Entertainment use. 1040ez form free file   Treat the use of listed property for entertainment, recreation, or amusement purposes as a business use only to the extent you can deduct expenses (other than interest and property tax expenses) due to its use as an ordinary and necessary business expense. 1040ez form free file Commuting use. 1040ez form free file   The use of an automobile for commuting is not business use, regardless of whether work is performed during the trip. 1040ez form free file For example, a business telephone call made on a car telephone while commuting to work does not change the character of the trip from commuting to business. 1040ez form free file This is also true for a business meeting held in a car while commuting to work. 1040ez form free file Similarly, a business call made on an otherwise personal trip does not change the character of a trip from personal to business. 1040ez form free file The fact that an automobile is used to display material that advertises the owner's or user's trade or business does not convert an otherwise personal use into business use. 1040ez form free file Use of your automobile by another person. 1040ez form free file   If someone else uses your automobile, do not treat that use as business use unless one of the following conditions applies. 1040ez form free file That use is directly connected with your business. 1040ez form free file You properly report the value of the use as income to the other person and withhold tax on the income where required. 1040ez form free file You are paid a fair market rent. 1040ez form free file Treat any payment to you for the use of the automobile as a rent payment for purposes of item (3). 1040ez form free file Employee deductions. 1040ez form free file   If you are an employee, do not treat your use of listed property as business use unless it is for your employer's convenience and is required as a condition of your employment. 1040ez form free file See Can Employees Claim a Deduction , earlier. 1040ez form free file Qualified Business Use Qualified business use of listed property is any use of the property in your trade or business. 1040ez form free file However, it does not include the following uses. 1040ez form free file The leasing of property to any 5% owner or related person (to the extent the property is used by a 5% owner or person related to the owner or lessee of the property). 1040ez form free file The use of property as pay for the services of a 5% owner or related person. 1040ez form free file The use of property as pay for services of any person (other than a 5% owner or related person), unless the value of the use is included in that person's gross income and income tax is withheld on that amount where required. 1040ez form free file Property does not stop being used predominantly for qualified business use because of a transfer at death. 1040ez form free file Exception for leasing or compensatory use of aircraft. 1040ez form free file   Treat the leasing of any aircraft by a 5% owner or related person, or the compensatory use of any aircraft, as a qualified business use if at least 25% of the total use of the aircraft during the year is for a qualified business use. 1040ez form free file 5% owner. 1040ez form free file   For a business entity that is not a corporation, a 5% owner is any person who owns more than 5% of the capital or profits interest in the business. 1040ez form free file   For a corporation, a 5% owner is any person who owns, or is considered to own, either of the following. 1040ez form free file More than 5% of the outstanding stock of the corporation. 1040ez form free file Stock possessing more than 5% of the total combined voting power of all stock in the corporation. 1040ez form free file Related persons. 1040ez form free file   For a description of related persons, see Related persons in the discussion on property owned or used in 1986 under What Method Can You Use To Depreciate Your Property in chapter 1 . 1040ez form free file For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. 1040ez form free file Examples. 1040ez form free file   The following examples illustrate whether the use of business property is qualified business use. 1040ez form free file Example 1. 1040ez form free file John Maple is the sole proprietor of a plumbing contracting business. 1040ez form free file John employs his brother, Richard, in the business. 1040ez form free file As part of Richard's pay, he is allowed to use one of the company automobiles for personal use. 1040ez form free file The company includes the value of the personal use of the automobile in Richard's gross income and properly withholds tax on it. 1040ez form free file The use of the automobile is pay for the performance of services by a related person, so it is not a qualified business use. 1040ez form free file Example 2. 1040ez form free file John, in Example 1, allows unrelated employees to use company automobiles for personal purposes. 1040ez form free file He does not include the value of the personal use of the company automobiles as part of their compensation and he does not withhold tax on the value of the use of the automobiles. 1040ez form free file This use of company automobiles by employees is not a qualified business use. 1040ez form free file Example 3. 1040ez form free file James Company Inc. 1040ez form free file owns several automobiles that its employees use for business purposes. 1040ez form free file The employees also are allowed to take the automobiles home at night. 1040ez form free file The fair market value of each employee's use of an automobile for any personal purpose, such as commuting to and from work, is reported as income to the employee and James Company withholds tax on it. 1040ez form free file This use of company automobiles by employees, even for personal purposes, is a qualified business use for the company. 1040ez form free file Investment Use The use of property to produce income in a nonbusiness activity (investment use) is not a qualified business use. 1040ez form free file However, you can treat the investment use as business use to figure the depreciation deduction for the property in a given year. 1040ez form free file Example 1. 1040ez form free file Sarah Bradley uses a home computer 50% of the time to manage her investments. 1040ez form free file She also uses the computer 40% of the time in her part-time consumer research business. 1040ez form free file Sarah's home computer is listed property because it is not used at a regular business establishment. 1040ez form free file She does not use the computer predominantly for qualified business use. 1040ez form free file Therefore, she cannot elect a section 179 deduction or claim a special depreciation allowance for the computer. 1040ez form free file She must depreciate it using the straight line method over the ADS recovery period. 1040ez form free file Her combined business/investment use for determining her depreciation deduction is 90%. 1040ez form free file Example 2. 1040ez form free file If Sarah uses her computer 30% of the time to manage her investments and 60% of the time in her consumer research business, it is used predominantly for qualified business use. 1040ez form free file She can elect a section 179 deduction and, if she does not deduct all the computer's cost, she can claim a special depreciation allowance and depreciate the computer using the 200% declining balance method over the GDS recovery period. 1040ez form free file Her combined business/investment use for determining her depreciation deduction is 90%. 1040ez form free file Recapture of Excess Depreciation If you used listed property more than 50% in a qualified business use in the year you placed it in service, you must recapture (include in income) excess depreciation in the first year you use it 50% or less. 1040ez form free file You also increase the adjusted basis of your property by the same amount. 1040ez form free file Excess depreciation is: The depreciation allowable for the property (including any section 179 deduction and special depreciation allowance claimed) for years before the first year you do not use the property predominantly for qualified business use, minus The depreciation that would have been allowable for those years if you had not used the property predominantly for qualified business use in the year you placed it in service. 1040ez form free file To determine the amount in (2) above, you must refigure the depreciation using the straight line method and the ADS recovery period. 1040ez form free file Example. 1040ez form free file In June 2009, Ellen Rye purchased and placed in service a pickup truck that cost $18,000. 1040ez form free file She used it only for qualified business use for 2009 through 2012. 1040ez form free file Ellen claimed a section 179 deduction of $10,000 based on the purchase of the truck. 1040ez form free file She began depreciating it using the 200% DB method over a 5-year GDS recovery period. 1040ez form free file The pickup truck's gross vehicle weight was over 6,000 pounds, so it was not subject to the passenger automobile limits discussed later under Do the Passenger Automobile Limits Apply. 1040ez form free file During 2013, she used the truck 50% for business and 50% for personal purposes. 1040ez form free file She includes $4,018 excess depreciation in her gross income for 2013. 1040ez form free file The excess depreciation is determined as follows. 1040ez form free file Total section 179 deduction ($10,000) and depreciation claimed ($6,618) for 2009 through 2012. 1040ez form free file (Depreciation is from Table A-1. 1040ez form free file ) $16,618 Minus: Depreciation allowable (Table A-8):     2009 – 10% of $18,000 $1,800   2010 – 20% of $18,000 3,600   2011 – 20% of $18,000 3,600   2012 – 20% of $18,000 3,600 12,600 Excess depreciation $4,018 If Ellen's use of the truck does not change to 50% for business and 50% for personal purposes until 2015, there will be no excess depreciation. 1040ez form free file The total depreciation allowable using Table A-8 through 2015 will be $18,000, which equals the total of the section 179 deduction and depreciation she will have claimed. 1040ez form free file Where to figure and report recapture. 1040ez form free file   Use Form 4797, Part IV, to figure the recapture amount. 1040ez form free file Report the recapture amount as other income on the same form or schedule on which you took the depreciation deduction. 1040ez form free file For example, report the recapture amount as other income on Schedule C (Form 1040) if you took the depreciation deduction on Schedule C. 1040ez form free file If you took the depreciation deduction on Form 2106, report the recapture amount as other income on Form 1040, line 21. 1040ez form free file Lessee's Inclusion Amount If you use leased listed property other than a passenger automobile for business/investment use, you must include an amount in your income in the first year your qualified business-use percentage is 50% or less. 1040ez form free file Your qualified business-use percentage is the part of the property's total use that is qualified business use (defined earlier). 1040ez form free file For the inclusion amount rules for a leased passenger automobile, see Leasing a Car in chapter 4 of Publication 463. 1040ez form free file The inclusion amount is the sum of Amount A and Amount B, described next. 1040ez form free file However, see the special rules for the inclusion amount, later, if your lease begins in the last 9 months of your tax year or is for less than one year. 1040ez form free file Amount A. 1040ez form free file   Amount A is: The fair market value of the property, multiplied by The business/investment use for the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A-19 in Appendix A . 1040ez form free file   The fair market value of the property is the value on the first day of the lease term. 1040ez form free file If the capitalized cost of an item of listed property is specified in the lease agreement, you must treat that amount as the fair market value. 1040ez form free file Amount B. 1040ez form free file   Amount B is: The fair market value of the property, multiplied by The average of the business/investment use for all tax years the property was leased that precede the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A–20 in Appendix A . 1040ez form free file Maximum inclusion amount. 1040ez form free file   The inclusion amount cannot be more than the sum of the deductible amounts of rent for the tax year in which the lessee must include the amount in gross income. 1040ez form free file Inclusion amount worksheet. 1040ez form free file   The following worksheet is provided to help you figure the inclusion amount for leased listed property. 1040ez form free file Inclusion Amount Worksheet for Leased Listed Property 1. 1040ez form free file Fair market value   2. 1040ez form free file Business/investment use for first year business use is 50% or less   3. 1040ez form free file Multiply line 1 by line 2. 1040ez form free file   4. 1040ez form free file Rate (%) from Table A-19   5. 1040ez form free file Multiply line 3 by line 4. 1040ez form free file This is Amount A. 1040ez form free file   6. 1040ez form free file Fair market value   7. 1040ez form free file Average business/investment use for years property leased before the first year business use is 50% or less . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file . 1040ez form free file   8. 1040ez form free file Multiply line 6 by line 7   9. 1040ez form free file Rate (%) from Table A-20   10. 1040ez form free file Multiply line 8 by line 9. 1040ez form free file This is Amount B. 1040ez form free file   11. 1040ez form free file Add line 5 and line 10. 1040ez form free file This is your inclusion amount. 1040ez form free file Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. 1040ez form free file )         Example. 1040ez form free file On February 1, 2011, Larry House, a calendar year taxpayer, leased and placed in service a computer with a fair market value of $3,000. 1040ez form free file The lease is for a period of 5 years. 1040ez form free file Larry does not use the computer at a regular business establishment, so it is listed property. 1040ez form free file His business use of the property (all of which is qualified business use) is 80% in 2011, 60% in 2012, and 40% in 2013. 1040ez form free file He must add an inclusion amount to gross income for 2013, the first tax year his qualified business-use percentage is 50% or less. 1040ez form free file The computer has a 5-year recovery period under both GDS and ADS. 1040ez form free file 2013 is the third tax year of the lease, so the applicable percentage from Table A-19 is −19. 1040ez form free file 8%. 1040ez form free file The applicable percentage from Table A-20 is 22. 1040ez form free file 0%. 1040ez form free file Larry's deductible rent for the computer for 2013 is $800. 1040ez form free file Larry uses the Inclusion amount worksheet. 1040ez form free file to figure the amount he must include in income for 2013. 1040ez form free file His inclusion amount is $224, which is the sum of −$238 (Amount A) and $462 (Amount B). 1040ez form free file Inclusion Amount Worksheet for Leased Listed Property 1. 1040ez form free file Fair market value $3,000   2. 1040ez form free file Business/investment use for first year business use is 50% or less 40 % 3. 1040ez form free file Multiply line 1 by line 2. 1040ez form free file 1,200   4. 1040ez form free file Rate (%) from Table A-19 −19. 1040ez form free file 8 % 5. 1040ez form free file Multiply line 3 by line 4. 1040ez form free file This is Amount A. 1040ez form free file −238   6. 1040ez form free file Fair market value 3,000   7. 1040ez form free file Average business/investment use for years property leased before the first year business use is 50% or less 70 % 8. 1040ez form free file Multiply line 6 by line 7 2,100   9. 1040ez form free file Rate (%) from Table A-20 22. 1040ez form free file 0 % 10. 1040ez form free file Multiply line 8 by line 9. 1040ez form free file This is Amount B. 1040ez form free file 462   11. 1040ez form free file Add line 5 and line 10. 1040ez form free file This is your inclusion amount. 1040ez form free file Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. 1040ez form free file ) $224           Lease beginning in the last 9 months of your tax year. 1040ez form free file    The inclusion amount is subject to a special rule if all the following apply. 1040ez form free file The lease term begins within 9 months before the close of your tax year. 1040ez form free file You do not use the property predominantly (more than 50%) for qualified business use during that part of the tax year. 1040ez form free file The lease term continues into your next tax year. 1040ez form free file Under this special rule, add the inclusion amount to income in the next tax year. 1040ez form free file Figure the inclusion amount by taking into account the average of the business/investment use for both tax years (line 2 of the Inclusion Amount Worksheet for Leased Listed Property) and the applicable percentage for the tax year the lease term begins. 1040ez form free file Skip lines 6 through 9 of the worksheet and enter zero on line 10. 1040ez form free file Example 1. 1040ez form free file On August 1, 2012, Julie Rule, a calendar year taxpayer, leased and placed in service an item of listed property. 1040ez form free file The property is 5-year property with a fair market value of $10,000. 1040ez form free file Her property has a recovery period of 5 years under ADS. 1040ez form free file The lease is for 5 years. 1040ez form free file Her business use of the property was 50% in 2012 and 90% in 2013. 1040ez form free file She paid rent of $3,600 for 2012, of which $3,240 is deductible. 1040ez form free file She must include $147 in income in 2013. 1040ez form free file The $147 is the sum of Amount A and Amount B. 1040ez form free file Amount A is $147 ($10,000 × 70% × 2. 1040ez form free file 1%), the product of the fair market value, the average business use for 2012 and 2013, and the applicable percentage for year one from Table A-19 . 1040ez form free file Amount B is zero. 1040ez form free file Lease for less than one year. 1040ez form free file   A special rule for the inclusion amount applies if the lease term is less than one year and you do not use the property predominantly (more than 50%) for qualified business use. 1040ez form free file The amount included in income is the inclusion amount (figured as described in the preceding discussions) multiplied by a fraction. 1040ez form free file The numerator of the fraction is the number of days in the lease term and the denominator is 365 (or 366 for leap years). 1040ez form free file   The lease term for listed property other than residential rental or nonresidential real property includes options to renew. 1040ez form free file If you have two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property, treat them as one lease. 1040ez form free file Example 2. 1040ez form free file On October 1, 2012, John Joyce, a calendar year taxpayer, leased and placed in service an item of listed property that is 3-year property. 1040ez form free file This property had a fair market value of $15,000 and a recovery period of 5 years under ADS. 1040ez form free file The lease term was 6 months (ending on March 31, 2013), during which he used the property 45% in business. 1040ez form free file He must include $71 in income in 2013. 1040ez form free file The $71 is the sum of Amount A and Amount B. 1040ez form free file Amount A is $71 ($15,000 × 45% × 2. 1040ez form free file 1% × 183/365), the product of the fair market value, the average business use for both years, and the applicable percentage for year one from Table A-19 , prorated for the length of the lease. 1040ez form free file Amount B is zero. 1040ez form free file Where to report inclusion amount. 1040ez form free file   Report the inclusion amount figured as described in the preceding discussions as other income on the same form or schedule on which you took the deduction for your rental costs. 1040ez form free file For example, report the inclusion amount as other income on Schedule C (Form 1040) if you took the deduction on Schedule C. 1040ez form free file If you took the deduction for rental costs on Form 2106, report the inclusion amount as other income on Form 1040, line 21. 1040ez form free file Do the Passenger Automobile Limits Apply? The depreciation deduction, including the section 179 deduction and special depreciation allowance, you can claim for a passenger automobile (defined earlier) each year is limited. 1040ez form free file This section describes the maximum depreciation deduction amounts for 2013 and explains how to deduct, after the recovery period, the unrecovered basis of your property that results from applying the passenger automobile limit. 1040ez form free file Exception for leased cars. 1040ez form free file   The passenger automobile limits generally do not apply to passenger automobiles leased or held for leasing by anyone regularly engaged in the business of leasing passenger automobiles. 1040ez form free file For information on when you are considered regularly engaged in the business of leasing listed property, including passenger automobiles, see Exception for leased property , earlier, under What Is the Business-Use Requirement . 1040ez form free file Maximum Depreciation Deduction The passenger automobile limits are the maximum depreciation amounts you can deduct for a passenger automobile. 1040ez form free file They are based on the date you placed the automobile in service. 1040ez form free file Passenger Automobiles The maximum deduction amounts for most passenger automobiles are shown in the following table. 1040ez form free file Maximum Depreciation Deduction for Passenger Automobiles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,1601 $5,100 $3,050 $1,875 2012 11,1601 5,100 3,050 1,875 2011 11,0602 4,900 2,950 1,775 2010 11,0602  4,900 2,950 1,775 2009 10,9603 4,800 2,850 1,775 2008 10,9603  4,800 2,850 1,775 2007 3,060 4,900 2,850 1,775 2006 2,960 4,800 2,850 1,775 2005 2,960 4,700 2,850 1,675 2004 10,6104 4,800 2,850 1,675 5/06/2003– 12/31/2003 10,7105 4,900 2,950 1,775 1/01/2003– 5/05/2003 7,6606 4,900 2,950 1,775 1If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. 1040ez form free file 2If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,060. 1040ez form free file 3If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $2,960. 1040ez form free file 4If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $2,960. 1040ez form free file 5If you acquired the vehicle before 5/06/03, the maximum deduction is $7,660. 1040ez form free file If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. 1040ez form free file 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. 1040ez form free file If your business/investment use of the automobile is less than 100%, you must reduce the maximum deduction amount by multiplying the maximum amount by the percentage of business/investment use determined on an annual basis during the tax year. 1040ez form free file If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. 1040ez form free file The numerator of the fraction is the number of months and partial months in the short tax year and the denominator is 12. 1040ez form free file Example. 1040ez form free file On April 15, 2013, Virginia Hart bought and placed in service a new car for $14,500. 1040ez form free file She used the car only in her business. 1040ez form free file She files her tax return based on the calendar year. 1040ez form free file She does not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. 1040ez form free file Under MACRS, a car is 5-year property. 1040ez form free file Since she placed her car in service on April 15 and used it only for business, she uses the percentages in Table A-1 to figure her MACRS depreciation on the car. 1040ez form free file Virginia multiplies the $14,500 unadjusted basis of her car by 0. 1040ez form free file 20 to get her MACRS depreciation of $2,900 for 2013. 1040ez form free file This $2,900 is below the maximum depreciation deduction of $3,160 for passenger automobiles placed in service in 2013. 1040ez form free file She can deduct the full $2,900. 1040ez form free file Electric Vehicles The maximum depreciation deductions for passenger automobiles that are produced to run primarily on electricity are higher than those for other automobiles. 1040ez form free file The maximum deduction amounts for electric vehicles placed in service after August 5, 1997, and before January 1, 2007, are shown in the following table. 1040ez form free file Owners of electric vehicles placed in service after December 31, 2006, should use the table of maximum deduction amounts later for electric vehicles classified as passenger automobiles or use the table of maximum deduction amounts for trucks and vans later, for electric vehicles classified as trucks and vans. 1040ez form free file Maximum Depreciation Deduction For Electric Vehicles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2006 $8,980 $14,400 $8,650 $5,225 2005 8,880 14,200 8,450 5,125 2004 31,8301 14,300 8,550 5,125 5/06/2003– 12/31/2003 32,0302 14,600 8,750 5,225 1/01/2003– 5/05/2003 22,8803 14,600 8,750 5,225 1If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $8,880. 1040ez form free file 2If you acquired the vehicle before 5/06/03, the maximum deduction is $22,880. 1040ez form free file If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. 1040ez form free file 3 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. 1040ez form free file Trucks and Vans The maximum depreciation deductions for trucks and vans placed in service after 2002 are higher than those for other passenger automobiles. 1040ez form free file The maximum deduction amounts for trucks and vans are shown in the following table. 1040ez form free file Maximum Depreciation Deduction For Trucks and Vans Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,3601 $5,400 $3,250 $1,975 2012 11,3601 5,300 3,150 1,875 2011 11,2602 5,200 3,150 1,875 2010 11,1603 5,100 3,050 1,875 2009 11,0604 4,900 2,950 1,775 2008 11,1605 5,100 3,050 1,875 2007 3,260 5,200 3,050 1,875 2006 3,260 5,200 3,150 1,875 2005 3,260 5,200 3,150 1,875 2004 10,9106 5,300 3,150 1,875 5/06/2003– 12/31/2003 11,0107 5,400 3,250 1,975 1/01/2003– 5/05/2003 7,9608 5,400 3,250 1,975 1 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,360. 1040ez form free file 2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,260. 1040ez form free file 3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. 1040ez form free file 4 If you elect not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,060. 1040ez form free file 5If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,160. 1040ez form free file 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, or the maximum deduction is $3,260. 1040ez form free file 7 If you acquired the vehicle before 5/06/03, the maximum deduction is $7,960. 1040ez form free file If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. 1040ez form free file 8 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. 1040ez form free file Depreciation Worksheet for Passenger Automobiles You can use the following worksheet to figure your depreciation deduction using the percentage tables. 1040ez form free file Then use the information from this worksheet to prepare Form 4562. 1040ez form free file Depreciation Worksheet for Passenger Automobiles   Part I   1. 1040ez form free file MACRS system (GDS or ADS)     2. 1040ez form free file Property class     3. 1040ez form free file Date placed in service     4. 1040ez form free file Recovery period     5. 1040ez form free file Method and convention     6. 1040ez form free file Depreciation rate (from tables)     7. 1040ez form free file Maximum depreciation deduction for this year from the appropriate table       8. 1040ez form free file Business/investment-use percentage       9. 1040ez form free file Multiply line 7 by line 8. 1040ez form free file This is your adjusted maximum depreciation deduction       10. 1040ez form free file Section 179 deduction claimed this year (not more than line 9). 1040ez form free file Enter -0- if this is not the year you placed the car in service. 1040ez form free file         Note. 1040ez form free file  1) If line 10 is equal to line 9, stop here. 1040ez form free file Your combined section 179 and depreciation deduction (including your special depreciation allowance) is limited to the amount on line 9. 1040ez form free file  2) If line 10 is less than line 9, complete Part II. 1040ez form free file   Part II   11. 1040ez form free file Subtract line 10 from line 9. 1040ez form free file This is the limit on the amount you can deduct for depreciation (including any special depreciation allowance )       12. 1040ez form free file Cost or other basis (reduced by any alternative motor vehicle credit 1or credit for electric vehicles 2)       13. 1040ez form free file Multiply line 12 by line 8. 1040ez form free file This is your business/investment cost       14. 1040ez form free file Section 179 deduction claimed in the year you placed the car in service       15. 1040ez form free file Subtract line 14 from line 13. 1040ez form free file This is your tentative basis for depreciation       16. 1040ez form free file Multiply line 15 by . 1040ez form free file 50 if the 50% special depreciation allowance applies. 1040ez form free file This is your special depreciation allowance. 1040ez form free file Enter -0- if this is not the year you placed the car in service, the car is not qualified property, or you elected not to claim a special depreciation allowance       Note 1) If line 16 is equal to line 11, stop here. 1040ez form free file Your depreciation deduction (including your special depreciation allowance) is limited to the amount on line 11. 1040ez form free file  2) If line 16 is less than line 11, complete Part III. 1040ez form free file   Part III   17. 1040ez form free file Subtract line 16 from 11. 1040ez form free file This is the limit on the amount you can deduct for MACRS depreciation       18. 1040ez form free file Subtract line 16 from line 15. 1040ez form free file This is your basis for depreciation. 1040ez form free file       19. 1040ez form free file Multiply line 18 by line 6. 1040ez form free file This is your tentative MACRS depreciation deduction. 1040ez form free file       20. 1040ez form free file Enter the lesser of line 17 or line 19. 1040ez form free file This is your MACRS depreciation deduction. 1040ez form free file     1 When figuring the amount to enter on line 12, do not reduce your cost or other basis by any section 179 deduction you claimed for your car. 1040ez form free file 2 Reduce the basis by the lesser of $4,000 or 10% of the cost of the vehicle even if the credit is less than that amount. 1040ez form free file             Deductions After the Recovery Period If the depreciation deductions for your automobile are reduced under the passenger automobile limits, you will have unrecovered basis in your automobile at the end of the recovery period. 1040ez form free file If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends. 1040ez form free file You can claim a depreciation deduction in each succeeding tax year until you recover your full basis in the car. 1040ez form free file The maximum amount you can deduct each year is determined by the date you placed the car in service and your business/investment-use percentage. 1040ez form free file See Maximum Depreciation Deduction , earlier. 1040ez form free file Unrecovered basis is the cost or other basis of the passenger automobile reduced by any clean-fuel vehicle deduction, electric vehicle credit, depreciation, and section 179 deductions that would have been allowable if you had used the car 100% for business and investment use and the passenger automobile limits had not applied. 1040ez form free file You cannot claim a depreciation deduction for listed property other than passenger automobiles after the recovery period ends. 1040ez form free file There is no unrecovered basis at the end of the recovery period because you are considered to have used this property 100% for business and investment purposes during all of the recovery period. 1040ez form free file Example. 1040ez form free file In May 2007, you bought and placed in service a car costing $31,500. 1040ez form free file The car was 5-year property under GDS (MACRS). 1040ez form free file You did not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. 1040ez form free file You used the car exclusively for business during the recovery period (2007 through 2012). 1040ez form free file You figured your depreciation as shown below. 1040ez form free file Year Percentage Amount Limit   Allowed 2007 20. 1040ez form free file 0% $6,300 $2,960   $2,960 2008 32. 1040ez form free file 0 10,080 4,800   4,800 2009 19. 1040ez form free file 2 6,048 2,850   2,850 2010 11. 1040ez form free file 52 3,629 1,675   1,675 2011 11. 1040ez form free file 52 3,629 1,675   1,675 2012 5. 1040ez form free file 76 1,814 1,675   1,675 Total   $15,635 At the end of 2012, you had an unrecovered basis of $15,865 ($31,500 − $15,635). 1040ez form free file If in 2013 and later years you continue to use the car 100% for business, you can deduct each year the lesser of $1,675 or your remaining unrecovered basis. 1040ez form free file If your business use of the car had been less than 100% during any year, your depreciation deduction would have been less than the maximum amount allowable for that year. 1040ez form free file However, in figuring your unrecovered basis in the car, you would still reduce your basis by the maximum amount allowable as if the business use had been 100%. 1040ez form free file For example, if you had used your car 60% for business instead of 100%, your allowable depreciation deductions would have been $9,519 ($15,865 × 60%), but you still would have to reduce your basis by $15,865 to determine your unrecovered basis. 1040ez form free file Deductions For Passenger Automobiles Acquired in a Trade-in If you acquire a passenger automobile in a trade-in, depreciate the carryover basis separately as if the trade-in did not occur. 1040ez form free file Depreciate the part of the new automobile's basis that exceeds its carryover basis (excess basis) as if it were newly placed in service property. 1040ez form free file This excess basis is the additional cash paid for the new automobile in the trade-in. 1040ez form free file The depreciation figured for the two components of the basis (carryover basis and excess basis) is subject to a single passenger automobile limit. 1040ez form free file Special rules apply in determining the passenger automobile limits. 1040ez form free file These rules and examples are discussed in section 1. 1040ez form free file 168(i)-6(d)(3) of the regulations. 1040ez form free file Instead of figuring depreciation for the carryover basis and the excess basis separately, you can elect to treat the old automobile as disposed of and both of the basis components for the new automobile as if placed in service at the time of the trade-in. 1040ez form free file For more information, including how to make this election, see Election out under Property Acquired in a Like-kind Exchange or Involuntary Conversion in chapter 4 and sections 1. 1040ez form free file 168(i)-6(i) and 1. 1040ez form free file 168(i)-6(j) of the regulations. 1040ez form free file What Records Must Be Kept? You cannot take any depreciation or section 179 deduction for the use of listed property unless you can prove your business/investment use with adequate records or with sufficient evidence to support your own statements. 1040ez form free file For listed property, you must keep records for as long as any recapture can still occur. 1040ez form free file Recapture can occur in any tax year of the recovery period. 1040ez form free file Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. 1040ez form free file You do not have to record information in an account book, diary, or similar record if the information is already shown on the receipt. 1040ez form free file However, your records should back up your receipts in an orderly manner. 1040ez form free file Elements of expenditure or use. 1040ez form free file   Your records or other documentary evidence must support all the following. 1040ez form free file The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses. 1040ez form free file The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year. 1040ez form free file The date of the expenditure or use. 1040ez form free file The business or investment purpose for the expenditure or use. 1040ez form free file   Written documents of your expenditure or use are generally better evidence than oral statements alone. 1040ez form free file You do not have to keep a daily log. 1040ez form free file However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time of the expenditure or use and backed up by other documents is preferable to a statement you prepare later. 1040ez form free file Timeliness. 1040ez form free file   You must record the elements of an expenditure or use at the time you have full knowledge of the elements. 1040ez form free file An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use generally is considered a timely record if, in the regular course of business: The statement is given by an employee to the employer, or The statement is given by an independent contractor to the client or customer. 1040ez form free file   For example, a log maintained on a weekly basis, that accounts for use during the week, will be considered a record made at or near the time of use. 1040ez form free file Business purpose supported. 1040ez form free file   Generally, an adequate record of business purpose must be in the form of a written statement. 1040ez form free file However, the amount of detail necessary to establish a business purpose depends on the facts and circumstances of each case. 1040ez form free file A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. 1040ez form free file For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. 1040ez form free file Business use supported. 1040ez form free file   An adequate record contains enough information on each element of every business or investment use. 1040ez form free file The amount of detail required to support the use depends on the facts and circumstances. 1040ez form free file For example, a taxpayer who uses a truck for both business and personal purposes and whose only business use of the truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. 1040ez form free file   Although you generally must prepare an adequate written record, you can prepare a record of the business use of listed property in a computer memory device that uses a logging program. 1040ez form free file Separate or combined expenditures or uses. 1040ez form free file   Each use by you normally is considered a separate use. 1040ez form free file However, you can combine repeated uses as a single item. 1040ez form free file   Record each expenditure as a separate item. 1040ez form free file Do not combine it with other expenditures. 1040ez form free file If you choose, however, you can combine amounts you spent for the use of listed property during a tax year, such as for gasoline or automobile repairs. 1040ez form free file If you combine these expenses, you do not need to support the business purpose of each expense. 1040ez form free file Instead, you can divide the expenses based on the total business use of the listed property. 1040ez form free file   You can account for uses that can be considered part of a single use, such as a round trip or uninterrupted business use, by a single record. 1040ez form free file For example, you can account for the use of a truck to make deliveries at several locations that begin and end at the business premises and can include a stop at the business in between deliveries by a single record of miles driven. 1040ez form free file You can account for the use of a passenger automobile by a salesperson for a business trip away from home over a period of time by a single record of miles traveled. 1040ez form free file Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. 1040ez form free file Confidential information. 1040ez form free file   If any of the information on the elements of an expenditure or use is confidential, you do not need to include it in the account book or similar record if you record it at or near the time of the expenditure or use. 1040ez form free file You must keep it elsewhere and make it available as support to the IRS director for your area on request. 1040ez form free file Substantial compliance. 1040ez form free file   If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the satisfaction of the IRS director for your area, you can establish this element by any evidence the IRS director for your area deems adequate. 1040ez form free file   If you fail to establish to the satisfaction of the IRS director for your area that you have substantially complied with the adequate records requirement for an element of an expenditure or use, you must establish the element as follows. 1040ez form free file By your own oral or written statement containing detailed information as to the element. 1040ez form free file By other evidence sufficient to establish the element. 1040ez form free file   If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct evidence, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. 1040ez form free file If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. 1040ez form free file Sampling. 1040ez form free file   You can maintain an adequate record for part of a tax year and use that record to support your business and investment use of listed property for the entire tax year if it can be shown by other evidence that the periods for which you maintain an adequate record are representative of the use throughout the year. 1040ez form free file Example 1. 1040ez form free file Denise Williams, a sole proprietor and calendar year taxpayer, operates an interior decorating business out of her home. 1040ez form free file She uses her automobile for local business visits to the homes or offices of clients, for meetings with suppliers and subcontractors, and to pick up and deliver items to clients. 1040ez form free file There is no other business use of the automobile, but she and family members also use it for personal purposes. 1040ez form free file She maintains adequate records for the first 3 months of the year showing that 75% of the automobile use was for business. 1040ez form free file Subcontractor invoices and paid bills show that her business continued at approximately the same rate for the rest of the year. 1040ez form free file If there is no change in circumstances, such as the purchase of a second car for exclusive use in her business, the determination that her combined business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. 1040ez form free file Example 2. 1040ez form free file Assume the same facts as in Example 1, except that Denise maintains adequate records during the first week of every month showing that 75% of her use of the automobile is for business. 1040ez form free file Her business invoices show that her business continued at the same rate during the later weeks of each month so that her weekly records are representative of the automobile's business use throughout the month. 1040ez form free file The determination that her business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. 1040ez form free file Example 3. 1040ez form free file Bill Baker, a sole proprietor and calendar year taxpayer, is a salesman in a large metropolitan area for a company that manufactures household products. 1040ez form free file For the first 3 weeks of each month, he occasionally uses his own automobile for business travel within the metropolitan area. 1040ez form free file During these weeks, his business use of the automobile does not follow a consistent pattern. 1040ez form free file During the fourth week of each month, he delivers all business orders taken during the previous month. 1040ez form free file The business use of his automobile, as supported by adequate records, is 70% of its total use during that fourth week. 1040ez form free file The determination based on the record maintained during the fourth week of the month that his business/investment use of the automobile for the tax year is 70% does not rest on sufficient supporting evidence because his use during that week is not representative of use during other periods. 1040ez form free file Loss of records. 1040ez form free file   When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. 1040ez form free file How Is Listed Property Information Reported? You must provide the information about your listed property requested in Part V of Form 4562, Section A, if you claim either of the following deductions. 1040ez form free file Any deduction for a vehicle. 1040ez form free file A depreciation deduction for any other listed property. 1040ez form free file If you claim any deduction for a vehicle, you also must provide the information requested in Section B. 1040ez form free file If you provide the vehicle for your employee's use, the employee must give you this information. 1040ez form free file If you provide any vehicle for use by an employee, you must first answer the questions in Section C to see if you meet an exception to completing Section B for that vehicle. 1040ez form free file Vehicles used by your employees. 1040ez form free file   You do not have to complete Section B, Part V, for vehicles used by your employees who are not more-than-5% owners or related persons if you meet at least one of the following requirements. 1040ez form free file You maintain a written policy statement that prohibits one of the following uses of the vehicles. 1040ez form free file All personal use including commuting. 1040ez form free file Personal use, other than commuting, by employees who are not officers, directors, or 1%-or-more owners. 1040ez form free file You treat all use of the vehicles by your employees as personal use. 1040ez form free file You provide more than five vehicles for use by your employees, and you keep in your records the information on their use given to you by the employees. 1040ez form free file For demonstrator automobiles provided to full-time salespersons, you maintain a written policy statement that limits the total mileage outside the salesperson's normal working hours and prohibits use of the automobile by anyone else, for vacation trips, or to store personal possessions. 1040ez form free file Exceptions. 1040ez form free file   If you file Form 2106, 2106-EZ, or Schedule C-EZ (Form 1040), and you are not required to file Form 4562, report information about listed property on that form and not on Form 4562. 1040ez form free file Also, if you file Schedule C (Form 1040) and are claiming the standard mileage rate or actual vehicle expenses (except depreciation) and you are not required to file Form 4562 for any other reason, report vehicle information in Part IV of Schedule C and not on Form 4562. 1040ez form free file Prev  Up  Next   Home   More Online Publications
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The 1040ez Form Free File

1040ez form free file 6. 1040ez form free file   How To Get Tax Help Table of Contents 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. 1040ez form free file Free help with your return. 1040ez form free file   You can get free help preparing your return nationwide from IRS-certified volunteers. 1040ez form free file The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 1040ez form free file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1040ez form free file 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. 1040ez form free file In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 1040ez form free file To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 1040ez form free file gov, download the IRS2Go app, or call 1-800-906-9887. 1040ez form free file   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040ez form free file To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1040ez form free file aarp. 1040ez form free file org/money/taxaide or call 1-888-227-7669. 1040ez form free file For more information on these programs, go to IRS. 1040ez form free file gov and enter “VITA” in the search box. 1040ez form free file   For more information on these programs, go to IRS. 1040ez form free file gov and enter “VITA” in the search box. 1040ez form free file Internet. 1040ez form free file    IRS. 1040ez form free file gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 1040ez form free file Download the free IRS2Go app from the iTunes app store or from Google Play. 1040ez form free file 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. 1040ez form free file Check the status of your 2013 refund with the Where's My Refund? application on IRS. 1040ez form free file gov or download the IRS2Go app and select the Refund Status option. 1040ez form free file The IRS issues more than 9 out of 10 refunds in less than 21 days. 1040ez form free file 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. 1040ez form free file You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040ez form free file The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1040ez form free file Use the Interactive Tax Assistant (ITA) to research your tax questions. 1040ez form free file No need to wait on the phone or stand in line. 1040ez form free file 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. 1040ez form free file When you reach the response screen, you can print the entire interview and the final response for your records. 1040ez form free file New subject areas are added on a regular basis. 1040ez form free file  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 1040ez form free file gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 1040ez form free file You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 1040ez form free file The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 1040ez form free file 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. 1040ez form free file 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. 1040ez form free file You can also ask the IRS to mail a return or an account transcript to you. 1040ez form free file Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 1040ez form free file gov or by calling 1-800-908-9946. 1040ez form free file Tax return and tax account transcripts are generally available for the current year and the past three years. 1040ez form free file Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 1040ez form free file Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 1040ez form free file 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. 1040ez form free file Check the status of your amended return using Where's My Amended Return? Go to IRS. 1040ez form free file gov and enter Where's My Amended Return? in the search box. 1040ez form free file You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1040ez form free file It can take up to 3 weeks from the date you mailed it to show up in our system. 1040ez form free file Make a payment using one of several safe and convenient electronic payment options available on IRS. 1040ez form free file gov. 1040ez form free file Select the Payment tab on the front page of IRS. 1040ez form free file gov for more information. 1040ez form free file Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 1040ez form free file Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1040ez form free file gov. 1040ez form free file 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. 1040ez form free file Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1040ez form free file gov. 1040ez form free file Request an Electronic Filing PIN by going to IRS. 1040ez form free file gov and entering Electronic Filing PIN in the search box. 1040ez form free file Download forms, instructions and publications, including accessible versions for people with disabilities. 1040ez form free file Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 1040ez form free file gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 1040ez form free file An employee can answer questions about your tax account or help you set up a payment plan. 1040ez form free file Before you visit, check the Office Locator on IRS. 1040ez form free file gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 1040ez form free file If you have a special need, such as a disability, you can request an appointment. 1040ez form free file Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1040ez form free file Apply for an Employer Identification Number (EIN). 1040ez form free file Go to IRS. 1040ez form free file gov and enter Apply for an EIN in the search box. 1040ez form free file Read the Internal Revenue Code, regulations, or other official guidance. 1040ez form free file Read Internal Revenue Bulletins. 1040ez form free file Sign up to receive local and national tax news and more by email. 1040ez form free file Just click on “subscriptions” above the search box on IRS. 1040ez form free file gov and choose from a variety of options. 1040ez form free file Phone. 1040ez form free file    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1040ez form free file Download the free IRS2Go app from the iTunes app store or from Google Play. 1040ez form free file Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 1040ez form free file gov, or download the IRS2Go app. 1040ez form free file 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. 1040ez form free file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1040ez form free file Most VITA and TCE sites offer free electronic filing. 1040ez form free file Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 1040ez form free file Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 1040ez form free file 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. 1040ez form free file 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. 1040ez form free file The IRS issues more than 9 out of 10 refunds in less than 21 days. 1040ez form free file Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040ez form free file 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. 1040ez form free file The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1040ez form free file Note, the above information is for our automated hotline. 1040ez form free file 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. 1040ez form free file Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 1040ez form free file You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1040ez form free file It can take up to 3 weeks from the date you mailed it to show up in our system. 1040ez form free file 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). 1040ez form free file You should receive your order within 10 business days. 1040ez form free file Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. 1040ez form free file 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. 1040ez form free file Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 1040ez form free file The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 1040ez form free file These individuals can also contact the IRS through relay services such as the Federal Relay Service. 1040ez form free file Walk-in. 1040ez form free file   You can find a selection of forms, publications and services — in-person. 1040ez form free file Products. 1040ez form free file You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040ez form free file Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 1040ez form free file Services. 1040ez form free file You can walk in to your local TAC for face-to-face tax help. 1040ez form free file An employee can answer questions about your tax account or help you set up a payment plan. 1040ez form free file Before visiting, use the Office Locator tool on IRS. 1040ez form free file gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. 1040ez form free file Mail. 1040ez form free file   You can send your order for forms, instructions, and publications to the address below. 1040ez form free file You should receive a response within 10 business days after your request is received. 1040ez form free file Internal Revenue Service 1201 N. 1040ez form free file Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. 1040ez form free file The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1040ez form free file Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 1040ez form free file   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. 1040ez form free file 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. 1040ez form free file You face (or your business is facing) an immediate threat of adverse action. 1040ez form free file You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 1040ez form free file   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. 1040ez form free file Here's why we can help: TAS is an independent organization within the IRS. 1040ez form free file Our advocates know how to work with the IRS. 1040ez form free file Our services are free and tailored to meet your needs. 1040ez form free file We have offices in every state, the District of Columbia, and Puerto Rico. 1040ez form free file   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. 1040ez form free file   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 1040ez form free file If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. 1040ez form free file 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. 1040ez form free file Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 1040ez form free file Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. 1040ez form free file Prev  Up  Next   Home   More Online Publications