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1040ez Free Online File

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1040ez free online file 2. 1040ez free online file   Accounting Periods and Methods Table of Contents Introduction Useful Items - You may want to see: Accounting Periods Accounting MethodsCash Method Accrual Method Combination Method Inventories Uniform Capitalization Rules Special Methods Change in Accounting Method Introduction You must figure your taxable income and file an income tax return for an annual accounting period called a tax year. 1040ez free online file Also, you must consistently use an accounting method that clearly shows your income and expenses for the tax year. 1040ez free online file Useful Items - You may want to see: Publication 538 Accounting Periods and Methods See chapter 12 for information about getting publications and forms. 1040ez free online file Accounting Periods When preparing a statement of income and expenses (generally your income tax return), you must use your books and records for a specific interval of time called an accounting period. 1040ez free online file The annual accounting period for your income tax return is called a tax year. 1040ez free online file You can use one of the following tax years. 1040ez free online file A calendar tax year. 1040ez free online file A fiscal tax year. 1040ez free online file Unless you have a required tax year, you adopt a tax year by filing your first income tax return using that tax year. 1040ez free online file A required tax year is a tax year required under the Internal Revenue Code or the Income Tax Regulations. 1040ez free online file Calendar tax year. 1040ez free online file   A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. 1040ez free online file   You must adopt the calendar tax year if any of the following apply. 1040ez free online file You do not keep books. 1040ez free online file You have no annual accounting period. 1040ez free online file Your present tax year does not qualify as a fiscal year. 1040ez free online file Your use of the calendar tax year is required under the Internal Revenue Code or the Income Tax Regulations. 1040ez free online file   If you filed your first income tax return using the calendar tax year and you later begin business as a sole proprietor, you must continue to use the calendar tax year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. 1040ez free online file For more information, see Change in tax year, later. 1040ez free online file   If you adopt the calendar tax year, you must maintain your books and records and report your income and expenses for the period from January 1 through December 31 of each year. 1040ez free online file Fiscal tax year. 1040ez free online file   A fiscal tax year is 12 consecutive months ending on the last day of any month except December. 1040ez free online file A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. 1040ez free online file   If you adopt a fiscal tax year, you must maintain your books and records and report your income and expenses using the same tax year. 1040ez free online file   For more information on a fiscal tax year, including a 52-53-week tax year, see Publication 538. 1040ez free online file Change in tax year. 1040ez free online file   Generally, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year, to request IRS approval to change your tax year. 1040ez free online file See the Instructions for Form 1128 for exceptions. 1040ez free online file If you qualify for an automatic approval request, a user fee is not required. 1040ez free online file If you do not qualify for automatic approval, a ruling must be requested. 1040ez free online file See the instructions for Form 1128 for information about user fees if you are requesting a ruling. 1040ez free online file Accounting Methods An accounting method is a set of rules used to determine when and how income and expenses are reported. 1040ez free online file Your accounting method includes not only the overall method of accounting you use, but also the accounting treatment you use for any material item. 1040ez free online file You choose an accounting method for your business when you file your first income tax return that includes a Schedule C for the business. 1040ez free online file After that, if you want to change your accounting method, you must generally get IRS approval. 1040ez free online file See Change in Accounting Method, later. 1040ez free online file Kinds of methods. 1040ez free online file   Generally, you can use any of the following accounting methods. 1040ez free online file Cash method. 1040ez free online file An accrual method. 1040ez free online file Special methods of accounting for certain items of income and expenses. 1040ez free online file Combination method using elements of two or more of the above. 1040ez free online file You must use the same accounting method to figure your taxable income and to keep your books. 1040ez free online file Also, you must use an accounting method that clearly shows your income. 1040ez free online file Business and personal items. 1040ez free online file   You can account for business and personal items under different accounting methods. 1040ez free online file For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. 1040ez free online file Two or more businesses. 1040ez free online file   If you have two or more separate and distinct businesses, you can use a different accounting method for each if the method clearly reflects the income of each business. 1040ez free online file They are separate and distinct only if you maintain complete and separate books and records for each business. 1040ez free online file Cash Method Most individuals and many sole proprietors with no inventory use the cash method because they find it easier to keep cash method records. 1040ez free online file However, if an inventory is necessary to account for your income, you must generally use an accrual method of accounting for sales and purchases. 1040ez free online file For more information, see Inventories, later. 1040ez free online file Income Under the cash method, include in your gross income all items of income you actually or constructively receive during your tax year. 1040ez free online file If you receive property or services, you must include their fair market value in income. 1040ez free online file Example. 1040ez free online file On December 30, 2012, Mrs. 1040ez free online file Sycamore sent you a check for interior decorating services you provided to her. 1040ez free online file You received the check on January 2, 2013. 1040ez free online file You must include the amount of the check in income for 2013. 1040ez free online file Constructive receipt. 1040ez free online file   You have constructive receipt of income when an amount is credited to your account or made available to you without restriction. 1040ez free online file You do not need to have possession of it. 1040ez free online file If you authorize someone to be your agent and receive income for you, you are treated as having received it when your agent received it. 1040ez free online file Example. 1040ez free online file Interest is credited to your bank account in December 2013. 1040ez free online file You do not withdraw it or enter it into your passbook until 2014. 1040ez free online file You must include it in your gross income for 2013. 1040ez free online file Delaying receipt of income. 1040ez free online file   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. 1040ez free online file You must report the income in the year the property is received or made available to you without restriction. 1040ez free online file Example. 1040ez free online file Frances Jones, a service contractor, was entitled to receive a $10,000 payment on a contract in December 2013. 1040ez free online file She was told in December that her payment was available. 1040ez free online file At her request, she was not paid until January 2014. 1040ez free online file She must include this payment in her 2013 income because it was constructively received in 2013. 1040ez free online file Checks. 1040ez free online file   Receipt of a valid check by the end of the tax year is constructive receipt of income in that year, even if you cannot cash or deposit the check until the following year. 1040ez free online file Example. 1040ez free online file Dr. 1040ez free online file Redd received a check for $500 on December 31, 2013, from a patient. 1040ez free online file She could not deposit the check in her business account until January 2, 2014. 1040ez free online file She must include this fee in her income for 2013. 1040ez free online file Debts paid by another person or canceled. 1040ez free online file   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. 1040ez free online file If you receive income in this way, you constructively receive the income when the debt is canceled or paid. 1040ez free online file For more information, see Canceled Debt under Kinds of Income in chapter 5. 1040ez free online file Repayment of income. 1040ez free online file   If you include an amount in income and in a later year you have to repay all or part of it, you can usually deduct the repayment in the year in which you make it. 1040ez free online file If the amount you repay is over $3,000, a special rule applies. 1040ez free online file For details about the special rule, see Repayments in chapter 11 of Publication 535, Business Expenses. 1040ez free online file Expenses Under the cash method, you generally deduct expenses in the tax year in which you actually pay them. 1040ez free online file This includes business expenses for which you contest liability. 1040ez free online file However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained later under Uniform Capitalization Rules. 1040ez free online file Expenses paid in advance. 1040ez free online file   You can deduct an expense you pay in advance only in the year to which it applies. 1040ez free online file Example. 1040ez free online file You are a calendar year taxpayer and you pay $1,000 in 2013 for a business insurance policy effective for one year, beginning July 1. 1040ez free online file You can deduct $500 in 2013 and $500 in 2014. 1040ez free online file Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. 1040ez free online file The purpose of an accrual method of accounting is to match income and expenses in the correct year. 1040ez free online file Income—General Rule Under an accrual method, you generally include an amount in your gross income for the tax year in which all events that fix your right to receive the income have occurred and you can determine the amount with reasonable accuracy. 1040ez free online file Example. 1040ez free online file You are a calendar year accrual method taxpayer. 1040ez free online file You sold a computer on December 28, 2013. 1040ez free online file You billed the customer in the first week of January 2014, but you did not receive payment until February 2014. 1040ez free online file You must include the amount received for the computer in your 2013 income. 1040ez free online file Income—Special Rules The following are special rules that apply to advance payments, estimating income, and changing a payment schedule for services. 1040ez free online file Estimated income. 1040ez free online file   If you include a reasonably estimated amount in gross income, and later determine the exact amount is different, take the difference into account in the tax year in which you make the determination. 1040ez free online file Change in payment schedule for services. 1040ez free online file   If you perform services for a basic rate specified in a contract, you must accrue the income at the basic rate, even if you agree to receive payments at a lower rate until you complete the services and then receive the difference. 1040ez free online file Advance payments for services. 1040ez free online file   Generally, you report an advance payment for services to be performed in a later tax year as income in the year you receive the payment. 1040ez free online file However, if you receive an advance payment for services you agree to perform by the end of the next tax year, you can elect to postpone including the advance payment in income until the next tax year. 1040ez free online file However, you cannot postpone including any payment beyond that tax year. 1040ez free online file   For more information, see Advance Payment for Services under Accrual Method in Publication 538. 1040ez free online file That publication also explains special rules for reporting the following types of income. 1040ez free online file Advance payments for service agreements. 1040ez free online file Prepaid rent. 1040ez free online file Advance payments for sales. 1040ez free online file   Special rules apply to including income from advance payments on agreements for future sales or other dispositions of goods you hold primarily for sale to your customers in the ordinary course of your business. 1040ez free online file If the advance payments are for contracts involving both the sale and service of goods, it may be necessary to treat them as two agreements. 1040ez free online file An agreement includes a gift certificate that can be redeemed for goods. 1040ez free online file Treat amounts that are due and payable as amounts you received. 1040ez free online file   You generally include an advance payment in income for the tax year in which you receive it. 1040ez free online file However, you can use an alternative method. 1040ez free online file For information about the alternative method, see Publication 538. 1040ez free online file Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both the following apply. 1040ez free online file The all-events test has been met. 1040ez free online file The test has been met when: All events have occurred that fix the fact of liability, and The liability can be determined with reasonable accuracy. 1040ez free online file Economic performance has occurred. 1040ez free online file Economic performance. 1040ez free online file   You generally cannot deduct or capitalize a business expense until economic performance occurs. 1040ez free online file 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 as the property is used. 1040ez free online file If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. 1040ez free online file An exception allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. 1040ez free online file For more information on economic performance, see Economic Performance under Accrual Method in Publication 538. 1040ez free online file Example. 1040ez free online file You are a calendar year taxpayer and use an accrual method of accounting. 1040ez free online file You buy office supplies in December 2013. 1040ez free online file You receive the supplies and the bill in December, but you pay the bill in January 2014. 1040ez free online file You can deduct the expense in 2013 because all events that fix the fact of liability have occurred, the amount of the liability could be reasonably determined, and economic performance occurred in that year. 1040ez free online file Your office supplies may qualify as a recurring expense. 1040ez free online file In that case, you can deduct them in 2013 even if the supplies are not delivered until 2014 (when economic performance occurs). 1040ez free online file Keeping inventories. 1040ez free online file   When the production, purchase, or sale of merchandise is an income-producing factor in your business, you must generally take inventories into account at the beginning and the end of your tax year. 1040ez free online file If you must account for an inventory, you must generally use an accrual method of accounting for your purchases and sales. 1040ez free online file For more information, see Inventories , later. 1040ez free online file Special rule for related persons. 1040ez free online file   You cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until you make the payment and the corresponding amount is includible in the related person's gross income. 1040ez free online file Determine the relationship, for this rule, as of the end of the tax year for which the expense or interest would otherwise be deductible. 1040ez free online file If a deduction is not allowed under this rule, the rule will continue to apply even if your relationship with the person ends before the expense or interest is includible in the gross income of that person. 1040ez free online file   Related persons include members of your immediate family, including only brothers and sisters (either whole or half), your spouse, ancestors, and lineal descendants. 1040ez free online file For a list of other related persons, see section 267 of the Internal Revenue Code. 1040ez free online file Combination Method You can generally use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. 1040ez free online file However, the following restrictions apply. 1040ez free online file If an inventory is necessary to account for your income, you must generally use an accrual method for purchases and sales. 1040ez free online file (See, however, Inventories, later. 1040ez free online file ) You can use the cash method for all other items of income and expenses. 1040ez free online file If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. 1040ez free online file If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. 1040ez free online file If you use a combination method that includes the cash method, treat that combination method as the cash method. 1040ez free online file Inventories Generally, if you produce, purchase, or sell merchandise in your business, you must keep an inventory and use the accrual method for purchases and sales of merchandise. 1040ez free online file However, the following taxpayers can use the cash method of accounting even if they produce, purchase, or sell merchandise. 1040ez free online file These taxpayers can also account for inventoriable items as materials and supplies that are not incidental (discussed later). 1040ez free online file A qualifying taxpayer under Revenue Procedure 2001-10 in Internal Revenue Bulletin 2001-2. 1040ez free online file A qualifying small business taxpayer under Revenue Procedure 2002-28 in Internal Revenue Bulletin 2002-18. 1040ez free online file Qualifying taxpayer. 1040ez free online file   You are a qualifying taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 17, 1998, is $1 million or less. 1040ez free online file (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing by 3. 1040ez free online file ) Your business is not a tax shelter, as defined under section 448(d)(3) of the Internal Revenue Code. 1040ez free online file Qualifying small business taxpayer. 1040ez free online file   You are a qualifying small business taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 31, 2000, is more than $1 million but not more than $10 million. 1040ez free online file (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing the total by 3. 1040ez free online file ) You are not prohibited from using the cash method under section 448 of the Internal Revenue Code. 1040ez free online file Your principal business activity is an eligible business (described in Publication 538 and Revenue Procedure 2002-28). 1040ez free online file Business not owned or not in existence for 3 years. 1040ez free online file   If you did not own your business for all of the 3-tax-year period used in figuring your average annual gross receipts, include the period of any predecessor. 1040ez free online file If your business has not been in existence for the 3-tax-year period, base your average on the period it has existed including any short tax years, annualizing the short tax year's gross receipts. 1040ez free online file Materials and supplies that are not incidental. 1040ez free online file   If you account for inventoriable items as materials and supplies that are not incidental, you will deduct the cost of the items you would otherwise include in inventory in the year you sell the items, or the year you pay for them, whichever is later. 1040ez free online file If you are a producer, you can use any reasonable method to estimate the raw material in your work in process and finished goods on hand at the end of the year to determine the raw material used to produce finished goods that were sold during the year. 1040ez free online file Changing accounting method. 1040ez free online file   If you are a qualifying taxpayer or qualifying small business taxpayer and want to change to the cash method or to account for inventoriable items as non-incidental materials and supplies, you must file Form 3115, Application for Change in Accounting Method. 1040ez free online file See Change in Accounting Method, later. 1040ez free online file More information. 1040ez free online file    For more information about the qualifying taxpayer exception, see Revenue Procedure 2001-10 in Internal Revenue Bulletin 2001-2. 1040ez free online file For more information about the qualifying small business taxpayer exception, see Revenue Procedure 2002-28 in Internal Revenue Bulletin 2002-18. 1040ez free online file Items included in inventory. 1040ez free online file   If you are required to account for inventories, include the following items when accounting for your inventory. 1040ez free online file Merchandise or stock in trade. 1040ez free online file Raw materials. 1040ez free online file Work in process. 1040ez free online file Finished products. 1040ez free online file Supplies that physically become a part of the item intended for sale. 1040ez free online file Valuing inventory. 1040ez free online file   You must value your inventory at the beginning and end of each tax year to determine your cost of goods sold (Schedule C, line 42). 1040ez free online file To determine the value of your inventory, you need a method for identifying the items in your inventory and a method for valuing these items. 1040ez free online file   Inventory valuation rules cannot be the same for all kinds of businesses. 1040ez free online file The method you use to value your inventory must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. 1040ez free online file Your inventory practices must be consistent from year to year. 1040ez free online file More information. 1040ez free online file   For more information about inventories, see Publication 538. 1040ez free online file Uniform Capitalization Rules Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for production or resale activities. 1040ez free online file Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. 1040ez free online file You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. 1040ez free online file Activities subject to the uniform capitalization rules. 1040ez free online file   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. 1040ez free online file Produce real or tangible personal property. 1040ez free online file For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. 1040ez free online file Acquire property for resale. 1040ez free online file Exceptions. 1040ez free online file   These rules do not apply to the following property. 1040ez free online file Personal property you acquire for resale if your average annual gross receipts are $10 million or less. 1040ez free online file Property you produce if you meet either of the following conditions. 1040ez free online file Your indirect costs of producing the property are $200,000 or less. 1040ez free online file You use the cash method of accounting and do not account for inventories. 1040ez free online file For more information, see Inventories, earlier. 1040ez free online file Special Methods There are special methods of accounting for certain items of income or expense. 1040ez free online file These include the following. 1040ez free online file Amortization, discussed in chapter 8 of Publication 535, Business Expenses. 1040ez free online file Bad debts, discussed in chapter 10 of Publication 535. 1040ez free online file Depletion, discussed in chapter 9 of Publication 535. 1040ez free online file Depreciation, discussed in Publication 946, How To Depreciate Property. 1040ez free online file Installment sales, discussed in Publication 537, Installment Sales. 1040ez free online file Change in Accounting Method Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. 1040ez free online file A change in your accounting method includes a change in: Your overall method, such as from cash to an accrual method, and Your treatment of any material item. 1040ez free online file To get approval, you must file Form 3115, Application for Change in Accounting Method. 1040ez free online file You can get IRS approval to change an accounting method under either the automatic change procedures or the advance consent request procedures. 1040ez free online file You may have to pay a user fee. 1040ez free online file For more information, see the form instructions. 1040ez free online file Automatic change procedures. 1040ez free online file   Certain taxpayers can presume to have IRS approval to change their method of accounting. 1040ez free online file The approval is granted for the tax year for which the taxpayer requests a change (year of change), if the taxpayer complies with the provisions of the automatic change procedures. 1040ez free online file No user fee is required for an application filed under an automatic change procedure generally covered in Revenue Procedure 2002-9. 1040ez free online file   Generally, you must use Form 3115 to request an automatic change. 1040ez free online file For more information, see the Instructions for Form 3115. 1040ez free online file Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats - Individual Tax Statistics

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Here you will find links to various studies relating to the individual taxpayer.

 

Individual Income Tax Numerous studies which provide statistics on income, deductions, tax, and credits reported on individual Form 1040 income tax returns and associated schedules are available in this area. Find statistics on high income tax returns, income tax rates, nonfarm sole proprietorships, data by geographic areas, and more...

Estate Tax

Estate Tax Statistics OneSheet

This annual study includes information on gross estate and its composition, deductions, and tax; and information on the age, sex, and marital status of decedents. Basic estate tax return data by year in which returns are filed are produced each year. Also included are data on nonresident aliens who had more than $60,000 of assets in the United States. These data come from taxpayers filing Form 706.
International Numerous studies which provide statistics on the individual taxpayer in the international context. Find statistics on foreign recipients of U.S. income, foreign trusts, individual foreign earned income and the foreign tax credit, international boycotts and nonresident alien estate tax returns. These data come from taxpayers filing Forms 706-NA, 1042-S, 1116, 2555, 3520, 5713 and more.
Personal Wealth This periodic study provides estimates of personal wealth of top wealth holders that are generated from estate tax return data using the "estate multiplier" technique, in conjunction with both filing-year and year-of-death estate databases.

Income from Trusts and Estates

Snapshot of Estate and Trust Income Tax Statistics

The U.S. Income Tax Return for Estates and Trusts (Form 1041) is used to report the income, deductions, gains, and losses of estates and trusts, as well as distributions to beneficiaries and income tax liability. Entities are classified into types based on their purpose.  

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Page Last Reviewed or Updated: 24-Mar-2014

The 1040ez Free Online File

1040ez free online file 2. 1040ez free online file   The Tax and Filing Requirements Table of Contents Returns and Filing Requirements Payment of TaxFederal Tax Deposits Must be Made by Electronic Funds Transfer All organizations subject to the tax on unrelated business income, except the exempt trusts described in section 511(b)(2), are taxable at corporate rates on that income. 1040ez free online file All exempt trusts subject to the tax on unrelated business income that, if not exempt, would be taxable as trusts are taxable at trust rates on that income. 1040ez free online file However, an exempt trust may not claim the deduction for a personal exemption that is normally allowed to a trust. 1040ez free online file The tax is imposed on the organization's unrelated business taxable income (described in chapter 4). 1040ez free online file The tax is reduced by any applicable tax credits, including the general business credits (such as the investment credit) and the foreign tax credit. 1040ez free online file Alternative minimum tax. 1040ez free online file   Organizations liable for tax on unrelated business income may be liable for alternative minimum tax on certain adjustments and tax preference items. 1040ez free online file Returns and Filing Requirements An exempt organization subject to the tax on unrelated business income must file Form 990-T and attach any required supporting schedules and forms. 1040ez free online file The obligation to file Form 990-T is in addition to the obligation to file any other required returns. 1040ez free online file Form 990-T is required if the organization's gross income from unrelated businesses is $1,000 or more. 1040ez free online file An exempt organization must report income from all its unrelated businesses on a single Form 990-T. 1040ez free online file Each organization must file a separate Form 990-T, except section 501(c)(2) title holding corporations and organizations receiving their earnings that file a consolidated return under section 1501. 1040ez free online file The various provisions of tax law relating to accounting periods, accounting methods, at-risk limits (described in section 465), assessments, and collection penalties that apply to tax returns generally also apply to Form 990-T. 1040ez free online file When to file. 1040ez free online file   The Form 990-T of an employees' trust described in section 401(a), an IRA (including a traditional, SEP, SIMPLE, Roth, or Coverdell IRA), or an MSA must be filed by the 15th day of the 4th month after the end of its tax year. 1040ez free online file The Form 990-T of any other exempt organization must be filed by the 15th day of the 5th month after the end of its tax year. 1040ez free online file If the due date falls on a Saturday, Sunday, or legal holiday, the return is due by the next business day. 1040ez free online file Extension of time to file. 1040ez free online file   A Form 990-T filer may request an automatic 3-month (6 months for corporation) extension of time to file a return by submitting Form 8868, Application for Extension of Time To File an Exempt Organization Return. 1040ez free online file The Form 990-T filer may also use Form 8868 to apply for an additional (not automatic) 3-month extension to file the return if the original 3-month extension was not enough time. 1040ez free online file Public Inspection Requirements of Section 501(c)(3) Organizations. 1040ez free online file   Under section 6104(d), a section 501(c)(3) organization that has gross income from an unrelated trade or business of $1,000 or more must make its annual exempt organization business income tax return (including amended returns) available for public inspection. 1040ez free online file    A section 501(c)(3) organization filing the Form 990-T only to request a credit for certain federal excise taxes paid does not have to make the Form 990-T available for public inspection. 1040ez free online file Payment of Tax Estimated tax. 1040ez free online file   A tax-exempt organization must make estimated tax payments if it expects its tax (unrelated business income tax after certain adjustments) to be $500 or more. 1040ez free online file Estimated tax payments are generally due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. 1040ez free online file If any due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next business day. 1040ez free online file   Any organization that fails to pay the proper estimated tax when due may be charged an underpayment penalty for the period of underpayment. 1040ez free online file Generally, to avoid the estimated tax penalty, the organization must make estimated tax payments that total 100% of the organization's current tax year liability. 1040ez free online file However, an organization can base its required estimated tax payments on 100% of the tax shown on its return for the preceding year (unless no tax is shown) if its taxable income for each of the 3 preceding tax years was less than $1 million. 1040ez free online file If an organization's taxable income for any of those years was $1 million or more, it can base only its first required installment payment on its last year's tax. 1040ez free online file   All tax-exempt organizations should use Form 990-W (Worksheet), to figure their estimated tax. 1040ez free online file    Tax due with Form 990-T. 1040ez free online file   Any tax due with Form 990-T must be paid in full when the return is filed, but no later than the date the return is due (determined without extensions). 1040ez free online file Federal Tax Deposits Must be Made by Electronic Funds Transfer You must use electronic funds transfer to make all federal deposits (such as deposits of estimated tax, employment tax, and excise tax). 1040ez free online file Forms 8109 and 8109-B, Federal Tax Deposit Coupon, are no longer in use. 1040ez free online file Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040ez free online file If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. 1040ez free online file Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. 1040ez free online file EFTPS is a free service provided by the Department of Treasury. 1040ez free online file Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. 1040ez free online file To get more information about EFTPS or to enroll in EFTPS, visit www. 1040ez free online file eftps. 1040ez free online file gov or call 1-800-555-4477. 1040ez free online file Additional information about EFTPS is available in Publication 966, The Secure Way to Pay Your Federal Taxes. 1040ez free online file Deposits on business days only. 1040ez free online file   If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. 1040ez free online file A business day is any day other than a Saturday, Sunday, or legal holiday. 1040ez free online file For example, if a deposit is required to be made on a Friday and Friday is a legal holiday, the deposit will be considered timely if it is made by the following Monday (if that Monday is a business day). 1040ez free online file The term "legal holiday" means any legal holiday in the District of Columbia. 1040ez free online file Prev  Up  Next   Home   More Online Publications