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1040ez Tax Form For 2012

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1040ez Tax Form For 2012

1040ez tax form for 2012 Publication 936 - Main Content Table of Contents Part I. 1040ez tax form for 2012 Home Mortgage InterestSecured Debt Qualified Home Special Situations Points Mortgage Insurance Premiums Form 1098, Mortgage Interest Statement How To Report Special Rule for Tenant-Stockholders in Cooperative Housing Corporations Part II. 1040ez tax form for 2012 Limits on Home Mortgage Interest DeductionHome Acquisition Debt Home Equity Debt Grandfathered Debt Table 1 Instructions How To Get Tax HelpLow Income Taxpayer Clinics Part I. 1040ez tax form for 2012 Home Mortgage Interest This part explains what you can deduct as home mortgage interest. 1040ez tax form for 2012 It includes discussions on points, mortgage insurance premiums, and how to report deductible interest on your tax return. 1040ez tax form for 2012 Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). 1040ez tax form for 2012 The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. 1040ez tax form for 2012 You can deduct home mortgage interest if all the following conditions are met. 1040ez tax form for 2012 You file Form 1040 and itemize deductions on Schedule A (Form 1040). 1040ez tax form for 2012 The mortgage is a secured debt on a qualified home in which you have an ownership interest. 1040ez tax form for 2012 Secured Debt and Qualified Home are explained later. 1040ez tax form for 2012  Both you and the lender must intend that the loan be repaid. 1040ez tax form for 2012 Fully deductible interest. 1040ez tax form for 2012   In most cases, you can deduct all of your home mortgage interest. 1040ez tax form for 2012 How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. 1040ez tax form for 2012   If all of your mortgages fit into one or more of the following three categories at all times during the year, you can deduct all of the interest on those mortgages. 1040ez tax form for 2012 (If any one mortgage fits into more than one category, add the debt that fits in each category to your other debt in the same category. 1040ez tax form for 2012 ) If one or more of your mortgages does not fit into any of these categories, use Part II of this publication to figure the amount of interest you can deduct. 1040ez tax form for 2012   The three categories are as follows. 1040ez tax form for 2012 Mortgages you took out on or before October 13, 1987 (called grandfathered debt). 1040ez tax form for 2012 Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2013 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately). 1040ez tax form for 2012 Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2013 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2). 1040ez tax form for 2012 The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home. 1040ez tax form for 2012   See Part II for more detailed definitions of grandfathered, home acquisition, and home equity debt. 1040ez tax form for 2012    You can use Figure A to check whether your home mortgage interest is fully deductible. 1040ez tax form for 2012 This image is too large to be displayed in the current screen. 1040ez tax form for 2012 Please click the link to view the image. 1040ez tax form for 2012 Figure A. 1040ez tax form for 2012 Is My Home Mortgage Interest Fully Deductible? Secured Debt You can deduct your home mortgage interest only if your mortgage is a secured debt. 1040ez tax form for 2012 A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that: Makes your ownership in a qualified home security for payment of the debt, Provides, in case of default, that your home could satisfy the debt, and Is recorded or is otherwise perfected under any state or local law that applies. 1040ez tax form for 2012 In other words, your mortgage is a secured debt if you put your home up as collateral to protect the interests of the lender. 1040ez tax form for 2012 If you cannot pay the debt, your home can then serve as payment to the lender to satisfy (pay) the debt. 1040ez tax form for 2012 In this publication, mortgage will refer to secured debt. 1040ez tax form for 2012 Debt not secured by home. 1040ez tax form for 2012   A debt is not secured by your home if it is secured solely because of a lien on your general assets or if it is a security interest that attaches to the property without your consent (such as a mechanic's lien or judgment lien). 1040ez tax form for 2012   A debt is not secured by your home if it once was, but is no longer secured by your home. 1040ez tax form for 2012 Wraparound mortgage. 1040ez tax form for 2012   This is not a secured debt unless it is recorded or otherwise perfected under state law. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 Beth owns a home subject to a mortgage of $40,000. 1040ez tax form for 2012 She sells the home for $100,000 to John, who takes it subject to the $40,000 mortgage. 1040ez tax form for 2012 Beth continues to make the payments on the $40,000 note. 1040ez tax form for 2012 John pays $10,000 down and gives Beth a $90,000 note secured by a wraparound mortgage on the home. 1040ez tax form for 2012 Beth does not record or otherwise perfect the $90,000 mortgage under the state law that applies. 1040ez tax form for 2012 Therefore, the mortgage is not a secured debt and John cannot deduct any of the interest he pays on it as home mortgage interest. 1040ez tax form for 2012 Choice to treat the debt as not secured by your home. 1040ez tax form for 2012   You can choose to treat any debt secured by your qualified home as not secured by the home. 1040ez tax form for 2012 This treatment begins with the tax year for which you make the choice and continues for all later tax years. 1040ez tax form for 2012 You can revoke your choice only with the consent of the Internal Revenue Service (IRS). 1040ez tax form for 2012   You may want to treat a debt as not secured by your home if the interest on that debt is fully deductible (for example, as a business expense) whether or not it qualifies as home mortgage interest. 1040ez tax form for 2012 This may allow you, if the limits in Part II apply, more of a deduction for interest on other debts that are deductible only as home mortgage interest. 1040ez tax form for 2012 Cooperative apartment owner. 1040ez tax form for 2012   If you own stock in a cooperative housing corporation, see the Special Rule for Tenant-Stockholders in Cooperative Housing Corporations , near the end of this Part I. 1040ez tax form for 2012 Qualified Home For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. 1040ez tax form for 2012 This means your main home or your second home. 1040ez tax form for 2012 A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. 1040ez tax form for 2012 The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. 1040ez tax form for 2012 Otherwise, it is considered personal interest and is not deductible. 1040ez tax form for 2012 Main home. 1040ez tax form for 2012   You can have only one main home at any one time. 1040ez tax form for 2012 This is the home where you ordinarily live most of the time. 1040ez tax form for 2012 Second home. 1040ez tax form for 2012   A second home is a home that you choose to treat as your second home. 1040ez tax form for 2012 Second home not rented out. 1040ez tax form for 2012   If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. 1040ez tax form for 2012 You do not have to use the home during the year. 1040ez tax form for 2012 Second home rented out. 1040ez tax form for 2012   If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. 1040ez tax form for 2012 You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. 1040ez tax form for 2012 If you do not use the home long enough, it is considered rental property and not a second home. 1040ez tax form for 2012 For information on residential rental property, see Publication 527. 1040ez tax form for 2012 More than one second home. 1040ez tax form for 2012   If you have more than one second home, you can treat only one as the qualified second home during any year. 1040ez tax form for 2012 However, you can change the home you treat as a second home during the year in the following situations. 1040ez tax form for 2012 If you get a new home during the year, you can choose to treat the new home as your second home as of the day you buy it. 1040ez tax form for 2012 If your main home no longer qualifies as your main home, you can choose to treat it as your second home as of the day you stop using it as your main home. 1040ez tax form for 2012 If your second home is sold during the year or becomes your main home, you can choose a new second home as of the day you sell the old one or begin using it as your main home. 1040ez tax form for 2012 Divided use of your home. 1040ez tax form for 2012   The only part of your home that is considered a qualified home is the part you use for residential living. 1040ez tax form for 2012 If you use part of your home for other than residential living, such as a home office, you must allocate the use of your home. 1040ez tax form for 2012 You must then divide both the cost and fair market value of your home between the part that is a qualified home and the part that is not. 1040ez tax form for 2012 Dividing the cost may affect the amount of your home acquisition debt, which is limited to the cost of your home plus the cost of any improvements. 1040ez tax form for 2012 (See Home Acquisition Debt in Part II. 1040ez tax form for 2012 ) Dividing the fair market value may affect your home equity debt limit, also explained in Part II . 1040ez tax form for 2012 Renting out part of home. 1040ez tax form for 2012   If you rent out part of a qualified home to another person (tenant), you can treat the rented part as being used by you for residential living only if all of the following conditions apply. 1040ez tax form for 2012 The rented part of your home is used by the tenant primarily for residential living. 1040ez tax form for 2012 The rented part of your home is not a self-contained residential unit having separate sleeping, cooking, and toilet facilities. 1040ez tax form for 2012 You do not rent (directly or by sublease) the same or different parts of your home to more than two tenants at any time during the tax year. 1040ez tax form for 2012 If two persons (and dependents of either) share the same sleeping quarters, they are treated as one tenant. 1040ez tax form for 2012 Office in home. 1040ez tax form for 2012   If you have an office in your home that you use in your business, see Publication 587, Business Use of Your Home. 1040ez tax form for 2012 It explains how to figure your deduction for the business use of your home, which includes the business part of your home mortgage interest. 1040ez tax form for 2012 Home under construction. 1040ez tax form for 2012   You can treat a home under construction as a qualified home for a period of up to 24 months, but only if it becomes your qualified home at the time it is ready for occupancy. 1040ez tax form for 2012   The 24-month period can start any time on or after the day construction begins. 1040ez tax form for 2012 Home destroyed. 1040ez tax form for 2012   You may be able to continue treating your home as a qualified home even after it is destroyed in a fire, storm, tornado, earthquake, or other casualty. 1040ez tax form for 2012 This means you can continue to deduct the interest you pay on your home mortgage, subject to the limits described in this publication. 1040ez tax form for 2012   You can continue treating a destroyed home as a qualified home if, within a reasonable period of time after the home is destroyed, you: Rebuild the destroyed home and move into it, or Sell the land on which the home was located. 1040ez tax form for 2012   This rule applies to your main home and to a second home that you treat as a qualified home. 1040ez tax form for 2012 Time-sharing arrangements. 1040ez tax form for 2012   You can treat a home you own under a time-sharing plan as a qualified home if it meets all the requirements. 1040ez tax form for 2012 A time-sharing plan is an arrangement between two or more people that limits each person's interest in the home or right to use it to a certain part of the year. 1040ez tax form for 2012 Rental of time-share. 1040ez tax form for 2012   If you rent out your time-share, it qualifies as a second home only if you also use it as a home during the year. 1040ez tax form for 2012 See Second home rented out , earlier, for the use requirement. 1040ez tax form for 2012 To know whether you meet that requirement, count your days of use and rental of the home only during the time you have a right to use it or to receive any benefits from the rental of it. 1040ez tax form for 2012 Married taxpayers. 1040ez tax form for 2012   If you are married and file a joint return, your qualified home(s) can be owned either jointly or by only one spouse. 1040ez tax form for 2012 Separate returns. 1040ez tax form for 2012   If you are married filing separately and you and your spouse own more than one home, you can each take into account only one home as a qualified home. 1040ez tax form for 2012 However, if you both consent in writing, then one spouse can take both the main home and a second home into account. 1040ez tax form for 2012 Special Situations This section describes certain items that can be included as home mortgage interest and others that cannot. 1040ez tax form for 2012 It also describes certain special situations that may affect your deduction. 1040ez tax form for 2012 Late payment charge on mortgage payment. 1040ez tax form for 2012   You can deduct as home mortgage interest a late payment charge if it was not for a specific service performed in connection with your mortgage loan. 1040ez tax form for 2012 Mortgage prepayment penalty. 1040ez tax form for 2012   If you pay off your home mortgage early, you may have to pay a penalty. 1040ez tax form for 2012 You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. 1040ez tax form for 2012 Sale of home. 1040ez tax form for 2012   If you sell your home, you can deduct your home mortgage interest (subject to any limits that apply) paid up to, but not including, the date of the sale. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 John and Peggy Harris sold their home on May 7. 1040ez tax form for 2012 Through April 30, they made home mortgage interest payments of $1,220. 1040ez tax form for 2012 The settlement sheet for the sale of the home showed $50 interest for the 6-day period in May up to, but not including, the date of sale. 1040ez tax form for 2012 Their mortgage interest deduction is $1,270 ($1,220 + $50). 1040ez tax form for 2012 Prepaid interest. 1040ez tax form for 2012   If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. 1040ez tax form for 2012 You can deduct in each year only the interest that qualifies as home mortgage interest for that year. 1040ez tax form for 2012 However, there is an exception that applies to points, discussed later. 1040ez tax form for 2012 Mortgage interest credit. 1040ez tax form for 2012    You may be able to claim a mortgage interest credit if you were issued a mortgage credit certificate (MCC) by a state or local government. 1040ez tax form for 2012 Figure the credit on Form 8396, Mortgage Interest Credit. 1040ez tax form for 2012 If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit. 1040ez tax form for 2012   See Form 8396 and Publication 530 for more information on the mortgage interest credit. 1040ez tax form for 2012 Ministers' and military housing allowance. 1040ez tax form for 2012   If you are a minister or a member of the uniformed services and receive a housing allowance that is not taxable, you can still deduct your home mortgage interest. 1040ez tax form for 2012 Hardest Hit Fund and Emergency Homeowners' Loan Programs. 1040ez tax form for 2012   You can use a special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet the following two conditions. 1040ez tax form for 2012 You received assistance under: A State Housing Finance Agency (State HFA) Hardest Hit Fund program in which program payments could be used to pay mortgage interest, or An Emergency Homeowners' Loan Program administered by the Department of Housing and Urban Development (HUD) or a state. 1040ez tax form for 2012 You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your main home. 1040ez tax form for 2012 If you meet these tests, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098–MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received from payer(s) / borrower(s)), box 4 (mortgage insurance premiums), and box 5 (other information including real property taxes paid). 1040ez tax form for 2012 However, you are not required to use this special method to compute your deduction for mortgage interest and real estate taxes on your main home. 1040ez tax form for 2012 Mortgage assistance payments under section 235 of the National Housing Act. 1040ez tax form for 2012   If you qualify for mortgage assistance payments for lower-income families under section 235 of the National Housing Act, part or all of the interest on your mortgage may be paid for you. 1040ez tax form for 2012 You cannot deduct the interest that is paid for you. 1040ez tax form for 2012 No other effect on taxes. 1040ez tax form for 2012   Do not include these mortgage assistance payments in your income. 1040ez tax form for 2012 Also, do not use these payments to reduce other deductions, such as real estate taxes. 1040ez tax form for 2012 Divorced or separated individuals. 1040ez tax form for 2012   If a divorce or separation agreement requires you or your spouse or former spouse to pay home mortgage interest on a home owned by both of you, the payment of interest may be alimony. 1040ez tax form for 2012 See the discussion of Payments for jointly-owned home under Alimony in Publication 504, Divorced or Separated Individuals. 1040ez tax form for 2012 Redeemable ground rents. 1040ez tax form for 2012   In some states (such as Maryland), you can buy your home subject to a ground rent. 1040ez tax form for 2012 A ground rent is an obligation you assume to pay a fixed amount per year on the property. 1040ez tax form for 2012 Under this arrangement, you are leasing (rather than buying) the land on which your home is located. 1040ez tax form for 2012   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. 1040ez tax form for 2012   A ground rent is a redeemable ground rent if all of the following are true. 1040ez tax form for 2012 Your lease, including renewal periods, is for more than 15 years. 1040ez tax form for 2012 You can freely assign the lease. 1040ez tax form for 2012 You have a present or future right (under state or local law) to end the lease and buy the lessor's entire interest in the land by paying a specific amount. 1040ez tax form for 2012 The lessor's interest in the land is primarily a security interest to protect the rental payments to which he or she is entitled. 1040ez tax form for 2012   Payments made to end the lease and to buy the lessor's entire interest in the land are not deductible as mortgage interest. 1040ez tax form for 2012 Nonredeemable ground rents. 1040ez tax form for 2012   Payments on a nonredeemable ground rent are not mortgage interest. 1040ez tax form for 2012 You can deduct them as rent if they are a business expense or if they are for rental property. 1040ez tax form for 2012 Reverse mortgages. 1040ez tax form for 2012   A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. 1040ez tax form for 2012 With a reverse mortgage, you retain title to your home. 1040ez tax form for 2012 Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die. 1040ez tax form for 2012 Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. 1040ez tax form for 2012 Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until you actually pay it, which is usually when you pay off the loan in full. 1040ez tax form for 2012 Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Part II. 1040ez tax form for 2012 Rental payments. 1040ez tax form for 2012   If you live in a house before final settlement on the purchase, any payments you make for that period are rent and not interest. 1040ez tax form for 2012 This is true even if the settlement papers call them interest. 1040ez tax form for 2012 You cannot deduct these payments as home mortgage interest. 1040ez tax form for 2012 Mortgage proceeds invested in tax-exempt securities. 1040ez tax form for 2012   You cannot deduct the home mortgage interest on grandfathered debt or home equity debt if you used the proceeds of the mortgage to buy securities or certificates that produce tax-free income. 1040ez tax form for 2012 “Grandfathered debt” and “home equity debt” are defined in Part II of this publication. 1040ez tax form for 2012 Refunds of interest. 1040ez tax form for 2012   If you receive a refund of interest in the same tax year you paid it, you must reduce your interest expense by the amount refunded to you. 1040ez tax form for 2012 If you receive a refund of interest you deducted in an earlier year, you generally must include the refund in income in the year you receive it. 1040ez tax form for 2012 However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. 1040ez tax form for 2012 This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. 1040ez tax form for 2012 If you need to include the refund in income, report it on Form 1040, line 21. 1040ez tax form for 2012   If you received a refund of interest you overpaid in an earlier year, you generally will receive a Form 1098, Mortgage Interest Statement, showing the refund in box 3. 1040ez tax form for 2012 For information about Form 1098, see Form 1098, Mortgage Interest Statement , later. 1040ez tax form for 2012   For more information on how to treat refunds of interest deducted in earlier years, see Recoveries in Publication 525, Taxable and Nontaxable Income. 1040ez tax form for 2012 Cooperative apartment owner. 1040ez tax form for 2012   If you own a cooperative apartment, you must reduce your home mortgage interest deduction by your share of any cash portion of a patronage dividend that the cooperative receives. 1040ez tax form for 2012 The patronage dividend is a partial refund to the cooperative housing corporation of mortgage interest it paid in a prior year. 1040ez tax form for 2012   If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount you can deduct. 1040ez tax form for 2012 Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. 1040ez tax form for 2012 Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. 1040ez tax form for 2012 This image is too large to be displayed in the current screen. 1040ez tax form for 2012 Please click the link to view the image. 1040ez tax form for 2012 Figure B. 1040ez tax form for 2012 Are My Points Fully Deductible This Year? A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. 1040ez tax form for 2012 See Points paid by the seller , later. 1040ez tax form for 2012 General Rule You generally cannot deduct the full amount of points in the year paid. 1040ez tax form for 2012 Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. 1040ez tax form for 2012 See Deduction Allowed Ratably , next. 1040ez tax form for 2012 For exceptions to the general rule, see Deduction Allowed in Year Paid , later. 1040ez tax form for 2012 Deduction Allowed Ratably If you do not meet the tests listed under Deduction Allowed in Year Paid , later, the loan is not a home improvement loan, or you choose not to deduct your points in full in the year paid, you can deduct the points ratably (equally) over the life of the loan if you meet all the following tests. 1040ez tax form for 2012 You use the cash method of accounting. 1040ez tax form for 2012 This means you report income in the year you receive it and deduct expenses in the year you pay them. 1040ez tax form for 2012 Most individuals use this method. 1040ez tax form for 2012 Your loan is secured by a home. 1040ez tax form for 2012 (The home does not need to be your main home. 1040ez tax form for 2012 ) Your loan period is not more than 30 years. 1040ez tax form for 2012 If your loan period is more than 10 years, the terms of your loan are the same as other loans offered in your area for the same or longer period. 1040ez tax form for 2012 Either your loan amount is $250,000 or less, or the number of points is not more than: 4, if your loan period is 15 years or less, or 6, if your loan period is more than 15 years. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 You use the cash method of accounting. 1040ez tax form for 2012 In 2013, you took out a $100,000 loan payable over 20 years. 1040ez tax form for 2012 The terms of the loan are the same as for other 20-year loans offered in your area. 1040ez tax form for 2012 You paid $4,800 in points. 1040ez tax form for 2012 You made 3 monthly payments on the loan in 2013. 1040ez tax form for 2012 You can deduct $60 [($4,800 ÷ 240 months) x 3 payments] in 2013. 1040ez tax form for 2012 In 2014, if you make all twelve payments, you will be able to deduct $240 ($20 x 12). 1040ez tax form for 2012 Deduction Allowed in Year Paid You can fully deduct points in the year paid if you meet all the following tests. 1040ez tax form for 2012 (You can use Figure B as a quick guide to see whether your points are fully deductible in the year paid. 1040ez tax form for 2012 ) Your loan is secured by your main home. 1040ez tax form for 2012 (Your main home is the one you ordinarily live in most of the time. 1040ez tax form for 2012 ) Paying points is an established business practice in the area where the loan was made. 1040ez tax form for 2012 The points paid were not more than the points generally charged in that area. 1040ez tax form for 2012 You use the cash method of accounting. 1040ez tax form for 2012 This means you report income in the year you receive it and deduct expenses in the year you pay them. 1040ez tax form for 2012 Most individuals use this method. 1040ez tax form for 2012 The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. 1040ez tax form for 2012 The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. 1040ez tax form for 2012 The funds you provided are not required to have been applied to the points. 1040ez tax form for 2012 They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. 1040ez tax form for 2012 You cannot have borrowed these funds from your lender or mortgage broker. 1040ez tax form for 2012 You use your loan to buy or build your main home. 1040ez tax form for 2012 The points were computed as a percentage of the principal amount of the mortgage. 1040ez tax form for 2012 The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. 1040ez tax form for 2012 The points may be shown as paid from either your funds or the seller's. 1040ez tax form for 2012 Note. 1040ez tax form for 2012 If you meet all of these tests, you can choose to either fully deduct the points in the year paid, or deduct them over the life of the loan. 1040ez tax form for 2012 Home improvement loan. 1040ez tax form for 2012   You can also fully deduct in the year paid points paid on a loan to improve your main home, if tests (1) through (6) are met. 1040ez tax form for 2012 Second home. 1040ez tax form for 2012 You cannot fully deduct in the year paid points you pay on loans secured by your second home. 1040ez tax form for 2012 You can deduct these points only over the life of the loan. 1040ez tax form for 2012 Refinancing. 1040ez tax form for 2012   Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. 1040ez tax form for 2012 This is true even if the new mortgage is secured by your main home. 1040ez tax form for 2012   However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first 6 tests listed under Deduction Allowed in Year Paid , you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. 1040ez tax form for 2012 You can deduct the rest of the points over the life of the loan. 1040ez tax form for 2012 Example 1. 1040ez tax form for 2012 In 1998, Bill Fields got a mortgage to buy a home. 1040ez tax form for 2012 In 2013, Bill refinanced that mortgage with a 15-year $100,000 mortgage loan. 1040ez tax form for 2012 The mortgage is secured by his home. 1040ez tax form for 2012 To get the new loan, he had to pay three points ($3,000). 1040ez tax form for 2012 Two points ($2,000) were for prepaid interest, and one point ($1,000) was charged for services, in place of amounts that ordinarily are stated separately on the settlement statement. 1040ez tax form for 2012 Bill paid the points out of his private funds, rather than out of the proceeds of the new loan. 1040ez tax form for 2012 The payment of points is an established practice in the area, and the points charged are not more than the amount generally charged there. 1040ez tax form for 2012 Bill's first payment on the new loan was due July 1. 1040ez tax form for 2012 He made six payments on the loan in 2013 and is a cash basis taxpayer. 1040ez tax form for 2012 Bill used the funds from the new mortgage to repay his existing mortgage. 1040ez tax form for 2012 Although the new mortgage loan was for Bill's continued ownership of his main home, it was not for the purchase or improvement of that home. 1040ez tax form for 2012 He cannot deduct all of the points in 2013. 1040ez tax form for 2012 He can deduct two points ($2,000) ratably over the life of the loan. 1040ez tax form for 2012 He deducts $67 [($2,000 ÷ 180 months) × 6 payments] of the points in 2013. 1040ez tax form for 2012 The other point ($1,000) was a fee for services and is not deductible. 1040ez tax form for 2012 Example 2. 1040ez tax form for 2012 The facts are the same as in Example 1, except that Bill used $25,000 of the loan proceeds to improve his home and $75,000 to repay his existing mortgage. 1040ez tax form for 2012 Bill deducts 25% ($25,000 ÷ $100,000) of the points ($2,000) in 2013. 1040ez tax form for 2012 His deduction is $500 ($2,000 × 25%). 1040ez tax form for 2012 Bill also deducts the ratable part of the remaining $1,500 ($2,000 − $500) that must be spread over the life of the loan. 1040ez tax form for 2012 This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2013. 1040ez tax form for 2012 The total amount Bill deducts in 2013 is $550 ($500 + $50). 1040ez tax form for 2012 Special Situations This section describes certain special situations that may affect your deduction of points. 1040ez tax form for 2012 Original issue discount. 1040ez tax form for 2012   If you do not qualify to either deduct the points in the year paid or deduct them ratably over the life of the loan, or if you choose not to use either of these methods, the points reduce the issue price of the loan. 1040ez tax form for 2012 This reduction results in original issue discount, which is discussed in chapter 4 of Publication 535. 1040ez tax form for 2012 Amounts charged for services. 1040ez tax form for 2012    Amounts charged by the lender for specific services connected to the loan are not interest. 1040ez tax form for 2012 Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. 1040ez tax form for 2012  You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. 1040ez tax form for 2012 Points paid by the seller. 1040ez tax form for 2012   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. 1040ez tax form for 2012 Treatment by seller. 1040ez tax form for 2012   The seller cannot deduct these fees as interest. 1040ez tax form for 2012 But they are a selling expense that reduces the amount realized by the seller. 1040ez tax form for 2012 See Publication 523 for information on selling your home. 1040ez tax form for 2012 Treatment by buyer. 1040ez tax form for 2012   The buyer reduces the basis of the home by the amount of the seller-paid points and treats the points as if he or she had paid them. 1040ez tax form for 2012 If all the tests under Deduction Allowed in Year Paid , earlier, are met, the buyer can deduct the points in the year paid. 1040ez tax form for 2012 If any of those tests are not met, the buyer deducts the points over the life of the loan. 1040ez tax form for 2012   If you need information about the basis of your home, see Publication 523 or Publication 530. 1040ez tax form for 2012 Funds provided are less than points. 1040ez tax form for 2012   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the funds you provided were less than the points charged to you (test (6)), you can deduct the points in the year paid, up to the amount of funds you provided. 1040ez tax form for 2012 In addition, you can deduct any points paid by the seller. 1040ez tax form for 2012 Example 1. 1040ez tax form for 2012 When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). 1040ez tax form for 2012 You meet all the tests for deducting points in the year paid, except the only funds you provided were a $750 down payment. 1040ez tax form for 2012 Of the $1,000 charged for points, you can deduct $750 in the year paid. 1040ez tax form for 2012 You spread the remaining $250 over the life of the mortgage. 1040ez tax form for 2012 Example 2. 1040ez tax form for 2012 The facts are the same as in Example 1, except that the person who sold you your home also paid one point ($1,000) to help you get your mortgage. 1040ez tax form for 2012 In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). 1040ez tax form for 2012 You spread the remaining $250 over the life of the mortgage. 1040ez tax form for 2012 You must reduce the basis of your home by the $1,000 paid by the seller. 1040ez tax form for 2012 Excess points. 1040ez tax form for 2012   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the points paid were more than generally paid in your area (test (3)), you deduct in the year paid only the points that are generally charged. 1040ez tax form for 2012 You must spread any additional points over the life of the mortgage. 1040ez tax form for 2012 Mortgage ending early. 1040ez tax form for 2012   If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. 1040ez tax form for 2012 However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. 1040ez tax form for 2012 Instead, deduct the remaining balance over the term of the new loan. 1040ez tax form for 2012   A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 Dan paid $3,000 in points in 2002 that he had to spread out over the 15-year life of the mortgage. 1040ez tax form for 2012 He deducts $200 points per year. 1040ez tax form for 2012 Through 2012, Dan has deducted $2,200 of the points. 1040ez tax form for 2012 Dan prepaid his mortgage in full in 2013. 1040ez tax form for 2012 He can deduct the remaining $800 of points in 2013. 1040ez tax form for 2012 Limits on deduction. 1040ez tax form for 2012   You cannot fully deduct points paid on a mortgage that exceeds the limits discussed in Part II . 1040ez tax form for 2012 See the Table 1 Instructions for line 10. 1040ez tax form for 2012 Form 1098. 1040ez tax form for 2012    The mortgage interest statement you receive should show not only the total interest paid during the year, but also your deductible points paid during the year. 1040ez tax form for 2012 See Form 1098, Mortgage Interest Statement , later. 1040ez tax form for 2012 Mortgage Insurance Premiums You can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. 1040ez tax form for 2012 The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after 2006. 1040ez tax form for 2012 Qualified mortgage insurance. 1040ez tax form for 2012   Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service, and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998 as in effect on December 20, 2006). 1040ez tax form for 2012   Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee. 1040ez tax form for 2012 If provided by the Rural Housing Service, it is commonly known as a guarantee fee. 1040ez tax form for 2012 The funding fee and guarantee fee can either be included in the amount of the loan or paid in full at the time of closing. 1040ez tax form for 2012 These fees can be deducted fully in 2013 if the mortgage insurance contract was issued in 2013. 1040ez tax form for 2012 Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 4 of Form 1098. 1040ez tax form for 2012 Special rules for prepaid mortgage insurance. 1040ez tax form for 2012   Generally, if you paid premiums for qualified mortgage insurance that are properly allocable to periods after the close of the tax year, such premiums are treated as paid in the period to which they are allocated. 1040ez tax form for 2012 You must allocate the premiums over the shorter of the stated term of the mortgage or 84 months, beginning with the month the insurance was obtained. 1040ez tax form for 2012 No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. 1040ez tax form for 2012 This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 Ryan purchased a home in May of 2012 and financed the home with a 15-year mortgage. 1040ez tax form for 2012 Ryan also prepaid all of the $9,240 in private mortgage insurance required at the time of closing in May. 1040ez tax form for 2012 Since the $9,240 in private mortgage insurance is allocable to periods after 2012, Ryan must allocate the $9,240 over the shorter of the life of the mortgage or 84 months. 1040ez tax form for 2012 Ryan's adjusted gross income (AGI) for 2012 is $76,000. 1040ez tax form for 2012 Ryan can deduct $880 ($9,240 ÷ 84 x 8 months) for qualified mortgage insurance premiums in 2012. 1040ez tax form for 2012 For 2013, Ryan can deduct $1,320 ($9,240 ÷ 84 x 12 months) if his AGI is $100,000 or less. 1040ez tax form for 2012 In this example, the mortgage insurance premiums are allocated over 84 months, which is shorter than the life of the mortgage of 15 years (180 months). 1040ez tax form for 2012 Limit on deduction. 1040ez tax form for 2012   If your adjusted gross income on Form 1040, line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated. 1040ez tax form for 2012 See Line 13 in the instructions for Schedule A (Form 1040) and complete the Mortgage Insurance Premiums Deduction Worksheet to figure the amount you can deduct. 1040ez tax form for 2012 If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. 1040ez tax form for 2012 Form 1098. 1040ez tax form for 2012   The mortgage interest statement you receive should show not only the total interest paid during the year, but also your mortgage insurance premiums paid during the year, which may qualify to be treated as deductible mortgage interest. 1040ez tax form for 2012 See Form 1098, Mortgage Interest Statement, next. 1040ez tax form for 2012 Form 1098, Mortgage Interest Statement If you paid $600 or more of mortgage interest (including certain points and mortgage insurance premiums) during the year on any one mortgage, you generally will receive a Form 1098 or a similar statement from the mortgage holder. 1040ez tax form for 2012 You will receive the statement if you pay interest to a person (including a financial institution or cooperative housing corporation) in the course of that person's trade or business. 1040ez tax form for 2012 A governmental unit is a person for purposes of furnishing the statement. 1040ez tax form for 2012 The statement for each year should be sent to you by January 31 of the following year. 1040ez tax form for 2012 A copy of this form will also be sent to the IRS. 1040ez tax form for 2012 The statement will show the total interest you paid during the year, any mortgage insurance premiums you paid, and if you purchased a main home during the year, it also will show the deductible points paid during the year, including seller-paid points. 1040ez tax form for 2012 However, it should not show any interest that was paid for you by a government agency. 1040ez tax form for 2012 As a general rule, Form 1098 will include only points that you can fully deduct in the year paid. 1040ez tax form for 2012 However, certain points not included on Form 1098 also may be deductible, either in the year paid or over the life of the loan. 1040ez tax form for 2012 See the earlier discussion of Points to determine whether you can deduct points not shown on Form 1098. 1040ez tax form for 2012 Prepaid interest on Form 1098. 1040ez tax form for 2012   If you prepaid interest in 2013 that accrued in full by January 15, 2014, this prepaid interest may be included in box 1 of Form 1098. 1040ez tax form for 2012 However, you cannot deduct the prepaid amount for January 2014 in 2013. 1040ez tax form for 2012 (See Prepaid interest , earlier. 1040ez tax form for 2012 ) You will have to figure the interest that accrued for 2014 and subtract it from the amount in box 1. 1040ez tax form for 2012 You will include the interest for January 2014 with other interest you pay for 2014. 1040ez tax form for 2012 Refunded interest. 1040ez tax form for 2012   If you received a refund of mortgage interest you overpaid in an earlier year, you generally will receive a Form 1098 showing the refund in box 3. 1040ez tax form for 2012 See Refunds of interest , earlier. 1040ez tax form for 2012 Mortgage insurance premiums. 1040ez tax form for 2012   The amount of mortgage insurance premiums you paid during 2013 may be shown in Box 4 of Form 1098. 1040ez tax form for 2012 See Mortgage Insurance Premiums , earlier. 1040ez tax form for 2012 How To Report Deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 10. 1040ez tax form for 2012 If you paid more deductible interest to the financial institution than the amount shown on Form 1098, show the larger deductible amount on line 10. 1040ez tax form for 2012 Attach a statement explaining the difference and print “See attached” next to line 10. 1040ez tax form for 2012 Deduct home mortgage interest that was not reported to you on Form 1098 on Schedule A (Form 1040), line 11. 1040ez tax form for 2012 If you paid home mortgage interest to the person from whom you bought your home, show that person's name, address, and taxpayer identification number (TIN) on the dotted lines next to line 11. 1040ez tax form for 2012 The seller must give you this number and you must give the seller your TIN. 1040ez tax form for 2012 A Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. 1040ez tax form for 2012 Failure to meet any of these requirements may result in a $50 penalty for each failure. 1040ez tax form for 2012 The TIN can be either a social security number, an individual taxpayer identification number (issued by the Internal Revenue Service), or an employer identification number. 1040ez tax form for 2012 If you can take a deduction for points that were not reported to you on Form 1098, deduct those points on Schedule A (Form 1040), line 12. 1040ez tax form for 2012 Deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. 1040ez tax form for 2012 More than one borrower. 1040ez tax form for 2012   If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. 1040ez tax form for 2012 Show how much of the interest each of you paid, and give the name and address of the person who received the form. 1040ez tax form for 2012 Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. 1040ez tax form for 2012 Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13. 1040ez tax form for 2012   Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. 1040ez tax form for 2012 Let each of the other borrowers know what his or her share is. 1040ez tax form for 2012 Mortgage proceeds used for business or investment. 1040ez tax form for 2012   If your home mortgage interest deduction is limited under the rules explained in Part II , but all or part of the mortgage proceeds were used for business, investment, or other deductible activities, see Table 2 near the end of this publication. 1040ez tax form for 2012 It shows where to deduct the part of your excess interest that is for those activities. 1040ez tax form for 2012 The Table 1 Instructions for line 13 in Part II explain how to divide the excess interest among the activities for which the mortgage proceeds were used. 1040ez tax form for 2012 Special Rule for Tenant-Stockholders in Cooperative Housing Corporations A qualified home includes stock in a cooperative housing corporation owned by a tenant-stockholder. 1040ez tax form for 2012 This applies only if the tenant-stockholder is entitled to live in the house or apartment because of owning stock in the cooperative. 1040ez tax form for 2012 Cooperative housing corporation. 1040ez tax form for 2012   This is a corporation that meets all of the following conditions. 1040ez tax form for 2012 Has only one class of stock outstanding, Has no stockholders other than those who own the stock that can live in a house, apartment, or house trailer owned or leased by the corporation, Has no stockholders who can receive any distribution out of capital other than on a liquidation of the corporation, and Meets at least one of the following requirements. 1040ez tax form for 2012 Receives at least 80% of its gross income for the year in which the mortgage interest is paid or incurred from tenant-stockholders. 1040ez tax form for 2012 For this purpose, gross income is all income received during the entire year, including amounts received before the corporation changed to cooperative ownership. 1040ez tax form for 2012 At all times during the year, at least 80% of the total square footage of the corporation's property is used or available for use by the tenant-stockholders for residential or residential-related use. 1040ez tax form for 2012 At least 90% of the corporation's expenditures paid or incurred during the year are for the acquisition, construction, management, maintenance, or care of corporate property for the benefit of the tenant-stockholders. 1040ez tax form for 2012 Stock used to secure debt. 1040ez tax form for 2012   In some cases, you cannot use your cooperative housing stock to secure a debt because of either: Restrictions under local or state law, or Restrictions in the cooperative agreement (other than restrictions in which the main purpose is to permit the tenant- stockholder to treat unsecured debt as secured debt). 1040ez tax form for 2012 However, you can treat a debt as secured by the stock to the extent that the proceeds are used to buy the stock under the allocation of interest rules. 1040ez tax form for 2012 See chapter 4 of Publication 535 for details on these rules. 1040ez tax form for 2012 Figuring deductible home mortgage interest. 1040ez tax form for 2012   Generally, if you are a tenant-stockholder, you can deduct payments you make for your share of the interest paid or incurred by the cooperative. 1040ez tax form for 2012 The interest must be on a debt to buy, build, change, improve, or maintain the cooperative's housing, or on a debt to buy the land. 1040ez tax form for 2012   Figure your share of this interest by multiplying the total by the following fraction. 1040ez tax form for 2012      Your shares of stock in the cooperative   The total shares of stock in the cooperative Limits on deduction. 1040ez tax form for 2012   To figure how the limits discussed in Part II apply to you, treat your share of the cooperative's debt as debt incurred by you. 1040ez tax form for 2012 The cooperative should determine your share of its grandfathered debt, its home acquisition debt, and its home equity debt. 1040ez tax form for 2012 (Your share of each of these types of debt is equal to the average balance of each debt multiplied by the fraction just given. 1040ez tax form for 2012 ) After your share of the average balance of each type of debt is determined, you include it with the average balance of that type of debt secured by your stock. 1040ez tax form for 2012 Form 1098. 1040ez tax form for 2012    The cooperative should give you a Form 1098 showing your share of the interest. 1040ez tax form for 2012 Use the rules in this publication to determine your deductible mortgage interest. 1040ez tax form for 2012 Part II. 1040ez tax form for 2012 Limits on Home Mortgage Interest Deduction This part of the publication discusses the limits on deductible home mortgage interest. 1040ez tax form for 2012 These limits apply to your home mortgage interest expense if you have a home mortgage that does not fit into any of the three categories listed at the beginning of Part I under Fully deductible interest . 1040ez tax form for 2012 Your home mortgage interest deduction is limited to the interest on the part of your home mortgage debt that is not more than your qualified loan limit. 1040ez tax form for 2012 This is the part of your home mortgage debt that is grandfathered debt or that is not more than the limits for home acquisition debt and home equity debt. 1040ez tax form for 2012 Table 1 can help you figure your qualified loan limit and your deductible home mortgage interest. 1040ez tax form for 2012 Home Acquisition Debt Home acquisition debt is a mortgage you took out after October 13, 1987, to buy, build, or substantially improve a qualified home (your main or second home). 1040ez tax form for 2012 It also must be secured by that home. 1040ez tax form for 2012 If the amount of your mortgage is more than the cost of the home plus the cost of any substantial improvements, only the debt that is not more than the cost of the home plus improvements qualifies as home acquisition debt. 1040ez tax form for 2012 The additional debt may qualify as home equity debt (discussed later). 1040ez tax form for 2012 Home acquisition debt limit. 1040ez tax form for 2012   The total amount you can treat as home acquisition debt at any time on your main home and second home cannot be more than $1 million ($500,000 if married filing separately). 1040ez tax form for 2012 This limit is reduced (but not below zero) by the amount of your grandfathered debt (discussed later). 1040ez tax form for 2012 Debt over this limit may qualify as home equity debt (also discussed later). 1040ez tax form for 2012 Refinanced home acquisition debt. 1040ez tax form for 2012   Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. 1040ez tax form for 2012 However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. 1040ez tax form for 2012 Any additional debt not used to buy, build, or substantially improve a qualified home is not home acquisition debt, but may qualify as home equity debt (discussed later). 1040ez tax form for 2012 Mortgage that qualifies later. 1040ez tax form for 2012   A mortgage that does not qualify as home acquisition debt because it does not meet all the requirements may qualify at a later time. 1040ez tax form for 2012 For example, a debt that you use to buy your home may not qualify as home acquisition debt because it is not secured by the home. 1040ez tax form for 2012 However, if the debt is later secured by the home, it may qualify as home acquisition debt after that time. 1040ez tax form for 2012 Similarly, a debt that you use to buy property may not qualify because the property is not a qualified home. 1040ez tax form for 2012 However, if the property later becomes a qualified home, the debt may qualify after that time. 1040ez tax form for 2012 Mortgage treated as used to buy, build, or improve home. 1040ez tax form for 2012   A mortgage secured by a qualified home may be treated as home acquisition debt, even if you do not actually use the proceeds to buy, build, or substantially improve the home. 1040ez tax form for 2012 This applies in the following situations. 1040ez tax form for 2012 You buy your home within 90 days before or after the date you take out the mortgage. 1040ez tax form for 2012 The home acquisition debt is limited to the home's cost, plus the cost of any substantial improvements within the limit described below in (2) or (3). 1040ez tax form for 2012 (See Example 1 later. 1040ez tax form for 2012 ) You build or improve your home and take out the mortgage before the work is completed. 1040ez tax form for 2012 The home acquisition debt is limited to the amount of the expenses incurred within 24 months before the date of the mortgage. 1040ez tax form for 2012 You build or improve your home and take out the mortgage within 90 days after the work is completed. 1040ez tax form for 2012 The home acquisition debt is limited to the amount of the expenses incurred within the period beginning 24 months before the work is completed and ending on the date of the mortgage. 1040ez tax form for 2012 (See Example 2 later. 1040ez tax form for 2012 ) Example 1. 1040ez tax form for 2012 You bought your main home on June 3 for $175,000. 1040ez tax form for 2012 You paid for the home with cash you got from the sale of your old home. 1040ez tax form for 2012 On July 15, you took out a mortgage of $150,000 secured by your main home. 1040ez tax form for 2012 You used the $150,000 to invest in stocks. 1040ez tax form for 2012 You can treat the mortgage as taken out to buy your home because you bought the home within 90 days before you took out the mortgage. 1040ez tax form for 2012 The entire mortgage qualifies as home acquisition debt because it was not more than the home's cost. 1040ez tax form for 2012 Example 2. 1040ez tax form for 2012 On January 31, John began building a home on the lot that he owned. 1040ez tax form for 2012 He used $45,000 of his personal funds to build the home. 1040ez tax form for 2012 The home was completed on October 31. 1040ez tax form for 2012 On November 21, John took out a $36,000 mortgage that was secured by the home. 1040ez tax form for 2012 The mortgage can be treated as used to build the home because it was taken out within 90 days after the home was completed. 1040ez tax form for 2012 The entire mortgage qualifies as home acquisition debt because it was not more than the expenses incurred within the period beginning 24 months before the home was completed. 1040ez tax form for 2012 This is illustrated by Figure C. 1040ez tax form for 2012   Please click here for the text description of the image. 1040ez tax form for 2012 Figure C. 1040ez tax form for 2012 John's example Date of the mortgage. 1040ez tax form for 2012   The date you take out your mortgage is the day the loan proceeds are disbursed. 1040ez tax form for 2012 This is generally the closing date. 1040ez tax form for 2012 You can treat the day you apply in writing for your mortgage as the date you take it out. 1040ez tax form for 2012 However, this applies only if you receive the loan proceeds within a reasonable time (such as within 30 days) after your application is approved. 1040ez tax form for 2012 If a timely application you make is rejected, a reasonable additional time will be allowed to make a new application. 1040ez tax form for 2012 Cost of home or improvements. 1040ez tax form for 2012   To determine your cost, include amounts paid to acquire any interest in a qualified home or to substantially improve the home. 1040ez tax form for 2012   The cost of building or substantially improving a qualified home includes the costs to acquire real property and building materials, fees for architects and design plans, and required building permits. 1040ez tax form for 2012 Substantial improvement. 1040ez tax form for 2012   An improvement is substantial if it: Adds to the value of your home, Prolongs your home's useful life, or Adapts your home to new uses. 1040ez tax form for 2012    Repairs that maintain your home in good condition, such as repainting your home, are not substantial improvements. 1040ez tax form for 2012 However, if you paint your home as part of a renovation that substantially improves your qualified home, you can include the painting costs in the cost of the improvements. 1040ez tax form for 2012 Acquiring an interest in a home because of a divorce. 1040ez tax form for 2012   If you incur debt to acquire the interest of a spouse or former spouse in a home, because of a divorce or legal separation, you can treat that debt as home acquisition debt. 1040ez tax form for 2012 Part of home not a qualified home. 1040ez tax form for 2012    To figure your home acquisition debt, you must divide the cost of your home and improvements between the part of your home that is a qualified home and any part that is not a qualified home. 1040ez tax form for 2012 See Divided use of your home under Qualified Home in Part I. 1040ez tax form for 2012 Home Equity Debt If you took out a loan for reasons other than to buy, build, or substantially improve your home, it may qualify as home equity debt. 1040ez tax form for 2012 In addition, debt you incurred to buy, build, or substantially improve your home, to the extent it is more than the home acquisition debt limit (discussed earlier), may qualify as home equity debt. 1040ez tax form for 2012 Home equity debt is a mortgage you took out after October 13, 1987, that: Does not qualify as home acquisition debt or as grandfathered debt, and Is secured by your qualified home. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 You bought your home for cash 10 years ago. 1040ez tax form for 2012 You did not have a mortgage on your home until last year, when you took out a $50,000 loan, secured by your home, to pay for your daughter's college tuition and your father's medical bills. 1040ez tax form for 2012 This loan is home equity debt. 1040ez tax form for 2012 Home equity debt limit. 1040ez tax form for 2012   There is a limit on the amount of debt that can be treated as home equity debt. 1040ez tax form for 2012 The total home equity debt on your main home and second home is limited to the smaller of: $100,000 ($50,000 if married filing separately), or The total of each home's fair market value (FMV) reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt. 1040ez tax form for 2012 Determine the FMV and the outstanding home acquisition and grandfathered debt for each home on the date that the last debt was secured by the home. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 You own one home that you bought in 2000. 1040ez tax form for 2012 Its FMV now is $110,000, and the current balance on your original mortgage (home acquisition debt) is $95,000. 1040ez tax form for 2012 Bank M offers you a home mortgage loan of 125% of the FMV of the home less any outstanding mortgages or other liens. 1040ez tax form for 2012 To consolidate some of your other debts, you take out a $42,500 home mortgage loan [(125% × $110,000) − $95,000] with Bank M. 1040ez tax form for 2012 Your home equity debt is limited to $15,000. 1040ez tax form for 2012 This is the smaller of: $100,000, the maximum limit, or $15,000, the amount that the FMV of $110,000 exceeds the amount of home acquisition debt of $95,000. 1040ez tax form for 2012 Debt higher than limit. 1040ez tax form for 2012   Interest on amounts over the home equity debt limit (such as the interest on $27,500 [$42,500 − $15,000] in the preceding example) generally is treated as personal interest and is not deductible. 1040ez tax form for 2012 But if the proceeds of the loan were used for investment, business, or other deductible purposes, the interest may be deductible. 1040ez tax form for 2012 If it is, see the Table 1 Instructions for line 13 for an explanation of how to allocate the excess interest. 1040ez tax form for 2012 Part of home not a qualified home. 1040ez tax form for 2012   To figure the limit on your home equity debt, you must divide the FMV of your home between the part that is a qualified home and any part that is not a qualified home. 1040ez tax form for 2012 See Divided use of your home under Qualified Home in Part I. 1040ez tax form for 2012 Fair market value (FMV). 1040ez tax form for 2012    This is the price at which the home would change hands between you and a buyer, neither having to sell or buy, and both having reasonable knowledge of all relevant facts. 1040ez tax form for 2012 Sales of similar homes in your area, on about the same date your last debt was secured by the home, may be helpful in figuring the FMV. 1040ez tax form for 2012 Grandfathered Debt If you took out a mortgage on your home before October 14, 1987, or you refinanced such a mortgage, it may qualify as grandfathered debt. 1040ez tax form for 2012 To qualify, it must have been secured by your qualified home on October 13, 1987, and at all times after that date. 1040ez tax form for 2012 How you used the proceeds does not matter. 1040ez tax form for 2012 Grandfathered debt is not limited. 1040ez tax form for 2012 All of the interest you paid on grandfathered debt is fully deductible home mortgage interest. 1040ez tax form for 2012 However, the amount of your grandfathered debt reduces the $1 million limit for home acquisition debt and the limit based on your home's fair market value for home equity debt. 1040ez tax form for 2012 Refinanced grandfathered debt. 1040ez tax form for 2012   If you refinanced grandfathered debt after October 13, 1987, for an amount that was not more than the mortgage principal left on the debt, then you still treat it as grandfathered debt. 1040ez tax form for 2012 To the extent the new debt is more than that mortgage principal, it is treated as home acquisition or home equity debt, and the mortgage is a mixed-use mortgage (discussed later under Average Mortgage Balance in the Table 1 instructions). 1040ez tax form for 2012 The debt must be secured by the qualified home. 1040ez tax form for 2012   You treat grandfathered debt that was refinanced after October 13, 1987, as grandfathered debt only for the term left on the debt that was refinanced. 1040ez tax form for 2012 After that, you treat it as home acquisition debt or home equity debt, depending on how you used the proceeds. 1040ez tax form for 2012 Exception. 1040ez tax form for 2012   If the debt before refinancing was like a balloon note (the principal on the debt was not amortized over the term of the debt), then you treat the refinanced debt as grandfathered debt for the term of the first refinancing. 1040ez tax form for 2012 This term cannot be more than 30 years. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 Chester took out a $200,000 first mortgage on his home in 1986. 1040ez tax form for 2012 The mortgage was a five-year balloon note and the entire balance on the note was due in 1991. 1040ez tax form for 2012 Chester refinanced the debt in 1991 with a new 20-year mortgage. 1040ez tax form for 2012 The refinanced debt is treated as grandfathered debt for its entire term (20 years). 1040ez tax form for 2012 Line-of-credit mortgage. 1040ez tax form for 2012    If you had a line-of-credit mortgage on October 13, 1987, and borrowed additional amounts against it after that date, then the additional amounts are either home acquisition debt or home equity debt depending on how you used the proceeds. 1040ez tax form for 2012 The balance on the mortgage before you borrowed the additional amounts is grandfathered debt. 1040ez tax form for 2012 The newly borrowed amounts are not grandfathered debt because the funds were borrowed after October 13, 1987. 1040ez tax form for 2012 See Average Mortgage Balance in the Table 1 Instructions that follow. 1040ez tax form for 2012 Table 1 Instructions Unless you are subject to the overall limit on itemized deductions, you can deduct all of the interest you paid during the year on mortgages secured by your main home or second home in either of the following two situations. 1040ez tax form for 2012 All the mortgages are grandfathered debt. 1040ez tax form for 2012 The total of the mortgage balances for the entire year is within the limits discussed earlier under Home Acquisition Debt and Home Equity Debt . 1040ez tax form for 2012 In either of those cases, you do not need Table 1. 1040ez tax form for 2012 Otherwise, you can use Table 1 to determine your qualified loan limit and deductible home mortgage interest. 1040ez tax form for 2012 Fill out only one Table 1 for both your main and second home regardless of how many mortgages you have. 1040ez tax form for 2012 Table 1. 1040ez tax form for 2012 Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. 1040ez tax form for 2012 Part I Qualified Loan Limit 1. 1040ez tax form for 2012 Enter the average balance of all your grandfathered debt. 1040ez tax form for 2012 See line 1 instructions 1. 1040ez tax form for 2012   2. 1040ez tax form for 2012 Enter the average balance of all your home acquisition debt. 1040ez tax form for 2012 See line 2 instructions 2. 1040ez tax form for 2012   3. 1040ez tax form for 2012 Enter $1,000,000 ($500,000 if married filing separately) 3. 1040ez tax form for 2012   4. 1040ez tax form for 2012 Enter the larger of the amount on line 1 or the amount on line 3 4. 1040ez tax form for 2012   5. 1040ez tax form for 2012 Add the amounts on lines 1 and 2. 1040ez tax form for 2012 Enter the total here 5. 1040ez tax form for 2012   6. 1040ez tax form for 2012 Enter the smaller of the amount on line 4 or the amount on line 5 6. 1040ez tax form for 2012   7. 1040ez tax form for 2012 If you have home equity debt, enter the smaller of $100,000 ($50,000 if married filing separately) or your limited amount. 1040ez tax form for 2012 See the line 7 instructions for the limit which may apply to you. 1040ez tax form for 2012 7. 1040ez tax form for 2012   8. 1040ez tax form for 2012 Add the amounts on lines 6 and 7. 1040ez tax form for 2012 Enter the total. 1040ez tax form for 2012 This is your qualified loan limit. 1040ez tax form for 2012 8. 1040ez tax form for 2012   Part II Deductible Home Mortgage Interest 9. 1040ez tax form for 2012 Enter the total of the average balances of all mortgages on all qualified homes. 1040ez tax form for 2012  See line 9 instructions 9. 1040ez tax form for 2012     If line 8 is less than line 9, go on to line 10. 1040ez tax form for 2012 If line 8 is equal to or more than line 9, stop here. 1040ez tax form for 2012 All of your interest on all the mortgages included on line 9 is deductible as home mortgage interest on Schedule A (Form 1040). 1040ez tax form for 2012     10. 1040ez tax form for 2012 Enter the total amount of interest that you paid. 1040ez tax form for 2012 See line 10 instructions 10. 1040ez tax form for 2012   11. 1040ez tax form for 2012 Divide the amount on line 8 by the amount on line 9. 1040ez tax form for 2012 Enter the result as a decimal amount (rounded to three places) 11. 1040ez tax form for 2012 × . 1040ez tax form for 2012 12. 1040ez tax form for 2012 Multiply the amount on line 10 by the decimal amount on line 11. 1040ez tax form for 2012 Enter the result. 1040ez tax form for 2012 This is your deductible home mortgage interest. 1040ez tax form for 2012 Enter this amount on Schedule A (Form 1040) 12. 1040ez tax form for 2012   13. 1040ez tax form for 2012 Subtract the amount on line 12 from the amount on line 10. 1040ez tax form for 2012 Enter the result. 1040ez tax form for 2012 This is not home mortgage interest. 1040ez tax form for 2012 See line 13 instructions 13. 1040ez tax form for 2012   Home equity debt only. 1040ez tax form for 2012   If all of your mortgages are home equity debt, do not fill in lines 1 through 5. 1040ez tax form for 2012 Enter zero on line 6 and complete the rest of Table 1. 1040ez tax form for 2012 Average Mortgage Balance You have to figure the average balance of each mortgage to determine your qualified loan limit. 1040ez tax form for 2012 You need these amounts to complete lines 1, 2, and 9 of Table 1. 1040ez tax form for 2012 You can use the highest mortgage balances during the year, but you may benefit most by using the average balances. 1040ez tax form for 2012 The following are methods you can use to figure your average mortgage balances. 1040ez tax form for 2012 However, if a mortgage has more than one category of debt, see Mixed-use mortgages , later, in this section. 1040ez tax form for 2012 Average of first and last balance method. 1040ez tax form for 2012   You can use this method if all the following apply. 1040ez tax form for 2012 You did not borrow any new amounts on the mortgage during the year. 1040ez tax form for 2012 (This does not include borrowing the original mortgage amount. 1040ez tax form for 2012 ) You did not prepay more than one month's principal during the year. 1040ez tax form for 2012 (This includes prepayment by refinancing your home or by applying proceeds from its sale. 1040ez tax form for 2012 ) You had to make level payments at fixed equal intervals on at least a semi-annual basis. 1040ez tax form for 2012 You treat your payments as level even if they were adjusted from time to time because of changes in the interest rate. 1040ez tax form for 2012    To figure your average balance, complete the following worksheet. 1040ez tax form for 2012    1. 1040ez tax form for 2012 Enter the balance as of the first day of the year that the mortgage was secured by your qualified home during the year (generally January 1)   2. 1040ez tax form for 2012 Enter the balance as of the last day of the year that the mortgage was secured by your qualified home during the year (generally December 31)   3. 1040ez tax form for 2012 Add amounts on lines 1 and 2   4. 1040ez tax form for 2012 Divide the amount on line 3 by 2. 1040ez tax form for 2012 Enter the result   Interest paid divided by interest rate method. 1040ez tax form for 2012   You can use this method if at all times in 2013 the mortgage was secured by your qualified home and the interest was paid at least monthly. 1040ez tax form for 2012    Complete the following worksheet to figure your average balance. 1040ez tax form for 2012    1. 1040ez tax form for 2012 Enter the interest paid in 2013. 1040ez tax form for 2012 Do not include points, mortgage insurance premiums, or any interest paid in 2013 that is for a year after 2013. 1040ez tax form for 2012 However, do include interest that is for 2013 but was paid in an earlier year   2. 1040ez tax form for 2012 Enter the annual interest rate on the mortgage. 1040ez tax form for 2012 If the interest rate varied in 2013, use the lowest rate for the year   3. 1040ez tax form for 2012 Divide the amount on line 1 by the amount on line 2. 1040ez tax form for 2012 Enter the result   Example. 1040ez tax form for 2012 Mr. 1040ez tax form for 2012 Blue had a line of credit secured by his main home all year. 1040ez tax form for 2012 He paid interest of $2,500 on this loan. 1040ez tax form for 2012 The interest rate on the loan was 9% (. 1040ez tax form for 2012 09) all year. 1040ez tax form for 2012 His average balance using this method is $27,778, figured as follows. 1040ez tax form for 2012 1. 1040ez tax form for 2012 Enter the interest paid in 2013. 1040ez tax form for 2012 Do not include points, mortgage insurance premiums, or any interest paid in 2013 that is for a year after 2013. 1040ez tax form for 2012 However, do include interest that is for 2013 but was paid in an earlier year $2,500 2. 1040ez tax form for 2012 Enter the annual interest rate on the mortgage. 1040ez tax form for 2012 If the interest rate varied in 2013, use the lowest rate for the year . 1040ez tax form for 2012 09 3. 1040ez tax form for 2012 Divide the amount on line 1 by the amount on line 2. 1040ez tax form for 2012 Enter the result $27,778 Statements provided by your lender. 1040ez tax form for 2012   If you receive monthly statements showing the closing balance or the average balance for the month, you can use either to figure your average balance for the year. 1040ez tax form for 2012 You can treat the balance as zero for any month the mortgage was not secured by your qualified home. 1040ez tax form for 2012   For each mortgage, figure your average balance by adding your monthly closing or average balances and dividing that total by the number of months the home secured by that mortgage was a qualified home during the year. 1040ez tax form for 2012   If your lender can give you your average balance for the year, you can use that amount. 1040ez tax form for 2012 Example. 1040ez tax form for 2012 Ms. 1040ez tax form for 2012 Brown had a home equity loan secured by her main home all year. 1040ez tax form for 2012 She received monthly statements showing her average balance for each month. 1040ez tax form for 2012 She can figure her average balance for the year by adding her monthly average balances and dividing the total by 12. 1040ez tax form for 2012 Mixed-use mortgages. 1040ez tax form for 2012   A mixed-use mortgage is a loan that consists of more than one of the three categories of debt (grandfathered debt, home acquisition debt, and home equity debt). 1040ez tax form for 2012 For example, a mortgage you took out during the year is a mixed-use mortgage if you used its proceeds partly to refinance a mortgage that you took out in an earlier year to buy your home (home acquisition debt) and partly to buy a car (home equity debt). 1040ez tax form for 2012   Complete lines 1 and 2 of Table 1 by including the separate average balances of any grandfathered debt and home acquisition debt in your mixed-use mortgage. 1040ez tax form for 2012 Do not use the methods described earlier in this section to figure the average balance of either category. 1040ez tax form for 2012 Instead, for each category, use the following method. 1040ez tax form for 2012 Figure the balance of that category of debt for each month. 1040ez tax form for 2012 This is the amount of the loan proceeds allocated to that category, reduced by your principal payments on the mortgage previously applied to that category. 1040ez tax form for 2012 Principal payments on a mixed-use mortgage are applied in full to each category of debt, until its balance is zero, in the following order: First, any home equity debt, Next, any grandfathered debt, and Finally, any home acquisition debt. 1040ez tax form for 2012 Add together the monthly balances figured in (1). 1040ez tax form for 2012 Divide the result in (2) by 12. 1040ez tax form for 2012   Complete line 9 of Table 1 by including the average balance of the entire mixed-use mortgage, figured under one of the methods described earlier in this section. 1040ez tax form for 2012 Example 1. 1040ez tax form for 2012 In 1986, Sharon took out a $1,400,000 mortgage to buy her main home (grandfathered debt). 1040ez tax form for 2012 On March 2, 2013, when the home had a fair market value of $1,700,000 and she owed $1,100,000 on the mortgage, Sharon took out a second mortgage for $200,000. 1040ez tax form for 2012 She used $180,000 of the proceeds to make substantial improvements to her home (home acquisition debt) and the remaining $20,000 to buy a car (home equity debt). 1040ez tax form for 2012 Under the loan agreement, Sharon must make principal payments of $1,000 at the end of each month. 1040ez tax form for 2012 During 2013, her principal payments on the second mortgage totaled $10,000. 1040ez tax form for 2012 To complete Table 1, line 2, Sharon must figure a separate average balance for the part of her second mortgage that is home acquisition debt. 1040ez tax form for 2012 The January and February balances were zero. 1040ez tax form for 2012 The March through December balances were all $180,000, because none of her principal payments are applied to the home acquisition debt. 1040ez tax form for 2012 (They are all applied to the home equity debt, reducing it to $10,000 [$20,000 − $10,000]. 1040ez tax form for 2012 ) The monthly balances of the home acquisition debt total $1,800,000 ($180,000 × 10). 1040ez tax form for 2012 Therefore, the average balance of the home acquisition debt for 2013 was $150,000 ($1,800,000 ÷ 12). 1040ez tax form for 2012 Example 2. 1040ez tax form for 2012 The facts are the same as in Example 1. 1040ez tax form for 2012 In 2014, Sharon's January through October principal payments on her second mortgage are applied to the home equity debt, reducing it to zero. 1040ez tax form for 2012 The balance of the home acquisition debt remains $180,000 for each of those months. 1040ez tax form for 2012 Because her November and December principal payments are applied to the home acquisition debt, the November balance is $179,000 ($180,000 − $1,000) and the December balance is $178,000 ($180,000 − $2,000). 1040ez tax form for 2012 The monthly balances total $2,157,000 [($180,000 × 10) + $179,000 + $178,000]. 1040ez tax form for 2012 Therefore, the average balance of the home acquisition debt for 2014 is $179,750 ($2,157,000 ÷ 12). 1040ez tax form for 2012 L
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The 1040ez Tax Form For 2012

1040ez tax form for 2012 4. 1040ez tax form for 2012   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. 1040ez tax form for 2012  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. 1040ez tax form for 2012 For more information, see Publication 505. 1040ez tax form for 2012 Reminders Estimated tax safe harbor for higher income taxpayers. 1040ez tax form for 2012  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. 1040ez tax form for 2012 Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. 1040ez tax form for 2012 In general, the federal income tax is a pay-as-you-go tax. 1040ez tax form for 2012 There are two ways to pay as you go. 1040ez tax form for 2012 Withholding. 1040ez tax form for 2012 If you are an employee, your employer probably withholds income tax from your pay. 1040ez tax form for 2012 Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. 1040ez tax form for 2012 The amount withheld is paid to the IRS in your name. 1040ez tax form for 2012 Estimated tax. 1040ez tax form for 2012 If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. 1040ez tax form for 2012 People who are in business for themselves generally will have to pay their tax this way. 1040ez tax form for 2012 Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. 1040ez tax form for 2012 Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. 1040ez tax form for 2012 This chapter explains these methods. 1040ez tax form for 2012 In addition, it also explains the following. 1040ez tax form for 2012 Credit for withholding and estimated tax. 1040ez tax form for 2012 When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. 1040ez tax form for 2012 , and for the estimated tax you paid for 2013. 1040ez tax form for 2012 Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). 1040ez tax form for 2012 Underpayment penalty. 1040ez tax form for 2012 If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. 1040ez tax form for 2012 In most cases, the IRS can figure this penalty for you. 1040ez tax form for 2012 See Underpayment Penalty for 2013 at the end of this chapter. 1040ez tax form for 2012 Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. 1040ez tax form for 2012 This section explains the rules for withholding tax from each of these types of income. 1040ez tax form for 2012 This section also covers backup withholding on interest, dividends, and other payments. 1040ez tax form for 2012 Salaries and Wages Income tax is withheld from the pay of most employees. 1040ez tax form for 2012 Your pay includes your regular pay, bonuses, commissions, and vacation allowances. 1040ez tax form for 2012 It also includes reimbursements and other expense allowances paid under a nonaccountable plan. 1040ez tax form for 2012 See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. 1040ez tax form for 2012 If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. 1040ez tax form for 2012 This is explained under Exemption From Withholding , later. 1040ez tax form for 2012 You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. 1040ez tax form for 2012 If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . 1040ez tax form for 2012 Military retirees. 1040ez tax form for 2012   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. 1040ez tax form for 2012 Household workers. 1040ez tax form for 2012   If you are a household worker, you can ask your employer to withhold income tax from your pay. 1040ez tax form for 2012 A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. 1040ez tax form for 2012   Tax is withheld only if you want it withheld and your employer agrees to withhold it. 1040ez tax form for 2012 If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . 1040ez tax form for 2012 Farmworkers. 1040ez tax form for 2012   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. 1040ez tax form for 2012 Differential wage payments. 1040ez tax form for 2012    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. 1040ez tax form for 2012 Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. 1040ez tax form for 2012 The wages and withholding will be reported on Form W-2, Wage and Tax Statement. 1040ez tax form for 2012   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. 1040ez tax form for 2012 Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. 1040ez tax form for 2012 The amount you earn in each payroll period. 1040ez tax form for 2012 The information you give your employer on Form W-4. 1040ez tax form for 2012 Form W-4 includes four types of information that your employer will use to figure your withholding. 1040ez tax form for 2012 Whether to withhold at the single rate or at the lower married rate. 1040ez tax form for 2012 How many withholding allowances you claim (each allowance reduces the amount withheld). 1040ez tax form for 2012 Whether you want an additional amount withheld. 1040ez tax form for 2012 Whether you are claiming an exemption from withholding in 2014. 1040ez tax form for 2012 See Exemption From Withholding , later. 1040ez tax form for 2012 Note. 1040ez tax form for 2012 You must specify a filing status and a number of withholding allowances on Form W-4. 1040ez tax form for 2012 You cannot specify only a dollar amount of withholding. 1040ez tax form for 2012 New Job When you start a new job, you must fill out Form W-4 and give it to your employer. 1040ez tax form for 2012 Your employer should have copies of the form. 1040ez tax form for 2012 If you need to change the information later, you must fill out a new form. 1040ez tax form for 2012 If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. 1040ez tax form for 2012 You may be able to avoid overwithholding if your employer agrees to use the part-year method. 1040ez tax form for 2012 See Part-Year Method in chapter 1 of Publication 505 for more information. 1040ez tax form for 2012 Employee also receiving pension income. 1040ez tax form for 2012   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. 1040ez tax form for 2012 However, you can choose to split your withholding allowances between your pension and job in any manner. 1040ez tax form for 2012 Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. 1040ez tax form for 2012 When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. 1040ez tax form for 2012 If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. 1040ez tax form for 2012 Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. 1040ez tax form for 2012 Changing your withholding for 2015. 1040ez tax form for 2012   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. 1040ez tax form for 2012 If the event occurs in December 2014, submit a new Form W-4 within 10 days. 1040ez tax form for 2012 Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. 1040ez tax form for 2012 If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. 1040ez tax form for 2012 You should try to have your withholding match your actual tax liability. 1040ez tax form for 2012 If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. 1040ez tax form for 2012 If too much tax is withheld, you will lose the use of that money until you get your refund. 1040ez tax form for 2012 Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. 1040ez tax form for 2012 Note. 1040ez tax form for 2012 You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. 1040ez tax form for 2012 Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. 1040ez tax form for 2012 The worksheets are for your own records. 1040ez tax form for 2012 Do not give them to your employer. 1040ez tax form for 2012 Multiple jobs. 1040ez tax form for 2012   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. 1040ez tax form for 2012 Then split your allowances between the Forms W-4 for each job. 1040ez tax form for 2012 You cannot claim the same allowances with more than one employer at the same time. 1040ez tax form for 2012 You can claim all your allowances with one employer and none with the other(s), or divide them any other way. 1040ez tax form for 2012 Married individuals. 1040ez tax form for 2012   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. 1040ez tax form for 2012 Use only one set of worksheets. 1040ez tax form for 2012 You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. 1040ez tax form for 2012   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. 1040ez tax form for 2012 Alternative method of figuring withholding allowances. 1040ez tax form for 2012   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. 1040ez tax form for 2012 For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. 1040ez tax form for 2012 Personal Allowances Worksheet. 1040ez tax form for 2012   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. 1040ez tax form for 2012 Deduction and Adjustments Worksheet. 1040ez tax form for 2012   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. 1040ez tax form for 2012 Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. 1040ez tax form for 2012 Two-Earners/Multiple Jobs Worksheet. 1040ez tax form for 2012   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. 1040ez tax form for 2012 Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. 1040ez tax form for 2012 Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. 1040ez tax form for 2012 You accurately complete all the Form W-4 worksheets that apply to you. 1040ez tax form for 2012 You give your employer a new Form W-4 when changes occur. 1040ez tax form for 2012 But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. 1040ez tax form for 2012 This is most likely to happen in the following situations. 1040ez tax form for 2012 You are married and both you and your spouse work. 1040ez tax form for 2012 You have more than one job at a time. 1040ez tax form for 2012 You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. 1040ez tax form for 2012 You will owe additional amounts with your return, such as self-employment tax. 1040ez tax form for 2012 Your withholding is based on obsolete Form W-4 information for a substantial part of the year. 1040ez tax form for 2012 Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. 1040ez tax form for 2012 You work only part of the year. 1040ez tax form for 2012 You change the number of your withholding allowances during the year. 1040ez tax form for 2012 Cumulative wage method. 1040ez tax form for 2012   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. 1040ez tax form for 2012 You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. 1040ez tax form for 2012 You must ask your employer in writing to use this method. 1040ez tax form for 2012   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. 1040ez tax form for 2012 ) since the beginning of the year. 1040ez tax form for 2012 Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. 1040ez tax form for 2012 It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. 1040ez tax form for 2012 It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. 1040ez tax form for 2012 If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. 1040ez tax form for 2012 You can use the IRS Withholding Calculator at www. 1040ez tax form for 2012 irs. 1040ez tax form for 2012 gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. 1040ez tax form for 2012 Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. 1040ez tax form for 2012 These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. 1040ez tax form for 2012 New Form W-4. 1040ez tax form for 2012   When you start a new job, your employer should have you complete a Form W-4. 1040ez tax form for 2012 Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. 1040ez tax form for 2012   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. 1040ez tax form for 2012 The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. 1040ez tax form for 2012 No Form W-4. 1040ez tax form for 2012   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. 1040ez tax form for 2012 Repaying withheld tax. 1040ez tax form for 2012   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. 1040ez tax form for 2012 Your employer cannot repay any of the tax previously withheld. 1040ez tax form for 2012 Instead, claim the full amount withheld when you file your tax return. 1040ez tax form for 2012   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. 1040ez tax form for 2012 Your employer can repay the amount that was withheld incorrectly. 1040ez tax form for 2012 If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. 1040ez tax form for 2012 Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. 1040ez tax form for 2012 The exemption applies only to income tax, not to social security or Medicare tax. 1040ez tax form for 2012 You can claim exemption from withholding for 2014 only if both of the following situations apply. 1040ez tax form for 2012 For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. 1040ez tax form for 2012 For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. 1040ez tax form for 2012 Students. 1040ez tax form for 2012   If you are a student, you are not automatically exempt. 1040ez tax form for 2012 See chapter 1 to find out if you must file a return. 1040ez tax form for 2012 If you work only part time or only during the summer, you may qualify for exemption from withholding. 1040ez tax form for 2012 Age 65 or older or blind. 1040ez tax form for 2012   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. 1040ez tax form for 2012 Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. 1040ez tax form for 2012 Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. 1040ez tax form for 2012 Claiming exemption from withholding. 1040ez tax form for 2012   To claim exemption, you must give your employer a Form W-4. 1040ez tax form for 2012 Do not complete lines 5 and 6. 1040ez tax form for 2012 Enter “Exempt” on line 7. 1040ez tax form for 2012   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. 1040ez tax form for 2012 If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. 1040ez tax form for 2012   Your claim of exempt status may be reviewed by the IRS. 1040ez tax form for 2012 An exemption is good for only 1 year. 1040ez tax form for 2012   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. 1040ez tax form for 2012 Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. 1040ez tax form for 2012 The payer can figure withholding on supplemental wages using the same method used for your regular wages. 1040ez tax form for 2012 However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. 1040ez tax form for 2012 Expense allowances. 1040ez tax form for 2012   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. 1040ez tax form for 2012   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. 1040ez tax form for 2012   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. 1040ez tax form for 2012 Penalties You may have to pay a penalty of $500 if both of the following apply. 1040ez tax form for 2012 You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. 1040ez tax form for 2012 You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. 1040ez tax form for 2012 There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. 1040ez tax form for 2012 The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. 1040ez tax form for 2012 These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. 1040ez tax form for 2012 A simple error or an honest mistake will not result in one of these penalties. 1040ez tax form for 2012 For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. 1040ez tax form for 2012 Tips The tips you receive while working on your job are considered part of your pay. 1040ez tax form for 2012 You must include your tips on your tax return on the same line as your regular pay. 1040ez tax form for 2012 However, tax is not withheld directly from tip income, as it is from your regular pay. 1040ez tax form for 2012 Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. 1040ez tax form for 2012 See chapter 6 for information on reporting your tips to your employer. 1040ez tax form for 2012 For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. 1040ez tax form for 2012 How employer figures amount to withhold. 1040ez tax form for 2012   The tips you report to your employer are counted as part of your income for the month you report them. 1040ez tax form for 2012 Your employer can figure your withholding in either of two ways. 1040ez tax form for 2012 By withholding at the regular rate on the sum of your pay plus your reported tips. 1040ez tax form for 2012 By withholding at the regular rate on your pay plus a percentage of your reported tips. 1040ez tax form for 2012 Not enough pay to cover taxes. 1040ez tax form for 2012   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. 1040ez tax form for 2012 See Giving your employer money for taxes in chapter 6. 1040ez tax form for 2012 Allocated tips. 1040ez tax form for 2012   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. 1040ez tax form for 2012 Withholding is based only on your pay plus your reported tips. 1040ez tax form for 2012 Your employer should refund to you any incorrectly withheld tax. 1040ez tax form for 2012 See Allocated Tips in chapter 6 for more information. 1040ez tax form for 2012 Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. 1040ez tax form for 2012 Your employer generally must withhold income tax on these benefits from your regular pay. 1040ez tax form for 2012 For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. 1040ez tax form for 2012 Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. 1040ez tax form for 2012 Your employer must notify you if this choice is made. 1040ez tax form for 2012 For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. 1040ez tax form for 2012 Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. 1040ez tax form for 2012 To qualify as sick pay, it must be paid under a plan to which your employer is a party. 1040ez tax form for 2012 If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. 1040ez tax form for 2012 An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. 1040ez tax form for 2012 However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. 1040ez tax form for 2012 See Form W-4S , later. 1040ez tax form for 2012 If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. 1040ez tax form for 2012 Union agreements. 1040ez tax form for 2012   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. 1040ez tax form for 2012 See your union representative or your employer for more information. 1040ez tax form for 2012 Form W-4S. 1040ez tax form for 2012   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. 1040ez tax form for 2012 Its instructions contain a worksheet you can use to figure the amount you want withheld. 1040ez tax form for 2012 They also explain restrictions that may apply. 1040ez tax form for 2012   Give the completed form to the payer of your sick pay. 1040ez tax form for 2012 The payer must withhold according to your directions on the form. 1040ez tax form for 2012 Estimated tax. 1040ez tax form for 2012   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. 1040ez tax form for 2012 If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. 1040ez tax form for 2012 See Underpayment Penalty for 2013 at the end of this chapter. 1040ez tax form for 2012 Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. 1040ez tax form for 2012 This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. 1040ez tax form for 2012 The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). 1040ez tax form for 2012 Income tax withholding from an ERD is mandatory. 1040ez tax form for 2012 More information. 1040ez tax form for 2012   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. 1040ez tax form for 2012 For information on IRAs, see chapter 17. 1040ez tax form for 2012 For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. 1040ez tax form for 2012 Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. 1040ez tax form for 2012 Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. 1040ez tax form for 2012 Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. 1040ez tax form for 2012 Any other wager, if the proceeds are at least 300 times the amount of the bet. 1040ez tax form for 2012 It does not matter whether your winnings are paid in cash, in property, or as an annuity. 1040ez tax form for 2012 Winnings not paid in cash are taken into account at their fair market value. 1040ez tax form for 2012 Exception. 1040ez tax form for 2012   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. 1040ez tax form for 2012 However, you may need to provide the payer with a social security number to avoid withholding. 1040ez tax form for 2012 See Backup withholding on gambling winnings in chapter 1 of Publication 505. 1040ez tax form for 2012 If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. 1040ez tax form for 2012 See Estimated Tax for 2014 , later. 1040ez tax form for 2012 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 1040ez tax form for 2012 See Underpayment Penalty for 2013 at the end of this chapter. 1040ez tax form for 2012 Form W-2G. 1040ez tax form for 2012   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. 1040ez tax form for 2012 Report the tax withheld on line 62 of Form 1040. 1040ez tax form for 2012 Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. 1040ez tax form for 2012 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. 1040ez tax form for 2012 All unemployment compensation is taxable. 1040ez tax form for 2012 So, if you do not have income tax withheld, you may have to pay estimated tax. 1040ez tax form for 2012 See Estimated Tax for 2014 , later. 1040ez tax form for 2012 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 1040ez tax form for 2012 For information, see Underpayment Penalty for 2013 at the end of this chapter. 1040ez tax form for 2012 Federal Payments You can choose to have income tax withheld from certain federal payments you receive. 1040ez tax form for 2012 These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. 1040ez tax form for 2012 S. 1040ez tax form for 2012 C. 1040ez tax form for 2012 1421 et. 1040ez tax form for 2012 seq. 1040ez tax form for 2012 ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. 1040ez tax form for 2012 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. 1040ez tax form for 2012 If you do not choose to have income tax withheld, you may have to pay estimated tax. 1040ez tax form for 2012 See Estimated Tax for 2014 , later. 1040ez tax form for 2012 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 1040ez tax form for 2012 For information, see Underpayment Penalty for 2013 at the end of this chapter. 1040ez tax form for 2012 More information. 1040ez tax form for 2012   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. 1040ez tax form for 2012 Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. 1040ez tax form for 2012 Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. 1040ez tax form for 2012 The information return shows how much you were paid during the year. 1040ez tax form for 2012 It also includes your name and taxpayer identification number (TIN). 1040ez tax form for 2012 TINs are explained in chapter 1 under Social Security Number (SSN) . 1040ez tax form for 2012 These payments generally are not subject to withholding. 1040ez tax form for 2012 However, “backup” withholding is required in certain situations. 1040ez tax form for 2012 Backup withholding can apply to most kinds of payments that are reported on Form 1099. 1040ez tax form for 2012 The payer must withhold at a flat 28% rate in the following situations. 1040ez tax form for 2012 You do not give the payer your TIN in the required manner. 1040ez tax form for 2012 The IRS notifies the payer that the TIN you gave is incorrect. 1040ez tax form for 2012 You are required, but fail, to certify that you are not subject to backup withholding. 1040ez tax form for 2012 The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. 1040ez tax form for 2012 The IRS will do this only after it has mailed you four notices over at least a 210-day period. 1040ez tax form for 2012 See Backup Withholding in chapter 1 of Publication 505 for more information. 1040ez tax form for 2012 Penalties. 1040ez tax form for 2012   There are civil and criminal penalties for giving false information to avoid backup withholding. 1040ez tax form for 2012 The civil penalty is $500. 1040ez tax form for 2012 The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. 1040ez tax form for 2012 Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. 1040ez tax form for 2012 This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. 1040ez tax form for 2012 You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. 1040ez tax form for 2012 Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. 1040ez tax form for 2012 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 1040ez tax form for 2012 If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. 1040ez tax form for 2012 For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. 1040ez tax form for 2012 Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. 1040ez tax form for 2012 To do this, give a new Form W-4 to your employer. 1040ez tax form for 2012 See chapter 1 of Publication 505. 1040ez tax form for 2012 Estimated tax not required. 1040ez tax form for 2012   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. 1040ez tax form for 2012 You had no tax liability for 2013. 1040ez tax form for 2012 You were a U. 1040ez tax form for 2012 S. 1040ez tax form for 2012 citizen or resident alien for the whole year. 1040ez tax form for 2012 Your 2013 tax year covered a 12-month period. 1040ez tax form for 2012   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. 1040ez tax form for 2012 For the definition of “total tax” for 2013, see Publication 505, chapter 2. 1040ez tax form for 2012 Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. 1040ez tax form for 2012 You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. 1040ez tax form for 2012 General rule. 1040ez tax form for 2012   In most cases, you must pay estimated tax for 2014 if both of the following apply. 1040ez tax form for 2012 You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. 1040ez tax form for 2012 You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). 1040ez tax form for 2012 Your 2013 tax return must cover all 12 months. 1040ez tax form for 2012    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. 1040ez tax form for 2012 Special rules for farmers, fishermen, and higher income taxpayers. 1040ez tax form for 2012   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. 1040ez tax form for 2012 If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. 1040ez tax form for 2012 See Figure 4-A and Publication 505, chapter 2 for more information. 1040ez tax form for 2012 Figure 4-A. 1040ez tax form for 2012 Do You Have To Pay Estimated Tax? Please click here for the text description of the image. 1040ez tax form for 2012 Figure 4-A Do You Have To Pay Estimated Tax? Aliens. 1040ez tax form for 2012   Resident and nonresident aliens also may have to pay estimated tax. 1040ez tax form for 2012 Resident aliens should follow the rules in this chapter unless noted otherwise. 1040ez tax form for 2012 Nonresident aliens should get Form 1040-ES (NR), U. 1040ez tax form for 2012 S. 1040ez tax form for 2012 Estimated Tax for Nonresident Alien Individuals. 1040ez tax form for 2012   You are an alien if you are not a citizen or national of the United States. 1040ez tax form for 2012 You are a resident alien if you either have a green card or meet the substantial presence test. 1040ez tax form for 2012 For more information about the substantial presence test, see Publication 519, U. 1040ez tax form for 2012 S. 1040ez tax form for 2012 Tax Guide for Aliens. 1040ez tax form for 2012 Married taxpayers. 1040ez tax form for 2012   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. 1040ez tax form for 2012   You and your spouse can make joint estimated tax payments even if you are not living together. 1040ez tax form for 2012   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). 1040ez tax form for 2012   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. 1040ez tax form for 2012 Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. 1040ez tax form for 2012 2013 separate returns and 2014 joint return. 1040ez tax form for 2012   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. 1040ez tax form for 2012 You filed a separate return if you filed as single, head of household, or married filing separately. 1040ez tax form for 2012 2013 joint return and 2014 separate returns. 1040ez tax form for 2012   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. 1040ez tax form for 2012 You file a separate return if you file as single, head of household, or married filing separately. 1040ez tax form for 2012   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. 1040ez tax form for 2012 Then multiply the tax on the joint return by the following fraction. 1040ez tax form for 2012     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. 1040ez tax form for 2012 Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. 1040ez tax form for 2012 Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. 1040ez tax form for 2012 For 2014, they plan to file married filing separately. 1040ez tax form for 2012 Joe figures his share of the tax on the 2013 joint return as follows. 1040ez tax form for 2012   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. 1040ez tax form for 2012 6%     Joe's share of tax on joint return  ($6,386 × 87. 1040ez tax form for 2012 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. 1040ez tax form for 2012 When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. 1040ez tax form for 2012 Use your 2013 federal tax return as a guide. 1040ez tax form for 2012 You can use Form 1040-ES and Publication 505 to figure your estimated tax. 1040ez tax form for 2012 Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). 1040ez tax form for 2012 You must make adjustments both for changes in your own situation and for recent changes in the tax law. 1040ez tax form for 2012 For a discussion of these changes, visit IRS. 1040ez tax form for 2012 gov. 1040ez tax form for 2012 For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. 1040ez tax form for 2012 When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. 1040ez tax form for 2012 Each period has a specific payment due date. 1040ez tax form for 2012 If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. 1040ez tax form for 2012 The payment periods and due dates for estimated tax payments are shown next. 1040ez tax form for 2012   For the period: Due date:*     Jan. 1040ez tax form for 2012 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. 1040ez tax form for 2012 15     Sept. 1040ez tax form for 2012 1– Dec. 1040ez tax form for 2012 31 Jan. 1040ez tax form for 2012 15, next year     *See Saturday, Sunday, holiday rule and January payment . 1040ez tax form for 2012 Saturday, Sunday, holiday rule. 1040ez tax form for 2012   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. 1040ez tax form for 2012 January payment. 1040ez tax form for 2012   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. 1040ez tax form for 2012 Fiscal year taxpayers. 1040ez tax form for 2012   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. 1040ez tax form for 2012 When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. 1040ez tax form for 2012 If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. 1040ez tax form for 2012 You can pay all your estimated tax at that time, or you can pay it in installments. 1040ez tax form for 2012 If you choose to pay in installments, make your first payment by the due date for the first payment period. 1040ez tax form for 2012 Make your remaining installment payments by the due dates for the later periods. 1040ez tax form for 2012 No income subject to estimated tax during first period. 1040ez tax form for 2012    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. 1040ez tax form for 2012 You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. 1040ez tax form for 2012 The following chart shows when to make installment payments. 1040ez tax form for 2012 If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. 1040ez tax form for 2012 15 Jan. 1040ez tax form for 2012 15 next year April 1–May 31 June 16 Sept. 1040ez tax form for 2012 15 Jan. 1040ez tax form for 2012 15 next year June 1–Aug. 1040ez tax form for 2012 31 Sept. 1040ez tax form for 2012 15 Jan. 1040ez tax form for 2012 15 next year After Aug. 1040ez tax form for 2012 31 Jan. 1040ez tax form for 2012 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . 1040ez tax form for 2012 How much to pay to avoid a penalty. 1040ez tax form for 2012   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. 1040ez tax form for 2012 How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. 1040ez tax form for 2012 You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. 1040ez tax form for 2012 These methods are described in chapter 2 of Publication 505. 1040ez tax form for 2012 If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. 1040ez tax form for 2012 If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. 1040ez tax form for 2012 Underpayment penalty. 1040ez tax form for 2012   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. 1040ez tax form for 2012 Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. 1040ez tax form for 2012 See chapter 4 of Publication 505 for more information. 1040ez tax form for 2012 Change in estimated tax. 1040ez tax form for 2012   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. 1040ez tax form for 2012 Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. 1040ez tax form for 2012 Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. 1040ez tax form for 2012 You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. 1040ez tax form for 2012 How To Pay Estimated Tax There are several ways to pay estimated tax. 1040ez tax form for 2012 Credit an overpayment on your 2013 return to your 2014 estimated tax. 1040ez tax form for 2012 Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. 1040ez tax form for 2012 Send in your payment (check or money order) with a payment voucher from Form 1040-ES. 1040ez tax form for 2012 Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. 1040ez tax form for 2012 On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. 1040ez tax form for 2012 Take the amount you have credited into account when figuring your estimated tax payments. 1040ez tax form for 2012 You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. 1040ez tax form for 2012 You also cannot use that overpayment in any other way. 1040ez tax form for 2012 Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. 1040ez tax form for 2012 You can pay using either of the following electronic payment methods. 1040ez tax form for 2012 Direct transfer from your bank account. 1040ez tax form for 2012 Credit or debit card. 1040ez tax form for 2012 To pay your taxes online or for more information, go to www. 1040ez tax form for 2012 irs. 1040ez tax form for 2012 gov/e-pay. 1040ez tax form for 2012 Pay by Phone Paying by phone is another safe and secure method of paying electronically. 1040ez tax form for 2012 Use one of the following methods. 1040ez tax form for 2012 Direct transfer from your bank account. 1040ez tax form for 2012 Credit or debit card. 1040ez tax form for 2012 To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). 1040ez tax form for 2012 People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. 1040ez tax form for 2012 To pay using a credit or debit card, you can call one of the following service providers. 1040ez tax form for 2012 There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. 1040ez tax form for 2012 WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. 1040ez tax form for 2012 payUSAtax. 1040ez tax form for 2012 com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. 1040ez tax form for 2012 officialpayments. 1040ez tax form for 2012 com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. 1040ez tax form for 2012 PAY1040. 1040ez tax form for 2012 com For the latest details on how to pay by phone, go to www. 1040ez tax form for 2012 irs. 1040ez tax form for 2012 gov/e-pay. 1040ez tax form for 2012 Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. 1040ez tax form for 2012 During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. 1040ez tax form for 2012 The enclosed payment vouchers will be preprinted with your name, address, and social security number. 1040ez tax form for 2012 Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. 1040ez tax form for 2012 Use the window envelopes that came with your Form 1040-ES package. 1040ez tax form for 2012 If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. 1040ez tax form for 2012 Note. 1040ez tax form for 2012 These criteria can change without notice. 1040ez tax form for 2012 If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. 1040ez tax form for 2012 irs. 1040ez tax form for 2012 gov and print a copy of Form 1040-ES which includes four blank payment vouchers. 1040ez tax form for 2012 Complete one of these and make your payment timely to avoid penalties for paying late. 1040ez tax form for 2012 Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. 1040ez tax form for 2012 If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. 1040ez tax form for 2012 gov. 1040ez tax form for 2012 Follow the instructions to make sure you use the vouchers correctly. 1040ez tax form for 2012 Joint estimated tax payments. 1040ez tax form for 2012   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. 1040ez tax form for 2012 Change of address. 1040ez tax form for 2012   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. 1040ez tax form for 2012 Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. 1040ez tax form for 2012 Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. 1040ez tax form for 2012 Also take credit for the estimated tax you paid for 2013. 1040ez tax form for 2012 These credits are subtracted from your total tax. 1040ez tax form for 2012 Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. 1040ez tax form for 2012 Two or more employers. 1040ez tax form for 2012   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. 1040ez tax form for 2012 You may be able to claim the excess as a credit against your income tax when you file your return. 1040ez tax form for 2012 See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. 1040ez tax form for 2012 Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. 1040ez tax form for 2012 Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. 1040ez tax form for 2012 Forms W-2 and W-2G. 1040ez tax form for 2012   If you file a paper return, always file Form W-2 with your income tax return. 1040ez tax form for 2012 File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. 1040ez tax form for 2012   You should get at least two copies of each form. 1040ez tax form for 2012 If you file a paper return, attach one copy to the front of your federal income tax return. 1040ez tax form for 2012 Keep one copy for your records. 1040ez tax form for 2012 You also should receive copies to file with your state and local returns. 1040ez tax form for 2012 Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. 1040ez tax form for 2012 You should receive a separate Form W-2 from each employer you worked for. 1040ez tax form for 2012 If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. 1040ez tax form for 2012 However, your employer must provide or send it to you by January 31, 2014. 1040ez tax form for 2012 If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. 1040ez tax form for 2012 If you have not received your Form W-2 by January 31, you should ask your employer for it. 1040ez tax form for 2012 If you do not receive it by February 15, call the IRS. 1040ez tax form for 2012 Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. 1040ez tax form for 2012 Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. 1040ez tax form for 2012 In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. 1040ez tax form for 2012 Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. 1040ez tax form for 2012 If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. 1040ez tax form for 2012 Report the amounts you won on line 21 of Form 1040. 1040ez tax form for 2012 Take credit for the tax withheld on line 62 of Form 1040. 1040ez tax form for 2012 If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. 1040ez tax form for 2012 The 1099 Series Most forms in the 1099 series are not filed with your return. 1040ez tax form for 2012 These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). 1040ez tax form for 2012 Unless instructed to file any of these forms with your return, keep them for your records. 1040ez tax form for 2012 There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040ez tax form for 2012 ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. 1040ez tax form for 2012 If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. 1040ez tax form for 2012 See the instructions to these forms for details. 1040ez tax form for 2012 Form 1099-R. 1040ez tax form for 2012   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. 1040ez tax form for 2012 Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. 1040ez tax form for 2012 You cannot use Form 1040EZ if you received payments reported on Form 1099-R. 1040ez tax form for 2012 Backup withholding. 1040ez tax form for 2012   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. 1040ez tax form for 2012 Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. 1040ez tax form for 2012 Call the telephone number or write to the address given for the payer on the form. 1040ez tax form for 2012 The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. 1040ez tax form for 2012 A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. 1040ez tax form for 2012 In certain situations, you will receive two forms in place of the original incorrect form. 1040ez tax form for 2012 This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). 1040ez tax form for 2012 One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. 1040ez tax form for 2012 This form will have an “X” in the “CORRECTED” box at the top of the form. 1040ez tax form for 2012 The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). 1040ez tax form for 2012 Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. 1040ez tax form for 2012 S. 1040ez tax form for 2012 Individual Income Tax Return. 1040ez tax form for 2012 Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. 1040ez tax form for 2012 Do not include any amount withheld from your spouse's income. 1040ez tax form for 2012 However, different rules may apply if you live in a community property state. 1040ez tax form for 2012 Community property states are listed in chapter 2. 1040ez tax form for 2012 For more information on these rules, and some exceptions, see Publication 555, Community Property. 1040ez tax form for 2012 Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. 1040ez tax form for 2012 For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. 1040ez tax form for 2012 Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. 1040ez tax form for 2012 Include any overpayment from 2012 that you had credited to your 2013 estimated tax. 1040ez tax form for 2012 You must use Form 1040 or Form 1040A if you paid estimated tax. 1040ez tax form for 2012 You cannot use Form 1040EZ. 1040ez tax form for 2012 Name changed. 1040ez tax form for 2012   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. 1040ez tax form for 2012 The statement should cover payments you made jointly with your spouse as well as any you made separately. 1040ez tax form for 2012   Be sure to report the change to the Social Security Administration. 1040ez tax form for 2012 This prevents delays in processing your return and issuing any refunds. 1040ez tax form for 2012 Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. 1040ez tax form for 2012 If you made joint estimated tax payments, you must decide how to divide the payments between your returns. 1040ez tax form for 2012 One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. 1040ez tax form for 2012 If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. 1040ez tax form for 2012 Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. 1040ez tax form for 2012 If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. 1040ez tax form for 2012 If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. 1040ez tax form for 2012 If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. 1040ez tax form for 2012 Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. 1040ez tax form for 2012 Generally, you will not have to pay a penalty for 2013 if any of the following apply. 1040ez tax form for 2012 The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. 1040ez tax form for 2012 The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. 1040ez tax form for 2012 Your total 2013 tax minus your withholding and refundable credits is less than $1,000. 1040ez tax form for 2012 You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. 1040ez tax form for 2012 See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. 1040ez tax form for 2012 Farmers and fishermen. 1040ez tax form for 2012   Special rules apply if you are a farmer or fisherman. 1040ez tax form for 2012 See Farmers and Fishermen in chapter 4 of Publication 505 for more information. 1040ez tax form for 2012 IRS can figure the penalty for you. 1040ez tax form for 2012   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. 1040ez tax form for 2012 Generally, the IRS will figure the penalty for you and send you a bill. 1040ez tax form for 2012 However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. 1040ez tax form for 2012 See chapter 4 of Publication 505. 1040ez tax form for 2012 Prev  Up  Next   Home   More Online Publications