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1040ezform

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1040ezform

1040ezform Publication 3920 - Main Contents Table of Contents Tax ForgivenessYears Eligible for Tax Forgiveness Amount of Tax Forgiven Refund of Taxes Paid How To Claim Tax Forgiveness Payments to SurvivorsSeptember 11th Victim Compensation Fund of 2001 Qualified Disaster Relief Payments Disability Payments Death Benefits Canceled Debt Payments to Survivors of Public Safety Officers Postponed Tax DeadlinesCovered area. 1040ezform Disaster Area Losses Estate Tax Reduction Structured Settlement Factoring Transactions Illustrated Worksheets B and C Additional Worksheets How To Get Tax Help Tax Forgiveness The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. 1040ezform Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. 1040ezform Any forgiven tax liability owed to the IRS will not have to be paid. 1040ezform Any forgiven tax liability that has already been paid will be refunded. 1040ezform (See Refund of Taxes Paid, later. 1040ezform ) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. 1040ezform Then read Amount of Tax Forgiven. 1040ezform Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. 1040ezform Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. 1040ezform See Minimum Amount of Relief later under Amount of Tax Forgiven. 1040ezform Years Eligible for Tax Forgiveness The following paragraphs explain which years are eligible for tax forgiveness. 1040ezform Oklahoma City attack. 1040ezform   For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death. 1040ezform Example 1. 1040ezform A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. 1040ezform His income tax is forgiven for 1994 and 1995. 1040ezform Example 2. 1040ezform A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. 1040ezform She subsequently died of her wounds in 1996. 1040ezform Her income tax is forgiven for 1994, 1995, and 1996. 1040ezform September 11 attacks and anthrax attacks. 1040ezform   For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death. 1040ezform Example 1. 1040ezform A Pentagon employee died in the September 11 attack. 1040ezform Her income tax is forgiven for 2000 and 2001. 1040ezform Example 2. 1040ezform A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. 1040ezform His income tax liability is forgiven for 2000, 2001, and 2002. 1040ezform Amount of Tax Forgiven The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. 1040ezform On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness. 1040ezform To figure the tax to be forgiven, use the following worksheets. 1040ezform Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er). 1040ezform Use Worksheet B for any eligible year the decedent filed a joint return. 1040ezform See the illustrated Worksheet B near the end of this publication. 1040ezform Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. 1040ezform Instead, complete Worksheet C and file a return for the decedent's last tax year. 1040ezform See Minimum Amount of Relief, later. 1040ezform If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times. 1040ezform In English–7 a. 1040ezform m. 1040ezform to 10 p. 1040ezform m. 1040ezform local time. 1040ezform In Spanish–8 a. 1040ezform m. 1040ezform to 9:30 p. 1040ezform m. 1040ezform local time. 1040ezform Both spouses died. 1040ezform   If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. 1040ezform Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). 1040ezform If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. 1040ezform However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. 1040ezform The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B. 1040ezform Residents of community property states. 1040ezform   If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. 1040ezform Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative. 1040ezform Worksheet B. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. 1040ezform 1       2 Enter the decedent's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 2       3 Enter the decedent's total tax. 1040ezform See the instructions. 1040ezform 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. 1040ezform See the instructions. 1040ezform 4       5 Subtract line 4 from line 3. 1040ezform 5       6 Enter the surviving spouse's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 6       7 Enter the surviving spouse's total tax. 1040ezform See the instructions. 1040ezform 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 1040ezform 8       9 Subtract line 8 from line 7. 1040ezform 9       10 Add lines 5 and 9. 1040ezform 10       11 Enter the total tax from the joint return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 11       12 Add lines 4 and 8. 1040ezform 12       13 Subtract line 12 from line 11. 1040ezform 13       14 Divide line 5 by line 10. 1040ezform Enter the result as a decimal. 1040ezform 14       15 Tax to be forgiven. 1040ezform Multiply line 13 by line 14 and enter the result. 1040ezform 15       Note. 1040ezform If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Worksheet B. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. 1040ezform 1       2 Enter the decedent's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 2       3 Enter the decedent's total tax. 1040ezform See the instructions. 1040ezform 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. 1040ezform See the instructions. 1040ezform 4       5 Subtract line 4 from line 3. 1040ezform 5       6 Enter the surviving spouse's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 6       7 Enter the surviving spouse's total tax. 1040ezform See the instructions. 1040ezform 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 1040ezform 8       9 Subtract line 8 from line 7. 1040ezform 9       10 Add lines 5 and 9. 1040ezform 10       11 Enter the total tax from the joint return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 11       12 Add lines 4 and 8. 1040ezform 12       13 Subtract line 12 from line 11. 1040ezform 13       14 Divide line 5 by line 10. 1040ezform Enter the result as a decimal. 1040ezform 14       15 Tax to be forgiven. 1040ezform Multiply line 13 by line 14 and enter the result. 1040ezform 15       Note. 1040ezform If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Instructions for Worksheet B Table 1. 1040ezform Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. 1040ezform * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. 1040ezform ** File Form 4506 to get a transcript of the decedent's account. 1040ezform Table 1. 1040ezform Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. 1040ezform * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. 1040ezform ** File Form 4506 to get a transcript of the decedent's account. 1040ezform Lines 2 and 6. 1040ezform   Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns. 1040ezform   Allocate wages and salaries to the spouse who performed the services and received the Form W-2. 1040ezform Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. 1040ezform Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate. 1040ezform   Allocate business deductions to the owner of the business. 1040ezform Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate. 1040ezform Lines 3 and 7. 1040ezform   Figure the total tax as if a separate return had been filed. 1040ezform The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. 1040ezform When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2. 1040ezform   When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. 1040ezform If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. 1040ezform Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit. 1040ezform Line 4. 1040ezform   Enter the total, if any, of the following taxes. 1040ezform Self-employment tax. 1040ezform Social security and Medicare tax on tip income not reported to employer. 1040ezform Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). 1040ezform Tax on excess accumulation in qualified retirement plans. 1040ezform Household employment taxes. 1040ezform Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. 1040ezform Tax on golden parachute payments. 1040ezform Minimum Amount of Relief The minimum amount of relief is $10,000. 1040ezform If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. 1040ezform The IRS will refund the difference as explained under Refund of Taxes Paid. 1040ezform Use Worksheet C to figure the additional tax payment. 1040ezform But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years. 1040ezform Example 1. 1040ezform An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. 1040ezform The $6,400 is eligible for forgiveness. 1040ezform The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001. 1040ezform Example 2. 1040ezform A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. 1040ezform The IRS will treat $10,000 as a tax payment for 2001. 1040ezform Income received after date of death. 1040ezform   Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. 1040ezform Examples are the final paycheck or dividends on stock owned by the decedent. 1040ezform However, this income is exempt from income tax and is not included on Form 1041 if it is received: After the date of the decedent's death, and Before the end of the decedent's tax year (determined without regard to death). 1040ezform Nonqualifying income. 1040ezform   The following income is not exempt from tax. 1040ezform The tax on it is not eligible for forgiveness. 1040ezform Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks. 1040ezform Amounts that would not have been payable but for an action taken after September 11, 2001. 1040ezform The following are examples of nonqualifying income. 1040ezform Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent. 1040ezform Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason. 1040ezform Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack. 1040ezform Interest on savings bonds cashed by the beneficiary of the decedent. 1040ezform If you are responsible for the estate of a decedent, see Publication 559. 1040ezform Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due. 1040ezform Instructions for lines 2–9 of Worksheet C. 1040ezform   The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. 1040ezform To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. 1040ezform Or, if special requirements are met, you can use the alternative computation instead. 1040ezform See Alternative computation, later. 1040ezform   You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. 1040ezform Use Form 1041 to figure what the taxable income would be without including the exempt income. 1040ezform Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)). 1040ezform Alternative computation. 1040ezform   Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. 1040ezform You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met. 1040ezform The estate claimed an income distribution deduction on line 18 (Form 1041). 1040ezform Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate. 1040ezform If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if: Form 1041 was not required because exempt income was received, and The estate would have claimed an income distribution deduction if the exempt income were taxable. 1040ezform If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. 1040ezform Complete the rest of Worksheet C to determine the additional payment allowed. 1040ezform Worksheet C. 1040ezform Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. 1040ezform Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. 1040ezform 1 Minimum relief amount. 1040ezform Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 1040ezform 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . 1040ezform 3       4 Add lines 2 and 3. 1040ezform 4       5 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 5       6 Add lines 4 and 5. 1040ezform 6       7 Figure the tax on line 6 using Schedule G (Form 1041). 1040ezform 7       8 Figure the tax on line 4 using Schedule G (Form 1041). 1040ezform 8       9 Tax on exempt income. 1040ezform Subtract line 8 from line 7. 1040ezform 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. 1040ezform If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 1040ezform 10       11 Add lines 9 and 10. 1040ezform 11   12 Additional payment allowed. 1040ezform If line 11 is $10,000 or more, enter -0- and stop here. 1040ezform No additional amount is allowed as a tax payment. 1040ezform Otherwise, subtract line 11 from line 1 and enter the result. 1040ezform 12   Note. 1040ezform The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). 1040ezform Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. 1040ezform If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. 1040ezform Write "Sec. 1040ezform 692(d)(2) Payment" and the amount to the right of the entry space. 1040ezform Also indicate whether a Form 1041 is being filed for the decedent's estate. 1040ezform If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). 1040ezform Write “Sec. 1040ezform 692(d)(2) Payment” on the dotted line to the left of the entry space. 1040ezform Worksheet C. 1040ezform Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. 1040ezform Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. 1040ezform 1 Minimum relief amount. 1040ezform Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 1040ezform 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . 1040ezform 3       4 Add lines 2 and 3. 1040ezform 4       5 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 5       6 Add lines 4 and 5. 1040ezform 6       7 Figure the tax on line 6 using Schedule G (Form 1041). 1040ezform 7       8 Figure the tax on line 4 using Schedule G (Form 1041). 1040ezform 8       9 Tax on exempt income. 1040ezform Subtract line 8 from line 7. 1040ezform 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. 1040ezform If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 1040ezform 10       11 Add lines 9 and 10. 1040ezform 11   12 Additional payment allowed. 1040ezform If line 11 is $10,000 or more, enter -0- and stop here. 1040ezform No additional amount is allowed as a tax payment. 1040ezform Otherwise, subtract line 11 from line 1 and enter the result. 1040ezform 12   Note. 1040ezform The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). 1040ezform Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. 1040ezform If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. 1040ezform Write "Sec. 1040ezform 692(d)(2) Payment" and the amount to the right of the entry space. 1040ezform Also indicate whether a Form 1041 is being filed for the decedent's estate. 1040ezform If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). 1040ezform Write “Sec. 1040ezform 692(d)(2) Payment” on the dotted line to the left of the entry space. 1040ezform Worksheet D. 1040ezform Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). 1040ezform 4   5 Figure the tax on line 1 using Schedule G (Form 1041). 1040ezform 5   6 Estate's tax on exempt income. 1040ezform Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. 1040ezform Figure the total tax that would have been payable by all beneficiaries. 1040ezform Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. 1040ezform Add the amounts by which each beneficiary's income tax is increased. 1040ezform 7   8 Add lines 6 and 7. 1040ezform Enter this amount on line 9 of Worksheet C. 1040ezform 8   Worksheet D. 1040ezform Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). 1040ezform 4   5 Figure the tax on line 1 using Schedule G (Form 1041). 1040ezform 5   6 Estate's tax on exempt income. 1040ezform Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. 1040ezform Figure the total tax that would have been payable by all beneficiaries. 1040ezform Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. 1040ezform Add the amounts by which each beneficiary's income tax is increased. 1040ezform 7   8 Add lines 6 and 7. 1040ezform Enter this amount on line 9 of Worksheet C. 1040ezform 8   Refund of Taxes Paid The IRS will refund the following forgiven income tax liabilities. 1040ezform Income tax liabilities that have been paid. 1040ezform Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. 1040ezform See Minimum Amount of Relief, earlier. 1040ezform Example 1. 1040ezform A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. 1040ezform The total, $14,000, is eligible for tax forgiveness. 1040ezform However, he paid only $13,000 of that amount. 1040ezform The IRS will refund the $13,000 paid. 1040ezform Example 2. 1040ezform A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. 1040ezform The child qualifies for the minimum relief of $10,000. 1040ezform The $10,000 is treated as a tax payment for 2001 and will be refunded. 1040ezform Period for filing a claim for credit or refund. 1040ezform   To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. 1040ezform For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. 1040ezform To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return. 1040ezform Extension of time for victims of Oklahoma City attack. 1040ezform   The period described above has been extended for victims of the Oklahoma City attack. 1040ezform Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return. 1040ezform How To Claim Tax Forgiveness Use the following procedures to claim income tax forgiveness. 1040ezform Which Form To Use The form you use depends on whether an income tax return for the eligible year was already filed for the decedent. 1040ezform Return required but not yet filed. 1040ezform   File Form 1040 if the decedent was a U. 1040ezform S. 1040ezform citizen or resident. 1040ezform File Form 1040NR if the decedent was a nonresident alien. 1040ezform A nonresident alien is someone who is not a U. 1040ezform S. 1040ezform citizen or resident. 1040ezform Return required and already filed. 1040ezform   File a separate Form 1040X for each year you are claiming tax relief. 1040ezform Return not required and not filed. 1040ezform   File Form 1040 only for the year of death if the decedent was a U. 1040ezform S. 1040ezform citizen or resident. 1040ezform File Form 1040NR if the decedent was a nonresident alien. 1040ezform Return not required but already filed. 1040ezform   File Form 1040X only for the year of death. 1040ezform How to complete the returns. 1040ezform   Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. 1040ezform Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. 1040ezform If filing Form 1040 or Form 1040NR, also attach any Forms W–2. 1040ezform If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C. 1040ezform Also, please write one of the following across the top of page 1 of each return. 1040ezform KITA—Oklahoma City KITA—9/11 KITA—Anthrax “KITA” means “killed in terrorist attack. 1040ezform ” Need a copy of a previously filed return?   You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. 1040ezform If you need a copy, use Form 4506. 1040ezform The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. 1040ezform Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. 1040ezform Send Form 4506 to the address shown in the form instructions. 1040ezform Taxpayer identification number. 1040ezform   A taxpayer identification number must be furnished on the decedent's returns. 1040ezform This is usually the decedent's social security number (SSN). 1040ezform However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). 1040ezform If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U. 1040ezform S. 1040ezform income tax return for any tax year, do not apply for an ITIN. 1040ezform You may claim a refund by filing Form 1040NR without an SSN or ITIN. 1040ezform Necessary Documents Please attach the following documents to the return or amended return. 1040ezform Proof of death. 1040ezform   Attach a copy of the death certificate. 1040ezform If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate. 1040ezform Form 1310. 1040ezform   You must send Form 1310 with all returns and claims for refund, unless either of the following applies. 1040ezform You are a surviving spouse filing an original or amended joint return with the decedent. 1040ezform You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return. 1040ezform A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. 1040ezform A copy of the decedent's will cannot be accepted as evidence that you are the personal representative. 1040ezform      If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. 1040ezform Include a statement saying an amended return will be filed as soon as the necessary tax information is available. 1040ezform Where To File The IRS has set up a special office for processing returns and claims for tax forgiveness. 1040ezform Use one of the addresses shown below. 1040ezform Where you file the returns or claims depends on whether you use the U. 1040ezform S. 1040ezform Postal Service or a private delivery service. 1040ezform Please do not send these returns or claims to any of the addresses shown in the tax form instructions. 1040ezform U. 1040ezform S. 1040ezform Postal Service. 1040ezform   If you use the U. 1040ezform S. 1040ezform Postal Service, file these returns and claims at the following address. 1040ezform Internal Revenue Service P. 1040ezform O. 1040ezform Box 4053 Woburn, MA 01888 Private delivery service. 1040ezform   Private delivery services cannot deliver items to P. 1040ezform O. 1040ezform boxes. 1040ezform If you use a private delivery service, file these returns and claims at the following address. 1040ezform Internal Revenue Service Stop 661 310 Lowell St. 1040ezform Andover, MA 01810 Designated private delivery services. 1040ezform   You can use the following private delivery services to file these returns and claims. 1040ezform Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service. 1040ezform DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight. 1040ezform Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day. 1040ezform United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 1040ezform M. 1040ezform , UPS Worldwide Express Plus, and UPS Worldwide Express. 1040ezform The private delivery service can tell you how to get written proof of the mailing date. 1040ezform Payments to Survivors The following section discusses the tax treatment of certain amounts received by survivors. 1040ezform September 11th Victim Compensation Fund of 2001 Payments from the September 11th Victim Compensation Fund of 2001 are not included in income. 1040ezform Qualified Disaster Relief Payments Qualified disaster relief payments are not included in income. 1040ezform These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). 1040ezform No withholding applies to these payments. 1040ezform Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses. 1040ezform Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack. 1040ezform Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. 1040ezform (A personal residence can be a rented residence or one you own. 1040ezform ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack. 1040ezform Qualified disaster relief payments also include the following. 1040ezform Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack. 1040ezform Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack. 1040ezform Qualified disaster relief payments do not include: Insurance or other reimbursements for expenses, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. 1040ezform Disability Payments For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income. 1040ezform Death Benefits Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. 1040ezform Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. 1040ezform However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack. 1040ezform If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. 1040ezform For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. 1040ezform If that period has expired, you are granted an extension. 1040ezform You have until January 22, 2003, to file Form 1040X to exclude the death benefits. 1040ezform On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. 1040ezform 102(b)(2). 1040ezform ” Canceled Debt Canceled debt is not included in your income (or the income of the estate) if: You (or the estate) were liable, or became liable, for the debt of a decedent, and The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks. 1040ezform The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt. 1040ezform Payments to Survivors of Public Safety Officers If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income. 1040ezform Bureau of Justice Assistance payments. 1040ezform   If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance. 1040ezform Government plan annuity. 1040ezform   If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. 1040ezform This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer. 1040ezform For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews. 1040ezform More information. 1040ezform   For more information, see Publication 559. 1040ezform Postponed Tax Deadlines The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. 1040ezform The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. 1040ezform If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). 1040ezform Affected taxpayers. 1040ezform   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. 1040ezform Any individual whose main home is located in a covered area (defined later). 1040ezform Any business entity or sole proprietor whose principal place of business is located in a covered area. 1040ezform Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. 1040ezform The main home or principal place of business does not have to be located in the covered area. 1040ezform Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area. 1040ezform Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area. 1040ezform The spouse on a joint return with a taxpayer who is eligible for postponements. 1040ezform Any other person determined by the IRS to be affected by a terrorist attack. 1040ezform Covered area. 1040ezform   This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year. 1040ezform Abatement of interest. 1040ezform   The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement. 1040ezform Disaster Area Losses If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return. 1040ezform You must make this choice to deduct your loss on your 2000 return by the later of the following dates. 1040ezform The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer). 1040ezform The due date (with extensions) for the 2000 return. 1040ezform For more information about disaster area losses, see Publication 547. 1040ezform Estate Tax Reduction The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. 1040ezform The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. 1040ezform The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. 1040ezform These credits may reduce or eliminate the estate tax due. 1040ezform A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid. 1040ezform Recovery from the September 11th Victim Compensation Fund. 1040ezform   The value of claims for a decedent's pain and suffering is normally included in the gross estate. 1040ezform However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. 1040ezform Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund. 1040ezform Which estates must file a return. 1040ezform   For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U. 1040ezform S. 1040ezform citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. 1040ezform Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. 1040ezform Use Form 4768, Application for Extension of Time To File a Return and/or Pay U. 1040ezform S. 1040ezform Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension. 1040ezform Where to file. 1040ezform   Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print. 1040ezform Internal Revenue Service E & G Department/Stop 824T 201 W. 1040ezform Rivercenter Blvd. 1040ezform Covington, KY 41011 More information. 1040ezform   For more information on the federal estate tax, see the instructions for Form 706. 1040ezform Structured Settlement Factoring Transactions A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. 1040ezform The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. 1040ezform However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. 1040ezform For information about these requirements, see Internal Revenue Code section 5891. 1040ezform Worksheet B Illustrated. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. 1040ezform 1 2000 2001   2 Enter the decedent's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 2 $17,259 $14,295   3 Enter the decedent's total tax. 1040ezform See the instructions. 1040ezform 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. 1040ezform See the instructions. 1040ezform 4 3,532 3,109   5 Subtract line 4 from line 3. 1040ezform 5 2,591 2,141   6 Enter the surviving spouse's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions for line 2. 1040ezform 6 29,025 29,850   7 Enter the surviving spouse's total tax. 1040ezform See the instructions. 1040ezform 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 1040ezform 8 0 0   9 Subtract line 8 from line 7. 1040ezform 9 5,277 5,391   10 Add lines 5 and 9. 1040ezform 10 7,868 7,532   11 Enter the total tax from the joint return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 11 10,789 9,728   12 Add lines 4 and 8. 1040ezform 12 3,532 3,109   13 Subtract line 12 from line 11. 1040ezform 13 7,257 6,619   14 Divide line 5 by line 10. 1040ezform Enter the result as a decimal. 1040ezform 14 . 1040ezform 329 . 1040ezform 284   15 Tax to be forgiven. 1040ezform Multiply line 13 by line 14 and enter the result. 1040ezform 15 $2,388 $1,880   Note. 1040ezform If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Worksheet B Illustrated. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. 1040ezform 1 2000 2001   2 Enter the decedent's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 2 $17,259 $14,295   3 Enter the decedent's total tax. 1040ezform See the instructions. 1040ezform 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. 1040ezform See the instructions. 1040ezform 4 3,532 3,109   5 Subtract line 4 from line 3. 1040ezform 5 2,591 2,141   6 Enter the surviving spouse's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions for line 2. 1040ezform 6 29,025 29,850   7 Enter the surviving spouse's total tax. 1040ezform See the instructions. 1040ezform 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 1040ezform 8 0 0   9 Subtract line 8 from line 7. 1040ezform 9 5,277 5,391   10 Add lines 5 and 9. 1040ezform 10 7,868 7,532   11 Enter the total tax from the joint return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 11 10,789 9,728   12 Add lines 4 and 8. 1040ezform 12 3,532 3,109   13 Subtract line 12 from line 11. 1040ezform 13 7,257 6,619   14 Divide line 5 by line 10. 1040ezform Enter the result as a decimal. 1040ezform 14 . 1040ezform 329 . 1040ezform 284   15 Tax to be forgiven. 1040ezform Multiply line 13 by line 14 and enter the result. 1040ezform 15 $2,388 $1,880   Note. 1040ezform If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Illustrated Worksheets B and C A wife lost her husband in the September 11 attack on the World Trade Center. 1040ezform They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. 1040ezform The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities. 1040ezform After the husband died, his estate received income of $4,000. 1040ezform Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. 1040ezform This net profit is exempt from income tax as explained earlier under Income received after date of death. 1040ezform The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more. 1040ezform To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. 1040ezform She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000. 1040ezform To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. 1040ezform To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C. 1040ezform   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728 Worksheet C Illustrated. 1040ezform Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. 1040ezform Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. 1040ezform 1 Minimum relief amount. 1040ezform Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 1040ezform 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . 1040ezform 3 0     4 Add lines 2 and 3. 1040ezform 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 5 1,000     6 Add lines 4 and 5. 1040ezform 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). 1040ezform 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). 1040ezform 8 435     9 Tax on exempt income. 1040ezform Subtract line 8 from line 7. 1040ezform 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. 1040ezform If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 1040ezform 10 4,268     11 Add lines 9 and 10. 1040ezform 11 $4,543 12 Additional payment allowed. 1040ezform If line 11 is $10,000 or more, enter -0- and stop here. 1040ezform No additional amount is allowed as a tax payment. 1040ezform Otherwise, subtract line 11 from line 1 and enter the result. 1040ezform 12 $5,457 Note. 1040ezform The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). 1040ezform Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. 1040ezform If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. 1040ezform Write "Sec. 1040ezform 692(d)(2) Payment" and the amount to the right of the entry space. 1040ezform Also indicate whether a Form 1041 is being filed for the decedent's estate. 1040ezform If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). 1040ezform Write “Sec. 1040ezform 692(d)(2) Payment” on the dotted line to the left of the entry space. 1040ezform Worksheet C Illustrated. 1040ezform Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. 1040ezform Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. 1040ezform 1 Minimum relief amount. 1040ezform Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 1040ezform 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . 1040ezform 3 0     4 Add lines 2 and 3. 1040ezform 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 5 1,000     6 Add lines 4 and 5. 1040ezform 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). 1040ezform 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). 1040ezform 8 435     9 Tax on exempt income. 1040ezform Subtract line 8 from line 7. 1040ezform 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. 1040ezform If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 1040ezform 10 4,268     11 Add lines 9 and 10. 1040ezform 11 $4,543 12 Additional payment allowed. 1040ezform If line 11 is $10,000 or more, enter -0- and stop here. 1040ezform No additional amount is allowed as a tax payment. 1040ezform Otherwise, subtract line 11 from line 1 and enter the result. 1040ezform 12 $5,457 Note. 1040ezform The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). 1040ezform Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. 1040ezform If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. 1040ezform Write "Sec. 1040ezform 692(d)(2) Payment" and the amount to the right of the entry space. 1040ezform Also indicate whether a Form 1041 is being filed for the decedent's estate. 1040ezform If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). 1040ezform Write “Sec. 1040ezform 692(d)(2) Payment” on the dotted line to the left of the entry space. 1040ezform Additional Worksheets The following additional worksheets are provided for your convenience. 1040ezform Worksheet A. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. 1040ezform 1       2 Enter the total tax from the decedent's income tax return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. 1040ezform (These taxes are not eligible for forgiveness. 1040ezform )           a Self-employment tax. 1040ezform 3a         b Social security and Medicare tax on tip income not reported to employer. 1040ezform 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). 1040ezform 3c         d Tax on excess accumulation in qualified retirement plans. 1040ezform 3d         e Household employment taxes. 1040ezform 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. 1040ezform 3f         g Tax on golden parachute payments. 1040ezform 3g       4 Add lines 3a through 3g. 1040ezform 4       5 Tax to be forgiven. 1040ezform Subtract line 4 from line 2. 1040ezform 5       Note. 1040ezform If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Worksheet A. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. 1040ezform 1       2 Enter the total tax from the decedent's income tax return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. 1040ezform (These taxes are not eligible for forgiveness. 1040ezform )           a Self-employment tax. 1040ezform 3a         b Social security and Medicare tax on tip income not reported to employer. 1040ezform 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). 1040ezform 3c         d Tax on excess accumulation in qualified retirement plans. 1040ezform 3d         e Household employment taxes. 1040ezform 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. 1040ezform 3f         g Tax on golden parachute payments. 1040ezform 3g       4 Add lines 3a through 3g. 1040ezform 4       5 Tax to be forgiven. 1040ezform Subtract line 4 from line 2. 1040ezform 5       Note. 1040ezform If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Worksheet B. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. 1040ezform 1       2 Enter the decedent's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 2       3 Enter the decedent's total tax. 1040ezform See the instructions. 1040ezform 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. 1040ezform See the instructions. 1040ezform 4       5 Subtract line 4 from line 3. 1040ezform 5       6 Enter the surviving spouse's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 6       7 Enter the surviving spouse's total tax. 1040ezform See the instructions. 1040ezform 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 1040ezform 8       9 Subtract line 8 from line 7. 1040ezform 9       10 Add lines 5 and 9. 1040ezform 10       11 Enter the total tax from the joint return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 11       12 Add lines 4 and 8. 1040ezform 12       13 Subtract line 12 from line 11. 1040ezform 13       14 Divide line 5 by line 10. 1040ezform Enter the result as a decimal. 1040ezform 14       15 Tax to be forgiven. 1040ezform Multiply line 13 by line 14 and enter the result. 1040ezform 15       Note. 1040ezform If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Worksheet B. 1040ezform Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. 1040ezform 1       2 Enter the decedent's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 2       3 Enter the decedent's total tax. 1040ezform See the instructions. 1040ezform 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. 1040ezform See the instructions. 1040ezform 4       5 Subtract line 4 from line 3. 1040ezform 5       6 Enter the surviving spouse's taxable income. 1040ezform Figure taxable income as if a separate return had been filed. 1040ezform See the instructions. 1040ezform 6       7 Enter the surviving spouse's total tax. 1040ezform See the instructions. 1040ezform 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 1040ezform 8       9 Subtract line 8 from line 7. 1040ezform 9       10 Add lines 5 and 9. 1040ezform 10       11 Enter the total tax from the joint return. 1040ezform See Table 1 on page 5 for the line number for years before 2002. 1040ezform 11       12 Add lines 4 and 8. 1040ezform 12       13 Subtract line 12 from line 11. 1040ezform 13       14 Divide line 5 by line 10. 1040ezform Enter the result as a decimal. 1040ezform 14       15 Tax to be forgiven. 1040ezform Multiply line 13 by line 14 and enter the result. 1040ezform 15       Note. 1040ezform If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. 1040ezform Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. 1040ezform If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. 1040ezform The IRS will determine the amount to be refunded. 1040ezform Worksheet C. 1040ezform Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. 1040ezform Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. 1040ezform 1 Minimum tax forgiveness. 1040ezform Note. 1040ezform Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 1040ezform 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . 1040ezform 3       4 Add lines 2 and 3. 1040ezform 4       5 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 5       6 Add lines 4 and 5. 1040ezform 6       7 Figure the tax on line 6 using Schedule G (Form 1041). 1040ezform 7       8 Figure the tax on line 4 using Schedule G (Form 1041). 1040ezform 8       9 Tax on exempt income. 1040ezform Subtract line 8 from line 7. 1040ezform 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. 1040ezform If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 1040ezform 10       11 Add lines 9 and 10. 1040ezform 11   12 Additional payment allowed. 1040ezform If line 11 is $10,000 or more, enter -0- and stop here. 1040ezform No additional amount is allowed as a tax payment. 1040ezform Otherwise, subtract line 11 from line 1 and enter the result. 1040ezform 12   Note. 1040ezform The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). 1040ezform Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. 1040ezform If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. 1040ezform Write "Sec. 1040ezform 692(d)(2) Payment" and the amount to the right of the entry space. 1040ezform Also indicate whether a Form 1041 is being filed for the decedent's estate. 1040ezform If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). 1040ezform Write “Sec. 1040ezform 692(d)(2) Payment” on the dotted line to the left of the entry space. 1040ezform Worksheet C. 1040ezform Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. 1040ezform Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. 1040ezform 1 Minimum tax forgiveness. 1040ezform Note. 1040ezform Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 1040ezform 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . 1040ezform 3       4 Add lines 2 and 3. 1040ezform 4       5 Enter exempt income received after death minus expenses allocable to exempt income. 1040ezform (See Income received after date of death on page 5. 1040ezform ) 5       6 Add lines 4 and 5. 1040ezform 6       7 Figure the tax on line 6 using Schedule G (Form 1041). 1040ezform 7       8 Figure the tax on line 4 using Schedule G (Form 1041). 1040ezform 8       9 Tax on exempt income. 1040ezform Subtract line 8 from line 7. 1040ezform 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. 1040ezform If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 1040ezform 10       11 Add lines 9 and 10. 1040ezform 11   12 Additional payment allowed. 1040ezform If line 11 is $10,000 or more, enter -0- and stop here. 1040ezform No additional amount is allowed as a tax payment. 1040ezform Otherwise, subtract line 11 from line 1 and enter the result. 1040ezform 12   Note. 1040ezform The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). 1040ezform Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. 1040ezform If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. 1040ezform Write "Sec. 1040ezform 692(d)(2) Payment" and the amount to the right of the entry space. 1040ezform Also indicate whether a Form 1041 is being filed for the decedent's estate. 1040ezform If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). 1040ezform Write “Sec. 1040ezform 692(d)(2) Payment” on the dotted line to the left of the entry space. 1040ezform How To Get Tax Help Special IRS assistance. 1040ezform   The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. 1040ezform We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks. 1040ezform Call 1–866–562–5227 Monday through Friday In English–7 a. 1040ezform m. 1040ezform to 10 p. 1040ezform m. 1040ezform local time In Spanish–8 a. 1040ezform m. 1040ezform to 9:30 p. 1040ezform m. 1040ezform local time   The IRS web site at www. 1040ezform irs. 1040ezform gov has notices and other tax relief information. 1040ezform Check it periodically for any new guidance or to see if Congress has enacted new legislation. 1040ezform   Business taxpayers affected by the attacks can e-mail their questions to corp. 1040ezform disaster. 1040ezform relief@irs. 1040ezform gov. 1040ezform   For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www. 1040ezform fema. 1040ezform gov. 1040ezform Other help from the IRS. 1040ezform   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. 1040ezform By selecting the method that is best for you, you will have quick and easy access to tax help. 1040ezform Contacting your Taxpayer Advocate. 1040ezform   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. 1040ezform   The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. 1040ezform While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. 1040ezform   To contact your Taxpayer Advocate: Call the Taxpayer Advocate at 1–877–777–4778. 1040ezform Call the IRS at 1–800–829–1040. 1040ezform Call, write, or fax the Taxpayer Advocate office in your area. 1040ezform Call 1–800–829–4059 if you are a TTY/TDD user. 1040ezform   For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS. 1040ezform Free tax services. 1040ezform   To find out what services are available, get Publication 910, Guide to Free Tax Services. 1040ezform It contains a list of free tax publications and an index of tax topics. 1040ezform It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. 1040ezform Personal computer. 1040ezform With your personal computer and modem, you can access the IRS on the Internet at www. 1040ezform irs. 1040ezform gov. 1040ezform While visiting our web site, you can: Find answers to questions you may have. 1040ezform Download forms and publications or search for forms and pub
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Questions and Answers on 501(c) Organizations

May 15, 2013

The IRS has received a variety of questions related to the exempt organization issues recently raised. Here are some basics on the issue.

1. What are the issues raised in the recent Treasury Inspector General for Tax Administration (“TIGTA”) report?

The issues relate to the application process for organizations seeking tax-exempt status. Part of the IRS’s responsibility is to review applications of organizations seeking tax-exempt status. Section 501(c)(3) organizations are required to get IRS approval. Others, including section 501(c)(4) organizations, are not required to get IRS approval, but often seek it.

2. Do the issues raised in the recent report relate to audits/ examinations?

No, the issues relate to the approval process of organizations that applied to the IRS for recognition of tax-exempt status. 

3. What does the IRS look for in the approval process? 

The IRS’s role is to determine whether organization meets the legal requirements for tax-exempt status. One requirement relates to the amount of political campaign intervention (“political activity”) that tax-exempt organizations may engage in. Section 501(c)(3) organizations are prohibited from engaging in any political activity. Other organizations, including section 501(c)(4) organizations, may only engage in a limited amount of political activity. 

4. Where does an organization send its application for tax-exemption?

All applications are sent to the IRS Determinations Office in Cincinnati. This office receives approximately 70,000 applications for tax-exempt status of all kinds each year. This includes applications from section 501(c)(3) and section 501(c)(4) organizations. This office, which includes fewer than 200 people working directly on applications, is primarily responsible for working determination applications. Determinations staff may consult with tax law specialists in Washington on how the law applies to their case. 

5. Has the IRS seen an increase in the number of applications in which the organization is potentially engaged in political activity?

Yes, the IRS has seen an increase in the number of section 501(c)(4) applications in general. The number of applications has more than doubled in recent years. In addition, the IRS has seen an increase in the number of tax-exempt organization applications in which the organization is potentially engaged in political activity. This includes both section 501(c)(3) and section 501(c)(4) organizations.

6. How did the IRS handle the increase in the number of applications from organizations that appeared to be engaged in political activity?

As done in the past in other situations, such as credit counseling and down payment assistance), the IRS selected cases using identified criteria so that cases needing further review would be worked consistently. This means that cases meeting the selection criteria were centralized and assigned to designated employees developing expertise in the area so that they could be worked in a fair and consistent manner. 

7. How are decisions made regarding what cases should be centralized in this area?

Cases are selected for centralization if there are indications in the application that the organization may engage in political campaign intervention, lobbying, or advocacy. This was done to ensure that the legal requirements related to these activities are applied in a fair and consistent manner. The set of criteria was revised at a later point in order to avoid centralizing pure lobbying organizations that did not require follow-on development. During certain periods (August 2010 to July 2011 and January 2012 to June 2012), specific names, terms and policies (such as Tea Party and Patriot) were inappropriately used as criteria in determining which cases should be centralized. However, case selection during these periods was not limited to these criteria. 

8. What cases were centralized?

The TIGTA report reflects that 300 cases were centralized. Approximately 70 of those cases included the name Tea Party. The remaining cases included organizations of all political views. The current number of centralized cases is approximately 470.

9. Why did IRS employees look at Tea Party organizations?

IRS employees had seen cases of organizations with the name Tea Party in which political activity was an issue that needed to be reviewed for compliance with legal requirements. Because of the increased inventory of applications, this inappropriate criterion was used as a shortcut to centralize similar cases.

10. Would organizations with Tea Party in the name have been centralized if only appropriate selection criteria had been used?

Yes, in most cases the organization would have been centralized based on the information included in the application. The IRS should have focused on this information instead of using a shortcut.

11. Were centralized cases worked differently depending on which selection criteria was used?

No, centralized cases were not worked differently depending on which selection criteria was used.

12. Did mistakes occur in working the centralized cases?

Yes. Applicants whose cases were centralized unfortunately experienced inappropriate delays and over-expansive information requests in some cases. This was caused by ineffective processes and not related to the selection criteria used for the centralization of a case.

13. Is there any evidence of political bias in selecting cases for centralization or in working those cases?

The TIGTA report included no findings of political bias. In addition, the IRS has found no indication of political bias. 

14. How many centralized applications have been approved?

Since centralization, more than 175 applications have been approved to date. As with all applications for tax-exempt status that are approved, the names of organizations whose applications have been approved are publicly available. 

Page Last Reviewed or Updated: 04-Sep-2013

The 1040ezform

1040ezform There are three ways you can request an automatic extension of time to file a U.S. individual income tax return: (1) you can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) you can pay all or part of your estimated income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS); or (3) you can file a paper Form 4868 by mail. 1040ezform 1040ezform If you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records and you do not need to mail in Form 4868. If you need to pay additional taxes when filing Form 4868 electronically, you may do so through the outside service provider or through e-file. You can refer to your tax software or tax professional for ways to file electronically using e-file services. Several companies offer free filing of Form 4868 through the Free File program that you can access on the IRS.gov website. If you wish to file electronically, be sure to have a copy of last year's tax return. You will be asked to provide the adjusted gross income (AGI) from the return for taxpayer verification. 1040ezform 1040ezform A second way of requesting an automatic extension of time to file your individual income tax return is to pay part or your entire estimated income tax due by credit card or debit card or by using EFTPS. You may pay by phone or Internet through one of the service providers listed on Form 4868. Each service provider will charge a convenience fee based on the amount of the tax payment. At the completion of the transaction, you will receive a confirmation number for your records. 1040ezform 1040ezform Finally, you can request an automatic extension of time to file your individual income tax return by completing paper Form 4868 and mailing it to the appropriate address provided on the form. 1040ezform 1040ezform Please be aware that an extension of time to file is NOT an extension of time to pay.