File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

2011 Ez Tax Form

Http Freefile Irs GovFree Tax CalculatorAmmended Tax ReturnsState Income Tax Return FormsTaxact Login Tax Return Taxact Login Page Taxact Sign Page1040x Tax FormFree State FillingFederal Income Tax Forms1040 Ez 2011 FormFile Federal And State Taxes Online FreeFree 2012 Federal Tax FilingAmended Return InstructionsHow To Fill Out The 1040ezAmended 1040ezIrs Free E File 2011Income Tax FormsIrs Gov File 2009 TaxesFree H & R Block Filing2011 Taxes FormsFederal 1040ez1040ez Instruction Manual1040 EzFiling 2010 Taxes Late Online Free2006 Tax Return Software FreeAmend 2009 Tax Return Online2011 Tax Return Form 1040Military TaxesFile State Tax OnlyH&r Block OnlineFiling State Tax Returns2012 Tax Form 1040ezTax Act Online 2009How To File 2012 Tax Return In 2014Taxes 20061040ez Tax FileIrs Form 1040ez Tax Tables2012 Tax Amendment2012 Free Taxes OnlineFree Tax Filing For 20112013 1040ez Tax Form

2011 Ez Tax Form

2011 ez tax form Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. 2011 ez tax form A pension is generally a series of payments made to you after you retire from work. 2011 ez tax form Pension payments are made regularly and are for past services with an employer. 2011 ez tax form An annuity is a series of payments under a contract. 2011 ez tax form You can buy the contract alone or you can buy it with the help of your employer. 2011 ez tax form Annuity payments are made regularly for more than one full year. 2011 ez tax form Note. 2011 ez tax form Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. 2011 ez tax form Types of pensions and annuities. 2011 ez tax form   Particular types of pensions and annuities include: Fixed period annuities. 2011 ez tax form You receive definite amounts at regular intervals for a definite length of time. 2011 ez tax form Annuities for a single life. 2011 ez tax form You receive definite amounts at regular intervals for life. 2011 ez tax form The payments end at death. 2011 ez tax form Joint and survivor annuities. 2011 ez tax form The first annuitant receives a definite amount at regular intervals for life. 2011 ez tax form After he or she dies, a second annuitant receives a definite amount at regular intervals for life. 2011 ez tax form The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. 2011 ez tax form Variable annuities. 2011 ez tax form You receive payments that may vary in amount for a definite length of time or for life. 2011 ez tax form The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. 2011 ez tax form Disability pensions. 2011 ez tax form You are under minimum retirement age and receive payments because you retired on disability. 2011 ez tax form If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. 2011 ez tax form If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. 2011 ez tax form A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. 2011 ez tax form This plan must meet Internal Revenue Code requirements. 2011 ez tax form It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. 2011 ez tax form However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. 2011 ez tax form A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. 2011 ez tax form A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. 2011 ez tax form   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. 2011 ez tax form A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. 2011 ez tax form It does not qualify for most of the tax benefits of a qualified plan. 2011 ez tax form Annuity worksheets. 2011 ez tax form   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. 2011 ez tax form Request for a ruling. 2011 ez tax form   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. 2011 ez tax form This is treated as a request for a ruling. 2011 ez tax form See Requesting a Ruling on Taxation of Annuity near the end of this publication. 2011 ez tax form Withholding tax and estimated tax. 2011 ez tax form   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. 2011 ez tax form If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. 2011 ez tax form Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. 2011 ez tax form Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). 2011 ez tax form These payments are also known as amounts received as an annuity. 2011 ez tax form If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. 2011 ez tax form In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. 2011 ez tax form The amount of each payment that is more than the part that represents your net cost is taxable. 2011 ez tax form Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. 2011 ez tax form These terms are explained in the following discussions. 2011 ez tax form Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. 2011 ez tax form First, find your net cost of the contract as of the annuity starting date (defined later). 2011 ez tax form To find this amount, you must first figure the total premiums, contributions, or other amounts paid. 2011 ez tax form This includes the amounts your employer contributed if you were required to include these amounts in income. 2011 ez tax form It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). 2011 ez tax form From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. 2011 ez tax form Any additional premiums paid for double indemnity or disability benefits. 2011 ez tax form Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). 2011 ez tax form The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. 2011 ez tax form Example. 2011 ez tax form On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. 2011 ez tax form The annuity starting date is July 1. 2011 ez tax form This is the date you use in figuring your investment in the contract and your expected return (discussed later). 2011 ez tax form Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. 2011 ez tax form Foreign employment. 2011 ez tax form   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. 2011 ez tax form The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. 2011 ez tax form Foreign employment contributions while a nonresident alien. 2011 ez tax form   In determining your cost, special rules apply if you are a U. 2011 ez tax form S. 2011 ez tax form citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. 2011 ez tax form Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. 2011 ez tax form Death benefit exclusion. 2011 ez tax form   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. 2011 ez tax form The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. 2011 ez tax form How to adjust your total cost. 2011 ez tax form   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. 2011 ez tax form Add it to the cost or unrecovered cost of the annuity at the annuity starting date. 2011 ez tax form See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. 2011 ez tax form Net cost. 2011 ez tax form   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. 2011 ez tax form This is the unrecovered investment in the contract as of the annuity starting date. 2011 ez tax form If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. 2011 ez tax form Refund feature. 2011 ez tax form   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. 2011 ez tax form Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. 2011 ez tax form   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. 2011 ez tax form Zero value of refund feature. 2011 ez tax form   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. 2011 ez tax form   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). 2011 ez tax form   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. 2011 ez tax form Examples. 2011 ez tax form The first example shows how to figure the value of the refund feature when there is only one beneficiary. 2011 ez tax form Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. 2011 ez tax form In both examples, the taxpayer elects to use Tables V through VIII. 2011 ez tax form If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. 2011 ez tax form Example 1. 2011 ez tax form At age 65, Barbara bought for $21,053 an annuity with a refund feature. 2011 ez tax form She will get $100 a month for life. 2011 ez tax form Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. 2011 ez tax form In this case, the contract cost and the total guaranteed return are the same ($21,053). 2011 ez tax form Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. 2011 ez tax form 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. 2011 ez tax form For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). 2011 ez tax form In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. 2011 ez tax form Example 2. 2011 ez tax form John died while still employed. 2011 ez tax form His widow, Eleanor, age 48, receives $171 a month for the rest of her life. 2011 ez tax form John's son, Elmer, age 9, receives $50 a month until he reaches age 18. 2011 ez tax form John's contributions to the retirement fund totaled $7,559. 2011 ez tax form 45, with interest on those contributions of $1,602. 2011 ez tax form 53. 2011 ez tax form The guarantee or total refund feature of the contract is $9,161. 2011 ez tax form 98 ($7,559. 2011 ez tax form 45 plus $1,602. 2011 ez tax form 53). 2011 ez tax form The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. 2011 ez tax form 9 $71,614. 2011 ez tax form 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. 2011 ez tax form 0 5,400. 2011 ez tax form 00   3) Total expected return   $77,014. 2011 ez tax form 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. 2011 ez tax form 45   2) Guaranteed amount (contributions of $7,559. 2011 ez tax form 45 plus interest of $1,602. 2011 ez tax form 53) $9,161. 2011 ez tax form 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. 2011 ez tax form 00   4) Net guaranteed amount $3,761. 2011 ez tax form 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. 2011 ez tax form 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. 2011 ez tax form 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 2011 ez tax form See the discussion of expected return, later in this publication. 2011 ez tax form Free IRS help. 2011 ez tax form   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. 2011 ez tax form Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 2011 ez tax form The following discussions explain how to figure the expected return with each type of annuity. 2011 ez tax form A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. 2011 ez tax form Fixed period annuity. 2011 ez tax form   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. 2011 ez tax form It is the total amount you will get beginning at the annuity starting date. 2011 ez tax form You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). 2011 ez tax form To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. 2011 ez tax form Single life annuity. 2011 ez tax form   If you are to get annuity payments for the rest of your life, find your expected return as follows. 2011 ez tax form You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. 2011 ez tax form These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). 2011 ez tax form   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. 2011 ez tax form See Adjustments to Tables I, II, V, VI, and VIA following Table I. 2011 ez tax form Example. 2011 ez tax form Henry bought an annuity contract that will give him an annuity of $500 a month for his life. 2011 ez tax form If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. 2011 ez tax form 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. 2011 ez tax form 2 multiple by +. 2011 ez tax form 1. 2011 ez tax form His expected return would then be $115,800 ($6,000 × 19. 2011 ez tax form 3). 2011 ez tax form Annuity for shorter of life or specified period. 2011 ez tax form   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. 2011 ez tax form To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. 2011 ez tax form Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. 2011 ez tax form Example. 2011 ez tax form Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. 2011 ez tax form She was age 65 at her birthday nearest the annuity starting date. 2011 ez tax form She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. 2011 ez tax form 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. 2011 ez tax form See Special Elections, later. 2011 ez tax form Joint and survivor annuities. 2011 ez tax form   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. 2011 ez tax form To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. 2011 ez tax form If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. 2011 ez tax form See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. 2011 ez tax form Example. 2011 ez tax form John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. 2011 ez tax form At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. 2011 ez tax form The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. 2011 ez tax form 0 Expected return $132,000 Different payments to survivor. 2011 ez tax form   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. 2011 ez tax form Example 1. 2011 ez tax form Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. 2011 ez tax form If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. 2011 ez tax form 0 Multiple for Gerald, age 70 (from Table V)   16. 2011 ez tax form 0 Difference: Multiple applicable to Mary   6. 2011 ez tax form 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. 2011 ez tax form 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. 2011 ez tax form 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. 2011 ez tax form Your husband died while still employed. 2011 ez tax form Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. 2011 ez tax form Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. 2011 ez tax form You were 50 years old at the annuity starting date. 2011 ez tax form Marie was 16 and Jean was 14. 2011 ez tax form Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. 2011 ez tax form 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. 2011 ez tax form 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. 2011 ez tax form 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. 2011 ez tax form Computation Under the General Rule Note. 2011 ez tax form Variable annuities use a different computation for determining the exclusion amounts. 2011 ez tax form See Variable annuities later. 2011 ez tax form Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. 2011 ez tax form   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. 2011 ez tax form See Death benefit exclusion , earlier. 2011 ez tax form Step 2. 2011 ez tax form   Figure your expected return. 2011 ez tax form Step 3. 2011 ez tax form   Divide Step 1 by Step 2 and round to three decimal places. 2011 ez tax form This will give you the exclusion percentage. 2011 ez tax form Step 4. 2011 ez tax form   Multiply the exclusion percentage by the first regular periodic payment. 2011 ez tax form The result is the tax-free part of each pension or annuity payment. 2011 ez tax form   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. 2011 ez tax form However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. 2011 ez tax form   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. 2011 ez tax form Step 5. 2011 ez tax form   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. 2011 ez tax form This will give you the tax-free part of the total payment for the year. 2011 ez tax form    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. 2011 ez tax form This fractional amount is multiplied by your exclusion percentage to get the tax-free part. 2011 ez tax form Step 6. 2011 ez tax form   Subtract the tax-free part from the total payment you received. 2011 ez tax form The rest is the taxable part of your pension or annuity. 2011 ez tax form Example 1. 2011 ez tax form You purchased an annuity with an investment in the contract of $10,800. 2011 ez tax form Under its terms, the annuity will pay you $100 a month for life. 2011 ez tax form The multiple for your age (age 65) is 20. 2011 ez tax form 0 as shown in Table V. 2011 ez tax form Your expected return is $24,000 (20 × 12 × $100). 2011 ez tax form Your cost of $10,800, divided by your expected return of $24,000, equals 45. 2011 ez tax form 0%. 2011 ez tax form This is the percentage you will not have to include in income. 2011 ez tax form Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. 2011 ez tax form If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). 2011 ez tax form Example 2. 2011 ez tax form Gerald bought a joint and survivor annuity. 2011 ez tax form Gerald's investment in the contract is $62,712 and the expected return is $121,200. 2011 ez tax form The exclusion percentage is 51. 2011 ez tax form 7% ($62,712 ÷ $121,200). 2011 ez tax form Gerald will receive $500 a month ($6,000 a year). 2011 ez tax form Each year, until his net cost is recovered, $3,102 (51. 2011 ez tax form 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. 2011 ez tax form If Gerald dies, his wife will receive $350 a month ($4,200 a year). 2011 ez tax form If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. 2011 ez tax form 7%). 2011 ez tax form Each year, until the entire net cost is recovered, his wife will receive $2,171. 2011 ez tax form 40 (51. 2011 ez tax form 7% of her payments received of $4,200) tax free. 2011 ez tax form She will include $2,028. 2011 ez tax form 60 ($4,200 − $2,171. 2011 ez tax form 40) in her income tax return. 2011 ez tax form Example 3. 2011 ez tax form Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. 2011 ez tax form Your two daughters each receive annual annuities of $1,800 until they reach age 18. 2011 ez tax form Your husband contributed $25,576 to the plan. 2011 ez tax form You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. 2011 ez tax form Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. 2011 ez tax form The exclusion percentage of 18. 2011 ez tax form 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. 2011 ez tax form Each full year $864 (18. 2011 ez tax form 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. 2011 ez tax form Each year, until age 18, $324 (18. 2011 ez tax form 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. 2011 ez tax form Part-year payments. 2011 ez tax form   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. 2011 ez tax form   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. 2011 ez tax form For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. 2011 ez tax form   If you received a fractional payment, follow Step 5, discussed earlier. 2011 ez tax form This gives you the tax-free part of your total payment. 2011 ez tax form Example. 2011 ez tax form On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. 2011 ez tax form The applicable multiple from Table V is 23. 2011 ez tax form 3 (age 61). 2011 ez tax form Her expected return is $34,950 ($125 × 12 × 23. 2011 ez tax form 3). 2011 ez tax form Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. 2011 ez tax form 1%. 2011 ez tax form Each payment received will consist of 63. 2011 ez tax form 1% return of cost and 36. 2011 ez tax form 9% taxable income, until her net cost of the contract is fully recovered. 2011 ez tax form During the first year, Mary received three payments of $125, or $375, of which $236. 2011 ez tax form 63 (63. 2011 ez tax form 1% × $375) is a return of cost. 2011 ez tax form The remaining $138. 2011 ez tax form 37 is included in income. 2011 ez tax form Increase in annuity payments. 2011 ez tax form   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. 2011 ez tax form All increases in the installment payments are fully taxable. 2011 ez tax form   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. 2011 ez tax form 72-5(a)(5) of the regulations. 2011 ez tax form Example. 2011 ez tax form Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. 2011 ez tax form In figuring the taxable part, Joe elects to use Tables V through VIII. 2011 ez tax form The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. 2011 ez tax form His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. 2011 ez tax form 0 × $1,764 annual payment). 2011 ez tax form The exclusion percentage is $7,938 ÷ $35,280, or 22. 2011 ez tax form 5%. 2011 ez tax form During the year he received 11 monthly payments of $147, or $1,617. 2011 ez tax form Of this amount, 22. 2011 ez tax form 5% × $147 × 11 ($363. 2011 ez tax form 83) is tax free as a return of cost and the balance of $1,253. 2011 ez tax form 17 is taxable. 2011 ez tax form Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). 2011 ez tax form The tax-free part is still only 22. 2011 ez tax form 5% of the annuity payments as of the annuity starting date (22. 2011 ez tax form 5% × $147 × 12 = $396. 2011 ez tax form 90 for a full year). 2011 ez tax form The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. 2011 ez tax form Variable annuities. 2011 ez tax form   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. 2011 ez tax form   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. 2011 ez tax form If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. 2011 ez tax form Example. 2011 ez tax form Frank purchased a variable annuity at age 65. 2011 ez tax form The total cost of the contract was $12,000. 2011 ez tax form The annuity starting date is January 1 of the year of purchase. 2011 ez tax form His annuity will be paid, starting July 1, in variable annual installments for his life. 2011 ez tax form The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. 2011 ez tax form   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. 2011 ez tax form Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. 2011 ez tax form The result is added to the previously figured periodic tax-free part. 2011 ez tax form The sum is the amount of each future payment that will be tax free. 2011 ez tax form Example. 2011 ez tax form Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. 2011 ez tax form Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. 2011 ez tax form Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. 2011 ez tax form 00 Amount received in second year 500. 2011 ez tax form 00 Difference $100. 2011 ez tax form 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. 2011 ez tax form 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. 2011 ez tax form 4) $5. 2011 ez tax form 43 Revised annual tax-free part for third and later years ($600 + $5. 2011 ez tax form 43) $605. 2011 ez tax form 43 Amount taxable in third year ($1,200 − $605. 2011 ez tax form 43) $594. 2011 ez tax form 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. 2011 ez tax form 72–4(d)(3) of the Income Tax Regulations. 2011 ez tax form The statement must also show the following information: The annuity starting date and your age on that date. 2011 ez tax form The first day of the first period for which you received an annuity payment in the current year. 2011 ez tax form Your investment in the contract as originally figured. 2011 ez tax form The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. 2011 ez tax form Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. 2011 ez tax form Exclusion limited to net cost. 2011 ez tax form   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). 2011 ez tax form This is the unrecovered investment in the contract as of the annuity starting date. 2011 ez tax form   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. 2011 ez tax form This deduction is not subject to the 2%-of-adjusted-gross-income limit. 2011 ez tax form Example 1. 2011 ez tax form Your annuity starting date is after 1986. 2011 ez tax form Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. 2011 ez tax form There is no refund feature. 2011 ez tax form Your monthly annuity payment is $833. 2011 ez tax form 33. 2011 ez tax form Your exclusion ratio is 12% and you exclude $100 a month. 2011 ez tax form Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. 2011 ez tax form Thereafter, your annuity payments are fully taxable. 2011 ez tax form Example 2. 2011 ez tax form The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. 2011 ez tax form The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. 2011 ez tax form The exclusion ratio is 10. 2011 ez tax form 8%, and your monthly exclusion is $90. 2011 ez tax form After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). 2011 ez tax form An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. 2011 ez tax form Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. 2011 ez tax form Exclusion not limited to net cost. 2011 ez tax form   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. 2011 ez tax form If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. 2011 ez tax form The total exclusion may be more than your investment in the contract. 2011 ez tax form How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. 2011 ez tax form Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. 2011 ez tax form These tables correspond to the old Tables I through IV. 2011 ez tax form In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. 2011 ez tax form If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. 2011 ez tax form However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). 2011 ez tax form Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. 2011 ez tax form Contributions made both before July 1986 and after June 1986. 2011 ez tax form   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. 2011 ez tax form (See the examples below. 2011 ez tax form )    Making the election. 2011 ez tax form Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. 2011 ez tax form 72–6 of the Income Tax Regulations. 2011 ez tax form ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. 2011 ez tax form   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. 2011 ez tax form You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. 2011 ez tax form    Advantages of election. 2011 ez tax form In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. 2011 ez tax form    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. 2011 ez tax form If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. 2011 ez tax form   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. 2011 ez tax form Example 1. 2011 ez tax form Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. 2011 ez tax form Payment of the $42,000 contribution is guaranteed under a refund feature. 2011 ez tax form Bill is 55 years old as of the annuity starting date. 2011 ez tax form For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. 2011 ez tax form       Pre- July 1986   Post- June 1986 A. 2011 ez tax form Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. 2011 ez tax form of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. 2011 ez tax form Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. 2011 ez tax form Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. 2011 ez tax form 7   28. 2011 ez tax form 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. 2011 ez tax form Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . 2011 ez tax form 079   . 2011 ez tax form 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). 2011 ez tax form The taxable part of his annuity is $22,080 ($24,000 minus $1,920). 2011 ez tax form If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). 2011 ez tax form Example 2. 2011 ez tax form Al is age 62 at his nearest birthday to the annuity starting date. 2011 ez tax form Al's wife is age 60 at her nearest birthday to the annuity starting date. 2011 ez tax form The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. 2011 ez tax form The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. 2011 ez tax form Al makes the election described in Example 1 . 2011 ez tax form For purposes of this example, assume the refund feature adjustment is zero. 2011 ez tax form If an adjustment is required, IRS will figure the amount. 2011 ez tax form See Requesting a Ruling on Taxation of Annuity near the end of this publication. 2011 ez tax form       Pre-  July 1986   Post-  June 1986 A. 2011 ez tax form Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. 2011 ez tax form Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. 2011 ez tax form Expected return         1) Multiple for both annuitants from Tables II and VI 25. 2011 ez tax form 4   28. 2011 ez tax form 8   2) Multiple for first annuitant from Tables I and V 16. 2011 ez tax form 9   22. 2011 ez tax form 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. 2011 ez tax form 5   6. 2011 ez tax form 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. 2011 ez tax form Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . 2011 ez tax form 209   . 2011 ez tax form 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). 2011 ez tax form The taxable part of his annuity is $9,216 ($12,000 − $2,784). 2011 ez tax form The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. 2011 ez tax form After Al's death, his widow will apply the same exclusion percentages (20. 2011 ez tax form 9% and 2. 2011 ez tax form 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. 2011 ez tax form Annuity received after June 30, 1986. 2011 ez tax form   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. 2011 ez tax form Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. 2011 ez tax form    Make the election by attaching the following statement to your income tax return. 2011 ez tax form    “I elect, under section 1. 2011 ez tax form 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. 2011 ez tax form ”   The statement must also include your name, address, and social security number. 2011 ez tax form   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. 2011 ez tax form Disqualifying form of payment or settlement. 2011 ez tax form   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. 2011 ez tax form See regulations section 1. 2011 ez tax form 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. 2011 ez tax form You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. 2011 ez tax form Worksheets for Determining Taxable Annuity Worksheets I and II. 2011 ez tax form   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. 2011 ez tax form 72–6(d)(6) Election. 2011 ez tax form Worksheet I For Determining Taxable Annuity Under Regulations Section 1. 2011 ez tax form 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. 2011 ez tax form   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 2011 ez tax form )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 2011 ez tax form If not, the IRS will calculate the refund feature percentage. 2011 ez tax form             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 2011 ez tax form   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. 2011 ez tax form   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. 2011 ez tax form   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 2011 ez tax form     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. 2011 ez tax form 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. 2011 ez tax form   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 2011 ez tax form )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 2011 ez tax form If not, the IRS will calculate the refund feature percentage. 2011 ez tax form             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 2011 ez tax form   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. 2011 ez tax form   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. 2011 ez tax form Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. 2011 ez tax form   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 2011 ez tax form   Actuarial Tables Please click here for the text description of the image. 2011 ez tax form Actuarial Tables Please click here for the text description of the image. 2011 ez tax form Actuarial Tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Please click here for the text description of the image. 2011 ez tax form Actuarial tables Requesting a Ruling on Taxation of Annuity If you are a retiree, or the survivor of an employee or retiree, you may ask the Internal Revenue Service to help you determine the taxation of your annuity. 2011 ez tax form If you make this request, you are asking for a ruling. 2011 ez tax form User fee. 2011 ez tax form   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. 2011 ez tax form You should call the IRS for the proper fee. 2011 ez tax form A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. 2011 ez tax form Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. 2011 ez tax form O. 2011 ez tax form Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. 2011 ez tax form When to make the request. 2011 ez tax form   Please note that requests sent between February 1 and April 15 may experience some delay. 2011 ez tax form We process requests in the order received, and we will reply to your request as soon as we can process it. 2011 ez tax form If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. 2011 ez tax form S. 2011 ez tax form Individual Income Tax Return, to get an extension of time to file. 2011 ez tax form Information you must furnish. 2011 ez tax form   You must furnish the information listed below so the IRS can comply with your request. 2011 ez tax form Failure to furnish the information will result in a delay in processing your request. 2011 ez tax form Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. 2011 ez tax form Copies of any documents showing distributions, annuity rates, and annuity options available to you. 2011 ez tax form A copy of any Form 1099–R you received since your annuity began. 2011 ez tax form A statement indicating whether you have filed your return for the year for which you are making the request. 2011 ez tax form If you have requested an extension of time to file that return, please indicate the extension date. 2011 ez tax form Your daytime phone number. 2011 ez tax form Your current mailing address. 2011 ez tax form A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. 2011 ez tax form Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. 2011 ez tax form A completed Tax Information Sheet (or facsimile) shown on the next page. 2011 ez tax form Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. 2011 ez tax form This statement must be signed by the retiree or the survivor annuitant. 2011 ez tax form It cannot be signed by a representative. 2011 ez tax form Tax Information Sheet Please click here for the text description of the image. 2011 ez tax form Tax Information Sheet Please click here for the text description of the image. 2011 ez tax form Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 2011 ez tax form Free help with your tax return. 2011 ez tax form   You can get free help preparing your return nationwide from IRS-certified volunteers. 2011 ez tax form The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 2011 ez tax form The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 2011 ez tax form Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 2011 ez tax form In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 2011 ez tax form To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 2011 ez tax form gov, download the IRS2Go app, or call 1-800-906-9887. 2011 ez tax form   As part of the TCE program, AARP offers the Tax-Aide counseling program. 2011 ez tax form To find the nearest AARP Tax-Aide site, visit AARP's website at www. 2011 ez tax form aarp. 2011 ez tax form org/money/taxaide or call 1-888-227-7669. 2011 ez tax form For more information on these programs, go to IRS. 2011 ez tax form gov and enter “VITA” in the search box. 2011 ez tax form Internet. 2011 ez tax form    IRS. 2011 ez tax form gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 2011 ez tax form Download the free IRS2Go app from the iTunes app store or from Google Play. 2011 ez tax form Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 2011 ez tax form Check the status of your 2013 refund with the Where's My Refund? application on IRS. 2011 ez tax form gov or download the IRS2Go app and select the Refund Status option. 2011 ez tax form The IRS issues more than 9 out of 10 refunds in less than 21 days. 2011 ez tax form Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 2011 ez tax form You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2011 ez tax form The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 2011 ez tax form Use the Interactive Tax Assistant (ITA) to research your tax questions. 2011 ez tax form No need to wait on the phone or stand in line. 2011 ez tax form The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 2011 ez tax form When you reach the response screen, you can print the entire interview and the final response for your records. 2011 ez tax form New subject areas are added on a regular basis. 2011 ez tax form  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 2011 ez tax form gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 2011 ez tax form You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 2011 ez tax form The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 2011 ez tax form When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 2011 ez tax form Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 2011 ez tax form You can also ask the IRS to mail a return or an account transcript to you. 2011 ez tax form Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 2011 ez tax form gov or by calling 1-800-908-9946. 2011 ez tax form Tax return and tax account transcripts are generally available for the current year and the past three years. 2011 ez tax form Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 2011 ez tax form Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 2011 ez tax form If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 2011 ez tax form Check the status of your amended return using Where's My Amended Return? Go to IRS. 2011 ez tax form gov and enter Where's My Amended Return? in the search box. 2011 ez tax form You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 2011 ez tax form It can take up to 3 weeks from the date you mailed it to show up in our system. 2011 ez tax form Make a payment using one of several safe and convenient electronic payment options available on IRS. 2011 ez tax form gov. 2011 ez tax form Select the Payment tab on the front page of IRS. 2011 ez tax form gov for more information. 2011 ez tax form Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 2011 ez tax form Figure your income tax withholding with the IRS Withholding Calculator on IRS. 2011 ez tax form gov. 2011 ez tax form Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 2011 ez tax form Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 2011 ez tax form gov. 2011 ez tax form Request an Electronic Filing PIN by going to IRS. 2011 ez tax form gov and entering Electronic Filing PIN in the search box. 2011 ez tax form Download forms, instructions and publications, including accessible versions for people with disabilities. 2011 ez tax form Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 2011 ez tax form gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 2011 ez tax form An employee can answer questions about your tax account or help you set up a payment plan. 2011 ez tax form Before you visit, check the Office Locator on IRS. 2011 ez tax form gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 2011 ez tax form If you have a special need, such as a disability, you can request an appointment. 2011 ez tax form Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 2011 ez tax form Apply for an Employer Identification Number (EIN). 2011 ez tax form Go to IRS. 2011 ez tax form gov and enter Apply for an EIN in the search box. 2011 ez tax form Read the Internal Revenue Code, regulations, or other official guidance. 2011 ez tax form Read Internal Revenue Bulletins. 2011 ez tax form Sign up to receive local and national tax news and more by email. 2011 ez tax form Just click on “subscriptions” above the search box on IRS. 2011 ez tax form gov and choose from a variety of options. 2011 ez tax form    Phone. 2011 ez tax form You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 2011 ez tax form Download the free IRS2Go app from the iTunes app store or from Google Play. 2011 ez tax form Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 2011 ez tax form gov, or download the IRS2Go app. 2011 ez tax form Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 2011 ez tax form The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 2011 ez tax form Mos
Español

Fair Housing and Equal Opportunity (FHEO)

The Office of Fair Housing and Equal Opportunity enforces federal laws and establishes policies to ensure that all Americans have equal access to the housing of their choice.

The 2011 Ez Tax Form

2011 ez tax form 8. 2011 ez tax form   Business Expenses Table of Contents Introduction Useful Items - You may want to see: Bad DebtsAccrual method. 2011 ez tax form Cash method. 2011 ez tax form Car and Truck ExpensesOffice in the home. 2011 ez tax form Methods for Deducting Car and Truck Expenses Reimbursing Your Employees for Expenses Depreciation Employees' PayFringe benefits. 2011 ez tax form InsuranceHow to figure the deduction. 2011 ez tax form Interest Legal and Professional FeesTax preparation fees. 2011 ez tax form Pension Plans Rent Expense Taxes Travel, Meals, and EntertainmentTransportation. 2011 ez tax form Taxi, commuter bus, and limousine. 2011 ez tax form Baggage and shipping. 2011 ez tax form Car or truck. 2011 ez tax form Meals and lodging. 2011 ez tax form Cleaning. 2011 ez tax form Telephone. 2011 ez tax form Tips. 2011 ez tax form More information. 2011 ez tax form Business Use of Your HomeExceptions to exclusive use. 2011 ez tax form Other Expenses You Can Deduct Expenses You Cannot Deduct Introduction You can deduct the costs of operating your business. 2011 ez tax form These costs are known as business expenses. 2011 ez tax form These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year. 2011 ez tax form To be deductible, a business expense must be both ordinary and necessary. 2011 ez tax form An ordinary expense is one that is common and accepted in your field of business. 2011 ez tax form A necessary expense is one that is helpful and appropriate for your business. 2011 ez tax form An expense does not have to be indispensable to be considered necessary. 2011 ez tax form For more information about the general rules for deducting business expenses, see chapter 1 in Publication 535, Business Expenses. 2011 ez tax form If you have an expense that is partly for business and partly personal, separate the personal part from the business part. 2011 ez tax form The personal part is not deductible. 2011 ez tax form Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 946 How To Depreciate Property See chapter 12 for information about getting publications and forms. 2011 ez tax form Bad Debts If someone owes you money you cannot collect, you have a bad debt. 2011 ez tax form There are two kinds of bad debts, business bad debts and nonbusiness bad debts. 2011 ez tax form A business bad debt is generally one that comes from operating your trade or business. 2011 ez tax form You may be able to deduct business bad debts as an expense on your business tax return. 2011 ez tax form Business bad debt. 2011 ez tax form   A business bad debt is a loss from the worthlessness of a debt that was either of the following. 2011 ez tax form Created or acquired in your business. 2011 ez tax form Closely related to your business when it became partly or totally worthless. 2011 ez tax form A debt is closely related to your business if your primary motive for incurring the debt is a business reason. 2011 ez tax form   Business bad debts are mainly the result of credit sales to customers. 2011 ez tax form They can also be the result of loans to suppliers, clients, employees, or distributors. 2011 ez tax form Goods and services customers have not paid for are shown in your books as either accounts receivable or notes receivable. 2011 ez tax form If you are unable to collect any part of these accounts or notes receivable, the uncollectible part is a business bad debt. 2011 ez tax form    You can take a bad debt deduction for these accounts and notes receivable only if the amount you were owed was included in your gross income either for the year the deduction is claimed or for a prior year. 2011 ez tax form Accrual method. 2011 ez tax form   If you use an accrual method of accounting, you normally report income as you earn it. 2011 ez tax form You can take a bad debt deduction for an uncollectible receivable if you have included the uncollectible amount in income. 2011 ez tax form Cash method. 2011 ez tax form   If you use the cash method of accounting, you normally report income when you receive payment. 2011 ez tax form You cannot take a bad debt deduction for amounts owed to you that you have not received and cannot collect if you never included those amounts in income. 2011 ez tax form More information. 2011 ez tax form   For more information about business bad debts, see chapter 10 in Publication 535. 2011 ez tax form Nonbusiness bad debts. 2011 ez tax form   All other bad debts are nonbusiness bad debts and are deductible as short-term capital losses on Form 8949 and Schedule D (Form 1040). 2011 ez tax form For more information on nonbusiness bad debts, see Publication 550, Investment Income and Expenses. 2011 ez tax form Car and Truck Expenses If you use your car or truck in your business, you may be able to deduct the costs of operating and maintaining your vehicle. 2011 ez tax form You also may be able to deduct other costs of local transportation and traveling away from home overnight on business. 2011 ez tax form You may qualify for a tax credit for qualified plug-in electric vehicles, qualified plug-in electric drive motor vehicles, and alternative motor vehicles you place in service during the year. 2011 ez tax form See Form 8936 and Form 8910 for more information. 2011 ez tax form Local transportation expenses. 2011 ez tax form   Local transportation expenses include the ordinary and necessary costs of all the following. 2011 ez tax form Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. 2011 ez tax form Tax home is defined later. 2011 ez tax form Visiting clients or customers. 2011 ez tax form Going to a business meeting away from your regular workplace. 2011 ez tax form Getting from your home to a temporary workplace when you have one or more regular places of work. 2011 ez tax form These temporary workplaces can be either within the area of your tax home or outside that area. 2011 ez tax form Local business transportation does not include expenses you have while traveling away from home overnight. 2011 ez tax form Those expenses are deductible as travel expenses and are discussed later under Travel, Meals, and Entertainment. 2011 ez tax form However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. 2011 ez tax form   Generally, your tax home is your regular place of business, regardless of where you maintain your family home. 2011 ez tax form It includes the entire city or general area in which your business or work is located. 2011 ez tax form Example. 2011 ez tax form You operate a printing business out of rented office space. 2011 ez tax form You use your van to deliver completed jobs to your customers. 2011 ez tax form You can deduct the cost of round-trip transportation between your customers and your print shop. 2011 ez tax form    You cannot deduct the costs of driving your car or truck between your home and your main or regular workplace. 2011 ez tax form These costs are personal commuting expenses. 2011 ez tax form Office in the home. 2011 ez tax form   Your workplace can be your home if you have an office in your home that qualifies as your principal place of business. 2011 ez tax form For more information, see Business Use of Your Home, later. 2011 ez tax form Example. 2011 ez tax form You are a graphics designer. 2011 ez tax form You operate your business out of your home. 2011 ez tax form Your home qualifies as your principal place of business. 2011 ez tax form You occasionally have to drive to your clients to deliver your completed work. 2011 ez tax form You can deduct the cost of the round-trip transportation between your home and your clients. 2011 ez tax form Methods for Deducting Car and Truck Expenses For local transportation or overnight travel by car or truck, you generally can use one of the following methods to figure your expenses. 2011 ez tax form Standard mileage rate. 2011 ez tax form Actual expenses. 2011 ez tax form Standard mileage rate. 2011 ez tax form   You may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. 2011 ez tax form For 2013, the standard mileage rate is 56. 2011 ez tax form 5 cents per mile. 2011 ez tax form    If you choose to use the standard mileage rate for a year, you cannot deduct your actual expenses for that year except for business-related parking fees and tolls. 2011 ez tax form Choosing the standard mileage rate. 2011 ez tax form   If you want to use the standard mileage rate for a car or truck you own, you must choose to use it in the first year the car is available for use in your business. 2011 ez tax form In later years, you can choose to use either the standard mileage rate or actual expenses. 2011 ez tax form   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). 2011 ez tax form Standard mileage rate not allowed. 2011 ez tax form   You cannot use the standard mileage rate if you: Operate five or more cars at the same time, Claimed a depreciation deduction using any method other than straight line, for example, ACRS or MACRS, Claimed a section 179 deduction on the car, Claimed the special depreciation allowance on the car, Claimed actual car expenses for a car you leased, or Are a rural mail carrier who received a qualified reimbursement. 2011 ez tax form Parking fees and tolls. 2011 ez tax form   In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls. 2011 ez tax form (Parking fees you pay to park your car at your place of work are nondeductible commuting expenses. 2011 ez tax form ) Actual expenses. 2011 ez tax form   If you do not choose to use the standard mileage rate, you may be able to deduct your actual car or truck expenses. 2011 ez tax form    If you qualify to use both methods, figure your deduction both ways to see which gives you a larger deduction. 2011 ez tax form   Actual car expenses include the costs of the following items. 2011 ez tax form Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. 2011 ez tax form You can divide your expenses based on the miles driven for each purpose. 2011 ez tax form Example. 2011 ez tax form You are the sole proprietor of a flower shop. 2011 ez tax form You drove your van 20,000 miles during the year. 2011 ez tax form 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use (including commuting miles). 2011 ez tax form You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. 2011 ez tax form More information. 2011 ez tax form   For more information about the rules for claiming car and truck expenses, see Publication 463. 2011 ez tax form Reimbursing Your Employees for Expenses You generally can deduct the amount you reimburse your employees for car and truck expenses. 2011 ez tax form The reimbursement you deduct and the manner in which you deduct it depend in part on whether you reimburse the expenses under an accountable plan or a nonaccountable plan. 2011 ez tax form For details, see chapter 11 in Publication 535. 2011 ez tax form That chapter explains accountable and nonaccountable plans and tells you whether to report the reimbursement on your employee's Form W-2, Wage and Tax Statement. 2011 ez tax form Depreciation If property you acquire to use in your business is expected to last more than 1 year, you generally cannot deduct the entire cost as a business expense in the year you acquire it. 2011 ez tax form You must spread the cost over more than 1 tax year and deduct part of it each year on Schedule C. 2011 ez tax form This method of deducting the cost of business property is called depreciation. 2011 ez tax form The discussion here is brief. 2011 ez tax form You will find more information about depreciation in Publication 946. 2011 ez tax form What property can be depreciated?   You can depreciate property if it meets all the following requirements. 2011 ez tax form It must be property you own. 2011 ez tax form It must be used in business or held to produce income. 2011 ez tax form You never can depreciate inventory (explained in chapter 2) because it is not held for use in your business. 2011 ez tax form It must have a useful life that extends substantially beyond the year it is placed in service. 2011 ez tax form It must have a determinable useful life, which means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. 2011 ez tax form You never can depreciate the cost of land because land does not wear out, become obsolete, or get used up. 2011 ez tax form It must not be excepted property. 2011 ez tax form This includes property placed in service and disposed of in the same year. 2011 ez tax form Repairs. 2011 ez tax form    You cannot depreciate repairs and replacements that do not increase the value of your property, make it more useful, or lengthen its useful life. 2011 ez tax form You can deduct these amounts on line 21 of Schedule C or line 2 of Schedule C-EZ. 2011 ez tax form Depreciation method. 2011 ez tax form   The method for depreciating most business and investment property placed in service after 1986 is called the Modified Accelerated Cost Recovery System (MACRS). 2011 ez tax form MACRS is discussed in detail in Publication 946. 2011 ez tax form Section 179 deduction. 2011 ez tax form   You can elect to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. 2011 ez tax form This deduction is known as the “section 179 deduction. 2011 ez tax form ” The maximum amount you can elect to deduct during 2013 is generally $500,000 (higher limits apply to certain property). 2011 ez tax form See IRC 179(e). 2011 ez tax form   This limit is generally reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2 million. 2011 ez tax form The total amount of depreciation (including the section 179 deduction) you can take for a passenger automobile you use in your business and first place in service in 2013 is $3,160 ($11,160 if you take the special depreciation allowance for qualified passenger automobiles placed in service in 2013). 2011 ez tax form Special rules apply to trucks and vans. 2011 ez tax form For more information, see Publication 946. 2011 ez tax form It explains what property qualifies for the deduction, what limits apply to the deduction, and when and how to recapture the deduction. 2011 ez tax form    Your section 179 election for the cost of any sport utility vehicle (SUV) and certain other vehicles is limited to $25,000. 2011 ez tax form For more information, see the Instructions for Form 4562 or Publication 946. 2011 ez tax form Listed property. 2011 ez tax form   You must follow special rules and recordkeeping requirements when depreciating listed property. 2011 ez tax form Listed property is any of the following. 2011 ez tax form Most passenger automobiles. 2011 ez tax form Most other property used for transportation. 2011 ez tax form Any property of a type generally used for entertainment, recreation, or amusement. 2011 ez tax form Certain computers and related peripheral equipment. 2011 ez tax form   For more information about listed property, see Publication 946. 2011 ez tax form Form 4562. 2011 ez tax form   Use Form 4562, Depreciation and Amortization, if you are claiming any of the following. 2011 ez tax form Depreciation on property placed in service during the current tax year. 2011 ez tax form A section 179 deduction. 2011 ez tax form Depreciation on any listed property (regardless of when it was placed in service). 2011 ez tax form    If you have to use Form 4562, you must file Schedule C. 2011 ez tax form You cannot use Schedule C-EZ. 2011 ez tax form   Employees' Pay You can generally deduct on Schedule C the pay you give your employees for the services they perform for your business. 2011 ez tax form The pay may be in cash, property, or services. 2011 ez tax form To be deductible, your employees' pay must be an ordinary and necessary expense and you must pay or incur it in the tax year. 2011 ez tax form In addition, the pay must meet both the following tests. 2011 ez tax form The pay must be reasonable. 2011 ez tax form The pay must be for services performed. 2011 ez tax form Chapter 2 in Publication 535 explains and defines these requirements. 2011 ez tax form You cannot deduct your own salary or any personal withdrawals you make from your business. 2011 ez tax form As a sole proprietor, you are not an employee of the business. 2011 ez tax form If you had employees during the year, you must use Schedule C. 2011 ez tax form You cannot use Schedule C-EZ. 2011 ez tax form Kinds of pay. 2011 ez tax form   Some of the ways you may provide pay to your employees are listed below. 2011 ez tax form For an explanation of each of these items, see chapter 2 in Publication 535. 2011 ez tax form Awards. 2011 ez tax form Bonuses. 2011 ez tax form Education expenses. 2011 ez tax form Fringe benefits (discussed later). 2011 ez tax form Loans or advances you do not expect the employee to repay if they are for personal services actually performed. 2011 ez tax form Property you transfer to an employee as payment for services. 2011 ez tax form Reimbursements for employee business expenses. 2011 ez tax form Sick pay. 2011 ez tax form Vacation pay. 2011 ez tax form Fringe benefits. 2011 ez tax form   A fringe benefit is a form of pay for the performance of services. 2011 ez tax form The following are examples of fringe benefits. 2011 ez tax form Benefits under qualified employee benefit programs. 2011 ez tax form Meals and lodging. 2011 ez tax form The use of a car. 2011 ez tax form Flights on airplanes. 2011 ez tax form Discounts on property or services. 2011 ez tax form Memberships in country clubs or other social clubs. 2011 ez tax form Tickets to entertainment or sporting events. 2011 ez tax form   Employee benefit programs include the following. 2011 ez tax form Accident and health plans. 2011 ez tax form Adoption assistance. 2011 ez tax form Cafeteria plans. 2011 ez tax form Dependent care assistance. 2011 ez tax form Educational assistance. 2011 ez tax form Group-term life insurance coverage. 2011 ez tax form Welfare benefit funds. 2011 ez tax form   You can generally deduct the cost of fringe benefits you provide on your Schedule C in whatever category the cost falls. 2011 ez tax form For example, if you allow an employee to use a car or other property you lease, deduct the cost of the lease as a rent or lease expense. 2011 ez tax form If you own the property, include your deduction for its cost or other basis as a section 179 deduction or a depreciation deduction. 2011 ez tax form    You may be able to exclude all or part of the fringe benefits you provide from your employees' wages. 2011 ez tax form For more information about fringe benefits and the exclusion of benefits, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. 2011 ez tax form Insurance You can generally deduct premiums you pay for the following kinds of insurance related to your business. 2011 ez tax form Fire, theft, flood, or similar insurance. 2011 ez tax form Credit insurance that covers losses from business bad debts. 2011 ez tax form Group hospitalization and medical insurance for employees, including long-term care insurance. 2011 ez tax form Liability insurance. 2011 ez tax form Malpractice insurance that covers your personal liability for professional negligence resulting in injury or damage to patients or clients. 2011 ez tax form Workers' compensation insurance set by state law that covers any claims for bodily injuries or job-related diseases suffered by employees in your business, regardless of fault. 2011 ez tax form Contributions to a state unemployment insurance fund are deductible as taxes if they are considered taxes under state law. 2011 ez tax form Overhead insurance that pays for business overhead expenses you have during long periods of disability caused by your injury or sickness. 2011 ez tax form Car and other vehicle insurance that covers vehicles used in your business for liability, damages, and other losses. 2011 ez tax form If you operate a vehicle partly for personal use, deduct only the part of the insurance premium that applies to the business use of the vehicle. 2011 ez tax form If you use the standard mileage rate to figure your car expenses, you cannot deduct any car insurance premiums. 2011 ez tax form Life insurance covering your employees if you are not directly or indirectly the beneficiary under the contract. 2011 ez tax form Business interruption insurance that pays for lost profits if your business is shut down due to a fire or other cause. 2011 ez tax form Nondeductible premiums. 2011 ez tax form   You cannot deduct premiums on the following kinds of insurance. 2011 ez tax form Self-insurance reserve funds. 2011 ez tax form You cannot deduct amounts credited to a reserve set up for self-insurance. 2011 ez tax form This applies even if you cannot get business insurance coverage for certain business risks. 2011 ez tax form However, your actual losses may be deductible. 2011 ez tax form For more information, see Publication 547, Casualties, Disasters, and Thefts. 2011 ez tax form Loss of earnings. 2011 ez tax form You cannot deduct premiums for a policy that pays for your lost earnings due to sickness or disability. 2011 ez tax form However, see item (8) in the previous list. 2011 ez tax form Certain life insurance and annuities. 2011 ez tax form For contracts issued before June 9, 1997, you cannot deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. 2011 ez tax form You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. 2011 ez tax form A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business. 2011 ez tax form For contracts issued after June 8, 1997, you generally cannot deduct the premiums on any life insurance policy, endowment contract, or annuity contract if you are directly or indirectly a beneficiary. 2011 ez tax form The disallowance applies without regard to whom the policy covers. 2011 ez tax form Insurance to secure a loan. 2011 ez tax form If you take out a policy on your life or on the life of another person with a financial interest in your business to get or protect a business loan, you cannot deduct the premiums as a business expense. 2011 ez tax form Nor can you deduct the premiums as interest on business loans or as an expense of financing loans. 2011 ez tax form In the event of death, the proceeds of the policy are not taxed as income even if they are used to liquidate the debt. 2011 ez tax form Self-employed health insurance deduction. 2011 ez tax form   You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for you and your family. 2011 ez tax form How to figure the deduction. 2011 ez tax form   Generally, you can use the worksheet in the Form 1040 instructions to figure your deduction. 2011 ez tax form However, if any of the following apply, you must use the worksheet in chapter 6 of Publication 535. 2011 ez tax form You have more than one source of income subject to self-employment tax. 2011 ez tax form You file Form 2555 or Form 2555-EZ (relating to foreign earned income). 2011 ez tax form You are using amounts paid for qualified long-term care insurance to figure the deduction. 2011 ez tax form Prepayment. 2011 ez tax form   You cannot deduct expenses in advance, even if you pay them in advance. 2011 ez tax form This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. 2011 ez tax form Example. 2011 ez tax form In 2013, you signed a 3-year insurance contract. 2011 ez tax form Even though you paid the premiums for 2013, 2014, and 2015 when you signed the contract, you can only deduct the premium for 2013 on your 2013 tax return. 2011 ez tax form You can deduct in 2014 and 2015 the premium allocable to those years. 2011 ez tax form More information. 2011 ez tax form   For more information about deducting insurance, see chapter 6 in Publication 535. 2011 ez tax form Interest You can generally deduct as a business expense all interest you pay or accrue during the tax year on debts related to your business. 2011 ez tax form Interest relates to your business if you use the proceeds of the loan for a business expense. 2011 ez tax form It does not matter what type of property secures the loan. 2011 ez tax form You can deduct interest on a debt only if you meet all of the following requirements. 2011 ez tax form You are legally liable for that debt. 2011 ez tax form Both you and the lender intend that the debt be repaid. 2011 ez tax form You and the lender have a true debtor-creditor relationship. 2011 ez tax form You cannot deduct on Schedule C or C-EZ the interest you paid on personal loans. 2011 ez tax form If a loan is part business and part personal, you must divide the interest between the personal part and the business part. 2011 ez tax form Example. 2011 ez tax form In 2013, you paid $600 interest on a car loan. 2011 ez tax form During 2013, you used the car 60% for business and 40% for personal purposes. 2011 ez tax form You are claiming actual expenses on the car. 2011 ez tax form You can only deduct $360 (60% × $600) for 2013 on Schedule C or C-EZ. 2011 ez tax form The remaining interest of $240 is a nondeductible personal expense. 2011 ez tax form More information. 2011 ez tax form   For more information about deducting interest, see chapter 4 in Publication 535. 2011 ez tax form That chapter explains the following items. 2011 ez tax form Interest you can deduct. 2011 ez tax form Interest you cannot deduct. 2011 ez tax form How to allocate interest between personal and business use. 2011 ez tax form When to deduct interest. 2011 ez tax form The rules for a below-market interest rate loan. 2011 ez tax form (This is generally a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. 2011 ez tax form ) Legal and Professional Fees Legal and professional fees, such as fees charged by accountants, that are ordinary and necessary expenses directly related to operating your business are deductible on Schedule C or C-EZ. 2011 ez tax form However, you usually cannot deduct legal fees you pay to acquire business assets. 2011 ez tax form Add them to the basis of the property. 2011 ez tax form If the fees include payments for work of a personal nature (such as making a will), you can take a business deduction only for the part of the fee related to your business. 2011 ez tax form The personal part of legal fees for producing or collecting taxable income, doing or keeping your job, or for tax advice may be deductible on Schedule A (Form 1040) if you itemize deductions. 2011 ez tax form For more information, see Publication 529, Miscellaneous Deductions. 2011 ez tax form Tax preparation fees. 2011 ez tax form   You can deduct on Schedule C or C-EZ the cost of preparing that part of your tax return relating to your business as a sole proprietor or statutory employee. 2011 ez tax form You can deduct the remaining cost on Schedule A (Form 1040) if you itemize your deductions. 2011 ez tax form   You can also deduct on Schedule C or C-EZ the amount you pay or incur in resolving asserted tax deficiencies for your business as a sole proprietor or statutory employee. 2011 ez tax form Pension Plans You can set up and maintain the following small business retirement plans for yourself and your employees. 2011 ez tax form SEP (Simplified Employee Pension) plans. 2011 ez tax form SIMPLE (Savings Incentive Match Plan for Employees) plans. 2011 ez tax form Qualified plans (including Keogh or H. 2011 ez tax form R. 2011 ez tax form 10 plans). 2011 ez tax form SEP, SIMPLE, and qualified plans offer you and your employees a tax favored way to save for retirement. 2011 ez tax form You can deduct contributions you make to the plan for your employees on line 19 of Schedule C. 2011 ez tax form If you are a sole proprietor, you can deduct contributions you make to the plan for yourself on line 28 of Form 1040. 2011 ez tax form You can also deduct trustees' fees if contributions to the plan do not cover them. 2011 ez tax form Earnings on the contributions are generally tax free until you or your employees receive distributions from the plan. 2011 ez tax form You may also be able to claim a tax credit of 50% of the first $1,000 of qualified startup costs if you begin a new qualified defined benefit or defined contribution plan (including a 401(k) plan), SIMPLE plan, or simplified employee pension. 2011 ez tax form Under certain plans, employees can have you contribute limited amounts of their before-tax pay to a plan. 2011 ez tax form These amounts (and earnings on them) are generally tax free until your employees receive distributions from the plan. 2011 ez tax form For more information on retirement plans for small business, see Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans). 2011 ez tax form Publication 590, Individual Retirement Arrangements (IRAs), discusses other tax favored ways to save for retirement. 2011 ez tax form Rent Expense Rent is any amount you pay for the use of property you do not own. 2011 ez tax form In general, you can deduct rent as a business expense only if the rent is for property you use in your business. 2011 ez tax form If you have or will receive equity in or title to the property, you cannot deduct the rent. 2011 ez tax form Unreasonable rent. 2011 ez tax form   You cannot take a rental deduction for unreasonable rents. 2011 ez tax form Ordinarily, the issue of reasonableness arises only if you and the lessor are related. 2011 ez tax form Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. 2011 ez tax form Rent is not unreasonable just because it is figured as a percentage of gross receipts. 2011 ez tax form   Related persons include members of your immediate family, including only brothers and sisters (either whole or half), your spouse, ancestors, and lineal descendants. 2011 ez tax form For a list of the other related persons, see section 267 of the Internal Revenue Code. 2011 ez tax form Rent on your home. 2011 ez tax form   If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. 2011 ez tax form You must meet the requirements for business use of your home. 2011 ez tax form For more information, see Business Use of Your Home , later. 2011 ez tax form Rent paid in advance. 2011 ez tax form   Generally, rent paid in your business is deductible in the year paid or accrued. 2011 ez tax form If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. 2011 ez tax form You can deduct the rest of your payment only over the period to which it applies. 2011 ez tax form More information. 2011 ez tax form   For more information about rent, see chapter 3 in Publication 535. 2011 ez tax form Taxes You can deduct on Schedule C or C-EZ various federal, state, local, and foreign taxes directly attributable to your business. 2011 ez tax form Income taxes. 2011 ez tax form   You can deduct on Schedule C or C-EZ a state tax on gross income (as distinguished from net income) directly attributable to your business. 2011 ez tax form You can deduct other state and local income taxes on Schedule A (Form 1040) if you itemize your deductions. 2011 ez tax form Do not deduct federal income tax. 2011 ez tax form Employment taxes. 2011 ez tax form   You can deduct the social security, Medicare, and federal unemployment (FUTA) taxes you paid out of your own funds as an employer. 2011 ez tax form Employment taxes are discussed briefly in chapter 1. 2011 ez tax form You can also deduct payments you made as an employer to a state unemployment compensation fund or to a state disability benefit fund. 2011 ez tax form Deduct these payments as taxes. 2011 ez tax form Self-employment tax. 2011 ez tax form   You can deduct one-half of your self-employment tax on line 27 of Form 1040. 2011 ez tax form Self-employment tax is discussed in chapters 1 and 10. 2011 ez tax form Personal property tax. 2011 ez tax form   You can deduct on Schedule C or C-EZ any tax imposed by a state or local government on personal property used in your business. 2011 ez tax form   You can also deduct registration fees for the right to use property within a state or local area. 2011 ez tax form Example. 2011 ez tax form May and Julius Winter drove their car 7,000 business miles out of a total of 10,000 miles. 2011 ez tax form They had to pay $25 for their annual state license tags and $20 for their city registration sticker. 2011 ez tax form They also paid $235 in city personal property tax on the car, for a total of $280. 2011 ez tax form They are claiming their actual car expenses. 2011 ez tax form Because they used the car 70% for business, they can deduct 70% of the $280, or $196, as a business expense. 2011 ez tax form Real estate taxes. 2011 ez tax form   You can deduct on Schedule C or C-EZ the real estate taxes you pay on your business property. 2011 ez tax form Deductible real estate taxes are any state, local, or foreign taxes on real estate levied for the general public welfare. 2011 ez tax form The taxing authority must base the taxes on the assessed value of the real estate and charge them uniformly against all property under its jurisdiction. 2011 ez tax form   For more information about real estate taxes, see chapter 5 in Publication 535. 2011 ez tax form That chapter explains special rules for deducting the following items. 2011 ez tax form Taxes for local benefits, such as those for sidewalks, streets, water mains, and sewer lines. 2011 ez tax form Real estate taxes when you buy or sell property during the year. 2011 ez tax form Real estate taxes if you use an accrual method of accounting and choose to accrue real estate tax related to a definite period ratably over that period. 2011 ez tax form Sales tax. 2011 ez tax form   Treat any sales tax you pay on a service or on the purchase or use of property as part of the cost of the service or property. 2011 ez tax form If the service or the cost or use of the property is a deductible business expense, you can deduct the tax as part of that service or cost. 2011 ez tax form If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. 2011 ez tax form If the property is depreciable, add the sales tax to the basis for depreciation. 2011 ez tax form For information on the basis of property, see Publication 551, Basis of Assets. 2011 ez tax form    Do not deduct state and local sales taxes imposed on the buyer that you must collect and pay over to the state or local government. 2011 ez tax form Do not include these taxes in gross receipts or sales. 2011 ez tax form Excise taxes. 2011 ez tax form   You can deduct on Schedule C or C-EZ all excise taxes that are ordinary and necessary expenses of carrying on your business. 2011 ez tax form Excise taxes are discussed briefly in chapter 1. 2011 ez tax form Fuel taxes. 2011 ez tax form   Taxes on gasoline, diesel fuel, and other motor fuels you use in your business are usually included as part of the cost of the fuel. 2011 ez tax form Do not deduct these taxes as a separate item. 2011 ez tax form   You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. 2011 ez tax form For more information, see Publication 510, Excise Taxes. 2011 ez tax form Travel, Meals, and Entertainment This section briefly explains the kinds of travel and entertainment expenses you can deduct on Schedule C or C-EZ. 2011 ez tax form Table 8-1. 2011 ez tax form When Are Entertainment Expenses Deductible? (Note. 2011 ez tax form The following is a summary of the rules for deducting entertainment expenses. 2011 ez tax form For more details about these rules, see Publication 463. 2011 ez tax form ) General rule You can deduct ordinary and necessary expenses to entertain a client, customer, or employee if the expenses meet the directly-related test or the associated test. 2011 ez tax form Definitions Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation, and includes meals provided to a customer or client. 2011 ez tax form An ordinary expense is one that is common and accepted in your field of business, trade, or profession. 2011 ez tax form A necessary expense is one that is helpful and appropriate, although not necessarily required, for your business. 2011 ez tax form Tests to be met Directly-related test Entertainment took place in a clear business setting, or Main purpose of entertainment was the active conduct of business, and You did engage in business with the person during the entertainment period, and You had more than a general expectation of getting income or some other specific business benefit. 2011 ez tax form   Associated test Entertainment is associated with your trade or business, and Entertainment directly precedes or follows a substantial business discussion. 2011 ez tax form Other rules You cannot deduct the cost of your meal as an entertainment expense if you are claiming the meal as a travel expense. 2011 ez tax form You cannot deduct expenses that are lavish or extravagant under the circumstances. 2011 ez tax form You generally can deduct only 50% of your unreimbursed entertainment expenses. 2011 ez tax form Travel expenses. 2011 ez tax form   These are the ordinary and necessary expenses of traveling away from home for your business. 2011 ez tax form You are traveling away from home if both the following conditions are met. 2011 ez tax form Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work. 2011 ez tax form You need to get sleep or rest to meet the demands of your work while away from home. 2011 ez tax form Generally, your tax home is your regular place of business, regardless of where you maintain your family home. 2011 ez tax form It includes the entire city or general area in which your business is located. 2011 ez tax form See Publication 463 for more information. 2011 ez tax form   The following is a brief discussion of the expenses you can deduct. 2011 ez tax form Transportation. 2011 ez tax form   You can deduct the cost of travel by airplane, train, bus, or car between your home and your business destination. 2011 ez tax form Taxi, commuter bus, and limousine. 2011 ez tax form   You can deduct fares for these and other types of transportation between the airport or station and your hotel, or between the hotel and your work location away from home. 2011 ez tax form Baggage and shipping. 2011 ez tax form   You can deduct the cost of sending baggage and sample or display material between your regular and temporary work locations. 2011 ez tax form Car or truck. 2011 ez tax form   You can deduct the costs of operating and maintaining your vehicle when traveling away from home on business. 2011 ez tax form You can deduct actual expenses or the standard mileage rate (discussed earlier under Car and Truck Expenses), as well as business-related tolls and parking. 2011 ez tax form If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. 2011 ez tax form Meals and lodging. 2011 ez tax form   You can deduct the cost of meals and lodging if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. 2011 ez tax form In most cases, you can deduct only 50% of your meal expenses. 2011 ez tax form Cleaning. 2011 ez tax form   You can deduct the costs of dry cleaning and laundry while on your business trip. 2011 ez tax form Telephone. 2011 ez tax form   You can deduct the cost of business calls while on your business trip, including business communication by fax machine or other communication devices. 2011 ez tax form Tips. 2011 ez tax form   You can deduct the tips you pay for any expense in this list. 2011 ez tax form More information. 2011 ez tax form   For more information about travel expenses, see Publication 463. 2011 ez tax form Entertainment expenses. 2011 ez tax form   You may be able to deduct business-related entertainment expenses for entertaining a client, customer, or employee. 2011 ez tax form In most cases, you can deduct only 50% of these expenses. 2011 ez tax form   The following are examples of entertainment expenses. 2011 ez tax form Entertaining guests at nightclubs, athletic clubs, theaters, or sporting events. 2011 ez tax form Providing meals, a hotel suite, or a car to business customers or their families. 2011 ez tax form To be deductible, the expenses must meet the rules listed in Table 8-1. 2011 ez tax form For details about these rules, see Publication 463. 2011 ez tax form Reimbursing your employees for expenses. 2011 ez tax form   You generally can deduct the amount you reimburse your employees for travel and entertainment expenses. 2011 ez tax form The reimbursement you deduct and the manner in which you deduct it depend in part on whether you reimburse the expenses under an accountable plan or a nonaccountable plan. 2011 ez tax form For details, see chapter 11 in Publication 535. 2011 ez tax form That chapter explains accountable and nonaccountable plans and tells you whether to report the reimbursement on your employee's Form W-2, Wage and Tax Statement. 2011 ez tax form Business Use of Your Home To deduct expenses related to the part of your home used for business, you must meet specific requirements. 2011 ez tax form Even then, your deduction may be limited. 2011 ez tax form To qualify to claim expenses for business use of your home, you must meet the following tests. 2011 ez tax form Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use , later), Regular, For your business, and The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your business, or A separate structure (not attached to your home) you use in connection with your business. 2011 ez tax form Exclusive use. 2011 ez tax form   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. 2011 ez tax form The area used for business can be a room or other separately identifiable space. 2011 ez tax form The space does not need to be marked off by a permanent partition. 2011 ez tax form   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. 2011 ez tax form Example. 2011 ez tax form You are an attorney and use a den in your home to write legal briefs and prepare clients' tax returns. 2011 ez tax form Your family also uses the den for recreation. 2011 ez tax form The den is not used exclusively in your profession, so you cannot claim a business deduction for its use. 2011 ez tax form Exceptions to exclusive use. 2011 ez tax form   You do not have to meet the exclusive use test if you use part of your home in either of the following ways. 2011 ez tax form For the storage of inventory or product samples. 2011 ez tax form As a daycare facility. 2011 ez tax form For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). 2011 ez tax form Regular use. 2011 ez tax form   To qualify under the regular use test, you must use a specific area of your home for business on a continuing basis. 2011 ez tax form You do not meet the test if your business use of the area is only occasional or incidental, even if you do not use that area for any other purpose. 2011 ez tax form Principal place of business. 2011 ez tax form   You can have more than one business location, including your home, for a single trade or business. 2011 ez tax form To qualify to deduct the expenses for the business use of your home under the principal place of business test, your home must be your principal place of business for that business. 2011 ez tax form To determine your principal place of business, you must consider all the facts and circumstances. 2011 ez tax form   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. 2011 ez tax form You use it exclusively and regularly for administrative or management activities of your business. 2011 ez tax form You have no other fixed location where you conduct substantial administrative or management activities of your business. 2011 ez tax form   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. 2011 ez tax form The relative importance of the activities performed at each location. 2011 ez tax form If the relative importance factor does not determine your principal place of business, you can also consider the time spent at each location. 2011 ez tax form   If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. 2011 ez tax form However, for other ways to qualify to deduct home office expenses, see Publication 587. 2011 ez tax form Deduction limit. 2011 ez tax form   If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home. 2011 ez tax form If your gross income from the business use is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited. 2011 ez tax form   Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation (with depreciation taken last), allocable to the business is limited to the gross income from the business use of your home minus the sum of the following. 2011 ez tax form The business part of expenses you could deduct even if you did not use your home for business (such as mortgage interest, real estate taxes, and casualty and theft losses that are allowable as itemized deductions on Schedule A (Form 1040)). 2011 ez tax form The business expenses that relate to the business activity in the home (for example, business phone, supplies, and depreciation on equipment), but not to the use of the home itself. 2011 ez tax form Do not include in (2) above your deduction for one-half of your self-employment tax. 2011 ez tax form   Use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. 2011 ez tax form New simplified method. 2011 ez tax form    The IRS now provides a simplified method to determine your expenses for business use of your home. 2011 ez tax form The simplified method is an alternative to calculating and substantiating actual expenses. 2011 ez tax form In most cases, you will figure your deduction by multiplying $5 by the area of your home used for a qualified business use. 2011 ez tax form The area you use to figure your deduction is limited to 300 square feet. 2011 ez tax form For more information, see the Instructions for Schedule C. 2011 ez tax form More information. 2011 ez tax form   For more information on deducting expenses for the business use of your home, see Publication 587. 2011 ez tax form Other Expenses You Can Deduct You may also be able to deduct the following expenses. 2011 ez tax form See Publication 535 to find out whether you can deduct them. 2011 ez tax form Advertising. 2011 ez tax form Bank fees. 2011 ez tax form Donations to business organizations. 2011 ez tax form Education expenses. 2011 ez tax form Energy efficient commercial buildings deduction expenses. 2011 ez tax form Impairment-related expenses. 2011 ez tax form Interview expense allowances. 2011 ez tax form Licenses and regulatory fees. 2011 ez tax form Moving machinery. 2011 ez tax form Outplacement services. 2011 ez tax form Penalties and fines you pay for late performance or nonperformance of a contract. 2011 ez tax form Repairs that keep your property in a normal efficient operating condition. 2011 ez tax form Repayments of income. 2011 ez tax form Subscriptions to trade or professional publications. 2011 ez tax form Supplies and materials. 2011 ez tax form Utilities. 2011 ez tax form Expenses You Cannot Deduct You usually cannot deduct the following as business expenses. 2011 ez tax form For more information, see Publication 535. 2011 ez tax form Bribes and kickbacks. 2011 ez tax form Charitable contributions. 2011 ez tax form Demolition expenses or losses. 2011 ez tax form Dues to business, social, athletic, luncheon, sporting, airline, and hotel clubs. 2011 ez tax form Lobbying expenses. 2011 ez tax form Penalties and fines you pay to a governmental agency or instrumentality because you broke the law. 2011 ez tax form Personal, living, and family expenses. 2011 ez tax form Political contributions. 2011 ez tax form Repairs that add to the value of your property or significantly increase its life. 2011 ez tax form Prev  Up  Next   Home   More Online Publications