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2012 1040 Ez

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2012 1040 Ez

2012 1040 ez 2. 2012 1040 ez   Filing Status Table of Contents What's New Introduction Useful Items - You may want to see: Marital StatusDivorced persons. 2012 1040 ez Divorce and remarriage. 2012 1040 ez Annulled marriages. 2012 1040 ez Head of household or qualifying widow(er) with dependent child. 2012 1040 ez Considered married. 2012 1040 ez Same-sex marriage. 2012 1040 ez Spouse died during the year. 2012 1040 ez Married persons living apart. 2012 1040 ez Single Married Filing JointlyFiling a Joint Return Married Filing SeparatelySpecial Rules Head of HouseholdConsidered Unmarried Keeping Up a Home Qualifying Person Qualifying Widow(er) With Dependent Child What's New Filing status for same-sex married couples. 2012 1040 ez  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. 2012 1040 ez See Same-sex marriage under Marital Status, later. 2012 1040 ez Introduction This chapter helps you determine which filing status to use. 2012 1040 ez There are five filing statuses. 2012 1040 ez Single. 2012 1040 ez Married Filing Jointly. 2012 1040 ez Married Filing Separately. 2012 1040 ez Head of Household. 2012 1040 ez Qualifying Widow(er) With Dependent Child. 2012 1040 ez If more than one filing status applies to you, choose the one that will give you the lowest tax. 2012 1040 ez You must determine your filing status before you can determine whether you must file a tax return (chapter 1), your standard deduction (chapter 20), and your tax (chapter 30). 2012 1040 ez You also use your filing status to determine whether you are eligible to claim certain deductions and credits. 2012 1040 ez Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 519 U. 2012 1040 ez S. 2012 1040 ez Tax Guide for Aliens 555 Community Property Marital Status In general, your filing status depends on whether you are considered unmarried or married. 2012 1040 ez Unmarried persons. 2012 1040 ez   You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree. 2012 1040 ez State law governs whether you are married or legally separated under a divorce or separate maintenance decree. 2012 1040 ez Divorced persons. 2012 1040 ez   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year. 2012 1040 ez Divorce and remarriage. 2012 1040 ez   If you obtain a divorce for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse must file as married individuals in both years. 2012 1040 ez Annulled marriages. 2012 1040 ez    If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried even if you filed joint returns for earlier years. 2012 1040 ez You must file Form 1040X, Amended U. 2012 1040 ez S. 2012 1040 ez Individual Income Tax Return, claiming single or head of household status for all tax years that are affected by the annulment and are not closed by the statute of limitations for filing a tax return. 2012 1040 ez Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. 2012 1040 ez If you filed your original return early (for example, March 1), your return is considered filed on the due date (generally April 15). 2012 1040 ez However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it on July 1, your return is considered filed on July 1. 2012 1040 ez Head of household or qualifying widow(er) with dependent child. 2012 1040 ez   If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er) with a dependent child. 2012 1040 ez See Head of Household and Qualifying Widow(er) With Dependent Child to see if you qualify. 2012 1040 ez Married persons. 2012 1040 ez   If you are considered married, you and your spouse can file a joint return or separate returns. 2012 1040 ez Considered married. 2012 1040 ez   You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests. 2012 1040 ez You are married and living together as a married couple. 2012 1040 ez You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began. 2012 1040 ez You are married and living apart, but not legally separated under a decree of divorce or separate maintenance. 2012 1040 ez You are separated under an interlocutory (not final) decree of divorce. 2012 1040 ez Same-sex marriage. 2012 1040 ez   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. 2012 1040 ez The term “spouse” includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. 2012 1040 ez However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. 2012 1040 ez For more details, see Publication 501. 2012 1040 ez Spouse died during the year. 2012 1040 ez   If your spouse died during the year, you are considered married for the whole year for filing status purposes. 2012 1040 ez   If you did not remarry before the end of the tax year, you can file a joint return for yourself and your deceased spouse. 2012 1040 ez For the next 2 years, you may be entitled to the special benefits described later under Qualifying Widow(er) With Dependent Child . 2012 1040 ez   If you remarried before the end of the tax year, you can file a joint return with your new spouse. 2012 1040 ez Your deceased spouse's filing status is married filing separately for that year. 2012 1040 ez Married persons living apart. 2012 1040 ez   If you live apart from your spouse and meet certain tests, you may be able to file as head of household even if you are not divorced or legally separated. 2012 1040 ez If you qualify to file as head of household instead of married filing separately, your standard deduction will be higher. 2012 1040 ez Also, your tax may be lower, and you may be able to claim the earned income credit. 2012 1040 ez See Head of Household , later. 2012 1040 ez Single Your filing status is single if you are considered unmarried and you do not qualify for another filing status. 2012 1040 ez To determine your marital status, see Marital Status , earlier. 2012 1040 ez Widow(er). 2012 1040 ez   Your filing status may be single if you were widowed before January 1, 2013, and did not remarry before the end of 2013. 2012 1040 ez You may, however, be able to use another filing status that will give you a lower tax. 2012 1040 ez See Head of Household and Qualifying Widow(er) With Dependent Child , later, to see if you qualify. 2012 1040 ez How to file. 2012 1040 ez   You can file Form 1040. 2012 1040 ez If you have taxable income of less than $100,000, you may be able to file Form 1040A. 2012 1040 ez If, in addition, you have no dependents, and are under 65 and not blind, and meet other requirements, you can file Form 1040EZ. 2012 1040 ez If you file Form 1040A or Form 1040, show your filing status as single by checking the box on line 1. 2012 1040 ez Use the Single column of the Tax Table or Section A of the Tax Computation Worksheet to figure your tax. 2012 1040 ez Married Filing Jointly You can choose married filing jointly as your filing status if you are considered married and both you and your spouse agree to file a joint return. 2012 1040 ez On a joint return, you and your spouse report your combined income and deduct your combined allowable expenses. 2012 1040 ez You can file a joint return even if one of you had no income or deductions. 2012 1040 ez If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. 2012 1040 ez Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to other filing statuses. 2012 1040 ez If you and your spouse each have income, you may want to figure your tax both on a joint return and on separate returns (using the filing status of married filing separately). 2012 1040 ez You can choose the method that gives the two of you the lower combined tax. 2012 1040 ez How to file. 2012 1040 ez   If you file as married filing jointly, you can use Form 1040. 2012 1040 ez If you and your spouse have taxable income of less than $100,000, you may be able to file Form 1040A. 2012 1040 ez If, in addition, you and your spouse have no dependents, are both under 65 and not blind, and meet other requirements, you can file Form 1040EZ. 2012 1040 ez If you file Form 1040 or Form 1040A, show this filing status by checking the box on line 2. 2012 1040 ez Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. 2012 1040 ez Spouse died. 2012 1040 ez   If your spouse died during the year, you are considered married for the whole year and can choose married filing jointly as your filing status. 2012 1040 ez See Spouse died during the year under Marital Status, earlier, for more information. 2012 1040 ez   If your spouse died in 2014 before filing a 2013 return, you can choose married filing jointly as your filing status on your 2013 return. 2012 1040 ez Divorced persons. 2012 1040 ez   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year and you cannot choose married filing jointly as your filing status. 2012 1040 ez Filing a Joint Return Both you and your spouse must include all of your income, exemptions, and deductions on your joint return. 2012 1040 ez Accounting period. 2012 1040 ez   Both of you must use the same accounting period, but you can use different accounting methods. 2012 1040 ez See Accounting Periods and Accounting Methods in chapter 1. 2012 1040 ez Joint responsibility. 2012 1040 ez   Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. 2012 1040 ez This means that if one spouse does not pay the tax due, the other may have to. 2012 1040 ez Or, if one spouse does not report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. 2012 1040 ez One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse. 2012 1040 ez You may want to file separately if: You believe your spouse is not reporting all of his or her income, or You do not want to be responsible for any taxes due if your spouse does not have enough tax withheld or does not pay enough estimated tax. 2012 1040 ez Divorced taxpayer. 2012 1040 ez   You may be held jointly and individually responsible for any tax, interest, and penalties due on a joint return filed before your divorce. 2012 1040 ez This responsibility may apply even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. 2012 1040 ez Relief from joint responsibility. 2012 1040 ez   In some cases, one spouse may be relieved of joint responsibility for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. 2012 1040 ez You can ask for relief no matter how small the liability. 2012 1040 ez   There are three types of relief available. 2012 1040 ez Innocent spouse relief. 2012 1040 ez Separation of liability (available only to joint filers who are divorced, widowed, legally separated, or have not lived together for the 12 months ending on the date the election for this relief is filed). 2012 1040 ez Equitable relief. 2012 1040 ez    You must file Form 8857, Request for Innocent Spouse Relief, to request relief from joint responsibility. 2012 1040 ez Publication 971, Innocent Spouse Relief, explains these kinds of relief and who may qualify for them. 2012 1040 ez Signing a joint return. 2012 1040 ez   For a return to be considered a joint return, both spouses generally must sign the return. 2012 1040 ez Spouse died before signing. 2012 1040 ez   If your spouse died before signing the return, the executor or administrator must sign the return for your spouse. 2012 1040 ez If neither you nor anyone else has yet been appointed as executor or administrator, you can sign the return for your spouse and enter “Filing as surviving spouse” in the area where you sign the return. 2012 1040 ez Spouse away from home. 2012 1040 ez   If your spouse is away from home, you should prepare the return, sign it, and send it to your spouse to sign so that it can be filed on time. 2012 1040 ez Injury or disease prevents signing. 2012 1040 ez   If your spouse cannot sign because of disease or injury and tells you to sign for him or her, you can sign your spouse's name in the proper space on the return followed by the words “By (your name), Husband (or Wife). 2012 1040 ez ” Be sure to also sign in the space provided for your signature. 2012 1040 ez Attach a dated statement, signed by you, to the return. 2012 1040 ez The statement should include the form number of the return you are filing, the tax year, and the reason your spouse cannot sign, and should state that your spouse has agreed to your signing for him or her. 2012 1040 ez Signing as guardian of spouse. 2012 1040 ez   If you are the guardian of your spouse who is mentally incompetent, you can sign the return for your spouse as guardian. 2012 1040 ez Spouse in combat zone. 2012 1040 ez   You can sign a joint return for your spouse if your spouse cannot sign because he or she is serving in a combat zone (such as the Persian Gulf Area, Serbia, Montenegro, Albania, or Afghanistan), even if you do not have a power of attorney or other statement. 2012 1040 ez Attach a signed statement to your return explaining that your spouse is serving in a combat zone. 2012 1040 ez For more information on special tax rules for persons who are serving in a combat zone, or who are in missing status as a result of serving in a combat zone, see Publication 3, Armed Forces' Tax Guide. 2012 1040 ez Other reasons spouse cannot sign. 2012 1040 ez    If your spouse cannot sign the joint return for any other reason, you can sign for your spouse only if you are given a valid power of attorney (a legal document giving you permission to act for your spouse). 2012 1040 ez Attach the power of attorney (or a copy of it) to your tax return. 2012 1040 ez You can use Form 2848, Power of Attorney and Declaration of Representative. 2012 1040 ez Nonresident alien or dual-status alien. 2012 1040 ez   Generally, a married couple cannot file a joint return if either one is a nonresident alien at any time during the tax year. 2012 1040 ez However, if one spouse was a nonresident alien or dual-status alien who was married to a U. 2012 1040 ez S. 2012 1040 ez citizen or resident alien at the end of the year, the spouses can choose to file a joint return. 2012 1040 ez If you do file a joint return, you and your spouse are both treated as U. 2012 1040 ez S. 2012 1040 ez residents for the entire tax year. 2012 1040 ez See chapter 1 of Publication 519. 2012 1040 ez Married Filing Separately You can choose married filing separately as your filing status if you are married. 2012 1040 ez This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax than filing a joint return. 2012 1040 ez If you and your spouse do not agree to file a joint return, you must use this filing status unless you qualify for head of household status, discussed later. 2012 1040 ez You may be able to choose head of household filing status if you are considered unmarried because you live apart from your spouse and meet certain tests (explained later, under Head of Household ). 2012 1040 ez This can apply to you even if you are not divorced or legally separated. 2012 1040 ez If you qualify to file as head of household, instead of as married filing separately, your tax may be lower, you may be able to claim the earned income credit and certain other credits, and your standard deduction will be higher. 2012 1040 ez The head of household filing status allows you to choose the standard deduction even if your spouse chooses to itemize deductions. 2012 1040 ez See Head of Household , later, for more information. 2012 1040 ez You will generally pay more combined tax on separate returns than you would on a joint return for the reasons listed under Special Rules, later. 2012 1040 ez However, unless you are required to file separately, you should figure your tax both ways (on a joint return and on separate returns). 2012 1040 ez This way you can make sure you are using the filing status that results in the lowest combined tax. 2012 1040 ez When figuring the combined tax of a married couple, you may want to consider state taxes as well as federal taxes. 2012 1040 ez How to file. 2012 1040 ez   If you file a separate return, you generally report only your own income, exemptions, credits, and deductions. 2012 1040 ez You can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another person. 2012 1040 ez You can file Form 1040. 2012 1040 ez If your taxable income is less than $100,000, you may be able to file Form 1040A. 2012 1040 ez Select this filing status by checking the box on line 3 of either form. 2012 1040 ez Enter your spouse's full name and SSN or ITIN in the spaces provided. 2012 1040 ez If your spouse does not have and is not required to have an SSN or ITIN, enter “NRA” in the space for your spouse's SSN. 2012 1040 ez Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax. 2012 1040 ez Special Rules If you choose married filing separately as your filing status, the following special rules apply. 2012 1040 ez Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for. 2012 1040 ez   Your tax rate generally is higher than on a joint return. 2012 1040 ez Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return. 2012 1040 ez You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000). 2012 1040 ez If you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. 2012 1040 ez For more information about these expenses, the credit, and the exclusion, see chapter 32. 2012 1040 ez You cannot take the earned income credit. 2012 1040 ez You cannot take the exclusion or credit for adoption expenses in most cases. 2012 1040 ez You cannot take the education credits (the American opportunity credit and lifetime learning credit), the deduction for student loan interest, or the tuition and fees deduction. 2012 1040 ez You cannot exclude any interest income from qualified U. 2012 1040 ez S. 2012 1040 ez savings bonds you used for higher education expenses. 2012 1040 ez If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received. 2012 1040 ez The following credits and deductions are reduced at income levels half those for a joint return: The child tax credit, The retirement savings contributions credit, The deduction for personal exemptions, and Itemized deductions. 2012 1040 ez Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). 2012 1040 ez If your spouse itemizes deductions, you cannot claim the standard deduction. 2012 1040 ez If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return. 2012 1040 ez Adjusted gross income (AGI) limits. 2012 1040 ez   If your AGI on a separate return is lower than it would have been on a joint return, you may be able to deduct a larger amount for certain deductions that are limited by AGI, such as medical expenses. 2012 1040 ez Individual retirement arrangements (IRAs). 2012 1040 ez   You may not be able to deduct all or part of your contributions to a traditional IRA if you or your spouse were covered by an employee retirement plan at work during the year. 2012 1040 ez Your deduction is reduced or eliminated if your income is more than a certain amount. 2012 1040 ez This amount is much lower for married individuals who file separately and lived together at any time during the year. 2012 1040 ez For more information, see How Much Can You Deduct in chapter 17. 2012 1040 ez Rental activity losses. 2012 1040 ez   If you actively participated in a passive rental real estate activity that produced a loss, you generally can deduct the loss from your nonpassive income, up to $25,000. 2012 1040 ez This is called a special allowance. 2012 1040 ez However, married persons filing separate returns who lived together at any time during the year cannot claim this special allowance. 2012 1040 ez Married persons filing separate returns who lived apart at all times during the year are each allowed a $12,500 maximum special allowance for losses from passive real estate activities. 2012 1040 ez See Limits on Rental Losses in chapter 9. 2012 1040 ez Community property states. 2012 1040 ez   If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file separately, your income may be considered separate income or community income for income tax purposes. 2012 1040 ez See Publication 555. 2012 1040 ez Joint Return After Separate Returns You can change your filing status from a separate return to a joint return by filing an amended return using Form 1040X. 2012 1040 ez You generally can change to a joint return any time within 3 years from the due date of the separate return or returns. 2012 1040 ez This does not include any extensions. 2012 1040 ez A separate return includes a return filed by you or your spouse claiming married filing separately, single, or head of household filing status. 2012 1040 ez Separate Returns After Joint Return Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. 2012 1040 ez Exception. 2012 1040 ez   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. 2012 1040 ez The personal representative has 1 year from the due date of the return (including extensions) to make the change. 2012 1040 ez See Publication 559, Survivors, Executors, and Administrators, for more information on filing a return for a decedent. 2012 1040 ez Head of Household You may be able to file as head of household if you meet all the following requirements. 2012 1040 ez You are unmarried or “considered unmarried” on the last day of the year. 2012 1040 ez See Marital Status , earlier, and Considered Unmarried , later. 2012 1040 ez You paid more than half the cost of keeping up a home for the year. 2012 1040 ez A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school). 2012 1040 ez However, if the qualifying person is your dependent parent, he or she does not have to live with you. 2012 1040 ez See Special rule for parent , later, under Qualifying Person. 2012 1040 ez If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. 2012 1040 ez You will also receive a higher standard deduction than if you file as single or married filing separately. 2012 1040 ez Kidnapped child. 2012 1040 ez   A child may qualify you to file as head of household even if the child has been kidnapped. 2012 1040 ez For more information, see Publication 501. 2012 1040 ez How to file. 2012 1040 ez   If you file as head of household, you can use Form 1040. 2012 1040 ez If your taxable income is less than $100,000, you may be able to file Form 1040A. 2012 1040 ez Indicate your choice of this filing status by checking the box on line 4 of either form. 2012 1040 ez Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax. 2012 1040 ez Considered Unmarried To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. 2012 1040 ez You are considered unmarried on the last day of the tax year if you meet all the following tests. 2012 1040 ez You file a separate return (defined earlier under Joint Return After Separate Returns ). 2012 1040 ez You paid more than half the cost of keeping up your home for the tax year. 2012 1040 ez Your spouse did not live in your home during the last 6 months of the tax year. 2012 1040 ez Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. 2012 1040 ez See Temporary absences , under Qualifying Person, later. 2012 1040 ez Your home was the main home of your child, stepchild, or foster child for more than half the year. 2012 1040 ez (See Home of qualifying person , under Qualifying Person, later, for rules applying to a child's birth, death, or temporary absence during the year. 2012 1040 ez ) You must be able to claim an exemption for the child. 2012 1040 ez However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described in Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3, or in Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) under Qualifying Relative in chapter 3. 2012 1040 ez The general rules for claiming an exemption for a dependent are explained under Exemptions for Dependents in chapter 3. 2012 1040 ez If you were considered married for part of the year and lived in a community property state (listed earlier under Married Filing Separately), special rules may apply in determining your income and expenses. 2012 1040 ez See Publication 555 for more information. 2012 1040 ez Nonresident alien spouse. 2012 1040 ez   You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. 2012 1040 ez However, your spouse is not a qualifying person for head of household purposes. 2012 1040 ez You must have another qualifying person and meet the other tests to be eligible to file as a head of household. 2012 1040 ez Choice to treat spouse as resident. 2012 1040 ez   You are considered married if you choose to treat your spouse as a resident alien. 2012 1040 ez See Publication 519. 2012 1040 ez Keeping Up a Home To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year. 2012 1040 ez You can determine whether you paid more than half of the cost of keeping up a home by using Worksheet 2–1. 2012 1040 ez Worksheet 2-1. 2012 1040 ez Cost of Keeping Up a Home   Amount You Paid Total Cost Property taxes $ $ Mortgage interest expense     Rent     Utility charges     Repairs/maintenance     Property insurance     Food consumed on the premises     Other household expenses     Totals $ $ Minus total amount you paid   () Amount others paid   $ If the total amount you paid is more than the amount others paid, you meet the requirement of paying more than half the cost of keeping up the home. 2012 1040 ez Costs you include. 2012 1040 ez   Include in the cost of keeping up a home expenses such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. 2012 1040 ez   If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. 2012 1040 ez However, you must include them in the total cost of keeping up your home to figure if you paid over half the cost. 2012 1040 ez Costs you do not include. 2012 1040 ez   Do not include the costs of clothing, education, medical treatment, vacations, life insurance, or transportation. 2012 1040 ez Also, do not include the rental value of a home you own or the value of your services or those of a member of your household. 2012 1040 ez Qualifying Person See Table 2-1 to see who is a qualifying person. 2012 1040 ez Any person not described in Table 2-1 is not a qualifying person. 2012 1040 ez Table 2-1. 2012 1040 ez Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. 2012 1040 ez See the text of this chapter for the other requirements you must meet to claim head of household filing status. 2012 1040 ez IF the person is your . 2012 1040 ez . 2012 1040 ez . 2012 1040 ez   AND . 2012 1040 ez . 2012 1040 ez . 2012 1040 ez   THEN that person is . 2012 1040 ez . 2012 1040 ez . 2012 1040 ez qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2   he or she is single   a qualifying person, whether or not you can claim an exemption for the person. 2012 1040 ez   he or she is married and you can claim an exemption for him or her   a qualifying person. 2012 1040 ez   he or she is married and you cannot claim an exemption for him or her   not a qualifying person. 2012 1040 ez 3 qualifying relative4 who is your father or mother   you can claim an exemption for him or her5   a qualifying person. 2012 1040 ez 6   you cannot claim an exemption for him or her   not a qualifying person. 2012 1040 ez qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests)   he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and you can claim an exemption for him or her5   a qualifying person. 2012 1040 ez   he or she did not live with you more than half the year   not a qualifying person. 2012 1040 ez   he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and is your qualifying relative only because he or she lived with you all year as a member of your household   not a qualifying person. 2012 1040 ez   you cannot claim an exemption for him or her   not a qualifying person. 2012 1040 ez 1A person cannot qualify more than one taxpayer to use the head of household filing status for the year. 2012 1040 ez 2The term “qualifying child” is defined in chapter 3. 2012 1040 ez Note. 2012 1040 ez If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3. 2012 1040 ez If you are the custodial parent and those rules apply, the child generally is your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. 2012 1040 ez 3This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. 2012 1040 ez 4The term “ qualifying relative ” is defined in chapter 3. 2012 1040 ez 5If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. 2012 1040 ez See Multiple Support Agreement in chapter 3. 2012 1040 ez 6See Special rule for parent . 2012 1040 ez Example 1—child. 2012 1040 ez Your unmarried son lived with you all year and was 18 years old at the end of the year. 2012 1040 ez He did not provide more than half of his own support and does not meet the tests to be a qualifying child of anyone else. 2012 1040 ez As a result, he is your qualifying child (see Qualifying Child in chapter 3) and, because he is single, your qualifying person for you to claim head of household filing status. 2012 1040 ez Example 2—child who is not qualifying person. 2012 1040 ez The facts are the same as in Example 1 except your son was 25 years old at the end of the year and his gross income was $5,000. 2012 1040 ez Because he does not meet the age test (explained under Qualifying Child in chapter 3), your son is not your qualifying child. 2012 1040 ez Because he does not meet the gross income test (explained later under Qualifying Relative in chapter 3), he is not your qualifying relative. 2012 1040 ez As a result, he is not your qualifying person for head of household purposes. 2012 1040 ez Example 3—girlfriend. 2012 1040 ez Your girlfriend lived with you all year. 2012 1040 ez Even though she may be your qualifying relative if the gross income and support tests (explained in chapter 3) are met, she is not your qualifying person for head of household purposes because she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3. 2012 1040 ez See Table 2-1. 2012 1040 ez Example 4—girlfriend's child. 2012 1040 ez The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. 2012 1040 ez He is not your qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see Not a Qualifying Child Test in chapter 3). 2012 1040 ez As a result, he is not your qualifying person for head of household purposes. 2012 1040 ez Home of qualifying person. 2012 1040 ez   Generally, the qualifying person must live with you for more than half of the year. 2012 1040 ez Special rule for parent. 2012 1040 ez   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. 2012 1040 ez However, you must be able to claim an exemption for your father or mother. 2012 1040 ez Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. 2012 1040 ez   You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. 2012 1040 ez Death or birth. 2012 1040 ez   You may be eligible to file as head of household even if the individual who qualifies you for this filing status is born or dies during the year. 2012 1040 ez If the individual is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. 2012 1040 ez If the individual is anyone else, see Publication 501. 2012 1040 ez Temporary absences. 2012 1040 ez   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. 2012 1040 ez It must be reasonable to assume the absent person will return to the home after the temporary absence. 2012 1040 ez You must continue to keep up the home during the absence. 2012 1040 ez Qualifying Widow(er) With Dependent Child If your spouse died in 2013, you can use married filing jointly as your filing status for 2013 if you otherwise qualify to use that status. 2012 1040 ez The year of death is the last year for which you can file jointly with your deceased spouse. 2012 1040 ez See Married Filing Jointly , earlier. 2012 1040 ez You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died. 2012 1040 ez For example, if your spouse died in 2012, and you have not remarried, you may be able to use this filing status for 2013 and 2014. 2012 1040 ez This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize deductions). 2012 1040 ez It does not entitle you to file a joint return. 2012 1040 ez How to file. 2012 1040 ez   If you file as qualifying widow(er) with dependent child, you can use Form 1040. 2012 1040 ez If you also have taxable income of less than $100,000 and meet certain other conditions, you may be able to file Form 1040A. 2012 1040 ez Check the box on line 5 of either form. 2012 1040 ez Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. 2012 1040 ez Eligibility rules. 2012 1040 ez   You are eligible to file your 2013 return as a qualifying widow(er) with dependent child if you meet all of the following tests. 2012 1040 ez You were entitled to file a joint return with your spouse for the year your spouse died. 2012 1040 ez It does not matter whether you actually filed a joint return. 2012 1040 ez Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. 2012 1040 ez You have a child or stepchild for whom you can claim an exemption. 2012 1040 ez This does not include a foster child. 2012 1040 ez This child lived in your home all year, except for temporary absences. 2012 1040 ez See Temporary absences , earlier, under Head of Household. 2012 1040 ez There are also exceptions, described later, for a child who was born or died during the year and for a kidnapped child. 2012 1040 ez You paid more than half the cost of keeping up a home for the year. 2012 1040 ez See Keeping Up a Home , earlier, under Head of Household. 2012 1040 ez Example. 2012 1040 ez John's wife died in 2011. 2012 1040 ez John has not remarried. 2012 1040 ez During 2012 and 2013, he continued to keep up a home for himself and his child, who lives with him and for whom he can claim an exemption. 2012 1040 ez For 2011 he was entitled to file a joint return for himself and his deceased wife. 2012 1040 ez For 2012 and 2013, he can file as qualifying widower with a dependent child. 2012 1040 ez After 2013 he can file as head of household if he qualifies. 2012 1040 ez Death or birth. 2012 1040 ez    You may be eligible to file as a qualifying widow(er) with dependent child if the child who qualifies you for this filing status is born or dies during the year. 2012 1040 ez You must have provided more than half of the cost of keeping up a home that was the child's main home during the entire part of the year he or she was alive. 2012 1040 ez Kidnapped child. 2012 1040 ez   A child may qualify you for qualifying widow(er) with dependent child, even if the child has been kidnapped. 2012 1040 ez See Publication 501. 2012 1040 ez    As mentioned earlier, this filing status is available for only 2 years following the year your spouse died. 2012 1040 ez Prev  Up  Next   Home   More Online Publications
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Page Last Reviewed or Updated: 19-Mar-2014

The 2012 1040 Ez

2012 1040 ez 6. 2012 1040 ez   How To Figure Cost of Goods Sold Table of Contents Introduction Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42Line 35 Inventory at Beginning of Year Line 36 Purchases Less Cost of Items Withdrawn for Personal Use Line 37 Cost of Labor Line 38 Materials and Supplies Line 39 Other Costs Line 40 Add Lines 35 through 39 Line 41 Inventory at End of Year Line 42 Cost of Goods Sold Introduction If you make or buy goods to sell, you can deduct the cost of goods sold from your gross receipts on Schedule C. 2012 1040 ez However, to determine these costs, you must value your inventory at the beginning and end of each tax year. 2012 1040 ez This chapter applies to you if you are a manufacturer, wholesaler, or retailer or if you are engaged in any business that makes, buys, or sells goods to produce income. 2012 1040 ez This chapter does not apply to a personal service business, such as the business of a doctor, lawyer, carpenter, or painter. 2012 1040 ez However, if you work in a personal service business and also sell or charge for the materials and supplies normally used in your business, this chapter applies to you. 2012 1040 ez If you must account for an inventory in your business, you must generally use an accrual method of accounting for your purchases and sales. 2012 1040 ez For more information, see chapter 2. 2012 1040 ez Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42 Figure your cost of goods sold by filling out lines 35 through 42 of Schedule C. 2012 1040 ez These lines are reproduced below and are explained in the discussion that follows. 2012 1040 ez 35 Inventory at beginning of year. 2012 1040 ez If different from last year's closing inventory, attach explanation   36 Purchases less cost of items withdrawn for personal use   37 Cost of labor. 2012 1040 ez Do not include any amounts paid to yourself   38 Materials and supplies   39 Other costs   40 Add lines 35 through 39   41 Inventory at end of year   42 Cost of goods sold. 2012 1040 ez Subtract line 41 from line 40. 2012 1040 ez  Enter the result here and on line 4   Line 35 Inventory at Beginning of Year If you are a merchant, beginning inventory is the cost of merchandise on hand at the beginning of the year that you will sell to customers. 2012 1040 ez If you are a manufacturer or producer, it includes the total cost of raw materials, work in process, finished goods, and materials and supplies used in manufacturing the goods (see Inventories in chapter 2). 2012 1040 ez Opening inventory usually will be identical to the closing inventory of the year before. 2012 1040 ez You must explain any difference in a schedule attached to your return. 2012 1040 ez Donation of inventory. 2012 1040 ez   If you contribute inventory (property that you sell in the course of your business), the amount you can claim as a contribution deduction is the smaller of its fair market value on the day you contributed it or its basis. 2012 1040 ez The basis of donated inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. 2012 1040 ez You must remove the amount of your contribution deduction from your opening inventory. 2012 1040 ez It is not part of the cost of goods sold. 2012 1040 ez   If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. 2012 1040 ez Treat the inventory's cost as you would ordinarily treat it under your method of accounting. 2012 1040 ez For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. 2012 1040 ez   A special rule may apply to certain donations of food inventory. 2012 1040 ez See Publication 526, Charitable Contributions. 2012 1040 ez Example 1. 2012 1040 ez You are a calendar year taxpayer who uses an accrual method of accounting. 2012 1040 ez In 2013, you contributed property from inventory to a church. 2012 1040 ez It had a fair market value of $600. 2012 1040 ez The closing inventory at the end of 2012 properly included $400 of costs due to the acquisition of the property, and in 2012, you properly deducted $50 of administrative and other expenses attributable to the property as business expenses. 2012 1040 ez The charitable contribution allowed for 2013 is $400 ($600 − $200). 2012 1040 ez The $200 is the amount that would be ordinary income if you had sold the contributed inventory at fair market value on the date of the gift. 2012 1040 ez The cost of goods sold you use in determining gross income for 2013 must not include the $400. 2012 1040 ez You remove that amount from opening inventory for 2013. 2012 1040 ez Example 2. 2012 1040 ez If, in Example 1, you acquired the contributed property in 2013 at a cost of $400, you would include the $400 cost of the property in figuring the cost of goods sold for 2013 and deduct the $50 of administrative and other expenses attributable to the property for that year. 2012 1040 ez You would not be allowed any charitable contribution deduction for the contributed property. 2012 1040 ez Line 36 Purchases Less Cost of Items Withdrawn for Personal Use If you are a merchant, use the cost of all merchandise you bought for sale. 2012 1040 ez If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into a finished product. 2012 1040 ez Trade discounts. 2012 1040 ez   The differences between the stated prices of articles and the actual prices you pay for them are called trade discounts. 2012 1040 ez You must use the prices you pay (not the stated prices) in figuring your cost of purchases. 2012 1040 ez Do not show the discount amount separately as an item in gross income. 2012 1040 ez   An automobile dealer must record the cost of a car in inventory reduced by any manufacturer's rebate that represents a trade discount. 2012 1040 ez Cash discounts. 2012 1040 ez   Cash discounts are amounts your suppliers let you deduct from your purchase invoices for prompt payments. 2012 1040 ez There are two methods of accounting for cash discounts. 2012 1040 ez You can either credit them to a separate discount account or deduct them from total purchases for the year. 2012 1040 ez Whichever method you use, you must be consistent. 2012 1040 ez If you want to change your method of figuring inventory cost, you must file Form 3115, Application for Change in Accounting Method. 2012 1040 ez For more information, see Change in Accounting Method in chapter 2. 2012 1040 ez   If you credit cash discounts to a separate account, you must include this credit balance in your business income at the end of the tax year. 2012 1040 ez If you use this method, do not reduce your cost of goods sold by the cash discounts. 2012 1040 ez Purchase returns and allowances. 2012 1040 ez   You must deduct all returns and allowances from your total purchases during the year. 2012 1040 ez Merchandise withdrawn from sale. 2012 1040 ez   If you withdraw merchandise for your personal or family use, you must exclude this cost from the total amount of merchandise you bought for sale. 2012 1040 ez Do this by crediting the purchases or sales account with the cost of merchandise you withdraw for personal use. 2012 1040 ez You must also charge the amount to your drawing account. 2012 1040 ez   A drawing account is a separate account you should keep to record the business income you withdraw to pay for personal and family expenses. 2012 1040 ez As stated above, you also use it to record withdrawals of merchandise for personal or family use. 2012 1040 ez This account is also known as a “withdrawals account” or “personal account. 2012 1040 ez ” Line 37 Cost of Labor Labor costs are usually an element of cost of goods sold only in a manufacturing or mining business. 2012 1040 ez Small merchandisers (wholesalers, retailers, etc. 2012 1040 ez ) usually do not have labor costs that can properly be charged to cost of goods sold. 2012 1040 ez In a manufacturing business, labor costs properly allocable to the cost of goods sold include both the direct and indirect labor used in fabricating the raw material into a finished, saleable product. 2012 1040 ez Direct labor. 2012 1040 ez   Direct labor costs are the wages you pay to those employees who spend all their time working directly on the product being manufactured. 2012 1040 ez They also include a part of the wages you pay to employees who work directly on the product part time if you can determine that part of their wages. 2012 1040 ez Indirect labor. 2012 1040 ez   Indirect labor costs are the wages you pay to employees who perform a general factory function that does not have any immediate or direct connection with making the saleable product, but that is a necessary part of the manufacturing process. 2012 1040 ez Other labor. 2012 1040 ez   Other labor costs not properly chargeable to the cost of goods sold can be deducted as selling or administrative expenses. 2012 1040 ez Generally, the only kinds of labor costs properly chargeable to your cost of goods sold are the direct or indirect labor costs and certain other costs treated as overhead expenses properly charged to the manufacturing process, as discussed later under Line 39 Other Costs. 2012 1040 ez Line 38 Materials and Supplies Materials and supplies, such as hardware and chemicals, used in manufacturing goods are charged to cost of goods sold. 2012 1040 ez Those that are not used in the manufacturing process are treated as deferred charges. 2012 1040 ez You deduct them as a business expense when you use them. 2012 1040 ez Business expenses are discussed in chapter 8. 2012 1040 ez Line 39 Other Costs Examples of other costs incurred in a manufacturing or mining process that you charge to your cost of goods sold are as follows. 2012 1040 ez Containers. 2012 1040 ez   Containers and packages that are an integral part of the product manufactured are a part of your cost of goods sold. 2012 1040 ez If they are not an integral part of the manufactured product, their costs are shipping or selling expenses. 2012 1040 ez Freight-in. 2012 1040 ez   Freight-in, express-in, and cartage-in on raw materials, supplies you use in production, and merchandise you purchase for sale are all part of cost of goods sold. 2012 1040 ez Overhead expenses. 2012 1040 ez   Overhead expenses include expenses such as rent, heat, light, power, insurance, depreciation, taxes, maintenance, labor, and supervision. 2012 1040 ez The overhead expenses you have as direct and necessary expenses of the manufacturing operation are included in your cost of goods sold. 2012 1040 ez Line 40 Add Lines 35 through 39 The total of lines 35 through 39 equals the cost of the goods available for sale during the year. 2012 1040 ez Line 41 Inventory at End of Year Subtract the value of your closing inventory (including, as appropriate, the allocable parts of the cost of raw materials and supplies, direct labor, and overhead expenses) from line 40. 2012 1040 ez Inventory at the end of the year is also known as closing or ending inventory. 2012 1040 ez Your ending inventory will usually become the beginning inventory of your next tax year. 2012 1040 ez Line 42 Cost of Goods Sold When you subtract your closing inventory (inventory at the end of the year) from the cost of goods available for sale, the remainder is your cost of goods sold during the tax year. 2012 1040 ez Prev  Up  Next   Home   More Online Publications