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2012 Tax Forms 1040ez

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2012 Tax Forms 1040ez

2012 tax forms 1040ez Publication 15-B - Main Content Table of Contents 1. 2012 tax forms 1040ez Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. 2012 tax forms 1040ez Fringe Benefit Exclusion RulesAccident and Health Benefits Achievement Awards Adoption Assistance Athletic Facilities De Minimis (Minimal) Benefits Dependent Care Assistance Educational Assistance Employee Discounts Employee Stock Options Employer-Provided Cell Phones Group-Term Life Insurance Coverage Health Savings Accounts Lodging on Your Business Premises Meals Moving Expense Reimbursements No-Additional-Cost Services Retirement Planning Services Transportation (Commuting) Benefits Tuition Reduction Working Condition Benefits 3. 2012 tax forms 1040ez Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. 2012 tax forms 1040ez Rules for Withholding, Depositing, and ReportingTransfer of property. 2012 tax forms 1040ez Amount of deposit. 2012 tax forms 1040ez Limitation. 2012 tax forms 1040ez Conformity rules. 2012 tax forms 1040ez Election not to withhold income tax. 2012 tax forms 1040ez How To Get Tax Help 1. 2012 tax forms 1040ez Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. 2012 tax forms 1040ez For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. 2012 tax forms 1040ez Performance of services. 2012 tax forms 1040ez   A person who performs services for you does not have to be your employee. 2012 tax forms 1040ez A person may perform services for you as an independent contractor, partner, or director. 2012 tax forms 1040ez Also, for fringe benefit purposes, treat a person who agrees not to perform services (such as under a covenant not to compete) as performing services. 2012 tax forms 1040ez Provider of benefit. 2012 tax forms 1040ez   You are the provider of a fringe benefit if it is provided for services performed for you. 2012 tax forms 1040ez You are considered the provider of a fringe benefit even if a third party, such as your client or customer, provides the benefit to your employee for services the employee performs for you. 2012 tax forms 1040ez For example, if, in exchange for goods or services, your customer provides day care services as a fringe benefit to your employees for services they provide for you as their employer, then you are the provider of this fringe benefit even though the customer is actually providing the day care. 2012 tax forms 1040ez Recipient of benefit. 2012 tax forms 1040ez   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. 2012 tax forms 1040ez That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. 2012 tax forms 1040ez For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. 2012 tax forms 1040ez Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. 2012 tax forms 1040ez Section 2 discusses the exclusions that apply to certain fringe benefits. 2012 tax forms 1040ez Any benefit not excluded under the rules discussed in section 2 is taxable. 2012 tax forms 1040ez Including taxable benefits in pay. 2012 tax forms 1040ez   You must include in a recipient's pay the amount by which the value of a fringe benefit is more than the sum of the following amounts. 2012 tax forms 1040ez Any amount the law excludes from pay. 2012 tax forms 1040ez Any amount the recipient paid for the benefit. 2012 tax forms 1040ez The rules used to determine the value of a fringe benefit are discussed in section 3. 2012 tax forms 1040ez   If the recipient of a taxable fringe benefit is your employee, the benefit is subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. 2012 tax forms 1040ez However, you can use special rules to withhold, deposit, and report the employment taxes. 2012 tax forms 1040ez These rules are discussed in section 4. 2012 tax forms 1040ez   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. 2012 tax forms 1040ez However, you may have to report the benefit on one of the following information returns. 2012 tax forms 1040ez If the recipient receives the benefit as: Use: An independent contractor Form 1099-MISC, Miscellaneous Income A partner Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 2012 tax forms 1040ez For more information, see the instructions for the forms listed above. 2012 tax forms 1040ez Cafeteria Plans A cafeteria plan, including a flexible spending arrangement, is a written plan that allows your employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. 2012 tax forms 1040ez If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. 2012 tax forms 1040ez Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. 2012 tax forms 1040ez However, a cafeteria plan can include a qualified 401(k) plan as a benefit. 2012 tax forms 1040ez Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. 2012 tax forms 1040ez Qualified benefits. 2012 tax forms 1040ez   A cafeteria plan can include the following benefits discussed in section 2. 2012 tax forms 1040ez Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). 2012 tax forms 1040ez Adoption assistance. 2012 tax forms 1040ez Dependent care assistance. 2012 tax forms 1040ez Group-term life insurance coverage (including costs that cannot be excluded from wages). 2012 tax forms 1040ez Health savings accounts (HSAs). 2012 tax forms 1040ez Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. 2012 tax forms 1040ez Benefits not allowed. 2012 tax forms 1040ez   A cafeteria plan cannot include the following benefits discussed in section 2. 2012 tax forms 1040ez Archer MSAs. 2012 tax forms 1040ez See Accident and Health Benefits in section 2. 2012 tax forms 1040ez Athletic facilities. 2012 tax forms 1040ez De minimis (minimal) benefits. 2012 tax forms 1040ez Educational assistance. 2012 tax forms 1040ez Employee discounts. 2012 tax forms 1040ez Employer-provided cell phones. 2012 tax forms 1040ez Lodging on your business premises. 2012 tax forms 1040ez Meals. 2012 tax forms 1040ez Moving expense reimbursements. 2012 tax forms 1040ez No-additional-cost services. 2012 tax forms 1040ez Transportation (commuting) benefits. 2012 tax forms 1040ez Tuition reduction. 2012 tax forms 1040ez Working condition benefits. 2012 tax forms 1040ez It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). 2012 tax forms 1040ez $2,500 limit on a health flexible spending arrangement (FSA). 2012 tax forms 1040ez   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. 2012 tax forms 1040ez For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. 2012 tax forms 1040ez   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). 2012 tax forms 1040ez While cafeteria plans generally must be amended on a prospective basis, an amendment that is adopted on or before December 31, 2014, may be made effective retroactively, provided that in operation the cafeteria plan meets the limit for plan years beginning after December 31, 2012. 2012 tax forms 1040ez A cafeteria plan that does not limit health FSA contributions to the dollar limit is not a cafeteria plan and all benefits offered under the plan are includible in the employee's gross income. 2012 tax forms 1040ez   For more information, see Notice 2012-40, 2012-26 I. 2012 tax forms 1040ez R. 2012 tax forms 1040ez B. 2012 tax forms 1040ez 1046, available at www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov/irb/2012-26_IRB/ar09. 2012 tax forms 1040ez html. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For these plans, treat the following individuals as employees. 2012 tax forms 1040ez A current common-law employee. 2012 tax forms 1040ez See section 2 in Publication 15 (Circular E) for more information. 2012 tax forms 1040ez A full-time life insurance agent who is a current statutory employee. 2012 tax forms 1040ez A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2012 tax forms 1040ez Exception for S corporation shareholders. 2012 tax forms 1040ez   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2012 tax forms 1040ez A 2% shareholder for this purpose is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2012 tax forms 1040ez Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2012 tax forms 1040ez Plans that favor highly compensated employees. 2012 tax forms 1040ez   If your plan favors highly compensated employees as to eligibility to participate, contributions, or benefits, you must include in their wages the value of taxable benefits they could have selected. 2012 tax forms 1040ez A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. 2012 tax forms 1040ez   A highly compensated employee for this purpose is any of the following employees. 2012 tax forms 1040ez An officer. 2012 tax forms 1040ez A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. 2012 tax forms 1040ez An employee who is highly compensated based on the facts and circumstances. 2012 tax forms 1040ez A spouse or dependent of a person described in (1), (2), or (3). 2012 tax forms 1040ez Plans that favor key employees. 2012 tax forms 1040ez   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. 2012 tax forms 1040ez A plan favors key employees if more than 25% of the total of the nontaxable benefits you provide for all employees under the plan go to key employees. 2012 tax forms 1040ez However, a plan you maintain under a collective bargaining agreement does not favor key employees. 2012 tax forms 1040ez   A key employee during 2014 is generally an employee who is either of the following. 2012 tax forms 1040ez An officer having annual pay of more than $170,000. 2012 tax forms 1040ez An employee who for 2014 is either of the following. 2012 tax forms 1040ez A 5% owner of your business. 2012 tax forms 1040ez A 1% owner of your business whose annual pay was more than $150,000. 2012 tax forms 1040ez Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. 2012 tax forms 1040ez Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. 2012 tax forms 1040ez Eligible employer. 2012 tax forms 1040ez   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. 2012 tax forms 1040ez If your business was not in existence throughout the preceding year, you are eligible if you reasonably expect to employ an average of 100 or fewer employees in the current year. 2012 tax forms 1040ez If you establish a simple cafeteria plan in a year that you employ an average of 100 or fewer employees, you are considered an eligible employer for any subsequent year as long as you do not employ an average of 200 or more employees in a subsequent year. 2012 tax forms 1040ez Eligibility and participation requirements. 2012 tax forms 1040ez   These requirements are met if all employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate and each employee eligible to participate in the plan may elect any benefit available under the plan. 2012 tax forms 1040ez You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year, Have less than 1 year of service with you as of any day during the plan year, Are covered under a collective bargaining agreement, or Are nonresident aliens working outside the United States whose income did not come from a U. 2012 tax forms 1040ez S. 2012 tax forms 1040ez source. 2012 tax forms 1040ez Contribution requirements. 2012 tax forms 1040ez   You must make a contribution to provide qualified benefits on behalf of each qualified employee in an amount equal to: A uniform percentage (not less than 2%) of the employee’s compensation for the plan year, or An amount which is at least 6% of the employee’s compensation for the plan year or twice the amount of the salary reduction contributions of each qualified employee, whichever is less. 2012 tax forms 1040ez If the contribution requirements are met using option (2), the rate of contribution to any salary reduction contribution of a highly compensated or key employee can not be greater than the rate of contribution to any other employee. 2012 tax forms 1040ez More information. 2012 tax forms 1040ez   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. 2012 tax forms 1040ez 2. 2012 tax forms 1040ez Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. 2012 tax forms 1040ez These rules exclude all or part of the value of certain benefits from the recipient's pay. 2012 tax forms 1040ez The excluded benefits are not subject to federal income tax withholding. 2012 tax forms 1040ez Also, in most cases, they are not subject to social security, Medicare, or federal unemployment (FUTA) tax and are not reported on Form W-2. 2012 tax forms 1040ez This section discusses the exclusion rules for the following fringe benefits. 2012 tax forms 1040ez Accident and health benefits. 2012 tax forms 1040ez Achievement awards. 2012 tax forms 1040ez Adoption assistance. 2012 tax forms 1040ez Athletic facilities. 2012 tax forms 1040ez De minimis (minimal) benefits. 2012 tax forms 1040ez Dependent care assistance. 2012 tax forms 1040ez Educational assistance. 2012 tax forms 1040ez Employee discounts. 2012 tax forms 1040ez Employee stock options. 2012 tax forms 1040ez Employer-provided cell phones. 2012 tax forms 1040ez Group-term life insurance coverage. 2012 tax forms 1040ez Health savings accounts (HSAs). 2012 tax forms 1040ez Lodging on your business premises. 2012 tax forms 1040ez Meals. 2012 tax forms 1040ez Moving expense reimbursements. 2012 tax forms 1040ez No-additional-cost services. 2012 tax forms 1040ez Retirement planning services. 2012 tax forms 1040ez Transportation (commuting) benefits. 2012 tax forms 1040ez Tuition reduction. 2012 tax forms 1040ez Working condition benefits. 2012 tax forms 1040ez See Table 2-1, later, for an overview of the employment tax treatment of these benefits. 2012 tax forms 1040ez Table 2-1. 2012 tax forms 1040ez Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. 2012 tax forms 1040ez ) Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. 2012 tax forms 1040ez Exempt, except for certain payments to S corporation employees who are 2% shareholders. 2012 tax forms 1040ez Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). 2012 tax forms 1040ez Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. 2012 tax forms 1040ez De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). 2012 tax forms 1040ez Educational assistance Exempt up to $5,250 of benefits each year. 2012 tax forms 1040ez (See Educational Assistance , later in this section. 2012 tax forms 1040ez ) Employee discounts Exempt3 up to certain limits. 2012 tax forms 1040ez (See Employee Discounts , later in this section. 2012 tax forms 1040ez ) Employee stock options See Employee Stock Options , later in this section. 2012 tax forms 1040ez Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. 2012 tax forms 1040ez Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. 2012 tax forms 1040ez (Special rules apply to former employees. 2012 tax forms 1040ez ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. 2012 tax forms 1040ez (See Health Savings Accounts , later in this section. 2012 tax forms 1040ez ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. 2012 tax forms 1040ez Meals Exempt if furnished on your business premises for your convenience. 2012 tax forms 1040ez Exempt if de minimis. 2012 tax forms 1040ez Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. 2012 tax forms 1040ez No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($130), qualified parking ($250), or qualified bicycle commuting reimbursement6 ($20). 2012 tax forms 1040ez (See Transportation (Commuting) Benefits , later in this section. 2012 tax forms 1040ez ) Exempt if de minimis. 2012 tax forms 1040ez Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). 2012 tax forms 1040ez Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. 2012 tax forms 1040ez 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. 2012 tax forms 1040ez 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. 2012 tax forms 1040ez 4 Exemption does not apply to certain key employees under a plan that favors those employees. 2012 tax forms 1040ez 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. 2012 tax forms 1040ez 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. 2012 tax forms 1040ez 7 You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. 2012 tax forms 1040ez Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. 2012 tax forms 1040ez Also, show it in box 12 with code “C. 2012 tax forms 1040ez ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. 2012 tax forms 1040ez Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. 2012 tax forms 1040ez Contributions to the cost of accident or health insurance including qualified long-term care insurance. 2012 tax forms 1040ez Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. 2012 tax forms 1040ez Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). 2012 tax forms 1040ez This exclusion also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are either of the following. 2012 tax forms 1040ez Payments or reimbursements of medical expenses. 2012 tax forms 1040ez Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). 2012 tax forms 1040ez The payments must be figured without regard to any period of absence from work. 2012 tax forms 1040ez Accident or health plan. 2012 tax forms 1040ez   This is an arrangement that provides benefits for your employees, their spouses, their dependents, and their children (under age 27) in the event of personal injury or sickness. 2012 tax forms 1040ez The plan may be insured or noninsured and does not need to be in writing. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat the following individuals as employees. 2012 tax forms 1040ez A current common-law employee. 2012 tax forms 1040ez A full-time life insurance agent who is a current statutory employee. 2012 tax forms 1040ez A retired employee. 2012 tax forms 1040ez A former employee you maintain coverage for based on the employment relationship. 2012 tax forms 1040ez A widow or widower of an individual who died while an employee. 2012 tax forms 1040ez A widow or widower of a retired employee. 2012 tax forms 1040ez For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2012 tax forms 1040ez Special rule for certain government plans. 2012 tax forms 1040ez   For certain government accident and health plans, payments to a deceased plan participant's beneficiary may qualify for the exclusion from gross income if the other requirements for exclusion are met. 2012 tax forms 1040ez See section 105(j) for details. 2012 tax forms 1040ez Exception for S corporation shareholders. 2012 tax forms 1040ez   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2012 tax forms 1040ez A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2012 tax forms 1040ez Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2012 tax forms 1040ez Exclusion from wages. 2012 tax forms 1040ez   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. 2012 tax forms 1040ez Exception for certain long-term care benefits. 2012 tax forms 1040ez   You cannot exclude contributions to the cost of long-term care insurance from an employee's wages subject to federal income tax withholding if the coverage is provided through a flexible spending or similar arrangement. 2012 tax forms 1040ez This is a benefit program that reimburses specified expenses up to a maximum amount that is reasonably available to the employee and is less than five times the total cost of the insurance. 2012 tax forms 1040ez However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. 2012 tax forms 1040ez S corporation shareholders. 2012 tax forms 1040ez   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. 2012 tax forms 1040ez However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. 2012 tax forms 1040ez Exception for highly compensated employees. 2012 tax forms 1040ez   If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. 2012 tax forms 1040ez However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. 2012 tax forms 1040ez   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. 2012 tax forms 1040ez   A highly compensated employee for this exception is any of the following individuals. 2012 tax forms 1040ez One of the five highest paid officers. 2012 tax forms 1040ez An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. 2012 tax forms 1040ez An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). 2012 tax forms 1040ez   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. 2012 tax forms 1040ez COBRA premiums. 2012 tax forms 1040ez   The exclusion for accident and health benefits applies to amounts you pay to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). 2012 tax forms 1040ez The exclusion applies regardless of the length of employment, whether you directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary. 2012 tax forms 1040ez Achievement Awards This exclusion applies to the value of any tangible personal property you give to an employee as an award for either length of service or safety achievement. 2012 tax forms 1040ez The exclusion does not apply to awards of cash, cash equivalents, gift certificates, or other intangible property such as vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, and other securities. 2012 tax forms 1040ez The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat the following individuals as employees. 2012 tax forms 1040ez A current employee. 2012 tax forms 1040ez A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. 2012 tax forms 1040ez A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2012 tax forms 1040ez Exception for S corporation shareholders. 2012 tax forms 1040ez   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2012 tax forms 1040ez A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2012 tax forms 1040ez Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2012 tax forms 1040ez Exclusion from wages. 2012 tax forms 1040ez   You can generally exclude the value of achievement awards you give to an employee from the employee's wages if their cost is not more than the amount you can deduct as a business expense for the year. 2012 tax forms 1040ez The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). 2012 tax forms 1040ez See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. 2012 tax forms 1040ez    To determine for 2014 whether an achievement award is a “qualified plan award” under the deduction rules described in Publication 535, treat any employee who received more than $115,000 in pay for 2013 as a highly compensated employee. 2012 tax forms 1040ez   If the cost of awards given to an employee is more than your allowable deduction, include in the employee's wages the larger of the following amounts. 2012 tax forms 1040ez The part of the cost that is more than your allowable deduction (up to the value of the awards). 2012 tax forms 1040ez The amount by which the value of the awards exceeds your allowable deduction. 2012 tax forms 1040ez Exclude the remaining value of the awards from the employee's wages. 2012 tax forms 1040ez Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. 2012 tax forms 1040ez It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. 2012 tax forms 1040ez To determine whether your plan meets this test, do not consider employees excluded from your plan who are covered by a collective bargaining agreement, if there is evidence that adoption assistance was a subject of good-faith bargaining. 2012 tax forms 1040ez It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). 2012 tax forms 1040ez A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. 2012 tax forms 1040ez You give reasonable notice of the plan to eligible employees. 2012 tax forms 1040ez Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. 2012 tax forms 1040ez For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2012 tax forms 1040ez The employee was a 5% owner at any time during the year or the preceding year. 2012 tax forms 1040ez The employee received more than $115,000 in pay for the preceding year. 2012 tax forms 1040ez You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2012 tax forms 1040ez You must exclude all payments or reimbursements you make under an adoption assistance program for an employee's qualified adoption expenses from the employee's wages subject to federal income tax withholding. 2012 tax forms 1040ez However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. 2012 tax forms 1040ez For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. 2012 tax forms 1040ez You must report all qualifying adoption expenses you paid or reimbursed under your adoption assistance program for each employee for the year in box 12 of the employee's Form W-2. 2012 tax forms 1040ez Use code “T” to identify this amount. 2012 tax forms 1040ez Exception for S corporation shareholders. 2012 tax forms 1040ez   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. 2012 tax forms 1040ez A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2012 tax forms 1040ez Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, including using the benefit as a reduction in distributions to the 2% shareholder. 2012 tax forms 1040ez Athletic Facilities You can exclude the value of an employee's use of an on-premises gym or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children. 2012 tax forms 1040ez For this purpose, an employee's dependent child is a child or stepchild who is the employee's dependent or who, if both parents are deceased, has not attained the age of 25. 2012 tax forms 1040ez On-premises facility. 2012 tax forms 1040ez   The athletic facility must be located on premises you own or lease. 2012 tax forms 1040ez It does not have to be located on your business premises. 2012 tax forms 1040ez However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat the following individuals as employees. 2012 tax forms 1040ez A current employee. 2012 tax forms 1040ez A former employee who retired or left on disability. 2012 tax forms 1040ez A widow or widower of an individual who died while an employee. 2012 tax forms 1040ez A widow or widower of a former employee who retired or left on disability. 2012 tax forms 1040ez A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2012 tax forms 1040ez A partner who performs services for a partnership. 2012 tax forms 1040ez De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. 2012 tax forms 1040ez A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. 2012 tax forms 1040ez Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. 2012 tax forms 1040ez Examples of de minimis benefits include the following. 2012 tax forms 1040ez Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. 2012 tax forms 1040ez See Employer-Provided Cell Phones , later in this section, for details. 2012 tax forms 1040ez Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes. 2012 tax forms 1040ez Holiday gifts, other than cash, with a low fair market value. 2012 tax forms 1040ez Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. 2012 tax forms 1040ez Meals. 2012 tax forms 1040ez See Meals , later in this section, for details. 2012 tax forms 1040ez Occasional parties or picnics for employees and their guests. 2012 tax forms 1040ez Occasional tickets for theater or sporting events. 2012 tax forms 1040ez Transportation fare. 2012 tax forms 1040ez See Transportation (Commuting) Benefits , later in this section, for details. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat any recipient of a de minimis benefit as an employee. 2012 tax forms 1040ez Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay for or provide to an employee under a dependent care assistance program that covers only your employees. 2012 tax forms 1040ez The services must be for a qualifying person's care and must be provided to allow the employee to work. 2012 tax forms 1040ez These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. 2012 tax forms 1040ez For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat the following individuals as employees. 2012 tax forms 1040ez A current employee. 2012 tax forms 1040ez A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2012 tax forms 1040ez Yourself (if you are a sole proprietor). 2012 tax forms 1040ez A partner who performs services for a partnership. 2012 tax forms 1040ez Exclusion from wages. 2012 tax forms 1040ez   You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. 2012 tax forms 1040ez   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. 2012 tax forms 1040ez This limit is reduced to $2,500 for married employees filing separate returns. 2012 tax forms 1040ez   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. 2012 tax forms 1040ez Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. 2012 tax forms 1040ez For more information on the earned income limit, see Publication 503. 2012 tax forms 1040ez Exception for highly compensated employees. 2012 tax forms 1040ez   You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the benefits provided under the program do not favor highly compensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. 2012 tax forms 1040ez   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2012 tax forms 1040ez The employee was a 5% owner at any time during the year or the preceding year. 2012 tax forms 1040ez The employee received more than $115,000 in pay for the preceding year. 2012 tax forms 1040ez You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2012 tax forms 1040ez Form W-2. 2012 tax forms 1040ez   Report the value of all dependent care assistance you provide to an employee under a dependent care assistance program in box 10 of the employee's Form W-2. 2012 tax forms 1040ez Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. 2012 tax forms 1040ez Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. 2012 tax forms 1040ez Example. 2012 tax forms 1040ez   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. 2012 tax forms 1040ez In addition, it provides occasional on-site dependent care to its employees at no cost. 2012 tax forms 1040ez Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. 2012 tax forms 1040ez In addition, Emily used the on-site dependent care several times. 2012 tax forms 1040ez The fair market value of the on-site care was $700. 2012 tax forms 1040ez Emily's Form W-2 should report $5,200 of dependent care assistance in box 10 ($4,500 flexible spending arrangement plus $700 on-site dependent care). 2012 tax forms 1040ez Boxes 1, 3, and 5 should include $200 (the amount in excess of the nontaxable assistance), and applicable taxes should be withheld on that amount. 2012 tax forms 1040ez Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. 2012 tax forms 1040ez The exclusion also applies to graduate level courses. 2012 tax forms 1040ez Educational assistance means amounts you pay or incur for your employees' education expenses. 2012 tax forms 1040ez These expenses generally include the cost of books, equipment, fees, supplies, and tuition. 2012 tax forms 1040ez However, these expenses do not include the cost of a course or other education involving sports, games, or hobbies, unless the education: Has a reasonable relationship to your business, or Is required as part of a degree program. 2012 tax forms 1040ez Education expenses do not include the cost of tools or supplies (other than textbooks) your employee is allowed to keep at the end of the course. 2012 tax forms 1040ez Nor do they include the cost of lodging, meals, or transportation. 2012 tax forms 1040ez Educational assistance program. 2012 tax forms 1040ez   An educational assistance program is a separate written plan that provides educational assistance only to your employees. 2012 tax forms 1040ez The program qualifies only if all of the following tests are met. 2012 tax forms 1040ez The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. 2012 tax forms 1040ez To determine whether your program meets this test, do not consider employees excluded from your program who are covered by a collective bargaining agreement if there is evidence that educational assistance was a subject of good-faith bargaining. 2012 tax forms 1040ez The program does not provide more than 5% of its benefits during the year for shareholders or owners. 2012 tax forms 1040ez A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. 2012 tax forms 1040ez The program does not allow employees to choose to receive cash or other benefits that must be included in gross income instead of educational assistance. 2012 tax forms 1040ez You give reasonable notice of the program to eligible employees. 2012 tax forms 1040ez Your program can cover former employees if their employment is the reason for the coverage. 2012 tax forms 1040ez   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2012 tax forms 1040ez The employee was a 5% owner at any time during the year or the preceding year. 2012 tax forms 1040ez The employee received more than $115,000 in pay for the preceding year. 2012 tax forms 1040ez You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat the following individuals as employees. 2012 tax forms 1040ez A current employee. 2012 tax forms 1040ez A former employee who retired, left on disability, or was laid off. 2012 tax forms 1040ez A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2012 tax forms 1040ez Yourself (if you are a sole proprietor). 2012 tax forms 1040ez A partner who performs services for a partnership. 2012 tax forms 1040ez Exclusion from wages. 2012 tax forms 1040ez   You can exclude up to $5,250 of educational assistance you provide to an employee under an educational assistance program from the employee's wages each year. 2012 tax forms 1040ez Assistance over $5,250. 2012 tax forms 1040ez   If you do not have an educational assistance plan, or you provide an employee with assistance exceeding $5,250, you must include the value of these benefits as wages, unless the benefits are working condition benefits. 2012 tax forms 1040ez Working condition benefits may be excluded from wages. 2012 tax forms 1040ez Property or a service provided is a working condition benefit to the extent that if the employee paid for it, the amount paid would have been deductible as a business or depreciation expense. 2012 tax forms 1040ez See Working Condition Benefits , later, in this section. 2012 tax forms 1040ez Employee Discounts This exclusion applies to a price reduction you give an employee on property or services you offer to customers in the ordinary course of the line of business in which the employee performs substantial services. 2012 tax forms 1040ez However, it does not apply to discounts on real property or discounts on personal property of a kind commonly held for investment (such as stocks or bonds). 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat the following individuals as employees. 2012 tax forms 1040ez A current employee. 2012 tax forms 1040ez A former employee who retired or left on disability. 2012 tax forms 1040ez A widow or widower of an individual who died while an employee. 2012 tax forms 1040ez A widow or widower of an employee who retired or left on disability. 2012 tax forms 1040ez A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2012 tax forms 1040ez A partner who performs services for a partnership. 2012 tax forms 1040ez Exclusion from wages. 2012 tax forms 1040ez   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. 2012 tax forms 1040ez For a discount on services, 20% of the price you charge nonemployee customers for the service. 2012 tax forms 1040ez For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. 2012 tax forms 1040ez   Determine your gross profit percentage in the line of business based on all property you offer to customers (including employee customers) and your experience during the tax year immediately before the tax year in which the discount is available. 2012 tax forms 1040ez To figure your gross profit percentage, subtract the total cost of the property from the total sales price of the property and divide the result by the total sales price of the property. 2012 tax forms 1040ez Exception for highly compensated employees. 2012 tax forms 1040ez   You cannot exclude from the wages of a highly compensated employee any part of the value of a discount that is not available on the same terms to one of the following groups. 2012 tax forms 1040ez All of your employees. 2012 tax forms 1040ez A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. 2012 tax forms 1040ez   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2012 tax forms 1040ez The employee was a 5% owner at any time during the year or the preceding year. 2012 tax forms 1040ez The employee received more than $115,000 in pay for the preceding year. 2012 tax forms 1040ez You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2012 tax forms 1040ez Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. 2012 tax forms 1040ez Wages for social security, Medicare, and federal unemployment (FUTA) taxes do not include remuneration resulting from the exercise, after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or from any disposition of stock acquired by exercising such an option. 2012 tax forms 1040ez The IRS will not apply these taxes to an exercise before October 23, 2004, of an incentive stock option or an employee stock purchase plan option or to a disposition of stock acquired by such exercise. 2012 tax forms 1040ez Additionally, federal income tax withholding is not required on the income resulting from a disqualifying disposition of stock acquired by the exercise after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or on income equal to the discount portion of stock acquired by the exercise, after October 22, 2004, of an employee stock purchase plan option resulting from any disposition of the stock. 2012 tax forms 1040ez The IRS will not apply federal income tax withholding upon the disposition of stock acquired by the exercise, before October 23, 2004, of an incentive stock option or an employee stock purchase plan option. 2012 tax forms 1040ez However, the employer must report as income in box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option. 2012 tax forms 1040ez An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V. 2012 tax forms 1040ez ” See Regulations section 1. 2012 tax forms 1040ez 83-7. 2012 tax forms 1040ez An employee who transfers his or her interest in nonstatutory stock options to the employee's former spouse incident to a divorce is not required to include an amount in gross income upon the transfer. 2012 tax forms 1040ez The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. 2012 tax forms 1040ez See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. 2012 tax forms 1040ez You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov/pub/irs-irbs/irb02-19. 2012 tax forms 1040ez pdf. 2012 tax forms 1040ez See Revenue Ruling 2004-60, 2004-24 I. 2012 tax forms 1040ez R. 2012 tax forms 1040ez B. 2012 tax forms 1040ez 1051, available at www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov/irb/2004-24_IRB/ar13. 2012 tax forms 1040ez html. 2012 tax forms 1040ez For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. 2012 tax forms 1040ez Employer-Provided Cell Phones The value of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a working condition fringe benefit. 2012 tax forms 1040ez Personal use of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a de minimis fringe benefit. 2012 tax forms 1040ez For the rules relating to these types of benefits, see De Minimis (Minimal) Benefits , earlier in this section, and Working Condition Benefits , later in this section. 2012 tax forms 1040ez Noncompensatory business purposes. 2012 tax forms 1040ez   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. 2012 tax forms 1040ez Examples of substantial business reasons include the employer's: Need to contact the employee at all times for work-related emergencies, Requirement that the employee be available to speak with clients at times when the employee is away from the office, and Need to speak with clients located in other time zones at times outside the employee's normal workday. 2012 tax forms 1040ez Cell phones provided to promote goodwill, boost morale, or attract prospective employees. 2012 tax forms 1040ez   You cannot exclude from an employee's wages the value of a cell phone provided to promote goodwill of an employee, to attract a prospective employee, or as a means of providing additional compensation to an employee. 2012 tax forms 1040ez Additional information. 2012 tax forms 1040ez   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. 2012 tax forms 1040ez R. 2012 tax forms 1040ez B. 2012 tax forms 1040ez 407, available at  www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov/irb/2011-38_IRB/ar07. 2012 tax forms 1040ez html. 2012 tax forms 1040ez Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. 2012 tax forms 1040ez It provides a general death benefit that is not included in income. 2012 tax forms 1040ez You provide it to a group of employees. 2012 tax forms 1040ez See The 10-employee rule , later. 2012 tax forms 1040ez It provides an amount of insurance to each employee based on a formula that prevents individual selection. 2012 tax forms 1040ez This formula must use factors such as the employee's age, years of service, pay, or position. 2012 tax forms 1040ez You provide it under a policy you directly or indirectly carry. 2012 tax forms 1040ez Even if you do not pay any of the policy's cost, you are considered to carry it if you arrange for payment of its cost by your employees and charge at least one employee less than, and at least one other employee more than, the cost of his or her insurance. 2012 tax forms 1040ez Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. 2012 tax forms 1040ez Group-term life insurance does not include the following insurance. 2012 tax forms 1040ez Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. 2012 tax forms 1040ez Life insurance on the life of your employee's spouse or dependent. 2012 tax forms 1040ez However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. 2012 tax forms 1040ez See De Minimis (Minimal) Benefits , earlier in this section. 2012 tax forms 1040ez Insurance provided under a policy that provides a permanent benefit (an economic value that extends beyond 1 policy year, such as paid-up or cash surrender value), unless certain requirements are met. 2012 tax forms 1040ez See Regulations section 1. 2012 tax forms 1040ez 79-1 for details. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat the following individuals as employees. 2012 tax forms 1040ez A current common-law employee. 2012 tax forms 1040ez A full-time life insurance agent who is a current statutory employee. 2012 tax forms 1040ez An individual who was formerly your employee under (1) or (2). 2012 tax forms 1040ez A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. 2012 tax forms 1040ez Exception for S corporation shareholders. 2012 tax forms 1040ez   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2012 tax forms 1040ez A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2012 tax forms 1040ez Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2012 tax forms 1040ez The 10-employee rule. 2012 tax forms 1040ez   Generally, life insurance is not group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year. 2012 tax forms 1040ez   For this rule, count employees who choose not to receive the insurance unless, to receive it, they must contribute to the cost of benefits other than the group-term life insurance. 2012 tax forms 1040ez For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. 2012 tax forms 1040ez However, do not count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. 2012 tax forms 1040ez A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy. 2012 tax forms 1040ez Exceptions. 2012 tax forms 1040ez   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. 2012 tax forms 1040ez   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. 2012 tax forms 1040ez If evidence that the employee is insurable is required, it is limited to a medical questionnaire (completed by the employee) that does not require a physical. 2012 tax forms 1040ez You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts. 2012 tax forms 1040ez You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. 2012 tax forms 1040ez See Regulations section 1. 2012 tax forms 1040ez 79-1 for details. 2012 tax forms 1040ez   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. 2012 tax forms 1040ez You provide the insurance under a common plan covering your employees and the employees of at least one other employer who is not related to you. 2012 tax forms 1040ez The insurance is restricted to, but mandatory for, all your employees who belong to, or are represented by, an organization (such as a union) that carries on substantial activities besides obtaining insurance. 2012 tax forms 1040ez Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. 2012 tax forms 1040ez   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. 2012 tax forms 1040ez They were 65 or older. 2012 tax forms 1040ez They customarily work 20 hours or less a week or 5 months or less in a calendar year. 2012 tax forms 1040ez They have not been employed for the waiting period given in the policy. 2012 tax forms 1040ez This waiting period cannot be more than 6 months. 2012 tax forms 1040ez Exclusion from wages. 2012 tax forms 1040ez   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. 2012 tax forms 1040ez You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. 2012 tax forms 1040ez In addition, you do not have to withhold federal income tax or pay FUTA tax on any group-term life insurance you provide to an employee. 2012 tax forms 1040ez Coverage over the limit. 2012 tax forms 1040ez   You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. 2012 tax forms 1040ez Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. 2012 tax forms 1040ez Also, show it in box 12 with code “C. 2012 tax forms 1040ez ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. 2012 tax forms 1040ez   Figure the monthly cost of the insurance to include in the employee's wages by multiplying the number of thousands of dollars of all insurance coverage over $50,000 (figured to the nearest $100) by the cost shown in Table 2-2. 2012 tax forms 1040ez For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. 2012 tax forms 1040ez You must prorate the cost from the table if less than a full month of coverage is involved. 2012 tax forms 1040ez Table 2-2. 2012 tax forms 1040ez Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . 2012 tax forms 1040ez 05 25 through 29 . 2012 tax forms 1040ez 06 30 through 34 . 2012 tax forms 1040ez 08 35 through 39 . 2012 tax forms 1040ez 09 40 through 44 . 2012 tax forms 1040ez 10 45 through 49 . 2012 tax forms 1040ez 15 50 through 54 . 2012 tax forms 1040ez 23 55 through 59 . 2012 tax forms 1040ez 43 60 through 64 . 2012 tax forms 1040ez 66 65 through 69 1. 2012 tax forms 1040ez 27 70 and older 2. 2012 tax forms 1040ez 06 You figure the total cost to include in the employee's wages by multiplying the monthly cost by the number of full months' coverage at that cost. 2012 tax forms 1040ez Example. 2012 tax forms 1040ez Tom's employer provides him with group-term life insurance coverage of $200,000. 2012 tax forms 1040ez Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. 2012 tax forms 1040ez Tom's employer must include $170 in his wages. 2012 tax forms 1040ez The $200,000 of insurance coverage is reduced by $50,000. 2012 tax forms 1040ez The yearly cost of $150,000 of coverage is $270 ($. 2012 tax forms 1040ez 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. 2012 tax forms 1040ez The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. 2012 tax forms 1040ez The employer also enters $170 in box 12 with code “C. 2012 tax forms 1040ez ” Coverage for dependents. 2012 tax forms 1040ez   Group-term life insurance coverage paid by the employer for the spouse or dependents of an employee may be excludable from income as a de minimis fringe benefit if the face amount is not more than $2,000. 2012 tax forms 1040ez If the face amount is greater than $2,000, the entire cost of the dependent coverage must be included in income unless the amount over $2,000 is purchased with employee contributions on an after-tax basis. 2012 tax forms 1040ez The cost of the insurance is determined by using Table 2-2. 2012 tax forms 1040ez Former employees. 2012 tax forms 1040ez   When group-term life insurance over $50,000 is provided to an employee (including retirees) after his or her termination, the employee share of social security and Medicare taxes on that period of coverage is paid by the former employee with his or her tax return and is not collected by the employer. 2012 tax forms 1040ez You are not required to collect those taxes. 2012 tax forms 1040ez Use the table above to determine the amount of social security and Medicare taxes owed by the former employee for coverage provided after separation from service. 2012 tax forms 1040ez Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. 2012 tax forms 1040ez ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. 2012 tax forms 1040ez Exception for key employees. 2012 tax forms 1040ez   Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. 2012 tax forms 1040ez This exception generally does not apply to church plans. 2012 tax forms 1040ez When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. 2012 tax forms 1040ez Include the cost in boxes 1, 3, and 5 of Form W-2. 2012 tax forms 1040ez However, you do not have to withhold federal income tax or pay FUTA tax on the cost of any group-term life insurance you provide to an employee. 2012 tax forms 1040ez   For this purpose, the cost of the insurance is the greater of the following amounts. 2012 tax forms 1040ez The premiums you pay for the employee's insurance. 2012 tax forms 1040ez See Regulations section 1. 2012 tax forms 1040ez 79-4T(Q&A 6) for more information. 2012 tax forms 1040ez The cost you figure using Table 2-2. 2012 tax forms 1040ez   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. 2012 tax forms 1040ez See section 416(i) of the Internal Revenue Code for more information. 2012 tax forms 1040ez An officer having annual pay of more than $170,000. 2012 tax forms 1040ez An individual who for 2014 was either of the following. 2012 tax forms 1040ez A 5% owner of your business. 2012 tax forms 1040ez A 1% owner of your business whose annual pay was more than $150,000. 2012 tax forms 1040ez   A former employee who was a key employee upon retirement or separation from service is also a key employee. 2012 tax forms 1040ez   Your plan does not favor key employees as to participation if at least one of the following is true. 2012 tax forms 1040ez It benefits at least 70% of your employees. 2012 tax forms 1040ez At least 85% of the participating employees are not key employees. 2012 tax forms 1040ez It benefits employees who qualify under a set of rules you set up that do not favor key employees. 2012 tax forms 1040ez   Your plan meets this participation test if it is part of a cafeteria plan (discussed in section 1) and it meets the participation test for those plans. 2012 tax forms 1040ez   When applying this test, do not consider employees who: Have not completed 3 years of service, Are part-time or seasonal, Are nonresident aliens who receive no U. 2012 tax forms 1040ez S. 2012 tax forms 1040ez source earned income from you, or Are not included in the plan but are in a unit of employees covered by a collective bargaining agreement, if the benefits provided under the plan were the subject of good-faith bargaining between you and employee representatives. 2012 tax forms 1040ez   Your plan does not favor key employees as to benefits if all benefits available to participating key employees are also available to all other participating employees. 2012 tax forms 1040ez Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. 2012 tax forms 1040ez S corporation shareholders. 2012 tax forms 1040ez   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provide the 2% shareholder in his or her wages. 2012 tax forms 1040ez When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. 2012 tax forms 1040ez Include the cost in boxes 1, 3, and 5 of Form W-2. 2012 tax forms 1040ez However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder. 2012 tax forms 1040ez Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. 2012 tax forms 1040ez Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. 2012 tax forms 1040ez Contributions to the account are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. 2012 tax forms 1040ez The medical expenses must not be reimbursable by insurance or other sources and their payment from HSA funds (distribution) will not give rise to a medical expense deduction on the individual's federal income tax return. 2012 tax forms 1040ez For more information about HSAs, visit the Department of Treasury's website at www. 2012 tax forms 1040ez treasury. 2012 tax forms 1040ez gov and enter “HSA” in the search box. 2012 tax forms 1040ez Eligibility. 2012 tax forms 1040ez   A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3) or insurance for accidents, disability, dental care, vision care, or long-term care. 2012 tax forms 1040ez For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage and $12,700 for family coverage. 2012 tax forms 1040ez   There are no income limits that restrict an individual's eligibility to contribute to an HSA nor is there a requirement that the account owner have earned income to make a contribution. 2012 tax forms 1040ez Exceptions. 2012 tax forms 1040ez   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. 2012 tax forms 1040ez Also, an employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) generally disqualifies the individual (and employer) from making contributions to his or her HSA. 2012 tax forms 1040ez However, an individual may qualify to participate in an HSA if he or she is participating in only a limited-purpose FSA or HRA or a post-deductible FSA. 2012 tax forms 1040ez For more information, see Other employee health plans in Publication 969. 2012 tax forms 1040ez Employer contributions. 2012 tax forms 1040ez   Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. 2012 tax forms 1040ez For 2014, you can contribute up to $3,300 for self-only coverage or $6,550 for family coverage to a qualified individual's HSA. 2012 tax forms 1040ez   The contribution amounts listed above are increased by $1,000 for a qualified individual who is age 55 or older at any time during the year. 2012 tax forms 1040ez For two qualified individuals who are married to each other and who each are age 55 or older at any time during the year, each spouse's contribution limit is increased by $1,000 provided each spouse has a separate HSA. 2012 tax forms 1040ez No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. 2012 tax forms 1040ez Nondiscrimination rules. 2012 tax forms 1040ez    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. 2012 tax forms 1040ez Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. 2012 tax forms 1040ez   For guidance on employer comparable contributions to HSAs under section 4980G in instances where an employee has not established an HSA by December 31 and in instances where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses, see Regulations section 54. 2012 tax forms 1040ez 4980G-4. 2012 tax forms 1040ez Exception. 2012 tax forms 1040ez   The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee. 2012 tax forms 1040ez A highly compensated employee for 2014 is an employee who meets either of the following tests. 2012 tax forms 1040ez The employee was a 5% owner at any time during the year or the preceding year. 2012 tax forms 1040ez The employee received more than $115,000 in pay for the preceding year. 2012 tax forms 1040ez You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2012 tax forms 1040ez Partnerships and S corporations. 2012 tax forms 1040ez   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. 2012 tax forms 1040ez Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. 2012 tax forms 1040ez Cafeteria plans. 2012 tax forms 1040ez   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. 2012 tax forms 1040ez However, cafeteria plan nondiscrimination rules still apply. 2012 tax forms 1040ez For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. 2012 tax forms 1040ez Contributions that favor lower-paid employees are not prohibited. 2012 tax forms 1040ez Reporting requirements. 2012 tax forms 1040ez   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. 2012 tax forms 1040ez ” The trustee or custodian of the HSA, generally a bank or insurance company, reports distributions from the HSA using Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. 2012 tax forms 1040ez Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. 2012 tax forms 1040ez It is furnished on your business premises. 2012 tax forms 1040ez It is furnished for your convenience. 2012 tax forms 1040ez The employee must accept it as a condition of employment. 2012 tax forms 1040ez Different tests may apply to lodging furnished by educational institutions. 2012 tax forms 1040ez See section 119(d) of the Internal Revenue Code for details. 2012 tax forms 1040ez The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. 2012 tax forms 1040ez On your business premises. 2012 tax forms 1040ez   For this exclusion, your business premises is generally your employee's place of work. 2012 tax forms 1040ez For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. 2012 tax forms 1040ez For your convenience. 2012 tax forms 1040ez   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. 2012 tax forms 1040ez You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. 2012 tax forms 1040ez This is true even if a law or an employment contract provides that the lodging is furnished as pay. 2012 tax forms 1040ez However, a written statement that the lodging is furnished for your convenience is not sufficient. 2012 tax forms 1040ez Condition of employment. 2012 tax forms 1040ez   Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. 2012 tax forms 1040ez Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. 2012 tax forms 1040ez   It does not matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. 2012 tax forms 1040ez Example. 2012 tax forms 1040ez A hospital gives Joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. 2012 tax forms 1040ez If Joan chooses to live at the hospital, the hospital cannot exclude the value of the lodging from her wages because she is not required to live at the hospital to properly perform the duties of her employment. 2012 tax forms 1040ez S corporation shareholders. 2012 tax forms 1040ez   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. 2012 tax forms 1040ez A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2012 tax forms 1040ez Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2012 tax forms 1040ez Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. 2012 tax forms 1040ez De Minimis Meals You can exclude any occasional meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. 2012 tax forms 1040ez The exclusion applies, for example, to the following items. 2012 tax forms 1040ez Coffee, doughnuts, or soft drinks. 2012 tax forms 1040ez Occasional meals or meal money provided to enable an employee to work overtime. 2012 tax forms 1040ez However, the exclusion does not apply to meal money figured on the basis of hours worked. 2012 tax forms 1040ez Occasional parties or picnics for employees and their guests. 2012 tax forms 1040ez This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. 2012 tax forms 1040ez For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later. 2012 tax forms 1040ez If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. 2012 tax forms 1040ez The 50% limit on deductions for the cost of meals does not apply. 2012 tax forms 1040ez The deduction limit on meals is discussed in chapter 2 of Publication 535. 2012 tax forms 1040ez Employee. 2012 tax forms 1040ez   For this exclusion, treat any recipient of a de minimis meal as
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The 2012 Tax Forms 1040ez

2012 tax forms 1040ez Publication 4492 - Main Contents Table of Contents DefinitionsHurricane Katrina Disaster Area Katrina Covered Disaster Area Gulf Opportunity (GO) Zone (Core Disaster Area) Hurricane Rita Disaster Area (Rita Covered Disaster Area) Rita GO Zone Hurricane Wilma Disaster Area Wilma Covered Disaster Area Wilma GO Zone Extended Tax Deadlines Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Charitable Deduction for Contributions of Food Inventory Charitable Deduction for Contributions of Book Inventories to Public Schools Casualty and Theft LossesTime limit for making election. 2012 tax forms 1040ez Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Hurricane Distributions Repayment of Qualified Hurricane Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by Hurricane Katrina Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Work Opportunity Credit Employee Retention Credit Hurricane Katrina Housing Credit Reforestation Costs Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax Help Definitions The following definitions are used throughout this publication. 2012 tax forms 1040ez Hurricane Katrina Disaster Area The Hurricane Katrina disaster area covers the area for which the President declared a major disaster before September 14, 2005, because of Hurricane Katrina. 2012 tax forms 1040ez The Hurricane Katrina disaster area covers the entire states of Alabama, Florida, Louisiana, and Mississippi. 2012 tax forms 1040ez Katrina Covered Disaster Area A portion of the Hurricane Katrina disaster area has been designated by the IRS as a covered disaster area. 2012 tax forms 1040ez The Katrina covered disaster area covers the following areas in four states. 2012 tax forms 1040ez Alabama. 2012 tax forms 1040ez   The counties of Baldwin, Bibb, Choctaw, Clarke, Colbert, Cullman, Greene, Hale, Jefferson, Lamar, Lauderdale, Marengo, Marion, Mobile, Monroe, Perry, Pickens, Sumter, Tuscaloosa, Washington, Wilcox, and Winston. 2012 tax forms 1040ez Florida. 2012 tax forms 1040ez   The counties of Bay, Broward, Collier, Escambia, Franklin, Gulf, Miami-Dade, Monroe, Okaloosa, Santa Rosa, and Walton. 2012 tax forms 1040ez Louisiana. 2012 tax forms 1040ez   All parishes. 2012 tax forms 1040ez Mississippi. 2012 tax forms 1040ez   All counties. 2012 tax forms 1040ez Gulf Opportunity (GO) Zone (Core Disaster Area) The GO Zone (also called the core disaster area) covers the portion of the Hurricane Katrina disaster area determined by the Federal Emergency Management Agency (FEMA) to be eligible for either individual only or both individual and public assistance from the Federal Government. 2012 tax forms 1040ez The GO Zone covers the following areas in three states. 2012 tax forms 1040ez Alabama. 2012 tax forms 1040ez   The counties of Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa, and Washington. 2012 tax forms 1040ez Louisiana. 2012 tax forms 1040ez   The parishes of Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. 2012 tax forms 1040ez Bernard, St. 2012 tax forms 1040ez Charles, St. 2012 tax forms 1040ez Helena, St. 2012 tax forms 1040ez James, St. 2012 tax forms 1040ez John the Baptist, St. 2012 tax forms 1040ez Martin, St. 2012 tax forms 1040ez Mary, St. 2012 tax forms 1040ez Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge, and West Feliciana. 2012 tax forms 1040ez Mississippi. 2012 tax forms 1040ez   The counties of Adams, Amite, Attala, Choctaw, Claiborne, Clarke, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston, and Yazoo. 2012 tax forms 1040ez Hurricane Rita Disaster Area (Rita Covered Disaster Area) The Hurricane Rita disaster area (also designated by the IRS as the Rita covered disaster area) covers the area for which the President declared a major disaster before October 6, 2005, because of Hurricane Rita. 2012 tax forms 1040ez This area covers the entire states of Louisiana and Texas. 2012 tax forms 1040ez Rita GO Zone The Rita GO Zone covers the portion of the Hurricane Rita disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. 2012 tax forms 1040ez The Rita GO Zone covers the following areas in two states. 2012 tax forms 1040ez Louisiana. 2012 tax forms 1040ez   The parishes of Acadia, Allen, Ascension, Beauregard, Calcasieu, Cameron, Evangeline, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Plaquemines, Sabine, St. 2012 tax forms 1040ez Landry, St. 2012 tax forms 1040ez Martin, St. 2012 tax forms 1040ez Mary, St. 2012 tax forms 1040ez Tammany, Terrebonne, Vermilion, Vernon, and West Baton Rouge. 2012 tax forms 1040ez Texas. 2012 tax forms 1040ez   The counties of Angelina, Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity, Tyler, and Walker. 2012 tax forms 1040ez Hurricane Wilma Disaster Area The Hurricane Wilma disaster area covers the area for which the President declared a major disaster before November 14, 2005, because of Hurricane Wilma. 2012 tax forms 1040ez The Hurricane Wilma disaster area covers the entire state of Florida. 2012 tax forms 1040ez Wilma Covered Disaster Area A portion of the Hurricane Wilma disaster area has been designated by the IRS as a covered disaster area. 2012 tax forms 1040ez The Wilma covered disaster area covers the following counties. 2012 tax forms 1040ez Florida. 2012 tax forms 1040ez   Brevard, Broward, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Osceola, Palm Beach, Polk, St. 2012 tax forms 1040ez Lucie, and Sarasota. 2012 tax forms 1040ez Wilma GO Zone The Wilma GO Zone covers the portion of the Hurricane Wilma disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. 2012 tax forms 1040ez The Wilma GO Zone covers the following counties. 2012 tax forms 1040ez Florida. 2012 tax forms 1040ez   Brevard, Broward, Collier, Glades, Hendry, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, and St. 2012 tax forms 1040ez Lucie. 2012 tax forms 1040ez Extended Tax Deadlines The IRS has extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Katrina, Rita, or Wilma, until February 28, 2006. 2012 tax forms 1040ez The extension applies to deadlines (either an original or extended due date) that occur during the following periods. 2012 tax forms 1040ez After August 28, 2005 (August 23, 2005, for Florida affected taxpayers), and before February 28, 2006, for taxpayers affected by Hurricane Katrina. 2012 tax forms 1040ez After September 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Rita. 2012 tax forms 1040ez After October 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Wilma. 2012 tax forms 1040ez Affected taxpayer. 2012 tax forms 1040ez   The following taxpayers are eligible for the extension. 2012 tax forms 1040ez Any individual whose main home is located in a covered disaster area. 2012 tax forms 1040ez Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. 2012 tax forms 1040ez Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained or whose tax professional's office is in a covered disaster area. 2012 tax forms 1040ez The main home or principal place of business does not have to be located in the covered area. 2012 tax forms 1040ez Any individual visiting a county or parish in the Hurricane Katrina or Hurricane Rita covered disaster area that was injured or killed (and the estate of an individual killed) as a result of the hurricane or its aftermath. 2012 tax forms 1040ez Any estate or trust whose tax records needed to meet a filing or payment deadline are maintained in a covered disaster area. 2012 tax forms 1040ez Generally, any individual who is a worker assisting in the relief activities in a covered disaster area. 2012 tax forms 1040ez However, a relief worker assisting in the Wilma covered disaster area is not an affected taxpayer unless the worker is affiliated with a recognized government or philanthropic organization assisting in the relief activities. 2012 tax forms 1040ez The spouse of an affected taxpayer, solely with regard to a joint income tax return with that taxpayer. 2012 tax forms 1040ez   To ensure correct processing, affected taxpayers should write the assigned disaster designation (for example, “Hurricane Katrina”) in red ink at the top of any forms or documents filed with the IRS. 2012 tax forms 1040ez Affected taxpayers can also identify themselves to the IRS or ask hurricane-related questions by calling the special IRS disaster hotline at 1-866-562-5227. 2012 tax forms 1040ez Acts extended. 2012 tax forms 1040ez   Deadlines for performing the following acts are extended. 2012 tax forms 1040ez Filing any return of income, estate, gift, generation-skipping transfer, excise, or employment tax. 2012 tax forms 1040ez Paying any income, estate, gift, generation-skipping transfer, excise, or employment tax. 2012 tax forms 1040ez This includes making estimated tax payments. 2012 tax forms 1040ez Making certain contributions, distributions, recharacterizing contributions, or making a rollover to or from a qualified retirement plan. 2012 tax forms 1040ez Filing certain petitions with the Tax Court. 2012 tax forms 1040ez Filing a claim for credit or refund of any tax. 2012 tax forms 1040ez Bringing suit upon a claim for credit or refund. 2012 tax forms 1040ez Certain other acts described in Revenue Procedure 2005-27. 2012 tax forms 1040ez You can find Revenue Procedure 2005-27 on page 1050 of Internal Revenue Bulletin 2005-20 at www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov/pub/irs-irbs/irb05-20. 2012 tax forms 1040ez pdf. 2012 tax forms 1040ez Forgiveness of interest and penalties. 2012 tax forms 1040ez   The IRS may forgive the interest and penalties on any underpaid income, estate, gift, employment, or excise tax for the length of any extension. 2012 tax forms 1040ez Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions Individuals. 2012 tax forms 1040ez   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% adjusted gross income (AGI) limit. 2012 tax forms 1040ez A qualified contribution is a charitable contribution paid in cash or by check after August 27, 2005, and before January 1, 2006, to a 50% limit organization (other than certain private foundations described in section 509(a)(3)) if you make an election to have the 50% limit not apply to these contributions. 2012 tax forms 1040ez   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. 2012 tax forms 1040ez You can carry over any contributions you are not able to deduct for 2005 because of this limit. 2012 tax forms 1040ez In 2006, treat the carryover of your unused qualified contributions as a carryover of contributions subject to the 50% limit. 2012 tax forms 1040ez Exception. 2012 tax forms 1040ez   Qualified contributions do not include a contribution to a segregated fund or account for which you (or any person you appoint or designate) have or expect to have advisory privileges with respect to distributions or investments based on your contribution. 2012 tax forms 1040ez Corporations. 2012 tax forms 1040ez   A corporation may elect to deduct qualified cash contributions without regard to the 10% taxable income limit if the contributions were made after August 27, 2005, and before January 1, 2006, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3)), for Hurricane Katrina, Rita, or Wilma relief efforts. 2012 tax forms 1040ez The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. 2012 tax forms 1040ez Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% limit. 2012 tax forms 1040ez Partners and shareholders. 2012 tax forms 1040ez   Each partner in a partnership and each shareholder in an S corporation makes a separate election to have the appropriate limit not apply. 2012 tax forms 1040ez More information. 2012 tax forms 1040ez   For more information, see Publication 526 or Publication 542, Corporations. 2012 tax forms 1040ez Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. 2012 tax forms 1040ez Standard Mileage Rate for Charitable Use of Vehicles The following are special standard mileage rates in effect in 2005 and 2006 for the cost of operating your automobile for providing charitable services solely related to Hurricane Katrina. 2012 tax forms 1040ez 29 cents per mile for the period August 25 through August 31, 2005. 2012 tax forms 1040ez 34 cents per mile for the period September 1 through December 31, 2005. 2012 tax forms 1040ez 32 cents per mile for the period January 1 through December 31, 2006. 2012 tax forms 1040ez Mileage Reimbursements to Charitable Volunteers You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger automobile for the benefit of a qualified charitable organization in providing relief related to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. 2012 tax forms 1040ez You cannot claim a deduction or credit for amounts you receive as a mileage reimbursement. 2012 tax forms 1040ez You must keep records of miles driven, time, place (or use), and purpose of the mileage. 2012 tax forms 1040ez The amount you can exclude from income cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. 2012 tax forms 1040ez 40. 2012 tax forms 1040ez 5 cents per mile for the period August 25 through August 31, 2005. 2012 tax forms 1040ez 48. 2012 tax forms 1040ez 5 cents per mile for the period September 1 through December 31, 2005. 2012 tax forms 1040ez 44. 2012 tax forms 1040ez 5 cents per mile for the period January 1 through December 31, 2006. 2012 tax forms 1040ez Charitable Deduction for Contributions of Food Inventory Any taxpayer engaged in a trade or business is eligible to claim a deduction for a contribution of “apparently wholesome food” inventory to a qualified charitable organization described in section 501(c)(3) (except for private nonoperating foundations) after August 27, 2005, and before January 1, 2006. 2012 tax forms 1040ez “Apparently wholesome food” is food that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions. 2012 tax forms 1040ez The deduction is equal to the lesser of: The basis of the donated food plus one-half of the gain that would have been realized if the donated food had been sold at fair market value on the date of the donation, or Two times the basis of the donated food. 2012 tax forms 1040ez The taxpayer must receive written certification from the donee stating: The donated food is related to the purpose or function of the donee's basis for exemption under section 501(c)(3) and is to be used solely for the care of the ill, the needy, or infants; and The food was not given in exchange for money, other property, or services. 2012 tax forms 1040ez For a taxpayer other than a C corporation, the deduction is limited to 10% of the taxpayer's total net income from all trades or businesses from which the food contributions were made (figured without regard to the deduction for charitable contributions). 2012 tax forms 1040ez For example, if a taxpayer is a sole proprietor, a shareholder in an S corporation, and a partner in a partnership, and each made a contribution of apparently wholesome food inventory, the taxpayer's deduction is limited to 10% of the taxpayer's total net income from the sole proprietorship, S corporation, and partnership (figured without regard to the deduction for charitable contributions). 2012 tax forms 1040ez Charitable Deduction for Contributions of Book Inventories to Public Schools A corporation (other than an S corporation) may be allowed a charitable deduction for a qualified book contribution made after August 27, 2005, and before January 1, 2006, to a public school that: Provides elementary or secondary education (kindergarten through grade 12), and Normally maintains a regular faculty and curriculum and has a regular enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. 2012 tax forms 1040ez . 2012 tax forms 1040ez The deduction is equal to the lesser of: The basis of the donated books plus one-half of the gain that would have been realized if the donated books had been sold at fair market value on the date of the donation, or Two times the basis of the donated books. 2012 tax forms 1040ez The corporation must receive written certification from the school stating that the donated books are suitable for the organization's educational programs and will be used for such programs. 2012 tax forms 1040ez Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that were caused by Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez For more information, see Publication 547. 2012 tax forms 1040ez Limits on personal casualty or theft losses caused by Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez   The following losses to personal use property are not subject to the $100 or 10% of adjusted gross income limits. 2012 tax forms 1040ez Losses that arose in the Hurricane Katrina disaster area after August 24, 2005, and that were caused by Hurricane Katrina. 2012 tax forms 1040ez Losses that arose in the Hurricane Rita disaster area after September 22, 2005, and that were caused by Hurricane Rita. 2012 tax forms 1040ez Losses that arose in the Hurricane Wilma disaster area after October 22, 2005, and that were caused by Hurricane Wilma. 2012 tax forms 1040ez Qualifying losses include losses from flooding or other casualty, and from theft, that arose in the hurricane disaster area and that were caused by the hurricane. 2012 tax forms 1040ez Special instructions for individuals who elect to claim a Hurricane Katrina, Rita, or Wilma casualty or theft loss for 2004. 2012 tax forms 1040ez   Casualty and theft losses are generally deductible only in the year the casualty occurred or theft was discovered. 2012 tax forms 1040ez However, Hurricane Katrina, Rita, and Wilma are Presidentially declared disasters. 2012 tax forms 1040ez Therefore, you can elect to deduct losses from these hurricanes on your tax return for the previous year. 2012 tax forms 1040ez If you make this election, use the following additional instructions to complete your forms. 2012 tax forms 1040ez   Individuals filing or amending their 2004 tax return whose only casualty or theft losses to personal use property claimed on that return were caused by Hurricane Katrina, Rita, or Wilma should write “Hurricane Katrina,” “Hurricane Rita,” or “Hurricane Wilma” at the top of Form 1040 or 1040X. 2012 tax forms 1040ez They must also complete and attach the 2004 Form 4684 and write “Hurricane Katrina,”“Hurricane Rita,” or “Hurricane Wilma” on the dotted line next to line 11 and enter -0- on lines 11 and 17. 2012 tax forms 1040ez   Individuals filing or amending their 2004 tax return who also have casualty or theft losses to personal use property not related to Hurricane Katrina, Rita, or Wilma should disregard the caution directing taxpayers to use only one Form 4684, located above line 13, and complete lines 13 through 18 on two Forms 4684. 2012 tax forms 1040ez The Form 1040 or 1040X and the first Form 4684 should be prepared as explained above for Hurricane Katrina, Rita, or Wilma losses only. 2012 tax forms 1040ez The second Form 4684 should be prepared in the normal manner for all gains and non-Hurricane Katrina, Rita or Wilma losses. 2012 tax forms 1040ez If both Forms 4684 have a loss on line 18, they should carry the combined losses from that line to Schedule A (Form 1040), line 19. 2012 tax forms 1040ez If there is a gain on line 15 of the second Form 4684, disregard the instruction to enter it on Schedule D (Form 1040), and instead enter on Schedule A (Form 1040), line 19, the excess of the loss from the first Form 4684 over the gain on line 15 of the second Form 4684. 2012 tax forms 1040ez , Time limit for making election. 2012 tax forms 1040ez   You must make this election to claim your casualty or theft loss in 2004 by the later of the following dates. 2012 tax forms 1040ez The due date (without extensions) for filing your 2005 income tax return. 2012 tax forms 1040ez The due date (with extensions) for filing your 2004 income tax return. 2012 tax forms 1040ez Example. 2012 tax forms 1040ez If you are a calendar year individual taxpayer, you have until April 17, 2006, to amend your 2004 tax return to claim a casualty or theft loss that occurred during 2005. 2012 tax forms 1040ez Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. 2012 tax forms 1040ez Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). 2012 tax forms 1040ez However, for property that was involuntarily converted after August 24, 2005, as a result of Hurricane Katrina, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. 2012 tax forms 1040ez For more information, see the Instructions for Form 4684. 2012 tax forms 1040ez Net Operating Losses Qualified GO Zone loss. 2012 tax forms 1040ez   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. 2012 tax forms 1040ez However, the portion of an NOL that is a qualified GO Zone loss can be carried back to the 5 tax years before the NOL year. 2012 tax forms 1040ez In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. 2012 tax forms 1040ez   A qualified GO Zone loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified GO Zone casualty loss (as defined below), Moving expenses paid or incurred after August 27, 2005, and before January 1, 2008, for the employment of an individual whose main home was in the GO Zone before August 28, 2005, who was unable to remain in that home because of Hurricane Katrina, and whose main job location (after the move) is in the GO Zone, Temporary housing expenses paid or incurred after August 27, 2005, and before January 1, 2008, to house employees of the taxpayer whose main job location is in the GO Zone, Depreciation or amortization allowable for any qualified GO Zone property (even if you elected not to claim the special GO Zone depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after August 27, 2005, and before January 1, 2008, for any damage from Hurricane Katrina to property located in the GO Zone. 2012 tax forms 1040ez Qualified GO Zone casualty loss. 2012 tax forms 1040ez   A qualified GO Zone casualty loss is any deductible section 1231 loss of property located in the GO Zone if the loss was caused by Hurricane Katrina. 2012 tax forms 1040ez For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by Hurricane Katrina of property located in the GO Zone. 2012 tax forms 1040ez Any such loss taken into account in figuring your qualified GO Zone loss is not eligible for the election to be treated as having occurred in the previous tax year. 2012 tax forms 1040ez 5-year NOL carryback of certain timber losses. 2012 tax forms 1040ez   Generally, you can carry the portion of an NOL due to income and deductions attributable to a farming business back to the 5 tax years before the NOL year. 2012 tax forms 1040ez You can treat income and deductions attributable to qualified timber property as attributable to a farming business if any portion of the property is located in the GO Zone, Rita GO Zone, or Wilma GO Zone, and the income and deductions are allocable to the part of your tax year which is after the applicable date below. 2012 tax forms 1040ez August 27, 2005, if any portion of the property is located in the GO Zone. 2012 tax forms 1040ez September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). 2012 tax forms 1040ez October 22, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the RITA GO Zone). 2012 tax forms 1040ez   These rules will not apply after 2006. 2012 tax forms 1040ez   However, these rules apply only to a timber producer who: Held qualified timber property (defined in Publication 535, Business Expenses) on the applicable date below: August 28, 2005, if any portion of the property is located in the GO Zone, September 23, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone), or October 23, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the Rita GO Zone); Is not a corporation with stock publicly traded on an established securities market; Is not a real estate investment trust; and Did not hold more than 500 acres of qualified timber property on the applicable date above. 2012 tax forms 1040ez More information. 2012 tax forms 1040ez   For more information on NOLs, see Publication 536 or Publication 542, Corporations. 2012 tax forms 1040ez IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez Definitions Qualified hurricane distribution. 2012 tax forms 1040ez   A qualified hurricane distribution is any distribution you received from an eligible retirement plan if all of the following apply. 2012 tax forms 1040ez The distribution was made: After August 24, 2005, and before January 1, 2007, for Hurricane Katrina; After September 22, 2005, and before January 1, 2007, for Hurricane Rita; or After October 22, 2005, and before January 1, 2007, for Hurricane Wilma. 2012 tax forms 1040ez Your main home was located in a hurricane disaster area listed below on the date shown for that area. 2012 tax forms 1040ez August 28, 2005, for the Hurricane Katrina disaster area. 2012 tax forms 1040ez September 23, 2005, for the Hurricane Rita disaster area. 2012 tax forms 1040ez October 23, 2005, for the Hurricane Wilma disaster area. 2012 tax forms 1040ez You sustained an economic loss because of Hurricane Katrina, Rita, or Wilma and your main home was in that hurricane disaster area on the date shown in (2) above for that hurricane. 2012 tax forms 1040ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 2012 tax forms 1040ez   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified hurricane distribution, regardless of whether the distribution was made on account of Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez Qualified hurricane distributions are permitted without regard to your need or the actual amount of your economic loss. 2012 tax forms 1040ez   The total of your qualified hurricane distributions from all plans is limited to $100,000. 2012 tax forms 1040ez If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. 2012 tax forms 1040ez   A reduction or offset (after August 24, 2005, for Katrina; after September 22, 2005, for Rita; or after October 22, 2005, for Wilma) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified hurricane distribution. 2012 tax forms 1040ez Eligible retirement plan. 2012 tax forms 1040ez   An eligible retirement plan can be any of the following. 2012 tax forms 1040ez A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). 2012 tax forms 1040ez A qualified annuity plan. 2012 tax forms 1040ez A tax-sheltered annuity contract. 2012 tax forms 1040ez A governmental section 457 deferred compensation plan. 2012 tax forms 1040ez A traditional, SEP, SIMPLE, or Roth IRA. 2012 tax forms 1040ez Main home. 2012 tax forms 1040ez   Generally, your main home is the home where you live most of the time. 2012 tax forms 1040ez A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. 2012 tax forms 1040ez Taxation of Qualified Hurricane Distributions Qualified hurricane distributions are included in income in equal amounts over three years. 2012 tax forms 1040ez However, if you elect, you can include the entire distribution in your income in the year it was received. 2012 tax forms 1040ez Qualified hurricane distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). 2012 tax forms 1040ez However, any distributions you receive in excess of the $100,000 qualified hurricane distribution limit may be subject to the additional tax on early distributions. 2012 tax forms 1040ez For more information, see Form 8915. 2012 tax forms 1040ez Repayment of Qualified Hurricane Distributions If you choose, you generally can repay any portion of a qualified hurricane distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. 2012 tax forms 1040ez Also, you can repay a qualified hurricane distribution made on account of a hardship from a retirement plan. 2012 tax forms 1040ez However, see Exceptions below for qualified hurricane distributions you cannot repay. 2012 tax forms 1040ez You have three years from the day after the date you received the distribution to make a repayment. 2012 tax forms 1040ez Amounts that are repaid are treated as a qualified rollover and are not included in income. 2012 tax forms 1040ez Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. 2012 tax forms 1040ez See Form 8915 for more information on how to report repayments. 2012 tax forms 1040ez Exceptions. 2012 tax forms 1040ez   You cannot repay the following types of distributions. 2012 tax forms 1040ez Qualified hurricane distributions received as a beneficiary (other than a surviving spouse). 2012 tax forms 1040ez Required minimum distributions. 2012 tax forms 1040ez Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. 2012 tax forms 1040ez Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area, you can repay that distribution before March 1, 2006, to an eligible retirement plan after August 24, 2005 (Katrina); after September 22, 2005 (Rita); or after October 22, 2005 (Wilma). 2012 tax forms 1040ez For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. 2012 tax forms 1040ez To be a qualified distribution, the distribution must meet all of the following requirements. 2012 tax forms 1040ez The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. 2012 tax forms 1040ez The distribution was received in 2005 after February 28 and before: August 29 for Hurricane Katrina; September 24 for Hurricane Rita; or October 24 for Hurricane Wilma. 2012 tax forms 1040ez The distribution was to be used to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area that was not purchased or constructed because of Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez Amounts that are repaid before March 1, 2006, are treated as a qualified rollover and are not included in income. 2012 tax forms 1040ez Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. 2012 tax forms 1040ez A qualified distribution not repaid before March 1, 2006, may be taxable for 2005 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. 2012 tax forms 1040ez You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before March 1, 2006. 2012 tax forms 1040ez Loans From Qualified Plans The following benefits are available to qualified individuals. 2012 tax forms 1040ez Increases to the limits for distributions treated as loans from employer plans. 2012 tax forms 1040ez A 1-year suspension for payments due on plan loans. 2012 tax forms 1040ez Qualified individual. 2012 tax forms 1040ez   You are a qualified individual if any of the following apply. 2012 tax forms 1040ez Your main home on August 28, 2005, was located in the Hurricane Katrina disaster area and you had an economic loss because of Hurricane Katrina. 2012 tax forms 1040ez Your main home on September 23, 2005, was located in the Hurricane Rita disaster area and you had an economic loss because of Hurricane Rita. 2012 tax forms 1040ez Your main home on October 23, 2005, was located in the Hurricane Wilma disaster area and you had an economic loss because of Hurricane Wilma. 2012 tax forms 1040ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 2012 tax forms 1040ez Limits on plan loans. 2012 tax forms 1040ez   The $50,000 limit for distributions treated as plan loans is increased to $100,000. 2012 tax forms 1040ez In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. 2012 tax forms 1040ez The higher limits apply only to loans received during the following period. 2012 tax forms 1040ez If your main home was located in the Hurricane Katrina disaster area, the period began on September 24, 2005, and ends on December 31, 2006. 2012 tax forms 1040ez If your main home was located in the Hurricane Rita or Wilma disaster area, the period began on December 21, 2005, and ends on December 31, 2006. 2012 tax forms 1040ez If you are a qualified individual based on Hurricane Katrina and another hurricane, use the period based on Hurricane Katrina. 2012 tax forms 1040ez One-year suspension of loan payments. 2012 tax forms 1040ez   Payments on plan loans due before 2007 may be suspended for 1 year by the plan administrator. 2012 tax forms 1040ez To qualify for the suspension, the due date for any loan payment must occur during the period beginning on: August 28, 2005, if your main home was located in the Hurricane Katrina disaster area. 2012 tax forms 1040ez September 23, 2005, if your main home was located in the Hurricane Rita disaster area. 2012 tax forms 1040ez October 23, 2005, if your main home was located in the Hurricane Wilma disaster area. 2012 tax forms 1040ez If you are a qualified individual based on more than one hurricane, use the period with the earliest beginning date. 2012 tax forms 1040ez Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit You can elect to use your 2004 earned income to figure your earned income credit (EIC) and additional child tax credit for 2005 if: Your 2005 earned income is less than your 2004 earned income, and At least one of the following statements is true. 2012 tax forms 1040ez Your main home on August 25, 2005, was in the Gulf Opportunity (GO) Zone. 2012 tax forms 1040ez Your main home on August 25, 2005, was in the Hurricane Katrina disaster area and you were displaced from that home because of Hurricane Katrina. 2012 tax forms 1040ez Your main home on September 23, 2005, was in the Rita GO Zone. 2012 tax forms 1040ez Your main home on September 23, 2005, was in the Hurricane Rita disaster area and you were displaced from that home because of Hurricane Rita. 2012 tax forms 1040ez Your main home on October 23, 2005, was in the Wilma GO Zone. 2012 tax forms 1040ez Your main home on October 23, 2005, was in the Hurricane Wilma disaster area and you were displaced from that home because of Hurricane Wilma. 2012 tax forms 1040ez Earned income. 2012 tax forms 1040ez    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. 2012 tax forms 1040ez If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. 2012 tax forms 1040ez Joint returns. 2012 tax forms 1040ez   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. 2012 tax forms 1040ez If you make the election, your 2004 earned income is the sum of your 2004 earned income and your spouse's 2004 earned income. 2012 tax forms 1040ez Making the election. 2012 tax forms 1040ez   If you make the election to use your 2004 earned income, the election applies for figuring both the EIC and the additional child tax credit. 2012 tax forms 1040ez However, you can make the election for the additional child tax credit even if you do not take the EIC. 2012 tax forms 1040ez   Electing to use your 2004 earned income may increase or decrease your EIC. 2012 tax forms 1040ez Take the following steps to decide whether to make the election. 2012 tax forms 1040ez Figure your 2005 EIC using your 2004 earned income. 2012 tax forms 1040ez Figure your 2005 additional child tax credit using your 2004 earned income for EIC purposes. 2012 tax forms 1040ez Add the results of (1) and (2). 2012 tax forms 1040ez Figure your 2005 EIC using your 2005 earned income. 2012 tax forms 1040ez Figure your 2005 additional child tax credit using your 2005 earned income for additional child tax credit purposes. 2012 tax forms 1040ez Add the results of (4) and (5). 2012 tax forms 1040ez Compare the results of (3) and (6). 2012 tax forms 1040ez If (3) is larger than (6), it is to your benefit to make the election. 2012 tax forms 1040ez If (3) is equal to or smaller than (6), making the election will not help you. 2012 tax forms 1040ez   If you elect to use your 2004 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2004 earned income on the dotted line next to line 66a of Form 1040, on the line next to line 41a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. 2012 tax forms 1040ez   If you elect to use your 2004 earned income and you are claiming the additional child tax credit, enter your 2004 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. 2012 tax forms 1040ez   Because Form 8812 was released before the GO Zone legislation was enacted, the instructions refer only to individuals whose main home was in the Hurricane Katrina disaster area. 2012 tax forms 1040ez When completing Form 8812, line 4a, use the above rules to determine your eligibility to make the election (instead of the Form 8812 instructions). 2012 tax forms 1040ez Getting your 2004 tax return information. 2012 tax forms 1040ez   If you do not have your 2004 tax records, you can get the amount of earned income used to figure your 2004 EIC by calling 1-866-562-5227. 2012 tax forms 1040ez You can also get this information by visiting the IRS website at www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov. 2012 tax forms 1040ez   If you prefer to figure your 2004 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. 2012 tax forms 1040ez See Request for Copy or Transcript of Tax Return on page 16. 2012 tax forms 1040ez Additional Exemption for Housing Individuals Displaced by Hurricane Katrina You may be able to claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by Hurricane Katrina. 2012 tax forms 1040ez The additional exemption amount is claimed on new Form 8914. 2012 tax forms 1040ez The additional exemption amount is allowable once per taxpayer for a specific individual in 2005 or 2006, but not in both years. 2012 tax forms 1040ez The maximum additional exemption amount you can claim for all displaced individuals is $2,000 ($1,000 if married filing separately). 2012 tax forms 1040ez The additional exemption amount you claim for displaced individuals in 2005 will reduce the $2,000 maximum for 2006. 2012 tax forms 1040ez If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. 2012 tax forms 1040ez If married filing separately, only one spouse may claim the additional exemption amount for a specific displaced individual. 2012 tax forms 1040ez In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). 2012 tax forms 1040ez To qualify as a displaced individual, the individual: Must have had his or her main home in the Hurricane Katrina disaster area on August 28, 2005, and he or she must have been displaced from that home. 2012 tax forms 1040ez If the individual's main home was located outside the core disaster area, that home must have been damaged by Hurricane Katrina or the individual must have been evacuated from that home because of Hurricane Katrina, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. 2012 tax forms 1040ez You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. 2012 tax forms 1040ez You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. 2012 tax forms 1040ez Food, clothing, or personal items consumed or used by the displaced individual. 2012 tax forms 1040ez Reimbursement for the cost of any long distance telephone calls made by the displaced individual. 2012 tax forms 1040ez Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. 2012 tax forms 1040ez However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. 2012 tax forms 1040ez Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. 2012 tax forms 1040ez For more information, see Form 8914. 2012 tax forms 1040ez Education Credits The education credits have been expanded for students attending an eligible educational institution located in the Gulf Opportunity Zone (GOZ students) for any tax year beginning in 2005 or 2006. 2012 tax forms 1040ez The Hope credit for a GOZ student is increased to 100% of the first $2,000 in qualified education expenses and 50% of the next $2,000 of qualified education expenses for a maximum credit of $3,000 per student. 2012 tax forms 1040ez The lifetime learning credit rate for a GOZ student is increased from 20% to 40%. 2012 tax forms 1040ez The definition of qualified education expenses for a GOZ student also has been expanded. 2012 tax forms 1040ez In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a GOZ student include the following. 2012 tax forms 1040ez Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. 2012 tax forms 1040ez For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. 2012 tax forms 1040ez For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. 2012 tax forms 1040ez The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. 2012 tax forms 1040ez The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. 2012 tax forms 1040ez You will need to contact the eligible educational institution for qualified room and board costs. 2012 tax forms 1040ez For more information, see Form 8863. 2012 tax forms 1040ez Recapture of Federal Mortgage Subsidy Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. 2012 tax forms 1040ez However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. 2012 tax forms 1040ez This amount is increased to $150,000 if the loan was provided before 2011 and was used to: Repair damage caused by Hurricane Katrina to a residence in the Hurricane Katrina disaster area, or Alter, repair, or improve an existing owner-occupied residence in the GO Zone, Rita GO Zone, or Wilma GO Zone. 2012 tax forms 1040ez Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Generally, discharges of nonbusiness debts (such as mortgages) made after August 24, 2005, and before January 1, 2007, are excluded from income for individuals whose main home was in the Hurricane Katrina disaster area on August 25, 2005. 2012 tax forms 1040ez If the individual's main home was located outside the core disaster area, the individual also must have had an economic loss because of Hurricane Katrina. 2012 tax forms 1040ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 2012 tax forms 1040ez This relief does not apply to any debt secured by real property located outside the Hurricane Katrina disaster area. 2012 tax forms 1040ez You may also have to reduce certain tax attributes by the amount excluded. 2012 tax forms 1040ez For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). 2012 tax forms 1040ez Tax Relief for Temporary Relocation Under the Gulf Opportunity Zone Act of 2005, the IRS may adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2005 or 2006 as a result of a temporary relocation caused by Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. 2012 tax forms 1040ez The IRS has exercised this authority as follows. 2012 tax forms 1040ez In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. 2012 tax forms 1040ez You can treat as a student an individual who enrolled in school before August 25, 2005, and who is unable to attend classes because of Hurricane Katrina, for each month of the enrollment period that individual is prevented by Hurricane Katrina from attending school as planned. 2012 tax forms 1040ez You can treat as a student an individual who enrolled in school before September 23, 2005, and who is unable to attend classes because of Hurricane Rita, for each month of the enrollment period that individual is prevented by Hurricane Rita from attending school as planned. 2012 tax forms 1040ez You can treat as a student an individual who enrolled in school before October 23, 2005, and who is unable to attend classes because of Hurricane Wilma, for each month of the enrollment period that individual is prevented by Hurricane Wilma from attending school as planned. 2012 tax forms 1040ez Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified Gulf Opportunity (GO) Zone property (as defined below) you place in service after August 27, 2005. 2012 tax forms 1040ez The allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). 2012 tax forms 1040ez The special allowance applies only for the first year the property is placed in service. 2012 tax forms 1040ez The allowance is deductible for both the regular tax and the alternative minimum tax (AMT). 2012 tax forms 1040ez There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 2012 tax forms 1040ez You can elect not to deduct the special GO Zone depreciation allowance for qualified property. 2012 tax forms 1040ez If you make this election for any property, it applies to all property in the same class placed in service during the year. 2012 tax forms 1040ez Qualified GO Zone property. 2012 tax forms 1040ez   Property that qualifies for the special GO Zone depreciation allowance includes the following. 2012 tax forms 1040ez Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. 2012 tax forms 1040ez Water utility property. 2012 tax forms 1040ez Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. 2012 tax forms 1040ez (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2012 tax forms 1040ez ) Qualified leasehold improvement property. 2012 tax forms 1040ez Nonresidential real property and residential rental property. 2012 tax forms 1040ez   For more information on this property, see Publication 946. 2012 tax forms 1040ez Other tests to be met. 2012 tax forms 1040ez   To be qualified GO Zone property, the property must also meet all of the following tests. 2012 tax forms 1040ez You must have acquired the property, by purchase, after August 27, 2005, but only if no binding written contract for the acquisition was in effect before August 28, 2005. 2012 tax forms 1040ez The property must be placed in service before 2008 (2009 in the case of nonresidential real property and residential rental property). 2012 tax forms 1040ez Substantially all of the use of the property must be in the GO Zone and in the active conduct of your trade or business in the GO Zone. 2012 tax forms 1040ez The original use of the property in the GO Zone must begin with you after August 27, 2005. 2012 tax forms 1040ez Used property can be qualified GO Zone property if it has not previously been used within the GO Zone. 2012 tax forms 1040ez Also, additional capital expenditures you incurred after August 27, 2005, to recondition or rebuild your property meet the original use test if the original use of the property in the GO Zone began with you. 2012 tax forms 1040ez Excepted property. 2012 tax forms 1040ez   Qualified GO Zone property does not include any of the following. 2012 tax forms 1040ez Property required to be depreciated using the Alternative Depreciation System (ADS). 2012 tax forms 1040ez Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. 2012 tax forms 1040ez Property for which you are claiming a commercial revitalization deduction. 2012 tax forms 1040ez Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. 2012 tax forms 1040ez Any gambling or animal racing property (as defined below). 2012 tax forms 1040ez Property in the same class as that for which you elected not to claim the special GO Zone depreciation allowance. 2012 tax forms 1040ez   Gambling or animal racing property is: Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and The portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. 2012 tax forms 1040ez Recapture of special allowance. 2012 tax forms 1040ez   If, in any year after the year you claim the special allowance, the property ceases to be qualified GO Zone property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. 2012 tax forms 1040ez Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 Gulf Opportunity (GO) Zone property (as defined later) placed in service in the GO Zone. 2012 tax forms 1040ez Increased dollar limit. 2012 tax forms 1040ez   The limit on the section 179 deduction ($105,000 for 2005, $108,000 for 2006) for qualified section 179 GO Zone property acquired after August 27, 2005, is increased by the smaller of: $100,000, or The cost of qualified section 179 GO Zone property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). 2012 tax forms 1040ez   The amount for which you can make the election is reduced if the cost of all qualified section 179 GO Zone property you placed in service during the year exceeds $420,000 for 2005 ($430,000 for 2006) increased by the smaller of: $600,000, or The cost of qualified section 179 GO Zone property placed in service during the year. 2012 tax forms 1040ez Qualified section 179 GO Zone property. 2012 tax forms 1040ez   Qualified section 179 GO Zone property is section 179 property that is qualified GO Zone property (explained earlier under Special Depreciation Allowance). 2012 tax forms 1040ez Section 179 property does not include nonresidential real property or residential rental property. 2012 tax forms 1040ez For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. 2012 tax forms 1040ez Work Opportunity Credit For the work opportunity credit, the definition of “targeted group employee” has been expanded to include a Hurricane Katrina employee. 2012 tax forms 1040ez Hurricane Katrina employee. 2012 tax forms 1040ez   A Hurricane Katrina employee is: A person who, on August 28, 2005, had a main home in the core disaster area and, within a two-year period beginning on that date, is hired to perform services principally in the core disaster area; or A person who, on August 28, 2005, had a main home in the core disaster area, was displaced from that main home as a result of Hurricane Katrina, and was hired during the period beginning on August 28, 2005, and ending on December 31, 2005. 2012 tax forms 1040ez Qualified wages. 2012 tax forms 1040ez   Generally, qualified wages do not include wages you paid to a targeted group employee who worked for you previously. 2012 tax forms 1040ez However, wages will qualify if: You paid them to an employee who is a Hurricane Katrina employee, The employee was not in your employment on August 28, 2005, and This is your first hire of the employee as a Hurricane Katrina employee after August 28, 2005. 2012 tax forms 1040ez   For more information, see Form 5884. 2012 tax forms 1040ez Certification requirements. 2012 tax forms 1040ez   An employee must provide to the employer reasonable evidence that he or she is a Hurricane Katrina employee. 2012 tax forms 1040ez An employer may accept a completed Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, as such evidence. 2012 tax forms 1040ez The certification requirements described in Form 8850 do not apply to a Hurricane Katrina employee. 2012 tax forms 1040ez Do not send any Forms 8850 that have only box 1 checked to the state employment security agency. 2012 tax forms 1040ez Instead, the employer should keep these Forms 8850 with the employer's other records. 2012 tax forms 1040ez For more information, see Form 8850 and its instructions. 2012 tax forms 1040ez Employee Retention Credit An eligible employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone, the Rita GO Zone, or the Wilma GO Zone can claim the employee retention credit. 2012 tax forms 1040ez The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). 2012 tax forms 1040ez Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). 2012 tax forms 1040ez Use Form 5884-A to claim the credit. 2012 tax forms 1040ez See the following rules and definitions for each hurricane. 2012 tax forms 1040ez Employers affected by Hurricane Katrina. 2012 tax forms 1040ez   The following definitions apply to employers affected by Hurricane Katrina. 2012 tax forms 1040ez Eligible employer. 2012 tax forms 1040ez   For this purpose, an eligible employer is any employer who conducted an active trade or business on August 28, 2005, in the GO Zone and whose trade or business was inoperable on any day after August 28, 2005, and before January 1, 2006, because of damage caused by Hurricane Katrina. 2012 tax forms 1040ez Eligible employee. 2012 tax forms 1040ez   For this purpose, an eligible employee is an employee whose principal place of employment on August 28, 2005, with such eligible employer was in the GO Zone. 2012 tax forms 1040ez An employee is not an eligible employee for purposes of Hurricane Katrina if the employee is treated as an eligible employee for the work opportunity credit. 2012 tax forms 1040ez Employers affected by Hurricane Rita. 2012 tax forms 1040ez   The following definitions apply to employers affected by Hurricane Rita. 2012 tax forms 1040ez Eligible employer. 2012 tax forms 1040ez   For this purpose, an eligible employer is any employer who conducted an active trade or business on September 23, 2005, in the Rita GO Zone and whose trade or business was inoperable on any day after September 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Rita. 2012 tax forms 1040ez Eligible employee. 2012 tax forms 1040ez   For this purpose, an eligible employee is an employee whose principal place of employment on September 23, 2005, with such eligible employer was in the Rita GO Zone. 2012 tax forms 1040ez An employee is not an eligible employee for purposes of Hurricane Rita if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina employee retention credit. 2012 tax forms 1040ez Employers affected by Hurricane Wilma. 2012 tax forms 1040ez   The following definitions apply to employers affected by Hurricane Wilma. 2012 tax forms 1040ez Eligible employer. 2012 tax forms 1040ez   For this purpose, an eligible employer is any employer who conducted an active trade or business on October 23, 2005, in the Wilma GO Zone and whose trade or business was inoperable on any day after October 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Wilma. 2012 tax forms 1040ez Eligible employee. 2012 tax forms 1040ez   For this purpose, an eligible employee is an employee whose principal place of employment on October 23, 2005, with such eligible employer was in the Wilma GO Zone. 2012 tax forms 1040ez An employee is not an eligible employee for purposes of Hurricane Wilma if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina or Rita employee retention credit. 2012 tax forms 1040ez Qualified wages. 2012 tax forms 1040ez   Qualified wages are wages you paid or incurred before January 1, 2006, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable hurricane, and ending on the date your trade or business resumed significant operations at that place. 2012 tax forms 1040ez In addition, the wages must have been paid or incurred after the following date. 2012 tax forms 1040ez August 28, 2005, for Hurricane Katrina. 2012 tax forms 1040ez September 23, 2005, for Hurricane Rita. 2012 tax forms 1040ez October 23, 2005, for Hurricane Wilma. 2012 tax forms 1040ez    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. 2012 tax forms 1040ez    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). 2012 tax forms 1040ez Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. 2012 tax forms 1040ez Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. 2012 tax forms 1040ez   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. 2012 tax forms 1040ez For a special rule that applies to railroad employees, see section 51(h)(1)(B). 2012 tax forms 1040ez   Qualified wages do not include the following. 2012 tax forms 1040ez Wages paid to your dependent or a related individual. 2012 tax forms 1040ez See section 51(i)(1). 2012 tax forms 1040ez Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. 2012 tax forms 1040ez Wages for services of replacement workers during a strike or lockout. 2012 tax forms 1040ez   For more information, see Form 5884-A. 2012 tax forms 1040ez Hurricane Katrina Housing Credit An employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone can claim the Hurricane Katrina housing credit. 2012 tax forms 1040ez The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from January 1, 2006, through July 1, 2006. 2012 tax forms 1040ez The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). 2012 tax forms 1040ez Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). 2012 tax forms 1040ez The employer must use Form 5884-A to claim the credit. 2012 tax forms 1040ez A qualified employee is an individual who had a main home in the GO Zone on August 28, 2005, and who performs substantially all employment services in the GO Zone for the employer furnishing the lodging. 2012 tax forms 1040ez The employee cannot be your dependent or a related individual. 2012 tax forms 1040ez See section 51(i)(1). 2012 tax forms 1040ez For more information, see Form 5884-A. 2012 tax forms 1040ez Reforestation Costs You may be able to elect to deduct a limited amount of reforestation costs for each qualified timber property. 2012 tax forms 1040ez The deduction for any tax year generally is limited to $10,000 ($5,000 if married filing separately, $0 for a trust). 2012 tax forms 1040ez However, this limit is increased if you paid or incurred reforestation costs after the applicable date below and any portion of the qualified timber property is located in one of the following areas. 2012 tax forms 1040ez August 27, 2005, if any portion of the property is located in the GO Zone. 2012 tax forms 1040ez September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). 2012 tax forms 1040ez October 22, 2005, if any portion of the property is located in the Wilma GO Zone. 2012 tax forms 1040ez The limit for each qualified timber property is increased by the smaller of: $10,000 ($5,000 if married filing separately, $0 for a trust), or The amount of reforestation costs you paid or incurred after the applicable date for the qualified timber property, any portion of which is located in the zone described above. 2012 tax forms 1040ez The increase in the limit applies only to costs paid or incurred before 2008. 2012 tax forms 1040ez However, these rules do not apply to any timber producer who: Held more than 500 acres of qualified timber property at any time during the tax year, Is a corporation with stock publicly traded on an established securities market, or Is a real estate investment trust. 2012 tax forms 1040ez For more information about the election to deduct reforestation costs, see chapter 8 in Publication 535, Business Expenses. 2012 tax forms 1040ez Demolition and Clean-up Costs You can elect to deduct 50% of any qualified GO Zone clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. 2012 tax forms 1040ez Qualified GO Zone clean-up costs are any amounts paid or incurred after August 27, 2005, and before January 1, 2008, for the removal of debris from, or the demolition of structures on, real property located in the GO Zone that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. 2012 tax forms 1040ez Increase in Rehabilitation Tax Credit The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred after August 27, 2005, and before January 1, 2009, on buildings located in the GO Zone as follows. 2012 tax forms 1040ez For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. 2012 tax forms 1040ez For certified historic structures, the credit percentage is increased from 20% to 26%. 2012 tax forms 1040ez For more information, see Form 3468, Investment Credit. 2012 tax forms 1040ez Request for Copy or Transcript of Tax Return Request for copy of tax return. 2012 tax forms 1040ez   You can use Form 4506 to order a copy of your tax return. 2012 tax forms 1040ez Generally, there is a $39. 2012 tax forms 1040ez 00 fee for requesting each copy of a tax return. 2012 tax forms 1040ez If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Hurricane Katrina”) is written in red across the top of the form when filed. 2012 tax forms 1040ez Request for transcript of tax return. 2012 tax forms 1040ez   You can use Form 4506-T to order a free transcript of your tax return. 2012 tax forms 1040ez A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. 2012 tax forms 1040ez You can also call 1-800-829-1040 to order a transcript. 2012 tax forms 1040ez How To Get Tax Help Special IRS assistance. 2012 tax forms 1040ez   The IRS is providing special help for those affected by Hurricane Katrina, Rita, or Wilma, as well as survivors and personal representatives of the victims. 2012 tax forms 1040ez We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by Hurricane Katrina, Rita, or Wilma, or who have other tax issues related to the hurricanes. 2012 tax forms 1040ez Call 1-866-562-5227 Monday through Friday In English-7 a. 2012 tax forms 1040ez m. 2012 tax forms 1040ez to 10 p. 2012 tax forms 1040ez m. 2012 tax forms 1040ez local time In Spanish-8 a. 2012 tax forms 1040ez m. 2012 tax forms 1040ez to 9:30 p. 2012 tax forms 1040ez m. 2012 tax forms 1040ez local time   The IRS website at www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov has notices and other tax relief information. 2012 tax forms 1040ez Check it periodically for any new guidance. 2012 tax forms 1040ez Other help from the IRS. 2012 tax forms 1040ez   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. 2012 tax forms 1040ez By selecting the method that is best for you, you will have quick and easy access to tax help. 2012 tax forms 1040ez Contacting your Taxpayer Advocate. 2012 tax forms 1040ez   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. 2012 tax forms 1040ez   The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. 2012 tax forms 1040ez While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. 2012 tax forms 1040ez   To contact your Taxpayer Advocate: Call the Taxpayer Advocate toll free at 1-877-777-4778. 2012 tax forms 1040ez Call, write, or fax the Taxpayer Advocate office in your area. 2012 tax forms 1040ez Call 1-800-829-4059 if you are a TTY/TDD user. 2012 tax forms 1040ez Visit www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov/advocate. 2012 tax forms 1040ez   For more information, see Publication 1546, How To Get Help With Unresolved Tax Problems (now available in Chinese, Korean, Russian, and Vietnamese, in addition to English and Spanish). 2012 tax forms 1040ez Free tax services. 2012 tax forms 1040ez   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. 2012 tax forms 1040ez It contains a list of free tax publications and an index of tax topics. 2012 tax forms 1040ez It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. 2012 tax forms 1040ez Internet. 2012 tax forms 1040ez You can access the IRS website 24 hours a day, 7 days a week, at www. 2012 tax forms 1040ez irs. 2012 tax forms 1040ez gov to: E-file your return. 2012 tax forms 1040ez Find out about commercial tax preparation and e-file services available free to eligible taxpayers. 2012 tax forms 1040ez Check the status of your refund. 2012 tax forms 1040ez Click on Where's My Refund. 2012 tax forms 1040ez Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). 2012 tax forms 1040ez Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. 2012 tax forms 1040ez Download forms, instructions, and publications. 2012 tax forms 1040ez Order IRS products online. 2012 tax forms 1040ez Research your tax questions online. 2012 tax forms 1040ez Search publications online by topic or keyword. 2012 tax forms 1040ez View Internal Revenue Bulletins (IRBs) published in the last few years. 2012 tax forms 1040ez Figure your withholdin