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Amended Tax Returns

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Amended Tax Returns

Amended tax returns 22. Amended tax returns   Taxes Table of Contents IntroductionIndian tribal government. Amended tax returns Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. Amended tax returns Real Estate TaxesReal estate taxes for prior years. Amended tax returns Examples. Amended tax returns Form 1099-S. Amended tax returns Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct Introduction This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). Amended tax returns It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct. Amended tax returns This chapter covers the following topics. Amended tax returns Income taxes (federal, state, local, and foreign). Amended tax returns General sales taxes (state and local). Amended tax returns Real estate taxes (state, local, and foreign). Amended tax returns Personal property taxes (state and local). Amended tax returns Taxes and fees you cannot deduct. Amended tax returns Use Table 22-1 as a guide to determine which taxes you can deduct. Amended tax returns The end of the chapter contains a section that explains which forms you use to deduct different types of taxes. Amended tax returns Business taxes. Amended tax returns   You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. Amended tax returns For information on these taxes, see Publication 535, Business Expenses. Amended tax returns State or local taxes. Amended tax returns   These are taxes imposed by the 50 states, U. Amended tax returns S. Amended tax returns possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia. Amended tax returns Indian tribal government. Amended tax returns   An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. Amended tax returns Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible. Amended tax returns General sales taxes. Amended tax returns   These are taxes imposed at one rate on retail sales of a broad range of classes of items. Amended tax returns Foreign taxes. Amended tax returns   These are taxes imposed by a foreign country or any of its political subdivisions. Amended tax returns Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 530 Tax Information for Homeowners Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule E (Form 1040) Supplemental Income and Loss 1116 Foreign Tax Credit Tests To Deduct Any Tax The following two tests must be met for you to deduct any tax. Amended tax returns The tax must be imposed on you. Amended tax returns You must pay the tax during your tax year. Amended tax returns The tax must be imposed on you. Amended tax returns   In general, you can deduct only taxes imposed on you. Amended tax returns   Generally, you can deduct property taxes only if you are an owner of the property. Amended tax returns If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return. Amended tax returns You must pay the tax during your tax year. Amended tax returns   If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. Amended tax returns If you pay your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial institution. Amended tax returns If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. Amended tax returns If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). Amended tax returns See Publication 538, Accounting Periods and Methods, for details. Amended tax returns    If you use an accrual method of accounting, see Publication 538 for more information. Amended tax returns Income Taxes This section discusses the deductibility of state and local income taxes (including employee contributions to state benefit funds) and foreign income taxes. Amended tax returns State and Local Income Taxes You can deduct state and local income taxes. Amended tax returns However, you can elect to deduct state and local general sales taxes instead of state and local income taxes. Amended tax returns See General Sales Taxes , later. Amended tax returns Exception. Amended tax returns    You cannot deduct state and local income taxes you pay on income that is exempt from federal income tax, unless the exempt income is interest income. Amended tax returns For example, you cannot deduct the part of a state's income tax that is on a cost-of-living allowance exempt from federal income tax. Amended tax returns What To Deduct Your deduction may be for withheld taxes, estimated tax payments, or other tax payments as follows. Amended tax returns Withheld taxes. Amended tax returns   You can deduct state and local income taxes withheld from your salary in the year they are withheld. Amended tax returns Your Form(s) W-2 will show these amounts. Amended tax returns Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld. Amended tax returns Estimated tax payments. Amended tax returns   You can deduct estimated tax payments you made during the year to a state or local government. Amended tax returns However, you must have a reasonable basis for making the estimated tax payments. Amended tax returns Any estimated state or local tax payments that are not made in good faith at the time of payment are not deductible. Amended tax returns For example, you made an estimated state income tax payment. Amended tax returns However, the estimate of your state tax liability shows that you will get a refund of the full amount of your estimated payment. Amended tax returns You had no reasonable basis to believe you had any additional liability for state income taxes and you cannot deduct the estimated tax payment. Amended tax returns Refund applied to taxes. Amended tax returns   You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2013 estimated state or local income taxes. Amended tax returns    Do not reduce your deduction by either of the following items. Amended tax returns Any state or local income tax refund (or credit) you expect to receive for 2013. Amended tax returns Any refund of (or credit for) prior-year state and local income taxes you actually received in 2013. Amended tax returns   However, part or all of this refund (or credit) may be taxable. Amended tax returns See Refund (or credit) of state or local income taxes , later. Amended tax returns Separate federal returns. Amended tax returns   If you and your spouse file separate state, local, and federal income tax returns, you each can deduct on your federal return only the amount of your own state and local income tax that you paid during the tax year. Amended tax returns Joint state and local returns. Amended tax returns   If you and your spouse file joint state and local returns and separate federal returns, each of you can deduct on your separate federal return a part of the total state and local income taxes paid during the tax year. Amended tax returns You can deduct only the amount of the total taxes that is proportionate to your gross income compared to the combined gross income of you and your spouse. Amended tax returns However, you cannot deduct more than the amount you actually paid during the year. Amended tax returns You can avoid this calculation if you and your spouse are jointly and individually liable for the full amount of the state and local income taxes. Amended tax returns If so, you and your spouse can deduct on your separate federal returns the amount you each actually paid. Amended tax returns Joint federal return. Amended tax returns   If you file a joint federal return, you can deduct the total of the state and local income taxes both of you paid. Amended tax returns Contributions to state benefit funds. Amended tax returns    As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. Amended tax returns For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. Amended tax returns Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5. Amended tax returns Alaska Unemployment Compensation Fund. Amended tax returns California Nonoccupational Disability Benefit Fund. Amended tax returns New Jersey Nonoccupational Disability Benefit Fund. Amended tax returns New Jersey Unemployment Compensation Fund. Amended tax returns New York Nonoccupational Disability Benefit Fund. Amended tax returns Pennsylvania Unemployment Compensation Fund. Amended tax returns Rhode Island Temporary Disability Benefit Fund. Amended tax returns Washington State Supplemental Workmen's Compensation Fund. Amended tax returns    Employee contributions to private or voluntary disability plans are not deductible. Amended tax returns Refund (or credit) of state or local income taxes. Amended tax returns   If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. Amended tax returns This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. Amended tax returns If you did not itemize your deductions in the previous year, do not include the refund in income. Amended tax returns If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. Amended tax returns For a discussion of how much to include, see Recoveries in chapter 12. Amended tax returns Foreign Income Taxes Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. Amended tax returns S. Amended tax returns possession. Amended tax returns However, you cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. Amended tax returns S. Amended tax returns tax under the foreign earned income exclusion or the foreign housing exclusion. Amended tax returns For information on these exclusions, see Publication 54, Tax Guide for U. Amended tax returns S. Amended tax returns Citizens and Resident Aliens Abroad. Amended tax returns For information on the foreign tax credit, see Publication 514. Amended tax returns General Sales Taxes You can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), line 5b. Amended tax returns You can use either your actual expenses or the state and local sales tax tables to figure your sales tax deduction. Amended tax returns Actual expenses. Amended tax returns   Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) if the tax rate was the same as the general sales tax rate. Amended tax returns However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Amended tax returns If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Amended tax returns If you use the actual expenses method, you must have receipts to show the general sales taxes paid. Amended tax returns Do not include sales taxes paid on items used in your trade or business. Amended tax returns Motor vehicles. Amended tax returns   For purposes of this section, motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Amended tax returns This also includes sales taxes on a leased motor vehicle, but not on vehicles used in your trade or business. Amended tax returns Optional sales tax tables. Amended tax returns   Instead of using your actual expenses, you can figure your state and local general sales tax deduction using the state and local sales tax tables in the Instructions for Schedule A (Form 1040). Amended tax returns You may also be able to add the state and local general sales taxes paid on certain specified items. Amended tax returns   Your applicable table amount is based on the state where you live, your income, and the number of exemptions claimed on your tax return. Amended tax returns Your income is your adjusted gross income plus any nontaxable items such as the following. Amended tax returns Tax-exempt interest. Amended tax returns Veterans' benefits. Amended tax returns Nontaxable combat pay. Amended tax returns Workers' compensation. Amended tax returns Nontaxable part of social security and railroad retirement benefits. Amended tax returns Nontaxable part of IRA, pension, or annuity distributions, excluding rollovers. Amended tax returns Public assistance payments. Amended tax returns If you lived in different states during the same tax year, you must prorate your applicable table amount for each state based on the days you lived in each state. Amended tax returns See the Instructions for Schedule A (Form 1040), line 5, for details. Amended tax returns Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. Amended tax returns You can deduct these taxes only if they are based on the assessed value of the real property and charged uniformly against all property under the jurisdiction of the taxing authority. Amended tax returns Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. Amended tax returns They also do not include itemized charges for services (such as trash collection) assessed against specific property or certain people, even if the charge is paid to the taxing authority. Amended tax returns For more information about taxes and charges that are not deductible, see Real Estate-Related Items You Cannot Deduct , later. Amended tax returns Tenant-shareholders in a cooperative housing corporation. Amended tax returns   Generally, if you are a tenant-stockholder in a cooperative housing corporation, you can deduct the amount paid to the corporation that represents your share of the real estate taxes the corporation paid or incurred for your dwelling unit. Amended tax returns The corporation should provide you with a statement showing your share of the taxes. Amended tax returns For more information, see Special Rules for Cooperatives in Publication 530. Amended tax returns Division of real estate taxes between buyers and sellers. Amended tax returns   If you bought or sold real estate during the year, the real estate taxes must be divided between the buyer and the seller. Amended tax returns   The buyer and the seller must divide the real estate taxes according to the number of days in the real property tax year (the period to which the tax is imposed relates) that each owned the property. Amended tax returns The seller is treated as paying the taxes up to, but not including, the date of sale. Amended tax returns The buyer is treated as paying the taxes beginning with the date of sale. Amended tax returns This applies regardless of the lien dates under local law. Amended tax returns Generally, this information is included on the settlement statement provided at the closing. Amended tax returns    If you (the seller) cannot deduct taxes until they are paid because you use the cash method of accounting, and the buyer of your property is personally liable for the tax, you are considered to have paid your part of the tax at the time of the sale. Amended tax returns This lets you deduct the part of the tax to the date of sale even though you did not actually pay it. Amended tax returns However, you must also include the amount of that tax in the selling price of the property. Amended tax returns The buyer must include the same amount in his or her cost of the property. Amended tax returns   You figure your deduction for taxes on each property bought or sold during the real property tax year as follows. Amended tax returns Worksheet 22-1. Amended tax returns Figuring Your Real Estate Tax Deduction 1. Amended tax returns Enter the total real estate taxes for the real property tax year   2. Amended tax returns Enter the number of days in the real property tax year that you owned the property   3. Amended tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Amended tax returns 4. Amended tax returns Multiply line 1 by line 3. Amended tax returns This is your deduction. Amended tax returns Enter it on Schedule A (Form 1040), line 6   Note. Amended tax returns Repeat steps 1 through 4 for each property you bought or sold during the real property tax year. Amended tax returns Your total deduction is the sum of the line 4 amounts for all of the properties. Amended tax returns Real estate taxes for prior years. Amended tax returns   Do not divide delinquent taxes between the buyer and seller if the taxes are for any real property tax year before the one in which the property is sold. Amended tax returns Even if the buyer agrees to pay the delinquent taxes, the buyer cannot deduct them. Amended tax returns The buyer must add them to the cost of the property. Amended tax returns The seller can deduct these taxes paid by the buyer. Amended tax returns However, the seller must include them in the selling price. Amended tax returns Examples. Amended tax returns   The following examples illustrate how real estate taxes are divided between buyer and seller. Amended tax returns Example 1. Amended tax returns Dennis and Beth White's real property tax year for both their old home and their new home is the calendar year, with payment due August 1. Amended tax returns The tax on their old home, sold on May 7, was $620. Amended tax returns The tax on their new home, bought on May 3, was $732. Amended tax returns Dennis and Beth are considered to have paid a proportionate share of the real estate taxes on the old home even though they did not actually pay them to the taxing authority. Amended tax returns On the other hand, they can claim only a proportionate share of the taxes they paid on their new property even though they paid the entire amount. Amended tax returns Dennis and Beth owned their old home during the real property tax year for 126 days (January 1 to May 6, the day before the sale). Amended tax returns They figure their deduction for taxes on their old home as follows. Amended tax returns Worksheet 22-1. Amended tax returns Figuring Your Real Estate Tax Deduction — Taxes on Old Home 1. Amended tax returns Enter the total real estate taxes for the real property tax year $620 2. Amended tax returns Enter the number of days in the real property tax year that you owned the property 126 3. Amended tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Amended tax returns 3452 4. Amended tax returns Multiply line 1 by line 3. Amended tax returns This is your deduction. Amended tax returns Enter it on Schedule A (Form 1040), line 6 $214 Since the buyers of their old home paid all of the taxes, Dennis and Beth also include the $214 in the selling price of the old home. Amended tax returns (The buyers add the $214 to their cost of the home. Amended tax returns ) Dennis and Beth owned their new home during the real property tax year for 243 days (May 3 to December 31, including their date of purchase). Amended tax returns They figure their deduction for taxes on their new home as follows. Amended tax returns Worksheet 22-1. Amended tax returns Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Amended tax returns Enter the total real estate taxes for the real property tax year $732 2. Amended tax returns Enter the number of days in the real property tax year that you owned the property 243 3. Amended tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Amended tax returns 6658 4. Amended tax returns Multiply line 1 by line 3. Amended tax returns This is your deduction. Amended tax returns Enter it on Schedule A (Form 1040), line 6 $487 Since Dennis and Beth paid all of the taxes on the new home, they add $245 ($732 paid less $487 deduction) to their cost of the new home. Amended tax returns (The sellers add this $245 to their selling price and deduct the $245 as a real estate tax. Amended tax returns ) Dennis and Beth's real estate tax deduction for their old and new homes is the sum of $214 and $487, or $701. Amended tax returns They will enter this amount on Schedule A (Form 1040), line 6. Amended tax returns Example 2. Amended tax returns George and Helen Brown bought a new home on May 3, 2013. Amended tax returns Their real property tax year for the new home is the calendar year. Amended tax returns Real estate taxes for 2012 were assessed in their state on January 1, 2013. Amended tax returns The taxes became due on May 31, 2013, and October 31, 2013. Amended tax returns The Browns agreed to pay all taxes due after the date of purchase. Amended tax returns Real estate taxes for 2012 were $680. Amended tax returns They paid $340 on May 31, 2013, and $340 on October 31, 2013. Amended tax returns These taxes were for the 2012 real property tax year. Amended tax returns The Browns cannot deduct them since they did not own the property until 2013. Amended tax returns Instead, they must add $680 to the cost of their new home. Amended tax returns In January 2014, the Browns receive their 2013 property tax statement for $752, which they will pay in 2014. Amended tax returns The Browns owned their new home during the 2013 real property tax year for 243 days (May 3 to December 31). Amended tax returns They will figure their 2014 deduction for taxes as follows. Amended tax returns Worksheet 22-1. Amended tax returns Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Amended tax returns Enter the total real estate taxes for the real property tax year $752 2. Amended tax returns Enter the number of days in the real property tax year that you owned the property 243 3. Amended tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Amended tax returns 6658 4. Amended tax returns Multiply line 1 by line 3. Amended tax returns This is your deduction. Amended tax returns Claim it on Schedule A (Form 1040), line 6 $501 The remaining $251 ($752 paid less $501 deduction) of taxes paid in 2014, along with the $680 paid in 2013, is added to the cost of their new home. Amended tax returns Because the taxes up to the date of sale are considered paid by the seller on the date of sale, the seller is entitled to a 2013 tax deduction of $931. Amended tax returns This is the sum of the $680 for 2012 and the $251 for the 122 days the seller owned the home in 2013. Amended tax returns The seller must also include the $931 in the selling price when he or she figures the gain or loss on the sale. Amended tax returns The seller should contact the Browns in January 2014 to find out how much real estate tax is due for 2013. Amended tax returns Form 1099-S. Amended tax returns   For certain sales or exchanges of real estate, the person responsible for closing the sale (generally the settlement agent) prepares Form 1099-S, Proceeds From Real Estate Transactions, to report certain information to the IRS and to the seller of the property. Amended tax returns Box 2 of Form 1099-S is for the gross proceeds from the sale and should include the portion of the seller's real estate tax liability that the buyer will pay after the date of sale. Amended tax returns The buyer includes these taxes in the cost basis of the property, and the seller both deducts this amount as a tax paid and includes it in the sales price of the property. Amended tax returns   For a real estate transaction that involves a home, any real estate tax the seller paid in advance but that is the liability of the buyer appears on Form 1099-S, box 5. Amended tax returns The buyer deducts this amount as a real estate tax, and the seller reduces his or her real estate tax deduction (or includes it in income) by the same amount. Amended tax returns See Refund (or rebate) , later. Amended tax returns Taxes placed in escrow. Amended tax returns   If your monthly mortgage payment includes an amount placed in escrow (put in the care of a third party) for real estate taxes, you may not be able to deduct the total amount placed in escrow. Amended tax returns You can deduct only the real estate tax that the third party actually paid to the taxing authority. Amended tax returns If the third party does not notify you of the amount of real estate tax that was paid for you, contact the third party or the taxing authority to find the proper amount to show on your return. Amended tax returns Tenants by the entirety. Amended tax returns   If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property. Amended tax returns Divorced individuals. Amended tax returns   If your divorce or separation agreement states that you must pay the real estate taxes for a home owned by you and your spouse, part of your payments may be deductible as alimony and part as real estate taxes. Amended tax returns See Taxes and insurance in chapter 18 for more information. Amended tax returns Ministers' and military housing allowances. Amended tax returns   If you are a minister or a member of the uniformed services and receive a housing allowance that you can exclude from income, you still can deduct all of the real estate taxes you pay on your home. Amended tax returns Refund (or rebate). Amended tax returns   If you received a refund or rebate in 2013 of real estate taxes you paid in 2013, you must reduce your deduction by the amount refunded to you. Amended tax returns If you received a refund or rebate in 2013 of real estate taxes you deducted in an earlier year (either as an itemized deduction or an increase to your standard deduction), you generally must include the refund or rebate in income in the year you receive it. Amended tax returns However, the amount you include in income is limited to the amount of the deduction that reduced your tax in the earlier year. Amended tax returns For more information, see Recoveries in chapter 12. Amended tax returns Table 22-1. Amended tax returns Which Taxes Can You Deduct? Type of Tax You Can Deduct You Cannot Deduct Fees and Charges Fees and charges that are expenses of your trade or business or of producing income. Amended tax returns Fees and charges that are not expenses of your trade or business or of producing income, such as fees for driver's licenses, car inspections, parking, or charges for water bills (see Taxes and Fees You Cannot Deduct ). Amended tax returns     Fines and penalties. Amended tax returns Income Taxes State and local income taxes. Amended tax returns Federal income taxes. Amended tax returns   Foreign income taxes. Amended tax returns     Employee contributions to state funds listed under Contributions to state benefit funds . Amended tax returns Employee contributions to private or voluntary disability plans. Amended tax returns     State and local general sales taxes if you choose to deduct state and local income taxes. Amended tax returns General Sales Taxes State and local general sales taxes, including compensating use taxes. Amended tax returns State and local income taxes if you choose to deduct state and local general sales taxes. Amended tax returns Other Taxes Taxes that are expenses of your trade or business. Amended tax returns Federal excise taxes, such as tax on gasoline, that are not expenses of your trade or business or of producing income. Amended tax returns   Taxes on property producing rent or royalty income. Amended tax returns Per capita taxes. Amended tax returns   Occupational taxes. Amended tax returns See chapter 28. Amended tax returns     One-half of self-employment tax paid. Amended tax returns   Personal Property Taxes State and local personal property taxes. Amended tax returns Customs duties that are not expenses of your trade or business or of producing income. Amended tax returns Real Estate Taxes State and local real estate taxes. Amended tax returns Real estate taxes that are treated as imposed on someone else (see Division of real estate taxes between buyers and sellers ). Amended tax returns   Foreign real estate taxes. Amended tax returns Taxes for local benefits (with exceptions). Amended tax returns See Real Estate-Related Items You Cannot Deduct . Amended tax returns   Tenant's share of real estate taxes paid by  cooperative housing corporation. Amended tax returns Trash and garbage pickup fees (with exceptions). Amended tax returns See Real Estate-Related Items You Cannot Deduct . Amended tax returns     Rent increase due to higher real estate taxes. Amended tax returns     Homeowners' association charges. Amended tax returns Real Estate-Related Items You Cannot Deduct Payments for the following items generally are not deductible as real estate taxes. Amended tax returns Taxes for local benefits. Amended tax returns Itemized charges for services (such as trash and garbage pickup fees). Amended tax returns Transfer taxes (or stamp taxes). Amended tax returns Rent increases due to higher real estate taxes. Amended tax returns Homeowners' association charges. Amended tax returns Taxes for local benefits. Amended tax returns   Deductible real estate taxes generally do not include taxes charged for local benefits and improvements tending to increase the value of your property. Amended tax returns These include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements. Amended tax returns You should increase the basis of your property by the amount of the assessment. Amended tax returns   Local benefit taxes are deductible only if they are for maintenance, repair, or interest charges related to those benefits. Amended tax returns If only a part of the taxes is for maintenance, repair, or interest, you must be able to show the amount of that part to claim the deduction. Amended tax returns If you cannot determine what part of the tax is for maintenance, repair, or interest, none of it is deductible. Amended tax returns    Taxes for local benefits may be included in your real estate tax bill. Amended tax returns If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Amended tax returns You should use the rules above to determine if the local benefit tax is deductible. Amended tax returns Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. Amended tax returns Itemized charges for services. Amended tax returns    An itemized charge for services assessed against specific property or certain people is not a tax, even if the charge is paid to the taxing authority. Amended tax returns For example, you cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged to each homeowner for trash collection), or A flat fee charged for a single service provided by your government (such as a $30 charge for mowing your lawn because it was allowed to grow higher than permitted under your local ordinance). Amended tax returns    You must look at your real estate tax bill to determine if any nondeductible itemized charges, such as those listed above, are included in the bill. Amended tax returns If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Amended tax returns Exception. Amended tax returns   Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if: The fees or charges are imposed at a like rate against all property in the taxing jurisdiction, The funds collected are not earmarked; instead, they are commingled with general revenue funds, and Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected. Amended tax returns Transfer taxes (or stamp taxes). Amended tax returns   Transfer taxes and similar taxes and charges on the sale of a personal home are not deductible. Amended tax returns If they are paid by the seller, they are expenses of the sale and reduce the amount realized on the sale. Amended tax returns If paid by the buyer, they are included in the cost basis of the property. Amended tax returns Rent increase due to higher real estate taxes. Amended tax returns   If your landlord increases your rent in the form of a tax surcharge because of increased real estate taxes, you cannot deduct the increase as taxes. Amended tax returns Homeowners' association charges. Amended tax returns   These charges are not deductible because they are imposed by the homeowners' association, rather than the state or local government. Amended tax returns Personal Property Taxes Personal property tax is deductible if it is a state or local tax that is: Charged on personal property, Based only on the value of the personal property, and Charged on a yearly basis, even if it is collected more or less than once a year. Amended tax returns A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. Amended tax returns For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways. Amended tax returns If the tax is partly based on value and partly based on other criteria, it may qualify in part. Amended tax returns Example. Amended tax returns Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. Amended tax returns You paid $32 based on the value ($1,500) and weight (3,400 lbs. Amended tax returns ) of your car. Amended tax returns You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. Amended tax returns The remaining $17 ($. Amended tax returns 50 × 34), based on the weight, is not deductible. Amended tax returns Taxes and Fees You Cannot Deduct Many federal, state, and local government taxes are not deductible because they do not fall within the categories discussed earlier. Amended tax returns Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. Amended tax returns See Table 22-1. Amended tax returns Taxes and fees that are generally not deductible include the following items. Amended tax returns Employment taxes. Amended tax returns This includes social security, Medicare, and railroad retirement taxes withheld from your pay. Amended tax returns However, one-half of self-employment tax you pay is deductible. Amended tax returns In addition, the social security and other employment taxes you pay on the wages of a household worker may be included in medical expenses that you can deduct or child care expenses that allow you to claim the child and dependent care credit. Amended tax returns For more information, see chapters 21 and 32. Amended tax returns Estate, inheritance, legacy, or succession taxes. Amended tax returns However, you can deduct the estate tax attributable to income in respect of a decedent if you, as a beneficiary, must include that income in your gross income. Amended tax returns In that case, deduct the estate tax as a miscellaneous deduction that is not subject to the 2%-of-adjusted-gross-income limit. Amended tax returns For more information, see Publication 559, Survivors, Executors, and Administrators. Amended tax returns Federal income taxes. Amended tax returns This includes income taxes withheld from your pay. Amended tax returns Fines and penalties. Amended tax returns You cannot deduct fines and penalties paid to a government for violation of any law, including related amounts forfeited as collateral deposits. Amended tax returns Gift taxes. Amended tax returns License fees. Amended tax returns You cannot deduct license fees for personal purposes (such as marriage, driver's, and dog license fees). Amended tax returns Per capita taxes. Amended tax returns You cannot deduct state or local per capita taxes. Amended tax returns Many taxes and fees other than those listed above are also nondeductible, unless they are ordinary and necessary expenses of a business or income producing activity. Amended tax returns For other nondeductible items, see Real Estate-Related Items You Cannot Deduct , earlier. Amended tax returns Where To Deduct You deduct taxes on the following schedules. Amended tax returns State and local income taxes. Amended tax returns    These taxes are deducted on Schedule A (Form 1040), line 5, even if your only source of income is from business, rents, or royalties. Amended tax returns Check box a on line 5. Amended tax returns General sales taxes. Amended tax returns   Sales taxes are deducted on Schedule A (Form 1040), line 5. Amended tax returns You must check box b on line 5. Amended tax returns If you elect to deduct sales taxes, you cannot deduct state and local income taxes on Schedule A (Form 1040), line 5, box a. Amended tax returns Foreign income taxes. Amended tax returns   Generally, income taxes you pay to a foreign country or U. Amended tax returns S. Amended tax returns possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U. Amended tax returns S. Amended tax returns income tax on Form 1040, line 47. Amended tax returns To claim the credit, you may have to complete and attach Form 1116. Amended tax returns For more information, see chapter 37, the Form 1040 instructions, or Publication 514. Amended tax returns Real estate taxes and personal property taxes. Amended tax returns    Real estate and personal property taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). Amended tax returns Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040). Amended tax returns Self-employment tax. Amended tax returns    Deduct one-half of your self-employment tax on Form 1040, line 27. Amended tax returns Other taxes. Amended tax returns    All other deductible taxes are deducted on Schedule A (Form 1040), line 8. Amended tax returns Prev  Up  Next   Home   More Online Publications
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A Brief Overview of Depreciation

Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property.

Most types of tangible property (except, land), such as buildings, machinery, vehicles, furniture, and equipment are depreciable. Likewise, certain intangible property, such as patents, copyrights, and computer software is depreciable.

In order for a taxpayer to be allowed a depreciation deduction for a property, the property must meet all the following requirements:

  • The taxpayer must own the property. Taxpayers may also depreciate any capital improvements for property the taxpayer leases.
  • A taxpayer must use the property in business or in an income-producing activity. If a taxpayer uses a property for business and for personal purposes, the taxpayer can only deduct depreciation based only on the business use of that property.
  • The property must have a determinable useful life of more than one year.

Even if a taxpayer meets the preceding requirements for a property, a taxpayer cannot depreciate the following property:

  • Property placed in service and disposed of in same year.
  • Equipment used to build capital improvements. A taxpayer must add otherwise allowable depreciation on the equipment during the period of construction to the basis of the improvements.
  • Certain term interests.

Depreciation begins when a taxpayer places property in service for use in a trade or business or for the production of income. The property ceases to be depreciable when the taxpayer has fully recovered the property’s cost or other basis or when the taxpayer retires it from service, whichever happens first.

A taxpayer must identify several items to ensure the proper depreciation of a property, including:

  • The depreciation method for the property
  • The class life of the asset
  • Whether the property is “Listed Property”
  • Whether the taxpayer elects to expense any portion of the asset
  • Whether the taxpayer qualifies for any “bonus” first year depreciation
  • The depreciable basis of the property

The Modified Accelerated Cost Recovery System (MACRS) is the proper depreciation method for most property. Additional information about MACRS, and the other components of depreciation are in Publication 946, How to Depreciate Property.

A taxpayer must use Form 4562, Depreciation and Amortization, to report depreciation on a tax return. Form 4562 is divided into six sections and the Instructions for Form 4562 contain information on how, and when to fill out each section.

Page Last Reviewed or Updated: 16-Sep-2013

The Amended Tax Returns

Amended tax returns Publication 531 - Main Content Table of Contents Keeping a Daily Tip RecordElectronic tip record. Amended tax returns Reporting Tips to Your EmployerElectronic tip statement. Amended tax returns Final report. Amended tax returns Tip Rate Determination and Education Program Reporting Tips on Your Tax Return Allocated Tips How To Get Tax Help Keeping a Daily Tip Record Why keep a daily tip record. Amended tax returns   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. Amended tax returns How to keep a daily tip record. Amended tax returns   There are two ways to keep a daily tip record. Amended tax returns You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. Amended tax returns You should keep your daily tip record with your tax or other personal records. Amended tax returns You must keep your records for as long as they are important for administration of the federal tax law. Amended tax returns For information on how long to keep records, see How Long to Keep Records in chapter 1 of Publication 17, Your Federal Income Tax. Amended tax returns    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. Amended tax returns To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244, Employee's Daily Record of Tips and Report to Employer. Amended tax returns Publication 1244 is also available at www. Amended tax returns irs. Amended tax returns gov/pub1244. Amended tax returns Publication 1244 includes a 1-year supply of Form 4070A. Amended tax returns Each day, write in the information asked for on the form. Amended tax returns A filled-in Form 4070A is shown on the following page. Amended tax returns   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. Amended tax returns Although you do not report these tips to your employer, you must report them on your tax return. Amended tax returns   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). Amended tax returns Then, each workday, write the date and the following information. Amended tax returns Cash tips you get directly from customers or from other employees. Amended tax returns Tips from credit and debit card charge customers that your employer pays you. Amended tax returns The value of any noncash tips you get, such as tickets, passes, or other items of value. Amended tax returns The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. Amended tax returns Please click here for the text description of the image. Amended tax returns Sample Filled-in Form 4070A from Publication 1244 Electronic tip record. Amended tax returns   You can use an electronic system provided by your employer to record your daily tips. Amended tax returns If you do, you must receive and keep a paper copy of this record. Amended tax returns Service charges. Amended tax returns    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. Amended tax returns This is part of your wages, not a tip. Amended tax returns The following factors determine if you have a tip or service charge: The payment is made free from compulsion; The customer has the right to determine the amount of payment; The payment is not subject to negotiation or dictated by employer policy; and The customer generally has the right to determine who receives the payment. Amended tax returns See examples below. Amended tax returns Example 1. Amended tax returns Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. Amended tax returns Jane's bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. Amended tax returns Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. Amended tax returns Do not include the 18% charge in your tip diary. Amended tax returns Service charges that are paid to you are considered wages, not tips. Amended tax returns Example 2. Amended tax returns Good Food Restaurant includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. Amended tax returns David's bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of the charges for food and beverages at the bottom of the bill beneath the signature line. Amended tax returns Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. Amended tax returns Be sure to include this amount in your tip diary. Amended tax returns Sample Filled-in Form 4070 from Publication 1244 Please click here for the text description of the image. Amended tax returns Filled-in Form 4070 Reporting Tips to Your Employer Why report tips to your employer. Amended tax returns   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). Amended tax returns What tips to report. Amended tax returns   Report to your employer only cash, check, and debit and credit card tips you receive. Amended tax returns   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. Amended tax returns   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Amended tax returns Do not report to your employer any portion of the tips you receive that you pass on to other employees. Amended tax returns However, you must report tips you receive from other employees. Amended tax returns   Do not report the value of any noncash tips, such as tickets or passes, to your employer. Amended tax returns You do not pay social security, Medicare, Additional Medicare, or railroad retirement taxes on these tips. Amended tax returns How to report. Amended tax returns   If your employer does not give you any other way to report your tips, you can use Form 4070, Employee's Report of Tips to Employer. Amended tax returns Fill in the information asked for on the form, sign and date the form, and give it to your employer. Amended tax returns A sample filled-in Form 4070 is shown above. Amended tax returns To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. Amended tax returns   If you do not use Form 4070, give your employer a statement with the following information. Amended tax returns Your name, address, and social security number. Amended tax returns Your employer's name, address, and business name (if it is different from your employer's name). Amended tax returns The month (or the dates of any shorter period) in which you received tips. Amended tax returns The total tips required to be reported for that period. Amended tax returns You must sign and date the statement. Amended tax returns Be sure to keep a copy with your tax or other personal records. Amended tax returns   Your employer may require you to report your tips more than once a month. Amended tax returns However, the statement cannot cover a period of more than 1 calendar month. Amended tax returns Electronic tip statement. Amended tax returns   Your employer can have you furnish your tip statements electronically. Amended tax returns When to report. Amended tax returns   Give your report for each month to your employer by the 10th of the next month. Amended tax returns If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. Amended tax returns Example. Amended tax returns You must report your tips received in September 2014 by October 10, 2014. Amended tax returns Final report. Amended tax returns   If your employment ends during the month, you can report your tips when your employment ends. Amended tax returns Penalty for not reporting tips. Amended tax returns   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, Additional Medicare, or railroad retirement taxes you owe on the unreported tips. Amended tax returns (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. Amended tax returns ) The penalty amount is in addition to the taxes you owe. Amended tax returns   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. Amended tax returns To do so, attach a statement to your return explaining why you did not report them. Amended tax returns Giving your employer money for taxes. Amended tax returns   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. Amended tax returns If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. Amended tax returns   If you do not give your employer enough money, your employer will apply your regular pay and any money you give to the taxes, in the following order. Amended tax returns All taxes on your regular pay. Amended tax returns Social security, Medicare, Additional Medicare, or railroad retirement taxes on your reported tips. Amended tax returns Federal, state, and local income taxes on your reported tips. Amended tax returns    Any taxes that remain unpaid can be collected by your employer from your next paycheck. Amended tax returns If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. Amended tax returns See Publication 505, Tax Withholding and Estimated Tax, for more information. Amended tax returns    Uncollected taxes. Amended tax returns You must report on your tax return any social security and Medicare taxes, or railroad retirement taxes that remained uncollected at the end of 2013. Amended tax returns These uncollected taxes will be shown on your 2013 Form W-2. Amended tax returns See Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. Amended tax returns Tip Rate Determination and Education Program Your employer may participate in the Tip Rate Determination and Education Program. Amended tax returns The program was developed to help employees and employers understand and meet their tip reporting responsibilities. Amended tax returns There are two agreements under the program: the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). Amended tax returns A variation of the TRAC program, the Employer Tip Reporting Alternative Commitment, (EmTRAC) was designed to allow employers in the food and beverage industry to design and receive approval for their own TRAC programs. Amended tax returns For information on the EmTRAC program, see Notice 2001-1, which is on page 261 of Internal Revenue Bulletin 2001-2 at www. Amended tax returns irs. Amended tax returns gov/pub/irs-irbs/irb01-02. Amended tax returns pdf. Amended tax returns If you are employed in the gaming industry, your employer may participate in the Gaming Industry Tip Compliance Agreement Program. Amended tax returns See Revenue Procedure 2007-32, 2007-22 I. Amended tax returns R. Amended tax returns B. Amended tax returns 1322, available at www. Amended tax returns irs. Amended tax returns gov/pub/irs-irbs/irb07_22. Amended tax returns pdf. Amended tax returns Your employer can provide you with a copy of any applicable agreement. Amended tax returns To find out more about these agreements, visit IRS. Amended tax returns gov and enter “restaurant tip reporting” in the search box. Amended tax returns You may also call 1-800-829-4933, visit www. Amended tax returns irs. Amended tax returns gov/localcontacts for the IRS Taxpayer Assistance Center in your area, or send an email to Tip. Amended tax returns Program@irs. Amended tax returns gov and request information on this program. Amended tax returns Reporting Tips on Your Tax Return How to report tips. Amended tax returns   Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; Form 1040EZ, line 1; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Amended tax returns What tips to report. Amended tax returns   Generally, you must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Amended tax returns Any tips you reported to your employer as required in 2013 are included in the wages shown in box 1 of your Form W-2. Amended tax returns Add to the amount in box 1 only the tips you did not report to your employer. Amended tax returns   However, any tips you received in 2013 that you reported to your employer as required after 2013 but before January 11, 2014, are not included in the wages shown in box 1 of your 2013 Form W-2. Amended tax returns Do not include the amount of these tips on your 2013 tax return. Amended tax returns Instead, include them on your 2014 tax return. Amended tax returns Tips you received in 2012 that you reported to your employer as required after 2012 but before January 11, 2013, are included in the wages shown in box 1 of your 2013 Form W-2. Amended tax returns Although these tips were received in 2012, you must report them on your 2013 tax return. Amended tax returns   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Amended tax returns Do not report on your income tax return any portion of the tips you receive that you pass on to other employees. Amended tax returns However, you must report tips you receive from other employees. Amended tax returns    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. Amended tax returns    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. Amended tax returns   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. Amended tax returns Cash and charge tips you received that totaled less than $20 for any month. Amended tax returns The value of noncash tips, such as tickets, passes, or other items of value. Amended tax returns Example. Amended tax returns Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. Amended tax returns Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. Amended tax returns He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. Amended tax returns Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages + $7,000 reported tips) in box 1. Amended tax returns He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. Amended tax returns Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Amended tax returns    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. Amended tax returns To report these taxes, you must file a return even if you would not otherwise have to file. Amended tax returns You must use Form 1040, Form 1040NR, Form 1040NR-EZ, Form 1040-SS, or 1040-PR (as appropriate) for this purpose. Amended tax returns (You cannot file Form 1040EZ or Form 1040A. Amended tax returns )    Use Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to figure social security and Medicare taxes. Amended tax returns Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. Amended tax returns Use Form 8959 to figure Additional Medicare Tax. Amended tax returns If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. Amended tax returns To get railroad retirement credit, you must report tips to your employer. Amended tax returns Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer. Amended tax returns    You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. Amended tax returns For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. Amended tax returns   If your employer could not collect all the social security and Medicare taxes, or railroad retirement taxes you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). Amended tax returns You must report these amounts as additional tax on your return. Amended tax returns   If you worked in the U. Amended tax returns S. Amended tax returns possessions and received Form W-2AS, Form W-2CM, Form W-2GU, or Form W-2VI, any uncollected taxes on tips will be shown in box 12 with codes A and B. Amended tax returns If you received Form 499R-2/W-2PR, any uncollected taxes will be shown in boxes 22 and 23. Amended tax returns Unlike the uncollected portion of the regular (1. Amended tax returns 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported on Form W-2. Amended tax returns   To report these uncollected taxes, you must file a return even if you would not otherwise have to file. Amended tax returns You can report these taxes on Form 1040, in the space next to line 60; Form 1040NR, line 59; Form 1040-SS, Part I, line 6; or Form 1040-PR, Part I, line 6. Amended tax returns See the instructions for the appropriate form and line number indicated, and Form 8959. Amended tax returns (You cannot file Form 1040A, Form 1040EZ, or Form 1040NR-EZ. Amended tax returns ) Self-employed persons. Amended tax returns    If you receive tips as a self-employed person, you should report these tips as income on Schedule C or C-EZ. Amended tax returns See Publication 334, Tax Guide for Small Business, for more information on reporting business income. Amended tax returns Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. Amended tax returns They are not included in box 1 with your wages and reported tips. Amended tax returns If box 8 is blank, this discussion does not apply to you. Amended tax returns What are allocated tips. Amended tax returns   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Amended tax returns Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. Amended tax returns No income, social security, Medicare, Additional Medicare, or railroad retirement taxes are withheld on allocated tips. Amended tax returns How were your allocated tips figured. Amended tax returns   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Amended tax returns Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. Amended tax returns For information about the exact allocation method used, ask your employer. Amended tax returns Must you report your allocated tips on your tax return. Amended tax returns   You must report tips you received in 2013 (including both cash and noncash tips) on your tax return as explained in What tips to report , earlier. Amended tax returns Any tips you reported to your employer in 2013 as required (explained under Reporting Tips to Your Employer , earlier) are included in the wages shown in box 1 of your Form W-2. Amended tax returns Add to the amount in box 1 only the tips you did not report to your employer as required. Amended tax returns This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated amount. Amended tax returns   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. Amended tax returns How to report allocated tips. Amended tax returns   If you received any tips in 2013 that you did not report to your employer as required (including allocated tips that you are required to report on your tax return), add these tips to the amount in box 1 of your Form(s) W-2 and report this amount as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Amended tax returns (You cannot file Form 1040A or Form 1040EZ). Amended tax returns    Because social security, Medicare, or Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Amended tax returns Complete Form 4137 and include the allocated tips on line 1 of the form as provided in its instructions. Amended tax returns See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. Amended tax returns How to request an approved lower rate. Amended tax returns   Your employer can use a tip rate lower than 8% (but not lower than 2%) to figure allocated tips only if the IRS approves the lower rate. Amended tax returns Either the employer or the employees can request approval of a lower rate by filing a petition with the IRS. Amended tax returns The petition must include specific information about the establishment that will justify the lower rate. Amended tax returns A user fee must be paid with the petition. Amended tax returns    An employee petition can be filed only with the consent of a majority of the directly tipped employees (waiters, bartenders, and others who receive tips directly from customers). Amended tax returns The petition must state the total number of directly tipped employees and the number of employees consenting to the petition. Amended tax returns Employees filing the petition must promptly notify the employer, and the employer must promptly give the IRS a copy of all Forms 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, filed for the establishment for the previous 3 years. Amended tax returns   For more information about how to file a petition and what information to include, see Allocation of Tips in the Instructions for Form 8027. Amended tax returns How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Amended tax returns Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Amended tax returns Free help with your tax return. Amended tax returns   Free help in preparing your return is available nationwide from IRS-certified volunteers. Amended tax returns The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. Amended tax returns The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Amended tax returns Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Amended tax returns Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Amended tax returns To find the nearest VITA or TCE site, visit IRS. Amended tax returns gov or call 1-800-906-9887. Amended tax returns   As part of the TCE program, AARP offers the Tax-Aide counseling program. Amended tax returns To find the nearest AARP Tax-Aide site, visit AARP's website at www. Amended tax returns aarp. Amended tax returns org/money/taxaide or call 1-888-227-7669. Amended tax returns   For more information on these programs, go to IRS. Amended tax returns gov and enter “VITA” in the search box. Amended tax returns Internet. Amended tax returns IRS. Amended tax returns gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. Amended tax returns Apply for an Employer Identification Number (EIN). Amended tax returns Go to IRS. Amended tax returns gov and enter Apply for an EIN in the search box. Amended tax returns Request an Electronic Filing PIN by going to IRS. Amended tax returns gov and entering Electronic Filing PIN in the search box. Amended tax returns Check the status of your 2013 refund with Where's My Refund? Go to IRS. Amended tax returns gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. Amended tax returns If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Amended tax returns Check the status of your amended return. Amended tax returns Go to IRS. Amended tax returns gov and enter Where's My Amended Return in the search box. Amended tax returns Download forms, instructions, and publications, including some accessible versions. Amended tax returns Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. Amended tax returns gov or IRS2Go. Amended tax returns Tax return and tax account transcripts are generally available for the current year and past three years. Amended tax returns Figure your income tax withholding with the IRS Withholding Calculator on IRS. Amended tax returns gov. Amended tax returns Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Amended tax returns Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Amended tax returns gov. Amended tax returns Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. Amended tax returns gov or IRS2Go. Amended tax returns Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. Amended tax returns An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. Amended tax returns Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. Amended tax returns If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. Amended tax returns Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Amended tax returns Locate the nearest volunteer help site with the VITA Locator Tool on IRS. Amended tax returns gov. Amended tax returns Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Amended tax returns The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Amended tax returns Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. Amended tax returns AARP offers the Tax-Aide counseling program as part of the TCE program. Amended tax returns Visit AARP's website to find the nearest Tax-Aide location. Amended tax returns Research your tax questions. Amended tax returns Search publications and instructions by topic or keyword. Amended tax returns Read the Internal Revenue Code, regulations, or other official guidance. Amended tax returns Read Internal Revenue Bulletins. Amended tax returns Sign up to receive local and national tax news by email. Amended tax returns Phone. Amended tax returns You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Amended tax returns Download the free IRS2Go mobile app from the iTunes app store or from Google Play. Amended tax returns Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Amended tax returns Call to locate the nearest volunteer help site, 1-800-906-9887. Amended tax returns Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Amended tax returns The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Amended tax returns Most VITA and TCE sites offer free electronic filing. Amended tax returns Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Amended tax returns Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Amended tax returns Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. Amended tax returns The automated Where's My Refund? information is available 24 hours a day, 7 days a week. Amended tax returns If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Amended tax returns Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Amended tax returns Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Amended tax returns Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Amended tax returns Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Amended tax returns Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). Amended tax returns You should receive your order within 10 business days. Amended tax returns Call to order transcripts of your tax returns or tax account, 1-800-908-9946. Amended tax returns Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. Amended tax returns Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. Amended tax returns Call to ask tax questions, 1-800-829-1040. Amended tax returns Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Amended tax returns The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Amended tax returns These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. Amended tax returns gsa. Amended tax returns gov/fedrelay. Amended tax returns Walk-in. Amended tax returns You can find a selection of forms, publications and services — in-person, face-to-face. Amended tax returns Products. Amended tax returns You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Amended tax returns Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Amended tax returns Services. Amended tax returns You can walk in to your local TAC most business days for personal, face-to-face tax help. Amended tax returns An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Amended tax returns If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Amended tax returns No appointment is necessary—just walk in. Amended tax returns Before visiting, check www. Amended tax returns irs. Amended tax returns gov/localcontacts for hours of operation and services provided. Amended tax returns Mail. Amended tax returns You can send your order for forms, instructions, and publications to the address below. Amended tax returns You should receive a response within 10 business days after your request is received. Amended tax returns  Internal Revenue Service 1201 N. Amended tax returns Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Amended tax returns   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Amended tax returns Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Amended tax returns What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. Amended tax returns We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Amended tax returns You face (or your business is facing) an immediate threat of adverse action. Amended tax returns You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Amended tax returns   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Amended tax returns Here's why we can help: TAS is an independent organization within the IRS. Amended tax returns Our advocates know how to work with the IRS. Amended tax returns Our services are free and tailored to meet your needs. Amended tax returns We have offices in every state, the District of Columbia, and Puerto Rico. Amended tax returns How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Amended tax returns irs. Amended tax returns gov/advocate, or call us toll-free at 1-877-777-4778. Amended tax returns How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Amended tax returns If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Amended tax returns irs. Amended tax returns gov/sams. Amended tax returns Low Income Taxpayer Clinics. Amended tax returns   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Amended tax returns Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Amended tax returns Visit www. Amended tax returns TaxpayerAdvocate. Amended tax returns irs. Amended tax returns gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. 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