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Can I Efile 2012 Taxes

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Can I Efile 2012 Taxes

Can i efile 2012 taxes Index A Acknowledgment, Acknowledgment. Can i efile 2012 taxes Adoption expenses, Personal Expenses Airplanes, donations of, Cars, Boats, and Airplanes Appraisal fees, Appraisal Fees Assistance (see Tax help) Athletic events, Athletic events. Can i efile 2012 taxes B Bargain sales, Bargain Sales Blood donated, Value of Time or Services Boats, donations of, Cars, Boats, and Airplanes Boats, fair market value, Cars, boats, and airplanes. Can i efile 2012 taxes C Canadian charity, Canadian charities. Can i efile 2012 taxes Capital gain property, Capital Gain Property Car expenses, Car expenses. Can i efile 2012 taxes , Car expenses. Can i efile 2012 taxes Carryovers, Carryovers Cars, donations of, Cars, Boats, and Airplanes Cash contributions, records to keep, Cash Contributions Charity benefit events, Charity benefit events. Can i efile 2012 taxes Church deacon, Church deacon. Can i efile 2012 taxes Clothing Fair market value of, Used clothing. Can i efile 2012 taxes Conservation contribution, Special 50% Limit for Qualified Conservation Contributions Contributions from which you benefit, Contributions From Which You Benefit, Contributions From Which You Benefit Contributions of property, Contributions of Property Contributions subject to special rules Car, boat, or airplane, 1098–C, Contributions Subject to Special Rules Clothing, Contributions Subject to Special Rules Fractional interest in tangible personal property, Contributions Subject to Special Rules Future interest in tangible personal property, Contributions Subject to Special Rules Household items, Contributions Subject to Special Rules Inventory from your business, Contributions Subject to Special Rules Partial interest in property, Contributions Subject to Special Rules Patent or other intellectual property, Contributions Subject to Special Rules Property subject to a debt, Contributions Subject to Special Rules Qualified conservation contribution, Contributions Subject to Special Rules Taxidermy property, Contributions Subject to Special Rules Contributions to nonqualified organizations Foreign organizations, Contributions to Nonqualified Organizations Contributions you can deduct, Contributions You Can Deduct Conventions of a qualified organization, Conventions. Can i efile 2012 taxes D Daily allowance (per diem) from a charitable organization, Daily allowance (per diem). Can i efile 2012 taxes Deduction limits, Limits on Deductions Determining fair market value, Determining Fair Market Value Disaster relief, Reminders Donor-advised funds, Contributions to Donor-Advised Funds E Easement, Building in registered historic district. Can i efile 2012 taxes F Farmer, Qualified farmer or rancher. Can i efile 2012 taxes Food inventory, Food Inventory Foreign organizations Canadian, Canadian charities. Can i efile 2012 taxes Israeli, Israeli charities. Can i efile 2012 taxes Mexican, Mexican charities. Can i efile 2012 taxes Form 8282, Form 8282. Can i efile 2012 taxes 8283, Total deduction over $500. Can i efile 2012 taxes Foster parents, Foster parents. Can i efile 2012 taxes Free tax services, Free help with your tax return. Can i efile 2012 taxes Future interests in property, Future Interest in Tangible Personal Property H Help (see Tax help) Historic building, Building in registered historic district. Can i efile 2012 taxes Household items Fair market value of, Household items. Can i efile 2012 taxes How to report, How To Report Noncash contributions, Reporting expenses for student living with you. Can i efile 2012 taxes I Introduction, Introduction Inventory, Food Inventory Israeli charity, Israeli charities. Can i efile 2012 taxes L Legislation, influencing, Contributions From Which You Benefit Limit on itemized deductions, What's New Limits on deductions, Limits on Deductions 20% limit, 20% Limit 30% limit, 30% Limit 50% limit, 50% Limit Calculation, How To Figure Your Deduction When Limits Apply Capital gain property, Special 30% Limit for Capital Gain Property Qualified conservation contributions, Special 50% Limit for Qualified Conservation Contributions M Meals, Personal Expenses Membership fees or dues, Membership fees or dues. Can i efile 2012 taxes Mexican charity, Mexican charities. Can i efile 2012 taxes Motor vehicles, donations of, Cars, Boats, and Airplanes Motor vehicles, fair market value, Cars, boats, and airplanes. Can i efile 2012 taxes N Noncash contributions, Noncash Contributions How to report, Reporting expenses for student living with you. Can i efile 2012 taxes Records to keep, Noncash Contributions Nondeductible contributions, Contributions You Cannot Deduct O Ordinary income property, Ordinary Income Property Out-of-pocket expenses, Out-of-pocket expenses. Can i efile 2012 taxes Out-of-pocket expenses in giving services, Out-of-Pocket Expenses in Giving Services P Payroll deductions, Payroll deductions. Can i efile 2012 taxes , Payroll deductions. Can i efile 2012 taxes Penalty, valuation overstatement, Penalty Personal expenses, Personal Expenses Private foundation, 50% Limit Organizations Private nonoperating foundation, Contributions to private nonoperating foundations. Can i efile 2012 taxes , 50% Limit Organizations Private operating foundation, 50% Limit Organizations Property Bargain sales, Bargain Sales Basis, Giving Property That Has Decreased in Value Capital gain, Capital Gain Property Capital gain election, Capital gain property election. Can i efile 2012 taxes Decreased in value, Giving Property That Has Decreased in Value Future interests, Future Interest in Tangible Personal Property Increased in value, Giving Property That Has Increased in Value Inventory, Food Inventory Ordinary income, Ordinary Income Property Unrelated use, Tangible personal property put to unrelated use. Can i efile 2012 taxes Publications (see Tax help) Q Qualified charitable distributions, Qualified Charitable Distributions Qualified conservation contribution, Special 50% Limit for Qualified Conservation Contributions Qualified organizations Foreign qualified organizations Canadian, Organizations That Qualify To Receive Deductible Contributions Israeli, Organizations That Qualify To Receive Deductible Contributions Mexican, Organizations That Qualify To Receive Deductible Contributions Types, Organizations That Qualify To Receive Deductible Contributions R Raffle or bingo, Contributions From Which You Benefit Recapture No exempt use, Recapture if no exempt use. Can i efile 2012 taxes Recapture of deduction of fractional interest in tangible personal property Additional tax, Recapture of deduction. Can i efile 2012 taxes Records to keep, Records To Keep Reminders Disaster relief, Reminders Reporting, How To Report Retirement home, Contributions From Which You Benefit S Services, value of, Value of Time or Services Split-dollar insurance arrangements, Contributions From Which You Benefit Student, Mutual exchange program. Can i efile 2012 taxes Exchange program, Mutual exchange program. Can i efile 2012 taxes Living with you, Student living with you. Can i efile 2012 taxes Student living with you, Expenses Paid for Student Living With You, Reporting expenses for student living with you. Can i efile 2012 taxes T Tangible personal property Future interest in, Future Interest in Tangible Personal Property Tax help, How To Get Tax Help Time, value of, Value of Time or Services Token items, Certain membership benefits can be disregarded. Can i efile 2012 taxes Travel expenses, Travel. Can i efile 2012 taxes Travel expenses for charitable services, Deductible travel expenses. Can i efile 2012 taxes Tuition, Contributions From Which You Benefit U Underprivileged youths, Underprivileged youths selected by charity. Can i efile 2012 taxes Uniforms, Uniforms. Can i efile 2012 taxes Unrelated use, Unrelated use. Can i efile 2012 taxes V Volunteers, Out-of-Pocket Expenses in Giving Services W Whaling captain, Expenses of Whaling Captains When to deduct, When To Deduct Prev  Up     Home   More Online Publications
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Can i efile 2012 taxes 5. Can i efile 2012 taxes   Business Income Table of Contents Introduction Kinds of IncomeBartering for Property or Services Real Estate Rents Personal Property Rents Interest and Dividend Income Canceled Debt Other Income Items That Are Not IncomeAmount you can exclude. Can i efile 2012 taxes Short-term lease. Can i efile 2012 taxes Retail space. Can i efile 2012 taxes Qualified long-term real property. Can i efile 2012 taxes Guidelines for Selected Occupations Accounting for Your Income Introduction This chapter primarily explains business income and how to account for it on your tax return, what items are not considered income, and gives guidelines for selected occupations. Can i efile 2012 taxes If there is a connection between any income you receive and your business, the income is business income. Can i efile 2012 taxes A connection exists if it is clear that the payment of income would not have been made if you did not have the business. Can i efile 2012 taxes You can have business income even if you are not involved in the activity on a regular full-time basis. Can i efile 2012 taxes Income from work you do on the side in addition to your regular job can be business income. Can i efile 2012 taxes You report most business income, such as income from selling your products or services, on Schedule C or C-EZ. Can i efile 2012 taxes But you report the income from the sale of business assets, such as land and office buildings, on other forms instead of Schedule C or C-EZ. Can i efile 2012 taxes For information on selling business assets, see chapter 3. Can i efile 2012 taxes Nonemployee compensation. Can i efile 2012 taxes Business income includes amounts you received in your business that were properly shown on Forms 1099-MISC. Can i efile 2012 taxes This includes amounts reported as nonemployee compensation in box 7 of the form. Can i efile 2012 taxes You can find more information in the instructions on the back of the Form 1099-MISC you received. Can i efile 2012 taxes Kinds of Income You must report on your tax return all income you receive from your business unless it is excluded by law. Can i efile 2012 taxes In most cases, your business income will be in the form of cash, checks, and credit card charges. Can i efile 2012 taxes But business income can be in other forms, such as property or services. Can i efile 2012 taxes These and other types of income are explained next. Can i efile 2012 taxes If you are a U. Can i efile 2012 taxes S. Can i efile 2012 taxes citizen who has business income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt from tax under U. Can i efile 2012 taxes S. Can i efile 2012 taxes law. Can i efile 2012 taxes If you live outside the United States, you may be able to exclude part or all of your foreign-source business income. Can i efile 2012 taxes For details, see Publication 54, Tax Guide for U. Can i efile 2012 taxes S. Can i efile 2012 taxes Citizens and Resident Aliens Abroad. Can i efile 2012 taxes Bartering for Property or Services Bartering is an exchange of property or services. Can i efile 2012 taxes You must include in your gross receipts, at the time received, the fair market value of property or services you receive in exchange for something else. Can i efile 2012 taxes If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as the fair market value unless the value can be shown to be otherwise. Can i efile 2012 taxes Example 1. Can i efile 2012 taxes You are a self-employed lawyer. Can i efile 2012 taxes You perform legal services for a client, a small corporation. Can i efile 2012 taxes In payment for your services, you receive shares of stock in the corporation. Can i efile 2012 taxes You must include the fair market value of the shares in income. Can i efile 2012 taxes Example 2. Can i efile 2012 taxes You are an artist and create a work of art to compensate your landlord for the rent-free use of your apartment. Can i efile 2012 taxes You must include the fair rental value of the apartment in your gross receipts. Can i efile 2012 taxes Your landlord must include the fair market value of the work of art in his or her rental income. Can i efile 2012 taxes Example 3. Can i efile 2012 taxes You are a self-employed accountant. Can i efile 2012 taxes Both you and a house painter are members of a barter club, an organization that each year gives its members a directory of members and the services each member provides. Can i efile 2012 taxes Members get in touch with other members directly and bargain for the value of the services to be performed. Can i efile 2012 taxes In return for accounting services you provided for the house painter's business, the house painter painted your home. Can i efile 2012 taxes You must include in gross receipts the fair market value of the services you received from the house painter. Can i efile 2012 taxes The house painter must include the fair market value of your accounting services in his or her gross receipts. Can i efile 2012 taxes Example 4. Can i efile 2012 taxes You are a member of a barter club that uses credit units to credit or debit members' accounts for goods or services provided or received. Can i efile 2012 taxes As soon as units are credited to your account, you can use them to buy goods or services or sell or transfer the units to other members. Can i efile 2012 taxes You must include the value of credit units you received in your gross receipts for the tax year in which the units are credited to your account. Can i efile 2012 taxes The dollar value of units received for services by an employee of the club, who can use the units in the same manner as other members, must be included in the employee's gross income for the tax year in which received. Can i efile 2012 taxes It is wages subject to social security and Medicare taxes (FICA), federal unemployment taxes (FUTA), and income tax withholding. Can i efile 2012 taxes See Publication 15 (Circular E), Employer's Tax Guide. Can i efile 2012 taxes Example 5. Can i efile 2012 taxes You operate a plumbing business and use the cash method of accounting. Can i efile 2012 taxes You join a barter club and agree to provide plumbing services to any member for a specified number of hours. Can i efile 2012 taxes Each member has access to a directory that lists the members of the club and the services available. Can i efile 2012 taxes Members contact each other directly and request services to be performed. Can i efile 2012 taxes You are not required to provide services unless requested by another member, but you can use as many of the offered services as you wish without paying a fee. Can i efile 2012 taxes You must include the fair market value of any services you receive from club members in your gross receipts when you receive them even if you have not provided any services to club members. Can i efile 2012 taxes Information returns. Can i efile 2012 taxes   If you are involved in a bartering transaction, you may have to file either of the following forms. Can i efile 2012 taxes Form 1099-B, Proceeds From Broker and Barter Exchange Transactions. Can i efile 2012 taxes Form 1099-MISC, Miscellaneous Income. Can i efile 2012 taxes For information about these forms, see the General Instructions for Certain Information Returns. Can i efile 2012 taxes Real Estate Rents If you are a real estate dealer who receives income from renting real property or an owner of a hotel, motel, etc. Can i efile 2012 taxes , who provides services (maid services, etc. Can i efile 2012 taxes ) for guests, report the rental income and expenses on Schedule C or C-EZ. Can i efile 2012 taxes If you are not a real estate dealer or the kind of owner described in the preceding sentence, report the rental income and expenses on Schedule E. Can i efile 2012 taxes For more information, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes). Can i efile 2012 taxes Real estate dealer. Can i efile 2012 taxes   You are a real estate dealer if you are engaged in the business of selling real estate to customers with the purpose of making a profit from those sales. Can i efile 2012 taxes Rent you receive from real estate held for sale to customers is subject to SE tax. Can i efile 2012 taxes However, rent you receive from real estate held for speculation or investment is not subject to SE tax. Can i efile 2012 taxes Trailer park owner. Can i efile 2012 taxes   Rental income from a trailer park is subject to SE tax if you are a self-employed trailer park owner who provides trailer lots and facilities and substantial services for the convenience of your tenants. Can i efile 2012 taxes    You generally are considered to provide substantial services for tenants if they are primarily for the tenants' convenience and normally are not provided to maintain the lots in a condition for occupancy. Can i efile 2012 taxes Services are substantial if the compensation for the services makes up a material part of the tenants' rental payments. Can i efile 2012 taxes   Examples of services that are not normally provided for the tenants' convenience include supervising and maintaining a recreational hall provided by the park, distributing a monthly newsletter to tenants, operating a laundry facility, and helping tenants buy or sell their trailers. Can i efile 2012 taxes   Examples of services that are normally provided to maintain the lots in a condition for tenant occupancy include city sewerage, electrical connections, and roadways. Can i efile 2012 taxes Hotels, boarding houses, and apartments. Can i efile 2012 taxes   Rental income you receive for the use or occupancy of hotels, boarding houses, or apartment houses is subject to SE tax if you provide services for the occupants. Can i efile 2012 taxes   Generally, you are considered to provide services for the occupants if the services are primarily for their convenience and are not services normally provided with the rental of rooms for occupancy only. Can i efile 2012 taxes An example of a service that is not normally provided for the convenience of the occupants is maid service. Can i efile 2012 taxes However, providing heat and light, cleaning stairways and lobbies, and collecting trash are services normally provided for the occupants' convenience. Can i efile 2012 taxes Prepaid rent. Can i efile 2012 taxes   Advance payments received under a lease that does not put any restriction on their use or enjoyment are income in the year you receive them. Can i efile 2012 taxes This is true no matter what accounting method or period you use. Can i efile 2012 taxes Lease bonus. Can i efile 2012 taxes   A bonus you receive from a lessee for granting a lease is an addition to the rent. Can i efile 2012 taxes Include it in your gross receipts in the year received. Can i efile 2012 taxes Lease cancellation payments. Can i efile 2012 taxes   Report payments you receive from your lessee for canceling a lease in your gross receipts in the year received. Can i efile 2012 taxes Payments to third parties. Can i efile 2012 taxes   If your lessee makes payments to someone else under an agreement to pay your debts or obligations, include the payments in your gross receipts when the lessee makes the payments. Can i efile 2012 taxes A common example of this kind of income is a lessee's payment of your property taxes on leased real property. Can i efile 2012 taxes Settlement payments. Can i efile 2012 taxes   Payments you receive in settlement of a lessee's obligation to restore the leased property to its original condition are income in the amount that the payments exceed the adjusted basis of the leasehold improvements destroyed, damaged, removed, or disconnected by the lessee. Can i efile 2012 taxes Personal Property Rents If you are in the business of renting personal property (equipment, vehicles, formal wear, etc. Can i efile 2012 taxes ), include the rental amount you receive in your gross receipts on Schedule C or C-EZ. Can i efile 2012 taxes Prepaid rent and other payments described in the preceding Real Estate Rents discussion can also be received for renting personal property. Can i efile 2012 taxes If you receive any of those payments, include them in your gross receipts as explained in that discussion. Can i efile 2012 taxes Interest and Dividend Income Interest and dividends may be considered business income. Can i efile 2012 taxes Interest. Can i efile 2012 taxes   Interest received on notes receivable that you have accepted in the ordinary course of business is business income. Can i efile 2012 taxes Interest received on loans is business income if you are in the business of lending money. Can i efile 2012 taxes Uncollectible loans. Can i efile 2012 taxes   If a loan payable to you becomes uncollectible during the tax year and you use an accrual method of accounting, you must include in gross income interest accrued up to the time the loan became uncollectible. Can i efile 2012 taxes If the accrued interest later becomes uncollectible, you may be able to take a bad debt deduction. Can i efile 2012 taxes See Bad Debts in chapter 8. Can i efile 2012 taxes Unstated interest. Can i efile 2012 taxes   If little or no interest is charged on an installment sale, you may have to treat a part of each payment as unstated interest. Can i efile 2012 taxes See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. Can i efile 2012 taxes Dividends. Can i efile 2012 taxes   Generally, dividends are business income to dealers in securities. Can i efile 2012 taxes For most sole proprietors and statutory employees, however, dividends are nonbusiness income. Can i efile 2012 taxes If you hold stock as a personal investment separately from your business activity, the dividends from the stock are nonbusiness income. Can i efile 2012 taxes   If you receive dividends from business insurance premiums you deducted in an earlier year, you must report all or part of the dividend as business income on your return. Can i efile 2012 taxes To find out how much you have to report, see   Recovery of items previously deducted under Other Income, later. Can i efile 2012 taxes Canceled Debt The following explains the general rule for including canceled debt in income and the exceptions to the general rule. Can i efile 2012 taxes General Rule Generally, if your debt is canceled or forgiven, other than as a gift or bequest to you, you must include the canceled amount in your gross income for tax purposes. Can i efile 2012 taxes Report the canceled amount on line 6 of Schedule C if you incurred the debt in your business. Can i efile 2012 taxes If the debt is a nonbusiness debt, report the canceled amount on line 21 of Form 1040. Can i efile 2012 taxes Exceptions The following discussion covers some exceptions to the general rule for canceled debt. Can i efile 2012 taxes Price reduced after purchase. Can i efile 2012 taxes   If you owe a debt to the seller for property you bought and the seller reduces the amount you owe, you generally do not have income from the reduction. Can i efile 2012 taxes Unless you are bankrupt or insolvent, treat the amount of the reduction as a purchase price adjustment and reduce your basis in the property. Can i efile 2012 taxes Deductible debt. Can i efile 2012 taxes   You do not realize income from a canceled debt to the extent the payment of the debt would have led to a deduction. Can i efile 2012 taxes Example. Can i efile 2012 taxes You get accounting services for your business on credit. Can i efile 2012 taxes Later, you have trouble paying your business debts, but you are not bankrupt or insolvent. Can i efile 2012 taxes Your accountant forgives part of the amount you owe for the accounting services. Can i efile 2012 taxes How you treat the canceled debt depends on your method of accounting. Can i efile 2012 taxes Cash method — You do not include the canceled debt in income because payment of the debt would have been deductible as a business expense. Can i efile 2012 taxes Accrual method — You include the canceled debt in income because the expense was deductible when you incurred the debt. Can i efile 2012 taxes   For information on the cash and accrual methods of accounting, see chapter 2. Can i efile 2012 taxes Exclusions Do not include canceled debt in income in the following situations. Can i efile 2012 taxes However, you may be required to file Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. Can i efile 2012 taxes For more information, see Form 982. Can i efile 2012 taxes The cancellation takes place in a bankruptcy case under title 11 of the U. Can i efile 2012 taxes S. Can i efile 2012 taxes Code (relating to bankruptcy). Can i efile 2012 taxes See Publication 908, Bankruptcy Tax Guide. Can i efile 2012 taxes The cancellation takes place when you are insolvent. Can i efile 2012 taxes You can exclude the canceled debt to the extent you are insolvent. Can i efile 2012 taxes See Publication 908. Can i efile 2012 taxes The canceled debt is a qualified farm debt owed to a qualified person. Can i efile 2012 taxes See chapter 3 in Publication 225, Farmer's Tax Guide. Can i efile 2012 taxes The canceled debt is a qualified real property business debt. Can i efile 2012 taxes This situation is explained later. Can i efile 2012 taxes The canceled debt is qualified principal residence indebtedness which is discharged after 2006. Can i efile 2012 taxes See Form 982. Can i efile 2012 taxes If a canceled debt is excluded from income because it takes place in a bankruptcy case, the exclusions in situations 2 through 5 do not apply. Can i efile 2012 taxes If it takes place when you are insolvent, the exclusions in situations 3 and 4 do not apply to the extent you are insolvent. Can i efile 2012 taxes Debt. Can i efile 2012 taxes   For purposes of this discussion, debt includes any debt for which you are liable or which attaches to property you hold. Can i efile 2012 taxes Qualified real property business debt. Can i efile 2012 taxes   You can elect to exclude (up to certain limits) the cancellation of qualified real property business debt. Can i efile 2012 taxes If you make the election, you must reduce the basis of your depreciable real property by the amount excluded. Can i efile 2012 taxes Make this reduction at the beginning of your tax year following the tax year in which the cancellation occurs. Can i efile 2012 taxes However, if you dispose of the property before that time, you must reduce its basis immediately before the disposition. Can i efile 2012 taxes Cancellation of qualified real property business debt. Can i efile 2012 taxes   Qualified real property business debt is debt (other than qualified farm debt) that meets all the following conditions. Can i efile 2012 taxes It was incurred or assumed in connection with real property used in a trade or business. Can i efile 2012 taxes It was secured by such real property. Can i efile 2012 taxes It was incurred or assumed at either of the following times. Can i efile 2012 taxes Before January 1, 1993. Can i efile 2012 taxes After December 31, 1992, if incurred or assumed to acquire, construct, or substantially improve the real property. Can i efile 2012 taxes It is debt to which you choose to apply these rules. Can i efile 2012 taxes   Qualified real property business debt includes refinancing of debt described in (3) earlier, but only to the extent it does not exceed the debt being refinanced. Can i efile 2012 taxes   You cannot exclude more than either of the following amounts. Can i efile 2012 taxes The excess (if any) of: The outstanding principal of qualified real property business debt (immediately before the cancellation), over The fair market value (immediately before the cancellation) of the business real property that is security for the debt, reduced by the outstanding principal amount of any other qualified real property business debt secured by this property immediately before the cancellation. Can i efile 2012 taxes The total adjusted bases of depreciable real property held by you immediately before the cancellation. Can i efile 2012 taxes These adjusted bases are determined after any basis reduction due to a cancellation in bankruptcy, insolvency, or of qualified farm debt. Can i efile 2012 taxes Do not take into account depreciable real property acquired in contemplation of the cancellation. Can i efile 2012 taxes Election. Can i efile 2012 taxes   To make this election, complete Form 982 and attach it to your income tax return for the tax year in which the cancellation occurs. Can i efile 2012 taxes You must file your return by the due date (including extensions). Can i efile 2012 taxes If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Can i efile 2012 taxes For more information, see When To File in the form instructions. Can i efile 2012 taxes Other Income The following discussion explains how to treat other types of business income you may receive. Can i efile 2012 taxes Restricted property. Can i efile 2012 taxes   Restricted property is property that has certain restrictions that affect its value. Can i efile 2012 taxes If you receive restricted stock or other property for services performed, the fair market value of the property in excess of your cost is included in your income on Schedule C or C-EZ when the restriction is lifted. Can i efile 2012 taxes However, you can choose to be taxed in the year you receive the property. Can i efile 2012 taxes For more information on including restricted property in income, see Publication 525, Taxable and Nontaxable Income. Can i efile 2012 taxes Gains and losses. Can i efile 2012 taxes   Do not report on Schedule C or C-EZ a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. Can i efile 2012 taxes Instead, you must report these gains and losses on other forms. Can i efile 2012 taxes For more information, see chapter 3. Can i efile 2012 taxes Promissory notes. Can i efile 2012 taxes   Report promissory notes and other evidences of debt issued to you in a sale or exchange of property that is stock in trade or held primarily for sale to customers on Schedule C or C-EZ. Can i efile 2012 taxes In general, you report them at their stated principal amount (minus any unstated interest) when you receive them. Can i efile 2012 taxes Lost income payments. Can i efile 2012 taxes   If you reduce or stop your business activities, report on Schedule C or C-EZ any payment you receive for the lost income of your business from insurance or other sources. Can i efile 2012 taxes Report it on Schedule C or C-EZ even if your business is inactive when you receive the payment. Can i efile 2012 taxes Damages. Can i efile 2012 taxes   You must include in gross income compensation you receive during the tax year as a result of any of the following injuries connected with your business. Can i efile 2012 taxes Patent infringement. Can i efile 2012 taxes Breach of contract or fiduciary duty. Can i efile 2012 taxes Antitrust injury. Can i efile 2012 taxes Economic injury. Can i efile 2012 taxes   You may be entitled to a deduction against the income if it compensates you for actual economic injury. Can i efile 2012 taxes Your deduction is the smaller of the following amounts. Can i efile 2012 taxes The amount you receive or accrue for damages in the tax year reduced by the amount you pay or incur in the tax year to recover that amount. Can i efile 2012 taxes Your loss from the injury that you have not yet deducted. Can i efile 2012 taxes Punitive damages. Can i efile 2012 taxes   You must also include punitive damages in income. Can i efile 2012 taxes Kickbacks. Can i efile 2012 taxes   If you receive any kickbacks, include them in your income on Schedule C or C-EZ. Can i efile 2012 taxes However, do not include them if you properly treat them as a reduction of a related expense item, a capital expenditure, or cost of goods sold. Can i efile 2012 taxes Recovery of items previously deducted. Can i efile 2012 taxes   If you recover a bad debt or any other item deducted in a previous year, include the recovery in income on Schedule C or C-EZ. Can i efile 2012 taxes However, if all or part of the deduction in earlier years did not reduce your tax, you can exclude the part that did not reduce your tax. Can i efile 2012 taxes If you exclude part of the recovery from income, you must include with your return a computation showing how you figured the exclusion. Can i efile 2012 taxes Example. Can i efile 2012 taxes Joe Smith, a sole proprietor, had gross income of $8,000, a bad debt deduction of $300, and other allowable deductions of $7,700. Can i efile 2012 taxes He also had 2 personal exemptions for a total of $7,800. Can i efile 2012 taxes He would not pay income tax even if he did not deduct the bad debt. Can i efile 2012 taxes Therefore, he will not report as income any part of the $300 he may recover in any future year. Can i efile 2012 taxes Exception for depreciation. Can i efile 2012 taxes   This rule does not apply to depreciation. Can i efile 2012 taxes You recover depreciation using the rules explained next. Can i efile 2012 taxes Recapture of depreciation. Can i efile 2012 taxes   In the following situations, you have to recapture the depreciation deduction. Can i efile 2012 taxes This means you include in income part or all of the depreciation you deducted in previous years. Can i efile 2012 taxes Listed property. Can i efile 2012 taxes   If your business use of listed property (explained in chapter 8 under Depreciation ) falls to 50% or less in a tax year after the tax year you placed the property in service, you may have to recapture part of the depreciation deduction. Can i efile 2012 taxes You do this by including in income on Schedule C part of the depreciation you deducted in previous years. Can i efile 2012 taxes Use Part IV of Form 4797, Sales of Business Property, to figure the amount to include on Schedule C. Can i efile 2012 taxes For more information, see What is the Business-Use Requirement? in chapter 5 of Publication 946, How To Depreciate Property. Can i efile 2012 taxes That chapter explains how to determine whether property is used more than 50% in your business. Can i efile 2012 taxes Section 179 property. Can i efile 2012 taxes   If you take a section 179 deduction (explained in chapter 8 under Depreciation ) for an asset and before the end of the asset's recovery period the percentage of business use drops to 50% or less, you must recapture part of the section 179 deduction. Can i efile 2012 taxes You do this by including in income on Schedule C part of the deduction you took. Can i efile 2012 taxes Use Part IV of Form 4797 to figure the amount to include on Schedule C. Can i efile 2012 taxes See chapter 2 in Publication 946 to find out when you recapture the deduction. Can i efile 2012 taxes Sale or exchange of depreciable property. Can i efile 2012 taxes   If you sell or exchange depreciable property at a gain, you may have to treat all or part of the gain due to depreciation as ordinary income. Can i efile 2012 taxes You figure the income due to depreciation recapture in Part III of Form 4797. Can i efile 2012 taxes For more information, see chapter 4 in Publication 544, Sales and Other Dispositions of Assets. Can i efile 2012 taxes Items That Are Not Income In some cases the property or money you receive is not income. Can i efile 2012 taxes Appreciation. Can i efile 2012 taxes   Increases in value of your property are not income until you realize the increases through a sale or other taxable disposition. Can i efile 2012 taxes Consignments. Can i efile 2012 taxes   Consignments of merchandise to others to sell for you are not sales. Can i efile 2012 taxes The title of merchandise remains with you, the consignor, even after the consignee possesses the merchandise. Can i efile 2012 taxes Therefore, if you ship goods on consignment, you have no profit or loss until the consignee sells the merchandise. Can i efile 2012 taxes Merchandise you have shipped out on consignment is included in your inventory until it is sold. Can i efile 2012 taxes   Do not include merchandise you receive on consignment in your inventory. Can i efile 2012 taxes Include your profit or commission on merchandise consigned to you in your income when you sell the merchandise or when you receive your profit or commission, depending upon the method of accounting you use. Can i efile 2012 taxes Construction allowances. Can i efile 2012 taxes   If you enter into a lease after August 5, 1997, you can exclude from income the construction allowance you receive (in cash or as a rent reduction) from your landlord if you receive it under both the following conditions. Can i efile 2012 taxes Under a short-term lease of retail space. Can i efile 2012 taxes For the purpose of constructing or improving qualified long-term real property for use in your business at that retail space. Can i efile 2012 taxes Amount you can exclude. Can i efile 2012 taxes   You can exclude the construction allowance to the extent it does not exceed the amount you spent for construction or improvements. Can i efile 2012 taxes Short-term lease. Can i efile 2012 taxes   A short-term lease is a lease (or other agreement for occupancy or use) of retail space for 15 years or less. Can i efile 2012 taxes The following rules apply in determining whether the lease is for 15 years or less. Can i efile 2012 taxes Take into account options to renew when figuring whether the lease is for 15 years or less. Can i efile 2012 taxes But do not take into account any option to renew at fair market value determined at the time of renewal. Can i efile 2012 taxes Two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar retail space are treated as one lease. Can i efile 2012 taxes Retail space. Can i efile 2012 taxes   Retail space is real property leased, occupied, or otherwise used by you as a tenant in your business of selling tangible personal property or services to the general public. Can i efile 2012 taxes Qualified long-term real property. Can i efile 2012 taxes   Qualified long-term real property is nonresidential real property that is part of, or otherwise present at, your retail space and that reverts to the landlord when the lease ends. Can i efile 2012 taxes Exchange of like-kind property. Can i efile 2012 taxes   If you exchange your business property or property you hold for investment solely for property of a like kind to be used in your business or to be held for investment, no gain or loss is recognized. Can i efile 2012 taxes This means that the gain is not taxable and the loss is not deductible. Can i efile 2012 taxes A common type of nontaxable exchange is the trade-in of a business automobile for another business automobile. Can i efile 2012 taxes For more information, see Form 8824. Can i efile 2012 taxes Leasehold improvements. Can i efile 2012 taxes   If a tenant erects buildings or makes improvements to your property, the increase in the value of the property due to the improvements is not income to you. Can i efile 2012 taxes However, if the facts indicate that the improvements are a payment of rent to you, then the increase in value would be income. Can i efile 2012 taxes Loans. Can i efile 2012 taxes   Money borrowed through a bona fide loan is not income. Can i efile 2012 taxes Sales tax. Can i efile 2012 taxes   State and local sales taxes imposed on the buyer, which you were required to collect and pay over to state or local governments, are not income. Can i efile 2012 taxes Guidelines for Selected Occupations This section provides information to determine whether your earnings should be reported on Schedule C (Form 1040) or C-EZ (Form 1040). Can i efile 2012 taxes Direct seller. Can i efile 2012 taxes   You must report all income you receive as a direct seller on Schedule C or C-EZ. Can i efile 2012 taxes This includes any of the following. Can i efile 2012 taxes Income from sales—payments you receive from customers for products they buy from you. Can i efile 2012 taxes Commissions, bonuses, or percentages you receive for sales and the sales of others who work under you. Can i efile 2012 taxes Prizes, awards, and gifts you receive from your selling business. Can i efile 2012 taxes You must report this income regardless of whether it is reported to you on an information return. Can i efile 2012 taxes   You are a direct seller if you meet all the following conditions. Can i efile 2012 taxes You are engaged in one of the following trades or businesses. Can i efile 2012 taxes Selling or soliciting the sale of consumer products either in a home or other place that is not a permanent retail establishment, or to any buyer on a buy-sell basis or a deposit-commission basis for resale in a home or other place of business that is not a permanent retail establishment. Can i efile 2012 taxes Delivering or distributing newspapers or shopping news (including any services directly related to that trade or business). Can i efile 2012 taxes Substantially all your pay (whether paid in cash or not) for services described above is directly related to sales or other output (including performance of services) rather than to the number of hours worked. Can i efile 2012 taxes Your services are performed under a written contract between you and the person for whom you perform the services, and the contract provides that you will not be treated as an employee for federal tax purposes. Can i efile 2012 taxes Executor or administrator. Can i efile 2012 taxes   If you administer a deceased person's estate, your fees are reported on Schedule C or C-EZ if you are one of the following: A professional fiduciary. Can i efile 2012 taxes A nonprofessional fiduciary (personal representative) and both of the following apply. Can i efile 2012 taxes The estate includes an active trade or business in which you actively participate. Can i efile 2012 taxes Your fees are related to the operation of that trade or business. Can i efile 2012 taxes A nonprofessional fiduciary of a single estate that requires extensive managerial activities on your part for a long period of time, provided these activities are enough to be considered a trade or business. Can i efile 2012 taxes    If the fees do not meet the above requirements, report them on line 21 of Form 1040. Can i efile 2012 taxes Fishing crew member. Can i efile 2012 taxes    If you are a member of the crew that catches fish or other water life, your earnings are reported on Schedule C or C-EZ if you meet all the requirements shown in chapter 10 under Fishing crew member . Can i efile 2012 taxes Insurance agent, former. Can i efile 2012 taxes   Termination payments you receive as a former self-employed insurance agent from an insurance company because of services you performed for that company are not reported on Schedule C or C-EZ if all the following conditions are met. Can i efile 2012 taxes You received payments after your agreement to perform services for the company ended. Can i efile 2012 taxes You did not perform any services for the company after your service agreement ended and before the end of the year in which you received the payment. Can i efile 2012 taxes You entered into a covenant not to compete against the company for at least a 1-year period beginning on the date your service agreement ended. Can i efile 2012 taxes The amount of the payments depended primarily on policies sold by you or credited to your account during the last year of your service agreement or the extent to which those policies remain in force for some period after your service agreement ended, or both. Can i efile 2012 taxes The amount of the payment did not depend to any extent on length of service or overall earnings from services performed for the company (regardless of whether eligibility for the payments depended on length of service). Can i efile 2012 taxes Insurance agent, retired. Can i efile 2012 taxes   Income paid by an insurance company to a retired self-employed insurance agent based on a percentage of commissions received before retirement is reported on Schedule C or C-EZ. Can i efile 2012 taxes Also, renewal commissions and deferred commissions for sales made before retirement are generally reported on Schedule C or C-EZ. Can i efile 2012 taxes   However, renewal commissions paid to the survivor of an insurance agent are not reported on Schedule C or C-EZ. Can i efile 2012 taxes Newspaper carrier or distributor. Can i efile 2012 taxes   You are a direct seller and your earnings are reported on Schedule C or C-EZ if all the following conditions apply. Can i efile 2012 taxes You are in the business of delivering or distributing newspapers or shopping news (including directly related services such as soliciting customers and collecting receipts). Can i efile 2012 taxes Substantially all your pay for these services directly relates to your sales or other output rather than to the number of hours you work. Can i efile 2012 taxes You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes. Can i efile 2012 taxes   This rule applies whether or not you hire others to help you make deliveries. Can i efile 2012 taxes It also applies whether you buy the papers from the publisher or are paid based on the number of papers you deliver. Can i efile 2012 taxes Newspaper or magazine vendor. Can i efile 2012 taxes   If you are 18 or older and you sell newspapers or magazines, your earnings are reported on Schedule C or C-EZ if all the following conditions apply. Can i efile 2012 taxes You sell newspapers or magazines to ultimate consumers. Can i efile 2012 taxes You sell them at a fixed price. Can i efile 2012 taxes Your earnings are based on the difference between the sales price and your cost of goods sold. Can i efile 2012 taxes   This rule applies whether or not you are guaranteed a minimum amount of earnings. Can i efile 2012 taxes It also applies whether or not you receive credit for unsold newspapers or magazines you return to your supplier. Can i efile 2012 taxes Notary public. Can i efile 2012 taxes   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ. Can i efile 2012 taxes These payments are not subject to self-employment tax (see the instructions for Schedule SE (Form 1040)). Can i efile 2012 taxes Public official. Can i efile 2012 taxes   Public officials generally do not report what they earn for serving in public office on Schedule C or C-EZ. Can i efile 2012 taxes This rule applies to payments received by an elected tax collector from state funds on the basis of a fixed percentage of the taxes collected. Can i efile 2012 taxes Public office includes any elective or appointive office of the United States or its possessions, the District of Columbia, a state or its political subdivisions, or a wholly owned instrumentality of any of these. Can i efile 2012 taxes   Public officials of state or local governments report their fees on Schedule C or C-EZ if they are paid solely on a fee basis and if their services are eligible for, but not covered by, social security under a federal-state agreement. Can i efile 2012 taxes Real estate agent or direct seller. Can i efile 2012 taxes   If you are a licensed real estate agent or a direct seller, your earnings are reported on Schedule C or C-EZ if both the following apply. Can i efile 2012 taxes Substantially all your pay for services as a real estate agent or direct seller directly relates to your sales or other output rather than to the number of hours you work. Can i efile 2012 taxes You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes. Can i efile 2012 taxes Securities dealer. Can i efile 2012 taxes   If you are a dealer in options or commodities, your gains and losses from dealing or trading in section 1256 contracts (regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options, and dealer securities futures contracts) or property related to those contracts (such as stock used to hedge options) are reported on Schedule C or C-EZ. Can i efile 2012 taxes For more information, see sections 1256 and 1402(i). Can i efile 2012 taxes Securities trader. Can i efile 2012 taxes   You are a trader in securities if you are engaged in the business of buying and selling securities for your own account. Can i efile 2012 taxes As a trader in securities, your gain or loss from the disposition of securities is not reported on Schedule C or C-EZ. Can i efile 2012 taxes However, see Securities dealer , earlier, for an exception that applies to section 1256 contracts. Can i efile 2012 taxes For more information about securities traders, see Publication 550, Investment Income and Expenses. Can i efile 2012 taxes Accounting for Your Income Accounting for your income for income tax purposes differs at times from accounting for financial purposes. Can i efile 2012 taxes This section discusses some of the more common differences that may affect business transactions. Can i efile 2012 taxes Figure your business income on the basis of a tax year and according to your regular method of accounting (see chapter 2). Can i efile 2012 taxes If the sale of a product is an income-producing factor in your business, you usually have to use inventories to clearly show your income. Can i efile 2012 taxes Dealers in real estate are not allowed to use inventories. Can i efile 2012 taxes For more information on inventories, see chapter 2. Can i efile 2012 taxes Income paid to a third party. Can i efile 2012 taxes   All income you earn is taxable to you. Can i efile 2012 taxes You cannot avoid tax by having the income paid to a third party. Can i efile 2012 taxes Example. Can i efile 2012 taxes You rent out your property and the rental agreement directs the lessee to pay the rent to your son. Can i efile 2012 taxes The amount paid to your son is gross income to you. Can i efile 2012 taxes Cash discounts. Can i efile 2012 taxes   These are amounts the seller permits you to deduct from the invoice price for prompt payment. Can i efile 2012 taxes For income tax purposes, you can use either of the following two methods to account for cash discounts. Can i efile 2012 taxes Deduct the cash discount from purchases (see Line 36, Purchases Less Cost of Items Withdrawn for Personal Use in chapter 6). Can i efile 2012 taxes Credit the cash discount to a discount income account. Can i efile 2012 taxes You must use the chosen method every year for all your purchase discounts. Can i efile 2012 taxes   If you use the second method, the credit balance in the account at the end of your tax year is business income. Can i efile 2012 taxes Under this method, you do not reduce the cost of goods sold by the cash discounts you received. Can i efile 2012 taxes When valuing your closing inventory, you cannot reduce the invoice price of merchandise on hand at the close of the tax year by the average or estimated discounts received on the merchandise. Can i efile 2012 taxes Trade discounts. Can i efile 2012 taxes   These are reductions from list or catalog prices and usually are not written into the invoice or charged to the customer. Can i efile 2012 taxes Do not enter these discounts on your books of account. Can i efile 2012 taxes Instead, use only the net amount as the cost of the merchandise purchased. Can i efile 2012 taxes For more information, see Trade discounts in chapter 6. Can i efile 2012 taxes Payment placed in escrow. Can i efile 2012 taxes   If the buyer of your property places part or all of the purchase price in escrow, you do not include any part of it in gross sales until you actually or constructively receive it. Can i efile 2012 taxes However, upon completion of the terms of the contract and the escrow agreement, you will have taxable income, even if you do not accept the money until the next year. Can i efile 2012 taxes Sales returns and allowances. Can i efile 2012 taxes   Credits you allow customers for returned merchandise and any other allowances you make on sales are deductions from gross sales in figuring net sales. Can i efile 2012 taxes Advance payments. Can i efile 2012 taxes   Special rules dealing with an accrual method of accounting for payments received in advance are discussed in chapter 2 under Accrual Method. Can i efile 2012 taxes Insurance proceeds. Can i efile 2012 taxes   If you receive insurance or another type of reimbursement for a casualty or theft loss, you must subtract it from the loss when you figure your deduction. Can i efile 2012 taxes You cannot deduct the reimbursed part of a casualty or theft loss. Can i efile 2012 taxes   For information on casualty or theft losses, see Publication 547, Casualties, Disasters, and Thefts. Can i efile 2012 taxes Prev  Up  Next   Home   More Online Publications