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E File Income Tax Return

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E File Income Tax Return

E file income tax return Index A Abandonment, Abandonment Accounting method Accrual, Accrual Method Cash, Cash Method Change in, Changes in Methods of Accounting Crop, Crop method. E file income tax return Farm inventory, Farm Inventory Accounting periods, Introduction Accrual method of accounting, Accrual Method Additional Medicare Tax withholding, What's New for 2013, Additional Medicare Tax. E file income tax return Adjusted basis for installment sale, Adjusted basis for installment sale purposes. E file income tax return Adjusted basis of assets, Adjusted Basis Agricultural activity codes, Schedule F, Reminders Agricultural program payments, Agricultural Program Payments Agricultural structure, defined, Agricultural structure. E file income tax return Alternative Depreciation System (ADS), Required use of ADS. E file income tax return , ADS election. E file income tax return Amortization Going into business, Business Start-Up Costs Reforestation expenses, Reforestation Costs Section 197 intangibles, Section 197 Intangibles Assessments By conservation district, Assessment by Conservation District Depreciable property, Assessment for Depreciable Property Assistance (see Tax help) Automobiles, depreciation, Limits for passenger automobiles. E file income tax return B Bankruptcy, Bankruptcy. E file income tax return Barter income, Barter income. E file income tax return Basis Adjusted, Adjusted basis. E file income tax return Installment sale, Adjusted basis for installment sale purposes. E file income tax return Involuntary conversion, Basis for depreciation. E file income tax return Like-kind exchange, Basis for depreciation. E file income tax return Partner's basis, Property Distributed From a Partnership or Corporation Replacement property, Basis of replacement property. E file income tax return Shareholder's basis, Property Distributed From a Partnership or Corporation Basis of assets Adjusted basis, Adjusted Basis Allocating to several assets, Allocating the Basis Changed to business use, Property changed from personal to business or rental use. E file income tax return Constructing assets, Constructing assets. E file income tax return Cost, Cost Basis Decreases, Decreases to Basis Depreciation, What Is the Basis for Depreciation? Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Gifts, Property Received as a Gift Increases, Increases to Basis Real property, Real Property Received for services, Property received for services. E file income tax return Uniform capitalization rules, Uniform Capitalization Rules Below-market loans, Below-market loans. E file income tax return Books and records, Importance of Records Breeding fees, Breeding Fees Business income limit, section 179 expense deduction, Business Income Limit Business use of home, Business Use of Your Home C Canceled debt, Cancellation of Debt Capital assets, Capital Assets Capital expenses, Capital Expenses Car expenses, Truck and Car Expenses Cash method of accounting, Cash Method Casualties and thefts Adjustments to basis, Adjustments to basis. E file income tax return Casualty, defined, Casualty. E file income tax return Disaster area losses, Disaster Area Losses Leased property, Leased property. E file income tax return Livestock, Livestock or produce bought for resale. E file income tax return , Raised draft, breeding, dairy, or sporting animals. E file income tax return Reimbursement, Insurance and other reimbursements. E file income tax return Reporting gains and losses, Reporting Gains and Losses Theft, defined, Theft. E file income tax return Change in accounting method, Changes in Methods of Accounting Chickens, purchased, Chickens, seeds, and young plants. E file income tax return Christmas trees, Christmas tree cultivation. E file income tax return , Christmas trees. E file income tax return Club dues, Club dues and membership fees. E file income tax return Comments on publication, Comments and suggestions. E file income tax return Commodity Futures, Hedging (Commodity Futures) Wages, Noncash wages. E file income tax return Commodity Credit Corporation (CCC) Loans, Commodity Credit Corporation (CCC) Loans Market gain, Market Gain Community property, Community property. E file income tax return , Community property. E file income tax return Computer, software, Computer software. E file income tax return Condemnation, Casualties, Thefts, and Condemnations, Condemnation Conservation Cost-sharing exclusion, Conservation Expenses District assessments, Assessment by Conservation District Expenses, Conservation Expenses Plans, Conservation plan. E file income tax return Conservation Reserve Program, Conservation Reserve Program (CRP) payments. E file income tax return Conservation Reserve Program (CRP), Conservation Reserve Program (CRP) Constructing assets, Constructing assets. E file income tax return Constructive receipt of income, Constructive receipt. E file income tax return Contamination, Soil or other environmental contamination. E file income tax return Contract price, Contract price. E file income tax return Converted wetland, Converted Wetland and Highly Erodible Cropland Cooperatives, income from, Income From Cooperatives Cost-sharing exclusion, Cost-Sharing Exclusion (Improvements) Counter-cyclical payments, Direct payments and counter-cyclical payments. E file income tax return , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Credits Employment, Employment Credits Fuel tax, Fuel tax credit and refund. E file income tax return , How To Claim a Credit or Refund, Claiming a Credit Social security and Medicare, Earning credits in 2013. E file income tax return Social security coverage, How to become insured under social security. E file income tax return State unemployment tax, Tax rate and credit. E file income tax return Crew leaders, Crew Leaders Crop Destroyed, Standing crop destroyed by casualty. E file income tax return Insurance proceeds, Crop Insurance and Crop Disaster Payments Method of accounting, Crop method. E file income tax return Shares, Rents (Including Crop Shares) Unharvested, Cost of raising unharvested crops. E file income tax return , Section 1231 transactions. E file income tax return , Gain or loss. E file income tax return Cropland, highly erodible, Converted Wetland and Highly Erodible Cropland D Damage Casualties and thefts, Casualties and Thefts Crop insurance, Crop Insurance and Crop Disaster Payments Tree seedlings, Tree Seedlings Debt Bad, Nonbusiness bad debt. E file income tax return Canceled, Cancellation of Debt, Canceled debt excluded from income. E file income tax return , Cancellation of debt. E file income tax return , Canceled debt. E file income tax return Nonrecourse, Amount realized on a nonrecourse debt. E file income tax return Qualified farm, Qualified Farm Debt Qualified principal residence, Qualified Principal Residence Debt Recourse, Amount realized on a recourse debt. E file income tax return Depletion, Depletion Depreciation, Claiming the Special Depreciation Allowance ADS election, ADS election. E file income tax return Conservation assets, Depreciable conservation assets. E file income tax return Deduction, Overview of Depreciation Incorrect amount deducted, How Do You Correct Depreciation Deductions? Limit for automobiles, Limits for passenger automobiles. E file income tax return Listed property, Additional Rules for Listed Property Raised livestock, Livestock. E file income tax return Recapture, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Section 1250 Property When to file, Do You Have To File Form 4562? Depreciation allowable, Basis adjustment for depreciation allowed or allowable. E file income tax return Depreciation allowed, Basis adjustment for depreciation allowed or allowable. E file income tax return Direct payments, Direct payments and counter-cyclical payments. E file income tax return , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Disaster area losses, Disaster Area Losses Disaster payments, Crop Insurance and Crop Disaster Payments Disaster relief grants, Federal disaster relief grants. E file income tax return Disaster relief payments, Qualified disaster relief payments. E file income tax return Dispositions, Sale or other disposal of land during 9-year period. E file income tax return , Gain on sale of farmland. E file income tax return , Introduction Domestic production activities deduction, Domestic Production Activities Deduction Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E e-file, Reminders Easement, Easements and rights-of-way. E file income tax return , Easements. E file income tax return Election ADS depreciation, Electing ADS. E file income tax return , ADS election. E file income tax return Amortization Business start-up costs, Business Start-Up Costs Reforestation costs, Reforestation Costs Crop method, Election to use crop method. E file income tax return Cutting of timber, Election to treat cutting as a sale or exchange. E file income tax return Deducting conservation expenses, When to Deduct or Capitalize Not excluding cost-sharing payments, Electing not to exclude payments. E file income tax return Out of installment method, Electing out of the installment method. E file income tax return Postponing casualty gain, Postponing Gain Postponing reporting crop insurance proceeds, Election to postpone reporting until the following year. E file income tax return Section 179 expense deduction, How Do You Elect the Deduction? Electronic filing, Reminders Embryo transplants, Transplanted embryo. E file income tax return Employer identification number, Reminders, Employer identification number (EIN). E file income tax return Endangered species recovery expenses, Endangered species recovery expenses. E file income tax return Environmental contamination, Soil or other environmental contamination. E file income tax return Estimated tax Farm gross income, Gross Income From Farming Gross income, Gross Income Penalties, Estimated Tax Penalty for 2013 Exchanges Basis Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Like-Kind Exchanges Excise taxes Credit, Claiming a Credit Diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Farming purposes, Fuels Used in Farming Home use of fuels, Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines Off-highway uses, Fuels Used in Off-Highway Business Use Refund, Claiming a Refund F Fair market value defined, Fair market value (FMV). E file income tax return , Fair market value (FMV). E file income tax return Family member Business expenses, Special rule for related persons. E file income tax return Installment sale, Sale to a related person. E file income tax return Like-kind exchange, Like-kind exchanges between related persons. E file income tax return Loss on sale or exchange of property, Losses from sales or exchanges between related persons. E file income tax return Personal-use property, Personal-use property. E file income tax return Social security coverage, Family Employees Farm Business expenses, Farm Business Expenses Business, defined, Business of Farming Defined, Farm defined. E file income tax return , Farm. E file income tax return Income averaging, Income Averaging for Farmers Rental, Farm rental. E file income tax return Sale of, Sale of a Farm Farmer, Farmer. E file income tax return Federal unemployment tax (FUTA), Federal Unemployment (FUTA) Tax Fertilizer, Fertilizer and Lime, Fertilizer and Lime Foreclosure, Foreclosure or Repossession Forestation costs, Forestation and reforestation costs. E file income tax return Form 1099-A, Form 1099-A. E file income tax return , Forms 1099-A and 1099-C. E file income tax return 1099-C, Cancellation of Debt, Form 1099-C. E file income tax return , Forms 1099-A and 1099-C. E file income tax return 1099-G, Market Gain, Payment to More Than One Person 1099-MISC, Reminders, Nonemployee compensation. E file income tax return 1099-PATR, Form 1099-PATR. E file income tax return 1128, Introduction 2210-F, Estimated Tax Penalty for 2013 3115, Changes in Methods of Accounting 4136, Claiming a Credit 4562, Do You Have To File Form 4562? 4797, Form 4797. E file income tax return , Recapture. E file income tax return , Reporting the exchange. E file income tax return 4835, Rents (Including Crop Shares) 5213, Using the presumption later. E file income tax return 6252, Form 6252. E file income tax return 8822, Reminders 8824, Reporting the exchange. E file income tax return 8849, Claiming a Refund 8886, Reminders 940, Form 940. E file income tax return 943, Form 943. E file income tax return 982, Form 982 I-9, Form I-9. E file income tax return SS-4, Reminders, Employer identification number (EIN). E file income tax return SS-5, Obtaining a social security number. E file income tax return T (Timber), Form T (Timber). E file income tax return W-2, Form W-2. E file income tax return W-4, Reminders, New hire reporting. E file income tax return , Form W-4. E file income tax return W-4V, Commodity Credit Corporation (CCC) Loans, Crop Insurance and Crop Disaster Payments W-7, Obtaining an individual taxpayer identification number. E file income tax return Free tax services, How To Get Tax Help, Free help with your tax return. E file income tax return Fuel tax credit or refund, Fuel tax credit and refund. E file income tax return , How To Claim a Credit or Refund G Gains and losses Basis of assets, Cost Basis Capital assets, defined, Capital Assets Casualty, How To Figure a Loss, Figuring a Gain Installment sales, Installment Sales Livestock, Livestock Long- or short-term, Long and Short Term Ordinary or capital, Ordinary or Capital Gain or Loss Sale of farm, Sale of a Farm Section 1231, Section 1231 Gains and Losses Theft, How To Figure a Loss, Figuring a Gain Timber, Timber General asset accounts, How Do You Use General Asset Accounts? Gifts, Crop shares you give to others (gift). E file income tax return , Cost related to gifts. E file income tax return , Property Received as a Gift, Gift. E file income tax return Going into business, Business Start-Up Costs Grants, disaster relief, Federal disaster relief grants. E file income tax return Gross profit percentage, Gross profit percentage. E file income tax return Gross profit, defined, Gross profit. E file income tax return Guarantee, Debt not payable on demand. E file income tax return H Health insurance deduction, Self-employed health insurance deduction. E file income tax return Hedging, Hedging (Commodity Futures) Help (see Tax help) Highway use tax, Highway use tax. E file income tax return Holding period, Holding period. E file income tax return Horticultural structure, Horticultural structure. E file income tax return I Illegal irrigation subsidy, Illegal federal irrigation subsidy. E file income tax return Important dates, Important Dates for 2014 Improvements, Cost-Sharing Exclusion (Improvements) Income Accounting for, Accounting Methods Accrual method of accounting, Income Canceled debt excluded, Cancellation of Debt From farming, Farm Income, Gross income from farming. E file income tax return , Gross Income From Farming Gross, Gross Income Not-for-profit farming, Not-for-Profit Farming Pasture, Pasture income and rental. E file income tax return Schedule F, Farm Income Withholding of tax, Federal Income Tax Withholding Income averaging (see Farm: Income averaging) Incorrect amount of depreciation deducted, How Do You Correct Depreciation Deductions? Individual taxpayer identification number (ITIN), Obtaining an individual taxpayer identification number. E file income tax return Inherited property, Inherited Property Insolvency, Insolvency. E file income tax return Installment sales, Form 6252. E file income tax return Electing out, Electing out of the installment method. E file income tax return Farm, sale of, Installment Sale of a Farm Figuring income, Figuring Installment Sale Income Reporting income, Form 6252. E file income tax return Unstated interest, Unstated interest. E file income tax return Insurance, Insurance, Self-employed health insurance deduction. E file income tax return Intangible property, Section 197 Intangibles Interest Expense, Interest Income, Interest income. E file income tax return Unstated, Unstated interest. E file income tax return Inventory Items included, Farm Inventory Methods of valuation, Inventory valuation methods. E file income tax return Involuntary conversions, Involuntary Conversions, Property acquired in a like-kind exchange or involuntary conversion. E file income tax return , Introduction Irrigation Illegal subsidy, Illegal federal irrigation subsidy. E file income tax return Project, Irrigation Project L Labor hired, Labor Hired Landlord participation, Landlord Participation in Farming Lease or purchase, Lease or Purchase Life tenant (see Term interests) Like-kind exchanges, Like-Kind Exchanges, Like-Kind Exchanges Lime, Fertilizer and Lime Limits At-risk, At-Risk Limits Business use of home, Deduction limit. E file income tax return Capital losses, Treatment of Capital Losses Conservation expenses, Assessment for Depreciable Property, 25% Limit on Deduction Depreciation Business-use, What Is the Business-Use Requirement? Excluded farm debt, Exclusion limit. E file income tax return Farm losses, Losses From Operating a Farm Loss of personal-use property, Deduction Limits on Losses of Personal-Use Property Not-for-profit farming, Not-for-Profit Farming Passive activity, Passive Activity Limits Percentage depletion, Taxable income limit. E file income tax return Prepaid farm supplies, Deduction limit. E file income tax return Reforestation costs, Reforestation Costs Section 179 expense deduction Automobile, Limits for passenger automobiles. E file income tax return Business income, Business Income Limit Dollar, Dollar Limits Time to keep records, How Long To Keep Records Listed property Defined, What Is Listed Property? Passenger automobile, Passenger automobiles. E file income tax return Rules, Additional Rules for Listed Property Livestock, Section 1231 transactions. E file income tax return Casualty and theft losses, Livestock or produce bought for resale. E file income tax return Crop shares, Crop shares you use to feed livestock. E file income tax return Depreciation, Livestock. E file income tax return Diseased, Diseased livestock. E file income tax return Feed assistance, Feed Assistance and Payments Immature, Immature livestock. E file income tax return Losses, Loss of livestock. E file income tax return , Livestock Purchased, Purchased livestock. E file income tax return Raised, Raised livestock. E file income tax return Sale of, Sales of Farm Products, Livestock Unit-livestock-price, inventory valuation, Unit-livestock-price method. E file income tax return Used in a farm business, Livestock used in farm business. E file income tax return Weather-related sales, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. E file income tax return Loans, Commodity Credit Corporation (CCC) Loans, Loan expenses. E file income tax return Losses At-risk limits, At-Risk Limits Casualty, Casualties, Thefts, and Condemnations Disaster areas, Disaster Area Losses Farming, Farming Losses Growing crops, Loss of growing plants, produce, and crops. E file income tax return Hobby farming, Not-for-Profit Farming Livestock, Livestock, Diseased livestock. E file income tax return Nondeductible, Other Nondeductible Items Theft, Casualties, Thefts, and Condemnations Lost income payments, Lost income payments. E file income tax return Lost property, Mislaid or lost property. E file income tax return M MACRS property Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. E file income tax return Like-kind exchange, Property acquired in a like-kind exchange or involuntary conversion. E file income tax return Nontaxable transfer, Property acquired in a nontaxable transfer. E file income tax return Market gain, reporting, Market Gain Marketing quota penalties, Marketing Quota Penalties Material participation, Landlord Participation in Farming Meals, Meals. E file income tax return Membership fees, Club dues and membership fees. E file income tax return Methods of accounting, Accounting Methods Modified ACRS (MACRS) ADS election, ADS election. E file income tax return Conventions, Which Convention Applies? Depreciation methods, Which Depreciation Method Applies? Exchange, Property acquired in a like-kind exchange or involuntary conversion. E file income tax return Figuring the deduction, How Is the Depreciation Deduction Figured? Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. E file income tax return Nontaxable transfer, Property acquired in a nontaxable transfer. E file income tax return Percentage tables, Rules for using the tables. E file income tax return Property classes, Which Property Class Applies Under GDS? Recovery periods, Which Recovery Period Applies? N New hire reporting, New hire reporting. E file income tax return Noncapital asset, Noncapital Assets Nontaxable exchanges, Like-Kind Exchanges Nontaxable transfer of MACRS property, Property acquired in a nontaxable transfer. E file income tax return Not-for-profit farming, Not-for-Profit Farming O Organizational costs, Business start-up and organizational costs. E file income tax return P Partners, limited, Limited partner. E file income tax return Partners, retired, Retired partner. E file income tax return Partners, Spouse, Business Owned and Operated by Spouses. E file income tax return Partnership, Partnership income or loss. E file income tax return Passenger automobile, Passenger automobiles. E file income tax return Pasture income, Pasture income and rental. E file income tax return Patronage dividends, Patronage Dividends Payments considered received, Payments Received or Considered Received Payments received, Payments Received or Considered Received Penalties Estimated tax, Estimated Tax Penalty for 2013 Returns, Estimated Tax Penalty for 2013 Trust fund recovery, Trust fund recovery penalty. E file income tax return Per-unit retain certificates, Per-Unit Retain Certificates Personal expenses, Personal, Living, and Family Expenses Placed in service, Placed in Service, What Is the Placed-in-Service Date? Postponing casualty gain, Postponing Gain Prepaid expense Advance premiums, Advance premiums. E file income tax return Extends useful life, Prepayment. E file income tax return Farm supplies, Prepaid Farm Supplies Livestock feed, Prepaid Livestock Feed Prizes, Prizes. E file income tax return Produce, Sales of Farm Products Property Changed to business use, Property changed from personal to business or rental use. E file income tax return Received for services, Property received for services. E file income tax return Repairs and improvements, How Do You Treat Repairs and Improvements? Section 1231, Section 1231 transactions. E file income tax return Section 1245, Section 1245 Property Section 1250, Section 1250 Property Section 1252, Section 1252 property. E file income tax return Section 1255, Section 1255 property. E file income tax return Tangible personal, Tangible personal property. E file income tax return Publications (see Tax help) Q Qualified disaster relief payments, Qualified disaster relief payments. E file income tax return Qualified farm debt, Qualified Farm Debt Qualified joint venture, Qualified joint venture. E file income tax return Qualified principal residence debt, Qualified Principal Residence Debt R Recapture Amortization, Depreciation and amortization. E file income tax return Basis reductions, Recapture of basis reductions. E file income tax return Certain depreciation, Recapture of certain depreciation. E file income tax return Cost-sharing payments, Recapture. E file income tax return Depreciation, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Depreciation recapture. E file income tax return Section 1245 property, Section 1245 Property Section 1250 property, Section 1250 Property Section 179 expense deduction, When Must You Recapture the Deduction? Section 179 GO Zone property, Recapture for qualified section 179 GO Zone property. E file income tax return Special depreciation allowance, When Must You Recapture an Allowance Recordkeeping, Importance of Records, Meals. E file income tax return Records on depreciable property, Depreciation Recapture Reforestation costs, Forestation and reforestation costs. E file income tax return , Reforestation Costs Refund Deduction taken, Refund or reimbursement. E file income tax return Fuel tax, Fuel tax credit and refund. E file income tax return , Including the Credit or Refund in Income Reimbursements Casualties and thefts, Casualty and theft losses. E file income tax return , Casualties and Thefts, Insurance and other reimbursements. E file income tax return Deduction taken, Refund or reimbursement. E file income tax return Expenses, Reimbursed expenses. E file income tax return Feed assistance, Feed Assistance and Payments Real estate taxes, Real estate taxes. E file income tax return Reforestation expenses, Qualifying costs. E file income tax return To employees, Reimbursements to employees. E file income tax return Related persons, Special rule for related persons. E file income tax return , Losses from sales or exchanges between related persons. E file income tax return , Special rules for related persons. E file income tax return , Like-kind exchanges between related persons. E file income tax return , Sale to a related person. E file income tax return , Buying replacement property from a related person. E file income tax return , Related persons. E file income tax return Rental income, Rents (Including Crop Shares) Rented property, improvements, Improvements to rented property. E file income tax return Repairs, Repairs and Maintenance Repairs and improvements, How Do You Treat Repairs and Improvements? Repayment of income, Repayment of income. E file income tax return Replacement Period, Replacement Period Property, Replacement Property Reportable transactions. E file income tax return , Reminders Repossessions, Foreclosure or Repossession Right-of-way income, Easements and rights-of-way. E file income tax return S Sale of home, Sale of your home. E file income tax return Section 179 expense deduction, Section 179 Expense Deduction How to elect, How Do You Elect the Deduction? Listed property, Additional Rules for Listed Property Qualifying property, What Property Qualifies? Recapture, When Must You Recapture the Deduction? Self-employed health insurance, Self-employed health insurance deduction. E file income tax return Self-employed health insurance deduction, Self-employed health insurance deduction. E file income tax return Self-employment tax Community property, Community property. E file income tax return Deduction, Deduction for employer-equivalent portion of self-employment tax. E file income tax return How to pay, How To Pay Self-Employment Tax Landlord participation, Landlord Participation in Farming Material participation, Material participation for landlords. E file income tax return Maximum net earnings, What's New for 2013 Methods for figuring net earnings, Methods for Figuring Net Earnings Optional method, Farm Optional Method Regular method, Regular Method Rental income, Landlord Participation in Farming Reporting, Reporting Self-Employment Tax Self-employment tax rate, Self-employment tax rate. E file income tax return Share farming, Share farmer. E file income tax return Tax rates, What's New for 2013 Who must pay, Who Must Pay Self-Employment Tax? Selling expenses, Selling expenses. E file income tax return Selling price Defined, Selling price. E file income tax return Reduced, Selling price reduced. E file income tax return Settlement costs (fees), Settlement costs. E file income tax return Social security and Medicare Credits of coverage, Earning credits in 2013. E file income tax return Withholding of tax, Social Security and Medicare Taxes Social security number, Obtaining a social security number. E file income tax return Software, computer, Computer software. E file income tax return Soil Conservation, Conservation Expenses Contamination, Soil or other environmental contamination. E file income tax return Special depreciation allowance How to elect not to claim, How Can You Elect Not To Claim the Allowance? Recapture, When Must You Recapture an Allowance Standard mileage rate, Standard mileage rate. E file income tax return Start-up costs for businesses, Business start-up and organizational costs. E file income tax return Suggestions for publication, Comments and suggestions. E file income tax return T Tangible personal property, Tangible personal property. E file income tax return Tax help, How To Get Tax Help Tax preparation fees, Tax preparation fees. E file income tax return Tax shelter At-risk limits, At-Risk Limits Defined, Tax shelter. E file income tax return Tax-free exchanges, Like-Kind Exchanges Taxes Excise, Excise Taxes Federal use, Highway use tax. E file income tax return General, Taxes Self-employment, Self-Employment Tax State and federal, State and federal income taxes. E file income tax return State and local general sales, State and local general sales taxes. E file income tax return Withholding, Federal income tax withholding. E file income tax return , Social Security and Medicare Taxes, Federal Income Tax Withholding Telephone expense, Telephone expense. E file income tax return Tenant house expenses, Tenant House Expenses Term interests, Certain term interests in property. E file income tax return Theft losses, Casualties, Thefts, and Condemnations Timber, Timber. E file income tax return , Timber Depletion, Timber Tobacco quota buyout payments, Tobacco Quota Buyout Program Payments Tobacco settlement payments, National Tobacco Growers' Settlement Trust Fund Payments Trade-in, Sale and Purchase Travel expenses, Travel Expenses Truck expenses, Truck and Car Expenses Trust fund recovery penalty, Trust fund recovery penalty. E file income tax return TTY/TDD information, How To Get Tax Help U Uniform capitalization rules Basis of assets, Uniform Capitalization Rules Inventory, Uniform capitalization rules. E file income tax return Unstated interest, Unstated interest. E file income tax return W Wages and salaries, Wages and salaries. E file income tax return Water conservation, Conservation Expenses Water well, Water well. E file income tax return , Water wells. E file income tax return Weather-related sales, livestock, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. E file income tax return Withholding Income tax, Federal Income Tax Withholding Social security and Medicare tax, Social Security and Medicare Taxes Prev  Up     Home   More Online Publications
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The E File Income Tax Return

E file income tax return 5. E file income tax return   Excise Taxes Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Prohibited Tax Shelter TransactionsEntity Level Tax Excess Benefit TransactionsTax on Disqualified Persons Tax on Organization Managers Excess Benefit Transaction Excess Business Holdings Taxable Distributions of Sponsoring Organizations Exception. E file income tax return A donor advised fund does not include: Taxes on Prohibited Benefits Resulting From Donor Advised Fund Distributions Excise Taxes on Private Foundations Excise Taxes on Black Lung Benefit Trusts Excise Tax on Failure to Meet the Community Health Needs Assessment Requirements Introduction An excise tax may be imposed on certain tax-exempt organizations. E file income tax return Topics - This chapter discusses: Prohibited tax shelter transactions Excess benefit transactions Excess business holdings Taxable distributions of sponsoring organizations Taxes on prohibited benefits distributed from donor advised funds Excise taxes on private foundations Excise taxes on 501(c)(21) black lung benefit trusts Excise Tax on Failure to Meet the Community Health Needs Assessment Requirements of Hospitals Useful Items - You may want to see: Forms (and Instructions) 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code See chapter 6 for more information about getting Form 4720. E file income tax return Prohibited Tax Shelter Transactions Section 4965 imposes an excise tax on: Certain tax-exempt entities that are party to prohibited tax shelter transactions, and Any entity manager who approves or otherwise causes the entity to be a party to a prohibited tax shelter transaction and knows or has reason to know that the transaction is a prohibited tax shelter transaction. E file income tax return  Additionally, section 6033 provides new disclosure requirements on a tax-exempt entity that is a party to a prohibited tax shelter transaction. E file income tax return Tax-exempt entities. E file income tax return   Tax-exempt entities that are subject to section 4965 include: Entities described in section 501(c), including but not limited to the following common types of entities: Instrumentalities of the United States described in section 501(c)(1); Churches, hospitals, museums, schools, scientific research organizations, and other charities described in section 501(c)(3); Civic leagues, social welfare organizations, and local associations of employees described in section 501(c)(4); Labor, agricultural, or horticultural organizations described in section 501(c)(5); Business leagues, chambers of commerce, trade associations, and other organizations described in section 501(c)(6); Voluntary employees' beneficiary associations (VEBAs) described in section 501(c)(9); Credit unions described in section 501(c)(14); Insurance companies described in section 501(c)(15); and Veterans' organizations described in section 501(c)(19). E file income tax return Religious or apostolic associations or corporations described in section 501(d). E file income tax return Entities described in section 170(c), including states, possessions of the United States, the District of Columbia, political subdivisions of states and political subdivisions of possessions of the United States (but not including the United States). E file income tax return Indian tribal governments within the meaning of section 7701(a)(40). E file income tax return Entity manager. E file income tax return    An entity manager is any person with authority or responsibility similar to that exercised by an officer, director, or trustee, and, for any act, the person that has authority or responsibility with respect to the prohibited transaction. E file income tax return Prohibited tax shelter transaction. E file income tax return   A prohibited tax shelter transaction is any listed transaction, within the meaning of section 6707A(c)(2), and any prohibited reportable transactions. E file income tax return A prohibited reportable transaction is a confidential transaction within the meaning of Regulations section 1. E file income tax return 6011-4(b)(3), and a transaction with contractual protection within the meaning of Regulations section 1. E file income tax return 6011-4(b)(4). E file income tax return See the Instructions for Form 8886 for more information on listed transactions and prohibited reportable transactions. E file income tax return Subsequently listed transaction. E file income tax return   Any transaction to which the tax-exempt entity is a party and is later determined to be a listed transaction after the entity has become a party to it, is a subsequently listed transaction. E file income tax return Entity Level Tax Section 4965(a)(1) imposes an entity level excise tax on any tax-exempt entity described in 1, 2, 3, or 4 above that becomes a party to a prohibited tax shelter transaction or is a party to a subsequently listed transaction (defined earlier). E file income tax return The excise tax imposed on a tax-exempt entity applies to tax years in which the entity becomes a party to the prohibited tax shelter transaction and any subsequent tax years. E file income tax return The amount of the excise tax depends on whether the tax-exempt entity knew or had reason to know that the transaction was a prohibited tax shelter transaction at the time it became a party to the transaction. E file income tax return To figure and report the excise tax imposed on a tax-exempt entity for being a party to a prohibited tax shelter transaction, file Form 4720. E file income tax return For more information about this excise tax, including information about how it is figured, see the Instructions for Form 4720. E file income tax return Manager Level Tax Section 4965(a)(2) imposes an excise tax on any tax-exempt entity manager who approves or otherwise causes the entity to be a party to a prohibited tax shelter transaction and knows (or has reason to know) that the transaction is a prohibited tax shelter transaction. E file income tax return The excise tax, in the amount of $20,000, is assessed for each approval or other act causing the organization to be a party to the prohibited tax shelter transaction. E file income tax return To report this tax, file Form 4720. E file income tax return Excess Benefit Transactions Excise tax on excess benefit transactions. E file income tax return   A disqualified person who benefits from an excess benefit transaction, such as compensation, fringe benefits, or contract payments from certain section 501(c)(3), 501(c)(4), or 501(c)(29) organizations, must correct the transaction and may have to pay an excise tax under section 4958. E file income tax return A manager of the organization may also have to pay an excise tax under section 4958. E file income tax return These taxes are reported on Form 4720. E file income tax return   The excise taxes are imposed if an applicable tax-exempt organization provides an excess benefit to a disqualified person and that benefit exceeds the value of the benefit received in exchange. E file income tax return   There are three taxes under section 4958. E file income tax return Disqualified persons are liable for the first two taxes and certain organization managers are liable for the third tax. E file income tax return    Taxes imposed on excess benefit transactions do not apply to a transaction under a written contract that was binding on September 13, 1995, and at all times thereafter before the transaction occurred. E file income tax return Tax on Disqualified Persons An excise tax equal to 25% of the excess benefit is imposed on each excess benefit transaction between an applicable tax-exempt organization and a disqualified person. E file income tax return The disqualified person who benefited from the transaction is liable for the tax. E file income tax return See definition of Disqualified person, later at Disqualified person. E file income tax return Additional tax on the disqualified person. E file income tax return   If the 25% tax is imposed and the excess benefit transaction is not corrected within the taxable period, an additional excise tax equal to 200% of the excess benefit is imposed on any disqualified person involved. E file income tax return   If a disqualified person makes a payment of less than the full correction amount, the 200% tax is imposed only on the unpaid portion of the correction amount. E file income tax return If more than one disqualified person received an excess benefit from an excess benefit transaction, all such disqualified persons are jointly and severally liable for the taxes. E file income tax return   To avoid the 200% tax, a disqualified person must correct the excess benefit transaction during the taxable period. E file income tax return The 200% tax is abated (refunded if collected) if the excess benefit transaction is corrected within a 90-day correction period beginning on the date a statutory notice of deficiency is issued. E file income tax return Taxable period. E file income tax return   The taxable period means the period beginning with the date on which the excess benefit transaction occurs and ending on the earlier of: The date a notice of deficiency was mailed to the disqualified person for the initial tax on the excess benefit transaction, or The date on which the initial tax on the excess benefit transaction for the disqualified person is assessed. E file income tax return Tax on Organization Managers If tax is imposed on a disqualified person for any excess benefit transaction, an excise tax equal to 10% of the excess benefit is imposed on an organization manager who knowingly participated in an excess benefit transaction, unless such participation was not willful and was due to reasonable cause. E file income tax return This tax cannot exceed $20,000 ($10,000 for transactions entered in a tax year beginning before August 18, 2006), for each transaction. E file income tax return There is also joint and several liability for this tax. E file income tax return A person can be liable for both the tax paid by the disqualified person and the organization manager tax for a particular excess benefit transaction. E file income tax return Organization Manager. E file income tax return   An organization manager is any officer, director, or trustee of an applicable tax-exempt organization, or any individual having powers or responsibilities similar to officers, directors, or trustees of the organization, regardless of title. E file income tax return An organization manager is not considered to have participated in an excess benefit transaction where the manager has opposed the transaction in a manner consistent with the fulfillment of the manager's responsibilities to the organization. E file income tax return For example, a director who votes against giving an excess benefit would ordinarily not be subject to the 10% tax. E file income tax return A person participates in a transaction knowingly if the person: Has actual knowledge of sufficient facts so that, based solely upon those facts, such transaction would be an excess benefit transaction; Is aware that such a transaction under these circumstances may violate the provisions of federal tax law governing excess benefit transactions; and Negligently fails to make reasonable attempts to ascertain whether the transaction is an excess benefit transaction, or the manager is in fact aware that it is such a transaction. E file income tax return Knowing does not mean having reason to know. E file income tax return The organization manager ordinarily will not be considered knowing if, after full disclosure of the factual situation to an appropriate professional, the organization manager relied on the professional's reasoned written opinion on matters within the professional's expertise or if the manager relied on the fact that the requirements for the rebuttable presumption of reasonableness have been satisfied. E file income tax return Participation by an organization manager is willful if it is voluntary, conscious, and intentional. E file income tax return An organization manager's participation is due to reasonable cause if the manager has exercised responsibility on behalf of the organization with ordinary business care and prudence. E file income tax return Excess Benefit Transaction An excess benefit transaction is a transaction in which an economic benefit is provided by an applicable tax-exempt organization, directly or indirectly, to or for the use of any disqualified person, and the value of the economic benefit provided by the organization exceeds the value of the consideration (including the performance of services) received for providing such benefit. E file income tax return The excess benefit transaction rules apply to all transactions with disqualified persons, regardless of whether the amount of the benefit provided is determined in whole or in part by the revenues of one or more activities of the organization. E file income tax return To determine whether an excess benefit transaction has occurred, all consideration and benefits exchanged between a disqualified person and the applicable tax-exempt organization, and all entities it controls, are taken into account. E file income tax return For purposes of determining the value of economic benefits, the value of property, including the right to use property, is the fair market value. E file income tax return Fair market value is the price at which property, or the right to use property, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy, sell, or transfer property or the right to use property, and both having reasonable knowledge of relevant facts. E file income tax return Donor advised fund transactions occurring after August 17, 2006. E file income tax return   For a donor advised fund, an excess benefit transaction includes a grant, loan, compensation, or other similar payment from the fund to a: Donor or donor advisor, Family member of a donor, or donor advisor, 35% controlled entity of a donor, or donor advisor, or 35% controlled entity of a family member of a donor, or donor advisor. E file income tax return   The excess benefit in this transaction is the amount of the grant, loan, compensation, or other similar payment. E file income tax return For additional information, see the Instructions for Form 4720. E file income tax return Supporting organization transactions occurring after July 25, 2006. E file income tax return   For any supporting organization, defined in section 509(a)(3), an excess benefit transaction includes grants, loans, compensation, or other similar payment provided by the supporting organization to a: Substantial contributor, Family member of a substantial contributor, 35% controlled entity of a substantial contributor, or 35% controlled entity of a family member of a substantial contributor. E file income tax return   Additionally, an excess benefit transaction includes any loans provided by the supporting organization to a disqualified person (other than an organization described in section 509(a)(1), (2), or (4)). E file income tax return   The excess benefit for substantial contributors and parties related to those contributors includes the amount of the grant, loan, compensation, or other similar payment. E file income tax return For additional information, see the Instructions for Form 4720. E file income tax return   Excess benefit transaction rules generally do not apply to transactions between a supporting organization and its supported organization described in section 501(c)(4), (5), or (6) in furtherance of charitable purposes. E file income tax return Date of Occurrence An excess benefit transaction occurs on the date the disqualified person receives the economic benefit from the organization for federal income tax purposes. E file income tax return However, when a single contractual arrangement provides for a series of compensation or other payments to or for the use of a disqualified person during the disqualified person's tax year, any excess benefit transaction with respect to these payments occurs on the last day of the taxpayer's tax year. E file income tax return In the case of benefits provided to a qualified pension, profit-sharing, or stock bonus plan, the transaction occurs on the date the benefit is vested. E file income tax return In the case of the transfer of property subject to a substantial risk of forfeiture, or in the case of rights to future compensation or property, the transaction occurs on the date the property, or the rights to future compensation or property, is not subject to a substantial risk of forfeiture. E file income tax return Where the disqualified person elects to include an amount in gross income in the tax year of transfer under section 83(b), the excess benefit transaction occurs on the date the disqualified person receives the economic benefit for federal income tax purposes. E file income tax return Correcting the excess benefit. E file income tax return   An excess benefit transaction is corrected by undoing the excess benefit to the extent possible, and by taking any additional measures necessary to place the organization in a financial position not worse than what it would have been if the disqualified person were dealing under the highest fiduciary standards. E file income tax return   A disqualified person corrects an excess benefit by making a payment in cash or cash equivalents, excluding payment by a promissory note, equal to the correction amount to the applicable tax-exempt organization. E file income tax return The correction amount equals the excess benefit plus the interest on the excess benefit. E file income tax return The interest rate can be no lower than the applicable federal rate, compounded annually, for the month the transaction occurred. E file income tax return   A disqualified person can, with the agreement of the applicable tax-exempt organization, make a payment by returning the specific property previously transferred in the excess transaction. E file income tax return In this case, the disqualified person is treated as making a payment equal to the lesser of: The fair market value of the property on the date the property is returned to the organization, or The fair market value of the property on the date the excess benefit transaction occurred. E file income tax return   If the payment resulting from the return of property is less than the correction amount, the disqualified person must make an additional cash payment to the organization equal to the difference. E file income tax return   If the payment resulting from the return of the property exceeds the correction amount described above, the organization can make a cash payment to the disqualified person equal to the difference. E file income tax return Exception. E file income tax return   For a correction of an excess benefit transaction (discussed earlier), no amount repaid in a manner prescribed by the Secretary can be held in a donor advised fund. E file income tax return Applicable Tax-Exempt Organization An applicable tax-exempt organization is a section 501(c)(3), 501(c)(4), or 501(c)(29) organization that is tax-exempt under section 501(a), or was such an organization at any time during a 5-year period ending on the day of the excess benefit transaction. E file income tax return An applicable tax-exempt organization does not include: A private foundation as defined in section 509(a), A governmental entity that is: Exempt from (or not subject to) taxation without regard to section 501(a), or Not required to file an annual return, or A foreign organization, recognized by the IRS or by treaty, that receives substantially all of its support (other than gross investment income) from sources outside the United States. E file income tax return An organization is not treated as a section 501(c)(3), 501(c)(4), or 501(c)(29) organization for any period covered by a final determination that the organization was not tax-exempt under section 501(a), but only if the determination was not based on private inurement or one or more excess benefit transactions. E file income tax return Disqualified Person A disqualified person is: Any person (at any time during the 5-year period ending on the date of the transaction) in a position to exercise substantial influence over the affairs of the organization, A family member of an individual described in 1, and A 35% controlled entity. E file income tax return For donor advised funds, sponsoring organizations, and certain supporting organizations occurring after August 17, 2006. E file income tax return   The following persons will be considered disqualified persons along with certain family members and 35% controlled entities associated with them. E file income tax return Donors of donor advised funds, Investment advisors of sponsoring organizations, and Disqualified persons of a section 509(a)(3) supporting organization that supports the applicable tax-exempt organization. E file income tax return For certain supporting organization transactions occurring after July 25, 2006. E file income tax return   Substantial contributors to supporting organizations will also be considered disqualified persons with respect to the supporting organizations, along with their family members and 35% controlled entities. E file income tax return Investment advisor. E file income tax return   Investment advisor means for any sponsoring organization, any person compensated by such organization (but not an employee of such organization) for managing the investment of, or providing investment advice for, assets maintained in donor advised funds owned by such sponsoring organization. E file income tax return Substantial contributor. E file income tax return   In general, a substantial contributor means any person who contributed or bequeathed an aggregate of more than $5,000 to the organization, if that amount is more than 2% of the total contributions and bequests received by the end of the organization's tax year in which the contribution or bequest is received. E file income tax return A substantial contributor includes the grantor of a trust. E file income tax return Family members. E file income tax return   Family members of a disqualified person include a disqualified person's spouse, brothers or sisters (whether by whole or half-blood), spouses of brothers or sisters (whether by whole or half-blood), ancestors, children (including a legally adopted child), grandchildren, great grandchildren, and spouses of children, grandchildren, and great grandchildren (whether by whole or half-blood). E file income tax return 35% controlled entity. E file income tax return   A 35% controlled entity is: A corporation in which disqualified persons own more than 35% of the total combined voting power, A partnership in which such persons own more than 35% of the profits interest, or A trust or estate in which such persons own more than 35% of the beneficial interest. E file income tax return   In determining the holdings of a business enterprise, any stock or other interest owned directly or indirectly shall apply. E file income tax return Persons having substantial influence. E file income tax return   Among those who are in a position to exercise substantial influence over the affairs of the organization are, for example, voting members of the governing body, and persons holding the power of: Presidents, chief executives, or chief operating officers. E file income tax return Treasurers and chief financial officers. E file income tax return Persons with a material financial interest in a provider-sponsored organization. E file income tax return Persons not considered to have substantial influence. E file income tax return   Persons who are not considered to be in a position to exercise substantial influence over the affairs of an organization include: An employee who receives benefits that total less than the highly compensated amount in section 414(q)(1)(B)(i) and who does not hold the executive or voting powers mentioned earlier in the discussion on Disqualified Person, is not a family member of a disqualified person, and is not a substantial contributor, Tax-exempt organizations described in section 501(c)(3), and Section 501(c)(4) organizations with respect to transactions engaged in with other section 501(c)(4) organizations. E file income tax return Facts and circumstances. E file income tax return   The determination of whether a person has substantial influence over the affairs of an organization is based on all the facts and circumstances. E file income tax return Facts and circumstances that tend to show a person has substantial influence over the affairs of an organization include, but are not limited to, the following. E file income tax return The person founded the organization. E file income tax return The person is a substantial contributor to the organization under the section 507(d)(2)(A) definition, only taking into account contributions to the organization for the past 5 years. E file income tax return The person's compensation is primarily based on revenues derived from activities of the organization that the person controls. E file income tax return The person has or shares authority to control or determine a substantial portion of the organization's capital expenditures, operating budget, or compensation for employees. E file income tax return The person manages a discrete segment or activity of the organization that represents a substantial portion of the activities, assets, income, or expenses of the organization, as compared to the organization as a whole. E file income tax return The person owns a controlling interest (measured by either vote or value) in a corporation, partnership, or trust that is a disqualified person. E file income tax return The person is a nonstock organization controlled directly or indirectly by one or more disqualified persons. E file income tax return   Facts and circumstances tending to show that a person does not have substantial influence over the affairs of an organization include, but are not limited to, the following. E file income tax return The person has taken a bona fide vow of poverty as an employee or agent of a religious organization or on its behalf. E file income tax return The person is an independent contractor whose sole relationship to the organization is providing professional advice (without having decision-making authority) with respect to transactions from which the independent contractor will not economically benefit either directly or indirectly aside from customary fees received for the professional advice rendered. E file income tax return Any preferential treatment the person receives based on the size of the person's donation is also offered to others making comparable widely solicited donations. E file income tax return The direct supervisor of the person is not a disqualified person. E file income tax return The person does not participate in any management decisions affecting the organization as a whole or a discrete segment of the organization that represents a substantial portion of the activities, assets, income, or expenses of the organization, as compared to the organization as a whole. E file income tax return   In the case of multiple organizations affiliated by common control or governing documents, the determination of whether a person does or does not have substantial influence is made separately for each applicable tax-exempt organization. E file income tax return A person may be a disqualified person with respect to transactions with more than one organization. E file income tax return Reasonable Compensation. E file income tax return    Reasonable compensation is the value that would ordinarily be paid for like services by like enterprises under like circumstances. E file income tax return The section 162 standard will apply in determining the reasonableness of compensation. E file income tax return The fact that a bonus or revenue-sharing arrangement is subject to a cap is a relevant factor in determining reasonableness of compensation. E file income tax return   To determine the reasonableness of compensation, all items of compensation provided by an applicable tax-exempt organization in exchange for performance of services are taken into account in determining the value of compensation (except for economic benefits that are disregarded under the discussion Disregarded benefits , later). E file income tax return Items of compensation include: All forms of cash and noncash compensation, including salary, fees, bonuses, severance payments, and deferred noncash compensation, The payment of liability insurance premiums for, or the payment or reimbursement by the organization of penalties, taxes, or certain expenses under section 4958, unless excludable from income as a de minimis fringe benefit under section 132(a)(4), All other compensatory benefits, whether or not included in gross income for income tax purposes, Taxable and nontaxable fringe benefits, except fringe benefits described in section 132, and Foregone interest on loans. E file income tax return    Intent to treat benefits as compensation. E file income tax return An economic benefit is not treated as consideration for the performance of services unless the organization providing the benefit clearly indicates its intent to treat the benefit as compensation when the benefit is paid. E file income tax return   An applicable tax-exempt organization (or entity that it controls) is treated as clearly indicating its intent to provide an economic benefit as compensation for services only if the organization provides written substantiation that is contemporaneous with the transfer of the economic benefits under consideration. E file income tax return Ways to provide contemporaneous written substantiation of its intent to provide an economic benefit as compensation include: The organization produces a signed written employment contract, The organization reports the benefit as compensation on an original Form W-2, Form 1099, or Form 990, or on an amended form filed before starting an IRS examination, or The disqualified person reports the benefit as income on the person's original Form 1040, or on an amended form filed before starting an IRS examination. E file income tax return Exception. E file income tax return   If the economic benefit is excluded from the disqualified person's gross income for income tax purposes, the applicable tax-exempt organization is not required to indicate its intent to provide an economic benefit as compensation for services. E file income tax return Rebuttable presumption that a transaction is not an excess benefit transaction. E file income tax return   Payments under a compensation arrangement are presumed to be reasonable and the transfer of property (or right to use property) is presumed to be at fair market value, if the following three conditions are met. E file income tax return The transaction is approved in advance by an authorized body of the organization (or an entity it controls) which is composed of individuals who do not have a conflict of interest concerning the transaction. E file income tax return Before making its determination, the authorized body obtained and relied upon appropriate data as to comparability. E file income tax return (There is a special safe harbor for small organizations. E file income tax return If the organization has gross receipts of less than $1 million, appropriate comparability data includes data on compensation paid by three comparable organizations in the same or similar communities for similar services. E file income tax return ) The authorized body adequately documents the basis for its determination concurrently with making that determination. E file income tax return The documentation should include: The terms of the approved transaction and the date approved, The members of the authorized body who were present during debate on the transaction that was approved and those who voted on it, The comparability data obtained and relied upon by the authorized body and how the data was obtained, Any actions by a member of the authorized body having conflict of interest, and Documentation of the basis of the determination before the later of the next meeting of the authorized body or 60 days after the final actions of the authorized body are taken, and approval of records as reasonable, accurate, and complete within a reasonable time thereafter. E file income tax return Disregarded benefits. E file income tax return   The following economic benefits are disregarded for section 4958 purposes. E file income tax return Nontaxable fringe benefits that are excluded from income under section 132. E file income tax return Benefits provided to a volunteer for the organization if the benefit is provided to the general public in exchange for a membership fee or contribution of $75 or less. E file income tax return Benefits provided to a member of an organization due to the payment of a membership fee or to a donor as a result of a deductible contribution, if a significant number of disqualified persons make similar payments or contributions and are offered a similar economic benefit. E file income tax return Benefits provided to a person solely as a member of a charitable class that the applicable tax-exempt organization intends to benefit as part of the accomplishment of its exempt purpose. E file income tax return A transfer of an economic benefit to or for the use of a governmental unit, as defined in section 170(c)(1), if exclusively for public purposes. E file income tax return Special Exception for Initial Contracts      Section 4958 does not apply to any fixed payment made to a person under an initial contract. E file income tax return   A fixed payment is an amount of cash or other property specified in the contract, or determined by a fixed formula that is specified in the contract, which is to be paid or transferred in exchange for the provision of specified services or property. E file income tax return   A fixed formula can, generally, incorporate an amount that depends upon future specified events or contingencies, as long as no one has discretion when calculating the amount of a payment or deciding whether to make a payment (such as a bonus). E file income tax return   An initial contract is a binding written contract between an applicable tax-exempt organization and a person who was not a disqualified person immediately before entering into the contract. E file income tax return   A binding written contract, providing it can be terminated or canceled by the applicable tax-exempt organization without the other party's consent (except as a result of substantial nonperformance) and without substantial penalty, is treated as a new contract, as of the earliest date any termination or cancellation would be effective. E file income tax return Also, if the parties make a material change to a contract, which includes an extension or renewal of the contract (except for an extension or renewal resulting from the exercise of an option by the disqualified person), or a more than incidental change to the amount payable under the contract, it is treated as a new contract as of the effective date of the material change. E file income tax return More information. E file income tax return   For more information, see the Instructions to Forms 990 and 4720. E file income tax return Excess Business Holdings Private foundations are generally not permitted to hold more than a 20% interest in an unrelated business enterprise. E file income tax return They may be subject to an excise tax on the amount of any excess business holdings. E file income tax return For purposes of section 4943, for tax years beginning after August 17, 2006, donor advised funds and certain supporting organizations are considered private foundations. E file income tax return Donor advised fund. E file income tax return   In general, a donor advised fund is a fund or account separately identified by reference to contributions of a donor or donors that is owned and controlled by a sponsoring organization and for which the donor has or expects to have advisory privileges concerning the distribution or investment of the funds. E file income tax return Supporting organizations. E file income tax return   Only certain supporting organizations are subject to the excess business holdings tax under section 4943. E file income tax return These include (1) Type III supporting organizations that are not functionally integrated and (2) Type II supporting organizations that accept any gift or contribution from a person who by himself or in connection with a related party controls the supported organization that the Type II supporting organization supports. E file income tax return Taxes. E file income tax return   A private foundation that has excess holdings in a business enterprise may become liable for an excise tax based on the amount of holdings. E file income tax return The initial tax is 10% (5% for tax years beginning before August 18, 2006) of the value of the excess holdings and is imposed on the last day of each tax year that ends during the taxable period. E file income tax return The excess holdings are determined on the day during the tax year when they were the largest. E file income tax return   A foundation that fails to correct the excess business holdings becomes liable for an additional tax of 200% of the remaining excess business holdings as of the earlier of tax assessment or mailing of a notice of deficiency. E file income tax return   For more information on the tax on excess business holdings, see the Instructions for Form 4720. E file income tax return Taxable Distributions of Sponsoring Organizations An excise tax is imposed on a sponsoring organization for each taxable distribution it makes from a donor advised fund. E file income tax return An excise tax is also imposed on any fund manager of the sponsoring organization who agreed to the making of a distribution, knowing that it is a taxable distribution. E file income tax return Taxable distribution. E file income tax return   A taxable distribution is any distribution from a donor advised fund to any natural person or to any other person if: The distribution is for any purpose other than one specified in section 170(c)(2)(B), or The sponsoring organization maintaining the donor advised fund does not exercise expenditure responsibility with respect to the distribution in accordance with section 4945(h). E file income tax return    However, a taxable distribution does not include a distribution from a donor advised fund to: Any organization described in section 170(b)(1)(A) (other than a disqualified supporting organization), The sponsoring organization of the donor advised fund, or Any other donor advised fund. E file income tax return The tax on taxable distributions applies to distributions occurring in tax years beginning after August 17, 2006. E file income tax return Sponsoring organization. E file income tax return   A sponsoring organization is a section 170(c) organization that is neither a government organization (as referred to in section 170(c)(1) and (2)(A)) nor a private foundation. E file income tax return Donor advised fund. E file income tax return    A donor advised fund is a fund or account: Which is separately identified by reference to contributions of a donor or donors, Which is owned and controlled by a sponsoring organization, and For which the donor (or any person appointed or designated by the donor) has or expects to have advisory privileges concerning the distribution or investment of the funds held in the donor advised funds or accounts because of the donor's status as a donor. E file income tax return Exception. E file income tax return A donor advised fund does not include:    A fund or account that makes distributions only to a single identified organization or governmental entity, or Any fund or account for a person described in 3 above that gives advice about which individuals receive grants for travel, study, or similar purposes, if the following three requirements are met: The person's advisory privileges are performed exclusively by such person in their capacity as a committee member of which all the committee members are appointed by the sponsoring organization, No combination of persons with advisory privileges, described in 3 above, or persons related to those in 3 above directly or indirectly control the committee, and All grants from the fund or account are awarded on an objective and nondiscriminatory basis according to a procedure approved in advance by the board of directors of the sponsoring organization. E file income tax return The procedure must be designed to ensure that all grants meet the requirements of section 4945(g)(1), (2), or (3). E file income tax return Disqualified supporting organization. E file income tax return   A disqualified supporting organization includes (1) a Type III supporting organization that is not functionally integrated and (2) any supporting organization where the donor or donor advisor (and any related parties) directly or indirectly controls a supported organization of the supporting organization. E file income tax return Tax on sponsoring organization. E file income tax return   A tax of 20% of the amount of each taxable distribution is imposed on the sponsoring organization. E file income tax return Tax on fund manager. E file income tax return   If a tax is imposed on a taxable distribution of the sponsoring organization, a tax of 5% of the distribution will be imposed on any fund manager who agreed to the distribution knowing that it was a taxable distribution. E file income tax return Any fund manager who took part in the distribution and is liable for the tax must pay the tax. E file income tax return The maximum amount of tax on all fund managers for any one taxable distribution is $10,000. E file income tax return If more than one fund manager is liable for tax on a taxable distribution, all such managers are jointly and severally liable for the tax. E file income tax return   For more information on the tax on taxable distributions of sponsoring organizations, see the Instructions for Form 4720. E file income tax return Taxes on Prohibited Benefits Resulting From Donor Advised Fund Distributions Prohibited benefit. E file income tax return   If any donor, donor advisor, or related party advises the sponsoring organization about making a distribution which results in a donor, donor advisor, or related party receiving (either directly or indirectly) a more than incidental benefit, then such benefit is a prohibited benefit. E file income tax return The tax on prohibited benefits applies to distributions occurring in tax years beginning after August 17, 2006. E file income tax return Donor advisor. E file income tax return   A donor advisor is any person appointed or designated by a donor to advise a sponsoring organization on the distribution or investment of amounts held in the donor's fund or account. E file income tax return Related party. E file income tax return   A related party includes any family member or 35% controlled entity. E file income tax return See the definition of those terms under Disqualified Person , earlier. E file income tax return Tax on donor, donor advisor, or related person. E file income tax return    A tax of 125% of the benefit resulting from the distribution is imposed on both the party who advised as to the distribution (which might be a donor, donor advisor, or related party) and the party who received such benefit (which might be a donor, donor advisor, or related party). E file income tax return The advisor and the party who received the benefit are jointly and severally liable for the tax. E file income tax return Tax on fund managers. E file income tax return   If a tax is imposed on a prohibited benefit received by a donor, donor advisor, or related person, a tax of 10% of the amount of the prohibited benefit is imposed on any fund manager who agreed to the distribution knowing that it would confer a prohibited benefit. E file income tax return Any fund manager who took part in the distribution and is liable for the tax must pay the tax. E file income tax return The maximum amount of tax on all fund managers for any one taxable distribution is $10,000. E file income tax return If more than one fund manager is liable for tax on a taxable distribution, all such managers are jointly and severally liable for the tax. E file income tax return Exception. E file income tax return   If a person engaged in an excess benefit transaction and received a prohibited benefit for the same transaction, the person is taxed under section 4958, and no tax is imposed under section 4967 for a prohibited benefit. E file income tax return   For more information on taxes on prohibited benefits distributed from donor advised funds, see the Instructions for Form 4720. E file income tax return Excise Taxes on Private Foundations There is an excise tax on the net investment income of most domestic private foundations. E file income tax return Capital gains from appreciation are included in the tax base on private foundation net investment income. E file income tax return This tax must be reported on Form 990-PF and must be paid annually at the time for filing that return or in quarterly estimated tax payments if the total tax for the year (section 4940 tax minus credits) is $500 or more. E file income tax return Form 990-W is used to calculate the estimated tax. E file income tax return In addition, there are several other rules that apply to excise taxes on private foundations. E file income tax return These include: Restrictions on self-dealing between private foundations and their substantial contributors and other disqualified persons, Requirements that the foundation annually distribute income for charitable purposes, Limits on their holdings in any business enterprise (see Excess Business Holdings, earlier), Provisions that investments must not jeopardize the carrying out of exempt purposes, and Provisions to assure that expenditures further the organization's exempt purposes. E file income tax return Violations of these provisions give rise to taxes and penalties against the private foundation and, in some cases, its managers, its substantial contributors, and certain related persons. E file income tax return For more information on the excise taxes imposed on private foundations, see the Instructions for Form 4720 and the Instructions for Form 990-PF. E file income tax return Excise Taxes on Black Lung Benefit Trusts A black lung benefit trust that makes any expenditures, payments, or investments other than those described in chapter 4 under 501(c)(21) - Black Lung Benefit Trusts must pay a tax equal to 10% of the amount of such expenditures. E file income tax return If there are any acts of self-dealing between the trust and a disqualified person, a tax equal to 10% of the amount involved is imposed on the disqualified person. E file income tax return Both of these excise taxes are reported on Schedule A (Form 990-BL). E file income tax return See the Form 990-BL instructions for more information on these taxes and what has to be filed, even if the trust is excepted from filing. E file income tax return Excise Tax on Failure to Meet the Community Health Needs Assessment Requirements For tax years beginning after March 23, 2012, new section 4959 imposes an excise tax on hospital organizations which fail to meet certain section 501(r) requirements for each of their hospital facilities. E file income tax return These entities must meet section 501(r)(3) requirements at all times during their tax year. E file income tax return Section 501(r)(3) requirements pertain to a hospital organization preparing a community health needs assessment (CHNA). E file income tax return See Schedule H, Hospitals (Form 990), for details. E file income tax return Prev  Up  Next   Home   More Online Publications