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Ez Form

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Ez Form

Ez form 24. Ez form   Contributions Table of Contents Introduction Useful Items - You may want to see: Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions of PropertyException. Ez form Household items. Ez form Deduction more than $500. Ez form Form 1098-C. Ez form Filing deadline approaching and still no Form 1098-C. Ez form Exception 1—vehicle used or improved by organization. Ez form Exception 2—vehicle given or sold to needy individual. Ez form Deduction $500 or less. Ez form Right to use property. Ez form Tangible personal property. Ez form Future interest. Ez form Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value When To DeductChecks. Ez form Text message. Ez form Credit card. Ez form Pay-by-phone account. Ez form Stock certificate. Ez form Promissory note. Ez form Option. Ez form Borrowed funds. Ez form Limits on DeductionsCarryovers Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To Report Introduction This chapter explains how to claim a deduction for your charitable contributions. Ez form It discusses the following topics. Ez form The types of organizations to which you can make deductible charitable contributions. Ez form The types of contributions you can deduct. Ez form How much you can deduct. Ez form What records you must keep. Ez form How to report your charitable contributions. Ez form A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Ez form It is voluntary and is made without getting, or expecting to get, anything of equal value. Ez form Form 1040 required. Ez form    To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. Ez form The amount of your deduction may be limited if certain rules and limits explained in this chapter apply to you. Ez form The limits are explained in detail in Publication 526. Ez form Useful Items - You may want to see: Publication 526 Charitable Contributions 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. Ez form Most organizations other than churches and governments must apply to the IRS to become a qualified organization. Ez form How to check whether an organization can receive deductible charitable contributions. Ez form   You can ask any organization whether it is a qualified organization, and most will be able to tell you. Ez form Or go to IRS. Ez form gov. Ez form Click on “Tools” and then on “Exempt Organizations Select Check” (www. Ez form irs. Ez form gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). Ez form This online tool will enable you to search for qualified organizations. Ez form You can also call the IRS to find out if an organization is qualified. Ez form Call 1-877-829-5500. Ez form People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. Ez form Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. Ez form gsa. Ez form gov/fedrelay. Ez form Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. Ez form A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). Ez form It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Ez form Certain organizations that foster national or international amateur sports competition also qualify. Ez form War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). Ez form Domestic fraternal societies, orders, and associations operating under the lodge system. Ez form (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Ez form ) Certain nonprofit cemetery companies or corporations. Ez form (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. Ez form ) The United States or any state, the District of Columbia, a U. Ez form S. Ez form possession (including Puerto Rico), a political subdivision of a state or U. Ez form S. Ez form possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. Ez form (Your contribution to this type of organization is only deductible if it is to be used solely for public purposes. Ez form ) Examples. Ez form    The following list gives some examples of qualified organizations. Ez form Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. Ez form Most nonprofit charitable organizations such as the American Red Cross and the United Way. Ez form Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. Ez form This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. Ez form However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . Ez form Nonprofit hospitals and medical research organizations. Ez form Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. Ez form Nonprofit volunteer fire companies. Ez form Nonprofit organizations that develop and maintain public parks and recreation facilities. Ez form Civil defense organizations. Ez form Certain foreign charitable organizations. Ez form   Under income tax treaties with Canada, Israel, and Mexico, you may be able to deduct contributions to certain Canadian, Israeli, or Mexican charitable organizations. Ez form Generally, you must have income from sources in that country. Ez form For additional information on the deduction of contributions to Canadian charities, see Publication 597, Information on the United States–Canada Income Tax Treaty. Ez form If you need more information on how to figure your contribution to Mexican and Israeli charities, see Publication 526. Ez form Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. Ez form A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. Ez form The contributions must be made to a qualified organization and not set aside for use by a specific person. Ez form If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. Ez form See Contributions of Property , later in this chapter. Ez form Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. Ez form See Limits on Deductions , later. Ez form In addition, the total of your charitable contribution deduction and certain other itemized deductions may be limited. Ez form See chapter 29. Ez form Table 24-1 gives examples of contributions you can and cannot deduct. Ez form Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Ez form Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. Ez form If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. Ez form For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. Ez form Example 1. Ez form You pay $65 for a ticket to a dinner-dance at a church. Ez form Your entire $65 payment goes to the church. Ez form The ticket to the dinner-dance has a fair market value of $25. Ez form When you buy your ticket, you know that its value is less than your payment. Ez form To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). Ez form You can deduct $40 as a contribution to the church. Ez form Example 2. Ez form At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. Ez form The amount you pay is no more than the fair rental value. Ez form You have not made a deductible charitable contribution. Ez form Athletic events. Ez form   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. Ez form   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. Ez form Subtract the price of the tickets from your payment. Ez form You can deduct 80% of the remaining amount as a charitable contribution. Ez form Example 1. Ez form You pay $300 a year for membership in a university's athletic scholarship program. Ez form The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. Ez form You can deduct $240 (80% of $300) as a charitable contribution. Ez form Table 24-1. Ez form Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. Ez form See the rest of this chapter for more information and additional rules and limits that may apply. Ez form Deductible As  Charitable Contributions Not Deductible  As Charitable Contributions Money or property you give to:  Churches, synagogues, temples, mosques, and other religious organizations Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park) Nonprofit schools and hospitals The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. Ez form War veterans groups   Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Money or property you give to:  Civic leagues, social and sports clubs, labor unions, and chambers of commerce Foreign organizations (except certain Canadian, Israeli, and Mexican charities) Groups that are run for personal profit Groups whose purpose is to lobby for law changes Homeowners' associations Individuals Political groups or candidates for public office   Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank    Example 2. Ez form The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. Ez form You must subtract the usual price of a ticket ($120) from your $300 payment. Ez form The result is $180. Ez form Your deductible charitable contribution is $144 (80% of $180). Ez form Charity benefit events. Ez form   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. Ez form   If there is an established charge for the event, that charge is the value of your benefit. Ez form If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. Ez form Whether you use the tickets or other privileges has no effect on the amount you can deduct. Ez form However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. Ez form    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. Ez form If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. Ez form Example. Ez form You pay $40 to see a special showing of a movie for the benefit of a qualified organization. Ez form Printed on the ticket is “Contribution—$40. Ez form ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). Ez form Membership fees or dues. Ez form    You may be able to deduct membership fees or dues you pay to a qualified organization. Ez form However, you can deduct only the amount that is more than the value of the benefits you receive. Ez form    You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. Ez form They are not qualified organizations. Ez form Certain membership benefits can be disregarded. Ez form   Both you and the organization can disregard the following membership benefits if you receive them in return for an annual payment of $75 or less. Ez form Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. Ez form Admission, while you are a member, to events open only to members of the organization, if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. Ez form 20. Ez form Token items. Ez form   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. Ez form You receive only a small item or other benefit of token value. Ez form The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. Ez form Written statement. Ez form   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. Ez form The statement must say that you can deduct only the amount of your payment that is more than the value of the goods or services you received. Ez form It must also give you a good faith estimate of the value of those goods or services. Ez form   The organization can give you the statement either when it solicits or when it receives the payment from you. Ez form Exception. Ez form   An organization will not have to give you this statement if one of the following is true. Ez form The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. Ez form You receive only items whose value is not substantial as described under Token items , earlier. Ez form You receive only membership benefits that can be disregarded, as described earlier. Ez form Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. Ez form You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization as part of a program of the organization to provide educational opportunities for the student, Is not your relative or dependent, and Is a full-time student in the twelfth or any lower grade at a school in the United States. Ez form You can deduct up to $50 a month for each full calendar month the student lives with you. Ez form Any month when conditions (1) through (3) are met for 15 days or more counts as a full month. Ez form For additional information, see Expenses Paid for Student Living With You in Publication 526. Ez form Mutual exchange program. Ez form   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. Ez form Table 24-2. Ez form Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. Ez form All of the rules explained in this chapter also apply. Ez form See, in particular, Out-of-Pocket Expenses in Giving Services . Ez form Question Answer I volunteer 6 hours a week in the office of a qualified organization. Ez form The receptionist is paid $10 an hour for the same work. Ez form Can I deduct $60 a week for my time?    No, you cannot deduct the value of your time or services. Ez form The office is 30 miles from my home. Ez form Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. Ez form If you don't want to figure your actual costs, you can deduct 14 cents for each mile. Ez form I volunteer as a Red Cross nurse's aide at a hospital. Ez form Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. Ez form I pay a babysitter to watch my children while I volunteer for a qualified organization. Ez form Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. Ez form (If you have childcare expenses so you can work for pay, see chapter 32. Ez form ) Out-of-Pocket Expenses in Giving Services Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. Ez form The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. Ez form Table 24-2 contains questions and answers that apply to some individuals who volunteer their services. Ez form Conventions. Ez form   If a qualified organization selects you to attend a convention as its representative, you can deduct unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight in connection with the convention. Ez form However, see Travel , later. Ez form   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. Ez form You also cannot deduct transportation, meals and lodging, and other expenses for your spouse or children. Ez form    You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. Ez form You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. Ez form Uniforms. Ez form   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. Ez form Foster parents. Ez form   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. Ez form A qualified organization must select the individuals you take into your home for foster care. Ez form    You can deduct expenses that meet both of the following requirements. Ez form They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. Ez form They are incurred primarily to benefit the qualified organization. Ez form   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. Ez form For details, see chapter 3. Ez form Example. Ez form You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. Ez form Your unreimbursed expenses are not deductible as charitable contributions. Ez form Car expenses. Ez form   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, that are directly related to the use of your car in giving services to a charitable organization. Ez form You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. Ez form    If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. Ez form   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. Ez form   You must keep reliable written records of your car expenses. Ez form For more information, see Car expenses under Records To Keep, later. Ez form Travel. Ez form   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. Ez form This applies whether you pay the expenses directly or indirectly. Ez form You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. Ez form   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Ez form Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. Ez form However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. Ez form Example 1. Ez form You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. Ez form You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. Ez form You participate in the activities of the group and enjoy your time with them. Ez form You oversee the breaking of camp and you transport the group home. Ez form You can deduct your travel expenses. Ez form Example 2. Ez form You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. Ez form The project is sponsored by a charitable organization. Ez form In most circumstances, you cannot deduct your expenses. Ez form Example 3. Ez form You work for several hours each morning on an archaeological dig sponsored by a charitable organization. Ez form The rest of the day is free for recreation and sightseeing. Ez form You cannot take a charitable contribution deduction even though you work very hard during those few hours. Ez form Example 4. Ez form You spend the entire day attending a charitable organization's regional meeting as a chosen representative. Ez form In the evening you go to the theater. Ez form You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. Ez form Daily allowance (per diem). Ez form   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. Ez form You may be able to deduct any necessary travel expenses that are more than the allowance. Ez form Deductible travel expenses. Ez form   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. Ez form Because these travel expenses are not business-related, they are not subject to the same limits as business-related expenses. Ez form For information on business travel expenses, see Travel Expenses in chapter 26. Ez form Contributions You Cannot Deduct There are some contributions you cannot deduct, such as those made to specific individuals and those made to nonqualified organizations. Ez form (See Contributions to Individuals and Contributions to Nonqualified Organizations , next. Ez form ) There are others you can deduct only part of, as discussed later under Contributions From Which You Benefit . Ez form Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. Ez form Contributions to fraternal societies made for the purpose of paying medical or burial expenses of deceased members. Ez form Contributions to individuals who are needy or worthy. Ez form You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. Ez form But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. Ez form Example. Ez form You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. Ez form However, you cannot deduct contributions earmarked for relief of a particular individual or family. Ez form Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. Ez form Expenses you paid for another person who provided services to a qualified organization. Ez form Example. Ez form Your son does missionary work. Ez form You pay his expenses. Ez form You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. Ez form Payments to a hospital that are for a specific patient's care or for services for a specific patient. Ez form You cannot deduct these payments even if the hospital is operated by a city, a state, or other qualified organization. Ez form Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. Ez form Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. Ez form Chambers of commerce and other business leagues or organizations (but see chapter 28). Ez form Civic leagues and associations. Ez form Communist organizations. Ez form Country clubs and other social clubs. Ez form Most foreign organizations (other than certain Canadian, Israeli, or Mexican charitable organizations). Ez form For details, see Publication 526. Ez form Homeowners' associations. Ez form Labor unions (but see chapter 28). Ez form Political organizations and candidates. Ez form Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. Ez form See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. Ez form These contributions include the following. Ez form Contributions for lobbying. Ez form This includes amounts that you earmark for use in, or in connection with, influencing specific legislation. Ez form Contributions to a retirement home for room, board, maintenance, or admittance. Ez form Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. Ez form Costs of raffles, bingo, lottery, etc. Ez form You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. Ez form For information on how to report gambling winnings and losses, see Gambling winnings in chapter 12 and Gambling Losses Up to the Amount of Gambling Winnings in chapter 28. Ez form Dues to fraternal orders and similar groups. Ez form However, see Membership fees or dues , earlier, under Contributions You Can Deduct. Ez form Tuition, or amounts you pay instead of tuition. Ez form You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. Ez form You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. Ez form ” Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. Ez form Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. Ez form The cost of meals you eat while you perform services for a qualified organization unless it is necessary for you to be away from home overnight while performing the services. Ez form Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final (but see Adoption Credit in chapter 37, and the instructions for Form 8839, Qualified Adoption Expenses). Ez form You also may be able to claim an exemption for the child. Ez form See Adopted child in chapter 3. Ez form Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property (but see chapter 28). Ez form Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. Ez form However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. Ez form See Giving Property That Has Increased in Value , later. Ez form For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. Ez form Clothing and household items. Ez form   You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. Ez form Exception. Ez form   You can take a deduction for a contribution of an item of clothing or household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. Ez form Household items. Ez form   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. Ez form   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. Ez form Cars, boats, and airplanes. Ez form    The following rules apply to any donation of a qualified vehicle. Ez form A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. Ez form Deduction more than $500. Ez form   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. Ez form If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. Ez form Form 1098-C. Ez form   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. Ez form The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. Ez form   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453 and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. Ez form   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. Ez form    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. Ez form But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. Ez form Filing deadline approaching and still no Form 1098-C. Ez form   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. Ez form Request an automatic 6-month extension of time to file your return. Ez form You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Ez form S. Ez form Individual Income Tax Return. Ez form  For more information, see Automatic Extension in chapter 1. Ez form File the return on time without claiming the deduction for the qualified vehicle. Ez form After receiving the Form 1098-C, file an amended return, Form 1040X, claiming the deduction. Ez form Attach Copy B of Form 1098-C (or other statement) to the amended return. Ez form For more information about amended returns, see Amended Returns and Claims for Refund in chapter 1. Ez form Exceptions. Ez form   There are two exceptions to the rules just described for deductions of more than $500. Ez form Exception 1—vehicle used or improved by organization. Ez form   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. Ez form But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Ez form The Form 1098-C (or other statement) will show whether this exception applies. Ez form Exception 2—vehicle given or sold to needy individual. Ez form   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. Ez form But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Ez form The Form 1098-C (or other statement) will show whether this exception applies. Ez form   This exception does not apply if the organization sells the vehicle at auction. Ez form In that case, you cannot deduct the vehicle's fair market value. Ez form Example. Ez form Anita donates a used car to a qualified organization. Ez form She bought it 3 years ago for $9,000. Ez form A used car guide shows the fair market value for this type of car is $6,000. Ez form However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. Ez form Neither exception 1 nor exception 2 applies. Ez form If Anita itemizes her deductions, she can deduct $2,900 for her donation. Ez form She must attach Form 1098-C and Form 8283 to her return. Ez form Deduction $500 or less. Ez form   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. Ez form But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Ez form   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. Ez form The statement must contain the information and meet the tests for an acknowledgment described under Deductions of At Least $250 But Not More Than $500 under Records To Keep, later. Ez form Partial interest in property. Ez form   Generally, you cannot deduct a charitable contribution of less than your entire interest in property. Ez form Right to use property. Ez form   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. Ez form For exceptions and more information, see Partial Interest in Property Not in Trust in Publication 561. Ez form Future interests in tangible personal property. Ez form   You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. Ez form Tangible personal property. Ez form   This is any property, other than land or buildings, that can be seen or touched. Ez form It includes furniture, books, jewelry, paintings, and cars. Ez form Future interest. Ez form   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. Ez form Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. Ez form Publication 561 contains a more complete discussion. Ez form Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. Ez form Used clothing and household items. Ez form   The fair market value of used clothing and household goods is usually far less than what you paid for them when they were new. Ez form   For used clothing, you should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. Ez form See Household Goods in Publication 561 for information on the valuation of household goods, such as furniture, appliances, and linens. Ez form Example. Ez form Dawn Greene donated a coat to a thrift store operated by her church. Ez form She paid $300 for the coat 3 years ago. Ez form Similar coats in the thrift store sell for $50. Ez form The fair market value of the coat is $50. Ez form Dawn's donation is limited to $50. Ez form Cars, boats, and airplanes. Ez form   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. Ez form Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. Ez form The guides may be published monthly or seasonally and for different regions of the country. Ez form These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Ez form The prices are not “official” and these publications are not considered an appraisal of any specific donated property. Ez form But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. Ez form   You can also find used car pricing information on the Internet. Ez form Example. Ez form You donate a used car in poor condition to a local high school for use by students studying car repair. Ez form A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Ez form However, the guide shows the price for a private party sale of the car is only $750. Ez form The fair market value of the car is considered to be $750. Ez form Large quantities. Ez form   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. Ez form Giving Property That Has Decreased in Value If you contribute property with a fair market value that is less than your basis in it, your deduction is limited to its fair market value. Ez form You cannot claim a deduction for the difference between the property's basis and its fair market value. Ez form Giving Property That Has Increased in Value If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. Ez form Your basis in property is generally what you paid for it. Ez form See chapter 13 if you need more information about basis. Ez form Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. Ez form Ordinary income property. Ez form   Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at fair market value on the date it was contributed. Ez form Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined in chapter 14) held 1 year or less. Ez form Amount of deduction. Ez form   The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Ez form Generally, this rule limits the deduction to your basis in the property. Ez form Example. Ez form You donate stock you held for 5 months to your church. Ez form The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). Ez form Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation). Ez form Capital gain property. Ez form   Property is capital gain property if you would have recognized long-term capital gain had you sold it at fair market value on the date of the contribution. Ez form It includes capital assets held more than 1 year, as well as certain real property and depreciable property used in your trade or business and, generally, held more than 1 year. Ez form Amount of deduction — general rule. Ez form   When figuring your deduction for a contribution of capital gain property, you generally can use the fair market value of the property. Ez form Exceptions. Ez form   In certain situations, you must reduce the fair market value by any amount that would have been long-term capital gain if you had sold the property for its fair market value. Ez form Generally, this means reducing the fair market value to the property's cost or other basis. Ez form Bargain sales. Ez form   A bargain sale of property is a sale or exchange for less than the property's fair market value. Ez form A bargain sale to a qualified organization is partly a charitable contribution and partly a sale or exchange. Ez form A bargain sale may result in a taxable gain. Ez form More information. Ez form   For more information on donating appreciated property, see Giving Property That Has Increased in Value in Publication 526. Ez form When To Deduct You can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year, as explained later under Carryovers ). Ez form This applies whether you use the cash or an accrual method of accounting. Ez form Time of making contribution. Ez form   Usually, you make a contribution at the time of its unconditional delivery. Ez form Checks. Ez form   A check you mail to a charity is considered delivered on the date you mail it. Ez form Text message. Ez form   Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account. Ez form Credit card. Ez form    Contributions charged on your credit card are deductible in the year you make the charge. Ez form Pay-by-phone account. Ez form    Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. Ez form Stock certificate. Ez form   A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. Ez form However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution is not delivered until the date the stock is transferred on the books of the corporation. Ez form Promissory note. Ez form   If you issue and deliver a promissory note to a charity as a contribution, it is not a contribution until you make the note payments. Ez form Option. Ez form    If you grant a charity an option to buy real property at a bargain price, it is not a contribution until the organization exercises the option. Ez form Borrowed funds. Ez form   If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan. Ez form Limits on Deductions The amount you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income (AGI). Ez form Your deduction may be further limited to 30% or 20% of your AGI, depending on the type of property you give and the type of organization you give it to. Ez form If your total contributions for the year are 20% or less of your AGI, these limits do not apply to you. Ez form The limits are discussed in detail under Limits on Deductions in Publication 526. Ez form A higher limit applies to certain qualified conservation contributions. Ez form See Publication 526 for details. Ez form Carryovers You can carry over any contributions you cannot deduct in the current year because they exceed your adjusted-gross-income limits. Ez form You can deduct the excess in each of the next 5 years until it is used up, but not beyond that time. Ez form For more information, see Carryovers in Publication 526. Ez form Records To Keep You must keep records to prove the amount of the contributions you make during the year. Ez form The kind of records you must keep depends on the amount of your contributions and whether they are: Cash contributions, Noncash contributions, or Out-of-pocket expenses when donating your services. Ez form Note. Ez form An organization generally must give you a written statement if it receives a payment from you that is more than $75 and is partly a contribution and partly for goods or services. Ez form (See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. Ez form ) Keep the statement for your records. Ez form It may satisfy all or part of the recordkeeping requirements explained in the following discussions. Ez form Cash Contributions Cash contributions include those paid by cash, check, electronic funds transfer, debit card, credit card, or payroll deduction. Ez form You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following. Ez form A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Ez form Bank records may include: A canceled check, A bank or credit union statement, or A credit card statement. Ez form A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution. Ez form The payroll deduction records described next. Ez form Payroll deductions. Ez form   If you make a contribution by payroll deduction, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the date and amount of the contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization. Ez form If your employer withheld $250 or more from a single paycheck, see Contributions of $250 or More , next. Ez form Contributions of $250 or More You can claim a deduction for a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization or certain payroll deduction records. Ez form If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions. Ez form Amount of contribution. Ez form   In figuring whether your contribution is $250 or more, do not combine separate contributions. Ez form For example, if you gave your church $25 each week, your weekly payments do not have to be combined. Ez form Each payment is a separate contribution. Ez form   If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution. Ez form   If you made a payment that is partly for goods and services, as described earlier under Contributions From Which You Benefit , your contribution is the amount of the payment that is more than the value of the goods and services. Ez form Acknowledgment. Ez form   The acknowledgment must meet these tests. Ez form It must be written. Ez form It must include: The amount of cash you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), A description and good faith estimate of the value of any goods or services described in (b) (other than intangible religious benefits), and A statement that the only benefit you received was an intangible religious benefit, if that was the case. Ez form The acknowledgment does not need to describe or estimate the value of an intangible religious benefit. Ez form An intangible religious benefit is a benefit that generally is not sold in commercial transactions outside a donative (gift) context. Ez form An example is admission to a religious ceremony. Ez form You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Ez form   If the acknowledgment does not show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. Ez form If the acknowledgment shows the date of the contribution and meets the other tests just described, you do not need any other records. Ez form Payroll deductions. Ez form   If you make a contribution by payroll deduction and your employer withholds $250 or more from a single paycheck, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the amount withheld as a contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization and states the organization does not provide goods or services in return for any contribution made to it by payroll deduction. Ez form A single pledge card may be kept for all contributions made by payroll deduction regardless of amount as long as it contains all the required information. Ez form   If the pay stub, Form W-2, pledge card, or other document does not show the date of the contribution, you must have another document that does show the date of the contribution. Ez form If the pay stub, Form W-2, pledge card, or other document shows the date of the contribution, you do not need any other records except those just described in (1) and (2). Ez form Noncash Contributions For a contribution not made in cash, the records you must keep depend on whether your deduction for the contribution is: Less than $250, At least $250 but not more than $500, Over $500 but not more than $5,000, or Over $5,000. Ez form Amount of deduction. Ez form   In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any charitable organization during the year. Ez form   If you received goods or services in return, as described earlier in Contributions From Which You Benefit , reduce your contribution by the value of those goods or services. Ez form If you figure your deduction by reducing the fair market value of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value , your contribution is the reduced amount. Ez form Deductions of Less Than $250 If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing: The name of the charitable organization, The date and location of the charitable contribution, and A reasonably detailed description of the property. Ez form A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing the information in (1), (2), and (3) will serve as a receipt. Ez form You are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site). Ez form Additional records. Ez form   You must also keep reliable written records for each item of contributed property. Ez form Your written records must include the following information. Ez form The name and address of the organization to which you contributed. Ez form The date and location of the contribution. Ez form A description of the property in detail reasonable under the circumstances. Ez form For a security, keep the name of the issuer, the type of security, and whether it is regularly traded on a stock exchange or in an over-the-counter market. Ez form The fair market value of the property at the time of the contribution and how you figured the fair market value. Ez form If it was determined by appraisal, keep a signed copy of the appraisal. Ez form The cost or other basis of the property, if you must reduce its fair market value by appreciation. Ez form Your records should also include the amount of the reduction and how you figured it. Ez form The amount you claim as a deduction for the tax year as a result of the contribution, if you contribute less than your entire interest in the property during the tax year. Ez form Your records must include the amount you claimed as a deduction in any earlier years for contributions of other interests in this property. Ez form They must also include the name and address of each organization to which you contributed the other interests, the place where any such tangible property is located or kept, and the name of any person in possession of the property, other than the organization to which you contributed it. Ez form The terms of any conditions attached to the contribution of property. Ez form Deductions of At Least $250 But Not More Than $500 If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. Ez form If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions. Ez form The acknowledgment must contain the information in items (1) through (3) under Deductions of Less Than $250 , earlier, and your written records must include the information listed in that discussion under Additional records . Ez form The acknowledgment must also meet these tests. Ez form It must be written. Ez form It must include: A description (but not necessarily the value) of any property you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), and A description and good faith estimate of the value of any goods or services described in (b). Ez form If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in a commercial transaction outside the donative context, the acknowledgment must say so and does not need to describe or estimate the value of the benefit. Ez form You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Ez form Deductions Over $500 You are required to give additional information if you claim a deduction over $500 for noncash charitable contributions. Ez form See Records To Keep in Publication 526 for more information. Ez form Out-of-Pocket Expenses If you give services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, the following two rules apply. Ez form You must have adequate records to prove the amount of the expenses. Ez form If any of your unreimbursed out-of-pocket expenses, considered separately, are $250 or more (for example, you pay $250 or more for an airline ticket to attend a convention of a qualified organization as a chosen representative), you must get an acknowledgment from the qualified organization that contains: A description of the services you provided, A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred, A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and A statement that the only benefit you received was an intangible religious benefit, if that was the case. Ez form The acknowledgment does not need to describe or estimate the value of an intangible religious benefit (defined earlier under Acknowledgment ). Ez form You must get the acknowledgment on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Ez form Car expenses. Ez form   If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. Ez form Whether your records are considered reliable depends on all the facts and circumstances. Ez form Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses. Ez form   For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. Ez form If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. Ez form If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose. Ez form   See Car expenses under Out-of-Pocket Expenses in Giving Services, earlier, for the expenses you can deduct. Ez form How To Report Report your charitable contributions on Schedule A (Form 1040). Ez form If your total deduction for all noncash contributions for the year is over $500, you must also file Form 8283. Ez form See How To Report in Publication 526 for more information. Ez form Prev  Up  Next   Home   More Online Publications
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U.S. Sentencing Commission

The U.S. Sentencing Commission studies and develops sentencing policies for the federal courts. The Commission serves as an information resource for Congress, the executive, the courts and the public on matters relating to federal crime and sentencing as well.

Contact the Agency or Department

Website: U.S. Sentencing Commission

E-mail: (All inquiries must include a surface mailing address)

Address: One Columbus Circle NE
Suite 2-500

Washington, DC 20002-8002

Phone Number: (202) 502-4500

The Ez Form

Ez form 10. Ez form   Self-Employment (SE) Tax Table of Contents Who Must Pay SE Tax?Special Rules and Exceptions Figuring Earnings Subject to SE Tax Farm Optional Method Using Both Optional Methods Reporting Self-Employment Tax The SE tax rules apply no matter how old you are and even if you are already receiving social security and Medicare benefits. Ez form Who Must Pay SE Tax? Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. Ez form Use Schedule SE to figure net earnings from self-employment. Ez form Sole proprietor or independent contractor. Ez form   If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ (Form 1040) to figure your earnings subject to SE tax. Ez form SE tax rate. Ez form    For 2013, the SE tax rate on net earnings is 15. Ez form 3% (12. Ez form 4% social security tax plus 2. Ez form 9% Medicare tax). Ez form Maximum earnings subject to self-employment tax. Ez form    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. Ez form 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. Ez form   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. Ez form 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. Ez form   If your wages and tips are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. Ez form 4% social security part of the SE tax on any of your net earnings. Ez form However, you must pay the 2. Ez form 9% Medicare part of the SE tax on all your net earnings. Ez form Special Rules and Exceptions Aliens. Ez form   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. Ez form S. Ez form citizens. Ez form Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. Ez form S. Ez form social security system. Ez form However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. Ez form S. Ez form residents for self-employment tax purposes. Ez form For more information on aliens, see Publication 519, U. Ez form S. Ez form Tax Guide for Aliens. Ez form Child employed by parent. Ez form   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. Ez form Church employee. Ez form    If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108. Ez form 28 or more in wages from the church or organization. Ez form For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Ez form Fishing crew member. Ez form   If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. Ez form You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. Ez form The pay is not more than $100 per trip. Ez form The pay is received only if there is a minimum catch. Ez form The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. Ez form You get a share of the catch or a share of the proceeds from the sale of the catch. Ez form Your share depends on the amount of the catch. Ez form The boat's operating crew normally numbers fewer than 10 individuals. Ez form (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10. Ez form ) Notary public. Ez form   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ but are not subject to self-employment tax (see the Instructions for Schedule SE (Form 1040)). Ez form State or local government employee. Ez form   You are subject to SE tax if you are an employee of a state or local government, are paid solely on a fee basis, and your services are not covered under a federal-state social security agreement. Ez form Foreign government or international organization employee. Ez form   You are subject to SE tax if both the following conditions are true. Ez form You are a U. Ez form S. Ez form citizen employed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Virgin Islands by: A foreign government, A wholly-owned agency of a foreign government, or An international organization. Ez form Your employer is not required to withhold social security and Medicare taxes from your wages. Ez form U. Ez form S. Ez form citizen or resident alien residing abroad. Ez form    If you are a self-employed U. Ez form S. Ez form citizen or resident alien living outside the United States, in most cases you must pay SE tax. Ez form Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. Ez form Exception. Ez form    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. Ez form Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. Ez form The country to which you must pay the tax will issue a certificate which serves as proof of exemption from social security tax in the other country. Ez form   For more information, see the Instructions for Schedule SE (Form 1040). Ez form More Than One Business If you have earnings subject to SE tax from more than one trade, business, or profession, you must combine the net profit (or loss) from each to determine your total earnings subject to SE tax. Ez form A loss from one business reduces your profit from another business. Ez form Community Property Income If any of the income from a trade or business, other than a partnership, is community property income under state law, it is included in the earnings subject to SE tax of the spouse carrying on the trade or business. Ez form Gain or Loss Do not include in earnings subject to SE tax a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. Ez form It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. Ez form Lost Income Payments If you are self-employed and reduce or stop your business activities, any payment you receive from insurance or other sources for the lost business income is included in earnings subject to SE tax. Ez form If you are not working when you receive the payment, it still relates to your business and is included in earnings subject to SE tax, even though your business is temporarily inactive. Ez form Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. Ez form The regular method. Ez form The nonfarm optional method. Ez form The farm optional method. Ez form You must use the regular method unless you are eligible to use one or both of the optional methods. Ez form Why use an optional method?    You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. Ez form You want to receive credit for social security benefit coverage. Ez form You incurred child or dependent care expenses for which you could claim a credit. Ez form (An optional method may increase your earned income, which could increase your credit. Ez form ) You are entitled to the earned income credit. Ez form (An optional method may increase your earned income, which could increase your credit. Ez form ) You are entitled to the additional child tax credit. Ez form (An optional method may increase your earned income, which could increase your credit. Ez form ) Effects of using an optional method. Ez form   Using an optional method could increase your SE tax. Ez form Paying more SE tax could result in your getting higher benefits when you retire. Ez form   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller tax or no tax using the regular method. Ez form   The optional methods may be used only to figure your SE tax. Ez form To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. Ez form Regular Method Multiply your total earnings subject to SE tax by 92. Ez form 35% (. Ez form 9235) to get your net earnings under the regular method. Ez form See Short Schedule SE, line 4, or Long Schedule SE, line 4a. Ez form Net earnings figured using the regular method are also called actual net earnings. Ez form Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. Ez form You may use this method if you meet all the following tests. Ez form You are self-employed on a regular basis. Ez form This means that your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. Ez form The net earnings can be from either farm or nonfarm earnings or both. Ez form You have used this method less than 5 years. Ez form (There is a 5-year lifetime limit. Ez form ) The years do not have to be one after another. Ez form Your net nonfarm profits were: Less than $5,024, and Less than 72. Ez form 189% of your gross nonfarm income. Ez form Net nonfarm profits. Ez form   Net nonfarm profit generally is the total of the amounts from: Line 31, Schedule C (Form 1040), Line 3, Schedule C-EZ (Form 1040), Box 14, code A, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J1, Schedule K-1 (Form 1065-B). Ez form   However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. Ez form Gross nonfarm income. Ez form   Your gross nonfarm income generally is the total of the amounts from: Line 7, Schedule C (Form 1040), Line 1, Schedule C-EZ (Form 1040), Box 14, code C, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J2, Schedule K-1 (Form 1065-B). Ez form Figuring Nonfarm Net Earnings If you meet the three tests explained earlier, use the following table to figure your net earnings from self-employment under the nonfarm optional method. Ez form Table 10-1. Ez form Figuring Nonfarm Net Earnings IF your gross nonfarm income is. Ez form . Ez form . Ez form THEN your net earnings are equal to. Ez form . Ez form . Ez form $6,960 or less Two-thirds of your gross nonfarm income. Ez form More than $6,960 $4,640 Actual net earnings. Ez form   Your actual net earnings are 92. Ez form 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. Ez form 35% (. Ez form 9235) to get actual net earnings). Ez form Actual net earnings are equivalent to net earnings figured using the regular method. Ez form Optional net earnings less than actual net earnings. Ez form   You cannot use this method to report an amount less than your actual net earnings from self-employment. Ez form Gross nonfarm income of $6,960 or less. Ez form   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. Ez form Example 1. Ez form Net nonfarm profit less than $5,024 and less than 72. Ez form 189% of gross nonfarm income. Ez form Ann Green runs a craft business. Ez form Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. Ez form She meets the test for being self-employed on a regular basis. Ez form She has used the nonfarm optional method less than 5 years. Ez form Her gross income and net profit in 2013 are as follows: Gross nonfarm income $5,400 Net nonfarm profit $1,200 Ann's actual net earnings for 2013 are $1,108 ($1,200 × . Ez form 9235). Ez form Because her net profit is less than $5,024 and less than 72. Ez form 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). Ez form Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. Ez form Example 2. Ez form Net nonfarm profit less than $5,024 but not less than 72. Ez form 189% of gross nonfarm income. Ez form Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. Ez form She must use the regular method to figure her net earnings. Ez form She cannot use the nonfarm optional method because her net profit is not less than 72. Ez form 189% of her gross income. Ez form Example 3. Ez form Net loss from a nonfarm business. Ez form Assume that in Example 1 Ann has a net loss of $700. Ez form She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. Ez form Example 4. Ez form Nonfarm net earnings less than $400. Ez form Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. Ez form In this situation, she would not pay any SE tax under either the regular method or the nonfarm optional method because her net earnings under both methods are less than $400. Ez form Gross nonfarm income of more than $6,960. Ez form   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. Ez form Example 1. Ez form Net nonfarm profit less than $5,024 and less than 72. Ez form 189% of gross nonfarm income. Ez form John White runs an appliance repair shop. Ez form His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. Ez form He meets the test for being self-employed on a regular basis. Ez form He has used the nonfarm optional method less than 5 years. Ez form His gross income and net profit in 2013 are as follows: Gross nonfarm income $12,000 Net nonfarm profit $1,200 John's actual net earnings for 2013 are $1,108 ($1,200 × . Ez form 9235). Ez form Because his net profit is less than $5,024 and less than 72. Ez form 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. Ez form Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. Ez form Example 2. Ez form Net nonfarm profit not less than $5,024. Ez form Assume that in Example 1 John's net profit is $5,400. Ez form He must use the regular method. Ez form He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. Ez form Example 3. Ez form Net loss from a nonfarm business. Ez form Assume that in Example 1 John has a net loss of $700. Ez form He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. Ez form Farm Optional Method Use the farm optional method only for earnings from a farming business. Ez form See Publication 225 for information about this method. Ez form Using Both Optional Methods If you have both farm and nonfarm earnings, you may be able to use both optional methods to determine your net earnings from self-employment. Ez form To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. Ez form Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. Ez form Add the net earnings figured under each method to arrive at your total net earnings from self-employment. Ez form You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. Ez form If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. Ez form Example. Ez form You are a self-employed farmer. Ez form You also operate a retail grocery store. Ez form Your gross income, actual net earnings from self-employment, and optional farm and optional nonfarm net earnings from self-employment are shown in Table 10-2. Ez form Table 10-2. Ez form Example—Farm and Nonfarm Earnings Income and Earnings Farm Nonfarm Gross income $3,000 $6,000 Actual net earnings $900 $500 Optional net earnings (2/3 of gross income) $2,000 $4,000 Table 10-3 shows four methods or combinations of methods you can use to figure net earnings from self-employment using the farm and nonfarm gross income and actual net earnings shown in Table 10-2. Ez form Method 1. Ez form Using the regular method for both farm and nonfarm income. Ez form Method 2. Ez form Using the optional method for farm income and the regular method for nonfarm income. Ez form Method 3. Ez form Using the regular method for farm income and the optional method for nonfarm income. Ez form Method 4. Ez form Using the optional method for both farm and nonfarm income. Ez form Note. Ez form Actual net earnings is the same as net earnings figured using the regular method. Ez form Table 10-3. Ez form Example—Net Earnings Net Earnings 1 2 3 4 Actual  farm $ 900   $ 900   Optional  farm   $ 2,000   $ 2,000 Actual nonfarm $ 500 $ 500     Optional nonfarm     $4,000 $4,000 Amount you can report: $1,400 $2,500 $4,900 $4,640* *Limited to $4,640 because you used both optional methods. Ez form Fiscal Year Filer If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. Ez form Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. Ez form Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. Ez form Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. Ez form Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. Ez form However, certain taxpayers must use Section B—Long Schedule SE. Ez form If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. Ez form Joint return. Ez form   Even if you file a joint return, you cannot file a joint Schedule SE. Ez form This is true whether one spouse or both spouses have earnings subject to SE tax. Ez form If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. Ez form However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. Ez form Attach both schedules to the joint return. Ez form More than one business. Ez form   If you have more than one trade or business, you must combine the net profit (or loss) from each business to figure your SE tax. Ez form A loss from one business will reduce your profit from another business. Ez form File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. Ez form Example. Ez form You are the sole proprietor of two separate businesses. Ez form You operate a restaurant that made a net profit of $25,000. Ez form You also have a cabinetmaking business that had a net loss of $500. Ez form You must file a Schedule C for the restaurant showing your net profit of $25,000 and another Schedule C for the cabinetmaking business showing your net loss of $500. Ez form You file Schedule SE showing total earnings subject to SE tax of $24,500. Ez form Prev  Up  Next   Home   More Online Publications