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File 2012 Income Tax Free Online

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File 2012 Income Tax Free Online

File 2012 income tax free online 12. File 2012 income tax free online   Self-Employment Tax Table of Contents What's New for 2013 What's New for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Why Pay Self-Employment Tax? How To Pay Self-Employment TaxReplacing a lost social security card. File 2012 income tax free online Name change. File 2012 income tax free online Penalty for underpayment of estimated tax. File 2012 income tax free online Who Must Pay Self-Employment Tax?Limited partner. File 2012 income tax free online Community property. File 2012 income tax free online Figuring Self-Employment EarningsLandlord Participation in Farming Methods for Figuring Net EarningsRegular Method Farm Optional Method Nonfarm Optional Method Using Both Optional Methods Reporting Self-Employment Tax What's New for 2013 Tax rates. File 2012 income tax free online  For tax years beginning in 2013, the social security part of the self-employment tax increases from 10. File 2012 income tax free online 4% to 12. File 2012 income tax free online 4%. File 2012 income tax free online The Medicare part of the tax remains at 2. File 2012 income tax free online 9%. File 2012 income tax free online As a result, the self-employment tax is increased from 13. File 2012 income tax free online 3% to 15. File 2012 income tax free online 3%. File 2012 income tax free online Additional Medicare Tax. File 2012 income tax free online . File 2012 income tax free online  For tax years beginning in 2013, a 0. File 2012 income tax free online 9% Additional Medicare Tax applies to your Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above a threshold amount. File 2012 income tax free online Use Form 8959, Additional Medicare Tax, to figure this tax. File 2012 income tax free online For more information, see the Instructions for Form 8959. File 2012 income tax free online Maximum net earnings. File 2012 income tax free online  The maximum net self-employment earnings subject to the social security part (12. File 2012 income tax free online 4%) of the self-employment tax increased to $113,700 for 2013. File 2012 income tax free online There is no maximum limit on earnings subject to the Medicare part (2. File 2012 income tax free online 9%). File 2012 income tax free online What's New for 2014 Maximum net earnings. File 2012 income tax free online  The maximum net self-employment earnings subject to the social security part of the self-employment tax for 2014 will be discussed in the 2013 Publication 334. File 2012 income tax free online Introduction Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. File 2012 income tax free online It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. File 2012 income tax free online You usually have to pay SE tax if you are self-employed. File 2012 income tax free online You are usually self-employed if you operate your own farm on land you either own or rent. File 2012 income tax free online You have to figure SE tax on Schedule SE (Form 1040). File 2012 income tax free online Farmers who have employees may have to pay the employer's share of social security and Medicare taxes, as well. File 2012 income tax free online See chapter 13 for information on employment taxes. File 2012 income tax free online Self-employment tax rate. File 2012 income tax free online   For tax years beginning in 2013, the self-employment tax rate is 15. File 2012 income tax free online 3%. File 2012 income tax free online The rate consists of two parts: 12. File 2012 income tax free online 4% for social security (old-age, survivors, and disability insurance) and 2. File 2012 income tax free online 9% for Medicare (hospital insurance). File 2012 income tax free online Topics - This chapter discusses: Why pay self-employment tax How to pay self-employment tax Who must pay self-employment tax Figuring self-employment earnings Landlord participation in farming Methods for figuring net earnings Reporting self-employment tax Useful Items - You may want to see: Publication 541 Partnerships Form (and Instructions) 1040 U. File 2012 income tax free online S. File 2012 income tax free online Individual Income Tax Return Sch F (Form 1040) Profit or Loss From Farming Sch SE (Form 1040) Self-Employment Tax 1065 U. File 2012 income tax free online S. File 2012 income tax free online Return of Partnership Income Sch K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. File 2012 income tax free online See chapter 16 for information about getting publications and forms. File 2012 income tax free online Why Pay Self-Employment Tax? Social security benefits are available to self-employed persons just as they are to wage earners. File 2012 income tax free online Your payments of SE tax contribute to your coverage under the social security system. File 2012 income tax free online Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. File 2012 income tax free online How to become insured under social security. File 2012 income tax free online   You must be insured under the social security system before you begin receiving social security benefits. File 2012 income tax free online You are insured if you have the required number of credits (also called quarters of coverage). File 2012 income tax free online Earning credits in 2013. File 2012 income tax free online   You can earn a maximum of four credits per year. File 2012 income tax free online For 2013, you earn one credit for each $1,160 of combined wages and self-employment earnings subject to social security tax. File 2012 income tax free online You need $4,640 ($1,160 × 4) of combined wages and self-employment earnings subject to social security tax to earn four credits in 2013. File 2012 income tax free online It does not matter whether the income is earned in 1 quarter or is spread over 2 or more quarters. File 2012 income tax free online For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office or visit the SSA website at www. File 2012 income tax free online socialsecurity. File 2012 income tax free online gov. File 2012 income tax free online Making false statements to get or to increase social security benefits may subject you to penalties. File 2012 income tax free online The Social Security Administration (SSA) time limit for posting self-employment earnings. File 2012 income tax free online   Generally, the SSA will give you credit only for self-employment earnings reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. File 2012 income tax free online    If you file your tax return or report a change in your self-employment earnings after the SSA time limit for posting self-employment earnings, the SSA may change its records, but only to remove or reduce the amount. File 2012 income tax free online The SSA will not change its records to increase your self-employment earnings after the SSA time limit listed above. File 2012 income tax free online How To Pay Self-Employment Tax To pay SE tax, you must have a social security number (SSN) or an individual taxpayer identification number (ITIN). File 2012 income tax free online This section explains how to: Obtain an SSN or ITIN, and Pay your SE tax using estimated tax. File 2012 income tax free online An ITIN does not entitle you to social security benefits. File 2012 income tax free online Obtaining an ITIN does not change your immigration or employment status under U. File 2012 income tax free online S. File 2012 income tax free online law. File 2012 income tax free online Obtaining a social security number. File 2012 income tax free online   If you have never had an SSN, apply for one using Form SS-5, Application for a Social Security Card. File 2012 income tax free online The application is also available in Spanish. File 2012 income tax free online You can get this form at any Social Security office or by calling 1-800-772-1213. File 2012 income tax free online    You can also download Form SS-5 from the Social Security Administration website at  www. File 2012 income tax free online socialsecurity. File 2012 income tax free online gov. File 2012 income tax free online   If you have a social security number from the time you were an employee, you must use that number. File 2012 income tax free online Do not apply for a new one. File 2012 income tax free online Replacing a lost social security card. File 2012 income tax free online   If you have a number but lost your card, file Form SS-5. File 2012 income tax free online You will get a new card showing your original number, not a new number. File 2012 income tax free online Name change. File 2012 income tax free online   If your name has changed since you received your social security card, complete Form SS-5 to report a name change. File 2012 income tax free online Obtaining an individual taxpayer identification number. File 2012 income tax free online   The IRS will issue you an ITIN, for tax use only, if you are a nonresident or resident alien and you do not have, and are not eligible to get, an SSN. File 2012 income tax free online To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number. File 2012 income tax free online You can get this form by calling 1-800-829-3676. File 2012 income tax free online For more information on ITINs, see Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number. File 2012 income tax free online Form W-7 and Publication 1915 are also available in Spanish. File 2012 income tax free online    You can also download Form W-7 from the IRS website at IRS. File 2012 income tax free online gov. File 2012 income tax free online Paying estimated tax. File 2012 income tax free online   Estimated tax is the method used to pay tax (including SE tax) on income not subject to withholding. File 2012 income tax free online You generally have to make estimated tax payments if you expect to owe tax, including SE tax, of $1,000 or more when you file your return. File 2012 income tax free online Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax. File 2012 income tax free online   However, if at least two-thirds of your gross income for 2013 or 2014 was from farming and you file your 2014 Form 1040 and pay all the tax due by March 2, 2015, you do not have to pay any estimated tax. File 2012 income tax free online For more information about estimated tax for farmers, see chapter 15. File 2012 income tax free online Penalty for underpayment of estimated tax. File 2012 income tax free online   You may have to pay a penalty if you do not pay enough estimated tax by its due date. File 2012 income tax free online Who Must Pay Self-Employment Tax? You must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. File 2012 income tax free online The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. File 2012 income tax free online Aliens. File 2012 income tax free online   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. File 2012 income tax free online S. File 2012 income tax free online citizens. File 2012 income tax free online Nonresident aliens are not subject to self-employment tax. File 2012 income tax free online 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. File 2012 income tax free online S. File 2012 income tax free online residents for self-employment tax purposes. File 2012 income tax free online For more information on aliens, see Publication 519, U. File 2012 income tax free online S. File 2012 income tax free online Tax Guide for Aliens. File 2012 income tax free online Are you self-employed?   You are self-employed if you carry on a trade or business (such as running a farm) as a sole proprietor, an independent contractor, a member of a partnership, or are otherwise in business for yourself. File 2012 income tax free online A trade or business is generally an activity carried on for a livelihood or in good faith to make a profit. File 2012 income tax free online Share farmer. File 2012 income tax free online   You are a self-employed farmer under an income-sharing arrangement if both the following apply. File 2012 income tax free online You produce a crop or raise livestock on land belonging to another person. File 2012 income tax free online Your share of the crop or livestock, or the proceeds from their sale, depends on the amount produced. File 2012 income tax free online Your net farm profit or loss from the income-sharing arrangement is reported on Schedule F (Form 1040) and included in your self-employment earnings. File 2012 income tax free online   If you produce a crop or livestock on land belonging to another person and are to receive a specified rate of pay, a fixed sum of money, or a fixed quantity of the crop or livestock, and not a share of the crop or livestock or their proceeds, you may be either self-employed or an employee of the landowner. File 2012 income tax free online This will depend on whether the landowner has the right to direct or control your performance of services. File 2012 income tax free online Example. File 2012 income tax free online A share farmer produces a crop on land owned by another person on a 50-50 crop-share basis. File 2012 income tax free online Under the terms of their agreement, the share farmer furnishes the labor and half the cost of seed and fertilizer. File 2012 income tax free online The landowner furnishes the machinery and equipment used to produce and harvest the crop, and half the cost of seed and fertilizer. File 2012 income tax free online The share farmer is provided a house in which to live. File 2012 income tax free online The landowner and the share farmer decide on a cropping plan. File 2012 income tax free online The share farmer is a self-employed farmer for purposes of the agreement to produce the crops, and the share farmer's part of the profit or loss from the crops is reported on Schedule F (Form 1040) and included in self-employment earnings. File 2012 income tax free online The tax treatment of the landowner is discussed later under Landlord Participation in Farming. File 2012 income tax free online Contract farming. File 2012 income tax free online   Under typical contract farming arrangements, the grower receives a fixed payment per unit of crops or finished livestock delivered to the processor or packing company. File 2012 income tax free online Since the grower typically furnishes labor and bears some production risk, the payments are reported on Schedule F and are therefore subject to self-employment tax. File 2012 income tax free online 4-H Club or FFA project. File 2012 income tax free online   If an individual participates in a 4-H Club or Future Farmers of America (FFA) project, any net income received from sales or prizes related to the project may be subject to income tax. File 2012 income tax free online Report the net income as “Other income” on line 21 of Form 1040. File 2012 income tax free online If necessary, attach a statement showing the gross income and expenses. File 2012 income tax free online The net income may not be subject to SE tax if the project is primarily for educational purposes and not for profit, and is completed by the individual under the rules and economic restrictions of the sponsoring 4-H or FFA organization. File 2012 income tax free online Such a project is generally not considered a trade or business. File 2012 income tax free online Partners in a partnership. File 2012 income tax free online   Generally, you are self-employed if you are a member of a partnership that carries on a trade or business. File 2012 income tax free online Limited partner. File 2012 income tax free online   If you are a limited partner, your partnership income is generally not subject to SE tax. File 2012 income tax free online However, guaranteed payments you receive for services you perform for the partnership are subject to SE tax and should be reported to you in box 14 of your Schedule K-1 (Form 1065). File 2012 income tax free online Business Owned and Operated by Spouses. File 2012 income tax free online   If you and your spouse jointly own and operate a farm as an unincorporated business and share in the profits and losses, you are partners in a partnership whether or not you have a formal partnership agreement. File 2012 income tax free online You must file Form 1065, instead of Schedule F, unless you make a joint election to be treated as a qualified joint venture. File 2012 income tax free online Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. File 2012 income tax free online Qualified joint venture. File 2012 income tax free online   If you and your spouse each materially participate as the only members of a jointly owned and operated farm, and you file a joint tax return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. File 2012 income tax free online For an explanation of “material participation,” see the instructions for Schedule C, line G, and the instructions for Schedule F, line E. File 2012 income tax free online   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. File 2012 income tax free online Each of you must file a separate Schedule F and a separate Schedule SE. File 2012 income tax free online For more information, see Qualified Joint Venture in the Instructions for Schedule SE (Form 1040). File 2012 income tax free online Spouse employee. File 2012 income tax free online   If your spouse is your employee, not your partner, you must withhold and pay social security and Medicare taxes for him or her. File 2012 income tax free online For more information about employment taxes, see chapter 13. File 2012 income tax free online Community property. File 2012 income tax free online   If you are a partner and your distributive share of any income or loss from a trade or business carried on by the partnership is community property, treat your share as your self-employment earnings. File 2012 income tax free online Do not treat any of your share as self-employment earnings of your spouse. File 2012 income tax free online Figuring Self-Employment Earnings Farmer. File 2012 income tax free online   If you are self-employed as a farmer, use Schedule F (Form 1040) to figure your self-employment earnings. File 2012 income tax free online Partnership income or loss. File 2012 income tax free online   If you are a member of a partnership that carries on a trade or business, the partnership should report your self-employment earnings in box 14, code A, of your Schedule K-1 (Form 1065). File 2012 income tax free online Box 14 of Schedule K-1 may also provide amounts for gross farming or fishing income (code B) and gross nonfarm income (code C). File 2012 income tax free online Use these amounts if you use the farm or nonfarm optional method to figure net earnings from self-employment (see Methods for Figuring Net Earnings , later). File 2012 income tax free online   If you are a general partner, you may need to reduce these reported earnings by amounts you claim as a section 179 deduction, unreimbursed partnership expenses, or depletion on oil and gas properties. File 2012 income tax free online   If the amount reported is a loss, include only the deductible amount when you figure your total self-employment earnings. File 2012 income tax free online   For more information, see the Partner's Instructions for Schedule K-1 (Form 1065). File 2012 income tax free online   For general information on partnerships, see Publication 541. File 2012 income tax free online More than one business. File 2012 income tax free online   If you have self-employment earnings from more than one trade, business, or profession, you generally must combine the net profit or loss from each to determine your total self-employment earnings. File 2012 income tax free online A loss from one business reduces your profit from another business. File 2012 income tax free online However, do not combine earnings from farm and nonfarm businesses if you are using one of the optional methods (discussed later) to figure net earnings. File 2012 income tax free online Community property. File 2012 income tax free online   If any of the income from a farm or business, other than a partnership, is community property under state law, it is included in the self-employment earnings of the spouse carrying on the trade or business. File 2012 income tax free online Lost income payments. File 2012 income tax free online   Lost income payments received from insurance or other sources for reducing or stopping farming activities are included in self-employment earnings. File 2012 income tax free online These include USDA payments to compensate for lost income resulting from reductions in tobacco quotas and allotments. File 2012 income tax free online Even if you are not farming when you receive the payment, it is included in self-employment earnings if it relates to your farm business (even though it is temporarily inactive). File 2012 income tax free online A connection exists if it is clear the payment would not have been made but for your conduct of your farm business. File 2012 income tax free online Gain or loss. File 2012 income tax free online   A gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers is not included in self-employment earnings. File 2012 income tax free online It does not matter whether the disposition is a sale, exchange, or involuntary conversion. File 2012 income tax free online For example, gains or losses from the disposition of the following types of property are not included in self-employment earnings. File 2012 income tax free online Investment property. File 2012 income tax free online Depreciable property or other fixed assets used in your trade or business. File 2012 income tax free online Livestock held for draft, breeding, sport, or dairy purposes, and not held primarily for sale, regardless of how long the livestock was held, or whether it was raised or purchased. File 2012 income tax free online Unharvested standing crops sold with land held more than 1 year. File 2012 income tax free online Timber, coal, or iron ore held for more than 1 year if an economic interest was retained, such as a right to receive coal royalties. File 2012 income tax free online   A gain or loss from the cutting of timber is not included in self-employment earnings if the cutting is treated as a sale or exchange. File 2012 income tax free online For more information on electing to treat the cutting of timber as a sale or exchange, see Timber in chapter 8. File 2012 income tax free online Wages and salaries. File 2012 income tax free online   Wages and salaries received for services performed as an employee and covered by social security or railroad retirement are not included in self-employment earnings. File 2012 income tax free online   Wages paid in kind to you for agricultural labor, such as commodity wages, are not included in self-employment earnings. File 2012 income tax free online Retired partner. File 2012 income tax free online   Retirement income received by a partner from his or her partnership under a written plan is not included in self-employment earnings if all the following apply. File 2012 income tax free online The retired partner performs no services for the partnership during the year. File 2012 income tax free online The retired partner is owed only the retirement payments. File 2012 income tax free online The retired partner's share (if any) of the partnership capital was fully paid to the retired partner. File 2012 income tax free online The payments to the retired partner are lifelong periodic payments. File 2012 income tax free online Conservation Reserve Program (CRP) payments. File 2012 income tax free online   Under the Conservation Reserve Program (CRP), if you own or operate highly erodible or other specified cropland, you may enter into a longterm contract with the USDA, agreeing to convert to a less intensive use of that cropland. File 2012 income tax free online You must include the annual rental payments and any onetime incentive payment you receive under the program on Schedule F, lines 4a and 4b. File 2012 income tax free online Cost share payments you receive may qualify for the costsharing exclusion. File 2012 income tax free online See Cost-Sharing Exclusion (Improvements), above. File 2012 income tax free online CRP payments are reported to you on Form 1099G. File 2012 income tax free online Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. File 2012 income tax free online See the instructions for Schedule SE (Form 1040). File 2012 income tax free online Self-employed health insurance deduction. File 2012 income tax free online   You cannot deduct the self-employed health insurance deduction you report on Form 1040, line 29, from self-employment earnings on Schedule SE (Form 1040). File 2012 income tax free online Landlord Participation in Farming As a general rule, income and deductions from rentals and from personal property leased with real estate are not included in determining self-employment earnings. File 2012 income tax free online However, income and deductions from farm rentals, including government commodity program payments received by a landowner who rents land, are included if the rental arrangement provides that the landowner will, and does, materially participate in the production or management of production of the farm products on the land. File 2012 income tax free online Crop shares. File 2012 income tax free online   Rent paid in the form of crop shares is included in self-employment earnings for the year you sell, exchange, give away, or use the crop shares if you meet one of the four material participation tests (discussed next) at the time the crop shares are produced. File 2012 income tax free online Feeding such crop shares to livestock is considered using them. File 2012 income tax free online Your gross income for figuring your self-employment earnings includes the fair market value of the crop shares when they are used as feed. File 2012 income tax free online Material participation for landlords. File 2012 income tax free online   You materially participate if you have an arrangement with your tenant for your participation and you meet one or more of the following tests. File 2012 income tax free online You do at least three of the following. File 2012 income tax free online Pay, using cash or credit, at least half the direct costs of producing the crop or livestock. File 2012 income tax free online Furnish at least half the tools, equipment, and livestock used in the production activities. File 2012 income tax free online Advise or consult with your tenant. File 2012 income tax free online Inspect the production activities periodically. File 2012 income tax free online You regularly and frequently make, or take an important part in making, management decisions substantially contributing to or affecting the success of the enterprise. File 2012 income tax free online You work 100 hours or more spread over a period of 5 weeks or more in activities connected with agricultural production. File 2012 income tax free online You do things that, considered in their totality, show you are materially and significantly involved in the production of the farm commodities. File 2012 income tax free online These tests may be used as general guides for determining whether you are a material participant. File 2012 income tax free online Example. File 2012 income tax free online Drew Houston agrees to produce a crop on J. File 2012 income tax free online Clarke's cotton farm, with each receiving half the proceeds. File 2012 income tax free online Clarke advises Houston when to plant, spray, and pick the cotton. File 2012 income tax free online During the growing season, Clarke inspects the crop every few days to determine whether Houston is properly taking care of the crop. File 2012 income tax free online Houston furnishes all labor needed to grow and harvest the crop. File 2012 income tax free online The management decisions made by Clarke in connection with the care of the cotton crop and his regular inspection of the crop establish that he participates to a material degree in the cotton production operations. File 2012 income tax free online The income Clarke receives from his cotton farm is included in his self-employment earnings. File 2012 income tax free online Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. File 2012 income tax free online The regular method. File 2012 income tax free online The farm optional method. File 2012 income tax free online The nonfarm optional method. File 2012 income tax free online You must use the regular method unless you are eligible to use one or both of the optional methods. File 2012 income tax free online See Figure 12-1 , shown later. File 2012 income tax free online Figure 12-1. File 2012 income tax free online Can I Use the Optional Methods? Please click here for the text description of the image. File 2012 income tax free online Figure 12–1. File 2012 income tax free online Can I Use the Optional Methods? 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. File 2012 income tax free online You want to receive credit for social security benefit coverage. File 2012 income tax free online You incurred child or dependent care expenses for which you could claim a credit. File 2012 income tax free online (An optional method may increase your earned income, which could increase your credit. File 2012 income tax free online ) You are entitled to the earned income credit. File 2012 income tax free online (An optional method may increase your earned income, which could increase your credit. File 2012 income tax free online ) You are entitled to the additional child tax credit. File 2012 income tax free online (An optional method may increase your earned income, which could increase your credit. File 2012 income tax free online ) Effects of using an optional method. File 2012 income tax free online   Using an optional method could increase your SE tax. File 2012 income tax free online Paying more SE tax may result in you getting higher social security disability or retirement benefits. File 2012 income tax free online   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 SE tax or no SE tax using the regular method. File 2012 income tax free online   The optional methods may be used only to figure your SE tax. File 2012 income tax free online To figure your income tax, include your actual self-employment earnings in gross income, regardless of which method you use to determine SE tax. File 2012 income tax free online Regular Method Multiply your total self-employment earnings by 92. File 2012 income tax free online 35% (. File 2012 income tax free online 9235) to get your net earnings under the regular method. File 2012 income tax free online See Short Schedule SE, line 4, or Long Schedule SE, line 4a. File 2012 income tax free online Net earnings figured using the regular method are also called “actual net earnings. File 2012 income tax free online ” Farm Optional Method Use the farm optional method only for self-employment earnings from a farming business. File 2012 income tax free online You can use this method if you meet either of the following tests. File 2012 income tax free online Your gross farm income is $6,960 or less. File 2012 income tax free online Your net farm profits are less than $5,024. File 2012 income tax free online Gross farm income. File 2012 income tax free online   Your gross farm income is the total of the amounts from: Schedule F (Form 1040), line 9, and Schedule K-1 (Form 1065), box 14, code B (from farm partnerships). File 2012 income tax free online Net farm profits. File 2012 income tax free online   Net farm profits generally are the total of the amounts from: Schedule F (Form 1040), line 34, and Schedule K-1 (Form 1065), box 14, code A (from farm partnerships). File 2012 income tax free online 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. File 2012 income tax free online For more information, see Partnership income or loss , earlier. File 2012 income tax free online Figuring farm net earnings. File 2012 income tax free online   If you meet either of the two tests explained above, use Table 12-1. File 2012 income tax free online Figuring Farm Net Earnings , to figure your net earnings from self-employment under the farm optional method. File 2012 income tax free online Table 12-1. File 2012 income tax free online Figuring Farm Net Earnings IF your gross farm income  is. File 2012 income tax free online . File 2012 income tax free online . File 2012 income tax free online THEN your net earnings are equal to. File 2012 income tax free online . File 2012 income tax free online . File 2012 income tax free online $6,960 or less Two-thirds of your gross farm income. File 2012 income tax free online More than $6,960 $4,640 Optional method can reduce or eliminate SE tax. File 2012 income tax free online   If your gross farm income is $6,960 or less and your farm net earnings figured under the farm optional method are less than your actual net earnings, you can use the farm optional method to reduce or eliminate your SE tax. File 2012 income tax free online Your actual net earnings are your net earnings figured using the regular method, explained earlier. File 2012 income tax free online Example. File 2012 income tax free online Your gross farm income is $540 and your net farm profit is $460. File 2012 income tax free online Consequently, your net earnings figured under the farm optional method are $360 (2/3 of $540) and your actual net earnings are $425 (92. File 2012 income tax free online 35% of $460). File 2012 income tax free online You owe no SE tax if you use the optional method because your net earnings under the farm optional method are less than $400. File 2012 income tax free online Nonfarm Optional Method This is an optional method available for determining net earnings from nonfarm self-employment, much like the farm optional method. File 2012 income tax free online If you are also engaged in a nonfarm business, you may be able to use this method to figure your nonfarm net earnings. File 2012 income tax free online You can use this method even if you do not use the farm optional method for determining your farm net earnings and even if you have a net loss from your nonfarm business. File 2012 income tax free online For more information about the nonfarm optional method, see Publication 334. File 2012 income tax free online You cannot combine farm and nonfarm self-employment earnings to figure your net earnings under either of the optional methods. File 2012 income tax free online Using Both Optional Methods If you use both optional methods, you must add the net earnings figured under each method to arrive at your total net earnings from self-employment. File 2012 income tax free online You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. File 2012 income tax free online If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. File 2012 income tax free online Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. File 2012 income tax free online Then, enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. File 2012 income tax free online Most taxpayers can use Section A–Short Schedule SE to figure their SE tax. File 2012 income tax free online However, certain taxpayers must use Section B–Long Schedule SE. File 2012 income tax free online Use the chart on page 1 of Schedule SE to find out which one to use. File 2012 income tax free online 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. File 2012 income tax free online Deduction for employer-equivalent portion of self-employment tax. File 2012 income tax free online   You can deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income. File 2012 income tax free online This deduction only affects your income tax. File 2012 income tax free online It does not affect either your net earnings from self-employment or your SE tax. File 2012 income tax free online   To deduct the tax, enter on Form 1040, line 27, the amount shown on Section A, Line 6, or Section B, line 13, Deduction for employer-equivalent portion of self-employment tax, of the Schedule SE. File 2012 income tax free online Joint return. File 2012 income tax free online   Even if you file a joint return, you cannot file a joint Schedule SE. File 2012 income tax free online This is true whether one spouse or both spouses have self-employment earnings. File 2012 income tax free online Your spouse is not considered self-employed just because you are. File 2012 income tax free online If both of you have self-employment earnings, each of you must complete a separate Schedule SE. File 2012 income tax free online 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. File 2012 income tax free online Attach both schedules to the joint return. File 2012 income tax free online If you and your spouse operate a business as a partnership, see Business Owned and Operated by Spouses and Qualified joint venture , earlier, under Who Must Pay Self-Employment Tax . File 2012 income tax free online Prev  Up  Next   Home   More Online Publications

Topic 515 - Casualty, Disaster, and Theft Losses (Including Federally Declared Disaster Areas)

Generally, you may deduct casualty and theft losses relating to your home, household items and vehicles on your federal income tax return. You may not deduct casualty and theft losses covered by insurance unless you file a timely claim for reimbursement, and you reduce the loss by the amount of any reimbursement or expected reimbursement.

A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption. A casualty does not include normal wear and tear or progressive deterioration.

A theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking must be illegal under the law of the state where it occurred and it must have been done with criminal intent.

If your property is personal-use property or is not completely destroyed, the amount of your casualty loss is the lesser of:

  • The adjusted basis of your property, or
  • The decrease in fair market value of your property as a result of the casualty

The amount of your theft loss is generally the adjusted basis of your property because the fair market value of your property immediately after the theft is considered to be zero.

If your property is business or income-producing property, such as rental property, and is completely destroyed, then the amount of your loss is your adjusted basis.

The loss, regardless of whether it is a casualty or theft loss, must be reduced by any salvage value and by any insurance or other reimbursement you receive or expect to receive. The adjusted basis of your property is usually your cost, increased or decreased by certain events such as improvements or depreciation. For more information about the basis of property, refer to Topic 703, Publication 547, Casualties, Disasters, and Thefts, and Publication 551, Basis of Assets. You may determine the decrease in fair market value by appraisal, or if certain conditions are met, by the cost of repairing the property. For more information, refer to Publication 547.

Individuals are required to claim their casualty and theft losses as an itemized deduction on Form 1040, Schedule A (PDF) (or Form 1040NR, Schedule A (PDF), if you are a nonresident alien). For property held by you for personal use, once you have subtracted any salvage value and any insurance or other reimbursement, you must subtract $100 from each casualty or theft event that occurred during the year. Then add up all those amounts and subtract 10% of your adjusted gross income from that total to calculate your allowable casualty and theft losses for the year.

Casualty and theft losses are reported on Form 4684 (PDF), Casualties and Thefts. Section A is used for personal-use property, and Section B is used for business or income-producing property. If personal-use property was damaged, destroyed or stolen, you may wish to refer to Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property). For losses involving business-use property, refer to Publication 584-B (PDF), Business Casualty, Disaster, and Theft Loss Workbook.

Casualty losses are generally deductible in the year the casualty occurred. However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to treat the loss as having occurred in the year immediately preceding the tax year in which the disaster happened, and you can deduct the loss on your return or amended return for that preceding tax year. Review Disaster Assistance and Emergency Relief for Individuals and Businesses on IRS.gov, for information regarding timeframes and additional information to your specific qualifying event.

Theft losses are generally deductible in the year you discover the property was stolen unless you have a reasonable prospect of recovery through a claim for reimbursement. In that case, no deduction is available until the taxable year in which it can be determined with reasonable certainty whether or not such reimbursement will be received.

Special rules may apply to theft losses from Ponzi-type investment schemes. For more information, see the Form 4684 (PDF) and the Form 4684 Instructions (PDF), Casualties and Thefts. Additionally, review Help for Victims of Ponzi Investment Schemes on IRS.gov.

If your loss deduction is more than your income, you may have a net operating loss. You do not have to be in business to have a net operating loss from a casualty. For more information, refer to Publication 536, Net Operating Losses for Individuals, Estates, and Trusts.

Page Last Reviewed or Updated: December 12, 2013

The File 2012 Income Tax Free Online

File 2012 income tax free online Publication 957 - Introductory Material Table of Contents Future Developments Introduction Future Developments For the latest information about developments related to Publication 957, such as legislation enacted after it was published, go to www. File 2012 income tax free online irs. File 2012 income tax free online gov/pub957. File 2012 income tax free online Introduction The Social Security Administration (SSA) has special rules for back pay awarded by a court or government agency to enforce a worker protection statute (law). File 2012 income tax free online The SSA also has rules for reporting special wage payments made to employees after they retire. File 2012 income tax free online These rules enable the SSA to correctly compute an employee's benefits under the social security earnings test. File 2012 income tax free online These rules are for social security coverage and benefit purposes only. File 2012 income tax free online This publication, written primarily for employers, discusses back pay under a statute and special wage payments. File 2012 income tax free online It also explains how to report these payments to the SSA. File 2012 income tax free online For more information, visit SSA's website at www. File 2012 income tax free online socialsecurity. File 2012 income tax free online gov/employer. File 2012 income tax free online To get a copy of Form SSA-131, Employer Report of Special Wage Payments, visit SSA's website at www. File 2012 income tax free online socialsecurity. File 2012 income tax free online gov/online/ssa-131. File 2012 income tax free online html. File 2012 income tax free online Prev  Up  Next   Home   More Online Publications