File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

File A Free Tax Extension Online

1040 ComFile 2010 Tax Return Turbotax1040aHow Do I File An Amended Tax ReturnHow To File 2011 Tax Return In 20132011 Federal Tax Forms 1040 EzWhere To File 2011 Tax ReturnMilitary Onesource Free Turbo TaxFree Amended ReturnHr Block Free2011 Taxes FormsIrs Estimated Tax Forms 2011Free Tax Software For 2012File 1040ez Online FreeHow To File 1040ezAdd 1098 T Information 1040x FormIrs Tax Forms For 20112012 1040 EzH&r Block At Home Free FileTax Extension OnlineAmended Tax Return 2010H&r Block Free File 2011H&r Block AdvantageIrs.gov Form 1040xWww Hrblock1080ez2013 Tax ReturnNeed 2011 Taxes1040ez 2010Irs Online Filing Tax Return2011 Taxact Online Tax Prepartion Including Free EfilingIrs Ez Tax Form 2011Can Unemployed People File TaxesIrs 1040ez 2012Irs ProblemsState TaxesAmending Tax Return OnlineFree File State ReturnIrs Form 1040ez FillableState Income Tax Free Filing

File A Free Tax Extension Online

File a free tax extension online Publication 597 - Main Content Table of Contents Application of Treaty Personal Services Pensions, Annuities, Social Security, and AlimonyRoth IRAs. File a free tax extension online Tax-deferred plans. File a free tax extension online Investment Income From Canadian Sources Other Income Charitable ContributionsQualified charities. File a free tax extension online Income Tax Credits Competent Authority Assistance How To Get Tax HelpText of Treaty U. File a free tax extension online S. File a free tax extension online Taxation Canadian Taxation Application of Treaty The benefits of the income tax treaty are generally provided on the basis of residence for income tax purposes. File a free tax extension online That is, a person who is recognized as a resident of the United States who has income from Canada, will often pay less income tax to Canada on that income than if no treaty was in effect. File a free tax extension online Article IV provides definitions of residents of Canada and the United States, and provides specific criteria for applying the treaty in cases where a taxpayer is considered by both countries to be a resident. File a free tax extension online Saving clause. File a free tax extension online   In most instances, a treaty does not affect the right of a country to tax its own residents (including those who are U. File a free tax extension online S. File a free tax extension online citizens) or of the United States to tax its residents or citizens (including U. File a free tax extension online S. File a free tax extension online citizens who are residents of the foreign country). File a free tax extension online This provision is known as the “saving clause. File a free tax extension online ”   For example, an individual who is a U. File a free tax extension online S. File a free tax extension online citizen and a resident of Canada may have dividend income from a U. File a free tax extension online S. File a free tax extension online corporation. File a free tax extension online The treaty provides a maximum rate of 15% on dividends received by a resident of Canada from sources in the United States. File a free tax extension online Even though a resident of Canada, the individual is a U. File a free tax extension online S. File a free tax extension online citizen and the saving clause overrides the treaty article that limits the U. File a free tax extension online S. File a free tax extension online tax to 15%. File a free tax extension online    Exceptions to the saving clause can be found in Article XXIX, paragraph 3. File a free tax extension online Treaty-based position. File a free tax extension online   If you take the position that any U. File a free tax extension online S. File a free tax extension online tax is overruled or otherwise reduced by a U. File a free tax extension online S. File a free tax extension online treaty (a treaty-based position), you generally must disclose that position on Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), and attach it to your return. File a free tax extension online Personal Services A U. File a free tax extension online S. File a free tax extension online citizen or resident who is temporarily present in Canada during the tax year is exempt from Canadian income taxes on pay for services performed, or remittances received from the United States, if the citizen or resident qualifies under one of the treaty exemption provisions set out below. File a free tax extension online Income from employment (Article XV). File a free tax extension online   Income U. File a free tax extension online S. File a free tax extension online residents receive for the performance of dependent personal services in Canada (except as public entertainers) is exempt from Canadian tax if it is not more than $10,000 in Canadian currency for the year. File a free tax extension online If it is more than $10,000 for the year, it is exempt only if: The residents are present in Canada for no more than 183 days in any 12-month period beginning or ending in the year concerned, and The income is not paid by, or on behalf of, a Canadian resident and is not borne by a permanent establishment in Canada. File a free tax extension online    Whether there is a permanent establishment in Canada is determined by the rules set forth in Article V. File a free tax extension online Example. File a free tax extension online You are a U. File a free tax extension online S. File a free tax extension online resident employed under an 8-month contract with a Canadian firm to install equipment in their Montreal plant. File a free tax extension online During the calendar year you were physically present in Canada for 179 days and were paid $16,500 (Canadian) for your services. File a free tax extension online Although you were in Canada for not more than 183 days during the year, your income is not exempt from Canadian income tax because it was paid by a Canadian resident and was more than $10,000 (Canadian) for the year. File a free tax extension online Pay received by a U. File a free tax extension online S. File a free tax extension online resident for work regularly done in more than one country as an employee on a ship, aircraft, motor vehicle, or train operated by a U. File a free tax extension online S. File a free tax extension online resident is exempt from Canadian tax. File a free tax extension online Income from self-employment (Article VII). File a free tax extension online   Income from services performed (other than those performed as an employee) are taxed in Canada if they are attributable to a permanent establishment in Canada. File a free tax extension online This income is treated as business profits, and deductions similar to those allowed under U. File a free tax extension online S. File a free tax extension online law are allowable. File a free tax extension online   If you carry on (or have carried on) business in both Canada and the United States, the business profits are attributable to each country based on the profits that the permanent establishment might be expected to make if it were a distinct and separate person engaged in the same or similar activities. File a free tax extension online The business profits attributable to the permanent establishment include only those profits derived from assets used, risks assumed, and activities performed by the permanent establishment. File a free tax extension online   You may be considered to have a permanent establishment if you meet certain conditions. File a free tax extension online For more information, see Article V (Permanent Establishment) and Article VII (Business Profits). File a free tax extension online Public entertainers (Article XVI). File a free tax extension online   The provisions under income from employment or income from self-employment do not apply to public entertainers (such as theater, motion picture, radio, or television artistes, musicians, or athletes) from the United States who receive more than $15,000 in gross receipts in Canadian currency, including reimbursed expenses, from their entertainment activities in Canada during the calendar year. File a free tax extension online However, this provision for public entertainers does not apply (and the other provisions will apply) to athletes participating in team sports in leagues with regularly scheduled games in both the United States and Canada. File a free tax extension online Compensation paid by the U. File a free tax extension online S. File a free tax extension online Government (Article XIX). File a free tax extension online   Wages, salaries, and similar income (other than pensions) paid to a U. File a free tax extension online S. File a free tax extension online citizen by the United States or any of its agencies, instrumentalities, or political subdivisions for discharging governmental functions are exempt from Canadian income tax. File a free tax extension online   The exemption does not apply to pay for services performed in connection with any trade or business carried on for profit by the United States, or any of its agencies, instrumentalities, or political subdivisions. File a free tax extension online Students and apprentices (Article XX). File a free tax extension online   A full-time student, apprentice, or business trainee who is in Canada to study or acquire business experience is exempt from Canadian income tax on remittances received from any source outside Canada for maintenance, education, or training. File a free tax extension online The recipient must be or must have been a U. File a free tax extension online S. File a free tax extension online resident immediately before visiting Canada. File a free tax extension online   An apprentice or business trainee can claim this exemption only for a period of one year from the date the individual first arrived in Canada for the purpose of training. File a free tax extension online Pensions, Annuities, Social Security, and Alimony Under Article XVIII, pensions and annuities from Canadian sources paid to U. File a free tax extension online S. File a free tax extension online residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity). File a free tax extension online Canadian pensions and annuities paid to U. File a free tax extension online S. File a free tax extension online residents may be taxed by the United States, but the amount of any pension included in income for U. File a free tax extension online S. File a free tax extension online tax purposes may not be more than the amount that would be included in income in Canada if the recipient were a Canadian resident. File a free tax extension online Pensions. File a free tax extension online   A pension includes any payment under a pension or other retirement arrangement, Armed Forces retirement pay, war veterans pensions and allowances, and payments under a sickness, accident, or disability plan. File a free tax extension online It includes pensions paid by private employers and the government for services rendered. File a free tax extension online   Pensions also include payments from individual retirement arrangements (IRAs) in the United States, registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) in Canada. File a free tax extension online   Pensions do not include social security benefits. File a free tax extension online Roth IRAs. File a free tax extension online   A distribution from a Roth IRA is exempt from Canadian tax to the extent it would be exempt from U. File a free tax extension online S. File a free tax extension online tax if paid to a U. File a free tax extension online S. File a free tax extension online resident. File a free tax extension online In addition, you may elect to defer any tax in Canada on income accrued within the Roth IRA but not distributed by the Roth IRA. File a free tax extension online However, you cannot defer tax on any accruals due to contributions made after you become a Canadian resident. File a free tax extension online Tax-deferred plans. File a free tax extension online   Generally, income that accrues in a Canadian RRSP or RRIF is subject to U. File a free tax extension online S. File a free tax extension online tax, even if it is not distributed. File a free tax extension online However, a U. File a free tax extension online S. File a free tax extension online citizen or resident can elect to defer U. File a free tax extension online S. File a free tax extension online tax on income from the plan until the income is distributed. File a free tax extension online Form 8891 is used to make the election. File a free tax extension online Annuities. File a free tax extension online    An annuity is a stated sum payable periodically at stated times, during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). File a free tax extension online Annuities do not include: Non-periodic payments, or An annuity the cost of which was deductible for tax purposes. File a free tax extension online Special rules. File a free tax extension online    Special rules apply to pensions and annuities with respect to: Short-term assignments, Cross-border commuters, and Individuals who participate in a Canadian qualifying plan. File a free tax extension online Generally, distributions in such cases are deemed to be earned in the country in which the plan is established, without regard to where the services were rendered. File a free tax extension online Social security benefits. File a free tax extension online   U. File a free tax extension online S. File a free tax extension online social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax. File a free tax extension online Alimony. File a free tax extension online   Alimony and similar amounts (including child support payments) from Canadian sources paid to U. File a free tax extension online S. File a free tax extension online residents are exempt from Canadian tax. File a free tax extension online For purposes of U. File a free tax extension online S. File a free tax extension online tax, these amounts are excluded from income to the same extent they would be excluded from income in Canada if the recipient was a Canadian resident. File a free tax extension online Investment Income From Canadian Sources The treaty provides beneficial treatment for certain items of Canadian source income that result from an investment of capital. File a free tax extension online Dividends (Article X). File a free tax extension online   For Canadian source dividends received by U. File a free tax extension online S. File a free tax extension online residents, the Canadian income tax generally may not be more than 15%. File a free tax extension online   A 5% rate applies to intercorporate dividends paid from a subsidiary to a parent corporation owning at least 10% of the subsidiary's voting stock. File a free tax extension online However, a 10% rate applies if the payer of the dividend is a nonresident-owned Canadian investment corporation. File a free tax extension online   These rates do not apply if the owner of the dividends carries on, or has carried on, a business in Canada through a permanent establishment and the holding on which the income is paid is effectively connected with that permanent establishment. File a free tax extension online Interest (Article XI). File a free tax extension online   Generally, Canadian source interest received by U. File a free tax extension online S. File a free tax extension online residents is exempt from Canadian income tax. File a free tax extension online   The exemption does not apply if the owner of the interest carries on, or has carried on, a business in Canada through a permanent establishment and the debt on which the income is paid is effectively connected with that permanent establishment. File a free tax extension online Gains from the sale of property (Article XIII). File a free tax extension online   Generally, gains from the sale of personal property by a U. File a free tax extension online S. File a free tax extension online resident having no permanent establishment in Canada are exempt from Canadian income tax. File a free tax extension online However, the exemption from Canadian tax does not apply to gains realized by U. File a free tax extension online S. File a free tax extension online residents on Canadian real property, and on personal property belonging to a permanent establishment in Canada. File a free tax extension online   If the property subject to Canadian tax is a capital asset and was owned by the U. File a free tax extension online S. File a free tax extension online resident on September 26, 1980, not as part of the business property of a permanent establishment in Canada, generally the taxable gain is limited to the appreciation after 1984. File a free tax extension online Royalties (Article XII). File a free tax extension online   The following are exempt from Canadian tax: Copyright royalties and other like payments for the production or reproduction of any literary, dramatic, musical, or artistic work (other than payments for motion pictures and works on film, videotape, or other means of reproduction for use in connection with television, which may be taxed at 10%), Payments for the use of, or the right to use, computer software, Payments for the use of, or the right to use, any patent or any information concerning industrial, commercial, or scientific experience (but not within a rental or franchise agreement), and Payments for broadcasting as agreed to in an exchange of notes between the countries. File a free tax extension online   This rate or exemption does not apply if the owner of the royalties carries on, or has carried on, a business in Canada through a permanent establishment and the right or property on which the income is paid is effectively connected with that permanent establishment. File a free tax extension online   This exemption (or lower rate) does not apply to royalties to explore for or to exploit mineral deposits, timber, and other natural resources. File a free tax extension online Other Income Generally, Canadian source income that is not specifically mentioned in the treaty, may be taxed by Canada. File a free tax extension online Gambling losses. File a free tax extension online   Canadian residents may deduct gambling losses in the U. File a free tax extension online S. File a free tax extension online against gambling winnings in the U. File a free tax extension online S. File a free tax extension online in the same manner as a U. File a free tax extension online S. File a free tax extension online resident. File a free tax extension online Charitable Contributions United States income tax return. File a free tax extension online   Under Article XXI, you may deduct contributions to certain qualified Canadian charitable organizations on your United States income tax return. File a free tax extension online Besides being subject to the overall limits applicable to all your charitable contributions under U. File a free tax extension online S. File a free tax extension online tax law, your charitable contributions to Canadian organizations (other than contributions to a college or university at which you or a member of your family is or was enrolled) are subject to the U. File a free tax extension online S. File a free tax extension online percentage limits on charitable contributions, applied to your Canadian source income. File a free tax extension online If your return does not include gross income from Canadian sources, charitable contributions to Canadian organizations are generally not deductible. File a free tax extension online Example. File a free tax extension online You are a U. File a free tax extension online S. File a free tax extension online citizen living in Canada. File a free tax extension online You have both U. File a free tax extension online S. File a free tax extension online and Canadian source income. File a free tax extension online During your tax year, you contribute to Canadian organizations that would qualify as charitable organizations under U. File a free tax extension online S. File a free tax extension online tax law if they were U. File a free tax extension online S. File a free tax extension online organizations. File a free tax extension online To figure the maximum amount of the contribution to Canadian organizations that you can deduct on your U. File a free tax extension online S. File a free tax extension online income tax return, multiply your adjusted gross income from Canadian sources by the percentage limit that applies to contributions under U. File a free tax extension online S. File a free tax extension online income tax law. File a free tax extension online Then include this amount on your return along with all your domestic charitable contributions, subject to the appropriate percentage limit required for contributions under U. File a free tax extension online S. File a free tax extension online income tax law. File a free tax extension online The appropriate percentage limit for U. File a free tax extension online S. File a free tax extension online tax purposes is applied to your total adjusted gross income from all sources. File a free tax extension online Qualified charities. File a free tax extension online   These Canadian organizations must meet the qualifications that a U. File a free tax extension online S. File a free tax extension online charitable organization must meet under U. File a free tax extension online S. File a free tax extension online tax law. File a free tax extension online Usually an organization will notify you if it qualifies. File a free tax extension online For further information on charitable contributions and the U. File a free tax extension online S. File a free tax extension online percentage limits, see Publication 526, Charitable Contributions. File a free tax extension online Canadian income tax return. File a free tax extension online   Under certain conditions, contributions to qualified U. File a free tax extension online S. File a free tax extension online charitable organizations may also be claimed on your Canadian income tax return if you are a Canadian resident. File a free tax extension online Income Tax Credits The treaty contains a credit provision (Article XXIV) for the elimination of double taxation. File a free tax extension online In general, the United States and Canada both allow a credit against their income tax for the income tax paid to the other country on income from sources in that other country. File a free tax extension online For detailed discussions of the U. File a free tax extension online S. File a free tax extension online income tax treatment of tax paid to foreign countries, see Publication 514, Foreign Tax Credit for Individuals. File a free tax extension online See paragraphs (4) and (5) of Article XXIV for certain provisions that affect the computation of the credit allowed by the United States for Canadian income taxes paid by U. File a free tax extension online S. File a free tax extension online citizens residing in Canada. File a free tax extension online Competent Authority Assistance Under Article XXVI, a U. File a free tax extension online S. File a free tax extension online citizen or resident may request assistance from the U. File a free tax extension online S. File a free tax extension online competent authority when the actions of Canada, the United States, or both, potentially result in double taxation or taxation contrary to the treaty. File a free tax extension online The U. File a free tax extension online S. File a free tax extension online competent authority may then consult with the Canadian competent authority to determine if the double taxation or denial of treaty benefits in question can be avoided. File a free tax extension online If the competent authorities are not able to reach agreement in a case, binding arbitration proceedings may apply. File a free tax extension online It is important that your request for competent authority assistance be made as soon as you have been notified by either Canada or the United States of proposed adjustments that would result in denial of treaty benefits or in double taxation. File a free tax extension online This is so that implementation of any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. File a free tax extension online For information that you should include with your request for competent authority assistance, see Revenue Procedure 2006-54, 2006-49 IRB 1035, available at www. File a free tax extension online irs. File a free tax extension online gov/irb/2006-49_IRB/ar13. File a free tax extension online html. File a free tax extension online The request should be addressed to:  Deputy Commissioner (International) Large Business and International Division Attn: Office of Tax Treaty  Internal Revenue Service 1111 Constitution Ave. File a free tax extension online , NW Routing: MA3-322A Washington, D. File a free tax extension online C. File a free tax extension online 20024 In addition to a timely request for assistance, you should take the following measures: File a timely protective claim for credit or refund of U. File a free tax extension online S. File a free tax extension online taxes on Form 1040X, Form 1120X, or amended Form 1041, whichever is appropriate. File a free tax extension online This will, among other things, give you the benefit of a foreign tax credit in case you do not qualify for the treaty benefit in question. File a free tax extension online For figuring this credit, attach either Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), or Form 1118, Foreign Tax Credit — Corporations, as appropriate. File a free tax extension online Attach your protective claim to your request for competent authority assistance. File a free tax extension online Take appropriate action under Canadian procedures to avoid the lapse or termination of your right of appeal under Canadian income tax law. File a free tax extension online How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS and the Canada Revenue Agency in several ways. File a free tax extension online Text of Treaty You can get the text of the U. File a free tax extension online S. File a free tax extension online —Canada income tax treaty from: Superintendent of Documents U. File a free tax extension online S. File a free tax extension online Government Printing Office P. File a free tax extension online O. File a free tax extension online Box 371954 Pittsburgh, PA 15250-7954 The treaty can also be found on the Internet at IRS. File a free tax extension online gov. File a free tax extension online U. File a free tax extension online S. File a free tax extension online Taxation During the filing season, the IRS conducts a taxpayer assistance program in Canada. File a free tax extension online To find out if IRS personnel will be in your area, you should contact the consular office at the nearest U. File a free tax extension online S. File a free tax extension online Embassy or consulate. File a free tax extension online Mail. File a free tax extension online For answers to technical or account questions, you can write to:   Internal Revenue Service International Section Philadelphia, PA 19255-0525 Phone. File a free tax extension online You can call the IRS for help at (267) 941-1000 (not a toll-free call). File a free tax extension online Canadian Taxation You can get information on Canadian taxation from the Canada Revenue Agency. File a free tax extension online The International Tax Services Office can be contacted on 1-800-267-5177 (from anywhere in Canada and the U. File a free tax extension online S. File a free tax extension online ) or on the Internet at www. File a free tax extension online cra-arc. File a free tax extension online gc. File a free tax extension online ca. File a free tax extension online Prev  Up  Next   Home   More Online Publications
Español

Office of Vocational and Adult Education (OVAE)

OVAE administers and coordinates programs that are related to adult education and literacy, career and technical education, and community colleges.

Contact the Agency or Department

Website: Office of Vocational and Adult Education (OVAE)

E-mail:

Address: 400 Maryland Ave., SW
Washington, DC 20202-7100

Phone Number: 202-245-7700

The File A Free Tax Extension Online

File a free tax extension online 1. File a free tax extension online   Rental Income and Expenses (If No Personal Use of Dwelling) Table of Contents Rental IncomeWhen To Report Types of Income Rental ExpensesWhen To Deduct Types of Expenses This chapter discusses the various types of rental income and expenses for a residential rental activity with no personal use of the dwelling. File a free tax extension online Generally, each year you will report all income and deduct all out-of-pocket expenses in full. File a free tax extension online The deduction to recover the cost of your rental property—depreciation—is taken over a prescribed number of years, and is discussed in chapter 2, Depreciation of Rental Property. File a free tax extension online If your rental income is from property you also use personally or rent to someone at less than a fair rental price, first read the information in chapter 5 , Personal Use of Dwelling Unit (Including Vacation Home). File a free tax extension online Rental Income In most cases, you must include in your gross income all amounts you receive as rent. File a free tax extension online Rental income is any payment you receive for the use or occupation of property. File a free tax extension online In addition to amounts you receive as normal rental payments, there are other amounts that may be rental income. File a free tax extension online When To Report When you report rental income on your tax return generally depends on whether you are a cash basis taxpayer or use an accrual method. File a free tax extension online Most individual taxpayers use the cash method. File a free tax extension online Cash method. File a free tax extension online   You are a cash basis taxpayer if you report income on your return in the year you actually or constructively receive it, regardless of when it was earned. File a free tax extension online You constructively receive income when it is made available to you, for example, by being credited to your bank account. File a free tax extension online Accrual method. File a free tax extension online    If you are an accrual basis taxpayer, you generally report income when you earn it, rather than when you receive it. File a free tax extension online You generally deduct your expenses when you incur them, rather than when you pay them. File a free tax extension online More information. File a free tax extension online   See Publication 538, Accounting Periods and Methods, for more information about when you constructively receive income and accrual methods of accounting. File a free tax extension online Types of Income The following are common types of rental income. File a free tax extension online Advance rent. File a free tax extension online   Advance rent is any amount you receive before the period that it covers. File a free tax extension online Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use. File a free tax extension online Example. File a free tax extension online On March 18, 2013, you signed a 10-year lease to rent your property. File a free tax extension online During 2013, you received $9,600 for the first year's rent and $9,600 as rent for the last year of the lease. File a free tax extension online You must include $19,200 in your rental income in the first year. File a free tax extension online Canceling a lease. File a free tax extension online   If your tenant pays you to cancel a lease, the amount you receive is rent. File a free tax extension online Include the payment in your income in the year you receive it regardless of your method of accounting. File a free tax extension online Expenses paid by tenant. File a free tax extension online   If your tenant pays any of your expenses, those payments are rental income. File a free tax extension online Because you must include this amount in income, you can also deduct the expenses if they are deductible rental expenses. File a free tax extension online For more information, see Rental Expenses , later. File a free tax extension online Example 1. File a free tax extension online Your tenant pays the water and sewage bill for your rental property and deducts the amount from the normal rent payment. File a free tax extension online Under the terms of the lease, your tenant does not have to pay this bill. File a free tax extension online Include the utility bill paid by the tenant and any amount received as a rent payment in your rental income. File a free tax extension online You can deduct the utility payment made by your tenant as a rental expense. File a free tax extension online Example 2. File a free tax extension online While you are out of town, the furnace in your rental property stops working. File a free tax extension online Your tenant pays for the necessary repairs and deducts the repair bill from the rent payment. File a free tax extension online Include the repair bill paid by the tenant and any amount received as a rent payment in your rental income. File a free tax extension online You can deduct the repair payment made by your tenant as a rental expense. File a free tax extension online Property or services. File a free tax extension online   If you receive property or services as rent, instead of money, include the fair market value of the property or services in your rental income. File a free tax extension online   If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary. File a free tax extension online Example. File a free tax extension online Your tenant is a house painter. File a free tax extension online He offers to paint your rental property instead of paying 2 months rent. File a free tax extension online You accept his offer. File a free tax extension online Include in your rental income the amount the tenant would have paid for 2 months rent. File a free tax extension online You can deduct that same amount as a rental expense for painting your property. File a free tax extension online Security deposits. File a free tax extension online   Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. File a free tax extension online But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year. File a free tax extension online    If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. File a free tax extension online Include it in your income when you receive it. File a free tax extension online Other Sources of Rental Income Lease with option to buy. File a free tax extension online   If the rental agreement gives your tenant the right to buy your rental property, the payments you receive under the agreement are generally rental income. File a free tax extension online If your tenant exercises the right to buy the property, the payments you receive for the period after the date of sale are considered part of the selling price. File a free tax extension online Part interest. File a free tax extension online   If you own a part interest in rental property, you must report your part of the rental income from the property. File a free tax extension online Rental of property also used as your home. File a free tax extension online   If you rent property that you also use as your home and you rent it less than 15 days during the tax year, do not include the rent you receive in your income and do not deduct rental expenses. File a free tax extension online However, you can deduct on Schedule A (Form 1040), Itemized Deductions, the interest, taxes, and casualty and theft losses that are allowed for nonrental property. File a free tax extension online See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). File a free tax extension online Rental Expenses In most cases, the expenses of renting your property, such as maintenance, insurance, taxes, and interest, can be deducted from your rental income. File a free tax extension online Personal use of rental property. File a free tax extension online   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. File a free tax extension online Also, your rental expense deductions may be limited. File a free tax extension online See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). File a free tax extension online Part interest. File a free tax extension online   If you own a part interest in rental property, you can deduct expenses you paid according to your percentage of ownership. File a free tax extension online Example. File a free tax extension online Roger owns a one-half undivided interest in a rental house. File a free tax extension online Last year he paid $968 for necessary repairs on the property. File a free tax extension online Roger can deduct $484 (50% × $968) as a rental expense. File a free tax extension online He is entitled to reimbursement for the remaining half from the co-owner. File a free tax extension online When To Deduct You generally deduct your rental expenses in the year you pay them. File a free tax extension online If you use the accrual method, see Publication 538 for more information. File a free tax extension online Types of Expenses Listed below are the most common rental expenses. File a free tax extension online Advertising. File a free tax extension online Auto and travel expenses. File a free tax extension online Cleaning and maintenance. File a free tax extension online Commissions. File a free tax extension online Depreciation. File a free tax extension online Insurance. File a free tax extension online Interest (other). File a free tax extension online Legal and other professional fees. File a free tax extension online Local transportation expenses. File a free tax extension online Management fees. File a free tax extension online Mortgage interest paid to banks, etc. File a free tax extension online Points. File a free tax extension online Rental payments. File a free tax extension online Repairs. File a free tax extension online Taxes. File a free tax extension online Utilities. File a free tax extension online Some of these expenses, as well as other less common ones, are discussed below. File a free tax extension online Depreciation. File a free tax extension online   Depreciation is a capital expense. File a free tax extension online It is the mechanism for recovering your cost in an income producing property and must be taken over the expected life of the property. File a free tax extension online   You can begin to depreciate rental property when it is ready and available for rent. File a free tax extension online See Placed in Service under When Does Depreciation Begin and End in chapter 2. File a free tax extension online Insurance premiums paid in advance. File a free tax extension online   If you pay an insurance premium for more than one year in advance, for each year of coverage you can deduct the part of the premium payment that will apply to that year. File a free tax extension online You cannot deduct the total premium in the year you pay it. File a free tax extension online See chapter 6 of Publication 535 for information on deductible premiums. File a free tax extension online Interest expense. File a free tax extension online   You can deduct mortgage interest you pay on your rental property. File a free tax extension online When you refinance a rental property for more than the previous outstanding balance, the portion of the interest allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. File a free tax extension online Chapter 4 of Publication 535 explains mortgage interest in detail. File a free tax extension online Expenses paid to obtain a mortgage. File a free tax extension online   Certain expenses you pay to obtain a mortgage on your rental property cannot be deducted as interest. File a free tax extension online These expenses, which include mortgage commissions, abstract fees, and recording fees, are capital expenses that are part of your basis in the property. File a free tax extension online Form 1098, Mortgage Interest Statement. File a free tax extension online   If you paid $600 or more of mortgage interest on your rental property to any one person, you should receive a Form 1098 or similar statement showing the interest you paid for the year. File a free tax extension online If you and at least one other person (other than your spouse if you file a joint return) were liable for, and paid interest on, the mortgage, and the other person received the Form 1098, report your share of the interest on Schedule E (Form 1040), line 13. File a free tax extension online Attach a statement to your return showing the name and address of the other person. File a free tax extension online On the dotted line next to line 13, enter “See attached. File a free tax extension online ” Legal and other professional fees. File a free tax extension online   You can deduct, as a rental expense, legal and other professional expenses such as tax return preparation fees you paid to prepare Schedule E, Part I. File a free tax extension online For example, on your 2013 Schedule E you can deduct fees paid in 2013 to prepare Part I of your 2012 Schedule E. File a free tax extension online You can also deduct, as a rental expense, any expense (other than federal taxes and penalties) you paid to resolve a tax underpayment related to your rental activities. File a free tax extension online Local benefit taxes. File a free tax extension online   In most cases, you cannot deduct charges for local benefits that increase the value of your property, such as charges for putting in streets, sidewalks, or water and sewer systems. File a free tax extension online These charges are nondepreciable capital expenditures and must be added to the basis of your property. File a free tax extension online However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. File a free tax extension online Local transportation expenses. File a free tax extension online   You may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve, or maintain your rental property. File a free tax extension online However, transportation expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business. File a free tax extension online See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. File a free tax extension online   Generally, if you use your personal car, pickup truck, or light van for rental activities, you can deduct the expenses using one of two methods: actual expenses or the standard mileage rate. File a free tax extension online For 2013, the standard mileage rate for business use is 56. File a free tax extension online 5 cents per mile. File a free tax extension online For more information, see chapter 4 of Publication 463. File a free tax extension online    To deduct car expenses under either method, you must keep records that follow the rules in chapter 5 of Publication 463. File a free tax extension online In addition, you must complete Form 4562, Part V, and attach it to your tax return. File a free tax extension online Pre-rental expenses. File a free tax extension online   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. File a free tax extension online Rental of equipment. File a free tax extension online   You can deduct the rent you pay for equipment that you use for rental purposes. File a free tax extension online However, in some cases, lease contracts are actually purchase contracts. File a free tax extension online If so, you cannot deduct these payments. File a free tax extension online You can recover the cost of purchased equipment through depreciation. File a free tax extension online Rental of property. File a free tax extension online   You can deduct the rent you pay for property that you use for rental purposes. File a free tax extension online If you buy a leasehold for rental purposes, you can deduct an equal part of the cost each year over the term of the lease. File a free tax extension online Travel expenses. File a free tax extension online   You can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of the trip is to collect rental income or to manage, conserve, or maintain your rental property. File a free tax extension online You must properly allocate your expenses between rental and nonrental activities. File a free tax extension online You cannot deduct the cost of traveling away from home if the primary purpose of the trip is to improve the property. File a free tax extension online The cost of improvements is recovered by taking depreciation. File a free tax extension online For information on travel expenses, see chapter 1 of Publication 463. File a free tax extension online    To deduct travel expenses, you must keep records that follow the rules in chapter 5 of Publication 463. File a free tax extension online Uncollected rent. File a free tax extension online   If you are a cash basis taxpayer, do not deduct uncollected rent. File a free tax extension online Because you have not included it in your income, it is not deductible. File a free tax extension online   If you use an accrual method, report income when you earn it. File a free tax extension online If you are unable to collect the rent, you may be able to deduct it as a business bad debt. File a free tax extension online See chapter 10 of Publication 535 for more information about business bad debts. File a free tax extension online Vacant rental property. File a free tax extension online   If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. File a free tax extension online However, you cannot deduct any loss of rental income for the period the property is vacant. File a free tax extension online Vacant while listed for sale. File a free tax extension online   If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. File a free tax extension online If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. File a free tax extension online Points The term “points” is often used to describe some of the charges paid, or treated as paid, by a borrower to take out a loan or a mortgage. File a free tax extension online These charges are also called loan origination fees, maximum loan charges, or premium charges. File a free tax extension online Any of these charges (points) that are solely for the use of money are interest. File a free tax extension online Because points are prepaid interest, you generally cannot deduct the full amount in the year paid, but must deduct the interest over the term of the loan. File a free tax extension online The method used to figure the amount of points you can deduct each year follows the original issue discount (OID) rules. File a free tax extension online In this case, points are equivalent to OID, which is the difference between: The amount borrowed (redemption price at maturity, or principal) and The proceeds (issue price). File a free tax extension online The first step is to determine whether your total OID (which you may have on bonds or other investments in addition to the mortgage loan), including the OID resulting from the points, is insignificant or de minimis. File a free tax extension online If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct. File a free tax extension online De minimis OID. File a free tax extension online   The OID is de minimis if it is less than one-fourth of 1% (. File a free tax extension online 0025) of the stated redemption price at maturity (principal amount of the loan) multiplied by the number of full years from the date of original issue to maturity (term of the loan). File a free tax extension online   If the OID is de minimis, you can choose one of the following ways to figure the amount of points you can deduct each year. File a free tax extension online On a constant-yield basis over the term of the loan. File a free tax extension online On a straight line basis over the term of the loan. File a free tax extension online In proportion to stated interest payments. File a free tax extension online In its entirety at maturity of the loan. File a free tax extension online You make this choice by deducting the OID (points) in a manner consistent with the method chosen on your timely filed tax return for the tax year in which the loan is issued. File a free tax extension online Example. File a free tax extension online Carol Madison took out a $100,000 mortgage loan on January 1, 2013, to buy a house she will use as a rental during 2013. File a free tax extension online The loan is to be repaid over 30 years. File a free tax extension online During 2013, Carol paid $10,000 of mortgage interest (stated interest) to the lender. File a free tax extension online When the loan was made, she paid $1,500 in points to the lender. File a free tax extension online The points reduced the principal amount of the loan from $100,000 to $98,500, resulting in $1,500 of OID. File a free tax extension online Carol determines that the points (OID) she paid are de minimis based on the following computation. File a free tax extension online Redemption price at maturity (principal amount of the loan) $100,000 Multiplied by: The term of the  loan in complete years ×30 Multiplied by ×. File a free tax extension online 0025 De minimis amount $7,500 The points (OID) she paid ($1,500) are less than the de minimis amount ($7,500). File a free tax extension online Therefore, Carol has de minimis OID and she can choose one of the four ways discussed earlier to figure the amount she can deduct each year. File a free tax extension online Under the straight line method, she can deduct $50 each year for 30 years. File a free tax extension online Constant-yield method. File a free tax extension online   If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct each year. File a free tax extension online   You figure your deduction for the first year in the following manner. File a free tax extension online Determine the issue price of the loan. File a free tax extension online If you paid points on the loan, the issue price generally is the difference between the principal and the points. File a free tax extension online Multiply the result in (1) by the yield to maturity (defined later). File a free tax extension online Subtract any qualified stated interest payments (defined later) from the result in (2). File a free tax extension online This is the OID you can deduct in the first year. File a free tax extension online Yield to maturity (YTM). File a free tax extension online   This rate is generally shown in the literature you receive from your lender. File a free tax extension online If you do not have this information, consult your lender or tax advisor. File a free tax extension online In general, the YTM is the discount rate that, when used in computing the present value of all principal and interest payments, produces an amount equal to the principal amount of the loan. File a free tax extension online Qualified stated interest (QSI). File a free tax extension online   In general, this is the stated interest that is unconditionally payable in cash or property (other than another loan of the issuer) at least annually over the term of the loan at a fixed rate. File a free tax extension online Example—Year 1. File a free tax extension online The facts are the same as in the previous example. File a free tax extension online The yield to maturity on Carol's loan is 10. File a free tax extension online 2467%, compounded annually. File a free tax extension online She figured the amount of points (OID) she could deduct in 2013 as follows. File a free tax extension online Principal amount of the loan $100,000 Minus: Points (OID) –1,500 Issue price of the loan $98,500 Multiplied by: YTM × . File a free tax extension online 102467 Total 10,093 Minus: QSI –10,000 Points (OID) deductible in 2013 $93 To figure your deduction in any subsequent year, you start with the adjusted issue price. File a free tax extension online To get the adjusted issue price, add to the issue price figured in Year 1 any OID previously deducted. File a free tax extension online Then follow steps (2) and (3), earlier. File a free tax extension online Example—Year 2. File a free tax extension online Carol figured the deduction for 2014 as follows. File a free tax extension online Issue price $98,500 Plus: Points (OID) deducted  in 2013 +93 Adjusted issue price $98,593 Multiplied by: YTM × . File a free tax extension online 102467 Total 10,103 Minus: QSI –10,000 Points (OID) deductible in 2014 $103 Loan or mortgage ends. File a free tax extension online    If your loan or mortgage ends, you may be able to deduct any remaining points (OID) in the tax year in which the loan or mortgage ends. File a free tax extension online A loan or mortgage may end due to a refinancing, prepayment, foreclosure, or similar event. File a free tax extension online However, if the refinancing is with the same lender, the remaining points (OID) generally are not deductible in the year in which the refinancing occurs, but may be deductible over the term of the new mortgage or loan. File a free tax extension online Points when loan refinance is more than the previous outstanding balance. File a free tax extension online   When you refinance a rental property for more than the previous outstanding balance, the portion of the points allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. File a free tax extension online For example, if an individual refinanced a loan with a balance of $100,000, the amount of the new loan was $120,000, and the taxpayer used $20,000 to purchase a car, points allocable to the $20,000 would be treated as nondeductible personal interest. File a free tax extension online Repairs and Improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. File a free tax extension online Improvements. File a free tax extension online   You must capitalize any expense you pay to improve your rental property. File a free tax extension online An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. File a free tax extension online Betterments. File a free tax extension online   Expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition, enlarging or expanding your property, or increasing the capacity, strength, or quality of your property. File a free tax extension online Restoration. File a free tax extension online   Expenses that may be for restoration include expenses for replacing a substantial structural part of your property, repairing damage to your property after you properly adjusted the basis of your property as a result of a casualty loss, or rebuilding your property to a like-new condition. File a free tax extension online Adaptation. File a free tax extension online   Expenses that may be for adaptation include expenses for altering your property to a use that is not consistent with the intended ordinary use of your property when you began renting the property. File a free tax extension online Separate the costs of repairs and improvements, and keep accurate records. File a free tax extension online You will need to know the cost of improvements when you sell or depreciate your property. File a free tax extension online The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. File a free tax extension online Table 1-1. File a free tax extension online Examples of Improvements Additions Bedroom Bathroom Deck Garage Porch Patio  Lawn & Grounds Landscaping Driveway Walkway Fence Retaining wall Sprinkler system Swimming pool Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system   Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances Kitchen modernization Flooring Wall-to-wall carpeting  Insulation Attic Walls, floor Pipes, duct work Prev  Up  Next   Home   More Online Publications