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 Taxes Free Online

Aarp Org TaxaideWhere To Get 2012 Tax FormsFree 1040 Ez FormsTax Form 1040a2012 Federal Tax ReturnFiling Late Taxes OnlineUnemployment Taxes 2011Tax Filing 2011Free State Tax FillingHow To Do A Amended Tax ReturnH&r Block Tax Forms1040ez Instructions 2013Taxes SoftwareForgot To File Taxes 2012I Need To Print A Free 1040x Form2011 1040 Income Tax FormTax Right Offs For StudentsForm 1040vAmended TaxFederal Tax Table2013 1040ez Tax FormFile 2012 Tax Return Online FreeH&r Block OnlineFiling Taxes 20142013 Tax Forms 1040ezIrs EfileFree Online 2012 Tax FilingFile State Tax Return Only2012 Tax Forms 1040H And R Block Free Online Tax Filing1040 Estimated Tax FormIrs Free File 1040ezIrs Amended ReturnsEz 10401040nr Instructions2011 1040 Ez FormEfile 7004 Tax ExtensionStudents Exempt From Income TaxFree Tax Filing Online2009 1040

File Taxes Free Online

File taxes free online 2. File taxes free online   Accounting Methods Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Accounting MethodsCash Method Accrual Method Farm Inventory Cash Versus Accrual Method Special Methods of Accounting Combination Method Changes in Methods of Accounting Introduction You must use an accounting method that clearly shows your income and expenses. File taxes free online You must also figure your taxable income and file an income tax return for an annual accounting period called a tax year. File taxes free online This chapter discusses accounting methods. File taxes free online For information on accounting periods, see Publication 538, Accounting Periods and Methods, and the Instructions for Form 1128, Application To Adopt, Change, or Retain a Tax Year. File taxes free online Topics - This chapter discusses: Cash method Accrual method Farm inventory Special methods of accounting Changes in methods of accounting Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 535 Business Expenses Form (and Instructions) 1128 Application To Adopt, Change, or Retain a Tax Year 3115 Application for Change in Accounting Method See chapter 16 for information about getting publications and forms. File taxes free online Accounting Methods An accounting method is a set of rules used to determine when and how your income and expenses are reported on your tax return. File taxes free online Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item. File taxes free online A material item is one that affects the proper time for inclusion of income or allowance of a deduction. File taxes free online An item considered material for financial statement purposes is generally also considered material for income tax purposes. File taxes free online See Publication 538 for more information. File taxes free online You generally choose an accounting method for your farm business when you file your first income tax return that includes a Schedule F (Form 1040), Profit or Loss From Farming. File taxes free online If you later want to change your accounting method, you generally must get IRS approval. File taxes free online How to obtain IRS approval is discussed later under Changes in Methods of Accounting . File taxes free online Types of accounting methods. File taxes free online   Generally, you can use any of the following accounting methods. File taxes free online Each method is discussed in detail below. File taxes free online Cash method. File taxes free online Accrual method. File taxes free online Special methods of accounting for certain items of income and expenses. File taxes free online Combination (hybrid) method using elements of two or more of the above. File taxes free online Business and other items. File taxes free online   You can account for business and personal items using different accounting methods. File taxes free online For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. File taxes free online Two or more businesses. File taxes free online   If you operate two or more separate and distinct businesses, you can use a different accounting method for each business. File taxes free online Generally, no business is separate and distinct unless a complete and separate set of books and records is maintained for each business. File taxes free online Cash Method Most farmers use the cash method because they find it easier to keep records using the cash method. File taxes free online However, certain farm corporations and partnerships and all tax shelters must use an accrual method of accounting. File taxes free online See Accrual Method Required , later. File taxes free online Income Under the cash method, include in your gross income all items of income you actually or constructively received during the tax year. File taxes free online Items of income include money received as well as property or services received. File taxes free online If you receive property or services, you must include the fair market value (FMV) of the property or services in income. File taxes free online See chapter 3 for information on how to report farm income on your income tax return. File taxes free online Constructive receipt. File taxes free online   Income is constructively received when an amount is credited to your account or made available to you without restriction. File taxes free online You do not need to have possession of the income for it to be treated as income for the tax year. File taxes free online If you authorize someone to be your agent and receive income for you, you are considered to have received the income when your agent receives it. File taxes free online Income is not constructively received if your receipt of the income is subject to substantial restrictions or limitations. File taxes free online Direct payments and counter-cyclical payments. File taxes free online   If you received direct payments or counter-cyclical payments under Subtitle A or C of the Farm Security and Rural Investment Act of 2002, you will not be considered to have constructively received a payment merely because you had the option to receive it in the year before it is required to be paid. File taxes free online Delaying receipt of income. File taxes free online   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. File taxes free online You must report the income in the year the money or property is received or made available to you without restriction. File taxes free online Example. File taxes free online Frances Jones, a farmer, was entitled to receive a $10,000 payment on a grain contract in December 2013. File taxes free online She was told in December that her payment was available. File taxes free online She requested not to be paid until January 2014. File taxes free online However, she must still include this payment in her 2013 income because it was made available to her in 2013. File taxes free online Debts paid by another person or canceled. File taxes free online   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. File taxes free online If you receive income in this way, you constructively receive the income when the debt is canceled or paid. File taxes free online See Cancellation of Debt in chapter 3. File taxes free online Deferred payment contract. File taxes free online   If you sell an item under a deferred payment contract that calls for payment in a future year, there is no constructive receipt in the year of sale. File taxes free online However, if the sales contract states that you have the right to the proceeds of the sale from the buyer at any time after delivery of the item, then you must include the sales price in income in the year of the sale, regardless of when you actually receive payment. File taxes free online Example. File taxes free online You are a farmer who uses the cash method and a calendar tax year. File taxes free online You sell grain in December 2013 under a bona fide arm's-length contract that calls for payment in 2014. File taxes free online You include the proceeds from the sale in your 2014 gross income since that is the year payment is received. File taxes free online However, if the contract states that you have the right to the proceeds from the buyer at any time after the grain is delivered, you must include the sales price in your 2013 income, regardless of when you actually receive payment. File taxes free online Repayment of income. File taxes free online   If you include an amount in income and in a later year you have to repay all or part of it, then you can usually deduct the repayment in the year repaid. File taxes free online If the repayment is more than $3,000, a special rule applies. File taxes free online For details, see Repayments in chapter 11 of Publication 535, Business Expenses. File taxes free online Expenses Under the cash method, generally you deduct expenses in the tax year you pay them. File taxes free online This includes business expenses for which you contest liability. File taxes free online However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained under Uniform Capitalization Rules in chapter 6. File taxes free online See chapter 4 for information on how to deduct farm business expenses on your income tax return. File taxes free online Prepayment. File taxes free online   Generally, you cannot deduct expenses paid in advance. File taxes free online This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. File taxes free online Example. File taxes free online On November 1, 2013, you signed and paid $3,600 for a 3-year (36-month) insurance contract for equipment. File taxes free online In 2013, you are allowed to deduct only $200 (2/36 x $3,600) of the cost of the policy that is attributable to 2013. File taxes free online In 2014, you'll be able to deduct $1,200 (12/36 x $3,600); in 2015, you'll be able to deduct $1,200 (12/36 x $3,600); and in 2016 you'll be able to deduct the remaining balance of $1,000. File taxes free online An exception applies if the expense qualifies for the 12-month rule. File taxes free online See Publication 538 for more information and examples. File taxes free online See chapter 4 for special rules for prepaid farm supplies and prepaid livestock feed. File taxes free online Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. File taxes free online The purpose of an accrual method of accounting is to correctly match income and expenses. File taxes free online Certain businesses engaged in farming must use an accrual method of accounting for its farm business and for sales and purchases of inventory items. File taxes free online See Accrual Method Required and Farm Inventory , later. File taxes free online Income Generally, you include an amount in income for the tax year in which all events that fix your right to receive the income have occurred, and you can determine the amount with reasonable accuracy. File taxes free online Under this rule, include an amount in income on the earliest of the following dates. File taxes free online When you receive payment. File taxes free online When the income amount is due to you. File taxes free online When you earn the income. File taxes free online When title passes. File taxes free online If you use an accrual method of accounting, complete Part III of Schedule F (Form 1040) to report your income. File taxes free online Inventory. File taxes free online   If you keep an inventory, generally you must use an accrual method of accounting to determine your gross income. File taxes free online An inventory is necessary to clearly show income when the production, purchase, or sale of merchandise is an income-producing factor. File taxes free online See Publication 538 for more information. File taxes free online Also see Farm Inventory , later, for more information on items that must be included in inventory by farmers and inventory valuation methods for farmers. File taxes free online Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both of the following apply. File taxes free online The all-events test has been met. File taxes free online This test is met when: All events have occurred that fix the fact that you have a liability, and The amount of the liability can be determined with reasonable accuracy. File taxes free online Economic performance has occurred. File taxes free online Economic performance. File taxes free online   Generally, you cannot deduct or capitalize a business expense until economic performance occurs. File taxes free online If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. File taxes free online If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. File taxes free online Example. File taxes free online Jane, who is a farmer, uses a calendar tax year and an accrual method of accounting. File taxes free online She entered into a contract with ABC Farm Consulting in 2012. File taxes free online The contract stated that Jane pay ABC Farm Consulting $2,000 in December 2012. File taxes free online It further stipulates that ABC Farm Consulting will develop a plan for integrating her farm with a larger farm operation based in a neighboring state by March 1, 2013. File taxes free online Jane paid ABC Farm Consulting $2,000 in December 2012. File taxes free online Integration of operations according to the plan began in May 2013 and they completed the integration in December 2013. File taxes free online Economic performance for Jane's liability in the contract occurs as the services are provided. File taxes free online Jane incurs the $2,000 cost in 2013. File taxes free online An exception to the economic performance rule allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. File taxes free online For more information, see Economic Performance in Publication 538. File taxes free online Special rule for related persons. File taxes free online   Business expenses and interest owed to a related person who uses the cash method of accounting are not deductible until you make the payment and the corresponding amount is includible in the related person's gross income. File taxes free online Determine the relationship for this rule as of the end of the tax year for which the expense or interest would otherwise be deductible. File taxes free online For more information, see Internal Revenue Code section 267. File taxes free online Accrual Method Required Generally, the following businesses, if engaged in farming, must use an accrual method of accounting. File taxes free online A corporation (other than a family corporation) that had gross receipts of more than $1,000,000 for any tax year beginning after 1975. File taxes free online A family corporation that had gross receipts of more than $25,000,000 for any tax year beginning after 1985. File taxes free online A partnership with a corporation as a partner, if that corporation meets the requirements of (1) or (2) above. File taxes free online A tax shelter. File taxes free online Note. File taxes free online Items (1), (2), and (3) above do not apply to an S corporation or a business operating a nursery or sod farm, or the raising or harvesting of trees (other than fruit and nut trees). File taxes free online Family corporation. File taxes free online   A family corporation is generally a corporation that meets one of the following ownership requirements. File taxes free online Members of the same family own at least 50% of the total combined voting power of all classes of stock entitled to vote and at least 50% of the total shares of all other classes of stock of the corporation. File taxes free online Members of two families have owned, directly or indirectly, since October 4, 1976, at least 65% of the total combined voting power of all classes of voting stock and at least 65% of the total shares of all other classes of the corporation's stock. File taxes free online Members of three families have owned, directly or indirectly, since October 4, 1976, at least 50% of the total combined voting power of all classes of voting stock and at least 50% of the total shares of all other classes of the corporation's stock. File taxes free online For more information on family corporations, see Internal Revenue Code section 447. File taxes free online Tax shelter. File taxes free online   A tax shelter is a partnership, noncorporate enterprise, or S corporation that meets either of the following tests. File taxes free online Its principal purpose is the avoidance or evasion of federal income tax. File taxes free online It is a farming syndicate. File taxes free online A farming syndicate is an entity that meets either of the following tests. File taxes free online Interests in the activity have been offered for sale in an offering required to be registered with a federal or state agency with the authority to regulate the offering of securities for sale. File taxes free online More than 35% of the losses during the tax year are allocable to limited partners or limited entrepreneurs. File taxes free online   A “limited partner” is one whose personal liability for partnership debts is limited to the money or other property the partner contributed or is required to contribute to the partnership. File taxes free online   A “limited entrepreneur” is one who has an interest in an enterprise other than as a limited partner and does not actively participate in the management of the enterprise. File taxes free online Farm Inventory If you are required to keep an inventory, you should keep a complete record of your inventory as part of your farm records. File taxes free online This record should show the actual count or measurement of the inventory. File taxes free online It should also show all factors that enter into its valuation, including quality and weight, if applicable. File taxes free online Hatchery business. File taxes free online   If you are in the hatchery business, and use an accrual method of accounting, you must include in inventory eggs in the process of incubation. File taxes free online Products held for sale. File taxes free online   All harvested and purchased farm products held for sale or for feed or seed, such as grain, hay, silage, concentrates, cotton, tobacco, etc. File taxes free online , must be included in inventory. File taxes free online Supplies. File taxes free online   Supplies acquired for sale or that become a physical part of items held for sale must be included in inventory. File taxes free online Deduct the cost of supplies in the year used or consumed in operations. File taxes free online Do not include incidental supplies in inventory as these are deductible in the year of purchase. File taxes free online Livestock. File taxes free online   Livestock held primarily for sale must be included in inventory. File taxes free online Livestock held for draft, breeding, or dairy purposes can either be depreciated or included in inventory. File taxes free online See also Unit-livestock-price method , later. File taxes free online If you are in the business of breeding and raising chinchillas, mink, foxes, or other fur-bearing animals, these animals are livestock for inventory purposes. File taxes free online Growing crops. File taxes free online   Generally, growing crops are not required to be included in inventory. File taxes free online However, if the crop has a preproductive period of more than 2 years, you may have to capitalize (or include in inventory) costs associated with the crop. File taxes free online See Uniform capitalization rules below. File taxes free online Also see Uniform Capitalization Rules in  chapter 6. File taxes free online Items to include in inventory. File taxes free online   Your inventory should include all items held for sale, or for use as feed, seed, etc. File taxes free online , whether raised or purchased, that are unsold at the end of the year. File taxes free online Uniform capitalization rules. File taxes free online   The following applies if you are required to use an accrual method of accounting. File taxes free online The uniform capitalization rules apply to all costs of raising a plant, even if the preproductive period of raising a plant is 2 years or less. File taxes free online The costs of animals are subject to the uniform capitalization rules. File taxes free online Inventory valuation methods. File taxes free online   The following methods, described below, are those generally available for valuing inventory. File taxes free online The method you use must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. File taxes free online Cost. File taxes free online Lower of cost or market. File taxes free online Farm-price method. File taxes free online Unit-livestock-price method. File taxes free online Cost and lower of cost or market methods. File taxes free online   See Publication 538 for information on these valuation methods. File taxes free online If you value your livestock inventory at cost or the lower of cost or market, you do not need IRS approval to change to the unit-livestock-price method. File taxes free online However, if you value your livestock inventory using the farm-price method, then you must obtain permission from the IRS to change to the unit-livestock-price method. File taxes free online Farm-price method. File taxes free online   Under this method, each item, whether raised or purchased, is valued at its market price less the direct cost of disposition. File taxes free online Market price is the current price at the nearest market in the quantities you usually sell. File taxes free online Cost of disposition includes broker's commissions, freight, hauling to market, and other marketing costs. File taxes free online If you use this method, you must use it for your entire inventory, except that livestock can be inventoried under the unit-livestock-price method. File taxes free online Unit-livestock-price method. File taxes free online   This method recognizes the difficulty of establishing the exact costs of producing and raising each animal. File taxes free online You group or classify livestock according to type and age and use a standard unit price for each animal within a class or group. File taxes free online The unit price you assign should reasonably approximate the normal costs incurred in producing the animals in such classes. File taxes free online Unit prices and classifications are subject to approval by the IRS on examination of your return. File taxes free online You must annually reevaluate your unit livestock prices and adjust the prices upward or downward to reflect increases or decreases in the costs of raising livestock. File taxes free online IRS approval is not required for these adjustments. File taxes free online Any other changes in unit prices or classifications do require IRS approval. File taxes free online   If you use this method, include all raised livestock in inventory, regardless of whether they are held for sale or for draft, breeding, sport, or dairy purposes. File taxes free online This method accounts only for the increase in cost of raising an animal to maturity. File taxes free online It does not provide for any decrease in the animal's market value after it reaches maturity. File taxes free online Also, if you raise cattle, you are not required to inventory hay you grow to feed your herd. File taxes free online   Do not include sold or lost animals in the year-end inventory. File taxes free online If your records do not show which animals were sold or lost, treat the first animals acquired as sold or lost. File taxes free online The animals on hand at the end of the year are considered those most recently acquired. File taxes free online   You must include in inventory all livestock purchased primarily for sale. File taxes free online You can choose either to include in inventory or depreciate livestock purchased for draft, breeding, sport or dairy purposes. File taxes free online However, you must be consistent from year to year, regardless of the method you have chosen. File taxes free online You cannot change your method without obtaining approval from the IRS. File taxes free online   You must include in inventory animals purchased after maturity or capitalize them at their purchase price. File taxes free online If the animals are not mature at purchase, increase the cost at the end of each tax year according to the established unit price. File taxes free online However, in the year of purchase, do not increase the cost of any animal purchased during the last 6 months of the year. File taxes free online This “no increase” rule does not apply to tax shelters which must make an adjustment for any animal purchased during the year. File taxes free online It also does not apply to taxpayers that must make an adjustment to reasonably reflect the particular period in the year in which animals are purchased, if necessary to avoid significant distortions in income. File taxes free online Uniform capitalization rules. File taxes free online   A farmer can determine costs required to be allocated under the uniform capitalization rules by using the farm-price or unit-livestock-price inventory method. File taxes free online This applies to any plant or animal, even if the farmer does not hold or treat the plant or animal as inventory property. File taxes free online Cash Versus Accrual Method The following examples compare the cash and accrual methods of accounting. File taxes free online Example 1. File taxes free online You are a farmer who uses an accrual method of accounting. File taxes free online You keep your books on the calendar year basis. File taxes free online You sell grain in December 2013 but you are not paid until January 2014. File taxes free online Because the accrual method was used and 2013 was the tax year in which the grain was sold, you must both include the sales proceeds and deduct the costs incurred in producing the grain on your 2013 tax return. File taxes free online Example 2. File taxes free online Assume the same facts as in Example 1 except that you use the cash method and there was no constructive receipt of the sales proceeds in 2013. File taxes free online Under this method, you include the sales proceeds in income for 2014, the year you receive payment. File taxes free online Deduct the costs of producing the grain in the year you pay for them. File taxes free online Special Methods of Accounting There are special methods of accounting for certain items of income and expense. File taxes free online Crop method. File taxes free online   If you do not harvest and dispose of your crop in the same tax year that you plant it, you can, with IRS approval, use the crop method of accounting. File taxes free online You cannot use the crop method for any tax return, including your first tax return, unless you receive approval from the IRS. File taxes free online Under this method, you deduct the entire cost of producing the crop, including the expense of seed or young plants, in the year you realize income from the crop. File taxes free online    See chapter 4 for details on deducting the costs of operating a farm. File taxes free online Also see Regulations section 1. File taxes free online 162-12. File taxes free online Other special methods. File taxes free online   Other special methods of accounting apply to the following items. File taxes free online Amortization, see chapter 7. File taxes free online Casualties, see chapter 11. File taxes free online Condemnations, see chapter 11. File taxes free online Depletion, see chapter 7. File taxes free online Depreciation, see chapter 7. File taxes free online Farm business expenses, see chapter 4. File taxes free online Farm income, see chapter 3. File taxes free online Installment sales, see chapter 10. File taxes free online Soil and water conservation expenses, see chapter 5. File taxes free online Thefts, see chapter 11. File taxes free online Combination Method Generally, you can use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. File taxes free online However, the following restrictions apply. File taxes free online If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. File taxes free online If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. File taxes free online Changes in Methods of Accounting A change in your method of accounting includes a change in: Your overall method, such as from the cash method to an accrual method, and Your treatment of any material item, such as a change in your method of valuing inventory (for example, a change from the farm-price method to the unit-livestock-price method, discussed earlier). File taxes free online Generally, once you have set up your accounting method, you must receive approval from the IRS before you can change to another method of accounting. File taxes free online You may also have to pay a fee. File taxes free online To obtain approval, you must generally file Form 3115. File taxes free online There are instances when you can obtain automatic consent to change certain methods of accounting. File taxes free online See the List of Automatic Accounting Method Changes located in the Instructions for Form 3115. File taxes free online For more information on changes in methods of accounting, see Form 3115 and the Instructions for Form 3115. File taxes free online Also see Publication 538. File taxes free online Prev  Up  Next   Home   More Online Publications
Español

The File Taxes Free Online

File taxes free online Internal Revenue Bulletin:  2011-12  March 21, 2011  Rev. File taxes free online Proc. File taxes free online 2011-21 Table of Contents SECTION 1. File taxes free online PURPOSE SECTION 2. File taxes free online BACKGROUND SECTION 3. File taxes free online SCOPE SECTION 4. File taxes free online APPLICATION SECTION 5. File taxes free online EFFECTIVE DATE SECTION 6. File taxes free online EFFECT ON OTHER DOCUMENTS SECTION 7. File taxes free online DRAFTING INFORMATION SECTION 1. File taxes free online PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2011, including separate tables of limitations on depreciation deductions for trucks and vans; (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2011, including a separate table of inclusion amounts for lessees of trucks and vans; and (3) revised tables of depreciation limitations and lessee inclusion amounts for passenger automobiles that were first placed in service or first leased by the taxpayer, respectively, during 2010 and to which the 50 percent additional first year depreciation deduction under § 168(k)(1)(A) of the Internal Revenue Code or the 100 percent additional first year depreciation deduction under § 168(k)(5) applies. File taxes free online The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7). File taxes free online SECTION 2. File taxes free online BACKGROUND . File taxes free online 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. File taxes free online For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. File taxes free online The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. File taxes free online This change reflects the higher rate of price inflation for trucks and vans since 1988. File taxes free online . File taxes free online 02 Section 2022(a) of the Small Business Jobs Act of 2010, Pub. File taxes free online L. File taxes free online No. File taxes free online 111-240, 124 Stat. File taxes free online 2504 (September 27, 2010), extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property (as defined in § 168(k)(2)) acquired by the taxpayer after December 31, 2007, and before January 1, 2011, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2011. File taxes free online Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. File taxes free online L. File taxes free online No. File taxes free online 111-312, 124 Stat. File taxes free online 3296 (Dec. File taxes free online 17, 2010) (the “Act”) further extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. File taxes free online Section 401(b) of the Act further amended § 168(k) by adding § 168(k)(5). File taxes free online It allows a 100 percent additional first year depreciation deduction for qualified property acquired by a taxpayer after September 8, 2010, and before January 1, 2012, if the taxpayer places the property in service generally before January 1, 2012. File taxes free online Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. File taxes free online . File taxes free online 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). File taxes free online Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. File taxes free online Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv). File taxes free online Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. File taxes free online This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2011 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. File taxes free online . File taxes free online 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. File taxes free online The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. File taxes free online Under § 1. File taxes free online 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. File taxes free online One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. File taxes free online Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. File taxes free online SECTION 3. File taxes free online SCOPE . File taxes free online 01 The limitations on depreciation deductions in section 4. File taxes free online 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2011, and continue to apply for each taxable year that the passenger automobile remains in service. File taxes free online . File taxes free online 02 The tables in section 4. File taxes free online 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2011. File taxes free online Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. File taxes free online See Rev. File taxes free online Proc. File taxes free online 2006-18, 2006-1 C. File taxes free online B. File taxes free online 645, for passenger automobiles first leased during calendar year 2006; Rev. File taxes free online Proc. File taxes free online 2007-30, 2007-1 C. File taxes free online B. File taxes free online 1104, for passenger automobiles first leased during calendar year 2007; Rev. File taxes free online Proc. File taxes free online 2008-22, 2008-1 C. File taxes free online B. File taxes free online 658, for passenger automobiles first leased during calendar year 2008; Rev. File taxes free online Proc. File taxes free online 2009-24, 2009-1 C. File taxes free online B. File taxes free online 885, for passenger automobiles first leased during calendar year 2009; and Rev. File taxes free online Proc. File taxes free online 2010-18, 2010-1 C. File taxes free online B. File taxes free online 427, as amplified and modified by section 4. File taxes free online 03 of this revenue procedure, for passenger automobiles first leased during calendar year 2010. File taxes free online SECTION 4. File taxes free online APPLICATION . File taxes free online 01 Limitations on Depreciation Deductions for Certain Automobiles. File taxes free online (1) Amount of the inflation adjustment. File taxes free online (a) Passenger automobiles (other than trucks or vans). File taxes free online Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. File taxes free online Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. File taxes free online The new car component of the CPI was 115. File taxes free online 2 for October 1987 and 137. File taxes free online 880 for October 2010. File taxes free online The October 2010 index exceeded the October 1987 index by 22. File taxes free online 680. File taxes free online Therefore, the automobile price inflation adjustment for 2011 for passenger automobiles (other than trucks and vans) is 19. File taxes free online 69 percent (22. File taxes free online 680/115. File taxes free online 2 x 100%). File taxes free online The dollar limitations in § 280F(a) are multiplied by a factor of 0. File taxes free online 1969, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2011. File taxes free online This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2011. File taxes free online (b) Trucks and vans. File taxes free online To determine the dollar limitations for trucks and vans first placed in service during calendar year 2011, the Service uses the new truck component of the CPI instead of the new car component. File taxes free online The new truck component of the CPI was 112. File taxes free online 4 for October 1987 and 142. File taxes free online 556 for October 2010. File taxes free online The October 2010 index exceeded the October 1987 index by 30. File taxes free online 156. File taxes free online Therefore, the automobile price inflation adjustment for 2011 for trucks and vans is 26. File taxes free online 83 percent (30. File taxes free online 156/112. File taxes free online 4 x 100%). File taxes free online The dollar limitations in § 280F(a) are multiplied by a factor of 0. File taxes free online 2683, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. File taxes free online This adjustment applies to all trucks and vans that are first placed in service in calendar year 2011. File taxes free online (2) Amount of the limitation. File taxes free online Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2011. File taxes free online Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2011 for which the § 168(k) additional first year depreciation deduction applies. File taxes free online Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2011 for which the § 168(k) additional first year depreciation deduction does not apply. File taxes free online The Service intends to issue additional guidance addressing the interaction between the 100 percent additional first year depreciation deduction and § 280F(a) for the taxable years subsequent to the first taxable year. File taxes free online REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,260 2nd Tax Year $5,200 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,260 2nd Tax Year $5,200 3rd Tax Year $3,150 Each Succeeding Year $1,875 . File taxes free online 02 Inclusions in Income of Lessees of Passenger Automobiles. File taxes free online A taxpayer must follow the procedures in § 1. File taxes free online 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2011. File taxes free online In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. File taxes free online REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2011 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $18,500 $19,000 3 8 11 13 16 19,000 19,500 4 9 13 15 18 19,500 20,000 4 10 15 17 20 20,000 20,500 5 11 16 19 23 20,500 21,000 5 12 18 21 25 21,000 21,500 6 13 19 24 26 21,500 22,000 6 14 21 26 29 22,000 23,000 7 16 23 29 32 23,000 24,000 8 18 27 32 37 24,000 25,000 9 20 30 36 42 25,000 26,000 10 23 33 40 46 26,000 27,000 11 25 36 44 51 27,000 28,000 12 27 40 48 55 28,000 29,000 13 29 43 52 60 29,000 30,000 14 31 47 55 65 30,000 31,000 15 34 49 60 69 31,000 32,000 16 36 53 63 73 32,000 33,000 17 38 56 68 77 33,000 34,000 18 40 60 71 82 34,000 35,000 19 42 63 75 87 35,000 36,000 20 45 66 79 91 36,000 37,000 21 47 69 83 96 37,000 38,000 22 49 73 87 100 38,000 39,000 23 51 76 91 105 39,000 40,000 24 53 80 94 110 40,000 41,000 25 56 82 99 114 41,000 42,000 26 58 86 102 119 42,000 43,000 27 60 89 107 123 43,000 44,000 28 62 93 110 128 44,000 45,000 29 64 96 114 133 45,000 46,000 30 67 98 119 137 46,000 47,000 31 69 102 122 141 47,000 48,000 32 71 105 127 145 48,000 49,000 33 73 109 130 150 49,000 50,000 34 76 111 134 155 50,000 51,000 35 78 115 138 159 51,000 52,000 36 80 118 142 164 52,000 53,000 37 82 122 146 168 53,000 54,000 38 84 125 150 173 54,000 55,000 39 87 128 153 178 55,000 56,000 40 89 131 158 182 56,000 57,000 41 91 135 161 187 57,000 58,000 42 93 138 166 191 58,000 59,000 43 95 142 169 196 59,000 60,000 44 98 144 174 200 60,000 62,000 46 101 149 179 207 62,000 64,000 48 105 156 187 216 64,000 66,000 50 109 163 195 225 66,000 68,000 52 114 169 203 234 68,000 70,000 54 118 176 211 243 70,000 72,000 56 123 182 218 253 72,000 74,000 58 127 189 226 262 74,000 76,000 60 132 195 234 270 76,000 78,000 62 136 202 242 279 78,000 80,000 64 140 209 250 288 80,000 85,000 67 148 220 264 304 85,000 90,000 72 159 237 283 327 90,000 95,000 77 170 253 303 350 95,000 100,000 82 181 269 323 372 100,000 110,000 90 198 293 352 406 110,000 120,000 100 220 326 391 452 120,000 130,000 110 242 359 430 497 130,000 140,000 120 264 392 469 543 140,000 150,000 130 286 424 509 588 150,000 160,000 140 308 457 548 633 160,000 170,000 150 330 490 587 679 170,000 180,000 160 352 523 626 724 180,000 190,000 170 374 555 666 769 190,000 200,000 180 396 588 705 815 200,000 210,000 190 418 621 744 860 210,000 220,000 200 440 654 784 904 220,000 230,000 210 462 687 823 950 230,000 240,000 220 484 719 863 995 240,000 And up 230 506 752 902 1,040 REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2011 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $19,000 $19,500 3 7 9 12 13 19,500 20,000 3 8 11 14 15 20,000 20,500 4 9 13 15 18 20,500 21,000 4 10 15 17 20 21,000 21,500 5 11 16 20 22 21,500 22,000 5 12 18 22 24 22,000 23,000 6 14 20 24 29 23,000 24,000 7 16 24 28 32 24,000 25,000 8 18 27 32 37 25,000 26,000 9 20 31 36 41 26,000 27,000 10 23 33 40 46 27,000 28,000 11 25 37 43 51 28,000 29,000 12 27 40 48 55 29,000 30,000 13 29 43 52 60 30,000 31,000 14 31 47 56 64 31,000 32,000 15 34 49 60 69 32,000 33,000 16 36 53 63 74 33,000 34,000 17 38 56 68 78 34,000 35,000 18 40 60 71 83 35,000 36,000 19 43 62 76 87 36,000 37,000 20 45 66 79 92 37,000 38,000 21 47 69 83 97 38,000 39,000 22 49 73 87 101 39,000 40,000 23 51 76 91 105 40,000 41,000 24 54 79 95 109 41,000 42,000 25 56 82 99 114 42,000 43,000 26 58 86 103 118 43,000 44,000 27 60 89 107 123 44,000 45,000 28 62 93 110 128 45,000 46,000 29 65 95 115 132 46,000 47,000 30 67 99 118 137 47,000 48,000 31 69 102 123 141 48,000 49,000 32 71 106 126 146 49,000 50,000 33 73 109 130 151 50,000 51,000 34 76 112 134 155 51,000 52,000 35 78 115 138 160 52,000 53,000 36 80 118 143 164 53,000 54,000 37 82 122 146 169 54,000 55,000 38 84 125 150 173 55,000 56,000 39 87 128 154 177 56,000 57,000 40 89 131 158 182 57,000 58,000 41 91 135 162 186 58,000 59,000 42 93 138 166 191 59,000 60,000 43 95 142 169 196 60,000 62,000 45 99 146 175 203 62,000 64,000 47 103 153 183 212 64,000 66,000 49 107 160 191 221 66,000 68,000 51 112 166 199 229 68,000 70,000 53 116 173 206 239 70,000 72,000 55 121 179 214 248 72,000 74,000 57 125 186 222 257 74,000 76,000 59 129 192 231 266 76,000 78,000 61 134 198 239 275 78,000 80,000 63 138 205 246 285 80,000 85,000 66 146 217 260 300 85,000 90,000 71 157 233 280 322 90,000 95,000 76 168 250 299 345 95,000 100,000 81 179 266 319 368 100,000 110,000 89 196 290 348 402 110,000 120,000 99 218 323 387 447 120,000 130,000 109 240 355 427 493 130,000 140,000 119 262 388 466 538 140,000 150,000 129 284 421 505 583 150,000 160,000 139 306 454 544 629 160,000 170,000 149 328 487 583 674 170,000 180,000 159 350 519 623 719 180,000 190,000 169 372 552 662 765 190,000 200,000 179 394 585 701 810 200,000 210,000 189 416 618 740 856 210,000 220,000 199 438 651 779 901 220,000 230,000 209 460 683 819 946 230,000 240,000 219 482 716 858 992 240,000 And up 229 504 749 897 1,037 . File taxes free online 03 Revised Amounts for Passenger Automobiles Placed in Service During 2010. File taxes free online (1) Calculation of the Revised Amount. File taxes free online The revised depreciation limits provided in this section 4. File taxes free online 03 were calculated by increasing the existing limitations on the first year allowance in Rev. File taxes free online Proc. File taxes free online 2010-18 by $8,000 as provided in § 168(k)(2)(F)(i). File taxes free online (2) Amount of the Revised Limitation. File taxes free online For passenger automobiles (that are not trucks or vans) placed in service by the taxpayer in calendar year 2010 for which the § 168(k) additional first year depreciation deduction applies, Table 7 of this revenue procedure contains the revised dollar amount of the depreciation limitations for each taxable year. File taxes free online For trucks or vans placed in service by the taxpayer in calendar year 2010 for which the § 168(k) additional first year depreciation deduction applies, Table 8 of this revenue procedure contains the revised dollar amount of the depreciation limitations for each taxable year. File taxes free online If the § 168(k) additional first year depreciation deduction does not apply to a passenger automobile placed in service by the taxpayer in calendar year 2010, the depreciation limitations for each taxable year in Tables 1 and 2 of Rev. File taxes free online Proc. File taxes free online 2010-18 apply. File taxes free online REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 7 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2010 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. File taxes free online PROC. File taxes free online 2011-21 TABLE 8 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2010 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 (3) Modification to lease inclusion amounts for 2010. File taxes free online The lease inclusion amounts in Tables 3 and 4 of Rev. File taxes free online Proc. File taxes free online 2010-18 are modified by striking the first four lines of the inclusion amounts in each table. File taxes free online Consequently, Table 3 of Rev. File taxes free online Proc. File taxes free online 2010-18 applies to passenger automobiles (other than trucks and vans) that are first leased by the taxpayer in calendar year 2010 with a fair market value over $18,500, and Table 4 of Rev. File taxes free online Proc. File taxes free online 2010-18 applies to trucks and vans that are first leased by the taxpayer in calendar year 2010 with a fair market value over $19,000. File taxes free online SECTION 5. File taxes free online EFFECTIVE DATE This revenue procedure, with the exception of section 4. File taxes free online 03, applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2011. File taxes free online Section 4. File taxes free online 03 of this revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. File taxes free online SECTION 6. File taxes free online EFFECT ON OTHER DOCUMENTS Rev. File taxes free online Proc. File taxes free online 2010-18 is amplified and modified. File taxes free online SECTION 7. File taxes free online DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. File taxes free online Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). File taxes free online For further information regarding this revenue procedure, contact Mr. File taxes free online Harvey at (202) 622-4930 (not a toll-free call). File taxes free online Prev  Up  Next   Home   More Internal Revenue Bulletins