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Filing An Amended Tax Return 2012

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Filing An Amended Tax Return 2012

Filing an amended tax return 2012 Internal Revenue Bulletin:  2011-12  March 21, 2011  Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2011-21 Table of Contents SECTION 1. Filing an amended tax return 2012 PURPOSE SECTION 2. Filing an amended tax return 2012 BACKGROUND SECTION 3. Filing an amended tax return 2012 SCOPE SECTION 4. Filing an amended tax return 2012 APPLICATION SECTION 5. Filing an amended tax return 2012 EFFECTIVE DATE SECTION 6. Filing an amended tax return 2012 EFFECT ON OTHER DOCUMENTS SECTION 7. Filing an amended tax return 2012 DRAFTING INFORMATION SECTION 1. Filing an amended tax return 2012 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. Filing an amended tax return 2012 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7). Filing an amended tax return 2012 SECTION 2. Filing an amended tax return 2012 BACKGROUND . Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 This change reflects the higher rate of price inflation for trucks and vans since 1988. Filing an amended tax return 2012 . Filing an amended tax return 2012 02 Section 2022(a) of the Small Business Jobs Act of 2010, Pub. Filing an amended tax return 2012 L. Filing an amended tax return 2012 No. Filing an amended tax return 2012 111-240, 124 Stat. Filing an amended tax return 2012 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. Filing an amended tax return 2012 Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. Filing an amended tax return 2012 L. Filing an amended tax return 2012 No. Filing an amended tax return 2012 111-312, 124 Stat. Filing an amended tax return 2012 3296 (Dec. Filing an amended tax return 2012 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. Filing an amended tax return 2012 Section 401(b) of the Act further amended § 168(k) by adding § 168(k)(5). Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 . Filing an amended tax return 2012 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). Filing an amended tax return 2012 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. Filing an amended tax return 2012 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). Filing an amended tax return 2012 Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. Filing an amended tax return 2012 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. Filing an amended tax return 2012 . Filing an amended tax return 2012 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. Filing an amended tax return 2012 The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Filing an amended tax return 2012 Under § 1. Filing an amended tax return 2012 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. Filing an amended tax return 2012 One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Filing an amended tax return 2012 Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. Filing an amended tax return 2012 SECTION 3. Filing an amended tax return 2012 SCOPE . Filing an amended tax return 2012 01 The limitations on depreciation deductions in section 4. Filing an amended tax return 2012 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. Filing an amended tax return 2012 . Filing an amended tax return 2012 02 The tables in section 4. Filing an amended tax return 2012 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2011. Filing an amended tax return 2012 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. Filing an amended tax return 2012 See Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2006-18, 2006-1 C. Filing an amended tax return 2012 B. Filing an amended tax return 2012 645, for passenger automobiles first leased during calendar year 2006; Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2007-30, 2007-1 C. Filing an amended tax return 2012 B. Filing an amended tax return 2012 1104, for passenger automobiles first leased during calendar year 2007; Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2008-22, 2008-1 C. Filing an amended tax return 2012 B. Filing an amended tax return 2012 658, for passenger automobiles first leased during calendar year 2008; Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2009-24, 2009-1 C. Filing an amended tax return 2012 B. Filing an amended tax return 2012 885, for passenger automobiles first leased during calendar year 2009; and Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2010-18, 2010-1 C. Filing an amended tax return 2012 B. Filing an amended tax return 2012 427, as amplified and modified by section 4. Filing an amended tax return 2012 03 of this revenue procedure, for passenger automobiles first leased during calendar year 2010. Filing an amended tax return 2012 SECTION 4. Filing an amended tax return 2012 APPLICATION . Filing an amended tax return 2012 01 Limitations on Depreciation Deductions for Certain Automobiles. Filing an amended tax return 2012 (1) Amount of the inflation adjustment. Filing an amended tax return 2012 (a) Passenger automobiles (other than trucks or vans). Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 The new car component of the CPI was 115. Filing an amended tax return 2012 2 for October 1987 and 137. Filing an amended tax return 2012 880 for October 2010. Filing an amended tax return 2012 The October 2010 index exceeded the October 1987 index by 22. Filing an amended tax return 2012 680. Filing an amended tax return 2012 Therefore, the automobile price inflation adjustment for 2011 for passenger automobiles (other than trucks and vans) is 19. Filing an amended tax return 2012 69 percent (22. Filing an amended tax return 2012 680/115. Filing an amended tax return 2012 2 x 100%). Filing an amended tax return 2012 The dollar limitations in § 280F(a) are multiplied by a factor of 0. Filing an amended tax return 2012 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. Filing an amended tax return 2012 This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2011. Filing an amended tax return 2012 (b) Trucks and vans. Filing an amended tax return 2012 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. Filing an amended tax return 2012 The new truck component of the CPI was 112. Filing an amended tax return 2012 4 for October 1987 and 142. Filing an amended tax return 2012 556 for October 2010. Filing an amended tax return 2012 The October 2010 index exceeded the October 1987 index by 30. Filing an amended tax return 2012 156. Filing an amended tax return 2012 Therefore, the automobile price inflation adjustment for 2011 for trucks and vans is 26. Filing an amended tax return 2012 83 percent (30. Filing an amended tax return 2012 156/112. Filing an amended tax return 2012 4 x 100%). Filing an amended tax return 2012 The dollar limitations in § 280F(a) are multiplied by a factor of 0. Filing an amended tax return 2012 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. Filing an amended tax return 2012 This adjustment applies to all trucks and vans that are first placed in service in calendar year 2011. Filing an amended tax return 2012 (2) Amount of the limitation. Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 REV. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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 . Filing an amended tax return 2012 02 Inclusions in Income of Lessees of Passenger Automobiles. Filing an amended tax return 2012 A taxpayer must follow the procedures in § 1. Filing an amended tax return 2012 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2011. Filing an amended tax return 2012 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. Filing an amended tax return 2012 REV. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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 . Filing an amended tax return 2012 03 Revised Amounts for Passenger Automobiles Placed in Service During 2010. Filing an amended tax return 2012 (1) Calculation of the Revised Amount. Filing an amended tax return 2012 The revised depreciation limits provided in this section 4. Filing an amended tax return 2012 03 were calculated by increasing the existing limitations on the first year allowance in Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2010-18 by $8,000 as provided in § 168(k)(2)(F)(i). Filing an amended tax return 2012 (2) Amount of the Revised Limitation. Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 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. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2010-18 apply. Filing an amended tax return 2012 REV. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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. Filing an amended tax return 2012 PROC. Filing an amended tax return 2012 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. Filing an amended tax return 2012 The lease inclusion amounts in Tables 3 and 4 of Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2010-18 are modified by striking the first four lines of the inclusion amounts in each table. Filing an amended tax return 2012 Consequently, Table 3 of Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 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. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 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. Filing an amended tax return 2012 SECTION 5. Filing an amended tax return 2012 EFFECTIVE DATE This revenue procedure, with the exception of section 4. Filing an amended tax return 2012 03, applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2011. Filing an amended tax return 2012 Section 4. Filing an amended tax return 2012 03 of this revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. Filing an amended tax return 2012 SECTION 6. Filing an amended tax return 2012 EFFECT ON OTHER DOCUMENTS Rev. Filing an amended tax return 2012 Proc. Filing an amended tax return 2012 2010-18 is amplified and modified. Filing an amended tax return 2012 SECTION 7. Filing an amended tax return 2012 DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. Filing an amended tax return 2012 Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). Filing an amended tax return 2012 For further information regarding this revenue procedure, contact Mr. Filing an amended tax return 2012 Harvey at (202) 622-4930 (not a toll-free call). Filing an amended tax return 2012 Prev  Up  Next   Home   More Internal Revenue Bulletins
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Current scams and phishing sites posing as the IRS

Aug. 20, 2010:
There is a fraud risk you need to be aware of. It is related to the Electronic Federal Tax Payment System.

The IRS recently became aware of a fraudulent scheme targeting EFTPS users, the scheme uses an e-mail that claims your tax payment was rejected and directs you to a website for additional information. The website contains malware that will attempt to infect your computer.

If you receive a message claiming to be from the IRS or EFTPS, please:

  1. Do not reply to the sender, access links on the site or submit any information to them.
  2. Forward the message as-is immediately to us at phishing@irs.gov.
  3. How to report and identify phishing, e-mail scams and bogus IRS websites.
  4. If you receive a suspicious e-mail or discover a website posing as the IRS, please forward the e-mail or URL information to the IRS at phishing@irs.gov.
  5. EFTPS is a tax payment system provided free by the U.S. Department of Treasury. Pay federal taxes electronically via the Internet or phone 24/7. Visit EFTPS to enroll.


Remember
The IRS does not initiate taxpayer communications through e-mail.
Page Last Reviewed or Updated: 24-Mar-2014

The Filing An Amended Tax Return 2012

Filing an amended tax return 2012 12. Filing an amended tax return 2012   Business Deduction for Work-Related Education Table of Contents What's New Introduction Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Filing an amended tax return 2012 Transportation Expenses Travel Expenses No Double Benefit Allowed How To Treat ReimbursementsAccountable Plans Nonaccountable Plans Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping Illustrated Example What's New Standard mileage rate. Filing an amended tax return 2012  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013, is 56. Filing an amended tax return 2012 5 cents per mile. Filing an amended tax return 2012 For more information, see Transportation Expenses under What Expenses Can Be Deducted, later. Filing an amended tax return 2012 Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. Filing an amended tax return 2012 To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee, File Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education , later. Filing an amended tax return 2012 What is the tax benefit of taking a business deduction for work-related education. Filing an amended tax return 2012   If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. Filing an amended tax return 2012 Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. Filing an amended tax return 2012 An itemized deduction reduces the amount of your income subject to tax. Filing an amended tax return 2012   If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. Filing an amended tax return 2012 This reduces the amount of your income subject to both income tax and self-employment tax. Filing an amended tax return 2012   Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits. Filing an amended tax return 2012 You may qualify for these other benefits even if you do not meet the requirements listed above. Filing an amended tax return 2012   Also, your work-related education expenses may qualify you to claim more than one tax benefit. Filing an amended tax return 2012 Generally, you may claim any number of benefits as long as you use different expenses to figure each one. Filing an amended tax return 2012 Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. Filing an amended tax return 2012 This is education that meets at least one of the following two tests. Filing an amended tax return 2012 The education is required by your employer or the law to keep your present salary, status, or job. Filing an amended tax return 2012 The required education must serve a bona fide business purpose of your employer. Filing an amended tax return 2012 The education maintains or improves skills needed in your present work. Filing an amended tax return 2012 However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Filing an amended tax return 2012 You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. Filing an amended tax return 2012 Use Figure 12-1, Does Your Work-Related Education Qualify as a quick check to see if your education qualifies. Filing an amended tax return 2012 Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. Filing an amended tax return 2012 This additional education is qualifying work-related education if all three of the following requirements are met. Filing an amended tax return 2012 It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. Filing an amended tax return 2012 When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. Filing an amended tax return 2012 See Education To Maintain or Improve Skills , later. Filing an amended tax return 2012 Example. Filing an amended tax return 2012 You are a teacher who has satisfied the minimum requirements for teaching. Filing an amended tax return 2012 Your employer requires you to take an additional college course each year to keep your teaching job. Filing an amended tax return 2012 If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. Filing an amended tax return 2012 This image is too large to be displayed in the current screen. Filing an amended tax return 2012 Please click the link to view the image. Filing an amended tax return 2012 Figure 12-1 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. Filing an amended tax return 2012 This could include refresher courses, courses on current developments, and academic or vocational courses. Filing an amended tax return 2012 Example. Filing an amended tax return 2012 You repair televisions, radios, and stereo systems for XYZ Store. Filing an amended tax return 2012 To keep up with the latest changes, you take special courses in radio and stereo service. Filing an amended tax return 2012 These courses maintain and improve skills required in your work. Filing an amended tax return 2012 Maintaining skills vs. Filing an amended tax return 2012 qualifying for new job. Filing an amended tax return 2012   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. Filing an amended tax return 2012 Education during temporary absence. Filing an amended tax return 2012   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Filing an amended tax return 2012 Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Filing an amended tax return 2012 Example. Filing an amended tax return 2012 You quit your biology research job to become a full-time biology graduate student for 1 year. Filing an amended tax return 2012 If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. Filing an amended tax return 2012 Education during indefinite absence. Filing an amended tax return 2012   If you stop work for more than a year, your absence from your job is considered indefinite. Filing an amended tax return 2012 Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Filing an amended tax return 2012 Therefore, it is not qualifying work-related education. Filing an amended tax return 2012 Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. Filing an amended tax return 2012 The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. Filing an amended tax return 2012 Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. Filing an amended tax return 2012 This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. Filing an amended tax return 2012 You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. Filing an amended tax return 2012 Example 1. Filing an amended tax return 2012 You are a full-time engineering student. Filing an amended tax return 2012 Although you have not received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Filing an amended tax return 2012 Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. Filing an amended tax return 2012 The education is not qualifying work-related education. Filing an amended tax return 2012 Example 2. Filing an amended tax return 2012 You are an accountant and you have met the minimum educational requirements of your employer. Filing an amended tax return 2012 Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. Filing an amended tax return 2012 These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. Filing an amended tax return 2012 Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. Filing an amended tax return 2012 The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. Filing an amended tax return 2012 If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. Filing an amended tax return 2012 The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. Filing an amended tax return 2012 You generally will be considered a faculty member when one or more of the following occurs. Filing an amended tax return 2012 You have tenure. Filing an amended tax return 2012 Your years of service count toward obtaining tenure. Filing an amended tax return 2012 You have a vote in faculty decisions. Filing an amended tax return 2012 Your school makes contributions for you to a retirement plan other than social security or a similar program. Filing an amended tax return 2012 Example 1. Filing an amended tax return 2012 The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. Filing an amended tax return 2012 In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. Filing an amended tax return 2012 If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. Filing an amended tax return 2012 However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. Filing an amended tax return 2012 Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. Filing an amended tax return 2012 If you have all the required education except the fifth year, you have met the minimum educational requirements. Filing an amended tax return 2012 The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. Filing an amended tax return 2012 Example 2. Filing an amended tax return 2012 Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. Filing an amended tax return 2012 The additional four education courses can be qualifying work-related education. Filing an amended tax return 2012 Although you do not have all the required courses, you have already met the minimum educational requirements. Filing an amended tax return 2012 Example 3. Filing an amended tax return 2012 Assume the same facts as in Example 1 except that you are hired with only 3 years of college. Filing an amended tax return 2012 The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. Filing an amended tax return 2012 They are needed to meet the minimum educational requirements for employment as a teacher. Filing an amended tax return 2012 Example 4. Filing an amended tax return 2012 You have a bachelor's degree and you work as a temporary instructor at a university. Filing an amended tax return 2012 At the same time, you take graduate courses toward an advanced degree. Filing an amended tax return 2012 The rules of the university state that you can become a faculty member only if you get a graduate degree. Filing an amended tax return 2012 Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. Filing an amended tax return 2012 You have not met the minimum educational requirements to qualify you as a faculty member. Filing an amended tax return 2012 The graduate courses are not qualifying work-related education. Filing an amended tax return 2012 Certification in a new state. Filing an amended tax return 2012   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. Filing an amended tax return 2012 This is true even if you must get additional education to be certified in another state. Filing an amended tax return 2012 Any additional education you need is qualifying work-related education. Filing an amended tax return 2012 You have already met the minimum requirements for teaching. Filing an amended tax return 2012 Teaching in another state is not a new trade or business. Filing an amended tax return 2012 Example. Filing an amended tax return 2012 You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. Filing an amended tax return 2012 You move to State B and are promptly hired as a teacher. Filing an amended tax return 2012 You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. Filing an amended tax return 2012 These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. Filing an amended tax return 2012 Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. Filing an amended tax return 2012 This is true even if you do not plan to enter that trade or business. Filing an amended tax return 2012 If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. Filing an amended tax return 2012 Example 1. Filing an amended tax return 2012 You are an accountant. Filing an amended tax return 2012 Your employer requires you to get a law degree at your own expense. Filing an amended tax return 2012 You register at a law school for the regular curriculum that leads to a law degree. Filing an amended tax return 2012 Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. Filing an amended tax return 2012 Example 2. Filing an amended tax return 2012 You are a general practitioner of medicine. Filing an amended tax return 2012 You take a 2-week course to review developments in several specialized fields of medicine. Filing an amended tax return 2012 The course does not qualify you for a new profession. Filing an amended tax return 2012 It is qualifying work- related education because it maintains or improves skills required in your present profession. Filing an amended tax return 2012 Example 3. Filing an amended tax return 2012 While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. Filing an amended tax return 2012 The program will lead to qualifying you to practice psychoanalysis. Filing an amended tax return 2012 The psychoanalytic training does not qualify you for a new profession. Filing an amended tax return 2012 It is qualifying work-related education because it maintains or improves skills required in your present profession. Filing an amended tax return 2012 Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. Filing an amended tax return 2012 They are part of a program of study that can qualify you for a new profession. Filing an amended tax return 2012 Teaching and Related Duties All teaching and related duties are considered the same general kind of work. Filing an amended tax return 2012 A change in duties in any of the following ways is not considered a change to a new business. Filing an amended tax return 2012 Elementary school teacher to secondary school teacher. Filing an amended tax return 2012 Teacher of one subject, such as biology, to teacher of another subject, such as art. Filing an amended tax return 2012 Classroom teacher to guidance counselor. Filing an amended tax return 2012 Classroom teacher to school administrator. Filing an amended tax return 2012 What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education you can generally deduct your education expenses as business expenses. Filing an amended tax return 2012 If you are not self-employed, you can deduct business expenses only if you itemize your deductions. Filing an amended tax return 2012 You cannot deduct expenses related to tax-exempt and excluded income. Filing an amended tax return 2012 Deductible expenses. Filing an amended tax return 2012   The following education expenses can be deducted. Filing an amended tax return 2012 Tuition, books, supplies, lab fees, and similar items. Filing an amended tax return 2012 Certain transportation and travel costs. Filing an amended tax return 2012 Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. Filing an amended tax return 2012 Nondeductible expenses. Filing an amended tax return 2012   You cannot deduct personal or capital expenses. Filing an amended tax return 2012 For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. Filing an amended tax return 2012 This amount is a personal expense. Filing an amended tax return 2012 Unclaimed reimbursement. Filing an amended tax return 2012   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. Filing an amended tax return 2012 Example. Filing an amended tax return 2012 Your employer agrees to pay your education expenses if you file a voucher showing your expenses. Filing an amended tax return 2012 You do not file a voucher and you do not get reimbursed. Filing an amended tax return 2012 Because you did not file a voucher, you cannot deduct the expenses on your tax return. Filing an amended tax return 2012 Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. Filing an amended tax return 2012 If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. Filing an amended tax return 2012 Temporary basis. Filing an amended tax return 2012   You go to school on a temporary basis if either of the following situations applies to you. Filing an amended tax return 2012 Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. Filing an amended tax return 2012 Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Filing an amended tax return 2012 Your attendance is temporary up to the date you determine it will last more than 1 year. Filing an amended tax return 2012 If you are in either situation (1) or (2) above, your attendance is not temporary if facts and circumstances indicate otherwise. Filing an amended tax return 2012 Attendance not on a temporary basis. Filing an amended tax return 2012   You do not go to school on a temporary basis if either of the following situations apply to you. Filing an amended tax return 2012 Your attendance at school is realistically expected to last more than 1 year. Filing an amended tax return 2012 It does not matter how long you actually attend. Filing an amended tax return 2012 Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Filing an amended tax return 2012 Your attendance is not temporary after the date you determine it will last more than 1 year. Filing an amended tax return 2012 Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. Filing an amended tax return 2012 This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. Filing an amended tax return 2012 Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Filing an amended tax return 2012 Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Filing an amended tax return 2012 Example 1. Filing an amended tax return 2012 You regularly work in a nearby town, and go directly from work to home. Filing an amended tax return 2012 You also attend school every work night for 3 months to take a course that improves your job skills. Filing an amended tax return 2012 Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. Filing an amended tax return 2012 This is true regardless of the distance traveled. Filing an amended tax return 2012 Example 2. Filing an amended tax return 2012 Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. Filing an amended tax return 2012 You can deduct your transportation expenses from your regular work site to school and then home. Filing an amended tax return 2012 Example 3. Filing an amended tax return 2012 Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Filing an amended tax return 2012 Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. Filing an amended tax return 2012 Example 4. Filing an amended tax return 2012 Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Filing an amended tax return 2012 Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. Filing an amended tax return 2012 If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. Filing an amended tax return 2012 If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. Filing an amended tax return 2012 Using your car. Filing an amended tax return 2012    If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. Filing an amended tax return 2012 The standard mileage rate for miles driven from January 1, 2013 through December 31, 2013, is 56. Filing an amended tax return 2012 5 cents per mile. Filing an amended tax return 2012 Whichever method you use, you can also deduct parking fees and tolls. Filing an amended tax return 2012 See Publication 463, chapter 4, for information on deducting your actual expenses of using a car. Filing an amended tax return 2012 Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. Filing an amended tax return 2012 Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. Filing an amended tax return 2012 For more information, see chapter 1 of Publication 463. Filing an amended tax return 2012 You cannot deduct expenses for personal activities such as sightseeing, visiting, or entertaining. Filing an amended tax return 2012 Mainly personal travel. Filing an amended tax return 2012   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. Filing an amended tax return 2012 You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. Filing an amended tax return 2012   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. Filing an amended tax return 2012 An important factor is the comparison of time spent on personal activities with time spent on educational activities. Filing an amended tax return 2012 If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. Filing an amended tax return 2012 Example 1. Filing an amended tax return 2012 John works in Newark, New Jersey. Filing an amended tax return 2012 He traveled to Chicago to take a deductible 1-week course at the request of his employer. Filing an amended tax return 2012 His main reason for going to Chicago was to take the course. Filing an amended tax return 2012 While there, he took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day. Filing an amended tax return 2012 Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. Filing an amended tax return 2012 He cannot deduct his transportation expenses of going to Pleasantville. Filing an amended tax return 2012 He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. Filing an amended tax return 2012 Example 2. Filing an amended tax return 2012 Sue works in Boston. Filing an amended tax return 2012 She went to a university in Michigan to take a course for work. Filing an amended tax return 2012 The course is qualifying work-related education. Filing an amended tax return 2012 She took one course, which is one-fourth of a full course load of study. Filing an amended tax return 2012 She spent the rest of the time on personal activities. Filing an amended tax return 2012 Her reasons for taking the course in Michigan were all personal. Filing an amended tax return 2012 Sue's trip is mainly personal because three-fourths of her time is considered personal time. Filing an amended tax return 2012 She cannot deduct the cost of her round-trip train ticket to Michigan. Filing an amended tax return 2012 She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. Filing an amended tax return 2012 Example 3. Filing an amended tax return 2012 Dave works in Nashville and recently traveled to California to take a 2-week seminar. Filing an amended tax return 2012 The seminar is qualifying work-related education. Filing an amended tax return 2012 While there, he spent an extra 8 weeks on personal activities. Filing an amended tax return 2012 The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. Filing an amended tax return 2012 Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. Filing an amended tax return 2012 He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. Filing an amended tax return 2012 Cruises and conventions. Filing an amended tax return 2012   Certain cruises and conventions offer seminars or courses as part of their itinerary. Filing an amended tax return 2012 Even if the seminars or courses are work related, your deduction for travel may be limited. Filing an amended tax return 2012 This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. Filing an amended tax return 2012   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. Filing an amended tax return 2012 50% limit on meals. Filing an amended tax return 2012   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. Filing an amended tax return 2012 If you were reimbursed for the meals, see How To Treat Reimbursements , later. Filing an amended tax return 2012   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. Filing an amended tax return 2012 Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. Filing an amended tax return 2012 Example. Filing an amended tax return 2012 You are a French language teacher. Filing an amended tax return 2012 While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. Filing an amended tax return 2012 You chose your itinerary and most of your activities to improve your French language skills. Filing an amended tax return 2012 You cannot deduct your travel expenses as education expenses. Filing an amended tax return 2012 This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. Filing an amended tax return 2012 No Double Benefit Allowed You cannot do either of the following. Filing an amended tax return 2012 Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, as a tuition and fees deduction. Filing an amended tax return 2012 Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. Filing an amended tax return 2012 See Adjustments to Qualifying Work-Related Education Expenses, next. Filing an amended tax return 2012 Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. Filing an amended tax return 2012 You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. Filing an amended tax return 2012 Tax-free educational assistance. Filing an amended tax return 2012   This includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). Filing an amended tax return 2012 Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Filing an amended tax return 2012 Amounts that do not reduce qualifying work-related education expenses. Filing an amended tax return 2012   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Filing an amended tax return 2012 Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. Filing an amended tax return 2012 How To Treat Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. Filing an amended tax return 2012 There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. Filing an amended tax return 2012 You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. Filing an amended tax return 2012 Note. Filing an amended tax return 2012 The following rules about reimbursement arrangements also apply to expense allowances received from your employer. Filing an amended tax return 2012 Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Filing an amended tax return 2012 Your expenses must have a business connection. Filing an amended tax return 2012 This means your expenses must be deductible under the rules for qualifying work-related education explained earlier. Filing an amended tax return 2012 You must adequately account to your employer for your expenses within a reasonable period of time. Filing an amended tax return 2012 You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. Filing an amended tax return 2012 If you are reimbursed under an accountable plan, your employer should not include any reimbursement in your income in box 1 of your Form W-2. Filing an amended tax return 2012 If your employer included reimbursements in box 1 of your Form W-2 and you meet all three rules for accountable plans, ask your employer for a corrected Form W-2. Filing an amended tax return 2012 Accountable plan rules not met. Filing an amended tax return 2012   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. Filing an amended tax return 2012 Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later). Filing an amended tax return 2012 Expenses equal reimbursement. Filing an amended tax return 2012   Under an accountable plan, if your expenses equal your reimbursement, you do not complete Form 2106 or 2106-EZ. Filing an amended tax return 2012 Because your expenses and reimbursements are equal, you do not have a deduction. Filing an amended tax return 2012 Excess expenses. Filing an amended tax return 2012   If your expenses are more than your reimbursement, you can deduct your excess expenses. Filing an amended tax return 2012 This is discussed later, under Deducting Business Expenses . Filing an amended tax return 2012 Allocating your reimbursements for meals. Filing an amended tax return 2012   Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. Filing an amended tax return 2012 If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. Filing an amended tax return 2012 Make the allocation as follows. Filing an amended tax return 2012 Divide your meal expenses by your total expenses. Filing an amended tax return 2012 Multiply your total reimbursement by the result from (1). Filing an amended tax return 2012 This is the allocated reimbursement for your meal expenses. Filing an amended tax return 2012 Subtract the amount figured in (2) from your total reimbursement. Filing an amended tax return 2012 The difference is the allocated reimbursement for your other expenses of qualifying work-related education. Filing an amended tax return 2012 Example. Filing an amended tax return 2012 Your employer paid you an expense allowance of $2,000 under an accountable plan. Filing an amended tax return 2012 The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. Filing an amended tax return 2012 There was no indication of how much of the reimbursement was for each type of expense. Filing an amended tax return 2012 Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition). Filing an amended tax return 2012 Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses. Filing an amended tax return 2012   1. Filing an amended tax return 2012 $425 meal expenses  $2,500 total expenses = . Filing an amended tax return 2012 17   2. Filing an amended tax return 2012 $2,000 (reimbursement)×. Filing an amended tax return 2012 17     =$340 (allocated reimbursement for meal expenses)   3. Filing an amended tax return 2012 $2,000 (reimbursement)−$340 (meals)     = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). Filing an amended tax return 2012 After you apply the 50% limit to your meals, you have a deduction for work-related education expenses of $458 (($85 × 50%) + $415). Filing an amended tax return 2012 Nonaccountable Plans Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. Filing an amended tax return 2012 You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. Filing an amended tax return 2012 This is discussed later under Deducting Business Expenses . Filing an amended tax return 2012 An illustrated example of a nonaccountable plan, using Form 2106-EZ, is shown at the end of this chapter. Filing an amended tax return 2012 Reimbursements for nondeductible expenses. Filing an amended tax return 2012   Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. Filing an amended tax return 2012 You must include them in your income. Filing an amended tax return 2012 For example, you must include in your income reimbursements your employer gave you for expenses of education that: You need to meet the minimum educational requirements for your job, or Is part of a program of study that can qualify you for a new trade or business. Filing an amended tax return 2012   For more information on accountable and nonaccountable plans, see chapter 6 of Publication 463. Filing an amended tax return 2012 Deducting Business Expenses Self-employed persons and employees report their business expenses differently. Filing an amended tax return 2012 The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. Filing an amended tax return 2012 Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040)). Filing an amended tax return 2012 If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. Filing an amended tax return 2012 See the instructions for the form you file for information on how to complete it. Filing an amended tax return 2012 Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. Filing an amended tax return 2012 If either (1) or (2) applies, you can deduct the total qualifying cost. Filing an amended tax return 2012 If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. Filing an amended tax return 2012 In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Filing an amended tax return 2012 (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Filing an amended tax return 2012 ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Filing an amended tax return 2012 Form 2106 or 2106-EZ. Filing an amended tax return 2012   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or 2106-EZ. Filing an amended tax return 2012 Form not required. Filing an amended tax return 2012   Do not complete either Form 2106 or 2106-EZ if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are not claiming travel, transportation, meal, or entertainment expenses. Filing an amended tax return 2012   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Filing an amended tax return 2012 (Special rules for expenses of certain Performing Artists and Fee-Basis Officials and for Impairment-Related Work Expenses are explained later. Filing an amended tax return 2012 ) Using Form 2106-EZ. Filing an amended tax return 2012   This form is shorter and easier to use than Form 2106. Filing an amended tax return 2012 Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. Filing an amended tax return 2012   If you do not meet both of these requirements, use Form 2106. Filing an amended tax return 2012 Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. Filing an amended tax return 2012 Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24, or Form 1040NR, line 35. Filing an amended tax return 2012 You do not have to itemize your deductions on Schedule A (Form 1040 or 1040NR), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. Filing an amended tax return 2012 You must complete Form 2106 or 2106-EZ to figure your deduction even if you meet the requirements described earlier under Form not required . Filing an amended tax return 2012 For more information on qualified performing artists, see chapter 6 of Publication 463. Filing an amended tax return 2012 Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Filing an amended tax return 2012 They are not subject to the 2%-of-adjusted-gross-income limit. Filing an amended tax return 2012 To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . Filing an amended tax return 2012 For more information on impairment-related work expenses, see chapter 6 of Publication 463. Filing an amended tax return 2012 Recordkeeping You must keep records as proof of any deduction claimed on your tax return. Filing an amended tax return 2012 Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. Filing an amended tax return 2012 If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you do not have to keep duplicate copies of this information. Filing an amended tax return 2012 However, you should keep your records for a 3-year period if: You claim deductions for expenses that are more than your reimbursement, Your employer does not use adequate accounting procedures to verify expense accounts, You are related to your employer, or Your expenses are reimbursed under a nonaccountable plan. Filing an amended tax return 2012 Examples of records to keep. Filing an amended tax return 2012   If any of the above cases apply to you, you must be able to prove that your expenses are deductible. Filing an amended tax return 2012 You should keep adequate records or have sufficient evidence that will support your expenses. Filing an amended tax return 2012 Estimates or approximations do not qualify as proof of an expense. Filing an amended tax return 2012 Some examples of what can be used to help prove your expenses are: Documents, such as transcripts, course descriptions, catalogs, etc. Filing an amended tax return 2012 , showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity. Filing an amended tax return 2012 Canceled checks and receipts to verify amounts you spent for: Tuition and books, Meals and lodging while away from home overnight for educational purposes, Travel and transportation, and Other education expenses. Filing an amended tax return 2012 Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught. Filing an amended tax return 2012 Complete information about any scholarship or fellowship grants, including amounts you received during the year. Filing an amended tax return 2012 Illustrated Example Victor Jones teaches math at a private high school in North Carolina. Filing an amended tax return 2012 He was selected to attend a 3-week math seminar at a university in California. Filing an amended tax return 2012 The seminar will improve his skills in his current job and is qualifying work-related education. Filing an amended tax return 2012 He was reimbursed for his expenses under his employer's nonaccountable plan, so his reimbursement of $2,100 is included in the wages shown in box 1 of his Form W-2. Filing an amended tax return 2012 Victor will file Form 1040. Filing an amended tax return 2012 His actual expenses for the seminar are as follows:   Lodging   $1,050     Meals   526     Airfare   550     Taxi fares   50     Tuition and books   400     Total Expenses   $2,576   Victor files Form 2106-EZ with his tax return. Filing an amended tax return 2012 He shows his expenses for the seminar in Part I of the form. Filing an amended tax return 2012 He enters $1,650 ($1,050 + $550 + $50) on line 3 to account for his lodging, airfare, and taxi fares. Filing an amended tax return 2012 He enters $400 on line 4 for his tuition and books. Filing an amended tax return 2012 On the line provided for total meals and entertainment expenses, Victor enters $526 for meal expenses. Filing an amended tax return 2012 He multiplies that amount by 50% and enters the result, $263, on line 5. Filing an amended tax return 2012 On line 6, Victor totals the amounts from lines 3 through 5. Filing an amended tax return 2012 He carries the total, $2,313, to Schedule A (Form 1040), line 21. Filing an amended tax return 2012 Since he does not claim any vehicle expenses, Victor leaves Part II blank. Filing an amended tax return 2012 His filled-in form is shown on the next page. Filing an amended tax return 2012 This image is too large to be displayed in the current screen. Filing an amended tax return 2012 Please click the link to view the image. Filing an amended tax return 2012 Form 2106-EZ for V. Filing an amended tax return 2012 Jones Prev  Up  Next   Home   More Online Publications