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Filing Past Tax Returns

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Filing Past Tax Returns

Filing past tax returns Index A Additional Medicare Tax, What's New Allocated tips, Allocated Tips Assistance (see Tax help) C Cash tips, How to keep a daily tip record. Filing past tax returns Credit card charge tips, How to keep a daily tip record. Filing past tax returns D Daily tip record, Keeping a Daily Tip Record E Electronic tip record, Electronic tip record. Filing past tax returns Electronic tip statement, Electronic tip statement. Filing past tax returns Employers Giving money to, for taxes, Giving your employer money for taxes. Filing past tax returns Reporting tips to, Reporting Tips to Your Employer EmTRAC program, Tip Rate Determination and Education Program F Figures Form 4070A, sample filled-in, Form 1040 Schedule C, Self-employed persons. Filing past tax returns Unreported tips, Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Filing past tax returns Form 4070, What tips to report. Filing past tax returns Sample filled-in, Form 4070A, How to keep a daily tip record. Filing past tax returns Form 4137, Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Filing past tax returns Form 8027, How to request an approved lower rate. Filing past tax returns Form W-2 Uncollected taxes, Giving your employer money for taxes. Filing past tax returns , Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer. Filing past tax returns Free tax services, Free help with your tax return. Filing past tax returns G Gaming Industry Tip Compliance Agreement Program, Tip Rate Determination and Education Program H Help (see Tax help) M Missing children, photographs of, Reminder N Noncash tips, How to keep a daily tip record. Filing past tax returns P Penalties Failure to report tips to employer, Penalty for not reporting tips. Filing past tax returns Underpayment of estimated taxes, Giving your employer money for taxes. Filing past tax returns Publications (see Tax help) R Recordkeeping requirements Daily tip record, Keeping a Daily Tip Record Reporting Employee to report tips to employer, Reporting Tips to Your Employer Tip income, Introduction S Self-employed persons, Self-employed persons. Filing past tax returns Service charge paid as wages, Service charges. Filing past tax returns Social security and Medicare taxes Allocated tips, How to report allocated tips. Filing past tax returns Reporting of earnings to Social Security Administration, Why report tips to your employer. Filing past tax returns Tips not reported to employer, Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Filing past tax returns Uncollected taxes on tips, Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer. Filing past tax returns T Tax help, How To Get Tax Help Tax returns, Reporting Tips on Your Tax Return Tip pools, How to keep a daily tip record. Filing past tax returns Tip Rate Determination and Education Program, Tip Rate Determination and Education Program Tip splitting, How to keep a daily tip record. Filing past tax returns TTY/TDD information, How To Get Tax Help U Uncollected taxes, Giving your employer money for taxes. Filing past tax returns , Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer. Filing past tax returns W Withholding, Why report tips to your employer. Filing past tax returns Prev  Up     Home   More Online Publications
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IRS Offers Health Care Tax Tips to Help Individuals Understand Tax Provisions in the Affordable Care Act

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IR-2014-19, Feb. 25, 2014

The Internal Revenue Service is offering educational Health Care Tax Tips to help individuals understand how the Affordable Care Act may affect their taxes. 

The IRS has designed the Health Care Tax Tips to help people understand what they need to know for the federal individual income tax returns they are filing this year, as well as for future tax returns. This includes information on the Premium Tax Credit and making health care coverage choices.

Although many of the tax provisions included in the law went into effect on Jan. 1, 2014, most do not affect the 2013 tax returns. 

The Health Care Tax Tips, which are now available at IRS.gov/aca, include:

    • IRS Reminds Individuals of Health Care Choices for 2014 — Find out what you need to know about how health care choices you make for 2014 may affect your taxes.
    • The Health Insurance Marketplace – Learn about Your Health Insurance Coverage Options Find out about getting health care coverage through the Health Insurance Marketplace.
    • The Premium Tax Credit — Learn the basics of the Premium Tax Credit, including who might be eligible and how to get the credit.
    • The Individual Shared Responsibility Payment – An Overview — Provides information about types of qualifying coverage, exemptions from having coverage, and making a payment if you do not have qualifying coverage or an exemption.
    • Three Timely Tips about Taxes and the Health Care Law —  Provides tips that help with filing the 2013 tax return, including information about employment status, tax favored health plans and itemized deductions.
    • Four Tax Facts about the Health Care Law for Individuals — Offers basic tips to help people determine if the Affordable Care Act affects them and their families, and where to find more information.
    • Changes in Circumstances can Affect your Premium Tax Credit — Learn the importance of reporting any changes in circumstances that involve family size or income when advance payments of the Premium Tax Credit are involved.

In addition to Health Care Tax Tips, the IRS.gov/aca website offers informative flyers and brochures, Frequently Asked Questions and in-depth legal guidance regarding the tax provisions of the Affordable Care Act.   

Individuals interested in receiving copies of IRS tax tips via email on a variety of topics, including the Affordable Care Act, can subscribe at www.irs.gov/uac/Subscribe-to-IRS-Tax-Tips.

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Page Last Reviewed or Updated: 12-Mar-2014

The Filing Past Tax Returns

Filing past tax returns 22. Filing past tax returns   Taxes Table of Contents IntroductionIndian tribal government. Filing past tax returns Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. Filing past tax returns Real Estate TaxesReal estate taxes for prior years. Filing past tax returns Examples. Filing past tax returns Form 1099-S. Filing past tax returns Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct Introduction This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). Filing past tax returns It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct. Filing past tax returns This chapter covers the following topics. Filing past tax returns Income taxes (federal, state, local, and foreign). Filing past tax returns General sales taxes (state and local). Filing past tax returns Real estate taxes (state, local, and foreign). Filing past tax returns Personal property taxes (state and local). Filing past tax returns Taxes and fees you cannot deduct. Filing past tax returns Use Table 22-1 as a guide to determine which taxes you can deduct. Filing past tax returns The end of the chapter contains a section that explains which forms you use to deduct different types of taxes. Filing past tax returns Business taxes. Filing past tax returns   You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. Filing past tax returns For information on these taxes, see Publication 535, Business Expenses. Filing past tax returns State or local taxes. Filing past tax returns   These are taxes imposed by the 50 states, U. Filing past tax returns S. Filing past tax returns possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia. Filing past tax returns Indian tribal government. Filing past tax returns   An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. Filing past tax returns Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible. Filing past tax returns General sales taxes. Filing past tax returns   These are taxes imposed at one rate on retail sales of a broad range of classes of items. Filing past tax returns Foreign taxes. Filing past tax returns   These are taxes imposed by a foreign country or any of its political subdivisions. Filing past tax returns Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 530 Tax Information for Homeowners Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule E (Form 1040) Supplemental Income and Loss 1116 Foreign Tax Credit Tests To Deduct Any Tax The following two tests must be met for you to deduct any tax. Filing past tax returns The tax must be imposed on you. Filing past tax returns You must pay the tax during your tax year. Filing past tax returns The tax must be imposed on you. Filing past tax returns   In general, you can deduct only taxes imposed on you. Filing past tax returns   Generally, you can deduct property taxes only if you are an owner of the property. Filing past tax returns If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return. Filing past tax returns You must pay the tax during your tax year. Filing past tax returns   If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. Filing past tax returns If you pay your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial institution. Filing past tax returns If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. Filing past tax returns If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). Filing past tax returns See Publication 538, Accounting Periods and Methods, for details. Filing past tax returns    If you use an accrual method of accounting, see Publication 538 for more information. Filing past tax returns Income Taxes This section discusses the deductibility of state and local income taxes (including employee contributions to state benefit funds) and foreign income taxes. Filing past tax returns State and Local Income Taxes You can deduct state and local income taxes. Filing past tax returns However, you can elect to deduct state and local general sales taxes instead of state and local income taxes. Filing past tax returns See General Sales Taxes , later. Filing past tax returns Exception. Filing past tax returns    You cannot deduct state and local income taxes you pay on income that is exempt from federal income tax, unless the exempt income is interest income. Filing past tax returns For example, you cannot deduct the part of a state's income tax that is on a cost-of-living allowance exempt from federal income tax. Filing past tax returns What To Deduct Your deduction may be for withheld taxes, estimated tax payments, or other tax payments as follows. Filing past tax returns Withheld taxes. Filing past tax returns   You can deduct state and local income taxes withheld from your salary in the year they are withheld. Filing past tax returns Your Form(s) W-2 will show these amounts. Filing past tax returns Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld. Filing past tax returns Estimated tax payments. Filing past tax returns   You can deduct estimated tax payments you made during the year to a state or local government. Filing past tax returns However, you must have a reasonable basis for making the estimated tax payments. Filing past tax returns Any estimated state or local tax payments that are not made in good faith at the time of payment are not deductible. Filing past tax returns For example, you made an estimated state income tax payment. Filing past tax returns However, the estimate of your state tax liability shows that you will get a refund of the full amount of your estimated payment. Filing past tax returns You had no reasonable basis to believe you had any additional liability for state income taxes and you cannot deduct the estimated tax payment. Filing past tax returns Refund applied to taxes. Filing past tax returns   You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2013 estimated state or local income taxes. Filing past tax returns    Do not reduce your deduction by either of the following items. Filing past tax returns Any state or local income tax refund (or credit) you expect to receive for 2013. Filing past tax returns Any refund of (or credit for) prior-year state and local income taxes you actually received in 2013. Filing past tax returns   However, part or all of this refund (or credit) may be taxable. Filing past tax returns See Refund (or credit) of state or local income taxes , later. Filing past tax returns Separate federal returns. Filing past tax returns   If you and your spouse file separate state, local, and federal income tax returns, you each can deduct on your federal return only the amount of your own state and local income tax that you paid during the tax year. Filing past tax returns Joint state and local returns. Filing past tax returns   If you and your spouse file joint state and local returns and separate federal returns, each of you can deduct on your separate federal return a part of the total state and local income taxes paid during the tax year. Filing past tax returns You can deduct only the amount of the total taxes that is proportionate to your gross income compared to the combined gross income of you and your spouse. Filing past tax returns However, you cannot deduct more than the amount you actually paid during the year. Filing past tax returns You can avoid this calculation if you and your spouse are jointly and individually liable for the full amount of the state and local income taxes. Filing past tax returns If so, you and your spouse can deduct on your separate federal returns the amount you each actually paid. Filing past tax returns Joint federal return. Filing past tax returns   If you file a joint federal return, you can deduct the total of the state and local income taxes both of you paid. Filing past tax returns Contributions to state benefit funds. Filing past tax returns    As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. Filing past tax returns For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. Filing past tax returns Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5. Filing past tax returns Alaska Unemployment Compensation Fund. Filing past tax returns California Nonoccupational Disability Benefit Fund. Filing past tax returns New Jersey Nonoccupational Disability Benefit Fund. Filing past tax returns New Jersey Unemployment Compensation Fund. Filing past tax returns New York Nonoccupational Disability Benefit Fund. Filing past tax returns Pennsylvania Unemployment Compensation Fund. Filing past tax returns Rhode Island Temporary Disability Benefit Fund. Filing past tax returns Washington State Supplemental Workmen's Compensation Fund. Filing past tax returns    Employee contributions to private or voluntary disability plans are not deductible. Filing past tax returns Refund (or credit) of state or local income taxes. Filing past tax returns   If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. Filing past tax returns This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. Filing past tax returns If you did not itemize your deductions in the previous year, do not include the refund in income. Filing past tax returns If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. Filing past tax returns For a discussion of how much to include, see Recoveries in chapter 12. Filing past tax returns Foreign Income Taxes Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. Filing past tax returns S. Filing past tax returns possession. Filing past tax returns However, you cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. Filing past tax returns S. Filing past tax returns tax under the foreign earned income exclusion or the foreign housing exclusion. Filing past tax returns For information on these exclusions, see Publication 54, Tax Guide for U. Filing past tax returns S. Filing past tax returns Citizens and Resident Aliens Abroad. Filing past tax returns For information on the foreign tax credit, see Publication 514. Filing past tax returns General Sales Taxes You can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), line 5b. Filing past tax returns You can use either your actual expenses or the state and local sales tax tables to figure your sales tax deduction. Filing past tax returns Actual expenses. Filing past tax returns   Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) if the tax rate was the same as the general sales tax rate. Filing past tax returns However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Filing past tax returns If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Filing past tax returns If you use the actual expenses method, you must have receipts to show the general sales taxes paid. Filing past tax returns Do not include sales taxes paid on items used in your trade or business. Filing past tax returns Motor vehicles. Filing past tax returns   For purposes of this section, motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Filing past tax returns This also includes sales taxes on a leased motor vehicle, but not on vehicles used in your trade or business. Filing past tax returns Optional sales tax tables. Filing past tax returns   Instead of using your actual expenses, you can figure your state and local general sales tax deduction using the state and local sales tax tables in the Instructions for Schedule A (Form 1040). Filing past tax returns You may also be able to add the state and local general sales taxes paid on certain specified items. Filing past tax returns   Your applicable table amount is based on the state where you live, your income, and the number of exemptions claimed on your tax return. Filing past tax returns Your income is your adjusted gross income plus any nontaxable items such as the following. Filing past tax returns Tax-exempt interest. Filing past tax returns Veterans' benefits. Filing past tax returns Nontaxable combat pay. Filing past tax returns Workers' compensation. Filing past tax returns Nontaxable part of social security and railroad retirement benefits. Filing past tax returns Nontaxable part of IRA, pension, or annuity distributions, excluding rollovers. Filing past tax returns Public assistance payments. Filing past tax returns If you lived in different states during the same tax year, you must prorate your applicable table amount for each state based on the days you lived in each state. Filing past tax returns See the Instructions for Schedule A (Form 1040), line 5, for details. Filing past tax returns Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. Filing past tax returns You can deduct these taxes only if they are based on the assessed value of the real property and charged uniformly against all property under the jurisdiction of the taxing authority. Filing past tax returns Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. Filing past tax returns They also do not include itemized charges for services (such as trash collection) assessed against specific property or certain people, even if the charge is paid to the taxing authority. Filing past tax returns For more information about taxes and charges that are not deductible, see Real Estate-Related Items You Cannot Deduct , later. Filing past tax returns Tenant-shareholders in a cooperative housing corporation. Filing past tax returns   Generally, if you are a tenant-stockholder in a cooperative housing corporation, you can deduct the amount paid to the corporation that represents your share of the real estate taxes the corporation paid or incurred for your dwelling unit. Filing past tax returns The corporation should provide you with a statement showing your share of the taxes. Filing past tax returns For more information, see Special Rules for Cooperatives in Publication 530. Filing past tax returns Division of real estate taxes between buyers and sellers. Filing past tax returns   If you bought or sold real estate during the year, the real estate taxes must be divided between the buyer and the seller. Filing past tax returns   The buyer and the seller must divide the real estate taxes according to the number of days in the real property tax year (the period to which the tax is imposed relates) that each owned the property. Filing past tax returns The seller is treated as paying the taxes up to, but not including, the date of sale. Filing past tax returns The buyer is treated as paying the taxes beginning with the date of sale. Filing past tax returns This applies regardless of the lien dates under local law. Filing past tax returns Generally, this information is included on the settlement statement provided at the closing. Filing past tax returns    If you (the seller) cannot deduct taxes until they are paid because you use the cash method of accounting, and the buyer of your property is personally liable for the tax, you are considered to have paid your part of the tax at the time of the sale. Filing past tax returns This lets you deduct the part of the tax to the date of sale even though you did not actually pay it. Filing past tax returns However, you must also include the amount of that tax in the selling price of the property. Filing past tax returns The buyer must include the same amount in his or her cost of the property. Filing past tax returns   You figure your deduction for taxes on each property bought or sold during the real property tax year as follows. Filing past tax returns Worksheet 22-1. Filing past tax returns Figuring Your Real Estate Tax Deduction 1. Filing past tax returns Enter the total real estate taxes for the real property tax year   2. Filing past tax returns Enter the number of days in the real property tax year that you owned the property   3. Filing past tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Filing past tax returns 4. Filing past tax returns Multiply line 1 by line 3. Filing past tax returns This is your deduction. Filing past tax returns Enter it on Schedule A (Form 1040), line 6   Note. Filing past tax returns Repeat steps 1 through 4 for each property you bought or sold during the real property tax year. Filing past tax returns Your total deduction is the sum of the line 4 amounts for all of the properties. Filing past tax returns Real estate taxes for prior years. Filing past tax returns   Do not divide delinquent taxes between the buyer and seller if the taxes are for any real property tax year before the one in which the property is sold. Filing past tax returns Even if the buyer agrees to pay the delinquent taxes, the buyer cannot deduct them. Filing past tax returns The buyer must add them to the cost of the property. Filing past tax returns The seller can deduct these taxes paid by the buyer. Filing past tax returns However, the seller must include them in the selling price. Filing past tax returns Examples. Filing past tax returns   The following examples illustrate how real estate taxes are divided between buyer and seller. Filing past tax returns Example 1. Filing past tax returns Dennis and Beth White's real property tax year for both their old home and their new home is the calendar year, with payment due August 1. Filing past tax returns The tax on their old home, sold on May 7, was $620. Filing past tax returns The tax on their new home, bought on May 3, was $732. Filing past tax returns Dennis and Beth are considered to have paid a proportionate share of the real estate taxes on the old home even though they did not actually pay them to the taxing authority. Filing past tax returns On the other hand, they can claim only a proportionate share of the taxes they paid on their new property even though they paid the entire amount. Filing past tax returns Dennis and Beth owned their old home during the real property tax year for 126 days (January 1 to May 6, the day before the sale). Filing past tax returns They figure their deduction for taxes on their old home as follows. Filing past tax returns Worksheet 22-1. Filing past tax returns Figuring Your Real Estate Tax Deduction — Taxes on Old Home 1. Filing past tax returns Enter the total real estate taxes for the real property tax year $620 2. Filing past tax returns Enter the number of days in the real property tax year that you owned the property 126 3. Filing past tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Filing past tax returns 3452 4. Filing past tax returns Multiply line 1 by line 3. Filing past tax returns This is your deduction. Filing past tax returns Enter it on Schedule A (Form 1040), line 6 $214 Since the buyers of their old home paid all of the taxes, Dennis and Beth also include the $214 in the selling price of the old home. Filing past tax returns (The buyers add the $214 to their cost of the home. Filing past tax returns ) Dennis and Beth owned their new home during the real property tax year for 243 days (May 3 to December 31, including their date of purchase). Filing past tax returns They figure their deduction for taxes on their new home as follows. Filing past tax returns Worksheet 22-1. Filing past tax returns Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Filing past tax returns Enter the total real estate taxes for the real property tax year $732 2. Filing past tax returns Enter the number of days in the real property tax year that you owned the property 243 3. Filing past tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Filing past tax returns 6658 4. Filing past tax returns Multiply line 1 by line 3. Filing past tax returns This is your deduction. Filing past tax returns Enter it on Schedule A (Form 1040), line 6 $487 Since Dennis and Beth paid all of the taxes on the new home, they add $245 ($732 paid less $487 deduction) to their cost of the new home. Filing past tax returns (The sellers add this $245 to their selling price and deduct the $245 as a real estate tax. Filing past tax returns ) Dennis and Beth's real estate tax deduction for their old and new homes is the sum of $214 and $487, or $701. Filing past tax returns They will enter this amount on Schedule A (Form 1040), line 6. Filing past tax returns Example 2. Filing past tax returns George and Helen Brown bought a new home on May 3, 2013. Filing past tax returns Their real property tax year for the new home is the calendar year. Filing past tax returns Real estate taxes for 2012 were assessed in their state on January 1, 2013. Filing past tax returns The taxes became due on May 31, 2013, and October 31, 2013. Filing past tax returns The Browns agreed to pay all taxes due after the date of purchase. Filing past tax returns Real estate taxes for 2012 were $680. Filing past tax returns They paid $340 on May 31, 2013, and $340 on October 31, 2013. Filing past tax returns These taxes were for the 2012 real property tax year. Filing past tax returns The Browns cannot deduct them since they did not own the property until 2013. Filing past tax returns Instead, they must add $680 to the cost of their new home. Filing past tax returns In January 2014, the Browns receive their 2013 property tax statement for $752, which they will pay in 2014. Filing past tax returns The Browns owned their new home during the 2013 real property tax year for 243 days (May 3 to December 31). Filing past tax returns They will figure their 2014 deduction for taxes as follows. Filing past tax returns Worksheet 22-1. Filing past tax returns Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Filing past tax returns Enter the total real estate taxes for the real property tax year $752 2. Filing past tax returns Enter the number of days in the real property tax year that you owned the property 243 3. Filing past tax returns Divide line 2 by 365 (for leap years, divide line 2 by 366) . Filing past tax returns 6658 4. Filing past tax returns Multiply line 1 by line 3. Filing past tax returns This is your deduction. Filing past tax returns Claim it on Schedule A (Form 1040), line 6 $501 The remaining $251 ($752 paid less $501 deduction) of taxes paid in 2014, along with the $680 paid in 2013, is added to the cost of their new home. Filing past tax returns Because the taxes up to the date of sale are considered paid by the seller on the date of sale, the seller is entitled to a 2013 tax deduction of $931. Filing past tax returns This is the sum of the $680 for 2012 and the $251 for the 122 days the seller owned the home in 2013. Filing past tax returns The seller must also include the $931 in the selling price when he or she figures the gain or loss on the sale. Filing past tax returns The seller should contact the Browns in January 2014 to find out how much real estate tax is due for 2013. Filing past tax returns Form 1099-S. Filing past tax returns   For certain sales or exchanges of real estate, the person responsible for closing the sale (generally the settlement agent) prepares Form 1099-S, Proceeds From Real Estate Transactions, to report certain information to the IRS and to the seller of the property. Filing past tax returns Box 2 of Form 1099-S is for the gross proceeds from the sale and should include the portion of the seller's real estate tax liability that the buyer will pay after the date of sale. Filing past tax returns The buyer includes these taxes in the cost basis of the property, and the seller both deducts this amount as a tax paid and includes it in the sales price of the property. Filing past tax returns   For a real estate transaction that involves a home, any real estate tax the seller paid in advance but that is the liability of the buyer appears on Form 1099-S, box 5. Filing past tax returns The buyer deducts this amount as a real estate tax, and the seller reduces his or her real estate tax deduction (or includes it in income) by the same amount. Filing past tax returns See Refund (or rebate) , later. Filing past tax returns Taxes placed in escrow. Filing past tax returns   If your monthly mortgage payment includes an amount placed in escrow (put in the care of a third party) for real estate taxes, you may not be able to deduct the total amount placed in escrow. Filing past tax returns You can deduct only the real estate tax that the third party actually paid to the taxing authority. Filing past tax returns If the third party does not notify you of the amount of real estate tax that was paid for you, contact the third party or the taxing authority to find the proper amount to show on your return. Filing past tax returns Tenants by the entirety. Filing past tax returns   If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property. Filing past tax returns Divorced individuals. Filing past tax returns   If your divorce or separation agreement states that you must pay the real estate taxes for a home owned by you and your spouse, part of your payments may be deductible as alimony and part as real estate taxes. Filing past tax returns See Taxes and insurance in chapter 18 for more information. Filing past tax returns Ministers' and military housing allowances. Filing past tax returns   If you are a minister or a member of the uniformed services and receive a housing allowance that you can exclude from income, you still can deduct all of the real estate taxes you pay on your home. Filing past tax returns Refund (or rebate). Filing past tax returns   If you received a refund or rebate in 2013 of real estate taxes you paid in 2013, you must reduce your deduction by the amount refunded to you. Filing past tax returns If you received a refund or rebate in 2013 of real estate taxes you deducted in an earlier year (either as an itemized deduction or an increase to your standard deduction), you generally must include the refund or rebate in income in the year you receive it. Filing past tax returns However, the amount you include in income is limited to the amount of the deduction that reduced your tax in the earlier year. Filing past tax returns For more information, see Recoveries in chapter 12. Filing past tax returns Table 22-1. Filing past tax returns Which Taxes Can You Deduct? Type of Tax You Can Deduct You Cannot Deduct Fees and Charges Fees and charges that are expenses of your trade or business or of producing income. Filing past tax returns Fees and charges that are not expenses of your trade or business or of producing income, such as fees for driver's licenses, car inspections, parking, or charges for water bills (see Taxes and Fees You Cannot Deduct ). Filing past tax returns     Fines and penalties. Filing past tax returns Income Taxes State and local income taxes. Filing past tax returns Federal income taxes. Filing past tax returns   Foreign income taxes. Filing past tax returns     Employee contributions to state funds listed under Contributions to state benefit funds . Filing past tax returns Employee contributions to private or voluntary disability plans. Filing past tax returns     State and local general sales taxes if you choose to deduct state and local income taxes. Filing past tax returns General Sales Taxes State and local general sales taxes, including compensating use taxes. Filing past tax returns State and local income taxes if you choose to deduct state and local general sales taxes. Filing past tax returns Other Taxes Taxes that are expenses of your trade or business. Filing past tax returns Federal excise taxes, such as tax on gasoline, that are not expenses of your trade or business or of producing income. Filing past tax returns   Taxes on property producing rent or royalty income. Filing past tax returns Per capita taxes. Filing past tax returns   Occupational taxes. Filing past tax returns See chapter 28. Filing past tax returns     One-half of self-employment tax paid. Filing past tax returns   Personal Property Taxes State and local personal property taxes. Filing past tax returns Customs duties that are not expenses of your trade or business or of producing income. Filing past tax returns Real Estate Taxes State and local real estate taxes. Filing past tax returns Real estate taxes that are treated as imposed on someone else (see Division of real estate taxes between buyers and sellers ). Filing past tax returns   Foreign real estate taxes. Filing past tax returns Taxes for local benefits (with exceptions). Filing past tax returns See Real Estate-Related Items You Cannot Deduct . Filing past tax returns   Tenant's share of real estate taxes paid by  cooperative housing corporation. Filing past tax returns Trash and garbage pickup fees (with exceptions). Filing past tax returns See Real Estate-Related Items You Cannot Deduct . Filing past tax returns     Rent increase due to higher real estate taxes. Filing past tax returns     Homeowners' association charges. Filing past tax returns Real Estate-Related Items You Cannot Deduct Payments for the following items generally are not deductible as real estate taxes. Filing past tax returns Taxes for local benefits. Filing past tax returns Itemized charges for services (such as trash and garbage pickup fees). Filing past tax returns Transfer taxes (or stamp taxes). Filing past tax returns Rent increases due to higher real estate taxes. Filing past tax returns Homeowners' association charges. Filing past tax returns Taxes for local benefits. Filing past tax returns   Deductible real estate taxes generally do not include taxes charged for local benefits and improvements tending to increase the value of your property. Filing past tax returns These include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements. Filing past tax returns You should increase the basis of your property by the amount of the assessment. Filing past tax returns   Local benefit taxes are deductible only if they are for maintenance, repair, or interest charges related to those benefits. Filing past tax returns If only a part of the taxes is for maintenance, repair, or interest, you must be able to show the amount of that part to claim the deduction. Filing past tax returns If you cannot determine what part of the tax is for maintenance, repair, or interest, none of it is deductible. Filing past tax returns    Taxes for local benefits may be included in your real estate tax bill. Filing past tax returns If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Filing past tax returns You should use the rules above to determine if the local benefit tax is deductible. Filing past tax returns Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. Filing past tax returns Itemized charges for services. Filing past tax returns    An itemized charge for services assessed against specific property or certain people is not a tax, even if the charge is paid to the taxing authority. Filing past tax returns For example, you cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged to each homeowner for trash collection), or A flat fee charged for a single service provided by your government (such as a $30 charge for mowing your lawn because it was allowed to grow higher than permitted under your local ordinance). Filing past tax returns    You must look at your real estate tax bill to determine if any nondeductible itemized charges, such as those listed above, are included in the bill. Filing past tax returns If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Filing past tax returns Exception. Filing past tax returns   Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if: The fees or charges are imposed at a like rate against all property in the taxing jurisdiction, The funds collected are not earmarked; instead, they are commingled with general revenue funds, and Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected. Filing past tax returns Transfer taxes (or stamp taxes). Filing past tax returns   Transfer taxes and similar taxes and charges on the sale of a personal home are not deductible. Filing past tax returns If they are paid by the seller, they are expenses of the sale and reduce the amount realized on the sale. Filing past tax returns If paid by the buyer, they are included in the cost basis of the property. Filing past tax returns Rent increase due to higher real estate taxes. Filing past tax returns   If your landlord increases your rent in the form of a tax surcharge because of increased real estate taxes, you cannot deduct the increase as taxes. Filing past tax returns Homeowners' association charges. Filing past tax returns   These charges are not deductible because they are imposed by the homeowners' association, rather than the state or local government. Filing past tax returns Personal Property Taxes Personal property tax is deductible if it is a state or local tax that is: Charged on personal property, Based only on the value of the personal property, and Charged on a yearly basis, even if it is collected more or less than once a year. Filing past tax returns A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. Filing past tax returns For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways. Filing past tax returns If the tax is partly based on value and partly based on other criteria, it may qualify in part. Filing past tax returns Example. Filing past tax returns Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. Filing past tax returns You paid $32 based on the value ($1,500) and weight (3,400 lbs. Filing past tax returns ) of your car. Filing past tax returns You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. Filing past tax returns The remaining $17 ($. Filing past tax returns 50 × 34), based on the weight, is not deductible. Filing past tax returns Taxes and Fees You Cannot Deduct Many federal, state, and local government taxes are not deductible because they do not fall within the categories discussed earlier. Filing past tax returns Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. Filing past tax returns See Table 22-1. Filing past tax returns Taxes and fees that are generally not deductible include the following items. Filing past tax returns Employment taxes. Filing past tax returns This includes social security, Medicare, and railroad retirement taxes withheld from your pay. Filing past tax returns However, one-half of self-employment tax you pay is deductible. Filing past tax returns In addition, the social security and other employment taxes you pay on the wages of a household worker may be included in medical expenses that you can deduct or child care expenses that allow you to claim the child and dependent care credit. Filing past tax returns For more information, see chapters 21 and 32. Filing past tax returns Estate, inheritance, legacy, or succession taxes. Filing past tax returns However, you can deduct the estate tax attributable to income in respect of a decedent if you, as a beneficiary, must include that income in your gross income. Filing past tax returns In that case, deduct the estate tax as a miscellaneous deduction that is not subject to the 2%-of-adjusted-gross-income limit. Filing past tax returns For more information, see Publication 559, Survivors, Executors, and Administrators. Filing past tax returns Federal income taxes. Filing past tax returns This includes income taxes withheld from your pay. Filing past tax returns Fines and penalties. Filing past tax returns You cannot deduct fines and penalties paid to a government for violation of any law, including related amounts forfeited as collateral deposits. Filing past tax returns Gift taxes. Filing past tax returns License fees. Filing past tax returns You cannot deduct license fees for personal purposes (such as marriage, driver's, and dog license fees). Filing past tax returns Per capita taxes. Filing past tax returns You cannot deduct state or local per capita taxes. Filing past tax returns Many taxes and fees other than those listed above are also nondeductible, unless they are ordinary and necessary expenses of a business or income producing activity. Filing past tax returns For other nondeductible items, see Real Estate-Related Items You Cannot Deduct , earlier. Filing past tax returns Where To Deduct You deduct taxes on the following schedules. Filing past tax returns State and local income taxes. Filing past tax returns    These taxes are deducted on Schedule A (Form 1040), line 5, even if your only source of income is from business, rents, or royalties. Filing past tax returns Check box a on line 5. Filing past tax returns General sales taxes. Filing past tax returns   Sales taxes are deducted on Schedule A (Form 1040), line 5. Filing past tax returns You must check box b on line 5. Filing past tax returns If you elect to deduct sales taxes, you cannot deduct state and local income taxes on Schedule A (Form 1040), line 5, box a. Filing past tax returns Foreign income taxes. Filing past tax returns   Generally, income taxes you pay to a foreign country or U. Filing past tax returns S. Filing past tax returns possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U. Filing past tax returns S. Filing past tax returns income tax on Form 1040, line 47. Filing past tax returns To claim the credit, you may have to complete and attach Form 1116. Filing past tax returns For more information, see chapter 37, the Form 1040 instructions, or Publication 514. Filing past tax returns Real estate taxes and personal property taxes. Filing past tax returns    Real estate and personal property taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). Filing past tax returns Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040). Filing past tax returns Self-employment tax. Filing past tax returns    Deduct one-half of your self-employment tax on Form 1040, line 27. Filing past tax returns Other taxes. Filing past tax returns    All other deductible taxes are deducted on Schedule A (Form 1040), line 8. 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