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Filing taxes online 1040ez Publication 583 - Main Content Table of Contents What New Business Owners Need To Know Forms of BusinessMore information. Filing taxes online 1040ez More information. Filing taxes online 1040ez Exception—Community Income. Filing taxes online 1040ez Exception—Qualified joint venture. Filing taxes online 1040ez More information. Filing taxes online 1040ez More information. Filing taxes online 1040ez Identification NumbersEmployer Identification Number (EIN) Payee's Identification Number Tax Year Accounting Method Business TaxesIncome Tax Self-Employment Tax Employment Taxes Excise Taxes Depositing Taxes Information Returns PenaltiesWaiver of penalty. Filing taxes online 1040ez Business ExpensesBusiness Start-Up Costs Depreciation Business Use of Your Home Car and Truck Expenses RecordkeepingWhy Keep Records? Kinds of Records To Keep How Long To Keep Records Sample Record System How to Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What New Business Owners Need To Know As a new business owner, you need to know your federal tax responsibilities. Filing taxes online 1040ez Table 1 can help you learn what those responsibilities are. Filing taxes online 1040ez Ask yourself each question listed in the table, then see the related discussion to find the answer. Filing taxes online 1040ez In addition to knowing about federal taxes, you need to make some basic business decisions. Filing taxes online 1040ez Ask yourself: What are my financial resources? What products and services will I sell? How will I market my products and services? How will I develop a strategic business plan? How will I manage my business on a day-to-day basis? How will I recruit employees? The Small Business Administration (SBA) is a federal agency that can help you answer these types of questions. Filing taxes online 1040ez For information on how to contact the SBA, see How to Get More Information, later. Filing taxes online 1040ez Forms of Business The most common forms of business are the sole proprietorship, partnership, and corporation. Filing taxes online 1040ez When beginning a business, you must decide which form of business to use. Filing taxes online 1040ez Legal and tax considerations enter into this decision. Filing taxes online 1040ez Only tax considerations are discussed in this publication. Filing taxes online 1040ez Your form of business determines which income tax return form you have to file. Filing taxes online 1040ez See Table 2 to find out which form you have to file. Filing taxes online 1040ez Sole proprietorships. Filing taxes online 1040ez   A sole proprietorship is an unincorporated business that is owned by one individual. Filing taxes online 1040ez It is the simplest form of business organization to start and maintain. Filing taxes online 1040ez The business has no existence apart from you, the owner. Filing taxes online 1040ez Its liabilities are your personal liabilities. Filing taxes online 1040ez You undertake the risks of the business for all assets owned, whether or not used in the business. Filing taxes online 1040ez You include the income and expenses of the business on your personal tax return. Filing taxes online 1040ez More information. Filing taxes online 1040ez   For more information on sole proprietorships, see Publication 334, Tax Guide for Small Business. Filing taxes online 1040ez If you are a farmer, see Publication 225, Farmer's Tax Guide. Filing taxes online 1040ez Partnerships. Filing taxes online 1040ez   A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Filing taxes online 1040ez Each person contributes money, property, labor, or skill, and expects to share in the profits and losses of the business. Filing taxes online 1040ez   A partnership must file an annual information return to report the income, deductions, gains, losses, etc. Filing taxes online 1040ez , from its operations, but it does not pay income tax. Filing taxes online 1040ez Instead, it “passes through” any profits or losses to its partners. Filing taxes online 1040ez Each partner includes his or her share of the partnership's items on his or her tax return. Filing taxes online 1040ez More information. Filing taxes online 1040ez   For more information on partnerships, see Publication 541, Partnerships. Filing taxes online 1040ez Husband and wife business. Filing taxes online 1040ez   If you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Filing taxes online 1040ez Do not use Schedule C or C-EZ. Filing taxes online 1040ez Instead, file Form 1065, U. Filing taxes online 1040ez S. Filing taxes online 1040ez Return of Partnership Income. Filing taxes online 1040ez For more information, see Publication 541, Partnerships. Filing taxes online 1040ez Exception—Community Income. Filing taxes online 1040ez   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Filing taxes online 1040ez S. Filing taxes online 1040ez possession, you can treat the business either as a sole proprietorship or a partnership. Filing taxes online 1040ez The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Filing taxes online 1040ez A change in your reporting position will be treated as a conversion of the entity. Filing taxes online 1040ez Exception—Qualified joint venture. Filing taxes online 1040ez   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. Filing taxes online 1040ez Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. Filing taxes online 1040ez For an explanation of "material participation," see the Instructions for Schedule C, line G. Filing taxes online 1040ez   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Filing taxes online 1040ez Each of you must file a separate Schedule C or C-EZ and a separate Schedule SE. Filing taxes online 1040ez For more information, see Qualified Joint Venture in the Instructions for Schedule SE. Filing taxes online 1040ez Corporations. Filing taxes online 1040ez   In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. Filing taxes online 1040ez A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. Filing taxes online 1040ez A corporation can also take special deductions. Filing taxes online 1040ez   The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. Filing taxes online 1040ez However, shareholders cannot deduct any loss of the corporation. Filing taxes online 1040ez More information. Filing taxes online 1040ez   For more information on corporations, see Publication 542, Corporations. Filing taxes online 1040ez S corporations. Filing taxes online 1040ez   An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. Filing taxes online 1040ez Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. Filing taxes online 1040ez On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of nonseparately stated income or loss. Filing taxes online 1040ez More information. Filing taxes online 1040ez   For more information on S corporations, see the instructions for Form 2553, Election by a Small Business Corporation, and Form 1120S, U. Filing taxes online 1040ez S. Filing taxes online 1040ez Income Tax Return for an S Corporation. Filing taxes online 1040ez Limited liability company. Filing taxes online 1040ez   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Filing taxes online 1040ez The members of an LLC are not personally liable for its debts. Filing taxes online 1040ez An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in regulations section 301. Filing taxes online 1040ez 7701-3. Filing taxes online 1040ez For more information, see the instructions for Form 8832, Entity Classification Election. Filing taxes online 1040ez Identification Numbers You must have a taxpayer identification number so the IRS can process your returns. Filing taxes online 1040ez The two most common kinds of taxpayer identification numbers are the social security number (SSN) and the employer identification number (EIN). Filing taxes online 1040ez An SSN is issued to individuals by the Social Security Administration (SSA) and is in the following format: 000–00–0000. Filing taxes online 1040ez An EIN is issued to individuals (sole proprietors), partnerships, corporations, and other entities by the IRS and is in the following format: 00–0000000. Filing taxes online 1040ez You must include your taxpayer identification number (SSN or EIN) on all returns and other documents you send to the IRS. Filing taxes online 1040ez You must also furnish your number to other persons who use your identification number on any returns or documents they send to the IRS. Filing taxes online 1040ez This includes returns or documents filed to report the following information. Filing taxes online 1040ez Interest, dividends, royalties, etc. Filing taxes online 1040ez , paid to you. Filing taxes online 1040ez Any amount paid to you as a dependent care provider. Filing taxes online 1040ez Certain other amounts paid to you that total $600 or more for the year. Filing taxes online 1040ez If you do not furnish your identification number as required, you may be subject to penalties. Filing taxes online 1040ez See Penalties, later. Filing taxes online 1040ez Employer Identification Number (EIN) EINs are used to identify the tax accounts of employers, certain sole proprietors, corporations, partnerships, estates, trusts, and other entities. Filing taxes online 1040ez If you don't already have an EIN, you need to get one if you: Have employees, Have a qualified retirement plan, Operate your business as a corporation or partnership, or File returns for: Employment taxes, or Excise taxes. Filing taxes online 1040ez Applying for an EIN. Filing taxes online 1040ez   You may apply for an EIN: Online—Click on the EIN link at www. Filing taxes online 1040ez irs. Filing taxes online 1040ez gov/businesses/small. Filing taxes online 1040ez The EIN is issued immediately once the application information is validated. Filing taxes online 1040ez By telephone at 1-800-829-4933. Filing taxes online 1040ez By mailing or faxing Form SS-4, Application for Employer Identification Number. Filing taxes online 1040ez When to apply. Filing taxes online 1040ez   You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. Filing taxes online 1040ez If you apply by mail, file Form SS-4 at least 4 weeks before you need an EIN. Filing taxes online 1040ez If you apply by telephone or through the IRS website, you can get an EIN immediately. Filing taxes online 1040ez If you apply by fax, you can get an EIN within 4 business days. Filing taxes online 1040ez   If you do not receive your EIN by the time a return is due, file your return anyway. Filing taxes online 1040ez Write “Applied for” and the date you applied for the number in the space for the EIN. Filing taxes online 1040ez Do not use your social security number as a substitute for an EIN on your tax returns. Filing taxes online 1040ez More than one EIN. Filing taxes online 1040ez   You should have only one EIN. Filing taxes online 1040ez If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. Filing taxes online 1040ez Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Filing taxes online 1040ez The IRS will tell you which number to use. Filing taxes online 1040ez More information. Filing taxes online 1040ez   For more information about EINs, see Publication 1635, Understanding Your EIN. Filing taxes online 1040ez Payee's Identification Number In the operation of a business, you will probably make certain payments you must report on information returns (discussed later under Information Returns). Filing taxes online 1040ez The forms used to report these payments must include the payee's identification number. Filing taxes online 1040ez Employee. Filing taxes online 1040ez   If you have employees, you must get an SSN from each of them. Filing taxes online 1040ez Record the name and SSN of each employee exactly as they are shown on the employee's social security card. Filing taxes online 1040ez If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. Filing taxes online 1040ez This may occur, for example, if the employee's name has changed due to marriage or divorce. Filing taxes online 1040ez   If your employee does not have an SSN, he or she should file Form SS-5, Application for a Social Security Card, with the SSA. Filing taxes online 1040ez This form is available at SSA offices or by calling 1-800-772-1213. Filing taxes online 1040ez It is also available from the SSA website at www. Filing taxes online 1040ez ssa. Filing taxes online 1040ez gov. Filing taxes online 1040ez Other payee. Filing taxes online 1040ez   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. Filing taxes online 1040ez If you make reportable payments to an organization, such as a corporation or partnership, you must get its EIN. Filing taxes online 1040ez   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. Filing taxes online 1040ez This form is available from IRS offices or by calling 1-800-829-3676. Filing taxes online 1040ez It is also available from the IRS website at IRS. Filing taxes online 1040ez gov. Filing taxes online 1040ez    If the payee does not provide you with an identification number, you may have to withhold part of the payments as backup withholding. Filing taxes online 1040ez For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. Filing taxes online 1040ez Tax Year You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. Filing taxes online 1040ez A tax year is usually 12 consecutive months. Filing taxes online 1040ez There are two kinds of tax years. Filing taxes online 1040ez Calendar tax year. Filing taxes online 1040ez A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. Filing taxes online 1040ez Fiscal tax year. Filing taxes online 1040ez A fiscal tax year is 12 consecutive months ending on the last day of any month except December. Filing taxes online 1040ez A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Filing taxes online 1040ez If you file your first tax return using the calendar tax year and you later begin business as a sole proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you must continue to use the calendar year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. Filing taxes online 1040ez You must use a calendar tax year if: You keep no books. Filing taxes online 1040ez You have no annual accounting period. Filing taxes online 1040ez Your present tax year does not qualify as a fiscal year. Filing taxes online 1040ez You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations. Filing taxes online 1040ez For more information, see Publication 538, Accounting Periods and Methods. Filing taxes online 1040ez First-time filer. Filing taxes online 1040ez   If you have never filed an income tax return, you can adopt either a calendar tax year or a fiscal tax year. Filing taxes online 1040ez You adopt a tax year by filing your first income tax return using that tax year. Filing taxes online 1040ez You have not adopted a tax year if you merely did any of the following. Filing taxes online 1040ez Filed an application for an extension of time to file an income tax return. Filing taxes online 1040ez Filed an application for an employer identification number. Filing taxes online 1040ez Paid estimated taxes for that tax year. Filing taxes online 1040ez Changing your tax year. Filing taxes online 1040ez   Once you have adopted your tax year, you may have to get IRS approval to change it. Filing taxes online 1040ez To get approval, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year. Filing taxes online 1040ez You may have to pay a fee. Filing taxes online 1040ez For more information, see Publication 538. Filing taxes online 1040ez Accounting Method An accounting method is a set of rules used to determine when and how income and expenses are reported. Filing taxes online 1040ez You choose an accounting method for your business when you file your first income tax return. Filing taxes online 1040ez There are two basic accounting methods. Filing taxes online 1040ez Cash method. Filing taxes online 1040ez Under the cash method, you report income in the tax year you receive it. Filing taxes online 1040ez You usually deduct or capitalize expenses in the tax year you pay them. Filing taxes online 1040ez Accrual method. Filing taxes online 1040ez Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. Filing taxes online 1040ez You deduct or capitalize expenses in the tax year you incur them, whether or not you pay them that year. Filing taxes online 1040ez For other methods, see Publication 538. Filing taxes online 1040ez If you need inventories to show income correctly, you must generally use an accrual method of accounting for purchases and sales. Filing taxes online 1040ez Inventories include goods held for sale in the normal course of business. Filing taxes online 1040ez They also include raw materials and supplies that will physically become a part of merchandise intended for sale. Filing taxes online 1040ez Inventories are explained in Publication 538. Filing taxes online 1040ez Certain small business taxpayers can use the cash method of accounting and can also account for inventoriable items as materials and supplies that are not incidental. Filing taxes online 1040ez For more information, see Publication 538. Filing taxes online 1040ez You must use the same accounting method to figure your taxable income and to keep your books. Filing taxes online 1040ez Also, you must use an accounting method that clearly shows your income. Filing taxes online 1040ez In general, any accounting method that consistently uses accounting principles suitable for your trade or business clearly shows income. Filing taxes online 1040ez An accounting method clearly shows income only if it treats all items of gross income and expense the same from year to year. Filing taxes online 1040ez More than one business. Filing taxes online 1040ez   When you own more than one business, you can use a different accounting method for each business if the method you use for each clearly shows your income. Filing taxes online 1040ez You must keep a complete and separate set of books and records for each business. Filing taxes online 1040ez Changing your method of accounting. Filing taxes online 1040ez   Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. Filing taxes online 1040ez A change in accounting method not only includes a change in your overall system of accounting, but also a change in the treatment of any material item. Filing taxes online 1040ez For examples of changes that require approval and information on how to get approval for the change, see Publication 538. Filing taxes online 1040ez Business Taxes The form of business you operate determines what taxes you must pay and how you pay them. Filing taxes online 1040ez The following are the four general kinds of business taxes. Filing taxes online 1040ez Income tax. Filing taxes online 1040ez Self-employment tax. Filing taxes online 1040ez Employment taxes. Filing taxes online 1040ez Excise taxes. Filing taxes online 1040ez See Table 2 for the forms you file to report these taxes. Filing taxes online 1040ez You may want to get Publication 509. Filing taxes online 1040ez It has tax calendars that tell you when to file returns and make tax payments. Filing taxes online 1040ez Income Tax All businesses except partnerships must file an annual income tax return. Filing taxes online 1040ez Partnerships file an information return. Filing taxes online 1040ez Which form you use depends on how your business is organized. Filing taxes online 1040ez See Table 2 to find out which return you have to file. Filing taxes online 1040ez The federal income tax is a pay-as-you-go tax. Filing taxes online 1040ez You must pay the tax as you earn or receive income during the year. Filing taxes online 1040ez An employee usually has income tax withheld from his or her pay. Filing taxes online 1040ez If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Filing taxes online 1040ez If you are not required to make estimated tax payments, you may pay any tax due when you file your return. Filing taxes online 1040ez Table 2. Filing taxes online 1040ez Which Forms Must I File? IF you are a. Filing taxes online 1040ez . Filing taxes online 1040ez . Filing taxes online 1040ez   THEN you may be liable for. Filing taxes online 1040ez . Filing taxes online 1040ez . Filing taxes online 1040ez   Use Form. Filing taxes online 1040ez . Filing taxes online 1040ez . Filing taxes online 1040ez Sole proprietor   Income tax   1040 and Schedule C 1 or C-EZ (Schedule F 1 for farm business)     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES     Employment taxes:         • Social security and Medicare   taxes and income tax   withholding   941 or 944 (943 for farm employees)     • Federal unemployment (FUTA)   tax   940     Excise taxes   See Excise Taxes Partnership   Annual return of income   1065     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes Partner in a partnership (individual)   Income tax   1040 and Schedule E 2     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES Corporation or S corporation   Income tax   1120 (corporation) 2  1120S (S corporation) 2     Estimated tax   1120-W (corporation only)     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes S corporation shareholder   Income tax   1040 and Schedule E 2     Estimated tax   1040-ES 1 File a separate schedule for each business. Filing taxes online 1040ez 2 Various other schedules may be needed. Filing taxes online 1040ez Estimated tax. Filing taxes online 1040ez   Generally, you must pay taxes on income, including self-employment tax (discussed next), by making regular payments of estimated tax during the year. Filing taxes online 1040ez Sole proprietors, partners, and S corporation shareholders. Filing taxes online 1040ez   You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Filing taxes online 1040ez Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. Filing taxes online 1040ez For more information, see Publication 505, Tax Withholding and Estimated Tax. Filing taxes online 1040ez Corporations. Filing taxes online 1040ez   You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Filing taxes online 1040ez Use Form 1120-W, Estimated Tax for Corporations, to figure the estimated tax. Filing taxes online 1040ez You must deposit the payments as explained later under Depositing Taxes. Filing taxes online 1040ez For more information, see Publication 542. Filing taxes online 1040ez Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Filing taxes online 1040ez Your payments of SE tax contribute to your coverage under the social security system. Filing taxes online 1040ez Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Filing taxes online 1040ez You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. Filing taxes online 1040ez Your net earnings from self-employment were $400 or more. Filing taxes online 1040ez You had church employee income of $108. Filing taxes online 1040ez 28 or more. Filing taxes online 1040ez Use Schedule SE (Form 1040) to figure your SE tax. Filing taxes online 1040ez For more information, see Publication 334, Tax Guide for Small Business. Filing taxes online 1040ez You can deduct a portion of your SE tax as an adjustment to income on your Form 1040. Filing taxes online 1040ez The Social Security Administration (SSA) time limit for posting self-employment income. Filing taxes online 1040ez   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Filing taxes online 1040ez If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. Filing taxes online 1040ez The SSA will not change its records to increase your self-employment income. Filing taxes online 1040ez Employment Taxes This section briefly discusses the employment taxes you must pay, the forms you must file to report them, and other forms that must be filed when you have employees. Filing taxes online 1040ez Employment taxes include the following. Filing taxes online 1040ez Social security and Medicare taxes. Filing taxes online 1040ez Federal income tax withholding. Filing taxes online 1040ez Federal unemployment (FUTA) tax. Filing taxes online 1040ez If you have employees, you will need to get Publication 15, Circular E, Employer's Tax Guide. Filing taxes online 1040ez If you have agricultural employees, get Publication 51, Circular A, Agricultural Employer's Tax Guide. Filing taxes online 1040ez These publications explain your tax responsibilities as an employer. Filing taxes online 1040ez If you are not sure whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. Filing taxes online 1040ez That publication has information to help you determine whether an individual is an employee or an independent contractor. Filing taxes online 1040ez If you classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty. Filing taxes online 1040ez An independent contractor is someone who is self-employed. Filing taxes online 1040ez Generally, you do not have to withhold or pay any taxes on payments to an independent contractor. Filing taxes online 1040ez Federal Income, Social Security, and Medicare Taxes You generally must withhold federal income tax from your employee's wages. Filing taxes online 1040ez To figure how much federal income tax to withhold from each wage payment, use the employee's Form W-4 (discussed later under Hiring Employees) and the methods described in Publication 15. Filing taxes online 1040ez Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Filing taxes online 1040ez Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Filing taxes online 1040ez Medicare tax pays for benefits under the hospital insurance part of FICA. Filing taxes online 1040ez You withhold part of these taxes from your employee's wages and you pay a part yourself. Filing taxes online 1040ez To find out how much social security and Medicare tax to withhold and to pay, see Publication 15. Filing taxes online 1040ez Which form do I file?   Report these taxes on Form 941, Employer's QUARTERLY Federal Tax Return, or Form 944, Employer's ANNUAL Federal Tax Return. Filing taxes online 1040ez (Farm employers use Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Filing taxes online 1040ez ) Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. Filing taxes online 1040ez You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. Filing taxes online 1040ez You pay FUTA tax only from your own funds. Filing taxes online 1040ez Employees do not pay this tax or have it withheld from their pay. Filing taxes online 1040ez Which form do I file?   Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Filing taxes online 1040ez See Publication 15 to find out if you can use this form. Filing taxes online 1040ez Hiring Employees Have the employees you hire fill out Form I-9 and Form W-4. Filing taxes online 1040ez Form I-9. Filing taxes online 1040ez   You must verify that each new employee is legally eligible to work in the United States. Filing taxes online 1040ez Both you and the employee must complete the U. Filing taxes online 1040ez S. Filing taxes online 1040ez Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. Filing taxes online 1040ez You can get the form from USCIS offices or from the USCIS website at www. Filing taxes online 1040ez uscis. Filing taxes online 1040ez gov. Filing taxes online 1040ez Call the USCIS at 1-800-375-5283 for more information about your responsibilities. Filing taxes online 1040ez Form W-4. Filing taxes online 1040ez   Each employee must fill out Form W-4, Employee's Withholding Allowance Certificate. Filing taxes online 1040ez You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages. Filing taxes online 1040ez For more information, see Publication 15. Filing taxes online 1040ez Employees claiming more than 10 withholding allowances. Filing taxes online 1040ez   An employer of an employee who claims more than 10 withholding allowances for wages paid can use several methods of withholding. Filing taxes online 1040ez See section 16 of Publication 15. Filing taxes online 1040ez Form W-2 Wage Reporting After the calendar year is over, you must furnish copies of Form W-2, Wage and Tax Statement, to each employee to whom you paid wages during the year. Filing taxes online 1040ez You must also send copies to the Social Security Administration. Filing taxes online 1040ez See Information Returns, later, for more information on Form W-2. Filing taxes online 1040ez Excise Taxes This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following. Filing taxes online 1040ez Manufacture or sell certain products. Filing taxes online 1040ez Operate certain kinds of businesses. Filing taxes online 1040ez Use various kinds of equipment, facilities, or products. Filing taxes online 1040ez Receive payment for certain services. Filing taxes online 1040ez For more information on excise taxes, see Publication 510, Excise Taxes. Filing taxes online 1040ez Form 720. Filing taxes online 1040ez   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. Filing taxes online 1040ez Environmental taxes. Filing taxes online 1040ez Communications and air transportation taxes. Filing taxes online 1040ez Fuel taxes. Filing taxes online 1040ez Tax on the first retail sale of heavy trucks, trailers, and tractors. Filing taxes online 1040ez Manufacturers taxes on the sale or use of a variety of different articles. Filing taxes online 1040ez Form 2290. Filing taxes online 1040ez   There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. Filing taxes online 1040ez The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Filing taxes online 1040ez Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. Filing taxes online 1040ez For more information, see the instructions for Form 2290. Filing taxes online 1040ez Form 730. Filing taxes online 1040ez   If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering. Filing taxes online 1040ez Use Form 730, Monthly Tax Return for Wagers, to figure the tax on the wagers you receive. Filing taxes online 1040ez Form 11-C. Filing taxes online 1040ez   Use Form 11-C, Occupational Tax and Registration Return for Wagering, to register for any wagering activity and to pay the federal occupational tax on wagering. Filing taxes online 1040ez Depositing Taxes You generally have to deposit employment taxes, certain excise taxes, corporate income tax, and S corporation taxes before you file your return. Filing taxes online 1040ez Generally, taxpayers are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS). Filing taxes online 1040ez Any business that has a federal tax obligation and requests a new EIN will automatically be enrolled in EFTPS. Filing taxes online 1040ez Through the mail, the business will receive an EFTPS PIN package that contains instructions for activating its EFTPS enrollment. Filing taxes online 1040ez Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. Filing taxes online 1040ez The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. Filing taxes online 1040ez You must give a copy of each information return you are required to file to the recipient or payer. Filing taxes online 1040ez In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. Filing taxes online 1040ez For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. Filing taxes online 1040ez Form 1099-MISC. Filing taxes online 1040ez   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your trade or business. Filing taxes online 1040ez These payments include the following items. Filing taxes online 1040ez Payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, or directors. Filing taxes online 1040ez Rent payments of $600 or more, other than rents paid to real estate agents. Filing taxes online 1040ez Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. Filing taxes online 1040ez Royalty payments of $10 or more. Filing taxes online 1040ez Payments to certain crew members by operators of fishing boats. Filing taxes online 1040ez You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. Filing taxes online 1040ez Form W-2. Filing taxes online 1040ez   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. Filing taxes online 1040ez For more information on what to report on Form W-2, see the Instructions for Forms W-2 and W-3. Filing taxes online 1040ez Form 8300. Filing taxes online 1040ez   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction or two or more related business transactions. Filing taxes online 1040ez Cash includes U. Filing taxes online 1040ez S. Filing taxes online 1040ez and foreign coin and currency. Filing taxes online 1040ez It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. Filing taxes online 1040ez For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). Filing taxes online 1040ez Penalties The law provides penalties for not filing returns or paying taxes as required. Filing taxes online 1040ez Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. Filing taxes online 1040ez Failure to file tax returns. Filing taxes online 1040ez   If you do not file your tax return by the due date, you may have to pay a penalty. Filing taxes online 1040ez The penalty is based on the tax not paid by the due date. Filing taxes online 1040ez See your tax return instructions for more information about this penalty. Filing taxes online 1040ez Failure to pay tax. Filing taxes online 1040ez   If you do not pay your taxes by the due date, you will have to pay a penalty for each month, or part of a month, that your taxes are not paid. Filing taxes online 1040ez For more information, see your tax return instructions. Filing taxes online 1040ez Failure to withhold, deposit, or pay taxes. Filing taxes online 1040ez   If you do not withhold income, social security, or Medicare taxes from employees, or if you withhold taxes but do not deposit them or pay them to the IRS, you may be subject to a penalty of the unpaid tax, plus interest. Filing taxes online 1040ez You may also be subject to penalties if you deposit the taxes late. Filing taxes online 1040ez For more information, see Publication 15. Filing taxes online 1040ez Failure to follow information reporting requirements. Filing taxes online 1040ez   The following penalties apply if you are required to file information returns. Filing taxes online 1040ez For more information, see the General Instructions for Certain Information Returns. Filing taxes online 1040ez Failure to file information returns. Filing taxes online 1040ez A penalty applies if you do not file information returns by the due date, if you do not include all required information, or if you report incorrect information. Filing taxes online 1040ez Failure to furnish correct payee statements. Filing taxes online 1040ez A penalty applies if you do not furnish a required statement to a payee by the due date, if you do not include all required information, or if you report incorrect information. Filing taxes online 1040ez Waiver of penalty. Filing taxes online 1040ez   These penalties will not apply if you can show that the failures were due to reasonable cause and not willful neglect. Filing taxes online 1040ez   In addition, there is no penalty for failure to include all the required information, or for including incorrect information, on a de minimis number of information returns if you correct the errors by August 1 of the year the returns are due. Filing taxes online 1040ez (To be considered de minimis, the number of returns cannot exceed the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. Filing taxes online 1040ez ) Failure to supply taxpayer identification number. Filing taxes online 1040ez   If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer identification number of another person where required on a return, statement, or other document, you may be subject to a penalty of $50 for each failure. Filing taxes online 1040ez You may also be subject to the $50 penalty if you do not give your taxpayer identification number to another person when it is required on a return, statement, or other document. Filing taxes online 1040ez Business Expenses You can deduct business expenses on your income tax return. Filing taxes online 1040ez These are the current operating costs of running your business. Filing taxes online 1040ez To be deductible, a business expense must be both ordinary and necessary. Filing taxes online 1040ez An ordinary expense is one that is common and accepted in your field of business, trade, or profession. Filing taxes online 1040ez A necessary expense is one that is helpful and appropriate for your business, trade, or profession. Filing taxes online 1040ez An expense does not have to be indispensable to be considered necessary. Filing taxes online 1040ez The following are brief explanations of some expenses that are of interest to people starting a business. Filing taxes online 1040ez There are many other expenses that you may be able to deduct. Filing taxes online 1040ez See your form instructions and Publication 535, Business Expenses. Filing taxes online 1040ez Business Start-Up Costs Business start-up costs are the expenses you incur before you actually begin business operations. Filing taxes online 1040ez Your business start-up costs will depend on the type of business you are starting. Filing taxes online 1040ez They may include costs for advertising, travel, surveys, and training. Filing taxes online 1040ez These costs are generally capital expenses. Filing taxes online 1040ez You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (discussed next). Filing taxes online 1040ez You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. Filing taxes online 1040ez The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Filing taxes online 1040ez Any remaining cost must be amortized. Filing taxes online 1040ez For more information about amortizing start-up and organizational costs, see chapter 7 in Publication 535. Filing taxes online 1040ez Depreciation If property you acquire to use in your business has a useful life that extends substantially beyond the year it is placed in service, you generally cannot deduct the entire cost as a business expense in the year you acquire it. Filing taxes online 1040ez You must spread the cost over more than one tax year and deduct part of it each year. Filing taxes online 1040ez This method of deducting the cost of business property is called depreciation. Filing taxes online 1040ez Business property you must depreciate includes the following items. Filing taxes online 1040ez Office furniture. Filing taxes online 1040ez Buildings. Filing taxes online 1040ez Machinery and equipment. Filing taxes online 1040ez You can choose to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. Filing taxes online 1040ez This deduction is known as the “section 179 deduction. Filing taxes online 1040ez ” For more information about depreciation and the section 179 deduction, see Publication 946, How To Depreciate Property. Filing taxes online 1040ez Depreciation must be taken in the year it is allowable. Filing taxes online 1040ez Allowable depreciation not taken in a prior year cannot be taken in the current year. Filing taxes online 1040ez If you do not deduct the correct depreciation, you may be able to make a correction by filing Form 1040X, Amended U. Filing taxes online 1040ez S. Filing taxes online 1040ez Individual Income Tax Return, or by changing your accounting method. Filing taxes online 1040ez For more information on how to correct depreciation deductions, see chapter 1 in Publication 946. Filing taxes online 1040ez Business Use of Your Home To deduct expenses related to the business use of part of your home, you must meet specific requirements. Filing taxes online 1040ez Even then, your deduction may be limited. Filing taxes online 1040ez To qualify to claim expenses for business use of your home, you must meet both the following tests. Filing taxes online 1040ez Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use, later), Regular, For your trade or business, AND The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) you use in connection with your trade or business. Filing taxes online 1040ez Exclusive use. Filing taxes online 1040ez   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Filing taxes online 1040ez The area used for business can be a room or other separately identifiable space. Filing taxes online 1040ez The space does not need to be marked off by a permanent partition. Filing taxes online 1040ez   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Filing taxes online 1040ez Exceptions to exclusive use. Filing taxes online 1040ez   You do not have to meet the exclusive use test if either of the following applies. Filing taxes online 1040ez You use part of your home for the storage of inventory or product samples. Filing taxes online 1040ez You use part of your home as a daycare facility. Filing taxes online 1040ez For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Filing taxes online 1040ez Principal place of business. Filing taxes online 1040ez   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. Filing taxes online 1040ez You use it exclusively and regularly for administrative or management activities of your trade or business. Filing taxes online 1040ez You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Filing taxes online 1040ez   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. Filing taxes online 1040ez The relative importance of the activities performed at each location. Filing taxes online 1040ez If the relative importance factor does not determine your principal place of business, the time spent at each location. Filing taxes online 1040ez    If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Filing taxes online 1040ez However, for other ways to qualify to deduct home office expenses, see Publication 587. Filing taxes online 1040ez Which form do I file?   If you file Schedule C (Form 1040), use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. Filing taxes online 1040ez If you file Schedule F (Form 1040) or you are a partner, you can use the worksheet in Publication 587. Filing taxes online 1040ez More information. Filing taxes online 1040ez   For more information about business use of your home, see Publication 587. Filing taxes online 1040ez Car and Truck Expenses If you use your car or truck in your business, you can deduct the costs of operating and maintaining it. Filing taxes online 1040ez You generally can deduct either your actual expenses or the standard mileage rate. Filing taxes online 1040ez Actual expenses. Filing taxes online 1040ez   If you deduct actual expenses, you can deduct the cost of the following items: Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. Filing taxes online 1040ez You can divide your expenses based on the miles driven for each purpose. Filing taxes online 1040ez Example. Filing taxes online 1040ez You are the sole proprietor of a flower shop. Filing taxes online 1040ez You drove your van 20,000 miles during the year. Filing taxes online 1040ez 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use. Filing taxes online 1040ez You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. Filing taxes online 1040ez Standard mileage rate. Filing taxes online 1040ez   Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. Filing taxes online 1040ez You can use the standard mileage rate for a vehicle you own or lease. Filing taxes online 1040ez The standard mileage rate is a specified amount of money you can deduct for each business mile you drive. Filing taxes online 1040ez It is announced annually by the IRS. Filing taxes online 1040ez To figure your deduction, multiply your business miles by the standard mileage rate for the year. Filing taxes online 1040ez    Generally, if you use the standard mileage rate, you cannot deduct your actual expenses. Filing taxes online 1040ez However, you may be able to deduct business-related parking fees, tolls, interest on your car loan, and certain state and local taxes. Filing taxes online 1040ez Choosing the standard mileage rate. Filing taxes online 1040ez   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Filing taxes online 1040ez In later years, you can choose to use either the standard mileage rate or actual expenses. Filing taxes online 1040ez   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). Filing taxes online 1040ez Additional information. Filing taxes online 1040ez   For more information about the rules for claiming car and truck expenses, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. Filing taxes online 1040ez Recordkeeping This part explains why you must keep records, what kinds of records you must keep, and how to keep them. Filing taxes online 1040ez It also explains how long you must keep your records for federal tax purposes. Filing taxes online 1040ez A sample recordkeeping system is illustrated at the end of this part. Filing taxes online 1040ez Why Keep Records? Everyone in business must keep records. Filing taxes online 1040ez Good records will help you do the following. Filing taxes online 1040ez Monitor the progress of your business. Filing taxes online 1040ez   You need good records to monitor the progress of your business. Filing taxes online 1040ez Records can show whether your business is improving, which items are selling, or what changes you need to make. Filing taxes online 1040ez Good records can increase the likelihood of business success. Filing taxes online 1040ez Prepare your financial statements. Filing taxes online 1040ez   You need good records to prepare accurate financial statements. Filing taxes online 1040ez These include income (profit and loss) statements and balance sheets. Filing taxes online 1040ez These statements can help you in dealing with your bank or creditors and help you manage your business. Filing taxes online 1040ez An income statement shows the income and expenses of the business for a given period of time. Filing taxes online 1040ez A balance sheet shows the assets, liabilities, and your equity in the business on a given date. Filing taxes online 1040ez Identify source of receipts. Filing taxes online 1040ez   You will receive money or property from many sources. Filing taxes online 1040ez Your records can identify the source of your receipts. Filing taxes online 1040ez You need this information to separate business from nonbusiness receipts and taxable from nontaxable income. Filing taxes online 1040ez Keep track of deductible expenses. Filing taxes online 1040ez   You may forget expenses when you prepare your tax return unless you record them when they occur. Filing taxes online 1040ez Prepare your tax returns. Filing taxes online 1040ez   You need good records to prepare your tax returns. Filing taxes online 1040ez These records must support the income, expenses, and credits you report. Filing taxes online 1040ez Generally, these are the same records you use to monitor your business and prepare your financial statements. Filing taxes online 1040ez Support items reported on tax returns. Filing taxes online 1040ez   You must keep your business records available at all times for inspection by the IRS. Filing taxes online 1040ez If the IRS examines any of your tax returns, you may be asked to explain the items reported. Filing taxes online 1040ez A complete set of records will speed up the examination. Filing taxes online 1040ez Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. Filing taxes online 1040ez You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. Filing taxes online 1040ez The business you are in affects the type of records you need to keep for federal tax purposes. Filing taxes online 1040ez You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. Filing taxes online 1040ez See Accounting Method, earlier. Filing taxes online 1040ez If you are in more than one business, you should keep a complete and separate set of records for each business. Filing taxes online 1040ez A corporation should keep minutes of board of directors' meetings. Filing taxes online 1040ez Your recordkeeping system should include a summary of your business transactions. Filing taxes online 1040ez This summary is ordinarily made in your books (for example, accounting journals and ledgers). Filing taxes online 1040ez Your books must show your gross income, as well as your deductions and credits. Filing taxes online 1040ez For most small businesses, the business checkbook (discussed later) is the main source for entries in the business books. Filing taxes online 1040ez In addition, you must keep supporting documents, explained later. Filing taxes online 1040ez Electronic records. Filing taxes online 1040ez   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Filing taxes online 1040ez When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Filing taxes online 1040ez An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. Filing taxes online 1040ez The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. Filing taxes online 1040ez All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Filing taxes online 1040ez Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. Filing taxes online 1040ez   The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. Filing taxes online 1040ez You still have the responsibility of retaining any other books and records that are required to be retained. Filing taxes online 1040ez   The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. Filing taxes online 1040ez This test is not considered an examination and the results must be shared with you. Filing taxes online 1040ez If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. Filing taxes online 1040ez If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copy books and records in a manner that allows you and the IRS to determine your correct tax. Filing taxes online 1040ez For details on electronic storage system requirements, see Revenue Procedure 97-22, available in Internal Revenue Bulletin 1997-13. Filing taxes online 1040ez Supporting Documents Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. Filing taxes online 1040ez Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Filing taxes online 1040ez These documents contain information you need to record in your books. Filing taxes online 1040ez It is important to keep these documents because they support the entries in your books and on your tax return. Filing taxes online 1040ez Keep them in an orderly fashion and in a safe place. Filing taxes online 1040ez For instance, organize them by year and type of income or expense. Filing taxes online 1040ez Gross receipts. Filing taxes online 1040ez   Gross receipts are the income you receive from your business. Filing taxes online 1040ez You should keep supporting documents that show the amounts and sources of your gross receipts. Filing taxes online 1040ez Documents that show gross receipts include the following. Filing taxes online 1040ez Cash register tapes. Filing taxes online 1040ez Bank deposit slips. Filing taxes online 1040ez Receipt books. Filing taxes online 1040ez Invoices. Filing taxes online 1040ez Credit card charge slips. Filing taxes online 1040ez Forms 1099-MISC. Filing taxes online 1040ez Purchases. Filing taxes online 1040ez   Purchases are the items you buy and resell to customers. Filing taxes online 1040ez If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Filing taxes online 1040ez Your supporting documents should show the amount paid and that the amount was for purchases. Filing taxes online 1040ez Documents for purchases include the following. Filing taxes online 1040ez Canceled checks. Filing taxes online 1040ez Cash register tape receipts. Filing taxes online 1040ez Credit card sales slips. Filing taxes online 1040ez Invoices. Filing taxes online 1040ez These records will help you determine the value of your inventory at the end of the year. Filing taxes online 1040ez See Publication 538 for information on methods for valuing inventory. Filing taxes online 1040ez Expenses. Filing taxes online 1040ez   Expenses are the costs you incur (other than purchases) to carry on your business. Filing taxes online 1040ez Your supporting documents should show the amount paid and that the amount was for a business expense. Filing taxes online 1040ez Documents for expenses include the following. Filing taxes online 1040ez Canceled checks. Filing taxes online 1040ez Cash register tapes. Filing taxes online 1040ez Account statements. Filing taxes online 1040ez Credit card sales slips. Filing taxes online 1040ez Invoices. Filing taxes online 1040ez Petty cash slips for small cash payments. Filing taxes online 1040ez    A petty cash fund allows you to make small payments without having to write checks for small amounts. Filing taxes online 1040ez Each time you make a payment from this fund, you should make out a petty cash slip and attach it to your receipt as proof of payment. Filing taxes online 1040ez Travel, transportation, entertainment, and gift expenses. Filing taxes online 1040ez   Specific recordkeeping rules apply to these expenses. Filing taxes online 1040ez For more information, see Publication 463. Filing taxes online 1040ez Employment taxes. Filing taxes online 1040ez   There are specific employment tax records you must keep. Filing taxes online 1040ez For a list, see Publication 15. Filing taxes online 1040ez Assets. Filing taxes online 1040ez   Assets are the property, such as machinery and furniture you own and use in your business. Filing taxes online 1040ez You must keep records to verify certain information about your business assets. Filing taxes online 1040ez You need records to figure the annual depreciation and the gain or loss when you sell the assets. Filing taxes online 1040ez Your records should show the following information. Filing taxes online 1040ez When and how you acquired the asset. Filing taxes online 1040ez Purchase price. Filing taxes online 1040ez Cost of any improvements. Filing taxes online 1040ez Section 179 deduction taken. Filing taxes online 1040ez Deductions taken for depreciation. Filing taxes online 1040ez Deductions taken for casualty losses, such as losses resulting from fires or storms. Filing taxes online 1040ez How you used the asset. Filing taxes online 1040ez When and how you disposed of the asset. Filing taxes online 1040ez Selling price. Filing taxes online 1040ez Expenses of sale. Filing taxes online 1040ez   The following documents may show this information. Filing taxes online 1040ez Purchase and sales invoices. Filing taxes online 1040ez Real estate closing statements. Filing taxes online 1040ez Canceled checks. Filing taxes online 1040ez What if I don't have a canceled check?   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. Filing taxes online 1040ez These include account statements prepared for the financial institution by a third party. Filing taxes online 1040ez These account statements must be highly legible. Filing taxes online 1040ez The following table lists acceptable account statements. Filing taxes online 1040ez  IF payment is by. Filing taxes online 1040ez . Filing taxes online 1040ez . Filing taxes online 1040ez THEN the statement must show the. Filing taxes online 1040ez . Filing taxes online 1040ez . Filing taxes online 1040ez Check Check number. Filing taxes online 1040ez Amount. Filing taxes online 1040ez Payee's name. Filing taxes online 1040ez Date the check amount was posted to the account by the financial institution. Filing taxes online 1040ez Electronic funds transfer Amount transferred. Filing taxes online 1040ez Payee's name. Filing taxes online 1040ez Date the transfer was posted to the account by the financial institution. Filing taxes online 1040ez Credit card Amount charged. Filing taxes online 1040ez Payee's name. Filing taxes online 1040ez Transaction date. Filing taxes online 1040ez    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. Filing taxes online 1040ez You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. Filing taxes online 1040ez Recording Business Transactions A good recordkeeping system includes a summary of your business transactions. Filing taxes online 1040ez (Your business transactions are shown on the supporting documents just discussed. Filing taxes online 1040ez ) Business transactions are ordinarily summarized in books called journals and ledgers. Filing taxes online 1040ez You can buy them at your local stationery or office supply store. Filing taxes online 1040ez A journal is a book where you record each business transaction shown on your supporting documents. Filing taxes online 1040ez You may have to keep separate journals for transactions that occur frequently. Filing taxes online 1040ez A ledger is a book that contains the totals from all of your journals. Filing taxes online 1040ez It is organized into different accounts. Filing taxes online 1040ez Whether you keep journals and ledgers and how you keep them depends on the type of business you are in. Filing taxes online 1040ez For example, a recordkeeping system for a small business might include the following items. Filing taxes online 1040ez Business checkbook. Filing taxes online 1040ez Daily summary of cash receipts. Filing taxes online 1040ez Monthly summary of cash receipts. Filing taxes online 1040ez Check disbursements journal. Filing taxes online 1040ez Depreciation worksheet. Filing taxes online 1040ez Employee compensation record. Filing taxes online 1040ez The business checkbook is explained next. Filing taxes online 1040ez The other items are illustrated later under Sample Record System. Filing taxes online 1040ez The system you use to record business transactions will be more effective if you follow good recordkeeping practices. Filing taxes online 1040ez For example, record expenses when they occur, and identify the source of recorded receipts. Filing taxes online 1040ez Generally, it is best to record transactions on a daily basis. Filing taxes online 1040ez Business checkbook. Filing taxes online 1040ez   One of the first things you should do when you start a business is open a business checking account. Filing taxes online 1040ez You should keep your business account separate from your personal checking account. Filing taxes online 1040ez   The business checkbook is your basic source of information for recording your business expenses. Filing taxes online 1040ez You should deposit all daily receipts in your business checking account. Filing taxes online 1040ez You should check your account for errors by reconciling it. Filing taxes online 1040ez See Reconciling the checking account, later. Filing taxes online 1040ez   Consider using a checkbook that allows enough space to identify the source of deposits as business income, personal funds, or loans. Filing taxes online 1040ez You should also note on the deposit slip the source of the deposit and keep copies of all slips. Filing taxes online 1040ez   You should make all payments by check to document business expenses. Filing taxes online 1040ez Write checks payable to yourself only when making withdrawals from your business for personal use. Filing taxes online 1040ez Avoid writing checks payable to cash. Filing taxes online 1040ez If you must write a check for cash to pay a business expense, include the receipt for the cash payment in your records. Filing taxes online 1040ez If you cannot get a receipt for a cash payment, you should make an adequate explanation in your records at the time of payment. Filing taxes online 1040ez    Use the business account for business purposes only. Filing taxes online 1040ez Indicate the source of deposits and the type of expense in the checkbook. Filing taxes online 1040ez Reconciling the checking account. Filing taxes online 1040ez   When you receive your bank statement, make sure the statement, your checkbook, and your books agree. Filing taxes online 1040ez The statement balance may not agree with the balance in your checkbook and books if the statement: Includes bank charges you did not enter in your books and subtract from your checkbook balance, or Does not include deposits made after the statement date or checks that did not clear your account before the statement date. Filing taxes online 1040ez   By reconciling your checking account, you will: Verify how much money you have in the account, Make sure that your checkbook and books reflect all bank charges and the correct balance in the checking account, and Correct any errors in your bank statement, checkbook, and books. Filing taxes online 1040ez    You should reconcile your checking account each month. Filing taxes online 1040ez     Before you reconcile your monthly bank statement, check your own figures. Filing taxes online 1040ez Begin with the balance shown in your checkbook at the end of the previous month. Filing taxes online 1040ez To this balance, add the total cash deposited during the month and subtract the total cash disbursements. Filing taxes online 1040ez   After checking your figures, the result should agree with your checkbook balance at the end of the month. Filing taxes online 1040ez If the result does not agree, you may have made an error in recording a check or deposit. Filing taxes online 1040ez You can find the error by doing the following. Filing taxes online 1040ez Adding the amounts on your check stubs and comparing that total with the total in the “amount of check” column in your check disbursements journal. Filing taxes online 1040ez If the totals do not agree, check the individual amounts to see if an error was made in your check stub record or in the related entry in your check disbursements journal. Filing taxes online 1040ez Adding the deposit amounts in your checkbook. Filing taxes online 1040ez Compare that total with the monthly total in your cash receipt book, if you have one. Filing taxes online 1040ez If the totals do not agree, check the individual amounts to find any errors. Filing taxes online 1040ez   If your checkbook and journal entries still disagree, then refigure the running balance in your checkbook to make sure additions and subtractions are correct. Filing taxes online 1040ez   When your checkbook balance agrees with the balance figured from the journal entries, you may begin reconciling your checkbook with the bank statement. Filing taxes online 1040ez Many banks print a reconciliation worksheet on the back of the statement. Filing taxes online 1040ez   To reconcile your account, follow these steps. Filing taxes online 1040ez Compare the deposits listed on the bank statement with the deposits shown in your checkbook. Filing taxes online 1040ez Note all differences in the dollar amounts. Filing taxes online 1040ez Compare each canceled check, including both check number and dollar amount, with the entry in your checkbook. Filing taxes online 1040ez Note all differences in the dollar amounts. Filing taxes online 1040ez Mark the check number in the checkbook as having cleared the bank. Filing taxes online 1040ez After accounting for all checks returned by the bank, those not marked in your checkbook are your outstanding checks. Filing taxes online 1040ez Prepare a bank reconciliation. Filing taxes online 1040ez One is illustrated later under Sample Record System. Filing taxes online 1040ez Update your checkbook and journals for items shown on the reconciliation as not recorded (such as service charges) or recorded incorrectly. Filing taxes online 1040ez At this point, the adjusted bank statement balance should equal your adjusted checkbook balance. Filing taxes online 1040ez If you still have differences, check the previous steps to find the errors. Filing taxes online 1040ez   Table 3. Filing taxes online 1040ez Period of Limitations IF you. Filing taxes online 1040ez . Filing taxes online 1040ez . Filing taxes online 1040ez   THEN the period is. Filing taxes online 1040ez . Filing taxes online 1040ez . Filing taxes online 1040ez 1. Filing taxes online 1040ez Owe additional tax and situations (2), (3), and (4), below, do not apply to you   3 years 2. Filing taxes online 1040ez Do not report income that you should report and it is more than 25% of the gross income shown on the return   6 years 3. Filing taxes online 1040ez File a fraudulent return   Not limited 4. Filing taxes online 1040ez Do not file a return   Not limited 5. Filing taxes online 1040ez File a claim for credit or refund after you filed your return   Later of: 3 years or  2 years after tax   was paid 6. Filing taxes online 1040ez File a claim for a loss from worthless securities or a bad debt deduction   7 years Bookkeeping System You must decide whether to use a single-entry or a double-entry bookkeeping system. Filing taxes online 1040ez The single-entry system of bookkeeping is the simplest to maintain, but it may not be suitable for everyone. Filing taxes online 1040ez You may find the double-entry system better because it has built-in checks and balances to assure accuracy and control. Filing taxes online 1040ez Single-entry. Filing taxes online 1040ez   A single-entry system is based on the income statement (profit or loss statement). Filing taxes online 1040ez It can be a simple and practical system if you are starting a small business. Filing taxes online 1040ez The system records the flow of income and expenses through the use of: A daily summary of cash receipts, and Monthly summaries of cash receipts and disbursements. Filing taxes online 1040ez Double-entry. Filing taxes online 1040ez   A double-entry bookkeeping system uses journals and ledgers. Filing taxes online 1040ez Transactions are first entered in a journal and then posted to ledger accounts. Filing taxes online 1040ez These accounts show income, expenses, assets (property a business owns), liabilities (debts of a business), and net worth (excess of assets over liabilities). Filing taxes online 1040ez You close income and expense accounts at the end of each tax year. Filing taxes online 1040ez You keep asset, liability, and net worth accounts open on a permanent basis. Filing taxes online 1040ez   In the double-entry system, each account has a left side for debits and a right side for credits. Filing taxes online 1040ez It is self-balancing because you record every transaction as a debit entry in one account and as a credit entry in another. Filing taxes online 1040ez   Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. Filing taxes online 1040ez If the amounts do not balance, you have made an error and you must find and correct it. Filing taxes online 1040ez   An example of a journal entry exhibiting a payment of rent in October is shown next. Filing taxes online 1040ez General Journal Date Description of Entry Debit  Credit Oct. Filing taxes online 1040ez 5 Rent expense 780. Filing taxes online 1040ez 00     Cash   780. Filing taxes online 1040ez 00                 Computerized System There are computer software packages you can use for recordkeeping. Filing taxes online 1040ez They can be purchased in many retail stores. Filing taxes online 1040ez These packages are very helpful and relatively easy to use; they require very little knowledge of bookkeeping and accounting. Filing taxes online 1040ez If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. Filing taxes online 1040ez To meet this qualification, the machine-sensible records must reconcile with your books and return. Filing taxes online 1040ez These records must provide enough detail to identify the underlying source documents. Filing taxes online 1040ez You must also keep all machine-sensible records and a complete description of the computerized portion of your recordkeeping system. Filing taxes online 1040ez This documentation must be sufficiently detailed to show all of the following items. Filing taxes online 1040ez Functions being performed as the data flows through the system. Filing taxes online 1040ez Controls used to ensure accurate and reliable processing. Filing taxes online 1040ez Controls used to prevent the unauthorized addition, alteration, or deletion of retained records. Filing taxes online 1040ez Charts of accounts and detailed account descriptions. Filing taxes online 1040ez See Revenue Procedure 98-25 in Cumulative Bulletin 1998-1 for more information. Filing taxes online 1040ez How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Filing taxes online 1040ez Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out. Filing taxes online 1040ez The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. Filing taxes online 1040ez Table 3 contains the periods of limitations that apply to income tax returns. Filing taxes online 1040ez Unless otherwise stated, the years refer to the period after the return was filed. Filing taxes online 1040ez Returns filed before the due date are treated as filed on the due date. Filing taxes online 1040ez Keep copies of your filed tax returns. Filing taxes online 1040ez They help in preparing future tax returns and making computations if you file an amended return. Filing taxes online 1040ez Employment taxes. Filing taxes online 1040ez   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. Filing taxes online 1040ez For more information about recordkeeping for employment taxes, see Publication 15. Filing taxes online 1040ez Assets. Filing taxes online 1040ez   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. Filing taxes online 1040ez You must keep these records to figure any depreciation, amortization, or depletion deduction, and to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. Filing taxes online 1040ez   Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. Filing taxes online 1040ez You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. Filing taxes online 1040ez Records for nontax purposes. Filing taxes online 1040ez   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. Filing taxes online 1040ez For example, your insurance company or creditors may require you to keep them longer than the IRS does. Filing taxes online 1040ez Sample Record System This example illustrates a single-entry system used by Henry Brown, who is the sole proprietor of a small automobile body shop. Filing taxes online 1040ez Henry uses part-time help, has no inventory of items held for sale, and uses the cash method of accounting. Filing taxes online 1040ez These sample records should not be viewed as a recommendation of how to keep your records. Filing taxes online 1040ez They are intended only to show how one business keeps its records. Filing taxes online 1040ez 1. Filing taxes online 1040ez Daily Summary of Cash Receipts This summary is a record of cash sales for the day. Filing taxes online 1040ez It accounts for cash at the end of the day over the amount in the Change and Petty Cash Fund at the beginning of the day. Filing taxes online 1040ez Henry takes the cash sales entry from his cash register tape. Filing taxes online 1040ez If he had no cash register, he would simply total his cash sale slips and any other cash received that day. Filing taxes online 1040ez He carries the total receipts shown in this summary for January 3 ($267. Filing taxes online 1040ez 80), including cash sales ($263. Filing taxes online 1040ez 60) and sales tax ($4. Filing taxes online 1040ez 20), to the Monthly Summary of Cash Receipts. Filing taxes online 1040ez Petty cash fund. Filing taxes online 1040ez   Henry uses a petty cash fund to make small payments without having to write checks for small amounts. Filing taxes online 1040ez Each time he makes a payment from this fund, he makes out a petty cash slip and attaches it to his receipt as proof of payment. Filing taxes online 1040ez He sets up a fixed amount ($50) in his petty cash fund. Filing taxes online 1040ez The total of the unspent petty cash and the amounts on the petty cash slips should equal the fixed amount of the fund. Filing taxes online 1040ez When the totals on the petty cash slips approach the fixed amount, he brings the cash in the fund back to the fixed amount by writing a check to “Petty Cash” for the total of the outstanding slips. Filing taxes online 1040ez (See the Check Disbursements Journal entry for check number 92. Filing taxes online 1040ez ) This restores the fund to its fixed amount of $50. Filing taxes online 1040ez He then summarizes the slips and enters them in the proper columns in the monthly check disbursements journal. Filing taxes online 1040ez 2. Filing taxes online 1040ez Monthly Summary of Cash Receipts This shows the income activity for the month. Filing taxes online 1040ez Henry carries the total monthly net sales shown in this summary for January ($4,865. Filing taxes online 1040ez 05) to his Annual Summary. Filing taxes online 1040ez To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. Filing taxes online 1040ez He cannot take a deduction for sales tax turned over to the state because he only collected the tax. Filing taxes online 1040ez He does not include the tax in his income. Filing taxes online 1040ez 3. Filing taxes online 1040ez Check Disbursements Journal Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. Filing taxes online 1040ez All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal. Filing taxes online 1040ez Frequent expenses have their own headings across the sheet. Filing taxes online 1040ez He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. Filing taxes online 1040ez Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage. Filing taxes online 1040ez Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. Filing taxes online 1040ez If he did, he would record them in the journal, even though he could not deduct them as business expenses. Filing taxes online 1040ez Henry carries the January total of expenses for materials ($1,083. Filing taxes online 1040ez 50) to the Annual Summary. Filing taxes online 1040ez Similarly, he enters the monthly total of expenses for telephone, truck/auto, etc. Filing taxes online 1040ez , in the appropriate columns of that summary. Filing taxes online 1040ez 4. Filing taxes online 1040ez Employee Compensation Record This record shows the following information. Filing taxes online 1040ez The number of hours Henry's employee worked in a pay period. Filing taxes online 1040ez The employee's total pay for the period. Filing taxes online 1040ez The deductions Henry withheld in figuring the employee's net pay. Filing taxes online 1040ez The monthly gross payroll. Filing taxes online 1040ez Henry carries the January gross payroll ($520) to the Annual Summary. Filing taxes online 1040ez 5. Filing taxes online 1040ez Annual Summary This annual summary of monthly cash receipts and expense totals provides the final amounts to enter on Henry's tax return. Filing taxes online 1040ez He figures the cash receipts total from the total of monthly cash receipts shown in the Monthly Summary of Cash Receipts. Filing taxes online 1040ez He figures the expense totals from the totals of monthly expense items shown in the Check Disbursements Journal. Filing taxes online 1040ez As in the journal, he keeps each major expense in a separate column. Filing taxes online 1040ez Henry carries the cash receipts total shown in the annual summary ($47,440. Filing taxes online 1040ez 9
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The Filing Taxes Online 1040ez

Filing taxes online 1040ez Part Two -   Income The eight chapters in this part discuss many kinds of income. Filing taxes online 1040ez They explain which income is and is not taxed. Filing taxes online 1040ez See Part Three for information on gains and losses you report on Form 8949 and Schedule D (Form 1040) and for information on selling your home. Filing taxes online 1040ez Table of Contents 5. Filing taxes online 1040ez   Wages, Salaries, and Other EarningsReminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. Filing taxes online 1040ez Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits 6. Filing taxes online 1040ez   Tip IncomeIntroduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. Filing taxes online 1040ez Reporting Tips to Your EmployerElectronic tip statement. Filing taxes online 1040ez Final report. Filing taxes online 1040ez Reporting Tips on Your Tax Return Allocated Tips 7. Filing taxes online 1040ez   Interest IncomeReminder Introduction Useful Items - You may want to see: General InformationSSN for joint account. Filing taxes online 1040ez Custodian account for your child. Filing taxes online 1040ez Penalty for failure to supply SSN. Filing taxes online 1040ez Reporting backup withholding. Filing taxes online 1040ez Savings account with parent as trustee. Filing taxes online 1040ez Interest not reported on Form 1099-INT. Filing taxes online 1040ez Nominees. Filing taxes online 1040ez Incorrect amount. Filing taxes online 1040ez Information reporting requirement. Filing taxes online 1040ez Taxable InterestInterest subject to penalty for early withdrawal. Filing taxes online 1040ez Money borrowed to invest in certificate of deposit. Filing taxes online 1040ez U. Filing taxes online 1040ez S. Filing taxes online 1040ez Savings Bonds Education Savings Bond Program U. Filing taxes online 1040ez S. Filing taxes online 1040ez Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Original Issue Discount (OID) When To Report Interest IncomeConstructive receipt. Filing taxes online 1040ez How To Report Interest IncomeSchedule B (Form 1040A or 1040). Filing taxes online 1040ez Reporting tax-exempt interest. Filing taxes online 1040ez U. Filing taxes online 1040ez S. Filing taxes online 1040ez savings bond interest previously reported. Filing taxes online 1040ez 8. Filing taxes online 1040ez   Dividends and Other DistributionsReminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Filing taxes online 1040ez Reporting tax withheld. Filing taxes online 1040ez Nominees. Filing taxes online 1040ez Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Filing taxes online 1040ez Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Filing taxes online 1040ez Alternative minimum tax treatment. Filing taxes online 1040ez How To Report Dividend IncomeInvestment interest deducted. Filing taxes online 1040ez 9. Filing taxes online 1040ez   Rental Income and ExpensesIntroduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. Filing taxes online 1040ez Repairs and Improvements Other Expenses Property Changed to Rental Use Renting Part of Property Not Rented for Profit Personal Use of Dwelling Unit (Including Vacation Home)Example. Filing taxes online 1040ez Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. Filing taxes online 1040ez Limits on Rental LossesAt-Risk Rules Passive Activity Limits How To Report Rental Income and ExpensesSchedule E (Form 1040) 10. Filing taxes online 1040ez   Retirement Plans, Pensions, and AnnuitiesWhat's New Reminder IntroductionThe General Rule. Filing taxes online 1040ez Individual retirement arrangements (IRAs). Filing taxes online 1040ez Civil service retirement benefits. Filing taxes online 1040ez Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. Filing taxes online 1040ez How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. Filing taxes online 1040ez Exclusion not limited to cost. Filing taxes online 1040ez Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. Filing taxes online 1040ez Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries 11. Filing taxes online 1040ez   Social Security and Equivalent Railroad Retirement BenefitsIntroduction Useful Items - You may want to see: Are Any of Your Benefits Taxable? How To Report Your BenefitsHow Much Is Taxable? Examples Deductions Related to Your BenefitsRepayments More Than Gross Benefits 12. Filing taxes online 1040ez   Other IncomeIntroduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. Filing taxes online 1040ez Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. Filing taxes online 1040ez Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. Filing taxes online 1040ez Method 2. Filing taxes online 1040ez RoyaltiesDepletion. Filing taxes online 1040ez Coal and iron ore. Filing taxes online 1040ez Sale of property interest. Filing taxes online 1040ez Part of future production sold. Filing taxes online 1040ez Unemployment BenefitsTypes of unemployment compensation. Filing taxes online 1040ez Governmental program. Filing taxes online 1040ez Repayment of unemployment compensation. Filing taxes online 1040ez Tax withholding. Filing taxes online 1040ez Repayment of benefits. Filing taxes online 1040ez Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. Filing taxes online 1040ez Deduction for costs involved in unlawful discrimination suits. Filing taxes online 1040ez Energy conservation measure. Filing taxes online 1040ez Dwelling unit. Filing taxes online 1040ez Current income required to be distributed. Filing taxes online 1040ez Current income not required to be distributed. Filing taxes online 1040ez How to report. Filing taxes online 1040ez Losses. Filing taxes online 1040ez Grantor trust. Filing taxes online 1040ez Nonemployee compensation. Filing taxes online 1040ez Corporate director. Filing taxes online 1040ez Personal representatives. Filing taxes online 1040ez Manager of trade or business for bankruptcy estate. Filing taxes online 1040ez Notary public. Filing taxes online 1040ez Election precinct official. Filing taxes online 1040ez Difficulty-of-care payments. Filing taxes online 1040ez Maintaining space in home. Filing taxes online 1040ez Reporting taxable payments. Filing taxes online 1040ez Lotteries and raffles. Filing taxes online 1040ez Form W-2G. Filing taxes online 1040ez Reporting winnings and recordkeeping. Filing taxes online 1040ez Inherited pension or IRA. Filing taxes online 1040ez Employee awards or bonuses. Filing taxes online 1040ez Pulitzer, Nobel, and similar prizes. Filing taxes online 1040ez Payment for services. Filing taxes online 1040ez VA payments. Filing taxes online 1040ez Prizes. Filing taxes online 1040ez Strike and lockout benefits. Filing taxes online 1040ez Prev  Up  Next   Home   More Online Publications