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Free Federal Tax Filing 2011

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Free federal tax filing 2011 Publication 510 - Introductory Material Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Excise Taxes Not Covered What's New Medical device excise tax. Free federal tax filing 2011  The Affordable Care Act (the “Act”) (Public Law 111-148, amended by Public Law 111-152) imposes a 2. Free federal tax filing 2011 3% (. Free federal tax filing 2011 023) excise tax on the sale of certain medical devices by the manufacturer, producer, or importer of the device. Free federal tax filing 2011 The tax applies to sales of taxable medical devices after December 31, 2012. Free federal tax filing 2011 See Taxable Medical Devices in chapter 5, later. Free federal tax filing 2011 Tax on seasonal flu vaccines. Free federal tax filing 2011  Sales of all vaccines against seasonal influenza are now subject to the section 4131 excise tax at the existing rate of $. Free federal tax filing 2011 75 per dose of taxable vaccine. Free federal tax filing 2011 Previously, only trivalent influenza vaccines were subject to this tax. Free federal tax filing 2011 See Vaccines in chapter 5, later. Free federal tax filing 2011 Patient-centered outcomes research fee. Free federal tax filing 2011  The Act imposes a fee on issuers of specified health insurance policies (section 4375) and plan sponsors of applicable self-insured health plans (section 4576) to help fund the Patient-Centered Outcomes Research Institute. Free federal tax filing 2011 The fee, required to be reported annually on the 2nd quarter Form 720 and paid by its due date, July 31st, is based on the average number of lives covered under the policy or plan. Free federal tax filing 2011 The fee applies to policy or plan years ending on or after October 1, 2012. Free federal tax filing 2011 See chapter 11, later. Free federal tax filing 2011 Extension of fuel tax credits. Free federal tax filing 2011  The following section 6426 credits, previously expired on December 31, 2011, are retroactively extended. Free federal tax filing 2011 Biodiesel or renewable diesel mixture credit. Free federal tax filing 2011 Alternative fuel credit. Free federal tax filing 2011 Alternative fuel mixture credit. Free federal tax filing 2011 See Notice 2013–26 (fuel tax credits) on page 984 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2013–18 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb13-18. Free federal tax filing 2011 pdf; also see chapter 2, later. Free federal tax filing 2011 Alternative fuel mixture credit can be claimed on Schedule C (Form 720) only. Free federal tax filing 2011  For alternative fuel mixtures produced after December 31, 2011, the section 6426 alternative fuel mixture credit can be claimed on Schedule C (Form 720) only, not on Form 4136, Credit for Federal Tax Paid on Fuels, or Schedule 3 (Form 8849), Claim for Refund of Excise Taxes, and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel, and kerosene. Free federal tax filing 2011 See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit in chapter 2, later. Free federal tax filing 2011 Expiration of alcohol fuel mixture credit. Free federal tax filing 2011  The section 6426 alcohol fuel mixture credit expired after December 31, 2011. Free federal tax filing 2011 Expiration of alcohol fuels credits. Free federal tax filing 2011  The section 40 alcohol, alcohol mixture, and small ethanol producer credits expired after December 31, 2011. Free federal tax filing 2011 Second generation biofuel producer credit and excise tax. Free federal tax filing 2011  The section 40 cellulosic biofuel producer credit was retroactively extended to include fuel sold or used through January 2, 2013. Free federal tax filing 2011 After January 2, 2013, cellulosic biofuel is renamed second generation biofuel, which adds algae-based fuel. Free federal tax filing 2011 The second generation biofuel producer credit is for fuel sold or used after January 2, 2013, and before January 1, 2014. Free federal tax filing 2011 You are liable for an excise tax on each gallon of cellulosic or second generation biofuel at the rate you used to figure the credit if you do not use the fuel for the purposes described under Qualified Cellulosic Biofuel Production or Qualified Second Generation Biofuel Production, later. Free federal tax filing 2011 Report the tax on Form 720. Free federal tax filing 2011 See Cellulosic or Second Generation Biofuel Not Used as Fuel, later; also see Form 6478, Biofuel Producer Credit, for more information. Free federal tax filing 2011 Extension of section 40A biodiesel fuels credit. Free federal tax filing 2011  The biodiesel fuels credit, previously expired on December 31, 2011, is retroactively extended. Free federal tax filing 2011 Future developments. Free federal tax filing 2011  The IRS has created a page on IRS. Free federal tax filing 2011 gov that includes information about Publication 510 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub510. Free federal tax filing 2011 Information about any future developments will be posted on that page. Free federal tax filing 2011 Reminders Publication 510 updates. Free federal tax filing 2011  Publication 510 is not updated annually. Free federal tax filing 2011 Instead, it will be updated only when there are major changes in the tax law. Free federal tax filing 2011 Use of international air travel facilities. Free federal tax filing 2011  Generally, the tax on the use of international air travel facilities increases annually. Free federal tax filing 2011 See the Instructions for Form 720 for the tax rate. Free federal tax filing 2011 For more information, see Air Transportation Taxes in chapter 4. Free federal tax filing 2011 Aviation fuels for use in foreign trade. Free federal tax filing 2011  Aviation gasoline and kerosene for use in aviation are exempt from the leaking underground storage tank (LUST) tax. Free federal tax filing 2011 Arrow shafts, tax rate. Free federal tax filing 2011  Generally, the tax on arrow shafts increases annually. Free federal tax filing 2011 See Form 720 for the tax rate. Free federal tax filing 2011 Disregarded entities and qualified subchapter S subsidiaries. Free federal tax filing 2011  Qualified subchapter S subsidiaries (QSubs) and eligible single-owner disregarded entities are treated as separate entities for excise tax and reporting purposes. Free federal tax filing 2011 QSubs and eligible single-owner disregarded entities must pay and report excise taxes (other than IRS Nos. Free federal tax filing 2011 31, 51, and 117), register for most excise tax activities, and claim any refunds, credits, and payments under the entity's employer identification number (EIN). Free federal tax filing 2011 These actions cannot take place under the owner's taxpayer identification number (TIN). Free federal tax filing 2011 Some QSubs and disregarded entities may already have an EIN. Free federal tax filing 2011 However, if you are unsure, please call the IRS Business and Specialty Tax line at 1-800-829-4933. Free federal tax filing 2011 Generally, QSubs and eligible single-owner disregarded entities will continue to be treated as disregarded entities for other federal tax purposes (other than employment taxes). Free federal tax filing 2011 For more information on these regulations, see Treasury Decision (T. Free federal tax filing 2011 D. Free federal tax filing 2011 ) 9356, T. Free federal tax filing 2011 D. Free federal tax filing 2011 9462, and T. Free federal tax filing 2011 D. Free federal tax filing 2011 9596. Free federal tax filing 2011 You can find T. Free federal tax filing 2011 D. Free federal tax filing 2011 9356 on page 675 of Internal Revenue Bulletin (I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 ) 2007-39 at  www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb07-39. Free federal tax filing 2011 pdf;  T. Free federal tax filing 2011 D. Free federal tax filing 2011 9462 on page 504 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2009-42 at  www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb09-42. Free federal tax filing 2011 pdf;  and T. Free federal tax filing 2011 D. Free federal tax filing 2011 9596 on page 84 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2012-30 at  www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb12-30. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Registration for certain activities. Free federal tax filing 2011  You are required to be registered for certain excise tax activities, such as blending of gasoline, diesel fuel, or kerosene outside the bulk transfer/terminal system. Free federal tax filing 2011 See the instructions for Form 637 for the list of activities for which you must register. Free federal tax filing 2011 Also see Registration Requirements under Fuel Taxes in chapter 1 for information on registration for activities related to fuel. Free federal tax filing 2011 Each business unit that has, or is required to have, a separate employer identification number must be registered. Free federal tax filing 2011 To apply for registration, complete Form 637 and provide the information requested in its instructions. Free federal tax filing 2011 If your application is approved, you will receive a Letter of Registration showing the activities for which you are registered, the effective date of the registration, and your registration number. Free federal tax filing 2011 A copy of Form 637 is not a Letter of Registration. Free federal tax filing 2011 Photographs of missing children. Free federal tax filing 2011  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free federal tax filing 2011 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free federal tax filing 2011 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Free federal tax filing 2011 Introduction This publication covers the excise taxes for which you may be liable and which are reported on Form 720 and other forms. Free federal tax filing 2011 It also covers fuel tax credits and refunds. Free federal tax filing 2011 For information on fuel credits against income tax (the section 40 credits for the production of cellulosic biofuel and second generation biofuel, and the section 40A credit for biodiesel and renewable diesel used as fuel) see the instructions for Form 6478 and Form 8864, Biodiesel and Renewable Diesel Fuels Credit. Free federal tax filing 2011 Comments and suggestions. Free federal tax filing 2011   We welcome your comments about this publication and your suggestions for future editions. Free federal tax filing 2011   You can write to us at the following address: Internal Revenue Service Individual and Specialty Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. Free federal tax filing 2011 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free federal tax filing 2011 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free federal tax filing 2011   You can email us at taxforms@irs. Free federal tax filing 2011 gov. Free federal tax filing 2011 Please put “Publications Comment” on the subject line. Free federal tax filing 2011 You can also send us comments from www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/Forms-&-Pubs/More-Information/ and select “Comment on Tax Forms and Publications”. Free federal tax filing 2011   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Free federal tax filing 2011 Useful Items - You may want to see: Publication 509 Tax Calendars Form (and Instructions) 11-C Occupational Tax and Registration Return for Wagering 637 Application for Registration (For Certain Excise Tax Activities) 720 Quarterly Federal Excise Tax Return 720X Amended Quarterly Federal Excise Tax Return 730 Monthly Tax Return for Wagers 1363 Export Exemption Certificate 2290 Heavy Highway Vehicle Use Tax Return 2290(SP) Declaración del Impuesto sobre el Uso de Vehículos Pesados en las Carreteras 4136 Credit for Federal Tax Paid on Fuels 6197 Gas Guzzler Tax 6478 Biofuel Producer Credit 6627 Environmental Taxes 8849 Claim for Refund of Excise Taxes, and Schedules 1–3, 5, 6, and 8 8864 Biodiesel and Renewable Diesel Fuels Credit Information Returns    Form 720-TO, Terminal Operator Report Form 720-CS, Carrier Summary Report   See How To Get Tax Help in chapter 17 for information about ordering forms and publications. Free federal tax filing 2011 Guidance    You can find Notice 2005-4 (fuel tax guidance) on page 289 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2005-2 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb05-02. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Notice 2005-62 (biodiesel and aviation-grade kerosene) on page 443 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2005-35 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb05-35. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Notice 2005-80 (LUST, kerosene, claims by credit card issuers, and mechanical dye injection) on page 953 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2005-46 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb05-46. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Notice 2006-92 (alternative fuels and alternative fuel mixtures) on page 774 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2006-43 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb06-43. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Notice 2008-110 (biodiesel and cellulosic biofuel) on page 1298 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2008-51 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb08-51. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Notice 2010-68 (Alaska dyed diesel exemption) on page 576 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2010-44 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb10-44. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Notice 2012-27 (fractional aircraft ownership programs fuel surtax) on page 849 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2012-17 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb12-17. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Notice 2013-26 (fuel tax credits) on page 984 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2013-18 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb13-18. Free federal tax filing 2011 pdf. Free federal tax filing 2011 T. Free federal tax filing 2011 D. Free federal tax filing 2011 9604 and Notice 2012–77 (medical device tax) on pages 730 and 781, respectively, of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2012-52 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb12-52. Free federal tax filing 2011 pdf. Free federal tax filing 2011 T. Free federal tax filing 2011 D. Free federal tax filing 2011 9602 (patient-centered outcomes research fee) on page 746 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2012-52 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb12-52. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Revenue Procedure 2012-41 (inflation adjustments) on page 539 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2012-45 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb12-45. Free federal tax filing 2011 pdf. Free federal tax filing 2011 T. Free federal tax filing 2011 D. Free federal tax filing 2011 9621 (indoor tanning services tax) on page 49 of I. Free federal tax filing 2011 R. Free federal tax filing 2011 B. Free federal tax filing 2011 2013-28 at www. Free federal tax filing 2011 irs. Free federal tax filing 2011 gov/pub/irs-irbs/irb13-28. Free federal tax filing 2011 pdf. Free federal tax filing 2011 Excise Taxes Not Covered In addition to the taxes discussed in this publication, you may have to report certain other excise taxes. Free federal tax filing 2011 For tax forms relating to alcohol, firearms, and tobacco, visit the Alcohol and Tobacco Tax and Trade Bureau website at www. Free federal tax filing 2011 ttb. Free federal tax filing 2011 gov. Free federal tax filing 2011 Heavy highway vehicle use tax. Free federal tax filing 2011   You report the federal excise tax on the use of certain trucks, truck tractors, and buses used on public highways on Form 2290, Heavy Highway Vehicle Use Tax Return. 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Free federal tax filing 2011    If you have questions on Form 2290, see its separate instructions, or you can call the Form 2290 call site at 1-866-699-4096 (toll free) from the United States, and 1-859-669-5733 (not toll free) from Canada and Mexico. Free federal tax filing 2011 The hours of service are 8:00 a. Free federal tax filing 2011 m. Free federal tax filing 2011 to 6:00 p. Free federal tax filing 2011 m. Free federal tax filing 2011 Eastern time. Free federal tax filing 2011 Wagering tax and occupational tax. Free federal tax filing 2011   The information on wagering tax can be found in the instructions for Form 730, Tax on Wagering, and Form 11-C, Occupational Tax and Registration Return for Wagering. Free federal tax filing 2011 Prev  Up  Next   Home   More Online Publications
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Retirement Topics - Required Minimum Distributions (RMDs)

You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA or retirement plan account when you reach age 70½. Roth IRAs do not require withdrawals until after the death of the owner.

Your required minimum distribution is the minimum amount you must withdraw from your account each year.

  • You can withdraw more than the minimum required amount.
  • Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).

Calculating the required minimum distribution

The required minimum distribution for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS’s “Uniform Lifetime Table.” A separate table is used if the sole beneficiary is the owner’s spouse who is ten or more years younger than the owner.

Beginning date for your first required minimum distribution

  • IRAs (including SEP and SIMPLE IRAs)
    • April 1 of the year following the calendar year in which you reach age 70½.

  • 401(k), profit-sharing, 403(b), or other defined contribution plan
    Generally, April 1 following the later of the calendar year in which you:
    • reach age 70½, or
    • retire.

See the chart comparing IRA and defined contribution plan RMDs.

Date that you turn 70½

You reach age 70½ on the date that is 6 calendar months after your 70th birthday.

Example: You are retired and your 70th birthday was June 30, 2011. You reached age 70½ on December 30, 2011. You must take your first RMD (for 2011) by April 1, 2012.

Example: You are retired and your 70th birthday was July 1, 2011. You reached age 70½ on January 1, 2012. You do not have an RMD for 2011. You must take your first RMD (for 2012) by April 1, 2013.

Terms of the plan govern

The plan’s terms may allow you to wait until the year you actually retire to take your first RMD (unless you are a 5% owner). Alternatively, a plan may require you to begin receiving distributions by April 1 of the year after you reach age 70½, even if you have not retired.

5% owners

If you own 5% or more of the business sponsoring the plan, then you must begin receiving distributions by April 1 of the year after the calendar year in which you reach age 70½.

Date for receiving subsequent required minimum distributions

For each subsequent year after your required beginning date, you must withdraw your RMD by December 31.

The first year following the year you reach age 70½ you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½), and an additional withdrawal by December 31 (for the year following the year you turn 70½). To avoid having both of these amounts included in your income for the same year, you can make your first withdrawal by December 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

Example: John reached age 70½ on August 20, 2011. He must receive his 2011 required minimum distribution by April 1, 2012, based on his 2010 year-end balance. John must receive his 2012 required minimum distribution by December 31, 2012, based on his 2011 year-end balance.

If John receives his initial required minimum distribution for 2011 on April 1, 2012, then both his 2011 and 2012 distributions will be included in income on his 2012 income tax return.

Consequence for failing to take required minimum distributions

If you do not take any distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required.

  • To report the excise tax, you may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.
  • See the Form 5329 instructions for additional information about this tax.

Required minimum distributions after the account owner dies

For the year of the account owner’s death, use the RMD the account owner would have received. For the year following the owner’s death, the RMD will depend on the identity of the designated beneficiary.

Calculating required minimum distributions for designated beneficiaries

Beneficiaries of retirement accounts and IRAs calculate RMDs using the Single Life Table (Table I, Appendix C, Publication 590, Individual Retirement Arrangements (IRAs)). The table shows a life expectancy based on the beneficiary’s age. The account balance is divided by this life expectancy to determine the RMD.

  • Spouses who are the sole designated beneficiary can:
    • treat an IRA as their own, or
    • base RMDs on their own current age,
    • base RMDs on the decedent’s age at death, reducing the distribution period by one each year, or
    • withdraw the entire account balance by the end of the 5th year following the account owner’s death, if the account owner died before the required beginning date.
If the account owner died before the required beginning date, the surviving spouse can wait until the owner would have turned 70½ to begin receiving RMDs
  • Individual beneficiaries other than a spouse can:
    • withdraw the entire account balance by the end of the 5th year following the account owner’s death, if the account owner died before the required beginning date, or
    • calculate RMDs using the distribution period from the Single Life Table based on:
      • If the owner died after RMDs began, the longer of the:
        • beneficiary’s remaining life expectancy determined in the year following the year of the owner’s death reduced by one for each subsequent year or
        • owner’s remaining life expectancy at death, reduced by one for each subsequent year
      • If the account owner died before RMDs began, the beneficiary’s age at year-end following the year of the owner’s death, reducing the distribution period by one for each subsequent year.

See Publication 590, Individual Retirement Arrangements (IRAs), for details on calculating required distributions for beneficiaries.

Chart of required minimum distributions for IRA beneficiaries

Do these rules apply to my retirement plan?

These minimum distribution rules apply to:

  • traditional IRAs,
  • SEP IRAs,
  • SIMPLE IRAs,
  • 401(k) plans
  • 403(b) plans
  • 457(b) plans
  • profit sharing plans, and
  • other defined contribution plans.

Additional resources

 

Page Last Reviewed or Updated: 20-Feb-2014

The Free Federal Tax Filing 2011

Free federal tax filing 2011 Publication 529 - Main Content Table of Contents Deductions Subject to the 2% LimitUnreimbursed Employee Expenses Tax Preparation Fees Other Expenses Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses How To ReportWho can use Form 2106-EZ. Free federal tax filing 2011 Computer used in a home office. Free federal tax filing 2011 Example How To Get Tax HelpLow Income Taxpayer Clinics Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). Free federal tax filing 2011 You can claim the amount of expenses that is more than 2% of your adjusted gross income. Free federal tax filing 2011 You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. 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Free federal tax filing 2011 Any other worthless debt is a business bad debt only if there is a very close relationship between the debt and your trade or business when the debt becomes worthless. Free federal tax filing 2011 A debt has a very close relationship to your trade or business of being an employee if your main motive for incurring the debt is a business reason. Free federal tax filing 2011 Example. Free federal tax filing 2011 You make a bona fide loan to the corporation you work for. Free federal tax filing 2011 It fails to pay you back. Free federal tax filing 2011 You had to make the loan in order to keep your job. Free federal tax filing 2011 You have a business bad debt as an employee. Free federal tax filing 2011 More information. Free federal tax filing 2011   For more information on business bad debts, see chapter 10 in Publication 535. Free federal tax filing 2011 For information on nonbusiness bad debts, see chapter 4 in Publication 550, Investment Income and Expenses. Free federal tax filing 2011 Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Free federal tax filing 2011 Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer if the damages are attributable to the pay you received from that employer. Free federal tax filing 2011 Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. Free federal tax filing 2011 For the convenience of your employer. Free federal tax filing 2011   This means that your use of the computer is for a substantial business reason of your employer. Free federal tax filing 2011 You must consider all facts in making this determination. Free federal tax filing 2011 Use of your computer during your regular working hours to carry on your employer's business is generally for the convenience of your employer. Free federal tax filing 2011 Required as a condition of your employment. Free federal tax filing 2011   This means that you cannot properly perform your duties without the computer. Free federal tax filing 2011 Whether you can properly perform your duties without it depends on all the facts and circumstances. Free federal tax filing 2011 It is not necessary that your employer explicitly requires you to use your computer. Free federal tax filing 2011 But neither is it enough that your employer merely states that your use of the item is a condition of your employment. Free federal tax filing 2011 Example. Free federal tax filing 2011 You are an engineer with an engineering firm. Free federal tax filing 2011 You occasionally take work home at night rather than work late at the office. Free federal tax filing 2011 You own and use a computer that is similar to the one you use at the office to complete your work at home. Free federal tax filing 2011 Since your use of the computer is not for the convenience of your employer and is not required as a condition of your employment, you cannot claim a depreciation deduction for it. Free federal tax filing 2011 Which depreciation method to use. Free federal tax filing 2011   The depreciation method you use depends on whether you meet the more-than-50%-use test. Free federal tax filing 2011 More-than-50%-use test met. Free federal tax filing 2011   You meet this test if you use the computer more than 50% in your work. Free federal tax filing 2011 If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). Free federal tax filing 2011 In addition, you may be able to take the section 179 deduction for the year you place the item in service. Free federal tax filing 2011 More-than-50%-use test not met. Free federal tax filing 2011   If you do not meet the more-than-50%-use test, you are limited to the straight line method of depreciation under the Alternative Depreciation System (ADS). Free federal tax filing 2011 You also cannot claim the section 179 deduction. Free federal tax filing 2011 (But if you use your computer in a home office, see the exception below. Free federal tax filing 2011 ) Investment use. Free federal tax filing 2011   Your use of a computer in connection with investments (described later under Other Expenses ) does not count as use in your work. Free federal tax filing 2011 However, you can combine your investment use with your work use in figuring your depreciation deduction. Free federal tax filing 2011 Exception for computer used in a home office. Free federal tax filing 2011   The more-than-50%-use test does not apply to a computer used only in a part of your home that meets the requirements described later under Home Office . Free federal tax filing 2011 You can claim accelerated depreciation using GDS for a computer used in a qualifying home office, even if you do not use it more than 50% in your work. Free federal tax filing 2011 You also may be able to take a section 179 deduction for the year you place the computer in service. Free federal tax filing 2011 See Computer used in a home office under How To Report, later. Free federal tax filing 2011 More information. Free federal tax filing 2011   For more information on depreciation and the section 179 deduction for computers and other items used in a home office, see Business Furniture and Equipment in Publication 587. Free federal tax filing 2011 Publication 946 has detailed information about the section 179 deduction and depreciation deductions using GDS and ADS. Free federal tax filing 2011 Reporting your depreciation deduction. Free federal tax filing 2011    See How To Report, later, for information about reporting a deduction for depreciation. Free federal tax filing 2011 You must keep records to prove your percentage of business and investment use. Free federal tax filing 2011 Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. Free federal tax filing 2011 Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Free federal tax filing 2011 Lobbying and political activities. Free federal tax filing 2011    You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Free federal tax filing 2011 See Lobbying Expenses under Nondeductible Expenses, later. Free federal tax filing 2011 Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. Free federal tax filing 2011 If you file Form 1040A, you can deduct these expenses on line 16. Free federal tax filing 2011 If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Free federal tax filing 2011 However, neither spouse can deduct more than $250 of his or her qualified expenses. Free federal tax filing 2011 Eligible educator. Free federal tax filing 2011   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in school for at least 900 hours during a school year. Free federal tax filing 2011 Qualified expenses. Free federal tax filing 2011   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Free federal tax filing 2011 An ordinary expense is one that is common and accepted in your educational field. Free federal tax filing 2011 A necessary expense is one that is helpful and appropriate for your profession as an educator. Free federal tax filing 2011 An expense does not have to be required to be considered necessary. Free federal tax filing 2011   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Free federal tax filing 2011 You must reduce your qualified expenses by the following amounts. Free federal tax filing 2011 Excludable U. Free federal tax filing 2011 S. Free federal tax filing 2011 series EE and I savings bond interest from Form 8815. Free federal tax filing 2011 Nontaxable qualified state tuition program earnings. Free federal tax filing 2011 Nontaxable earnings from Coverdell education savings accounts. Free federal tax filing 2011 Any reimbursements you received for those expenses that were not reported to you on your Form W-2, box 1. Free federal tax filing 2011 Educator expenses over limit. Free federal tax filing 2011   If you were an educator in 2013 and you had qualified expenses that you cannot take as an adjustment to gross income, you can deduct the rest as an itemized deduction subject to the 2% limit. Free federal tax filing 2011 Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. Free federal tax filing 2011 You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. Free federal tax filing 2011 The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Free federal tax filing 2011 Principal place of business. Free federal tax filing 2011   If you have more than one place of business, the business part of your home is your principal place of business if: You use it regularly and exclusively for administrative or management activities of your trade or business, and You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Free federal tax filing 2011   Otherwise, the location of your principal place of business generally depends on the relative importance of the activities performed at each location and the time spent at each location. Free federal tax filing 2011 You should keep records that will give the information needed to figure the deduction according to these rules. Free federal tax filing 2011 Also keep canceled checks, substitute checks, or account statements and receipts of the expenses paid to prove the deductions you claim. Free federal tax filing 2011 More information. Free federal tax filing 2011   See Publication 587 for more detailed information and a worksheet for figuring the deduction. Free federal tax filing 2011 Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. Free federal tax filing 2011 You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. Free federal tax filing 2011 Employment and outplacement agency fees. Free federal tax filing 2011    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Free federal tax filing 2011 Employer pays you back. Free federal tax filing 2011   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. Free federal tax filing 2011 See Recoveries in Publication 525. Free federal tax filing 2011 Employer pays the employment agency. Free federal tax filing 2011   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. Free federal tax filing 2011 Résumé. Free federal tax filing 2011   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. Free federal tax filing 2011 Travel and transportation expenses. Free federal tax filing 2011   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. Free federal tax filing 2011 You can deduct the travel expenses if the trip is primarily to look for a new job. Free federal tax filing 2011 The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. Free federal tax filing 2011   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. Free federal tax filing 2011    You can choose to use the standard mileage rate to figure your car expenses. Free federal tax filing 2011 The 2013 rate for business use of a vehicle is 56½ cents per mile. Free federal tax filing 2011 See Publication 463 for more information on travel and car expenses. Free federal tax filing 2011 Legal Fees You can deduct legal fees related to doing or keeping your job. Free federal tax filing 2011 Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. Free federal tax filing 2011 Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Free federal tax filing 2011 If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. Free federal tax filing 2011 Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. Free federal tax filing 2011 If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. Free federal tax filing 2011 Research Expenses of a College Professor If you are a college professor, you can deduct your research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Free federal tax filing 2011 You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. Free federal tax filing 2011 However, you cannot deduct the cost of travel as a form of education. Free federal tax filing 2011 Rural Mail Carriers' Vehicle Expenses If your expenses to use a vehicle in performing services as a rural mail carrier are more than the amount of your reimbursements, you can deduct the unreimbursed expenses. Free federal tax filing 2011 See chapter 4 of Publication 463 for more information. Free federal tax filing 2011 Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. Free federal tax filing 2011 You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Free federal tax filing 2011 For more information about depreciation, see Publication 946. Free federal tax filing 2011 Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging If you are an employee and have ordinary and necessary business-related expenses for travel away from home, local transportation, entertainment, and gifts, you may be able to deduct these expenses. Free federal tax filing 2011 Generally, you must file Form 2106 or Form 2106-EZ to claim these expenses. Free federal tax filing 2011 Travel expenses. Free federal tax filing 2011   Travel expenses are those incurred while traveling away from home for your employer. Free federal tax filing 2011 You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Free federal tax filing 2011 Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment. Free federal tax filing 2011   Travel expenses may include: The cost of getting to and from your business destination (air, rail, bus, car, etc. Free federal tax filing 2011 ), Meals and lodging while away from home, Taxi fares, Baggage charges, and Cleaning and laundry expenses. Free federal tax filing 2011   Travel expenses are discussed more fully in chapter 1 of Publication 463. Free federal tax filing 2011 Temporary work assignment. Free federal tax filing 2011    If your assignment or job away from home in a single location is realistically expected to last (and does in fact last) for 1 year or less, it is temporary, unless there are facts and circumstances that indicate it is not. Free federal tax filing 2011 Indefinite work assignment. Free federal tax filing 2011   If your assignment or job away from home in a single location is realistically expected to last for more than 1 year, it is indefinite, whether or not it actually lasts for more than 1 year. Free federal tax filing 2011 If your assignment or job away from home in a single location is realistically expected to last for 1 year or less, but at some later date it is realistically expected to exceed 1 year, it will be treated as temporary (in the absence of facts and circumstances indicating otherwise) until the date that your realistic expectation changes, and it will be treated as indefinite after that date. Free federal tax filing 2011 Federal crime investigation and prosecution. Free federal tax filing 2011   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule for deducting temporary travel expenses. Free federal tax filing 2011 This means that you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year. Free federal tax filing 2011   To qualify, the Attorney General must certify that you are traveling: For the Federal Government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Free federal tax filing 2011 Armed Forces reservists traveling more than 100 miles from home. Free federal tax filing 2011   If you are a member of a reserve component of the Armed Forces of the United States and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct some of your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Free federal tax filing 2011 The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Free federal tax filing 2011 The balance, if any, is reported on Schedule A. Free federal tax filing 2011   You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Naval, Marine Corps, Air Force, Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. Free federal tax filing 2011   For more information on travel expenses, see Publication 463. Free federal tax filing 2011 Local transportation expenses. Free federal tax filing 2011   Local transportation expenses are the expenses of getting from one workplace to another when you are not traveling away from home. Free federal tax filing 2011 They include the cost of transportation by air, rail, bus, taxi, and the cost of using your car. Free federal tax filing 2011   You can choose to use the standard mileage rate to figure your car expenses. Free federal tax filing 2011 The 2013 rate for business use of a vehicle is 56½ cents per mile. Free federal tax filing 2011    In general, the costs of commuting between your residence and your place of business are nondeductible. Free federal tax filing 2011 Work at two places in a day. Free federal tax filing 2011   If you work at two places in a day, whether or not for the same employer, you can generally deduct the expenses of getting from one workplace to the other. Free federal tax filing 2011 Temporary work location. Free federal tax filing 2011   You can deduct expenses incurred in going between your home and a temporary work location if at least one of the following applies. Free federal tax filing 2011 The work location is outside the metropolitan area where you live and normally work. Free federal tax filing 2011 You have at least one regular work location (other than your home) for the same trade or business. Free federal tax filing 2011 (If this applies, the distance between your home and the temporary work location does not matter. Free federal tax filing 2011 )   For this purpose, a work location is generally considered temporary if your work there is realistically expected to last (and does in fact last) for 1 year or less. Free federal tax filing 2011 It is not temporary if your work there is realistically expected to last for more than 1 year, even if it actually lasts for 1 year or less. Free federal tax filing 2011 If your work there initially is realistically expected to last for 1 year or less, but later is realistically expected to last for more than 1 year, the work location is generally considered temporary until the date your realistic expectation changes and not temporary after that date. Free federal tax filing 2011 For more information, see chapter 1 of Publication 463. Free federal tax filing 2011 Home office. Free federal tax filing 2011   You can deduct expenses incurred in going between your home and a workplace if your home is your principal place of business for the same trade or business. Free federal tax filing 2011 (In this situation, whether the other workplace is temporary or regular and its distance from your home do not matter. Free federal tax filing 2011 ) See Home Office , earlier, for a discussion on the use of your home as your principal place of business. Free federal tax filing 2011 Meals and entertainment. Free federal tax filing 2011   Generally, you can deduct entertainment expenses (including entertainment-related meals) only if they are directly related to the active conduct of your trade or business. Free federal tax filing 2011 However, the expense only needs to be associated with the active conduct of your trade or business if it directly precedes or follows a substantial and bona fide business-related discussion. Free federal tax filing 2011   You can deduct only 50% of your business-related meal and entertainment expenses unless the expenses meet certain exceptions. Free federal tax filing 2011 You apply this 50% limit before you apply the 2%-of-adjusted-gross-income limit. Free federal tax filing 2011 Meals when subject to “hours of service” limits. Free federal tax filing 2011   You can deduct 80% of your business-related meal expenses if you consume the meals during or incident to any period subject to the Department of Transportation's “hours of service” limits. Free federal tax filing 2011 You apply this 80% limit before you apply the 2%-of-adjusted-gross-income limit. Free federal tax filing 2011 Gift expenses. Free federal tax filing 2011   You can generally deduct up to $25 of business gifts you give to any one individual during the year. Free federal tax filing 2011 The following items do not count toward the $25 limit. Free federal tax filing 2011 Identical, widely distributed items costing $4 or less that have your name clearly and permanently imprinted. Free federal tax filing 2011 Signs, racks, and promotional materials to be displayed on the business premises of the recipient. Free federal tax filing 2011 Local lodging. Free federal tax filing 2011   If your employer provides or requires you to obtain lodging while you are not traveling away from home, you can deduct the cost of the lodging if it is: on a temporary basis, necessary for you to participate in or be available for a business meeting or employer function, and the costs are ordinary and necessary, but not lavish or extravagant. Free federal tax filing 2011   If your employer provides the lodging or reimburses you for the cost of the lodging, you can deduct the cost only if the value or the reimbursement is included in your gross income because it is reported as wages on your Form W-2. Free federal tax filing 2011 Additional information. Free federal tax filing 2011    See Publication 463 for more information on travel, transportation, meal, entertainment, and gift expenses, and reimbursements for these expenses. Free federal tax filing 2011 Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Free federal tax filing 2011 You can also deduct assessments for benefit payments to unemployed union members. Free federal tax filing 2011 However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Free federal tax filing 2011 Also, you cannot deduct contributions to a pension fund even if the union requires you to make the contributions. Free federal tax filing 2011 You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Free federal tax filing 2011 See Lobbying Expenses under Nondeductible Expenses, later. Free federal tax filing 2011 Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Free federal tax filing 2011 You must wear them as a condition of your employment. Free federal tax filing 2011 The clothes are not suitable for everyday wear. Free federal tax filing 2011 It is not enough that you wear distinctive clothing. Free federal tax filing 2011 The clothing must be specifically required by your employer. Free federal tax filing 2011 Nor is it enough that you do not, in fact, wear your work clothes away from work. Free federal tax filing 2011 The clothing must not be suitable for taking the place of your regular clothing. Free federal tax filing 2011 Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. Free federal tax filing 2011 ). Free federal tax filing 2011 Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Free federal tax filing 2011 However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Free federal tax filing 2011 Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Free federal tax filing 2011 Protective clothing. Free federal tax filing 2011   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. Free federal tax filing 2011   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. Free federal tax filing 2011 Military uniforms. Free federal tax filing 2011   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Free federal tax filing 2011 However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. Free federal tax filing 2011 In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Free federal tax filing 2011   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. Free federal tax filing 2011   If you are a student at an armed forces academy, you cannot deduct the cost of your uniforms if they replace regular clothing. Free federal tax filing 2011 However, you can deduct the cost of insignia, shoulder boards, and related items. Free federal tax filing 2011    You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Free federal tax filing 2011 Work-Related Education You can deduct expenses you have for education, even if the education may lead to a degree, if the education meets at least one of the following two tests. Free federal tax filing 2011 It maintains or improves skills required in your present work. Free federal tax filing 2011 It is required by your employer or the law to keep your salary, status, or job, and the requirement serves a business purpose of your employer. Free federal tax filing 2011 You cannot deduct expenses you have for education, even though one or both of the preceding tests are met, if the education: Is needed to meet the minimum educational requirements to qualify you in your trade or business, or Is part of a program of study that will lead to qualifying you in a new trade or business. Free federal tax filing 2011 If your education qualifies, you can deduct expenses for tuition, books, supplies, laboratory fees, and similar items, and certain transportation costs. Free federal tax filing 2011 If the education qualifies you for a new trade or business, you cannot deduct the educational expenses even if you do not intend to enter that trade or business. Free federal tax filing 2011 Travel as education. Free federal tax filing 2011   You cannot deduct the cost of travel that in itself constitutes a form of education. Free federal tax filing 2011 For example, a French teacher who travels to France to maintain general familiarity with the French language and culture cannot deduct the cost of the trip as an educational expense. Free federal tax filing 2011 More information. Free federal tax filing 2011    See Publication 970, Tax Benefits for Education, for a complete discussion of the deduction for work-related education expenses. Free federal tax filing 2011 Education Expenses During Unemployment If you stop working for a year or less in order to get education in order to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Free federal tax filing 2011 Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Free federal tax filing 2011 Tax Preparation Fees You can usually deduct tax preparation fees on the return for the year in which you pay them. Free federal tax filing 2011 Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Free federal tax filing 2011 These fees include the cost of tax preparation software programs and tax publications. Free federal tax filing 2011 They also include any fee you paid for electronic filing of your return. Free federal tax filing 2011 See Tax preparation fees under How To Report, later. Free federal tax filing 2011 Other Expenses You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit. Free federal tax filing 2011 On Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9, you can deduct the ordinary and necessary expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. Free federal tax filing 2011 You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonable and closely related to these purposes. Free federal tax filing 2011 These other expenses include the following items. Free federal tax filing 2011 Appraisal fees for a casualty loss or charitable contribution. Free federal tax filing 2011 Casualty and theft losses from property used in performing services as an employee. Free federal tax filing 2011 Clerical help and office rent in caring for investments. Free federal tax filing 2011 Depreciation on home computers used for investments. Free federal tax filing 2011 Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust. Free federal tax filing 2011 Fees to collect interest and dividends. Free federal tax filing 2011 Hobby expenses, but generally not more than hobby income. Free federal tax filing 2011 Indirect miscellaneous deductions from pass-through entities. Free federal tax filing 2011 Investment fees and expenses. Free federal tax filing 2011 Legal fees related to producing or collecting taxable income or getting tax advice. Free federal tax filing 2011 Loss on deposits in an insolvent or bankrupt financial institution. Free federal tax filing 2011 Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you. Free federal tax filing 2011 Repayments of income. Free federal tax filing 2011 Repayments of social security benefits. Free federal tax filing 2011 Safe deposit box rental, except for storing jewelry and other personal effects. Free federal tax filing 2011 Service charges on dividend reinvestment plans. Free federal tax filing 2011 Tax advice fees. Free federal tax filing 2011 Trustee's fees for your IRA, if separately billed and paid. Free federal tax filing 2011 If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses, later, under Nondeductible Expenses. Free federal tax filing 2011 Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Free federal tax filing 2011 Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. Free federal tax filing 2011 First report the loss in Section B of Form 4684, Casualties and Thefts. Free federal tax filing 2011 You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Free federal tax filing 2011 To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Free federal tax filing 2011 For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Free federal tax filing 2011 Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. Free federal tax filing 2011 Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. Free federal tax filing 2011 The fees are deductible on the return for the year in which you paid them. Free federal tax filing 2011 For example, fees charged to payments made in 2013 can be claimed on the 2013 tax return. Free federal tax filing 2011 Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). Free federal tax filing 2011 You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Free federal tax filing 2011 But if you work as an employee and also use the computer in that work, see Depreciation on Computers under Unreimbursed Employee Expenses, earlier. Free federal tax filing 2011 For more information on depreciation, see Publication 946. Free federal tax filing 2011 Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. Free federal tax filing 2011 Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Free federal tax filing 2011 The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. Free federal tax filing 2011 For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Free federal tax filing 2011 Fees To Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. Free federal tax filing 2011 But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Free federal tax filing 2011 You must add the fee to the cost of the property. Free federal tax filing 2011 You cannot deduct the fee you pay to a broker to sell securities. Free federal tax filing 2011 You can use the fee only to figure gain or loss from the sale. Free federal tax filing 2011 See the instructions for Schedule D (Form 1040) for information on how to report the fee. Free federal tax filing 2011 Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Free federal tax filing 2011 A hobby is not a business because it is not carried on to make a profit. Free federal tax filing 2011 See Not-for-Profit Activities in chapter 1 of Publication 535. Free federal tax filing 2011 Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Free federal tax filing 2011 Deductions of pass-through entities are passed through to the partners or shareholders. Free federal tax filing 2011 The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Free federal tax filing 2011 Example. Free federal tax filing 2011 You are a member of an investment club that is formed solely to invest in securities. Free federal tax filing 2011 The club is treated as a partnership. Free federal tax filing 2011 The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Free federal tax filing 2011 In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Free federal tax filing 2011 However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. Free federal tax filing 2011 Publicly offered mutual funds. Free federal tax filing 2011   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Free federal tax filing 2011 A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. Free federal tax filing 2011   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). Free federal tax filing 2011 This net figure is the amount you report on your return as income. Free federal tax filing 2011 You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Free federal tax filing 2011 Information returns. Free federal tax filing 2011   You should receive information returns from pass-through entities. Free federal tax filing 2011 Partnerships and S corporations. Free federal tax filing 2011   These entities issue Schedule K-1, which lists the items and amounts you must report, and identifies the tax return schedules and lines to use. Free federal tax filing 2011 Nonpublicly offered mutual funds. Free federal tax filing 2011   These funds will send you a Form 1099-DIV, or a substitute form, showing your share of gross income and investment expenses. Free federal tax filing 2011 You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Free federal tax filing 2011 Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. Free federal tax filing 2011 Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. Free federal tax filing 2011 You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. Free federal tax filing 2011 You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F) on the appropriate schedule. Free federal tax filing 2011 You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). Free federal tax filing 2011 See Tax Preparation Fees, earlier. Free federal tax filing 2011 Unlawful discrimination claims. Free federal tax filing 2011   You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 35, rather than as a miscellaneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U. Free federal tax filing 2011 S. Free federal tax filing 2011 Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. Free federal tax filing 2011 However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 35, is limited to the amount of the judgment or settlement you are including in income for the tax year. Free federal tax filing 2011 See Publication 525 for more information. Free federal tax filing 2011 Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Free federal tax filing 2011 If you can reasonably estimate the amount of your loss on money you have on deposit in a financial institution that becomes insolvent or bankrupt, you can generally choose to deduct it in the current year even though its exact amount has not been finally determined. Free federal tax filing 2011 If elected, the casualty loss is subject to certain deduction limitations. Free federal tax filing 2011 The election is made on Form 4684. Free federal tax filing 2011 Once you make this choice, you cannot change it without IRS approval. Free federal tax filing 2011 If none of the deposit is federally insured, you can deduct the loss in either of the following ways. Free federal tax filing 2011 As an ordinary loss (as a miscellaneous itemized deduction subject to the 2% limit). Free federal tax filing 2011 Write the name of the financial institution and “Insolvent Financial Institution” beside the amount on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. Free federal tax filing 2011 This deduction is limited to $20,000 ($10,000 if you are married filing separately) for each financial institution, reduced by any expected state insurance proceeds. Free federal tax filing 2011 As a casualty loss. Free federal tax filing 2011 Report it on Form 4684 first and then on Schedule A (Form 1040). Free federal tax filing 2011 See Publication 547 for details. Free federal tax filing 2011 As a nonbusiness bad debt. Free federal tax filing 2011 Report it on Schedule D (Form 1040). Free federal tax filing 2011 If any part of the deposit is federally insured, you can deduct the loss only as a casualty loss. Free federal tax filing 2011 Exception. Free federal tax filing 2011   You cannot make this choice if you are a 1%-or-more-owner or an officer of the financial institution, or are related to such owner or officer. Free federal tax filing 2011 For a definition of “related,” see Deposit in Insolvent or Bankrupt Financial Institution in chapter 4 of Publication 550. Free federal tax filing 2011 Actual loss different from estimated loss. Free federal tax filing 2011   If you make this choice and your actual loss is less than your estimated loss, you must include the excess in income. Free federal tax filing 2011 See Recoveries in Publication 525. Free federal tax filing 2011 If your actual loss is more than your estimated loss, treat the excess loss as explained under Choice not made, next. Free federal tax filing 2011 Choice not made. Free federal tax filing 2011   If you do not make this choice (or if you have an excess actual loss after choosing to deduct your estimated loss), treat your loss (or excess loss) as a nonbusiness bad debt (deductible as a short-term capital loss) in the year its amount is finally determined. Free federal tax filing 2011 See Nonbusiness Bad Debts in chapter 4 of Publication 550. Free federal tax filing 2011 Loss on IRA If you have a loss on your traditional IRA (or Roth IRA) investment, you can deduct the loss as a miscellaneous itemized deduction subject to the 2% limit, but only when all the amounts in all your traditional IRA (or Roth IRA) accounts have been distributed to you and the total distributions are less than your unrecovered basis. Free federal tax filing 2011 For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Free federal tax filing 2011 Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. Free federal tax filing 2011 If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Free federal tax filing 2011 If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Free federal tax filing 2011 Repayments of Social Security Benefits If the total of the amounts in box 5 (net benefits for 2013) of all your Forms SSA-1099, Social Security Benefit Statement, and Forms RRB-1099, Payments By the Railroad Retirement Board, is a negative figure (a figure in parentheses), you may be able to take a miscellaneous itemized deduction subject to the 2% limit. Free federal tax filing 2011 The amount you can deduct is the part of the negative figure that represents an amount you included in gross income in an earlier year. Free federal tax filing 2011 The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount of your benefits for the year. Free federal tax filing 2011 It will be a negative figure if the amount of benefits you repaid in 2013 (box 4) is more than the gross amount of benefits paid to you in 2013 (box 3). Free federal tax filing 2011 If the deduction is more than $3,000, you will have to use a special computation to figure your tax. Free federal tax filing 2011 See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Free federal tax filing 2011 Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. Free federal tax filing 2011 You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Free federal tax filing 2011 Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Free federal tax filing 2011 These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. Free federal tax filing 2011 Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your IRA are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Free federal tax filing 2011 Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Free federal tax filing 2011 They are not subject to the 2% limit. Free federal tax filing 2011 Report these items on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Free federal tax filing 2011 List of Deductions Amortizable premium on taxable bonds. Free federal tax filing 2011 Casualty and theft losses from income-producing property. Free federal tax filing 2011 Federal estate tax on income in respect of a decedent. Free federal tax filing 2011 Gambling losses up to the amount of gambling winnings. Free federal tax filing 2011 Impairment-related work expenses of persons with disabilities. Free federal tax filing 2011 Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Free federal tax filing 2011 Losses from Ponzi-type investment schemes. Free federal tax filing 2011 Repayments of more than $3,000 under a claim of right. Free federal tax filing 2011 Unrecovered investment in an annuity. Free federal tax filing 2011 Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. Free federal tax filing 2011 You can elect to amortize the premium on taxable bonds. Free federal tax filing 2011 The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Free federal tax filing 2011 Pre-1998 election to amortize bond premium. Free federal tax filing 2011   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. Free federal tax filing 2011 Bonds acquired after October 22, 1986, and before 1988. Free federal tax filing 2011   The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you chose to treat it as an offset to interest income on the bond. Free federal tax filing 2011 Bonds acquired before October 23, 1986. Free federal tax filing 2011   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2% limit. Free federal tax filing 2011 Deduction for excess premium. Free federal tax filing 2011   On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond premium allocable to a period may exceed the amount of stated interest allocable to the period. Free federal tax filing 2011 If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. Free federal tax filing 2011 However, the amount deductible is limited to the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated as a bond premium deduction on the bond in prior periods. Free federal tax filing 2011 If any of the excess bond premium cannot be deducted because of the limit, this amount is carried forward to the next period and is treated as bond premium allocable to that period. Free federal tax filing 2011    Pre-1998 choice to amortize bond premium. Free federal tax filing 2011 If you made the choice to amortize the premium on taxable bonds before 1998, you can deduct the bond premium amortization that is more than your interest income only for bonds acquired during 1998 and later years. Free federal tax filing 2011 More information. Free federal tax filing 2011    For more information on bond premium, see Bond Premium Amortization in chapter 3 of Publication 550. Free federal tax filing 2011 Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). Free federal tax filing 2011 First report the loss in Section B of Form 4684. Free federal tax filing 2011 You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Free federal tax filing 2011 To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Free federal tax filing 2011 For more information on casualty and theft losses, see Publication 547. Free federal tax filing 2011 Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. Free federal tax filing 2011 Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Free federal tax filing 2011 See Publication 559 for information about figuring the amount of this deduction. Free federal tax filing 2011 Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. Free federal tax filing 2011 You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Free federal tax filing 2011 You cannot deduct gambling losses that are more than your winnings. Free federal tax filing 2011 Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR). Free federal tax filing 2011 You cannot reduce your gambling winnings by your gambling losses and report the difference. Free federal tax filing 2011 You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Free federal tax filing 2011 Therefore, your records should show your winnings separately from your losses. Free federal tax filing 2011 Diary of winnings and losses. Free federal tax filing 2011 You must keep an accurate diary or similar record of your losses and winnings. Free federal tax filing 2011 Your diary should contain at least the following information. Free federal tax filing 2011 The date and type of your specific wager or wagering activity. Free federal tax filing 2011 The name and address or location of the gambling establishment. Free federal tax filing 2011 The names of other persons present with you at the gambling establishment. Free federal tax filing 2011 The amount(s) you won or lost. Free federal tax filing 2011 Proof of winnings and losses. Free federal tax filing 2011   In addition to your diary, you should also have other documentation. Free federal tax filing 2011 You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. Free federal tax filing 2011   For specific wagering transactions, you can use the following items to support your winnings and losses. Free federal tax filing 2011    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. Free federal tax filing 2011 They are not all-inclusive. Free federal tax filing 2011 Your tax liability depends on your particular facts and circumstances. Free federal tax filing 2011 Keno. Free federal tax filing 2011   Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records. Free federal tax filing 2011 Slot machines. Free federal tax filing 2011   A record of the machine number and all winnings by date and time the machine was played. Free federal tax filing 2011 Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc. Free federal tax filing 2011 ). Free federal tax filing 2011   The number of the table at which you were playing. Free federal tax filing 2011 Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage. Free federal tax filing 2011 Bingo. Free federal tax filing 2011   A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Free federal tax filing 2011 Supplemental records include any receipts from the casino, parlor, etc. Free federal tax filing 2011 Racing (horse, harness, dog, etc. Free federal tax filing 2011 ). Free federal tax filing 2011   A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Free federal tax filing 2011 Supplemental records include unredeemed tickets and payment records from the racetrack. Free federal tax filing 2011 Lotteries. Free federal tax filing 2011   A record of ticket purchases, dates, winnings, and losses. Free federal tax filing 2011 Supplemental records include unredeemed tickets, payment slips, and winnings statements. Free federal tax filing 2011 Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. Free federal tax filing 2011 Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work. Free federal tax filing 2011 Example. Free federal tax filing 2011 You are blind. Free federal tax filing 2011 You must use a reader to do your work. Free federal tax filing 2011 You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Free federal tax filing 2011 The reader's services are only for your work. Free federal tax filing 2011 You can deduct your expenses for the reader as impairment-related work expenses. Free federal tax filing 2011 Self-employed. Free federal tax filing 2011   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. Free federal tax filing 2011 See Impairment-related work expenses. Free federal tax filing 2011 , later under How To Report. Free federal tax filing 2011 Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14 (only if effectively connected with a U. Free federal tax filing 2011 S. Free federal tax filing 2011 trade or business). Free federal tax filing 2011 It is not subject to the passive activity limitations. Free federal tax filing 2011 Officials Paid on a Fee Basis If you are a fee-basis official, you can claim your expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. Free federal tax filing 2011 See Publication 463 for more information. Free federal tax filing 2011 Performing Artists If you are a qualified performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. Free federal tax filing 2011 If you are an employee, complete Form 2106 or Form 2106-EZ. Free federal tax filing 2011 See Publication 463 for more information. Free federal tax filing 2011 Losses From Ponzi-type Investment Schemes These losses are deductible as theft losses of income-producing property on your tax return for the year the loss was discovered. Free federal tax filing 2011 You figure the deductible loss in Section B of Form 4684. Free federal tax filing 2011 However, if you qualify to use Revenue Procedure 2009-20 (as modified by Revenue Procedure 2011-58) and you choose to follow the procedures in the guidance, complete Section C of Form 4684 before completing Section B. Free federal tax filing 2011 Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Free federal tax filing 2011 You do not need to complete Appendix A. Free federal tax filing 2011 See the Form 4684 instructions and Publication 547, Casualties, Disasters, and Thefts, for more information. Free federal tax filing 2011 Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid, or take a credit against your tax. Free federal tax filing 2011 See Repayments in Publication 525 for more information. Free federal tax filing 2011 Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. Free federal tax filing 2011 If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. Free federal tax filing 2011 See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities. Free federal tax filing 2011 Nondeductible Expenses You cannot deduct the following expenses. Free federal tax filing 2011 List of Nondeductible Expenses Adoption expenses. Free federal tax filing 2011 Broker's commissions. Free federal tax filing 2011 Burial or funeral expenses, including the cost of a cemetery lot. Free federal tax filing 2011 Campaign expenses. Free federal tax filing 2011 Capital expenses. Free federal tax filing 2011 Check-writing fees. Free federal tax filing 2011 Club dues. Free federal tax filing 2011 Commuting expenses. Free federal tax filing 2011 Fees and licenses, such as car licenses, marriage licenses, and dog tags. Free federal tax filing 2011 Fines and penalties, such as parking tickets. Free federal tax filing 2011 Health spa expenses. Free federal tax filing 2011 Hobby losses—but see Hobby Expenses, earlier. Free federal tax filing 2011 Home repairs, insurance, and rent. Free federal tax filing 2011 Home security system. Free federal tax filing 2011 Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535. Free federal tax filing 2011 Investment-related seminars. Free federal tax filing 2011 Life insurance premiums paid by the insured. Free federal tax filing 2011 Lobbying expenses. Free federal tax filing 2011 Losses from the sale of your home, furniture, personal car, etc. Free federal tax filing 2011 Lost or misplaced cash or property. Free federal tax filing 2011 Lunches with co-workers. Free federal tax filing 2011 Meals while working late. Free federal tax filing 2011 Medical expenses as business expenses other than medical examinations required by your employer. Free federal tax filing 2011 Personal disability insurance premiums. Free federal tax filing 2011 Personal legal expenses. Free federal tax filing 2011 Personal, living, or family expenses. Free federal tax filing 2011 Political contributions. Free federal tax filing 2011 Professional accreditation fees. Free federal tax filing 2011 Professional reputation, expenses to improve. Free federal tax filing 2011 Relief fund contributions. Free federal tax filing 2011 Residential telephone line. Free federal tax filing 2011 Stockholders' meeting, expenses of attending. Free federal tax filing 2011 Tax-exempt income, expenses of earning or collecting. Free federal tax filing 2011 The value of wages never received or lost vacation time. Free federal tax filing 2011 Travel expenses for another individual. Free federal tax filing 2011 Voluntary unemployment benefit fund contributions. Free federal tax filing 2011 Wristwatches. Free federal tax filing 2011 Adoption Expenses You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. Free federal tax filing 2011 For details, see Form 8839, Qualified Adoption Expenses. Free federal tax filing 2011 Commissions Commissions paid on the purchase of securities are not deductible, either as business or nonbusiness expenses. Free federal tax filing 2011 Instead, these fees must be added to the taxpayer's cost of the securities. Free federal tax filing 2011 Commissions paid on the sale are deductible as business expenses only by dealers. Free federal tax filing 2011 Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Free federal tax filing 2011 These include qualification and registration fees for primary elections. Free federal tax filing 2011 Legal fees. Free federal tax filing 2011   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Free federal tax filing 2011 Capital Expenses You cannot currently deduct amounts paid to buy property that has a useful life substantially beyond the tax year or amounts paid to increase the value or prolong the life of property. Free federal tax filing 2011 If you use such property in your work, you may be able to take a depreciation deduction. Free federal tax filing 2011 See Publication 946. Free federal tax filing 2011 If the property is a car used in your work, also see Publication 463. Free federal tax filing 2011 Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. Free federal tax filing 2011 Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Free federal tax filing 2011 This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Free federal tax filing 2011 You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. Free federal tax filing 2011 Dues paid to airline, hotel, and luncheon clubs are not deductible. Free federal tax filing 2011 Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Free federal tax filing 2011 If you haul tools, instruments, or other items in your car to and from work, you can deduct only the additional cost of hauling the items, such as the rent on a trailer to carry the items. Free federal tax filing 2011 Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Free federal tax filing 2011 This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Free federal tax filing 2011 Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Free federal tax filing 2011 Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. Free federal tax filing 2011 Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Free federal tax filing 2011 However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Free federal tax filing 2011 See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587. Free federal tax filing 2011 Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Free federal tax filing 2011 Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Free federal tax filing 2011 You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Free federal tax filing 2011 See Publication 504, Divorced or Separated Individuals, for information on alimony. Free federal tax filing 2011 Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Free federal tax filing 2011 These include expenses to: Influence legislation, Participate, or intervene, in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. Free federal tax filing 2011 Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Free federal tax filing 2011 Covered executive branch official. Free federal tax filing 2011   A covered executive branch official, for the purpose of (4) above, is any of the following officials. Free federal tax filing 2011 The President. Free federal tax filing 2011 The Vice President. Free federal tax filing 2011 Any officer or employee of the White House Office of the Executive Office of the President, and the two most senior level officers of each of the other agencies in the Executive Office. Free federal tax filing 2011 Any individual serving in a position in Level I of the Executive Schedule under section 5312 of Title 5, United States Code, any other individual designated by the President as having Cabinet-level status, and any immediate deputy of one of these individuals. Free federal tax filing 2011 Dues used for lobbying. Free federal tax filing 2011   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. Free federal tax filing 2011 Exceptions. Free federal tax filing 2011   You can deduct certain lobbying expenses if they are ordinary and necessary expenses of carrying on your trade or business. Free federal tax filing 2011 You can deduct expenses for attempting to influence the legislation of any local council or similar governing body (local legislation). Free federal tax filing 2011 An Indian tribal government is considered a local council or similar governing body. Free federal tax filing 2011 You can deduct in-house expenses for influencing legislation or communicating directly with a covered executive branch official if the expenses for the tax year are not more than $2,000 (not counting overhead expenses). Free federal tax filing 2011 If you are a professional lobbyist, you can deduct the expenses you incur in the trade or business of lobbying on behalf of another person. Free federal tax filing 2011 Payments by the other person to you for lobbying activities cannot be deducted. Free federal tax filing 2011 Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Free federal tax filing 2011 However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Free federal tax filing 2011 See Publication 547. Free federal tax filing 2011 Example. Free federal tax filing 2011 A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Free federal tax filing 2011 The diamond falls from the ring and is never found. Free federal tax filing 2011 The loss of the diamond is a casualty. Free federal tax filing 2011 Lunches With Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Free federal tax filing 2011 See Publication 463 for information on deductible expenses while traveling away from home. Free federal tax filing 2011 Meals While Working Late You cannot deduct the cost of meals while working late. Free federal tax filing 2011 However, you may be able to claim a deduction if the cost of the meals is a deductible entertainment expense, or if you are traveling away from home. Free federal tax filing 2011 See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home. Free federal tax filing 2011 Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Free federal tax filing 2011 Custody of children. Free federal tax filing 2011 Breach of promise to marry suit. Free federal tax filing 2011 Civil or criminal charges resulting from a personal relationship. Free federal tax filing 2011 Damages for personal injury (except certain whistleblower claims and unlawful discrimination claims). Free federal tax filing 2011 For more information about unlawful discrimination claims, see Deductions Subject to the 2% Limit, earlier. Free federal tax filing 2011 Preparation of a title (or defense or perfection of a title). Free federal tax filing 2011 Preparation of a will. Free federal tax filing 2011 Property claims or property settlement in a divorce. Free federal tax filing 2011 You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Free federal tax filing 2011 Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Free federal tax filing 2011 Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Free federal tax filing 2011 Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Free federal tax filing 2011 Accounting certificate fees paid for the initial right to practice accounting. Free federal tax filing 2011 Bar exam fees and incidental expenses in securing initial admission to the bar. Free federal tax filing 2011 Medical and dental license fees paid to get initial licensing. Free federal tax filing 2011 Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Free federal tax filing 2011 Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. Free federal tax filing 2011 Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. Free federal tax filing 2011 Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. Free federal tax filing 2011 You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Free federal tax filing 2011 Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Free federal tax filing 2011 You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities. Free federal tax filing 2011 If you have expenses to p