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Free Tax Calculator 2011

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Free Tax Calculator 2011

Free tax calculator 2011 5. Free tax calculator 2011   Manufacturers Taxes Table of Contents Importer. Free tax calculator 2011 Use considered sale. Free tax calculator 2011 Lease considered sale. Free tax calculator 2011 Bonus goods. Free tax calculator 2011 Taxable Event ExemptionsRequirements for Exempt Sales Credits or Refunds Sport Fishing EquipmentRelated person. Free tax calculator 2011 Bows, Quivers, Broadheads, and Points Arrow ShaftsExemption for certain wooden arrows. Free tax calculator 2011 CoalExported. Free tax calculator 2011 Taxable TiresQualifying intercity or local bus. Free tax calculator 2011 Qualifying school bus. Free tax calculator 2011 Gas Guzzler TaxVehicles not subject to tax. Free tax calculator 2011 Imported automobiles. Free tax calculator 2011 VaccinesConditions to allowance. Free tax calculator 2011 Taxable Medical Devices The following discussion of manufacturers taxes applies to the tax on: Sport fishing equipment; Fishing rods and fishing poles; Electric outboard motors; Fishing tackle boxes; Bows, quivers, broadheads, and points; Arrow shafts; Coal; Taxable tires; Gas guzzler automobiles; and Vaccines. Free tax calculator 2011 Manufacturer. Free tax calculator 2011   The term “manufacturer” includes a producer or importer. Free tax calculator 2011 A manufacturer is any person who produces a taxable article from new or raw material, or from scrap, salvage, or junk material, by processing or changing the form of an article or by combining or assembling two or more articles. Free tax calculator 2011 If you furnish the materials and keep title to those materials and to the finished article, you are considered the manufacturer even though another person actually manufactures the taxable article. Free tax calculator 2011   A manufacturer who sells a taxable article in knockdown (unassembled) condition is liable for the tax. Free tax calculator 2011 The person who buys these component parts and assembles a taxable article may also be liable for tax as a further manufacturer depending on the labor, material, and overhead required to assemble the completed article if the article is assembled for business use. Free tax calculator 2011 Importer. Free tax calculator 2011   An importer is a person who brings a taxable article into the United States, or withdraws a taxable article from a customs bonded warehouse for sale or use in the United States. Free tax calculator 2011 Sale. Free tax calculator 2011   A sale is the transfer of the title to, or the substantial incidents of ownership in, an article to a buyer for consideration that may consist of money, services, or other things. Free tax calculator 2011 Use considered sale. Free tax calculator 2011   A manufacturer who uses a taxable article is liable for the tax in the same manner as if it were sold. Free tax calculator 2011 Lease considered sale. Free tax calculator 2011   The lease of an article (including any renewal or extension of the lease) by the manufacturer is generally considered a taxable sale. Free tax calculator 2011 However, for the gas guzzler tax, only the first lease (excluding any renewal or extension) of the automobile by the manufacturer is considered a sale. Free tax calculator 2011 Manufacturers taxes based on sale price. Free tax calculator 2011   The manufacturers taxes imposed on the sale of sport fishing equipment, electric outboard motors, and bows are based on the sale price of the article. Free tax calculator 2011 The taxes imposed on coal are based either on the sale price or the weight. Free tax calculator 2011   The price for which an article is sold includes the total consideration paid for the article, whether that consideration is in the form of money, services, or other things. Free tax calculator 2011 However, you include certain charges made when a taxable article is sold and you exclude others. Free tax calculator 2011 To figure the price on which you base the tax, use the following rules. Free tax calculator 2011 Include both the following charges in the price. Free tax calculator 2011 Any charge for coverings or containers (regardless of their nature). Free tax calculator 2011 Any charge incident to placing the article in a condition packed ready for shipment. Free tax calculator 2011 Exclude all the following amounts from the price. Free tax calculator 2011 The manufacturers excise tax, whether or not it is stated as a separate charge. Free tax calculator 2011 The transportation charges pursuant to the sale. Free tax calculator 2011 The cost of transportation of goods to a warehouse before their bona fide sale is not excludable. Free tax calculator 2011 Delivery, insurance, installation, retail dealer preparation charges, and other charges you incur in placing the article in the hands of the purchaser under a bona fide sale. Free tax calculator 2011 Discounts, rebates, and similar allowances actually granted to the purchaser. Free tax calculator 2011 Local advertising charges. Free tax calculator 2011 A charge made separately when the article is sold and that qualifies as a charge for “local advertising” may, within certain limits, be excluded from the sale price. Free tax calculator 2011 Charges for warranty paid at the purchaser's option. Free tax calculator 2011 However, a charge for a warranty of an article that the manufacturer requires the purchaser to pay to obtain the article is included in the sale price on which the tax is figured. Free tax calculator 2011 Bonus goods. Free tax calculator 2011   Allocate the sale price if you give free nontaxable goods with the purchase of taxable merchandise. Free tax calculator 2011 Figure the tax only on the sale price attributable to the taxable articles. Free tax calculator 2011 Example. Free tax calculator 2011 A manufacturer sells a quantity of taxable articles and gives the purchaser certain nontaxable articles as a bonus. Free tax calculator 2011 The sale price of the shipment is $1,500. Free tax calculator 2011 The normal sale price is $2,000: $1,500 for the taxable articles and $500 for the nontaxable articles. Free tax calculator 2011 Since the taxable items represent 75% of the normal sale price, the tax is based on 75% of the actual sale price, or $1,125 (75% of $1,500). Free tax calculator 2011 The remaining $375 is allocated to the nontaxable articles. Free tax calculator 2011 Taxable Event Tax attaches when the title to the article sold passes from the manufacturer to the buyer. Free tax calculator 2011 When the title passes depends on the intention of the parties as gathered from the contract of sale. Free tax calculator 2011 In the absence of expressed intention, the legal rules of presumption followed in the jurisdiction where the sale occurs determine when title passes. Free tax calculator 2011 If the taxable article is used by the manufacturer, the tax attaches at the time use begins. Free tax calculator 2011 The manufacturer is liable for the tax. Free tax calculator 2011 Partial payments. Free tax calculator 2011   The tax applies to each partial payment received when taxable articles are: Leased, Sold conditionally, Sold on installment with chattel mortgage, or Sold on installment with title to pass in the future. Free tax calculator 2011 To figure the tax, multiply the partial payment by the tax rate in effect at the time of the payment. Free tax calculator 2011 Exemptions The following sales by the manufacturer are exempt from the manufacturers tax. Free tax calculator 2011 Sale of an article to a state or local government for the exclusive use of the state or local government. Free tax calculator 2011 This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. Free tax calculator 2011 State is defined in Definitions in chapter 1. Free tax calculator 2011 Sale of an article to a nonprofit educational organization for its exclusive use. Free tax calculator 2011 This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. Free tax calculator 2011 Nonprofit educational organization is defined under Communications Tax in chapter 4. Free tax calculator 2011 Sale of an article to a qualified blood collector organization. Free tax calculator 2011 This exemption does not apply to gas guzzlers, recreational equipment, and vaccines. Free tax calculator 2011 Qualified blood collector organizations are defined under Communications Tax in chapter 4. Free tax calculator 2011 Sale of an article for use by the purchaser as supplies for vessels. Free tax calculator 2011 This exemption does not apply to the taxes on coal and vaccines. Free tax calculator 2011 Supplies for vessels means ships' stores, sea stores, or legitimate equipment on vessels of war of the United States or any foreign nation, vessels employed in the fisheries or whaling business, or vessels actually engaged in foreign trade. Free tax calculator 2011 Sale of an article for use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by the second purchaser for further manufacture. Free tax calculator 2011 This exemption does not apply to the tax on coal and tires. Free tax calculator 2011 Use for further manufacture means use in the manufacture or production of an article subject to the manufacturers excise taxes. Free tax calculator 2011 If you buy articles tax free and resell or use them other than in the manufacture of another article, you are liable for the tax on their resale or use just as if you had manufactured and sold them. Free tax calculator 2011 Sale of an article for export or for resale by the purchaser to a second purchaser for export. Free tax calculator 2011 The article may be exported to a foreign country or to a possession of the United States. Free tax calculator 2011 A vaccine shipped to a possession of the United States is not considered to be exported. Free tax calculator 2011 If an article is sold tax free for export and the manufacturer does not receive proof of export, described later, the manufacturer is liable for the tax. Free tax calculator 2011 Sales of articles of native Indian handicraft, such as bows and arrow shafts, manufactured by Indians on reservations, in Indian schools, or under U. Free tax calculator 2011 S. Free tax calculator 2011 jurisdiction in Alaska. Free tax calculator 2011 For tire exemptions, see section 4221(e)(2). Free tax calculator 2011 Requirements for Exempt Sales The following requirements must be met for a sale to be exempt from the manufacturers tax. Free tax calculator 2011 Registration requirements. Free tax calculator 2011   The manufacturer, first purchaser, and second purchaser in the case of resales must be registered. Free tax calculator 2011 See the Form 637 instructions for more information. Free tax calculator 2011 Exceptions to registration requirements. Free tax calculator 2011   Registration is not required for: State or local governments, Foreign purchasers of articles sold or resold for export, The United States, or Parties to a sale of supplies for vessels and aircraft. Free tax calculator 2011 Certification requirement. Free tax calculator 2011   If the purchaser is required to be registered, the purchaser must give the manufacturer its registration number and certify the exempt purpose for which the article will be used. Free tax calculator 2011 The information must be in writing and may be noted on the purchase order or other document furnished by the purchaser to the seller in connection with the sale. Free tax calculator 2011   For a sale to a state or local government, an exemption certificate must be signed by an officer or employee authorized by the state or local government. Free tax calculator 2011 See Regulations section 48. Free tax calculator 2011 4221-5(c) for the certificate requirements. Free tax calculator 2011   For sales for use as supplies for vessels and aircraft, if the manufacturer and purchaser are not registered, the owner or agent of the vessel must provide an exemption certificate to the manufacturer before or at the time of sale. Free tax calculator 2011 See Regulations section 48. Free tax calculator 2011 4221-4(d) for the certificate requirements. Free tax calculator 2011 Proof of export requirement. Free tax calculator 2011   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof of exportation. Free tax calculator 2011 See Regulations section 48. Free tax calculator 2011 4221-3(d) for evidence that qualifies as proof of exportation. Free tax calculator 2011 Proof of resale for further manufacture requirement. Free tax calculator 2011   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof that the article has been resold for use in further manufacture. Free tax calculator 2011 See Regulations section 48. Free tax calculator 2011 4221-2(c) for evidence that qualifies as proof of resale. Free tax calculator 2011 Information to be furnished to purchaser. Free tax calculator 2011   The manufacturer must indicate to the purchaser that the articles normally would be subject to tax and are being sold tax free for an exempt purpose because the purchaser has provided the required certificate. Free tax calculator 2011 Credits or Refunds The manufacturer may be eligible to obtain a credit or refund of the manufacturers tax for certain uses, sales, exports, and price readjustments. Free tax calculator 2011 The claim must set forth in detail the facts upon which the claim is based. Free tax calculator 2011 Uses, sales, and exports. Free tax calculator 2011   A credit or refund (without interest) of the manufacturers taxes may be allowable if a tax-paid article is, by any person: Exported, Used or sold for use as supplies for vessels (except for coal and vaccines), Sold to a state or local government for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a nonprofit educational organization for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a qualified blood collector organization for its exclusive use (except for gas guzzlers, recreational equipment, and vaccines), or Used for further manufacture of another article subject to the manufacturers taxes (except for coal). Free tax calculator 2011 Export. Free tax calculator 2011   If a tax-paid article is exported, the exporter or shipper may claim a credit or refund if the manufacturer waives its right to claim the credit or refund. Free tax calculator 2011 In the case of a tax-paid article used to make another taxable article, the subsequent manufacturer may claim the credit or refund. Free tax calculator 2011 Price readjustments. Free tax calculator 2011   In addition, a credit or refund (without interest) may be allowable for a tax-paid article for which the price is readjusted by reason of return or repossession of the article or a bona fide discount, rebate, or allowance for taxes based on price. Free tax calculator 2011 Conditions to allowance. Free tax calculator 2011   To claim a credit or refund in the case of export; supplies for vessels; or sales to a state or local government, nonprofit educational organization, or qualified blood collector organization; the person who paid the tax must certify on the claim that one of the following applies and that the claimant has the required supporting information. Free tax calculator 2011 The claimant sold the article at a tax-excluded price. Free tax calculator 2011 The person has repaid, or agreed to repay, the tax to the ultimate vendor of the article. Free tax calculator 2011 The person has obtained the written consent of the ultimate vendor to make the claim. Free tax calculator 2011 The ultimate vendor generally is the seller making the sale that gives rise to the overpayment of tax. Free tax calculator 2011 Claim for further manufacture. Free tax calculator 2011   To claim a credit or refund for further manufacture, the claimant must include a statement that contains the following. Free tax calculator 2011 The name and address of the manufacturer and the date of payment. Free tax calculator 2011 An identification of the article for which the credit or refund is claimed. Free tax calculator 2011 The amount of tax paid on the article and the date on which it was paid. Free tax calculator 2011 Information indicating that the article was used as material in the manufacture or production of, or as a component part of, a second article manufactured or produced by the manufacturer, or was sold on or in connection with, or with the sale of a second article manufactured or produced by the manufacturer. Free tax calculator 2011 An identification of the second article. Free tax calculator 2011   For claims by the exporter or shipper, the claim must contain the proof of export and a statement signed by the person that paid the tax waiving the right to claim a credit or refund. Free tax calculator 2011 The statement must include the amount of tax paid, the date of payment, and the office to which it was paid. Free tax calculator 2011 Claim for price readjustment. Free tax calculator 2011   To claim a credit or refund for a price readjustment, the person who paid the tax must include with the claim, a statement that contains the following. Free tax calculator 2011 A description of the circumstances that gave rise to the price readjustment. Free tax calculator 2011 An identification of the article whose price was readjusted. Free tax calculator 2011 The price at which the article was sold. Free tax calculator 2011 The amount of tax paid on the article and the date on which it was paid. Free tax calculator 2011 The name and address of the purchaser. Free tax calculator 2011 The amount repaid to the purchaser or credited to the purchaser's account. Free tax calculator 2011 Sport Fishing Equipment A tax of 10% of the sale price is imposed on many articles of sport fishing equipment sold by the manufacturer. Free tax calculator 2011 This includes any parts or accessories sold on or in connection with the sale of those articles. Free tax calculator 2011 Pay this tax with Form 720. Free tax calculator 2011 No tax deposits are required. Free tax calculator 2011 Sport fishing equipment includes all the following items. Free tax calculator 2011 Fishing rods and poles (and component parts), fishing reels, fly fishing lines, and other fishing lines not over 130 pounds test, fishing spears, spear guns, and spear tips. Free tax calculator 2011 Items of terminal tackle, including leaders, artificial lures, artificial baits, artificial flies, fishing hooks, bobbers, sinkers, snaps, drayles, and swivels (but not including natural bait or any item of terminal tackle designed for use and ordinarily used on fishing lines not described in (1)). Free tax calculator 2011 The following items of fishing supplies and accessories: fish stringers, creels, bags, baskets, and other containers designed to hold fish, portable bait containers, fishing vests, landing nets, gaff hooks, fishing hook disgorgers, and dressing for fishing lines and artificial flies. Free tax calculator 2011 Fishing tip-ups and tilts. Free tax calculator 2011 Fishing rod belts, fishing rodholders, fishing harnesses, fish fighting chairs, fishing outriggers, and fishing downriggers. Free tax calculator 2011 See Revenue Ruling 88-52 in Cumulative Bulletin 1988-1 for a more complete description of the items of taxable equipment. Free tax calculator 2011 Fishing rods and fishing poles. Free tax calculator 2011   The tax on fishing rods and fishing poles (and component parts) is 10% of the sales price not to exceed $10 per article. Free tax calculator 2011 The tax is paid by the manufacturer, producer, or importer. Free tax calculator 2011 Fishing tackle boxes. Free tax calculator 2011   The tax on fishing tackle boxes is 3% of the sales price. Free tax calculator 2011 The tax is paid by the manufacturer, producer, or importer. Free tax calculator 2011 Electric outboard boat motors. Free tax calculator 2011   A tax of 3% of the sale price is imposed on the sale by the manufacturer of electric outboard motors. Free tax calculator 2011 This includes any parts or accessories sold on or in connection with the sale of those articles. Free tax calculator 2011 Certain equipment resale. Free tax calculator 2011   The tax on the sale of sport fishing equipment is imposed a second time under the following circumstances. Free tax calculator 2011 If the manufacturer sells a taxable article to any person, the manufacturer is liable for the tax. Free tax calculator 2011 If the purchaser or any other person then sells it to a person who is related (discussed next) to the manufacturer, that related person is liable for a second tax on any subsequent sale of the article. Free tax calculator 2011 The second tax, however, is not imposed if the constructive sale price rules under section 4216(b) apply to the sale by the manufacturer. Free tax calculator 2011   If the second tax is imposed, a credit for tax previously paid by the manufacturer is available provided the related person can document the tax paid. Free tax calculator 2011 The documentation requirement is generally satisfied only through submission of copies of actual records of the person that previously paid the tax. Free tax calculator 2011 Related person. Free tax calculator 2011   For the tax on sport fishing equipment, a person is a related person of the manufacturer if that person and the manufacturer have a relationship described in section 465(b)(3)(C). Free tax calculator 2011 Bows, Quivers, Broadheads, and Points The tax on bows is 11% (. Free tax calculator 2011 11) of the sales price. Free tax calculator 2011 The tax is paid by the manufacturer, producer, or importer. Free tax calculator 2011 It applies to bows having a peak draw weight of 30 pounds or more. Free tax calculator 2011 The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below. Free tax calculator 2011 Pay this tax with Form 720. Free tax calculator 2011 No tax deposits are required. Free tax calculator 2011 Arrow Shafts The tax on arrow shafts is listed on Form 720. Free tax calculator 2011 The tax is paid by the manufacturer, producer, or importer of any arrow shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow that after its assembly meets either of the following conditions. Free tax calculator 2011 It measures 18 inches or more in overall length. Free tax calculator 2011 It measures less than 18 inches in overall length but is suitable for use with a taxable bow, described earlier. Free tax calculator 2011 Exemption for certain wooden arrows. Free tax calculator 2011   After October 3, 2008, the tax does not apply to any shaft made of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) and used in the manufacture of any arrow that after its assembly meets both of the following conditions. Free tax calculator 2011 It measures 5/16 of an inch or less in diameter. Free tax calculator 2011 It is not suitable for use with a taxable bow, described earlier. Free tax calculator 2011 Pay this tax with Form 720. Free tax calculator 2011 No tax deposits are required. Free tax calculator 2011 Coal A tax is imposed on the first sale of coal mined in the United States. Free tax calculator 2011 The producer of the coal is liable for the tax. Free tax calculator 2011 The producer is the person who has vested ownership of the coal under state law immediately after the coal is severed from the ground. Free tax calculator 2011 Determine vested ownership without regard to any contractual arrangement for the sale or other disposition of the coal or the payment of any royalties between the producer and third parties. Free tax calculator 2011 A producer includes any person who extracts coal from coal waste refuse piles (or from the silt waste product that results from the wet washing of coal). Free tax calculator 2011 The tax is not imposed on coal extracted from a riverbed by dredging if it can be shown that the coal has been taxed previously. Free tax calculator 2011 Tax rates. Free tax calculator 2011   The tax on underground-mined coal is the lower of: $1. Free tax calculator 2011 10 a ton, or 4. Free tax calculator 2011 4% of the sale price. Free tax calculator 2011   The tax on surface-mined coal is the lower of: 55 cents a ton, or 4. Free tax calculator 2011 4% of the sale price. Free tax calculator 2011   Coal will be taxed at the 4. Free tax calculator 2011 4% rate if the selling price is less than $25 a ton for underground-mined coal and less than $12. Free tax calculator 2011 50 a ton for surface-mined coal. Free tax calculator 2011 Apply the tax proportionately if a sale or use includes a portion of a ton. Free tax calculator 2011 Example. Free tax calculator 2011 If you sell 21,000 pounds (10. Free tax calculator 2011 5 tons) of coal from an underground mine for $525, the price per ton is $50. Free tax calculator 2011 The tax is $1. Free tax calculator 2011 10 × 10. Free tax calculator 2011 5 tons ($11. Free tax calculator 2011 55). Free tax calculator 2011 Coal production. Free tax calculator 2011   Coal is produced from surface mines if all geological matter (trees, earth, rock) above the coal is removed before the coal is mined. Free tax calculator 2011 Treat coal removed by auger and coal reclaimed from coal waste refuse piles as produced from a surface mine. Free tax calculator 2011   Treat coal as produced from an underground mine when the coal is not produced from a surface mine. Free tax calculator 2011 In some cases, a single mine may yield coal from both surface mining and underground mining. Free tax calculator 2011 Determine if the coal is from a surface mine or an underground mine for each ton of coal produced and not on a mine-by-mine basis. Free tax calculator 2011 Determining tonnage or selling price. Free tax calculator 2011   The producer pays the tax on coal at the time of sale or use. Free tax calculator 2011 In figuring the selling price for applying the tax, the point of sale is f. Free tax calculator 2011 o. Free tax calculator 2011 b. Free tax calculator 2011 (free on board) mine or f. Free tax calculator 2011 o. Free tax calculator 2011 b. Free tax calculator 2011 cleaning plant if you clean the coal before selling it. Free tax calculator 2011 This applies even if you sell the coal for a delivered price. Free tax calculator 2011 The f. Free tax calculator 2011 o. Free tax calculator 2011 b. Free tax calculator 2011 mine or f. Free tax calculator 2011 o. Free tax calculator 2011 b. Free tax calculator 2011 cleaning plant is the point at which you figure the number of tons sold for applying the applicable tonnage rate, and the point at which you figure the sale price for applying the 4. Free tax calculator 2011 4% rate. Free tax calculator 2011   The tax applies to the full amount of coal sold. Free tax calculator 2011 However, the IRS allows a calculated reduction of the taxable weight of the coal for the weight of the moisture in excess of the coal's inherent moisture content. Free tax calculator 2011 Include in the sale price any additional charge for a freeze-conditioning additive in figuring the tax. Free tax calculator 2011   Do not include in the sales price the excise tax imposed on coal. Free tax calculator 2011 Coal used by the producer. Free tax calculator 2011   The tax on coal applies if the coal is used by the producer in other than a mining process. Free tax calculator 2011 A mining process means the same for this purpose as for percentage depletion. Free tax calculator 2011 For example, the tax does not apply if, before selling the coal, you break it, clean it, size it, or apply any other process considered mining under the rules for depletion. Free tax calculator 2011 In this case, the tax applies only when you sell the coal. Free tax calculator 2011 The tax does not apply to coal used as fuel in the coal drying process since it is considered to be used in a mining process. Free tax calculator 2011 However, the tax does apply when you use the coal as fuel or as an ingredient in making coke since the coal is not used in a mining process. Free tax calculator 2011   You must use a constructive sale price to figure the tax under the 4. Free tax calculator 2011 4% rate if you use the coal in other than a mining process. Free tax calculator 2011 Base your constructive sale price on sales of a like kind and grade of coal by you or other producers made f. Free tax calculator 2011 o. Free tax calculator 2011 b. Free tax calculator 2011 mine or cleaning plant. Free tax calculator 2011 Normally, you use the same constructive price used to figure your percentage depletion deduction. Free tax calculator 2011 Blending. Free tax calculator 2011   If you blend surface-mined coal with underground-mined coal during the cleaning process, you must figure the excise tax on the sale of the blended, cleaned coal. Free tax calculator 2011 Figure the tax separately for each type of coal in the blend. Free tax calculator 2011 Base the tax on the amount of each type in the blend if you can determine the proportion of each type of coal contained in the final blend. Free tax calculator 2011 Base the tax on the ratio of each type originally put into the cleaning process if you cannot determine the proportion of each type of coal in the blend. Free tax calculator 2011 However, the tax is limited to 4. Free tax calculator 2011 4% of the sale price per ton of the blended coal. Free tax calculator 2011 Exemption from tax. Free tax calculator 2011   The tax does not apply to sales of lignite and imported coal. Free tax calculator 2011 The only other exemption from the tax on the sale of coal is for coal exported as discussed next. Free tax calculator 2011 Exported. Free tax calculator 2011   The tax does not apply to the sale of coal if the coal is in the stream of export when sold by the producer and the coal is actually exported. Free tax calculator 2011   Coal is in the stream of export when sold by the producer if the sale is a step in the exportation of the coal to its ultimate destination in a foreign country. Free tax calculator 2011 For example, coal is in the stream of export when: The coal is loaded on an export vessel and title is transferred from the producer to a foreign purchaser, or The producer sells the coal to an export broker in the United States under terms of a contract showing that the coal is to be shipped to a foreign country. Free tax calculator 2011   Proof of export includes any of the following items. Free tax calculator 2011 A copy of the export bill of lading issued by the delivering carrier. Free tax calculator 2011 A certificate signed by the export carrier's agent or representative showing actual exportation of the coal. Free tax calculator 2011 A certificate of landing signed by a customs officer of the foreign country to which the coal is exported. Free tax calculator 2011 If the foreign country does not have a customs administrator, a statement of the foreign consignee showing receipt of the coal. Free tax calculator 2011 Taxable Tires Taxable tires are divided into three categories for reporting and figuring the tax as described below. Free tax calculator 2011 A tax is imposed on taxable tires sold by the manufacturer, producer, or importer at the rate of $. Free tax calculator 2011 0945 ($. Free tax calculator 2011 04725 in the case of a biasply tire or super single tire) for each 10 pounds of the maximum rated load capacity over 3,500 pounds. Free tax calculator 2011 The three categories for reporting the tax and the tax rate are listed below. Free tax calculator 2011 Taxable tires other than biasply or super single tires at $. Free tax calculator 2011 0945. Free tax calculator 2011 Taxable tires, biasply or super single tires (other than super single tires designed for steering) at $. Free tax calculator 2011 04725. Free tax calculator 2011 Taxable tires, super single tires designed for steering at $. Free tax calculator 2011 0945. Free tax calculator 2011 A taxable tire is any tire of the type used on highway vehicles if wholly or partially made of rubber and if marked according to federal regulations for highway use. Free tax calculator 2011 A biasply tire is a pneumatic tire on which the ply cords that extend to the beads are laid at alternate angles substantially less than 90 degrees to the centerline of the tread. Free tax calculator 2011 A super single tire is a tire greater than 13 inches in cross section width designed to replace 2 tires in a dual fitment. Free tax calculator 2011 Special rule, manufacturer's retail stores. Free tax calculator 2011   The excise tax on taxable tires is imposed at the time the taxable tires are delivered to the manufacturer-owned retail stores, not at the time of sale. Free tax calculator 2011 Tires on imported articles. Free tax calculator 2011   The importer of an article equipped with taxable tires is treated as the manufacturer of the tires and is liable for the taxable tire excise tax when the article is sold (except in the case of an automobile bus chassis or body with tires). Free tax calculator 2011 Tires exempt from tax. Free tax calculator 2011   The tax on taxable tires does not apply to the following items. Free tax calculator 2011 Domestically recapped or retreaded tires if the tires have been sold previously in the United States and were taxable tires at the time of sale. Free tax calculator 2011 Tire carcasses not suitable for commercial use. Free tax calculator 2011 Tires for use on qualifying intercity, local, and school buses. Free tax calculator 2011 For tax-free treatment, the registration requirements discussed earlier under Requirements for Exempt Sales apply. Free tax calculator 2011 Tires sold for the exclusive use of the Department of Defense or the Coast Guard. Free tax calculator 2011 Tires of a type used exclusively on mobile machinery. Free tax calculator 2011 A taxable tire used on mobile machinery is not exempt from tax. Free tax calculator 2011 Qualifying intercity or local bus. Free tax calculator 2011   This is any bus used mainly (more than 50%) to transport the general public for a fee and that either operates on a schedule along regular routes or seats at least 20 adults (excluding the driver). Free tax calculator 2011 Qualifying school bus. Free tax calculator 2011   This is any bus substantially all the use (85% or more) of which is to transport students and employees of schools. Free tax calculator 2011 Credit or refund. Free tax calculator 2011   A credit or refund (without interest) is allowable on tax-paid tires if the tires have been: Exported; Sold to a state or local government for its exclusive use; Sold to a nonprofit educational organization for its exclusive use (as defined under Communications Tax in chapter 4); Sold to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in connection with a vehicle the organization certifies will be primarily used in the collection, storage, or transportation of blood; Used or sold for use as supplies for vessels; or Sold in connection with qualified intercity, local, or school buses. Free tax calculator 2011   Also, a credit or refund (without interest) is allowable on tax-paid tires sold by any person on, or in connection with, any other article that is sold or used in an activity listed above. Free tax calculator 2011   The person who paid the tax is eligible to make the claim. Free tax calculator 2011 Gas Guzzler Tax Tax is imposed on the sale by the manufacturer of automobiles of a model type that has a fuel economy standard as measured by the Environmental Protection Agency (EPA) of less than 22. Free tax calculator 2011 5 miles per gallon. Free tax calculator 2011 If you import an automobile for personal use, you may be liable for this tax. Free tax calculator 2011 Figure the tax on Form 6197, as discussed later. Free tax calculator 2011 The tax rate is based on fuel economy rating. Free tax calculator 2011 The tax rates for the gas guzzler tax are shown on Form 6197. Free tax calculator 2011 A person that lengthens an existing automobile is the manufacturer of an automobile. Free tax calculator 2011 Automobiles. Free tax calculator 2011   An automobile (including limousines) means any four-wheeled vehicle that is: Rated at an unloaded gross vehicle weight of 6,000 pounds or less, Propelled by an engine powered by gasoline or diesel fuel, and Intended for use mainly on public streets, roads, and highways. Free tax calculator 2011 Vehicles not subject to tax. Free tax calculator 2011   For the gas guzzler tax, the following vehicles are not considered automobiles. Free tax calculator 2011 Limousines with a gross unloaded vehicle weight of more than 6,000 pounds. Free tax calculator 2011 Vehicles operated exclusively on a rail or rails. Free tax calculator 2011 Vehicles sold for use and used primarily: As ambulances or combination ambulance-hearses, For police or other law enforcement purposes by federal, state, or local governments, or For firefighting purposes. Free tax calculator 2011 Vehicles treated under 49 U. Free tax calculator 2011 S. Free tax calculator 2011 C. Free tax calculator 2011 32901 (1978) as non-passenger automobiles. Free tax calculator 2011 This includes limousines manufactured primarily to transport more than 10 persons. Free tax calculator 2011   The manufacturer can sell a vehicle described in item (3) tax free only when the sale is made directly to a purchaser for the described emergency use and the manufacturer and purchaser (other than a state or local government) are registered. Free tax calculator 2011   Treat an Indian tribal government as a state only if the police or other law enforcement purposes are an essential tribal government function. Free tax calculator 2011 Model type. Free tax calculator 2011   Model type is a particular class of automobile as determined by EPA regulations. Free tax calculator 2011 Fuel economy. Free tax calculator 2011   Fuel economy is the average number of miles an automobile travels on a gallon of gasoline (or diesel fuel) rounded to the nearest 0. Free tax calculator 2011 1 mile as figured by the EPA. Free tax calculator 2011 Imported automobiles. Free tax calculator 2011   The tax also applies to automobiles that do not have a prototype-based fuel economy rating assigned by the EPA. Free tax calculator 2011 An automobile imported into the United States without a certificate of conformity to United States emission standards and that has no assigned fuel economy rating must be either: Converted by installation of emission controls to conform in all material respects to an automobile already certified for sale in the United States, or Modified by installation of emission control components and individually tested to demonstrate emission compliance. Free tax calculator 2011   An imported automobile that has been converted to conform to an automobile already certified for sale in the United States may use the fuel economy rating assigned to that certified automobile. Free tax calculator 2011   A fuel economy rating is not generally available for modified imported automobiles because the EPA does not require a highway fuel economy test on them. Free tax calculator 2011 A separate highway fuel economy test would be required to devise a fuel economy rating (otherwise the automobile is presumed to fall within the lowest fuel economy rating category). Free tax calculator 2011   For more information about fuel economy ratings for imported automobiles, see Revenue Ruling 86-20 and Revenue Procedure 86-9 in Cumulative Bulletin 1986-1, and Revenue Procedure 87-10 in Cumulative Bulletin 1987-1. Free tax calculator 2011 Exemptions. Free tax calculator 2011   No one is exempt from the gas guzzler tax, including the federal government, state and local governments, qualified blood collector organizations, and nonprofit educational organizations. Free tax calculator 2011 However, see Vehicles not subject to tax, earlier. Free tax calculator 2011 Form 6197. Free tax calculator 2011   Use Form 6197 to figure your tax liability for each quarter. Free tax calculator 2011 Attach Form 6197 to your Form 720 for the quarter. Free tax calculator 2011 See the Form 6197 instructions for more information and the one-time filing rules. Free tax calculator 2011 Credit or refund. Free tax calculator 2011   If the manufacturer paid the tax on a vehicle that is used or resold for an emergency use (see item (3) under Vehicles not subject to tax), the manufacturer can claim a credit or refund. Free tax calculator 2011 For information about how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Free tax calculator 2011 Vaccines Tax is imposed on certain vaccines sold by the manufacturer in the United States. Free tax calculator 2011 A taxable vaccine means any of the following vaccines. Free tax calculator 2011 Any vaccine containing diphtheria toxoid. Free tax calculator 2011 Any vaccine containing tetanus toxoid. Free tax calculator 2011 Any vaccine containing pertussis bacteria, extracted or partial cell bacteria, or specific pertussis antigens. Free tax calculator 2011 Any vaccine containing polio virus. Free tax calculator 2011 Any vaccine against measles. Free tax calculator 2011 Any vaccine against mumps. Free tax calculator 2011 Any vaccine against rubella. Free tax calculator 2011 Any vaccine against hepatitis A. Free tax calculator 2011 Any vaccine against hepatitis B. Free tax calculator 2011 Any vaccine against chicken pox. Free tax calculator 2011 Any vaccine against rotavirus gastroenteritis. Free tax calculator 2011 Any HIB vaccine. Free tax calculator 2011 Any conjugate vaccine against streptococcus pneumoniae. Free tax calculator 2011 Any trivalent vaccine against influenza or any other vaccine against influenza. Free tax calculator 2011 Any meningococcal vaccine. Free tax calculator 2011 Any vaccine against the human papillomavirus. Free tax calculator 2011 The effective date for the tax on any vaccine against influenza, other than trivalent influenza vaccines, is the later of August 1, 2013, or the date the Secretary of Health and Human Services lists a vaccine against seasonal influenza for purposes of compensation for any vaccine-related injury or death through the Vaccine Injury Compensation Trust Fund. Free tax calculator 2011 The tax is $. Free tax calculator 2011 75 per dose of each taxable vaccine. Free tax calculator 2011 The tax per dose on a vaccine that contains more than one taxable vaccine is $. Free tax calculator 2011 75 times the number of taxable vaccines. Free tax calculator 2011 Taxable use. Free tax calculator 2011   Any manufacturer (including a governmental entity) that uses a taxable vaccine before it is sold will be liable for the tax in the same manner as if the vaccine was sold by the manufacturer. Free tax calculator 2011 Credit or refund. Free tax calculator 2011   A credit or refund (without interest) is available if the vaccine is: Returned to the person who paid the tax (other than for resale), or Destroyed. Free tax calculator 2011 The claim for a credit or refund must be filed within 6 months after the vaccine is returned or destroyed. Free tax calculator 2011 Conditions to allowance. Free tax calculator 2011   To claim a credit or refund, the person who paid the tax must have repaid or agreed to repay the tax to the ultimate purchaser of the vaccine or obtained the written consent of such purchaser to allowance of the credit or refund. Free tax calculator 2011 Taxable Medical Devices Taxable medical devices. Free tax calculator 2011   The tax on the sale of certain medical devices by the manufacturer, producer, or importer of the device is 2. Free tax calculator 2011 3% (. Free tax calculator 2011 023) of the sales price. Free tax calculator 2011 A taxable medical device is a device that is listed as a device with the Food and Drug Administration (FDA) under section 510(j) of the Federal Food, Drug, and Cosmetic Act and 21 CFR part 807, pursuant to FDA requirements. Free tax calculator 2011 There are specific exemptions for eyeglasses, contact lenses, and hearing aids. Free tax calculator 2011 There is also an exemption for devices that are determined by the Secretary to be of a type that are generally purchased by the general public at retail for individual use (this exemption is known as the retail exemption). Free tax calculator 2011 See T. Free tax calculator 2011 D. Free tax calculator 2011 9604 for information on how to determine whether a device falls within the retail exemption, and examples of how a taxpayer might evaluate a given device. Free tax calculator 2011 More information. Free tax calculator 2011   For more information on the medical device tax, see section 4191, T. Free tax calculator 2011 D. Free tax calculator 2011 9604, and Notice 2012-77. Free tax calculator 2011 You can find T. Free tax calculator 2011 D. Free tax calculator 2011 9604 and Notice 2012-77 on pages 730 and 781, respectively, of I. Free tax calculator 2011 R. Free tax calculator 2011 B. Free tax calculator 2011 2012-52 at www. Free tax calculator 2011 irs. Free tax calculator 2011 gov/pub/irs-irbs/irb12-52. Free tax calculator 2011 pdf. Free tax calculator 2011 Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Office of the Attorney General

Website: Office of the Attorney General

Address: Office of the Attorney General
Consumer Protection Unit
1031 W. 4th Ave., Suite 200
Anchorage, AK 99501-5903

Phone Number: 907-269-5200

Toll-free: 1-888-576-2529

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Commerce, Community and Economic Development

Website: Department of Commerce, Community and Economic Development

Address: Department of Commerce, Community and Economic Development
Division of Banking and Securities
PO Box 110807
Juneau, AK 99811-0807

Phone Number: 907-465-2521

Toll-free: 1-888-925-2521

TTY: 907-465-5437

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Commerce, Community and Economic Development

Website: Department of Commerce, Community and Economic Development

Address: Department of Commerce, Community and Economic Development
Division of Insurance
Robert B. Atwood Building
550 W. 7th Ave., Suite 1560
Anchorage, AK 99501-3567

Phone Number: 907-269-7900

Toll-free: 1-800-467-8725

TTY: 907-465-5437

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Commerce, Community and Economic Development

Website: Department of Commerce, Community and Economic Development

Address: Department of Commerce, Community and Economic Development
Division of Banking and Securities
PO Box 110807
Juneau, AK 99811-0807

Phone Number: 907-465-2521

Toll-free: 1-888-925-2521 (AK)

TTY: 907-465-5437

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Regulatory Commission

Website: Regulatory Commission

Address: Regulatory Commission
Consumer Protection and Information Section
701 W. 8th Ave., Suite 300
Anchorage, AK 99501-3469

Phone Number: 907-276-6222

Toll-free: 1-800-390-2782

TTY: 907-276-4533

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The Free Tax Calculator 2011

Free tax calculator 2011 11. Free tax calculator 2011   Other Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Reimbursement of Travel, Meals, and EntertainmentReimbursements Miscellaneous ExpensesMeaning of generally enforced. Free tax calculator 2011 Kickbacks. Free tax calculator 2011 Form 1099-MISC. Free tax calculator 2011 Exception. Free tax calculator 2011 Tax preparation fees. Free tax calculator 2011 Covered executive branch official. Free tax calculator 2011 Exceptions to denial of deduction. Free tax calculator 2011 Indirect political contributions. Free tax calculator 2011 Type of deduction. Free tax calculator 2011 Repayment—$3,000 or less. Free tax calculator 2011 Repayment—over $3,000. Free tax calculator 2011 Method 1. Free tax calculator 2011 Method 2. Free tax calculator 2011 Repayment does not apply. Free tax calculator 2011 Year of deduction (or credit). Free tax calculator 2011 Telephone. Free tax calculator 2011 What's New Standard mileage rate. Free tax calculator 2011  Beginning in 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for business use is 56. Free tax calculator 2011 5 cents per mile. Free tax calculator 2011 For more information, see Car and truck expenses under Miscellaneous Expenses. Free tax calculator 2011 Introduction This chapter covers business expenses that may not have been explained to you, as a business owner, in previous chapters of this publication. Free tax calculator 2011 Topics - This chapter discusses: Travel, meals, and entertainment Bribes and kickbacks Charitable contributions Education expenses Lobbying expenses Penalties and fines Repayments (claim of right) Other miscellaneous expenses Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 463 Travel, Entertainment, Gift, and Car Expenses 526 Charitable Contributions 529 Miscellaneous Deductions 544 Sales and Other Dispositions of Assets 970 Tax Benefits for Education 1542 Per Diem Rates See chapter 12 for information about getting publications and forms. Free tax calculator 2011 Reimbursement of Travel, Meals, and Entertainment The following discussion explains how to handle any reimbursements or allowances you may provide to your employees under a reimbursement or allowance arrangement for travel, meals, and entertainment expenses. Free tax calculator 2011 If you are self-employed and report your income and expenses on Schedule C or C-EZ (Form 1040), see Publication 463. Free tax calculator 2011 To be deductible for tax purposes, expenses incurred for travel, meals, and entertainment must be ordinary and necessary expenses incurred while carrying on your trade or business. Free tax calculator 2011 Generally, you also must show that entertainment expenses (including meals) are directly related to, or associated with, the conduct of your trade or business. Free tax calculator 2011 For more information on travel, meals, and entertainment, including deductibility, see Publication 463. Free tax calculator 2011 Reimbursements A “reimbursement or allowance arrangement” provides for payment of advances, reimbursements, and allowances for travel, meals, and entertainment expenses incurred by your employees during the ordinary course of business. Free tax calculator 2011 If the expenses are substantiated, you can deduct the allowable amount on your tax return. Free tax calculator 2011 Because of differences between accounting methods and tax law, the amount you can deduct for tax purposes may not be the same as the amount you deduct on your business books and records. Free tax calculator 2011 For example, you can deduct 100% of the cost of meals on your business books and records. Free tax calculator 2011 However, only 50% of these costs are allowed by law as a tax deduction. Free tax calculator 2011 How you deduct a business expense under a reimbursement or allowance arrangement depends on whether you have: An accountable plan, or A nonaccountable plan. Free tax calculator 2011 If you reimburse these expenses under an accountable plan, deduct them as travel, meals, or entertainment expenses. Free tax calculator 2011 If you reimburse these expenses under a nonaccountable plan, report the reimbursements as wages on Form W-2, Wage and Tax Statement, and deduct them as wages on the appropriate line of your tax return. Free tax calculator 2011 If you make a single payment to your employees and it includes both wages and an expense reimbursement, you must specify the amount of the reimbursement and report it accordingly. Free tax calculator 2011 See Table 11-1 , Reporting Reimbursements. Free tax calculator 2011 Accountable Plans An accountable plan requires your employees to meet all of the following requirements. Free tax calculator 2011 Each employee must: Have paid or incurred deductible expenses while performing services as your employee, Adequately account to you for these expenses within a reasonable period of time, and Return any excess reimbursement or allowance within a reasonable period of time. Free tax calculator 2011 An arrangement under which you advance money to employees is treated as meeting (3) above only if the following requirements are also met. Free tax calculator 2011 The advance is reasonably calculated not to exceed the amount of anticipated expenses. Free tax calculator 2011 You make the advance within a reasonable period of time of your employee paying or incurring the expense. Free tax calculator 2011 If any expenses reimbursed under this arrangement are not substantiated, or an excess reimbursement is not returned within a reasonable period of time by an employee, you cannot treat these expenses as reimbursed under an accountable plan. Free tax calculator 2011 Instead, treat the reimbursed expenses as paid under a nonaccountable plan, discussed later. Free tax calculator 2011 Adequate accounting. Free tax calculator 2011   Your employees must adequately account to you for their travel, meals, and entertainment expenses. Free tax calculator 2011 They must give you documentary evidence of their travel, mileage, and other employee business expenses. Free tax calculator 2011 This evidence should include items such as receipts, along with either a statement of expenses, an account book, a day-planner, or similar record in which the employee entered each expense at or near the time the expense was incurred. Free tax calculator 2011 Excess reimbursement or allowance. Free tax calculator 2011   An excess reimbursement or allowance is any amount you pay to an employee that is more than the business-related expenses for which the employee adequately accounted. Free tax calculator 2011 The employee must return any excess reimbursement or other expense allowance to you within a reasonable period of time. Free tax calculator 2011 Reasonable period of time. Free tax calculator 2011   A reasonable period of time depends on the facts and circumstances. Free tax calculator 2011 Generally, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. Free tax calculator 2011 You give an advance within 30 days of the time the employee pays or incurs the expense. Free tax calculator 2011 Your employees adequately account for their expenses within 60 days after the expenses were paid or incurred. Free tax calculator 2011 Your employees return any excess reimbursement within 120 days after the expenses were paid or incurred. Free tax calculator 2011 You give a periodic statement (at least quarterly) to your employees that asks them to either return or adequately account for outstanding advances and they comply within 120 days of the date of the statement. Free tax calculator 2011 How to deduct. Free tax calculator 2011   You can claim a deduction for travel, meals, and entertainment expenses if you reimburse your employees for these expenses under an accountable plan. Free tax calculator 2011 Generally, the amount you can deduct for meals and entertainment is subject to a 50% limit, discussed later. Free tax calculator 2011 If you are a sole proprietor, or are filing as a single member limited liability company, deduct the travel reimbursement on line 24a and the deductible part of the meals and entertainment reimbursement on line 24b, Schedule C (Form 1040) or line 2, Schedule C-EZ (Form 1040). Free tax calculator 2011   If you are filing an income tax return for a corporation, include the reimbursement on the Other deductions line of Form 1120, U. Free tax calculator 2011 S. Free tax calculator 2011 Corporation Income Tax Return. Free tax calculator 2011 If you are filing any other business income tax return, such as a partnership or S corporation return, deduct the reimbursement on the appropriate line of the return as provided in the instructions for that return. Free tax calculator 2011 Table 11-1. Free tax calculator 2011 Reporting Reimbursements IF the type of reimbursement (or other expense allowance) arrangement is under THEN the employer reports on Form W-2 An accountable plan with: Actual expense reimbursement:  Adequate accounting made and excess returned No amount. Free tax calculator 2011 Actual expense reimbursement:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. Free tax calculator 2011 Per diem or mileage allowance up to the federal rate:  Adequate accounting made and excess returned No amount. Free tax calculator 2011 Per diem or mileage allowance up to the federal rate:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. Free tax calculator 2011 The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Free tax calculator 2011 Per diem or mileage allowance exceeds the federal rate:  Adequate accounting made up to the federal rate only and excess not returned The excess amount as wages in box 1. Free tax calculator 2011 The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Free tax calculator 2011 A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan The entire amount as wages in box 1. Free tax calculator 2011 No reimbursement plan The entire amount as wages in box 1. Free tax calculator 2011 Per Diem and Car Allowances You can reimburse your employees under an accountable plan based on travel days, miles, or some other fixed allowance. Free tax calculator 2011 In these cases, your employee is considered to have accounted to you for the amount of the expense that does not exceed the rates established by the federal government. Free tax calculator 2011 Your employee must actually substantiate to you the other elements of the expense, such as time, place, and business purpose. Free tax calculator 2011 Federal rate. Free tax calculator 2011   The federal rate can be figured using any one of the following methods. Free tax calculator 2011 For car expenses: The standard mileage rate. Free tax calculator 2011 A fixed and variable rate (FAVR). Free tax calculator 2011 For per diem amounts: The regular federal per diem rate. Free tax calculator 2011 The standard meal allowance. Free tax calculator 2011 The high-low rate. Free tax calculator 2011 Car allowance. Free tax calculator 2011   Your employee is considered to have accounted to you for car expenses that do not exceed the standard mileage rate. Free tax calculator 2011 Beginning in 2013, the standard business mileage rate is 56. Free tax calculator 2011 5 cents per mile. Free tax calculator 2011   You can choose to reimburse your employees using a fixed and variable rate (FAVR) allowance. Free tax calculator 2011 This is an allowance that includes a combination of payments covering fixed and variable costs, such as a cents-per-mile rate to cover your employees' variable operating costs (such as gas, oil, etc. Free tax calculator 2011 ) plus a flat amount to cover your employees' fixed costs (such as depreciation, insurance, etc. Free tax calculator 2011 ). Free tax calculator 2011 For information on using a FAVR allowance, see Revenue Procedure 2010-51, available at www. Free tax calculator 2011 irs. Free tax calculator 2011 gov/irb/2010-51_IRB/ar14. Free tax calculator 2011 html and Notice 2012-72, available at www. Free tax calculator 2011 irs. Free tax calculator 2011 gov/irb/2012-50_IRB/ar10. Free tax calculator 2011 html. Free tax calculator 2011 Per diem allowance. Free tax calculator 2011   If your employee actually substantiates to you the other elements (discussed earlier) of the expenses reimbursed using the per diem allowance, how you report and deduct the allowance depends on whether the allowance is for lodging and meal expenses or for meal expenses only and whether the allowance is more than the federal rate. Free tax calculator 2011 Regular federal per diem rate. Free tax calculator 2011   The regular federal per diem rate is the highest amount the federal government will pay to its employees while away from home on travel. Free tax calculator 2011 It has two components: Lodging expense, and Meal and incidental expense (M&IE). Free tax calculator 2011 The rates are different for different locations. Free tax calculator 2011 Publication 1542 lists the rates in the continental United States. Free tax calculator 2011 Standard meal allowance. Free tax calculator 2011   The federal rate for meal and incidental expenses (M&IE) is the standard meal allowance. Free tax calculator 2011 You can pay only an M&IE allowance to employees who travel away from home if: You pay the employee for actual expenses for lodging based on receipts submitted to you, You provide for the lodging, You pay for the actual expense of the lodging directly to the provider, You do not have a reasonable belief that lodging expenses were incurred by the employee, or The allowance is computed on a basis similar to that used in computing the employee's wages (that is, number of hours worked or miles traveled). Free tax calculator 2011 Internet access. Free tax calculator 2011    Per diem rates are available on the Internet. Free tax calculator 2011 You can access per diem rates at www. Free tax calculator 2011 gsa. Free tax calculator 2011 gov/perdiemrates. Free tax calculator 2011 High-low method. Free tax calculator 2011   This is a simplified method of computing the federal per diem rate for travel within the continental United States. Free tax calculator 2011 It eliminates the need to keep a current list of the per diem rate for each city. Free tax calculator 2011   Under the high-low method, the per diem amount for travel during January through September of 2013 is $242 ($65 for M&IE) for certain high-cost locations. Free tax calculator 2011 All other areas have a per diem amount of $163 ($52 for M&IE). Free tax calculator 2011 The high-cost locations eligible for the higher per diem amount under the high-low method are listed in Publication 1542. Free tax calculator 2011   Effective October 1, 2013, the per diem rate for high-cost locations increased to $251 ($65 for M&IE). Free tax calculator 2011 The rate for all other locations increased to $170 ($52 for M&IE). Free tax calculator 2011 For October, November, and December 2013, you can either continue to use the rates described in the preceding paragraph or change to the new rates. Free tax calculator 2011 However, you must use the same rate for all employees reimbursed under the high-low method. Free tax calculator 2011   For more information about the high-low method, see Notice 2013-65, available at www. Free tax calculator 2011 irs. Free tax calculator 2011 gov/irb/2013-44_IRB/ar13. Free tax calculator 2011 html. Free tax calculator 2011 See Publication 1542 (available on the Internet at IRS. Free tax calculator 2011 gov) for the current per diem rates for all locations. Free tax calculator 2011 Reporting per diem and car allowances. Free tax calculator 2011   The following discussion explains how to report per diem and car allowances. Free tax calculator 2011 The manner in which you report them depends on how the allowance compares to the federal rate. Free tax calculator 2011 See Table 11-1. Free tax calculator 2011 Allowance less than or equal to the federal rate. Free tax calculator 2011   If your allowance for the employee is less than or equal to the appropriate federal rate, that allowance is not included as part of the employee's pay in box 1 of the employee's Form W-2. Free tax calculator 2011 Deduct the allowance as travel expenses (including meals that may be subject to the 50% limit, discussed later). Free tax calculator 2011 See How to deduct under Accountable Plans, earlier. Free tax calculator 2011 Allowance more than the federal rate. Free tax calculator 2011   If your employee's allowance is more than the appropriate federal rate, you must report the allowance as two separate items. Free tax calculator 2011   Include the allowance amount up to the federal rate in box 12 (code L) of the employee's Form W-2. Free tax calculator 2011 Deduct it as travel expenses (as explained above). Free tax calculator 2011 This part of the allowance is treated as reimbursed under an accountable plan. Free tax calculator 2011   Include the amount that is more than the federal rate in box 1 (and in boxes 3 and 5 if they apply) of the employee's Form W-2. Free tax calculator 2011 Deduct it as wages subject to income tax withholding, social security, Medicare, and federal unemployment taxes. Free tax calculator 2011 This part of the allowance is treated as reimbursed under a nonaccountable plan as explained later under Nonaccountable Plans. Free tax calculator 2011 Meals and Entertainment Under an accountable plan, you can generally deduct only 50% of any otherwise deductible business-related meal and entertainment expenses you reimburse your employees. Free tax calculator 2011 The deduction limit applies even if you reimburse them for 100% of the expenses. Free tax calculator 2011 Application of the 50% limit. Free tax calculator 2011   The 50% deduction limit applies to reimbursements you make to your employees for expenses they incur for meals while traveling away from home on business and for entertaining business customers at your place of business, a restaurant, or another location. Free tax calculator 2011 It applies to expenses incurred at a business convention or reception, business meeting, or business luncheon at a club. Free tax calculator 2011 The deduction limit may also apply to meals you furnish on your premises to your employees. Free tax calculator 2011 Related expenses. Free tax calculator 2011   Taxes and tips relating to a meal or entertainment activity you reimburse to your employee under an accountable plan are included in the amount subject to the 50% limit. Free tax calculator 2011 Reimbursements you make for expenses, such as cover charges for admission to a nightclub, rent paid for a room to hold a dinner or cocktail party, or the amount you pay for parking at a sports arena, are all subject to the 50% limit. Free tax calculator 2011 However, the cost of transportation to and from an otherwise allowable business meal or a business-related entertainment activity is not subject to the 50% limit. Free tax calculator 2011 Amount subject to 50% limit. Free tax calculator 2011   If you provide your employees with a per diem allowance only for meal and incidental expenses, the amount treated as an expense for food and beverages is the lesser of the following. Free tax calculator 2011 The per diem allowance. Free tax calculator 2011 The federal rate for M&IE. Free tax calculator 2011   If you provide your employees with a per diem allowance that covers lodging, meals, and incidental expenses, you must treat an amount equal to the federal M&IE rate for the area of travel as an expense for food and beverages. Free tax calculator 2011 If the per diem allowance you provide is less than the federal per diem rate for the area of travel, you can treat 40% of the per diem allowance as the amount for food and beverages. Free tax calculator 2011 Meal expenses when subject to “hours of service” limits. Free tax calculator 2011   You can deduct 80% of the cost of reimbursed meals your employees consume while away from their tax home on business during, or incident to, any period subject to the Department of Transportation's “hours of service” limits. Free tax calculator 2011   See Publication 463 for a detailed discussion of individuals subject to the Department of Transportation's “hours of service” limits. Free tax calculator 2011 De minimis (minimal) fringe benefit. Free tax calculator 2011   The 50% limit does not apply to an expense for food or beverage that is excluded from the gross income of an employee because it is a de minimis fringe benefit. Free tax calculator 2011 See Publication 15-B for additional information on de minimis fringe benefits. Free tax calculator 2011 Company cafeteria or executive dining room. Free tax calculator 2011   The cost of food and beverages you provide primarily to your employees on your business premises is deductible. Free tax calculator 2011 This includes the cost of maintaining the facilities for providing the food and beverages. Free tax calculator 2011 These expenses are subject to the 50% limit unless they qualify as a de minimis fringe benefit, as just discussed, or unless they are compensation to your employees (explained later). Free tax calculator 2011 Employee activities. Free tax calculator 2011   The expense of providing recreational, social, or similar activities (including the use of a facility) for your employees is deductible and is not subject to the 50% limit. Free tax calculator 2011 The benefit must be primarily for your employees who are not highly compensated. Free tax calculator 2011   For this purpose, a highly compensated employee is an employee who meets either of the following requirements. Free tax calculator 2011 Owned a 10% or more interest in the business during the year or the preceding year. Free tax calculator 2011 An employee is treated as owning any interest owned by his or her brother, sister, spouse, ancestors, and lineal descendants. Free tax calculator 2011 Received more than $115,000 in pay for the preceding year. Free tax calculator 2011 You can choose to include only employees who were also in the top 20% of employees when ranked by pay for the preceding year. Free tax calculator 2011   For example, the expenses for food, beverages, and entertainment for a company-wide picnic are not subject to the 50% limit. Free tax calculator 2011 Meals or entertainment treated as compensation. Free tax calculator 2011   The 50% limit does not apply to either of the following. Free tax calculator 2011 Expenses for meals or entertainment that you treat as: Compensation to an employee who was the recipient of the meals or entertainment, and Wages subject to withholding of federal income tax. Free tax calculator 2011 Expenses for meals or entertainment if: A recipient of the meals or entertainment who is not your employee has to include the expenses in gross income as compensation for services or as a prize or award, and You include that amount on a Form 1099 issued to the recipient, if a Form 1099 is required. Free tax calculator 2011 Sales of meals or entertainment. Free tax calculator 2011   You can deduct the cost of meals or entertainment (including the use of facilities) you sell to the public. Free tax calculator 2011 For example, if you run a nightclub, your expense for the entertainment you furnish to your customers, such as a floor show, is a business expense that is fully deductible. Free tax calculator 2011 The 50% limit does not apply to this expense. Free tax calculator 2011 Providing meals or entertainment to general public to promote goodwill. Free tax calculator 2011   You can deduct the cost of providing meals, entertainment, or recreational facilities to the general public as a means of advertising or promoting goodwill in the community. Free tax calculator 2011 The 50% limit does not apply to this expense. Free tax calculator 2011 Director, stockholder, or employee meetings. Free tax calculator 2011   You can deduct entertainment expenses directly related to business meetings of your employees, partners, stockholders, agents, or directors. Free tax calculator 2011 You can provide some minor social activities, but the main purpose of the meeting must be your company's business. Free tax calculator 2011 These expenses are subject to the 50% limit. Free tax calculator 2011 Trade association meetings. Free tax calculator 2011   You can deduct expenses directly related to and necessary for attending business meetings or conventions of certain tax-exempt organizations. Free tax calculator 2011 These organizations include business leagues, chambers of commerce, real estate boards, and trade and professional associations. Free tax calculator 2011 Nonaccountable Plans A nonaccountable plan is an arrangement that does not meet the requirements for an accountable plan. Free tax calculator 2011 All amounts paid, or treated as paid, under a nonaccountable plan are reported as wages on Form W-2. Free tax calculator 2011 The payments are subject to income tax withholding, social security, Medicare, and federal unemployment taxes. Free tax calculator 2011 You can deduct the reimbursement as compensation or wages only to the extent it meets the deductibility tests for employees' pay in chapter 2. Free tax calculator 2011 Deduct the allowable amount as compensation or wages on the appropriate line of your income tax return, as provided in its instructions. Free tax calculator 2011 Miscellaneous Expenses In addition to travel, meal, and entertainment expenses, there are other expenses you can deduct. Free tax calculator 2011 Advertising expenses. Free tax calculator 2011   You generally can deduct reasonable advertising expenses that are directly related to your business activities. Free tax calculator 2011 Generally, you cannot deduct amounts paid to influence legislation (i. Free tax calculator 2011 e. Free tax calculator 2011 , lobbying). Free tax calculator 2011 See Lobbying expenses , later. Free tax calculator 2011   You can usually deduct as a business expense the cost of institutional or goodwill advertising to keep your name before the public if it relates to business you reasonably expect to gain in the future. Free tax calculator 2011 For example, the cost of advertising that encourages people to contribute to the Red Cross, to buy U. Free tax calculator 2011 S. Free tax calculator 2011 Savings Bonds, or to participate in similar causes is usually deductible. Free tax calculator 2011 Anticipated liabilities. Free tax calculator 2011   Anticipated liabilities or reserves for anticipated liabilities are not deductible. Free tax calculator 2011 For example, assume you sold 1-year TV service contracts this year totaling $50,000. Free tax calculator 2011 From experience, you know you will have expenses of about $15,000 in the coming year for these contracts. Free tax calculator 2011 You cannot deduct any of the $15,000 this year by charging expenses to a reserve or liability account. Free tax calculator 2011 You can deduct your expenses only when you actually pay or accrue them, depending on your accounting method. Free tax calculator 2011 Bribes and kickbacks. Free tax calculator 2011   Engaging in the payment of bribes or kickbacks is a serious criminal matter. Free tax calculator 2011 Such activity could result in criminal prosecution. Free tax calculator 2011 Any payments that appear to have been made, either directly or indirectly, to an official or employee of any government or an agency or instrumentality of any government are not deductible for tax purposes and are in violation of the law. Free tax calculator 2011   Payments paid directly or indirectly to a person in violation of any federal or state law (but only if that state law is generally enforced, defined below) that provides for a criminal penalty or for the loss of a license or privilege to engage in a trade or business are also not allowed as a deduction for tax purposes. Free tax calculator 2011 Meaning of “generally enforced. Free tax calculator 2011 ”   A state law is considered generally enforced unless it is never enforced or enforced only for infamous persons or persons whose violations are extraordinarily flagrant. Free tax calculator 2011 For example, a state law is generally enforced unless proper reporting of a violation of the law results in enforcement only under unusual circumstances. Free tax calculator 2011 Kickbacks. Free tax calculator 2011   A kickback is a payment for referring a client, patient, or customer. Free tax calculator 2011 The common kickback situation occurs when money or property is given to someone as payment for influencing a third party to purchase from, use the services of, or otherwise deal with the person who pays the kickback. Free tax calculator 2011 In many cases, the person whose business is being sought or enjoyed by the person who pays the kickback is not aware of the payment. Free tax calculator 2011   For example, the Yard Corporation is in the business of repairing ships. Free tax calculator 2011 It returns 10% of the repair bills as kickbacks to the captains and chief officers of the vessels it repairs. Free tax calculator 2011 Although this practice is considered an ordinary and necessary expense of getting business, it is clearly a violation of a state law that is generally enforced. Free tax calculator 2011 These expenditures are not deductible for tax purposes, whether or not the owners of the shipyard are subsequently prosecuted. Free tax calculator 2011 Form 1099-MISC. Free tax calculator 2011   It does not matter whether any kickbacks paid during the tax year are deductible on your income tax return in regards to information reporting. Free tax calculator 2011 See Form 1099-MISC for more information. Free tax calculator 2011 Car and truck expenses. Free tax calculator 2011   The costs of operating a car, truck, or other vehicle in your business are deductible. Free tax calculator 2011 For more information on how to figure your deduction, see Publication 463. Free tax calculator 2011 Charitable contributions. Free tax calculator 2011   Cash payments to an organization, charitable or otherwise, may be deductible as business expenses if the payments are not charitable contributions or gifts and are directly related to your business. Free tax calculator 2011 If the payments are charitable contributions or gifts, you cannot deduct them as business expenses. Free tax calculator 2011 However, corporations (other than S corporations) can deduct charitable contributions on their income tax returns, subject to limitations. Free tax calculator 2011 See the Instructions for Form 1120 for more information. Free tax calculator 2011 Sole proprietors, partners in a partnership, or shareholders in an S corporation may be able to deduct charitable contributions made by their business on Schedule A (Form 1040). Free tax calculator 2011 Example. Free tax calculator 2011 You paid $15 to a local church for a half-page ad in a program for a concert it is sponsoring. Free tax calculator 2011 The purpose of the ad was to encourage readers to buy your products. Free tax calculator 2011 Your payment is not a charitable contribution. Free tax calculator 2011 You can deduct it as an advertising expense. Free tax calculator 2011 Example. Free tax calculator 2011 You made a $100,000 donation to a committee organized by the local Chamber of Commerce to bring a convention to your city, intended to increase business activity, including yours. Free tax calculator 2011 Your payment is not a charitable contribution. Free tax calculator 2011 You can deduct it as a business expense. Free tax calculator 2011 See Publication 526 for a discussion of donated inventory, including capital gain property. Free tax calculator 2011 Club dues and membership fees. Free tax calculator 2011   Generally, you cannot deduct amounts paid or incurred for membership in any club organized for business, pleasure, recreation, or any other social purpose. Free tax calculator 2011 This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Free tax calculator 2011 Exception. Free tax calculator 2011   The following organizations are not treated as clubs organized for business, pleasure, recreation, or other social purpose unless one of the main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. Free tax calculator 2011 Boards of trade. Free tax calculator 2011 Business leagues. Free tax calculator 2011 Chambers of commerce. Free tax calculator 2011 Civic or public service organizations. Free tax calculator 2011 Professional organizations such as bar associations and medical associations. Free tax calculator 2011 Real estate boards. Free tax calculator 2011 Trade associations. Free tax calculator 2011 Credit card convenience fees. Free tax calculator 2011   Credit card companies charge a fee to businesses who accept their cards. Free tax calculator 2011 This fee when paid or incurred by the business can be deducted as a business expense. Free tax calculator 2011 Damages recovered. Free tax calculator 2011   Special rules apply to compensation you receive for damages sustained as a result of patent infringement, breach of contract or fiduciary duty, or antitrust violations. Free tax calculator 2011 You must include this compensation in your income. Free tax calculator 2011 However, you may be able to take a special deduction. Free tax calculator 2011 The deduction applies only to amounts recovered for actual economic injury, not any additional amount. Free tax calculator 2011 The deduction is the smaller of the following. Free tax calculator 2011 The amount you received or accrued for damages in the tax year reduced by the amount you paid or incurred in the year to recover that amount. Free tax calculator 2011 Your losses from the injury you have not deducted. Free tax calculator 2011 Demolition expenses or losses. Free tax calculator 2011   Amounts paid or incurred to demolish a structure are not deductible. Free tax calculator 2011 These amounts are added to the basis of the land where the demolished structure was located. Free tax calculator 2011 Any loss for the remaining undepreciated basis of a demolished structure would not be recognized until the property is disposed of. Free tax calculator 2011 Education expenses. Free tax calculator 2011   Ordinary and necessary expenses paid for the cost of the education and training of your employees are deductible. Free tax calculator 2011 See Education Expenses in chapter 2. Free tax calculator 2011   You can also deduct the cost of your own education (including certain related travel) related to your trade or business. Free tax calculator 2011 You must be able to show the education maintains or improves skills required in your trade or business, or that it is required by law or regulations, for keeping your license to practice, status, or job. Free tax calculator 2011 For example, an attorney can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain his or her license to practice law. Free tax calculator 2011   Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. Free tax calculator 2011 This is true even if the education maintains or improves skills presently required in your business. Free tax calculator 2011 For more information on education expenses, see Publication 970. Free tax calculator 2011 Franchise, trademark, trade name. Free tax calculator 2011   If you buy a franchise, trademark, or trade name, you can deduct the amount you pay or incur as a business expense only if your payments are part of a series of payments that are: Contingent on productivity, use, or disposition of the item, Payable at least annually for the entire term of the transfer agreement, and Substantially equal in amount (or payable under a fixed formula). Free tax calculator 2011   When determining the term of the transfer agreement, include all renewal options and any other period for which you and the transferrer reasonably expect the agreement to be renewed. Free tax calculator 2011   A franchise includes an agreement that gives one of the parties to the agreement the right to distribute, sell, or provide goods, services, or facilities within a specified area. Free tax calculator 2011 Impairment-related expenses. Free tax calculator 2011   If you are disabled, you can deduct expenses necessary for you to be able to work (impairment-related expenses) as a business expense, rather than as a medical expense. Free tax calculator 2011   You are disabled if you have either of the following. Free tax calculator 2011 A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed. Free tax calculator 2011 A physical or mental impairment that substantially limits one or more of your major life activities. Free tax calculator 2011   The expense qualifies as a business expense if all the following apply. Free tax calculator 2011 Your work clearly requires the expense for you to satisfactorily perform that work. Free tax calculator 2011 The goods or services purchased are clearly not needed or used, other than incidentally, in your personal activities. Free tax calculator 2011 Their treatment is not specifically provided for under other tax law provisions. Free tax calculator 2011 Example. Free tax calculator 2011 You are blind. Free tax calculator 2011 You must use a reader to do your work, both at and away from your place of work. Free tax calculator 2011 The reader's services are only for your work. Free tax calculator 2011 You can deduct your expenses for the reader as a business expense. Free tax calculator 2011 Internet-related expenses. Free tax calculator 2011   Generally, you can deduct internet-related expenses including domain registrations fees and webmaster consulting costs. Free tax calculator 2011 If you are starting a business you may have to amortize these expenses as start-up costs. Free tax calculator 2011 For more information about amortizing start-up and organizational costs, see chapter 8. Free tax calculator 2011 Interview expense allowances. Free tax calculator 2011   Reimbursements you make to job candidates for transportation or other expenses related to interviews for possible employment are not wages. Free tax calculator 2011 You can deduct the reimbursements as a business expense. Free tax calculator 2011 However, expenses for food, beverages, and entertainment are subject to the 50% limit discussed earlier under Meals and Entertainment. Free tax calculator 2011 Legal and professional fees. Free tax calculator 2011   Fees charged by accountants and attorneys that are ordinary and necessary expenses directly related to operating your business are deductible as business expenses. Free tax calculator 2011 However, usually legal fees you pay to acquire business assets are not deductible. Free tax calculator 2011 These costs are added to the basis of the property. Free tax calculator 2011   Fees that include payments for work of a personal nature (such as drafting a will, or damages arising from a personal injury) are not allowed as a business deduction on Schedule C or C-EZ. Free tax calculator 2011 If the invoice includes both business and personal charges, compute the business portion as follows: multiply the total amount of the bill by a fraction, the numerator of which is the amount attributable to business matters, the denominator of which is the total amount paid. Free tax calculator 2011 The result is the portion of the invoice attributable to business expenses. Free tax calculator 2011 The portion attributable to personal matters is the difference between the total amount and the business portion (computed above). Free tax calculator 2011   Legal fees relating to personal tax advice may be deductible on Schedule A (Form 1040), if you itemize deductions. Free tax calculator 2011 However, the deduction is subject to the 2% limitation on miscellaneous itemized deductions. Free tax calculator 2011 See Publication 529, Miscellaneous Deductions. Free tax calculator 2011 Tax preparation fees. Free tax calculator 2011   The cost of hiring a tax professional, such as a C. Free tax calculator 2011 P. Free tax calculator 2011 A. Free tax calculator 2011 , to prepare that part of your tax return relating to your business as a sole proprietor is deductible on Schedule C or Schedule C-EZ. Free tax calculator 2011 Any remaining cost may be deductible on Schedule A (Form 1040) if you itemize deductions. Free tax calculator 2011   You can also claim a business deduction for amounts paid or incurred in resolving asserted tax deficiencies for your business operated as a sole proprietor. Free tax calculator 2011 Licenses and regulatory fees. Free tax calculator 2011   Licenses and regulatory fees for your trade or business paid annually to state or local governments generally are deductible. Free tax calculator 2011 Some licenses and fees may have to be amortized. Free tax calculator 2011 See chapter 8 for more information. Free tax calculator 2011 Lobbying expenses. Free tax calculator 2011   Generally, lobbying expenses are not deductible. Free tax calculator 2011 Lobbying expenses include amounts paid or incurred for any of the following activities. Free tax calculator 2011 Influencing legislation. Free tax calculator 2011 Participating in or intervening in any political campaign for, or against, any candidate for public office. Free tax calculator 2011 Attempting to influence the general public, or segments of the public, about elections, legislative matters, or referendums. Free tax calculator 2011 Communicating directly with covered executive branch officials (defined later) in any attempt to influence the official actions or positions of those officials. Free tax calculator 2011 Researching, preparing, planning, or coordinating any of the preceding activities. Free tax calculator 2011   Your expenses for influencing legislation and communicating directly with a covered executive branch official include a portion of your labor costs and general and administrative costs of your business. Free tax calculator 2011 For information on making this allocation, see section 1. Free tax calculator 2011 162-28 of the regulations. Free tax calculator 2011   You cannot claim a charitable or business expense deduction for amounts paid to an organization if both of the following apply. Free tax calculator 2011 The organization conducts lobbying activities on matters of direct financial interest to your business. Free tax calculator 2011 A principal purpose of your contribution is to avoid the rules discussed earlier that prohibit a business deduction for lobbying expenses. Free tax calculator 2011   If a tax-exempt organization, other than a section 501(c)(3) organization, provides you with a notice on the part of dues that is allocable to nondeductible lobbying and political expenses, you cannot deduct that part of the dues. Free tax calculator 2011 Covered executive branch official. Free tax calculator 2011   For purposes of this discussion, a covered executive branch official is any of the following. Free tax calculator 2011 The President. Free tax calculator 2011 The Vice President. Free tax calculator 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 tax calculator 2011 Any individual who: Is serving in a position in Level I of the Executive Schedule under section 5312 of title 5, United States Code, Has been designated by the President as having Cabinet-level status, or Is an immediate deputy of an individual listed in item (a) or (b). Free tax calculator 2011 Exceptions to denial of deduction. Free tax calculator 2011   The general denial of the deduction does not apply to the following. Free tax calculator 2011 Expenses of appearing before, or communicating with, any committee or member of any local council or similar governing body concerning its legislation (local legislation) if the legislation is of direct interest to you or to you and an organization of which you are a member. Free tax calculator 2011 An Indian tribal government is treated as a local council or similar governing body. Free tax calculator 2011 Any in-house expenses for influencing legislation and communicating directly with a covered executive branch official if those expenses for the tax year do not exceed $2,000 (excluding overhead expenses). Free tax calculator 2011 Expenses incurred by taxpayers engaged in the trade or business of lobbying (professional lobbyists) on behalf of another person (but does apply to payments by the other person to the lobbyist for lobbying activities). Free tax calculator 2011 Moving machinery. Free tax calculator 2011   Generally, the cost of moving machinery from one city to another is a deductible expense. Free tax calculator 2011 So is the cost of moving machinery from one plant to another, or from one part of your plant to another. Free tax calculator 2011 You can deduct the cost of installing the machinery in the new location. Free tax calculator 2011 However, you must capitalize the costs of installing or moving newly purchased machinery. Free tax calculator 2011 Outplacement services. Free tax calculator 2011   The costs of outplacement services you provide to your employees to help them find new employment, such as career counseling, résumé assistance, skills assessment, etc. Free tax calculator 2011 are deductible. Free tax calculator 2011   The costs of outplacement services may cover more than one deduction category. Free tax calculator 2011 For example, deduct as a utilities expense the cost of telephone calls made under this service and deduct as rental expense the cost of renting machinery and equipment for this service. Free tax calculator 2011   For information on whether the value of outplacement services is includable in your employees' income, see Publication 15-B. Free tax calculator 2011 Penalties and fines. Free tax calculator 2011   Penalties paid for late performance or nonperformance of a contract are generally deductible. Free tax calculator 2011 For instance, you own and operate a construction company. Free tax calculator 2011 Under a contract, you are to finish construction of a building by a certain date. Free tax calculator 2011 Due to construction delays, the building is not completed and ready for occupancy on the date stipulated in the contract. Free tax calculator 2011 You are now required to pay an additional amount for each day that completion is delayed beyond the completion date stipulated in the contract. Free tax calculator 2011 These additional costs are deductible business expenses. Free tax calculator 2011   On the other hand, penalties or fines paid to any government agency or instrumentality because of a violation of any law are not deductible. Free tax calculator 2011 These fines or penalties include the following amounts. Free tax calculator 2011 Paid because of a conviction for a crime or after a plea of guilty or no contest in a criminal proceeding. Free tax calculator 2011 Paid as a penalty imposed by federal, state, or local law in a civil action, including certain additions to tax and additional amounts and assessable penalties imposed by the Internal Revenue Code. Free tax calculator 2011 Paid in settlement of actual or possible liability for a fine or penalty, whether civil or criminal. Free tax calculator 2011 Forfeited as collateral posted for a proceeding that could result in a fine or penalty. Free tax calculator 2011   Examples of nondeductible penalties and fines include the following. Free tax calculator 2011 Fines for violating city housing codes. Free tax calculator 2011 Fines paid by truckers for violating state maximum highway weight laws. Free tax calculator 2011 Fines for violating air quality laws. Free tax calculator 2011 Civil penalties for violating federal laws regarding mining safety standards and discharges into navigable waters. Free tax calculator 2011   A fine or penalty does not include any of the following. Free tax calculator 2011 Legal fees and related expenses to defend yourself in a prosecution or civil action for a violation of the law imposing the fine or civil penalty. Free tax calculator 2011 Court costs or stenographic and printing charges. Free tax calculator 2011 Compensatory damages paid to a government. Free tax calculator 2011 Political contributions. Free tax calculator 2011   Contributions or gifts paid to political parties or candidates are not deductible. Free tax calculator 2011 In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible. Free tax calculator 2011 Indirect political contributions. Free tax calculator 2011   You cannot deduct indirect political contributions and costs of taking part in political activities as business expenses. Free tax calculator 2011 Examples of nondeductible expenses include the following. Free tax calculator 2011 Advertising in a convention program of a political party, or in any other publication if any of the proceeds from the publication are for, or intended for, the use of a political party or candidate. Free tax calculator 2011 Admission to a dinner or program (including, but not limited to, galas, dances, film presentations, parties, and sporting events) if any of the proceeds from the function are for, or intended for, the use of a political party or candidate. Free tax calculator 2011 Admission to an inaugural ball, gala, parade, concert, or similar event if identified with a political party or candidate. Free tax calculator 2011 Repairs. Free tax calculator 2011   The cost of repairing or improving property used in your trade or business is either a deductible or capital expense. Free tax calculator 2011 Routine maintenance that keeps your property in a normal efficient operating condition, but that does not materially increase the value or substantially prolong the useful life of the property, is deductible in the year that it is incurred. Free tax calculator 2011 Otherwise, the cost must be capitalized and depreciated. Free tax calculator 2011 See Form 4562 and its instructions for how to compute and claim the depreciation deduction. Free tax calculator 2011   The cost of repairs includes the costs of labor, supplies, and certain other items. Free tax calculator 2011 The value of your own labor is not deductible. Free tax calculator 2011 Examples of repairs include: Reconditioning floors (but not replacement), Repainting the interior and exterior walls of a building, Cleaning and repairing roofs and gutters, and Fixing plumbing leaks (but not replacement of fixtures). Free tax calculator 2011 Repayments. Free tax calculator 2011   If you had to repay an amount you included in your income in an earlier year, you may be able to deduct the amount repaid for the year in which you repaid it. Free tax calculator 2011 Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. Free tax calculator 2011 Type of deduction. Free tax calculator 2011   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Free tax calculator 2011 For instance, if you repay an amount you previously reported as a capital gain, deduct the repayment as a capital loss on Form 8949. Free tax calculator 2011 If you reported it as self-employment income, deduct it as a business deduction on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Free tax calculator 2011   If you reported the amount as wages, unemployment compensation, or other nonbusiness ordinary income, enter it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is subject to the 2% limitation. Free tax calculator 2011 However, if the repayment is over $3,000 and Method 1 (discussed later) applies, deduct it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is not subject to the 2% limitation. Free tax calculator 2011 Repayment—$3,000 or less. Free tax calculator 2011   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Free tax calculator 2011 Repayment—over $3,000. Free tax calculator 2011   If the amount you repaid was more than $3,000, you can deduct the repayment, as described earlier. Free tax calculator 2011 However, you can instead choose to take a tax credit for the year of repayment if you included the income under a “claim of right. Free tax calculator 2011 ” This means that at the time you included the income, it appeared that you had an unrestricted right to it. Free tax calculator 2011 If you qualify for this choice, figure your tax under both methods and use the method that results in less tax. Free tax calculator 2011 Method 1. Free tax calculator 2011   Figure your tax for 2013 claiming a deduction for the repaid amount. Free tax calculator 2011 Method 2. Free tax calculator 2011   Figure your tax for 2013 claiming a credit for the repaid amount. Free tax calculator 2011 Follow these steps. Free tax calculator 2011 Figure your tax for 2013 without deducting the repaid amount. Free tax calculator 2011 Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Free tax calculator 2011 Subtract the tax in (2) from the tax shown on your return for the earlier year. Free tax calculator 2011 This is the amount of your credit. Free tax calculator 2011 Subtract the answer in (3) from the tax for 2013 figured without the deduction (step 1). Free tax calculator 2011   If Method 1 results in less tax, deduct the amount repaid as discussed earlier under Type of deduction. Free tax calculator 2011   If Method 2 results in less tax, claim the credit on line 71 of Form 1040, and write “I. Free tax calculator 2011 R. Free tax calculator 2011 C. Free tax calculator 2011 1341” next to line 71. Free tax calculator 2011 Example. Free tax calculator 2011 For 2012, you filed a return and reported your income on the cash method. Free tax calculator 2011 In 2013, you repaid $5,000 included in your 2012 gross income under a claim of right. Free tax calculator 2011 Your filing status in 2013 and 2012 is single. Free tax calculator 2011 Your income and tax for both years are as follows:   2012  With Income 2012  Without Income Taxable Income $15,000 $10,000 Tax $ 1,819 $ 1,069   2013  Without Deduction 2013  With Deduction Taxable Income $49,950 $44,950 Tax $8,423 $7,173 Your tax under Method 1 is $7,173. Free tax calculator 2011 Your tax under Method 2 is $7,673, figured as follows: Tax previously determined for 2012 $ 1,819 Less: Tax as refigured − 1,069 Decrease in 2012 tax $ 750 Regular tax liability for 2013 $8,423 Less: Decrease in 2012 tax − 750 Refigured tax for 2013 $ 7,673 Because you pay less tax under Method 1, you should take a deduction for the repayment in 2013. Free tax calculator 2011 Repayment does not apply. Free tax calculator 2011   This discussion does not apply to the following. Free tax calculator 2011 Deductions for bad debts. Free tax calculator 2011 Deductions from sales to customers, such as returns and allowances, and similar items. Free tax calculator 2011 Deductions for legal and other expenses of contesting the repayment. Free tax calculator 2011 Year of deduction (or credit). Free tax calculator 2011   If you use the cash method of accounting, you can take the deduction (or credit, if applicable) for the tax year in which you actually make the repayment. Free tax calculator 2011 If you use any other accounting method, you can deduct the repayment or claim a credit for it only for the tax year in which it is a proper deduction under your accounting method. Free tax calculator 2011 For example, if you use the accrual method, you are entitled to the deduction or credit in the tax year in which the obligation for the repayment accrues. Free tax calculator 2011 Subscriptions. Free tax calculator 2011   Subscriptions to professional, technical, and trade journals that deal with your business field are deductible. Free tax calculator 2011 Supplies and materials. Free tax calculator 2011   Unless you have deducted the cost in any earlier year, you generally can deduct the cost of materials and supplies actually consumed and used during the tax year. Free tax calculator 2011   If you keep incidental materials and supplies on hand, you can deduct the cost of the incidental materials and supplies you bought during the tax year if all the following requirements are met. Free tax calculator 2011 You do not keep a record of when they are used. Free tax calculator 2011 You do not take an inventory of the amount on hand at the beginning and end of the tax year. Free tax calculator 2011 This method does not distort your income. Free tax calculator 2011   You can also deduct the cost of books, professional instruments, equipment, etc. Free tax calculator 2011 , if you normally use them within a year. Free tax calculator 2011 However, if the usefulness of these items extends substantially beyond the year they are placed in service, you generally must recover their costs through depreciation. Free tax calculator 2011 For more information regarding depreciation see Publication 946, How To Depreciate Property. Free tax calculator 2011 Utilities. Free tax calculator 2011   Business expenses for heat, lights, power, telephone service, and water and sewerage are deductible. Free tax calculator 2011 However, any part due to personal use is not deductible. Free tax calculator 2011 Telephone. Free tax calculator 2011   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. Free tax calculator 2011 However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. Free tax calculator 2011 Prev  Up  Next   Home   More Online Publications