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Free Tax Filing 2013

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Free Tax Filing 2013

Free tax filing 2013 Publication 595 - Introductory Material Table of Contents Introduction Important Reminder Introduction This publication discusses the Capital Construction Fund (CCF). Free tax filing 2013 The CCF is a special investment program administered by the National Marine Fisheries Service (NMFS) and the Internal Revenue Service (IRS). Free tax filing 2013 This program allows fishermen to defer paying income tax on certain income they invest in a CCF account and later use to acquire, build, or rebuild fishing vessels. Free tax filing 2013 This publication does not discuss all the tax rules that may apply to your fishing trade or business. Free tax filing 2013 For general information about the federal tax laws that apply to individuals, including commercial fishermen, who file Schedule C or C-EZ, see Publication 334, Tax Guide for Small Business. Free tax filing 2013 If your trade or business is a partnership or corporation, see Publication 541, Partnerships, or Publication 542, Corporations. Free tax filing 2013 Comments and suggestions. Free tax filing 2013   We welcome your comments about this publication and your suggestions for future editions. Free tax filing 2013   You can email us at *taxforms@irs. Free tax filing 2013 gov. Free tax filing 2013 Please put “Publications Comment” on the subject line. Free tax filing 2013   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. Free tax filing 2013 NW, IR-6406 Washington, DC 20224   We respond to many letters by telephone. Free tax filing 2013 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free tax filing 2013 Important Reminder Photographs of missing children. Free tax filing 2013  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free tax filing 2013 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free tax filing 2013 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Free tax filing 2013 Prev  Up  Next   Home   More Online Publications
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Individual Shared Responsibility Provision – Calculating the Payment

 

The individual shared responsibility provision requires you and each member of your family to either have basic health insurance coverage (also known as minimum essential coverage), qualify for an exemption, or make an individual shared responsibility payment when you file your federal income tax return. It is important to remember that choosing to make the individual shared responsibility payment instead of purchasing minimum essential coverage means you will also have to pay the entire cost of all your medical care. You won't be protected from the kind of very high medical bills that can sometimes lead to bankruptcy.

If you must make an individual shared responsibility payment with your return, the annual payment amount is the greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace. You will owe 1/12th of the annual payment for each month you or your dependent(s) don’t have either coverage or an exemption.

For 2014, the annual payment amount is:

  • The greater of:
    • 1 percent of your household income that is above the tax return filing threshold for your filing status, or
    • Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a family maximum of $285,
  • But capped at the cost of the national average premium for a bronze level health plan available through the Marketplace in 2014.

Calculating your payment requires you to know your household income and your tax return filing threshold.

  • Household income is the adjusted gross income from your tax return plus any excludible foreign earned income and tax-exempt interest you receive during the taxable year. Household income also includes the incomes of all of your dependents who are required to file tax returns.
  • Tax return filing threshold is the amount of gross income an individual of your age and with your filing status (e.g., single, married filing jointly, head of household) must make to be required to file a tax return.

2014 Federal Tax Filing Requirement Thresholds

Filing Status Age Must File a Return If Gross Income Exceeds
Single Under 65 $10,150
  65 or older $11,700
Head of Household Under 65 $13,050
  65 or older $14,600
Married Filing Jointly  Under 65 (both spouses) $20,300
  65 or older (one spouse) $21,500
  65 or older (both spouses) $22,700
Married Filing Separately  Any age $3,950
Qualifying Widow(er) with Dependent Children Under 65 $16,350
  65 or older $17,550

 

Examples

In the examples below, we assume that the payment amounts do not exceed the national average premium for bronze level coverage for the individuals involved. These examples are used only to represent the mechanics of calculating the payment and are not estimates of current or future health insurance premium costs. For information on the cost of bronze level plans, visit HealthCare.gov.

Example 1: Single individual with $40,000 income

Jim, an unmarried individual with no dependents, does not have minimum essential coverage for any month during 2014 and does not qualify for an exemption. For 2014, Jim’s household income is $40,000 and his filing threshold is $10,150.

  • To determine his payment using the income formula, subtract $10,150 (filing threshold) from $40,000 (2014 household income). The result is $29,850. One percent of $29,850 equals $298.50.
  • Jim’s flat dollar amount is $95.

Because $298.50 is greater than $95 (and is less than the national average premium for bronze level coverage for 2014), Jim’s shared responsibility payment for 2014 is $298.50, or $24.87 for each month he is uninsured (1/12 of $298.50 equals $24.87).

Jim will make his shared responsibility payment for the months he was uninsured when he files his 2014 income tax return, which is due in April 2015.

Example 2: Married couple with 2 children, $70,000 income

Eduardo and Julia are married and have two children under 18. They do not have minimum essential coverage for any family member for any month during 2014 and no one in the family qualifies for an exemption. For 2014, their household income is $70,000 and their filing threshold is $20,300.

  • To determine their payment using the income formula, subtract $20,300 (filing threshold) from $70,000 (2014 household income). The result is $49,700. One percent of $49,700 equals $497.
  • Eduardo and Julia’s flat dollar amount is $285, or $95 per adult and $47.50 per child. The total of $285 is the flat dollar amount in 2014.

Because $497 is greater than $285 (and is less than the national average premium for bronze level coverage for 2014), Eduardo and Julia’s shared responsibility payment is $497 for 2014, or $41.41 per month for each month the family is uninsured (1/12 of $497 equals $41.41).

Page Last Reviewed or Updated: 24-Mar-2014

The Free Tax Filing 2013

Free tax filing 2013 2. Free tax filing 2013   Foreclosures and Repossessions Table of Contents Amount realized and ordinary income on a recourse debt. Free tax filing 2013 Amount realized on a nonrecourse debt. Free tax filing 2013 If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. Free tax filing 2013 The foreclosure or repossession is treated as a sale from which you may realize gain or loss. Free tax filing 2013 This is true even if you voluntarily return the property to the lender. Free tax filing 2013 If the outstanding loan balance was more than the FMV of the property and the lender cancels all or part of the remaining loan balance, you also may realize ordinary income from the cancellation of debt. Free tax filing 2013 You must report this income on your return unless certain exceptions or exclusions apply. Free tax filing 2013 See chapter 1 for more details. Free tax filing 2013 Borrower's gain or loss. Free tax filing 2013    You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale. Free tax filing 2013 The gain is the difference between the amount realized and your adjusted basis in the transferred property (amount realized minus adjusted basis). Free tax filing 2013 The loss is the difference between your adjusted basis in the transferred property and the amount realized (adjusted basis minus amount realized). Free tax filing 2013 For more information on figuring gain or loss from the sale of property, see Gain or Loss From Sales and Exchanges in Publication 544. Free tax filing 2013 You can use Table 1-1 to figure your ordinary income from the cancellation of debt and your gain or loss from a foreclosure or repossession. Free tax filing 2013 Amount realized and ordinary income on a recourse debt. Free tax filing 2013    If you are personally liable for the debt, the amount realized on the foreclosure or repossession includes the smaller of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The FMV of the transferred property. Free tax filing 2013 The amount realized also includes any proceeds you received from the foreclosure sale. Free tax filing 2013 If the FMV of the transferred property is less than the total outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, the difference is ordinary income from the cancellation of debt. Free tax filing 2013 You must report this income on your return unless certain exceptions or exclusions apply. Free tax filing 2013 See chapter 1 for more details. Free tax filing 2013       Example 1. Free tax filing 2013 Tara bought a new car for $15,000. Free tax filing 2013 She made a $2,000 downpayment and borrowed the remaining $13,000 from the dealer's credit company. Free tax filing 2013 Tara is personally liable for the loan (recourse debt) and the car is pledged as security for the loan. Free tax filing 2013 On August 1, 2013, the credit company repossessed the car because Tara had stopped making loan payments. Free tax filing 2013 The balance due after taking into account the payments Tara made was $10,000. Free tax filing 2013 The FMV of the car when it was repossessed was $9,000. Free tax filing 2013 On November 15, 2013, the credit company forgave the remaining $1,000 balance on the loan due to insufficient assets. Free tax filing 2013 In this case, the amount Tara realizes is $9,000. Free tax filing 2013 This is the smaller of: The $10,000 outstanding debt immediately before the repossession reduced by the $1,000 for which she remains personally liable immediately after the repossession ($10,000 − $1,000 = $9,000), or The $9,000 FMV of the car. Free tax filing 2013 Tara figures her gain or loss on the repossession by comparing the $9,000 amount realized with her $15,000 adjusted basis. Free tax filing 2013 She has a $6,000 nondeductible loss. Free tax filing 2013 After the cancellation of the remaining balance on the loan in November, Tara also has ordinary income from cancellation of debt in the amount of $1,000 (the remaining balance on the $10,000 loan after the $9,000 amount satisfied by the FMV of the repossessed car). Free tax filing 2013 Tara must report this $1,000 on her return unless one of the exceptions or exclusions described in chapter 1 applies. Free tax filing 2013 Example 2. Free tax filing 2013 Lili paid $200,000 for her home. Free tax filing 2013 She made a $15,000 downpayment and borrowed the remaining $185,000 from a bank. Free tax filing 2013 Lili is personally liable for the mortgage loan and the house secures the loan. Free tax filing 2013 In 2013, the bank foreclosed on the mortgage because Lili stopped making payments. Free tax filing 2013 When the bank foreclosed the mortgage, the balance due was $180,000, the FMV of the house was $170,000, and Lili's adjusted basis was $175,000 due to a casualty loss she had deducted. Free tax filing 2013 At the time of the foreclosure, the bank forgave $2,000 of the $10,000 debt in excess of the FMV ($180,000 minus $170,000). Free tax filing 2013 She remained personally liable for the $8,000 balance. Free tax filing 2013 In this case, Lili has ordinary income from the cancellation of debt in the amount of $2,000. Free tax filing 2013 The $2,000 income from the cancellation of debt is figured by subtracting the $170,000 FMV of the house from the $172,000 difference between her total outstanding debt immediately before the transfer of property and the amount for which she remains personally liable immediately after the transfer ($180,000 minus $8,000). Free tax filing 2013 She is able to exclude the $2,000 of canceled debt from her income under the qualified principal residence indebtedness rules discussed earlier. Free tax filing 2013 Lili must also determine her gain or loss from the foreclosure. Free tax filing 2013 In this case, the amount that she realizes is $170,000. Free tax filing 2013 This is the smaller of: (a) the $180,000 outstanding debt immediately before the transfer reduced by the $8,000 for which she remains personally liable immediately after the transfer ($180,000 − $8,000 = $172,000) or (b) the $170,000 FMV of the house. Free tax filing 2013 Lili figures her gain or loss on the foreclosure by comparing the $170,000 amount realized with her $175,000 adjusted basis. Free tax filing 2013 She has a $5,000 nondeductible loss. Free tax filing 2013 Table 1-1. Free tax filing 2013 Worksheet for Foreclosures and Repossessions Part 1. Free tax filing 2013 Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Free tax filing 2013 Otherwise, go to Part 2. Free tax filing 2013 1. Free tax filing 2013 Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property   2. Free tax filing 2013 Enter the fair market value of the transferred property   3. Free tax filing 2013 Ordinary income from the cancellation of debt upon foreclosure or repossession. Free tax filing 2013 * Subtract line 2 from line 1. Free tax filing 2013 If less than zero, enter zero. Free tax filing 2013 Next, go to Part 2   Part 2. Free tax filing 2013 Gain or loss from foreclosure or repossession. Free tax filing 2013   4. Free tax filing 2013 Enter the smaller of line 1 or line 2. Free tax filing 2013 If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property   5. Free tax filing 2013 Enter any proceeds you received from the foreclosure sale   6. Free tax filing 2013 Add line 4 and line 5   7. Free tax filing 2013 Enter the adjusted basis of the transferred property   8. Free tax filing 2013 Gain or loss from foreclosure or repossession. Free tax filing 2013 Subtract line 7 from line 6   * The income may not be taxable. Free tax filing 2013 See chapter 1 for more details. Free tax filing 2013 Amount realized on a nonrecourse debt. Free tax filing 2013    If you are not personally liable for repaying the debt secured by the transferred property, the amount you realize includes the full amount of the outstanding debt immediately before the transfer. Free tax filing 2013 This is true even if the FMV of the property is less than the outstanding debt immediately before the transfer. Free tax filing 2013 Example 1. Free tax filing 2013 Tara bought a new car for $15,000. Free tax filing 2013 She made a $2,000 downpayment and borrowed the remaining $13,000 from the dealer's credit company. Free tax filing 2013 Tara is not personally liable for the loan (nonrecourse), but pledged the new car as security for the loan. Free tax filing 2013 On August 1, 2013, the credit company repossessed the car because Tara had stopped making loan payments. Free tax filing 2013 The balance due after taking into account the payments Tara made was $10,000. Free tax filing 2013 The FMV of the car when it was repossessed was $9,000. Free tax filing 2013 The amount Tara realized on the repossession is $10,000. Free tax filing 2013 That is the outstanding amount of debt immediately before the repossession, even though the FMV of the car is less than $10,000. Free tax filing 2013 Tara figures her gain or loss on the repossession by comparing the $10,000 amount realized with her $15,000 adjusted basis. Free tax filing 2013 Tara has a $5,000 nondeductible loss. Free tax filing 2013 Example 2. Free tax filing 2013 Lili paid $200,000 for her home. Free tax filing 2013 She made a $15,000 downpayment and borrowed the remaining $185,000 from a bank. Free tax filing 2013 She is not personally liable for the loan, but grants the bank a mortgage. Free tax filing 2013 The bank foreclosed on the mortgage because Lili stopped making payments. Free tax filing 2013 When the bank foreclosed on the mortgage, the balance due was $180,000, the FMV of the house was $170,000, and Lili's adjusted basis was $175,000 due to a casualty loss she had deducted. Free tax filing 2013 The amount Lili realized on the foreclosure is $180,000, the outstanding debt immediately before the foreclosure. Free tax filing 2013 She figures her gain or loss by comparing the $180,000 amount realized with her $175,000 adjusted basis. Free tax filing 2013 Lili has a $5,000 realized gain. Free tax filing 2013 See Publication 523 to figure and report any taxable amount. Free tax filing 2013 Forms 1099-A and 1099-C. Free tax filing 2013    A lender who acquires an interest in your property in a foreclosure or repossession should send you Form 1099-A, Acquisition or Abandonment of Secured Property, showing information you need to figure your gain or loss. Free tax filing 2013 However, if the lender also cancels part of your debt and must file Form 1099-C, the lender can include the information about the foreclosure or repossession on that form instead of on Form 1099-A. Free tax filing 2013 The lender must file Form 1099-C and send you a copy if the amount of debt canceled is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. Free tax filing 2013 For foreclosures or repossessions occurring in 2013, these forms should be sent to you by January 31, 2014. Free tax filing 2013 Prev  Up  Next   Home   More Online Publications