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How Do I Do My 2010 Taxes

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How Do I Do My 2010 Taxes

How do i do my 2010 taxes 2. How do i do my 2010 taxes   Filing Status Table of Contents What's New Introduction Useful Items - You may want to see: Marital StatusDivorced persons. How do i do my 2010 taxes Divorce and remarriage. How do i do my 2010 taxes Annulled marriages. How do i do my 2010 taxes Head of household or qualifying widow(er) with dependent child. How do i do my 2010 taxes Considered married. How do i do my 2010 taxes Same-sex marriage. How do i do my 2010 taxes Spouse died during the year. How do i do my 2010 taxes Married persons living apart. How do i do my 2010 taxes Single Married Filing JointlyFiling a Joint Return Married Filing SeparatelySpecial Rules Head of HouseholdConsidered Unmarried Keeping Up a Home Qualifying Person Qualifying Widow(er) With Dependent Child What's New Filing status for same-sex married couples. How do i do my 2010 taxes  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. How do i do my 2010 taxes See Same-sex marriage under Marital Status, later. How do i do my 2010 taxes Introduction This chapter helps you determine which filing status to use. How do i do my 2010 taxes There are five filing statuses. How do i do my 2010 taxes Single. How do i do my 2010 taxes Married Filing Jointly. How do i do my 2010 taxes Married Filing Separately. How do i do my 2010 taxes Head of Household. How do i do my 2010 taxes Qualifying Widow(er) With Dependent Child. How do i do my 2010 taxes If more than one filing status applies to you, choose the one that will give you the lowest tax. How do i do my 2010 taxes You must determine your filing status before you can determine whether you must file a tax return (chapter 1), your standard deduction (chapter 20), and your tax (chapter 30). How do i do my 2010 taxes You also use your filing status to determine whether you are eligible to claim certain deductions and credits. How do i do my 2010 taxes Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 519 U. How do i do my 2010 taxes S. How do i do my 2010 taxes Tax Guide for Aliens 555 Community Property Marital Status In general, your filing status depends on whether you are considered unmarried or married. How do i do my 2010 taxes Unmarried persons. How do i do my 2010 taxes   You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree. How do i do my 2010 taxes State law governs whether you are married or legally separated under a divorce or separate maintenance decree. How do i do my 2010 taxes Divorced persons. How do i do my 2010 taxes   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year. How do i do my 2010 taxes Divorce and remarriage. How do i do my 2010 taxes   If you obtain a divorce for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse must file as married individuals in both years. How do i do my 2010 taxes Annulled marriages. How do i do my 2010 taxes    If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried even if you filed joint returns for earlier years. How do i do my 2010 taxes You must file Form 1040X, Amended U. How do i do my 2010 taxes S. How do i do my 2010 taxes Individual Income Tax Return, claiming single or head of household status for all tax years that are affected by the annulment and are not closed by the statute of limitations for filing a tax return. How do i do my 2010 taxes Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. How do i do my 2010 taxes If you filed your original return early (for example, March 1), your return is considered filed on the due date (generally April 15). How do i do my 2010 taxes However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it on July 1, your return is considered filed on July 1. How do i do my 2010 taxes Head of household or qualifying widow(er) with dependent child. How do i do my 2010 taxes   If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er) with a dependent child. How do i do my 2010 taxes See Head of Household and Qualifying Widow(er) With Dependent Child to see if you qualify. How do i do my 2010 taxes Married persons. How do i do my 2010 taxes   If you are considered married, you and your spouse can file a joint return or separate returns. How do i do my 2010 taxes Considered married. How do i do my 2010 taxes   You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests. How do i do my 2010 taxes You are married and living together as a married couple. How do i do my 2010 taxes You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began. How do i do my 2010 taxes You are married and living apart, but not legally separated under a decree of divorce or separate maintenance. How do i do my 2010 taxes You are separated under an interlocutory (not final) decree of divorce. How do i do my 2010 taxes Same-sex marriage. How do i do my 2010 taxes   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. How do i do my 2010 taxes The term “spouse” includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. How do i do my 2010 taxes However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. How do i do my 2010 taxes For more details, see Publication 501. How do i do my 2010 taxes Spouse died during the year. How do i do my 2010 taxes   If your spouse died during the year, you are considered married for the whole year for filing status purposes. How do i do my 2010 taxes   If you did not remarry before the end of the tax year, you can file a joint return for yourself and your deceased spouse. How do i do my 2010 taxes For the next 2 years, you may be entitled to the special benefits described later under Qualifying Widow(er) With Dependent Child . How do i do my 2010 taxes   If you remarried before the end of the tax year, you can file a joint return with your new spouse. How do i do my 2010 taxes Your deceased spouse's filing status is married filing separately for that year. How do i do my 2010 taxes Married persons living apart. How do i do my 2010 taxes   If you live apart from your spouse and meet certain tests, you may be able to file as head of household even if you are not divorced or legally separated. How do i do my 2010 taxes If you qualify to file as head of household instead of married filing separately, your standard deduction will be higher. How do i do my 2010 taxes Also, your tax may be lower, and you may be able to claim the earned income credit. How do i do my 2010 taxes See Head of Household , later. How do i do my 2010 taxes Single Your filing status is single if you are considered unmarried and you do not qualify for another filing status. How do i do my 2010 taxes To determine your marital status, see Marital Status , earlier. How do i do my 2010 taxes Widow(er). How do i do my 2010 taxes   Your filing status may be single if you were widowed before January 1, 2013, and did not remarry before the end of 2013. How do i do my 2010 taxes You may, however, be able to use another filing status that will give you a lower tax. How do i do my 2010 taxes See Head of Household and Qualifying Widow(er) With Dependent Child , later, to see if you qualify. How do i do my 2010 taxes How to file. How do i do my 2010 taxes   You can file Form 1040. How do i do my 2010 taxes If you have taxable income of less than $100,000, you may be able to file Form 1040A. How do i do my 2010 taxes If, in addition, you have no dependents, and are under 65 and not blind, and meet other requirements, you can file Form 1040EZ. How do i do my 2010 taxes If you file Form 1040A or Form 1040, show your filing status as single by checking the box on line 1. How do i do my 2010 taxes Use the Single column of the Tax Table or Section A of the Tax Computation Worksheet to figure your tax. How do i do my 2010 taxes Married Filing Jointly You can choose married filing jointly as your filing status if you are considered married and both you and your spouse agree to file a joint return. How do i do my 2010 taxes On a joint return, you and your spouse report your combined income and deduct your combined allowable expenses. How do i do my 2010 taxes You can file a joint return even if one of you had no income or deductions. How do i do my 2010 taxes If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. How do i do my 2010 taxes Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to other filing statuses. How do i do my 2010 taxes If you and your spouse each have income, you may want to figure your tax both on a joint return and on separate returns (using the filing status of married filing separately). How do i do my 2010 taxes You can choose the method that gives the two of you the lower combined tax. How do i do my 2010 taxes How to file. How do i do my 2010 taxes   If you file as married filing jointly, you can use Form 1040. How do i do my 2010 taxes If you and your spouse have taxable income of less than $100,000, you may be able to file Form 1040A. How do i do my 2010 taxes If, in addition, you and your spouse have no dependents, are both under 65 and not blind, and meet other requirements, you can file Form 1040EZ. How do i do my 2010 taxes If you file Form 1040 or Form 1040A, show this filing status by checking the box on line 2. How do i do my 2010 taxes Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. How do i do my 2010 taxes Spouse died. How do i do my 2010 taxes   If your spouse died during the year, you are considered married for the whole year and can choose married filing jointly as your filing status. How do i do my 2010 taxes See Spouse died during the year under Marital Status, earlier, for more information. How do i do my 2010 taxes   If your spouse died in 2014 before filing a 2013 return, you can choose married filing jointly as your filing status on your 2013 return. How do i do my 2010 taxes Divorced persons. How do i do my 2010 taxes   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year and you cannot choose married filing jointly as your filing status. How do i do my 2010 taxes Filing a Joint Return Both you and your spouse must include all of your income, exemptions, and deductions on your joint return. How do i do my 2010 taxes Accounting period. How do i do my 2010 taxes   Both of you must use the same accounting period, but you can use different accounting methods. How do i do my 2010 taxes See Accounting Periods and Accounting Methods in chapter 1. How do i do my 2010 taxes Joint responsibility. How do i do my 2010 taxes   Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. How do i do my 2010 taxes This means that if one spouse does not pay the tax due, the other may have to. How do i do my 2010 taxes Or, if one spouse does not report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. How do i do my 2010 taxes One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse. How do i do my 2010 taxes You may want to file separately if: You believe your spouse is not reporting all of his or her income, or You do not want to be responsible for any taxes due if your spouse does not have enough tax withheld or does not pay enough estimated tax. How do i do my 2010 taxes Divorced taxpayer. How do i do my 2010 taxes   You may be held jointly and individually responsible for any tax, interest, and penalties due on a joint return filed before your divorce. How do i do my 2010 taxes This responsibility may apply even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. How do i do my 2010 taxes Relief from joint responsibility. How do i do my 2010 taxes   In some cases, one spouse may be relieved of joint responsibility for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. How do i do my 2010 taxes You can ask for relief no matter how small the liability. How do i do my 2010 taxes   There are three types of relief available. How do i do my 2010 taxes Innocent spouse relief. How do i do my 2010 taxes Separation of liability (available only to joint filers who are divorced, widowed, legally separated, or have not lived together for the 12 months ending on the date the election for this relief is filed). How do i do my 2010 taxes Equitable relief. How do i do my 2010 taxes    You must file Form 8857, Request for Innocent Spouse Relief, to request relief from joint responsibility. How do i do my 2010 taxes Publication 971, Innocent Spouse Relief, explains these kinds of relief and who may qualify for them. How do i do my 2010 taxes Signing a joint return. How do i do my 2010 taxes   For a return to be considered a joint return, both spouses generally must sign the return. How do i do my 2010 taxes Spouse died before signing. How do i do my 2010 taxes   If your spouse died before signing the return, the executor or administrator must sign the return for your spouse. How do i do my 2010 taxes If neither you nor anyone else has yet been appointed as executor or administrator, you can sign the return for your spouse and enter “Filing as surviving spouse” in the area where you sign the return. How do i do my 2010 taxes Spouse away from home. How do i do my 2010 taxes   If your spouse is away from home, you should prepare the return, sign it, and send it to your spouse to sign so that it can be filed on time. How do i do my 2010 taxes Injury or disease prevents signing. How do i do my 2010 taxes   If your spouse cannot sign because of disease or injury and tells you to sign for him or her, you can sign your spouse's name in the proper space on the return followed by the words “By (your name), Husband (or Wife). How do i do my 2010 taxes ” Be sure to also sign in the space provided for your signature. How do i do my 2010 taxes Attach a dated statement, signed by you, to the return. How do i do my 2010 taxes The statement should include the form number of the return you are filing, the tax year, and the reason your spouse cannot sign, and should state that your spouse has agreed to your signing for him or her. How do i do my 2010 taxes Signing as guardian of spouse. How do i do my 2010 taxes   If you are the guardian of your spouse who is mentally incompetent, you can sign the return for your spouse as guardian. How do i do my 2010 taxes Spouse in combat zone. How do i do my 2010 taxes   You can sign a joint return for your spouse if your spouse cannot sign because he or she is serving in a combat zone (such as the Persian Gulf Area, Serbia, Montenegro, Albania, or Afghanistan), even if you do not have a power of attorney or other statement. How do i do my 2010 taxes Attach a signed statement to your return explaining that your spouse is serving in a combat zone. How do i do my 2010 taxes For more information on special tax rules for persons who are serving in a combat zone, or who are in missing status as a result of serving in a combat zone, see Publication 3, Armed Forces' Tax Guide. How do i do my 2010 taxes Other reasons spouse cannot sign. How do i do my 2010 taxes    If your spouse cannot sign the joint return for any other reason, you can sign for your spouse only if you are given a valid power of attorney (a legal document giving you permission to act for your spouse). How do i do my 2010 taxes Attach the power of attorney (or a copy of it) to your tax return. How do i do my 2010 taxes You can use Form 2848, Power of Attorney and Declaration of Representative. How do i do my 2010 taxes Nonresident alien or dual-status alien. How do i do my 2010 taxes   Generally, a married couple cannot file a joint return if either one is a nonresident alien at any time during the tax year. How do i do my 2010 taxes However, if one spouse was a nonresident alien or dual-status alien who was married to a U. How do i do my 2010 taxes S. How do i do my 2010 taxes citizen or resident alien at the end of the year, the spouses can choose to file a joint return. How do i do my 2010 taxes If you do file a joint return, you and your spouse are both treated as U. How do i do my 2010 taxes S. How do i do my 2010 taxes residents for the entire tax year. How do i do my 2010 taxes See chapter 1 of Publication 519. How do i do my 2010 taxes Married Filing Separately You can choose married filing separately as your filing status if you are married. How do i do my 2010 taxes This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax than filing a joint return. How do i do my 2010 taxes If you and your spouse do not agree to file a joint return, you must use this filing status unless you qualify for head of household status, discussed later. How do i do my 2010 taxes You may be able to choose head of household filing status if you are considered unmarried because you live apart from your spouse and meet certain tests (explained later, under Head of Household ). How do i do my 2010 taxes This can apply to you even if you are not divorced or legally separated. How do i do my 2010 taxes If you qualify to file as head of household, instead of as married filing separately, your tax may be lower, you may be able to claim the earned income credit and certain other credits, and your standard deduction will be higher. How do i do my 2010 taxes The head of household filing status allows you to choose the standard deduction even if your spouse chooses to itemize deductions. How do i do my 2010 taxes See Head of Household , later, for more information. How do i do my 2010 taxes You will generally pay more combined tax on separate returns than you would on a joint return for the reasons listed under Special Rules, later. How do i do my 2010 taxes However, unless you are required to file separately, you should figure your tax both ways (on a joint return and on separate returns). How do i do my 2010 taxes This way you can make sure you are using the filing status that results in the lowest combined tax. How do i do my 2010 taxes When figuring the combined tax of a married couple, you may want to consider state taxes as well as federal taxes. How do i do my 2010 taxes How to file. How do i do my 2010 taxes   If you file a separate return, you generally report only your own income, exemptions, credits, and deductions. How do i do my 2010 taxes You can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another person. How do i do my 2010 taxes You can file Form 1040. How do i do my 2010 taxes If your taxable income is less than $100,000, you may be able to file Form 1040A. How do i do my 2010 taxes Select this filing status by checking the box on line 3 of either form. How do i do my 2010 taxes Enter your spouse's full name and SSN or ITIN in the spaces provided. How do i do my 2010 taxes If your spouse does not have and is not required to have an SSN or ITIN, enter “NRA” in the space for your spouse's SSN. How do i do my 2010 taxes Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax. How do i do my 2010 taxes Special Rules If you choose married filing separately as your filing status, the following special rules apply. How do i do my 2010 taxes Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for. How do i do my 2010 taxes   Your tax rate generally is higher than on a joint return. How do i do my 2010 taxes Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return. How do i do my 2010 taxes You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000). How do i do my 2010 taxes If you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. How do i do my 2010 taxes For more information about these expenses, the credit, and the exclusion, see chapter 32. How do i do my 2010 taxes You cannot take the earned income credit. How do i do my 2010 taxes You cannot take the exclusion or credit for adoption expenses in most cases. How do i do my 2010 taxes You cannot take the education credits (the American opportunity credit and lifetime learning credit), the deduction for student loan interest, or the tuition and fees deduction. How do i do my 2010 taxes You cannot exclude any interest income from qualified U. How do i do my 2010 taxes S. How do i do my 2010 taxes savings bonds you used for higher education expenses. How do i do my 2010 taxes If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received. How do i do my 2010 taxes The following credits and deductions are reduced at income levels half those for a joint return: The child tax credit, The retirement savings contributions credit, The deduction for personal exemptions, and Itemized deductions. How do i do my 2010 taxes Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). How do i do my 2010 taxes If your spouse itemizes deductions, you cannot claim the standard deduction. How do i do my 2010 taxes If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return. How do i do my 2010 taxes Adjusted gross income (AGI) limits. How do i do my 2010 taxes   If your AGI on a separate return is lower than it would have been on a joint return, you may be able to deduct a larger amount for certain deductions that are limited by AGI, such as medical expenses. How do i do my 2010 taxes Individual retirement arrangements (IRAs). How do i do my 2010 taxes   You may not be able to deduct all or part of your contributions to a traditional IRA if you or your spouse were covered by an employee retirement plan at work during the year. How do i do my 2010 taxes Your deduction is reduced or eliminated if your income is more than a certain amount. How do i do my 2010 taxes This amount is much lower for married individuals who file separately and lived together at any time during the year. How do i do my 2010 taxes For more information, see How Much Can You Deduct in chapter 17. How do i do my 2010 taxes Rental activity losses. How do i do my 2010 taxes   If you actively participated in a passive rental real estate activity that produced a loss, you generally can deduct the loss from your nonpassive income, up to $25,000. How do i do my 2010 taxes This is called a special allowance. How do i do my 2010 taxes However, married persons filing separate returns who lived together at any time during the year cannot claim this special allowance. How do i do my 2010 taxes Married persons filing separate returns who lived apart at all times during the year are each allowed a $12,500 maximum special allowance for losses from passive real estate activities. How do i do my 2010 taxes See Limits on Rental Losses in chapter 9. How do i do my 2010 taxes Community property states. How do i do my 2010 taxes   If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file separately, your income may be considered separate income or community income for income tax purposes. How do i do my 2010 taxes See Publication 555. How do i do my 2010 taxes Joint Return After Separate Returns You can change your filing status from a separate return to a joint return by filing an amended return using Form 1040X. How do i do my 2010 taxes You generally can change to a joint return any time within 3 years from the due date of the separate return or returns. How do i do my 2010 taxes This does not include any extensions. How do i do my 2010 taxes A separate return includes a return filed by you or your spouse claiming married filing separately, single, or head of household filing status. How do i do my 2010 taxes Separate Returns After Joint Return Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. How do i do my 2010 taxes Exception. How do i do my 2010 taxes   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. How do i do my 2010 taxes The personal representative has 1 year from the due date of the return (including extensions) to make the change. How do i do my 2010 taxes See Publication 559, Survivors, Executors, and Administrators, for more information on filing a return for a decedent. How do i do my 2010 taxes Head of Household You may be able to file as head of household if you meet all the following requirements. How do i do my 2010 taxes You are unmarried or “considered unmarried” on the last day of the year. How do i do my 2010 taxes See Marital Status , earlier, and Considered Unmarried , later. How do i do my 2010 taxes You paid more than half the cost of keeping up a home for the year. How do i do my 2010 taxes A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school). How do i do my 2010 taxes However, if the qualifying person is your dependent parent, he or she does not have to live with you. How do i do my 2010 taxes See Special rule for parent , later, under Qualifying Person. How do i do my 2010 taxes If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. How do i do my 2010 taxes You will also receive a higher standard deduction than if you file as single or married filing separately. How do i do my 2010 taxes Kidnapped child. How do i do my 2010 taxes   A child may qualify you to file as head of household even if the child has been kidnapped. How do i do my 2010 taxes For more information, see Publication 501. How do i do my 2010 taxes How to file. How do i do my 2010 taxes   If you file as head of household, you can use Form 1040. How do i do my 2010 taxes If your taxable income is less than $100,000, you may be able to file Form 1040A. How do i do my 2010 taxes Indicate your choice of this filing status by checking the box on line 4 of either form. How do i do my 2010 taxes Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax. How do i do my 2010 taxes Considered Unmarried To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. How do i do my 2010 taxes You are considered unmarried on the last day of the tax year if you meet all the following tests. How do i do my 2010 taxes You file a separate return (defined earlier under Joint Return After Separate Returns ). How do i do my 2010 taxes You paid more than half the cost of keeping up your home for the tax year. How do i do my 2010 taxes Your spouse did not live in your home during the last 6 months of the tax year. How do i do my 2010 taxes Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. How do i do my 2010 taxes See Temporary absences , under Qualifying Person, later. How do i do my 2010 taxes Your home was the main home of your child, stepchild, or foster child for more than half the year. How do i do my 2010 taxes (See Home of qualifying person , under Qualifying Person, later, for rules applying to a child's birth, death, or temporary absence during the year. How do i do my 2010 taxes ) You must be able to claim an exemption for the child. How do i do my 2010 taxes However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described in Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3, or in Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) under Qualifying Relative in chapter 3. How do i do my 2010 taxes The general rules for claiming an exemption for a dependent are explained under Exemptions for Dependents in chapter 3. How do i do my 2010 taxes If you were considered married for part of the year and lived in a community property state (listed earlier under Married Filing Separately), special rules may apply in determining your income and expenses. How do i do my 2010 taxes See Publication 555 for more information. How do i do my 2010 taxes Nonresident alien spouse. How do i do my 2010 taxes   You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. How do i do my 2010 taxes However, your spouse is not a qualifying person for head of household purposes. How do i do my 2010 taxes You must have another qualifying person and meet the other tests to be eligible to file as a head of household. How do i do my 2010 taxes Choice to treat spouse as resident. How do i do my 2010 taxes   You are considered married if you choose to treat your spouse as a resident alien. How do i do my 2010 taxes See Publication 519. How do i do my 2010 taxes Keeping Up a Home To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year. How do i do my 2010 taxes You can determine whether you paid more than half of the cost of keeping up a home by using Worksheet 2–1. How do i do my 2010 taxes Worksheet 2-1. How do i do my 2010 taxes Cost of Keeping Up a Home   Amount You Paid Total Cost Property taxes $ $ Mortgage interest expense     Rent     Utility charges     Repairs/maintenance     Property insurance     Food consumed on the premises     Other household expenses     Totals $ $ Minus total amount you paid   () Amount others paid   $ If the total amount you paid is more than the amount others paid, you meet the requirement of paying more than half the cost of keeping up the home. How do i do my 2010 taxes Costs you include. How do i do my 2010 taxes   Include in the cost of keeping up a home expenses such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. How do i do my 2010 taxes   If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. How do i do my 2010 taxes However, you must include them in the total cost of keeping up your home to figure if you paid over half the cost. How do i do my 2010 taxes Costs you do not include. How do i do my 2010 taxes   Do not include the costs of clothing, education, medical treatment, vacations, life insurance, or transportation. How do i do my 2010 taxes Also, do not include the rental value of a home you own or the value of your services or those of a member of your household. How do i do my 2010 taxes Qualifying Person See Table 2-1 to see who is a qualifying person. How do i do my 2010 taxes Any person not described in Table 2-1 is not a qualifying person. How do i do my 2010 taxes Table 2-1. How do i do my 2010 taxes Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. How do i do my 2010 taxes See the text of this chapter for the other requirements you must meet to claim head of household filing status. How do i do my 2010 taxes IF the person is your . How do i do my 2010 taxes . How do i do my 2010 taxes . How do i do my 2010 taxes   AND . How do i do my 2010 taxes . How do i do my 2010 taxes . How do i do my 2010 taxes   THEN that person is . How do i do my 2010 taxes . How do i do my 2010 taxes . How do i do my 2010 taxes qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2   he or she is single   a qualifying person, whether or not you can claim an exemption for the person. How do i do my 2010 taxes   he or she is married and you can claim an exemption for him or her   a qualifying person. How do i do my 2010 taxes   he or she is married and you cannot claim an exemption for him or her   not a qualifying person. How do i do my 2010 taxes 3 qualifying relative4 who is your father or mother   you can claim an exemption for him or her5   a qualifying person. How do i do my 2010 taxes 6   you cannot claim an exemption for him or her   not a qualifying person. How do i do my 2010 taxes qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests)   he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and you can claim an exemption for him or her5   a qualifying person. How do i do my 2010 taxes   he or she did not live with you more than half the year   not a qualifying person. How do i do my 2010 taxes   he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and is your qualifying relative only because he or she lived with you all year as a member of your household   not a qualifying person. How do i do my 2010 taxes   you cannot claim an exemption for him or her   not a qualifying person. How do i do my 2010 taxes 1A person cannot qualify more than one taxpayer to use the head of household filing status for the year. How do i do my 2010 taxes 2The term “qualifying child” is defined in chapter 3. How do i do my 2010 taxes Note. How do i do my 2010 taxes If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3. How do i do my 2010 taxes If you are the custodial parent and those rules apply, the child generally is your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. How do i do my 2010 taxes 3This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. How do i do my 2010 taxes 4The term “ qualifying relative ” is defined in chapter 3. How do i do my 2010 taxes 5If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. How do i do my 2010 taxes See Multiple Support Agreement in chapter 3. How do i do my 2010 taxes 6See Special rule for parent . How do i do my 2010 taxes Example 1—child. How do i do my 2010 taxes Your unmarried son lived with you all year and was 18 years old at the end of the year. How do i do my 2010 taxes He did not provide more than half of his own support and does not meet the tests to be a qualifying child of anyone else. How do i do my 2010 taxes As a result, he is your qualifying child (see Qualifying Child in chapter 3) and, because he is single, your qualifying person for you to claim head of household filing status. How do i do my 2010 taxes Example 2—child who is not qualifying person. How do i do my 2010 taxes The facts are the same as in Example 1 except your son was 25 years old at the end of the year and his gross income was $5,000. How do i do my 2010 taxes Because he does not meet the age test (explained under Qualifying Child in chapter 3), your son is not your qualifying child. How do i do my 2010 taxes Because he does not meet the gross income test (explained later under Qualifying Relative in chapter 3), he is not your qualifying relative. How do i do my 2010 taxes As a result, he is not your qualifying person for head of household purposes. How do i do my 2010 taxes Example 3—girlfriend. How do i do my 2010 taxes Your girlfriend lived with you all year. How do i do my 2010 taxes Even though she may be your qualifying relative if the gross income and support tests (explained in chapter 3) are met, she is not your qualifying person for head of household purposes because she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3. How do i do my 2010 taxes See Table 2-1. How do i do my 2010 taxes Example 4—girlfriend's child. How do i do my 2010 taxes The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. How do i do my 2010 taxes He is not your qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see Not a Qualifying Child Test in chapter 3). How do i do my 2010 taxes As a result, he is not your qualifying person for head of household purposes. How do i do my 2010 taxes Home of qualifying person. How do i do my 2010 taxes   Generally, the qualifying person must live with you for more than half of the year. How do i do my 2010 taxes Special rule for parent. How do i do my 2010 taxes   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. How do i do my 2010 taxes However, you must be able to claim an exemption for your father or mother. How do i do my 2010 taxes Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. How do i do my 2010 taxes   You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. How do i do my 2010 taxes Death or birth. How do i do my 2010 taxes   You may be eligible to file as head of household even if the individual who qualifies you for this filing status is born or dies during the year. How do i do my 2010 taxes If the individual is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. How do i do my 2010 taxes If the individual is anyone else, see Publication 501. How do i do my 2010 taxes Temporary absences. How do i do my 2010 taxes   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. How do i do my 2010 taxes It must be reasonable to assume the absent person will return to the home after the temporary absence. How do i do my 2010 taxes You must continue to keep up the home during the absence. How do i do my 2010 taxes Qualifying Widow(er) With Dependent Child If your spouse died in 2013, you can use married filing jointly as your filing status for 2013 if you otherwise qualify to use that status. How do i do my 2010 taxes The year of death is the last year for which you can file jointly with your deceased spouse. How do i do my 2010 taxes See Married Filing Jointly , earlier. How do i do my 2010 taxes You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died. How do i do my 2010 taxes For example, if your spouse died in 2012, and you have not remarried, you may be able to use this filing status for 2013 and 2014. How do i do my 2010 taxes This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize deductions). How do i do my 2010 taxes It does not entitle you to file a joint return. How do i do my 2010 taxes How to file. How do i do my 2010 taxes   If you file as qualifying widow(er) with dependent child, you can use Form 1040. How do i do my 2010 taxes If you also have taxable income of less than $100,000 and meet certain other conditions, you may be able to file Form 1040A. How do i do my 2010 taxes Check the box on line 5 of either form. How do i do my 2010 taxes Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. How do i do my 2010 taxes Eligibility rules. How do i do my 2010 taxes   You are eligible to file your 2013 return as a qualifying widow(er) with dependent child if you meet all of the following tests. How do i do my 2010 taxes You were entitled to file a joint return with your spouse for the year your spouse died. How do i do my 2010 taxes It does not matter whether you actually filed a joint return. How do i do my 2010 taxes Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. How do i do my 2010 taxes You have a child or stepchild for whom you can claim an exemption. How do i do my 2010 taxes This does not include a foster child. How do i do my 2010 taxes This child lived in your home all year, except for temporary absences. How do i do my 2010 taxes See Temporary absences , earlier, under Head of Household. How do i do my 2010 taxes There are also exceptions, described later, for a child who was born or died during the year and for a kidnapped child. How do i do my 2010 taxes You paid more than half the cost of keeping up a home for the year. How do i do my 2010 taxes See Keeping Up a Home , earlier, under Head of Household. How do i do my 2010 taxes Example. How do i do my 2010 taxes John's wife died in 2011. How do i do my 2010 taxes John has not remarried. How do i do my 2010 taxes During 2012 and 2013, he continued to keep up a home for himself and his child, who lives with him and for whom he can claim an exemption. How do i do my 2010 taxes For 2011 he was entitled to file a joint return for himself and his deceased wife. How do i do my 2010 taxes For 2012 and 2013, he can file as qualifying widower with a dependent child. How do i do my 2010 taxes After 2013 he can file as head of household if he qualifies. How do i do my 2010 taxes Death or birth. How do i do my 2010 taxes    You may be eligible to file as a qualifying widow(er) with dependent child if the child who qualifies you for this filing status is born or dies during the year. How do i do my 2010 taxes You must have provided more than half of the cost of keeping up a home that was the child's main home during the entire part of the year he or she was alive. How do i do my 2010 taxes Kidnapped child. How do i do my 2010 taxes   A child may qualify you for qualifying widow(er) with dependent child, even if the child has been kidnapped. How do i do my 2010 taxes See Publication 501. How do i do my 2010 taxes    As mentioned earlier, this filing status is available for only 2 years following the year your spouse died. How do i do my 2010 taxes Prev  Up  Next   Home   More Online Publications
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How do i do my 2010 taxes 5. How do i do my 2010 taxes   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. How do i do my 2010 taxes Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. How do i do my 2010 taxes When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. How do i do my 2010 taxes Otherwise, these are capital expenses that must be added to the basis of the land. How do i do my 2010 taxes (See chapter 6 for information on determining basis. How do i do my 2010 taxes ) Conservation expenses for land in a foreign country do not qualify for this special treatment. How do i do my 2010 taxes The deduction for conservation expenses cannot be more than 25% of your gross income from farming. How do i do my 2010 taxes See 25% Limit on Deduction , later. How do i do my 2010 taxes Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. How do i do my 2010 taxes These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. How do i do my 2010 taxes You must include in income most government payments for approved conservation practices. How do i do my 2010 taxes However, you can exclude some payments you receive under certain cost-sharing conservation programs. How do i do my 2010 taxes For more information, see Agricultural Program Payments in chapter 3. How do i do my 2010 taxes To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. How do i do my 2010 taxes Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. How do i do my 2010 taxes You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. How do i do my 2010 taxes You are not farming if you are engaged only in forestry or the growing of timber. How do i do my 2010 taxes Farm defined. How do i do my 2010 taxes   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. How do i do my 2010 taxes It also includes plantations, ranches, ranges, and orchards. How do i do my 2010 taxes A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. How do i do my 2010 taxes It does not include an area where they are merely caught or harvested. How do i do my 2010 taxes A plant nursery is a farm for purposes of deducting soil and water conservation expenses. How do i do my 2010 taxes Farm rental. How do i do my 2010 taxes   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. How do i do my 2010 taxes If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. How do i do my 2010 taxes   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. How do i do my 2010 taxes Example. How do i do my 2010 taxes You own a farm in Iowa and live in California. How do i do my 2010 taxes You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. How do i do my 2010 taxes You cannot deduct your soil conservation expenses for this farm. How do i do my 2010 taxes You must capitalize the expenses and add them to the basis of the land. How do i do my 2010 taxes     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. How do i do my 2010 taxes Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. How do i do my 2010 taxes If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. How do i do my 2010 taxes Keep a copy of the plan with your books and records to support your deductions. How do i do my 2010 taxes Conservation plan. How do i do my 2010 taxes   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. How do i do my 2010 taxes There are three types of approved plans. How do i do my 2010 taxes NRCS individual site plans. How do i do my 2010 taxes These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. How do i do my 2010 taxes NRCS county plans. How do i do my 2010 taxes These plans include a listing of farm conservation practices approved for the county where the farmland is located. How do i do my 2010 taxes You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. How do i do my 2010 taxes Comparable state agency plans. How do i do my 2010 taxes These plans are approved by state agencies and can be approved individual site plans or county plans. How do i do my 2010 taxes   A list of NRCS conservation programs is available at www. How do i do my 2010 taxes nrcs. How do i do my 2010 taxes usda. How do i do my 2010 taxes gov/programs. How do i do my 2010 taxes Individual site plans can be obtained from NRCS offices and the comparable state agencies. How do i do my 2010 taxes Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. How do i do my 2010 taxes These expenses include, but are not limited to, the following. How do i do my 2010 taxes The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. How do i do my 2010 taxes The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. How do i do my 2010 taxes The eradication of brush. How do i do my 2010 taxes The planting of windbreaks. How do i do my 2010 taxes You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. How do i do my 2010 taxes These expenses are added to the basis of the land. How do i do my 2010 taxes If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. How do i do my 2010 taxes See chapter 3 for information about payments eligible for the cost-sharing exclusion. How do i do my 2010 taxes New farm or farmland. How do i do my 2010 taxes   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. How do i do my 2010 taxes You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. How do i do my 2010 taxes The new farming activity does not have to be the same as the old farming activity. How do i do my 2010 taxes For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. How do i do my 2010 taxes Land not used for farming. How do i do my 2010 taxes   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. How do i do my 2010 taxes For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. How do i do my 2010 taxes You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. How do i do my 2010 taxes Depreciable conservation assets. How do i do my 2010 taxes   You generally cannot deduct your expenses for depreciable conservation assets. How do i do my 2010 taxes However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. How do i do my 2010 taxes See Assessment for Depreciable Property , later. How do i do my 2010 taxes   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. How do i do my 2010 taxes These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. How do i do my 2010 taxes You recover your capital investment through annual allowances for depreciation. How do i do my 2010 taxes   You can deduct soil and water conservation expenses for nondepreciable earthen items. How do i do my 2010 taxes Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. How do i do my 2010 taxes Water well. How do i do my 2010 taxes   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. How do i do my 2010 taxes It is a capital expense. How do i do my 2010 taxes You recover your cost through depreciation. How do i do my 2010 taxes You also must capitalize your cost for drilling a test hole. How do i do my 2010 taxes If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. How do i do my 2010 taxes You can recover the total cost through depreciation deductions. How do i do my 2010 taxes   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. How do i do my 2010 taxes Abandonment means that all economic benefits from the well are terminated. How do i do my 2010 taxes For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. How do i do my 2010 taxes Endangered species recovery expenses. How do i do my 2010 taxes   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. How do i do my 2010 taxes Otherwise, these are capital expenses that must be added to the basis of the land. How do i do my 2010 taxes   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. How do i do my 2010 taxes See Internal Revenue Code section 175 for more information. How do i do my 2010 taxes Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. How do i do my 2010 taxes You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. How do i do my 2010 taxes Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. How do i do my 2010 taxes This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. How do i do my 2010 taxes The depreciable property must be used in the district's soil and water conservation activities. How do i do my 2010 taxes However, the following limits apply to these assessments. How do i do my 2010 taxes The total assessment limit. How do i do my 2010 taxes The yearly assessment limit. How do i do my 2010 taxes After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. How do i do my 2010 taxes The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. How do i do my 2010 taxes See Table 5-1 for a brief summary of these limits. How do i do my 2010 taxes Table 5-1. How do i do my 2010 taxes Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. How do i do my 2010 taxes Your deductible share of the cost to the district for the property. How do i do my 2010 taxes Your gross income from farming. How do i do my 2010 taxes No one taxpayer can deduct more than 10% of the total assessment. How do i do my 2010 taxes Any amount over 10% is a capital expense and is added to the basis of your land. How do i do my 2010 taxes If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. How do i do my 2010 taxes If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. How do i do my 2010 taxes You can deduct the remainder in equal amounts over the next 9 tax years. How do i do my 2010 taxes Limit for all conservation expenses, including assessments for depreciable property. How do i do my 2010 taxes Amounts greater than 25% can be carried to the following year and added to that year's expenses. How do i do my 2010 taxes The total is then subject to the 25% of gross income from farming limit in that year. How do i do my 2010 taxes To ensure your deduction is within the deduction limits, keep records to show the following. How do i do my 2010 taxes The total assessment against all members of the district for the depreciable property. How do i do my 2010 taxes Your deductible share of the cost to the district for the depreciable property. How do i do my 2010 taxes Your gross income from farming. How do i do my 2010 taxes Total assessment limit. How do i do my 2010 taxes   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. How do i do my 2010 taxes This applies whether you pay the assessment in one payment or in installments. How do i do my 2010 taxes If your assessment is more than 10% of the total amount assessed, both the following rules apply. How do i do my 2010 taxes The amount over 10% is a capital expense and is added to the basis of your land. How do i do my 2010 taxes If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. How do i do my 2010 taxes Yearly assessment limit. How do i do my 2010 taxes   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. How do i do my 2010 taxes If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. How do i do my 2010 taxes If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. How do i do my 2010 taxes You can deduct the remainder in equal amounts over the next 9 tax years. How do i do my 2010 taxes Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. How do i do my 2010 taxes Example 1. How do i do my 2010 taxes This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. How do i do my 2010 taxes Of the assessment, $1,500 is for digging drainage ditches. How do i do my 2010 taxes You can deduct this part as a soil or conservation expense as if you had paid it directly. How do i do my 2010 taxes The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. How do i do my 2010 taxes The total amount assessed by the district against all its members for the depreciable equipment is $7,000. How do i do my 2010 taxes The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. How do i do my 2010 taxes The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. How do i do my 2010 taxes To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. How do i do my 2010 taxes Add $500 to the result for a total of $570. How do i do my 2010 taxes Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). How do i do my 2010 taxes You can deduct the balance at the rate of $70 a year over the next 9 years. How do i do my 2010 taxes You add $70 to the $1,500 portion of the assessment for drainage ditches. How do i do my 2010 taxes You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. How do i do my 2010 taxes Example 2. How do i do my 2010 taxes Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. How do i do my 2010 taxes The total amount assessed by the district against all its members for depreciable equipment is $5,500. How do i do my 2010 taxes The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. How do i do my 2010 taxes The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). How do i do my 2010 taxes Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. How do i do my 2010 taxes You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. How do i do my 2010 taxes Sale or other disposal of land during 9-year period. How do i do my 2010 taxes   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. How do i do my 2010 taxes Death of farmer during 9-year period. How do i do my 2010 taxes   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. How do i do my 2010 taxes 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. How do i do my 2010 taxes Gross income from farming. How do i do my 2010 taxes   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. How do i do my 2010 taxes Gains from sales of draft, breeding, or dairy livestock are included. How do i do my 2010 taxes Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. How do i do my 2010 taxes Carryover of deduction. How do i do my 2010 taxes   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. How do i do my 2010 taxes However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. How do i do my 2010 taxes Example. How do i do my 2010 taxes In 2012, you have gross income of $32,000 from two farms. How do i do my 2010 taxes During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. How do i do my 2010 taxes However, your deduction is limited to 25% of $32,000, or $8,000. How do i do my 2010 taxes The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. How do i do my 2010 taxes The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. How do i do my 2010 taxes Any expenses over the limit in that year are carried to 2014 and later years. How do i do my 2010 taxes Net operating loss. How do i do my 2010 taxes   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. How do i do my 2010 taxes If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. How do i do my 2010 taxes When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. How do i do my 2010 taxes If you do not choose to deduct the expenses, you must capitalize them. How do i do my 2010 taxes Change of method. How do i do my 2010 taxes   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. How do i do my 2010 taxes To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. How do i do my 2010 taxes You or your authorized representative must sign the request. How do i do my 2010 taxes   The request must include the following information. How do i do my 2010 taxes Your name and address. How do i do my 2010 taxes The first tax year the method or change of method is to apply. How do i do my 2010 taxes Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. How do i do my 2010 taxes If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. How do i do my 2010 taxes The total expenses you paid or incurred in the first tax year the method or change of method is to apply. How do i do my 2010 taxes A statement that you will account separately in your books for the expenses to which this method or change of method relates. How do i do my 2010 taxes Send your request to the following  address. How do i do my 2010 taxes  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. How do i do my 2010 taxes Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). How do i do my 2010 taxes However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. How do i do my 2010 taxes Gain on sale of farmland. How do i do my 2010 taxes   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. How do i do my 2010 taxes If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. How do i do my 2010 taxes See Section 1252 property under Other Gains in chapter 9. 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