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How Long Do I Have To File An Amended Tax Return

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How Long Do I Have To File An Amended Tax Return

How long do i have to file an amended tax return 3. How long do i have to file an amended tax return   Investment Expenses Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Limits on DeductionsPassive activity. How long do i have to file an amended tax return Other income (nonpassive income). How long do i have to file an amended tax return Expenses. How long do i have to file an amended tax return Additional information. How long do i have to file an amended tax return Interest ExpensesInvestment Interest Limit on Deduction Bond Premium AmortizationSpecial rules to determine amounts payable on a bond. How long do i have to file an amended tax return Basis. How long do i have to file an amended tax return How To Figure Amortization Choosing To Amortize How To Report Amortization Expenses of Producing IncomeFees to buy or sell. How long do i have to file an amended tax return Including mutual fund or REMIC expenses in income. How long do i have to file an amended tax return Nondeductible ExpensesUsed as collateral. How long do i have to file an amended tax return Short-sale expenses. How long do i have to file an amended tax return Expenses for both tax-exempt and taxable income. How long do i have to file an amended tax return State income taxes. How long do i have to file an amended tax return Nondeductible amount. How long do i have to file an amended tax return Basis adjustment. How long do i have to file an amended tax return How To Report Investment Expenses When To Report Investment Expenses Topics - This chapter discusses: Limits on Deductions , Interest Expenses , Bond Premium Amortization , Expenses of Producing Income , Nondeductible Expenses , How To Report Investment Expenses , and When To Report Investment Expenses . How long do i have to file an amended tax return Useful Items - You may want to see: Publication 535 Business Expenses 925 Passive Activity and At-Risk Rules 929 Tax Rules for Children and Dependents Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 4952 Investment Interest Expense Deduction See chapter 5, How To Get Tax Help , for information about getting these publications and forms. How long do i have to file an amended tax return Limits on Deductions Your deductions for investment expenses may be limited by: The at-risk rules, The passive activity loss limits, The limit on investment interest, or The 2% limit on certain miscellaneous itemized deductions. How long do i have to file an amended tax return The at-risk rules and passive activity rules are explained briefly in this section. How long do i have to file an amended tax return The limit on investment interest is explained later in this chapter under Interest Expenses . How long do i have to file an amended tax return The 2% limit is explained later in this chapter under Expenses of Producing Income . How long do i have to file an amended tax return At-risk rules. How long do i have to file an amended tax return   Special at-risk rules apply to most income-producing activities. How long do i have to file an amended tax return These rules limit the amount of loss you can deduct to the amount you risk losing in the activity. How long do i have to file an amended tax return Generally, this is the cash and the adjusted basis of property you contribute to the activity. How long do i have to file an amended tax return It also includes money you borrow for use in the activity if you are personally liable for repayment or if you use property not used in the activity as security for the loan. How long do i have to file an amended tax return For more information, see Publication 925. How long do i have to file an amended tax return Passive activity losses and credits. How long do i have to file an amended tax return   The amount of losses and tax credits you can claim from passive activities is limited. How long do i have to file an amended tax return Generally, you are allowed to deduct passive activity losses only up to the amount of your passive activity income. How long do i have to file an amended tax return Also, you can use credits from passive activities only against tax on the income from passive activities. How long do i have to file an amended tax return There are exceptions for certain activities, such as rental real estate activities. How long do i have to file an amended tax return Passive activity. How long do i have to file an amended tax return   A passive activity generally is any activity involving the conduct of any trade or business in which you do not materially participate and any rental activity. How long do i have to file an amended tax return However, if you are involved in renting real estate, the activity is not a passive activity if both of the following are true. How long do i have to file an amended tax return More than one-half of the personal services you perform during the year in all trades or businesses are performed in real property trades or businesses in which you materially participate. How long do i have to file an amended tax return You perform more than 750 hours of services during the year in real property trades or businesses in which you materially participate. How long do i have to file an amended tax return  The term “trade or business” generally means any activity that involves the conduct of a trade or business, is conducted in anticipation of starting a trade or business, or involves certain research or experimental expenditures. How long do i have to file an amended tax return However, it does not include rental activities or certain activities treated as incidental to holding property for investment. How long do i have to file an amended tax return   You are considered to materially participate in an activity if you are involved on a regular, continuous, and substantial basis in the operations of the activity. How long do i have to file an amended tax return Other income (nonpassive income). How long do i have to file an amended tax return    Generally, you can use losses from passive activities only to offset income from passive activities. How long do i have to file an amended tax return You cannot use passive activity losses to offset your other income, such as your wages or your portfolio income. How long do i have to file an amended tax return Portfolio income includes gross income from interest, dividends, annuities, or royalties that is not derived in the ordinary course of a trade or business. How long do i have to file an amended tax return It also includes gains or losses (not derived in the ordinary course of a trade or business) from the sale or trade of property (other than an interest in a passive activity) producing portfolio income or held for investment. How long do i have to file an amended tax return This includes capital gain distributions from mutual funds (and other regulated investment companies) and real estate investment trusts. How long do i have to file an amended tax return   You cannot use passive activity losses to offset Alaska Permanent Fund dividends. How long do i have to file an amended tax return Expenses. How long do i have to file an amended tax return   Do not include in the computation of your passive activity income or loss: Expenses (other than interest) that are clearly and directly allocable to your portfolio income, or Interest expense properly allocable to portfolio income. How long do i have to file an amended tax return However, this interest and other expenses may be subject to other limits. How long do i have to file an amended tax return These limits are explained in the rest of this chapter. How long do i have to file an amended tax return Additional information. How long do i have to file an amended tax return   For more information about determining and reporting income and losses from passive activities, see Publication 925. How long do i have to file an amended tax return Interest Expenses This section discusses interest expenses you may be able to deduct as an investor. How long do i have to file an amended tax return For information on business interest, see chapter 4 of Publication 535. How long do i have to file an amended tax return You cannot deduct personal interest expenses other than qualified home mortgage interest, as explained in Publication 936, Home Mortgage Interest Deduction, and interest on certain student loans, as explained in Publication 970. How long do i have to file an amended tax return Investment Interest If you borrow money to buy property you hold for investment, the interest you pay is investment interest. How long do i have to file an amended tax return You can deduct investment interest subject to the limit discussed later. How long do i have to file an amended tax return However, you cannot deduct interest you incurred to produce tax-exempt income. How long do i have to file an amended tax return See Tax-exempt income under Nondeductible Expenses, later. How long do i have to file an amended tax return You also cannot deduct interest expenses on straddles discussed under Interest expense and carrying charges on straddles , later. How long do i have to file an amended tax return Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. How long do i have to file an amended tax return Investment property. How long do i have to file an amended tax return   Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. How long do i have to file an amended tax return It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). How long do i have to file an amended tax return Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity). How long do i have to file an amended tax return Partners, shareholders, and beneficiaries. How long do i have to file an amended tax return   To determine your investment interest, combine your share of investment interest from a partnership, S corporation, estate, or trust with your other investment interest. How long do i have to file an amended tax return Allocation of Interest Expense If you borrow money for business or personal purposes as well as for investment, you must allocate the debt among those purposes. How long do i have to file an amended tax return Only the interest expense on the part of the debt used for investment purposes is treated as investment interest. How long do i have to file an amended tax return The allocation is not affected by the use of property that secures the debt. How long do i have to file an amended tax return Example 1. How long do i have to file an amended tax return You borrow $10,000 and use $8,000 to buy stock. How long do i have to file an amended tax return You use the other $2,000 to buy items for your home. How long do i have to file an amended tax return Since 80% of the debt is used for, and allocated to, investment purposes, 80% of the interest on that debt is investment interest. How long do i have to file an amended tax return The other 20% is nondeductible personal interest. How long do i have to file an amended tax return Debt proceeds received in cash. How long do i have to file an amended tax return   If you receive debt proceeds in cash, the proceeds are generally not treated as investment property. How long do i have to file an amended tax return Debt proceeds deposited in account. How long do i have to file an amended tax return   If you deposit debt proceeds in an account, that deposit is treated as investment property, regardless of whether the account bears interest. How long do i have to file an amended tax return But, if you withdraw the funds and use them for another purpose, you must reallocate the debt to determine the amount considered to be for investment purposes. How long do i have to file an amended tax return Example 2. How long do i have to file an amended tax return Assume in Example 1 that you borrowed the money on March 1 and immediately bought the stock for $8,000. How long do i have to file an amended tax return You did not buy the household items until June 1. How long do i have to file an amended tax return You had deposited the $2,000 in the bank. How long do i have to file an amended tax return You had no other transactions on the bank account until June. How long do i have to file an amended tax return You did not sell the stock, and you made no principal payments on the debt. How long do i have to file an amended tax return You paid interest from another account. How long do i have to file an amended tax return The $8,000 is treated as being used for an investment purpose. How long do i have to file an amended tax return The $2,000 is treated as being used for an investment purpose for the 3-month period. How long do i have to file an amended tax return Your total interest expense for 3 months on this debt is investment interest. How long do i have to file an amended tax return In June, when you spend the $2,000 for household items, you must begin to allocate 80% of the debt and the interest expense to investment purposes and 20% to personal purposes. How long do i have to file an amended tax return Amounts paid within 30 days. How long do i have to file an amended tax return   If you receive loan proceeds in cash or if the loan proceeds are deposited in an account, you can treat any payment (up to the amount of the proceeds) made from any account you own, or from cash, as made from those proceeds. How long do i have to file an amended tax return This applies to any payment made within 30 days before or after the proceeds are received in cash or deposited in your account. How long do i have to file an amended tax return   If you received the loan proceeds in cash, you can treat the payment as made on the date you received the cash instead of the date you actually made the payment. How long do i have to file an amended tax return Payments on debt may require new allocation. How long do i have to file an amended tax return   As you repay a debt used for more than one purpose, you must reallocate the balance. How long do i have to file an amended tax return You must first reduce the amount allocated to personal purposes by the repayment. How long do i have to file an amended tax return You then reallocate the rest of the debt to find what part is for investment purposes. How long do i have to file an amended tax return Example 3. How long do i have to file an amended tax return If, in Example 2 , you repay $500 on November 1, the entire repayment is applied against the amount allocated to personal purposes. How long do i have to file an amended tax return The debt balance is now allocated as $8,000 for investment purposes and $1,500 for personal purposes. How long do i have to file an amended tax return Until the next reallocation is necessary, 84% ($8,000 ÷ $9,500) of the debt and the interest expense is allocated to investment. How long do i have to file an amended tax return Pass-through entities. How long do i have to file an amended tax return   If you use borrowed funds to buy an interest in a partnership or S corporation, then the interest on those funds must be allocated based on the assets of the entity. How long do i have to file an amended tax return If you contribute to the capital of the entity, you can make the allocation using any reasonable method. How long do i have to file an amended tax return Additional allocation rules. How long do i have to file an amended tax return   For more information about allocating interest expense, see chapter 4 of Publication 535. How long do i have to file an amended tax return When To Deduct Investment Interest If you use the cash method of accounting, you must pay the interest before you can deduct it. How long do i have to file an amended tax return If you use an accrual method of accounting, you can deduct interest over the period it accrues, regardless of when you pay it. How long do i have to file an amended tax return For an exception, see Unpaid expenses owed to related party under When To Report Investment Expenses, later in this chapter. How long do i have to file an amended tax return Example. How long do i have to file an amended tax return You borrowed $1,000 on August 26, 2013, payable in 90 days at 12% interest. How long do i have to file an amended tax return On November 26, 2013, you paid this with a new note for $1,030, due on February 26, 2014. How long do i have to file an amended tax return If you use the cash method of accounting, you cannot deduct any part of the $30 interest on your return for 2013 because you did not actually pay it. How long do i have to file an amended tax return If you use an accrual method, you may be able to deduct a portion of the interest on the loans through December 31, 2013, on your return for 2013. How long do i have to file an amended tax return Interest paid in advance. How long do i have to file an amended tax return   Generally, if you pay interest in advance for a period that goes beyond the end of the tax year, you must spread the interest over the tax years to which it belongs under the OID rules discussed in chapter 1. How long do i have to file an amended tax return You can deduct in each year only the interest for that year. How long do i have to file an amended tax return Interest on margin accounts. How long do i have to file an amended tax return   If you are a cash method taxpayer, you can deduct interest on margin accounts to buy taxable securities as investment interest in the year you paid it. How long do i have to file an amended tax return You are considered to have paid interest on these accounts only when you actually pay the broker or when payment becomes available to the broker through your account. How long do i have to file an amended tax return Payment may become available to the broker through your account when the broker collects dividends or interest for your account, or sells securities held for you or received from you. How long do i have to file an amended tax return   You cannot deduct any interest on money borrowed for personal reasons. How long do i have to file an amended tax return Limit on interest deduction for market discount bonds. How long do i have to file an amended tax return   The amount you can deduct for interest expense you paid or accrued during the year to buy or carry a market discount bond may be limited. How long do i have to file an amended tax return This limit does not apply if you accrue the market discount and include it in your income currently. How long do i have to file an amended tax return   Under this limit, the interest is deductible only to the extent it is more than: The total interest and OID includible in gross income for the bond for the year, plus The market discount for the number of days you held the bond during the year. How long do i have to file an amended tax return Figure the amount in (2) above using the rules for figuring accrued market discount in chapter 1 under Market Discount Bonds . How long do i have to file an amended tax return Interest not deducted due to limit. How long do i have to file an amended tax return   In the year you dispose of the bond, you can deduct any interest expense you were not allowed to deduct in earlier years because of the limit. How long do i have to file an amended tax return Choosing to deduct disallowed interest expense before the year of disposition. How long do i have to file an amended tax return   You can choose to deduct disallowed interest expense in any year before the year you dispose of the bond, up to your net interest income from the bond during the year. How long do i have to file an amended tax return The rest of the disallowed interest expense remains deductible in the year you dispose of the bond. How long do i have to file an amended tax return Net interest income. How long do i have to file an amended tax return   This is the interest income (including OID) from the bond that you include in income for the year, minus the interest expense paid or accrued during the year to purchase or carry the bond. How long do i have to file an amended tax return Limit on interest deduction for short-term obligations. How long do i have to file an amended tax return   If the current income inclusion rules discussed in chapter 1 under Discount on Short-Term Obligations do not apply to you, the amount you can deduct for interest expense you paid or accrued during the year to buy or carry a short-term obligation is limited. How long do i have to file an amended tax return   The interest is deductible only to the extent it is more than: The amount of acquisition discount or OID on the obligation for the tax year, plus The amount of any interest payable on the obligation for the year that is not included in income because of your accounting method (other than interest taken into account in determining the amount of acquisition discount or OID). How long do i have to file an amended tax return The method of determining acquisition discount and OID for short-term obligations is discussed in chapter 1 under Discount on Short-Term Obligations . How long do i have to file an amended tax return Interest not deducted due to limit. How long do i have to file an amended tax return   In the year you dispose of the obligation, or, if you choose, in another year in which you have net interest income from the obligation, you can deduct any interest expense you were not allowed to deduct for an earlier year because of the limit. How long do i have to file an amended tax return Follow the same rules provided in the earlier discussion under Limit on interest deduction for market discount bonds , earlier. How long do i have to file an amended tax return Limit on Deduction Generally, your deduction for investment interest expense is limited to your net investment income. How long do i have to file an amended tax return You can carry over the amount of investment interest you could not deduct because of this limit to the next tax year. How long do i have to file an amended tax return The interest carried over is treated as investment interest paid or accrued in that next year. How long do i have to file an amended tax return You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued. How long do i have to file an amended tax return Net Investment Income Determine the amount of your net investment income by subtracting your investment expenses (other than interest expense) from your investment income. How long do i have to file an amended tax return Investment income. How long do i have to file an amended tax return   This generally includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties). How long do i have to file an amended tax return Investment income does not include Alaska Permanent Fund dividends. How long do i have to file an amended tax return It also does not include qualified dividends or net capital gain unless you choose to include them. How long do i have to file an amended tax return Choosing to include qualified dividends. How long do i have to file an amended tax return   Investment income generally does not include qualified dividends, discussed in chapter 1. How long do i have to file an amended tax return However, you can choose to include all or part of your qualified dividends in investment income. How long do i have to file an amended tax return   You make this choice by completing Form 4952, line 4g, according to its instructions. How long do i have to file an amended tax return   If you choose to include any of your qualified dividends in investment income, you must reduce your qualified dividends that are eligible for the lower capital gains tax rates by the same amount. How long do i have to file an amended tax return Choosing to include net capital gain. How long do i have to file an amended tax return    Investment income generally does not include net capital gain from disposing of investment property (including capital gain distributions from mutual funds). How long do i have to file an amended tax return However, you can choose to include all or part of your net capital gain in investment income. How long do i have to file an amended tax return   You make this choice by completing Form 4952, line 4g, according to its instructions. How long do i have to file an amended tax return   If you choose to include any of your net capital gain in investment income, you must reduce your net capital gain that is eligible for the lower capital gains tax rates by the same amount. How long do i have to file an amended tax return   For more information about the capital gains rates, see Capital Gain Tax Rates in chapter 4. How long do i have to file an amended tax return    Before making either choice, consider the overall effect on your tax liability. How long do i have to file an amended tax return Compare your tax if you make one or both of these choices with your tax if you do not. How long do i have to file an amended tax return Investment income of child reported on parent's return. How long do i have to file an amended tax return   Investment income includes the part of your child's interest and dividend income you choose to report on your return. How long do i have to file an amended tax return If the child does not have qualified dividends, Alaska Permanent Fund dividends, or capital gain distributions, this is the amount on line 6 of Form 8814. How long do i have to file an amended tax return Include it on line 4a of Form 4952. How long do i have to file an amended tax return Example. How long do i have to file an amended tax return Your 8-year-old son has interest income of $2,200, which you choose to report on your own return. How long do i have to file an amended tax return You enter $2,200 on Form 8814, lines 1a and 4, and $200 on lines 6 and 12 and complete Part II. How long do i have to file an amended tax return Also enter $200 on Form 1040, line 21. How long do i have to file an amended tax return Your investment income includes this $200. How long do i have to file an amended tax return Child's qualified dividends. How long do i have to file an amended tax return   If part of the amount you report is your child's qualified dividends, that part (which is reported on Form 1040, line 9b) generally does not count as investment income. How long do i have to file an amended tax return However, you can choose to include all or part of it in investment income, as explained under Choosing to include qualified dividends , earlier. How long do i have to file an amended tax return   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured next under Child's Alaska Permanent Fund dividends). How long do i have to file an amended tax return Child's Alaska Permanent Fund dividends. How long do i have to file an amended tax return   If part of the amount you report is your child's Alaska Permanent Fund dividends, that part does not count as investment income. How long do i have to file an amended tax return To figure the amount of your child's income that you can consider your investment income, start with the amount on Form 8814, line 6. How long do i have to file an amended tax return Multiply that amount by a percentage that is equal to the Alaska Permanent Fund dividends divided by the total amount on Form 8814, line 4. How long do i have to file an amended tax return Subtract the result from the amount on Form 8814, line 12. How long do i have to file an amended tax return Example. How long do i have to file an amended tax return Your 10-year-old child has taxable interest income of $4,000 and Alaska Permanent Fund dividends of $2,000. How long do i have to file an amended tax return You choose to report this on your return. How long do i have to file an amended tax return You enter $4,000 on Form 8814, line 1a, $2,000 on line 2a, and $6,000 on line 4. How long do i have to file an amended tax return You then enter $4,000 on Form 8814, lines 6 and 12, and Form 1040, line 21. How long do i have to file an amended tax return You figure the amount of your child's income that you can consider your investment income as follows: $4,000 − ($4,000 × ($2,000 ÷ $6,000)) = $2,667 You include the result, $2,667, on Form 4952, line 4a. How long do i have to file an amended tax return Child's capital gain distributions. How long do i have to file an amended tax return   If part of the amount you report is your child's capital gain distributions, that part (which is reported on Schedule D (Form 1040), line 13, or Form 1040, line 13) generally does not count as investment income. How long do i have to file an amended tax return However, you can choose to include all or part of it in investment income, as explained in Choosing to include net capital gain , earlier. How long do i have to file an amended tax return   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured under Child's Alaska Permanent Fund dividends , earlier). How long do i have to file an amended tax return Investment expenses. How long do i have to file an amended tax return   Investment expenses are your allowed deductions (other than interest expense) directly connected with the production of investment income. How long do i have to file an amended tax return Investment expenses that are included as a miscellaneous itemized deduction on Schedule A (Form 1040) are allowable deductions after applying the 2% limit that applies to miscellaneous itemized deductions. How long do i have to file an amended tax return Use the smaller of: The investment expenses included on Schedule A (Form 1040), line 23, or The amount on Schedule A (Form 1040), line 27. How long do i have to file an amended tax return See Expenses of Producing Income , later, for a discussion of the 2% limit. How long do i have to file an amended tax return Losses from passive activities. How long do i have to file an amended tax return   Income or expenses that you used in computing income or loss from a passive activity are not included in determining your investment income or investment expenses (including investment interest expense). How long do i have to file an amended tax return See Publication 925 for information about passive activities. How long do i have to file an amended tax return Example. How long do i have to file an amended tax return Ted is a partner in a partnership that operates a business. How long do i have to file an amended tax return However, he does not materially participate in the partnership's business. How long do i have to file an amended tax return Ted's interest in the partnership is considered a passive activity. How long do i have to file an amended tax return Ted's investment income from interest and dividends (other than qualified dividends) is $10,000. How long do i have to file an amended tax return His investment expenses (other than interest) are $3,200 after taking into account the 2% limit on miscellaneous itemized deductions. How long do i have to file an amended tax return His investment interest expense is $8,000. How long do i have to file an amended tax return Ted also has income from the partnership of $2,000. How long do i have to file an amended tax return Ted figures his net investment income and the limit on his investment interest expense deduction in the following way: Total investment income $10,000 Minus: Investment expenses (other than interest) 3,200 Net investment income $6,800 Deductible investment interest expense for the year $6,800 The $2,000 of income from the passive activity is not used in determining Ted's net investment income. How long do i have to file an amended tax return His investment interest deduction for the year is limited to $6,800, the amount of his net investment income. How long do i have to file an amended tax return Form 4952 Use Form 4952 to figure your deduction for investment interest. How long do i have to file an amended tax return See Form 4952 for more information. How long do i have to file an amended tax return Exception to use of Form 4952. How long do i have to file an amended tax return   You do not have to complete Form 4952 or attach it to your return if you meet all of the following tests. How long do i have to file an amended tax return Your investment interest expense is not more than your investment income from interest and ordinary dividends minus any qualified dividends. How long do i have to file an amended tax return You do not have any other deductible investment expenses. How long do i have to file an amended tax return You have no carryover of investment interest expense from 2012. How long do i have to file an amended tax return   If you meet all of these tests, you can deduct all of your investment interest. How long do i have to file an amended tax return    Bond Premium Amortization If you pay a premium to buy a bond, the premium is part of your basis in the bond. How long do i have to file an amended tax return If the bond yields taxable interest, you can choose to amortize the premium. How long do i have to file an amended tax return This generally means that each year, over the life of the bond, you use a part of the premium to reduce the amount of interest includible in your income. How long do i have to file an amended tax return If you make this choice, you must reduce your basis in the bond by the amortization for the year. How long do i have to file an amended tax return If the bond yields tax-exempt interest, you must amortize the premium. How long do i have to file an amended tax return This amortized amount is not deductible in determining taxable income. How long do i have to file an amended tax return However, each year you must reduce your basis in the bond (and tax-exempt interest otherwise reportable on Form 1040, line 8b) by the amortization for the year. How long do i have to file an amended tax return Bond premium. How long do i have to file an amended tax return   Bond premium is the amount by which your basis in the bond right after you get it is more than the total of all amounts payable on the bond after you get it (other than payments of qualified stated interest). How long do i have to file an amended tax return For example, a bond with a maturity value of $1,000 generally would have a $50 premium if you buy it for $1,050. How long do i have to file an amended tax return Special rules to determine amounts payable on a bond. How long do i have to file an amended tax return   For special rules that apply to determine the amounts payable on a variable rate bond, an inflation-indexed debt instrument, a bond that provides for certain alternative payment schedules (for example, a bond callable prior to the stated maturity date of the bond), or a bond that provides for remote or incidental contingencies, see Regulations section 1. How long do i have to file an amended tax return 171-3. How long do i have to file an amended tax return Basis. How long do i have to file an amended tax return   In general, your basis for figuring bond premium amortization is the same as your basis for figuring any loss on the sale of the bond. How long do i have to file an amended tax return However, you may need to use a different basis for: Convertible bonds, Bonds you got in a trade, and Bonds whose basis has to be determined using the basis of the person who transferred the bond to you. How long do i have to file an amended tax return See Regulations section 1. How long do i have to file an amended tax return 171-1(e). How long do i have to file an amended tax return Dealers. How long do i have to file an amended tax return   A dealer in taxable bonds (or anyone who holds them mainly for sale to customers in the ordinary course of a trade or business or who would properly include bonds in inventory at the close of the tax year) cannot claim a deduction for amortizable bond premium. How long do i have to file an amended tax return   See section 75 of the Internal Revenue Code for the treatment of bond premium by a dealer in tax-exempt bonds. How long do i have to file an amended tax return How To Figure Amortization For bonds issued after September 27, 1985, you must amortize bond premium using a constant yield method on the basis of the bond's yield to maturity, determined by using the bond's basis and compounding at the close of each accrual period. How long do i have to file an amended tax return Constant yield method. How long do i have to file an amended tax return   Figure the bond premium amortization for each accrual period as follows. How long do i have to file an amended tax return Step 1: Determine your yield. How long do i have to file an amended tax return   Your yield is the discount rate that, when used in figuring the present value of all remaining payments to be made on the bond (including payments of qualified stated interest), produces an amount equal to your basis in the bond. How long do i have to file an amended tax return Figure the yield as of the date you got the bond. How long do i have to file an amended tax return It must be constant over the term of the bond and must be figured to at least two decimal places when expressed as a percentage. How long do i have to file an amended tax return   If you do not know the yield, consult your broker or tax advisor. How long do i have to file an amended tax return Databases available to them are likely to show the yield at the date of purchase. How long do i have to file an amended tax return Step 2: Determine the accrual periods. How long do i have to file an amended tax return   You can choose the accrual periods to use. How long do i have to file an amended tax return They may be of any length and may vary in length over the term of the bond, but each accrual period can be no longer than 1 year and each scheduled payment of principal or interest must occur either on the first or the final day of an accrual period. How long do i have to file an amended tax return The computation is simplest if accrual periods are the same as the intervals between interest payment dates. How long do i have to file an amended tax return Step 3: Determine the bond premium for the accrual period. How long do i have to file an amended tax return   To do this, multiply your adjusted acquisition price at the beginning of the accrual period by your yield. How long do i have to file an amended tax return Then subtract the result from the qualified stated interest for the period. How long do i have to file an amended tax return   Your adjusted acquisition price at the beginning of the first accrual period is the same as your basis. How long do i have to file an amended tax return After that, it is your basis decreased by the amount of bond premium amortized for earlier periods and the amount of any payment previously made on the bond other than a payment of qualified stated interest. How long do i have to file an amended tax return Example. How long do i have to file an amended tax return On February 1, 2012, you bought a taxable bond for $110,000. How long do i have to file an amended tax return The bond has a stated principal amount of $100,000, payable at maturity on February 1, 2019, making your premium $10,000 ($110,000 − $100,000). How long do i have to file an amended tax return The bond pays qualified stated interest of $10,000 on February 1 of each year. How long do i have to file an amended tax return Your yield is 8. How long do i have to file an amended tax return 07439% compounded annually. How long do i have to file an amended tax return You choose to use annual accrual periods ending on February 1 of each year. How long do i have to file an amended tax return To find your bond premium amortization for the accrual period ending on February 1, 2013, you multiply the adjusted acquisition price at the beginning of the period ($110,000) by your yield. How long do i have to file an amended tax return When you subtract the result ($8,881. How long do i have to file an amended tax return 83) from the qualified stated interest for the period ($10,000), you find that your bond premium amortization for the period is $1,118. How long do i have to file an amended tax return 17. How long do i have to file an amended tax return Special rules to figure amortization. How long do i have to file an amended tax return   For special rules to figure the bond premium amortization on a variable rate bond, an inflation-indexed debt instrument, a bond that provides for certain alternative payment schedules (for example, a bond callable prior to the stated maturity date of the bond), or a bond that provides for remote or incidental contingencies, see Regulations section 1. How long do i have to file an amended tax return 171-3. How long do i have to file an amended tax return Bonds Issued Before September 28, 1985 For these bonds, you can amortize bond premium using any reasonable method. How long do i have to file an amended tax return Reasonable methods include: The straight-line method, and The Revenue Ruling 82-10 method. How long do i have to file an amended tax return Straight-line method. How long do i have to file an amended tax return   Under this method, the amount of your bond premium amortization is the same each month. How long do i have to file an amended tax return Divide the number of months you held the bond during the year by the number of months from the beginning of the tax year (or, if later, the date of acquisition) to the date of maturity or earlier call date. How long do i have to file an amended tax return Then multiply the result by the bond premium (reduced by any bond premium amortization claimed in earlier years). How long do i have to file an amended tax return This gives you your bond premium amortization for the year. How long do i have to file an amended tax return Revenue Ruling 82-10 method. How long do i have to file an amended tax return   Under this method, the amount of your bond premium amortization increases each month over the life of the bond. How long do i have to file an amended tax return This method is explained in Revenue Ruling 82-10, 1982-1 C. How long do i have to file an amended tax return B. How long do i have to file an amended tax return 46. How long do i have to file an amended tax return Choosing To Amortize You choose to amortize the premium on taxable bonds by reporting the amortization for the year on your income tax return for the first tax year you want the choice to apply. How long do i have to file an amended tax return You should attach a statement to your return that you are making this choice under section 171. How long do i have to file an amended tax return See How To Report Amortization, next. How long do i have to file an amended tax return This choice is binding for the year you make it and for later tax years. How long do i have to file an amended tax return It applies to all taxable bonds you own in the year you make the choice and also to those you acquire in later years. How long do i have to file an amended tax return You can change your decision to amortize bond premium only with the written approval of the IRS. How long do i have to file an amended tax return To request approval, use Form 3115. How long do i have to file an amended tax return For more information on requesting approval, see section 5 of the Appendix to Revenue Procedure 2011-14 in Internal Revenue Bulletin 2011-4. How long do i have to file an amended tax return You can find Revenue Procedure 2011-14 at www. How long do i have to file an amended tax return irs. How long do i have to file an amended tax return gov/irb/2011-04_IRB/ar08. How long do i have to file an amended tax return html. How long do i have to file an amended tax return How To Report Amortization Subtract the bond premium amortization from your interest income from these bonds. How long do i have to file an amended tax return Report the bond's interest on Schedule B (Form 1040A or 1040), line 1. How long do i have to file an amended tax return Under your last entry on line 1, put a subtotal of all interest listed on line 1. How long do i have to file an amended tax return Below this subtotal, print “ABP Adjustment,” and the total interest you received. How long do i have to file an amended tax return Subtract this amount from the subtotal, and enter the result on line 2. How long do i have to file an amended tax return Bond premium amortization more than interest. How long do i have to file an amended tax return   If the amount of your bond premium amortization for an accrual period is more than the qualified stated interest for the period, you can deduct the difference as a miscellaneous itemized deduction on Schedule A (Form 1040), line 28. How long do i have to file an amended tax return    But your deduction is limited to the amount by which your total interest inclusions on the bond in prior accrual periods is more than your total bond premium deductions on the bond in prior periods. How long do i have to file an amended tax return Any amount you cannot deduct because of this limit can be carried forward to the next accrual period. How long do i have to file an amended tax return Pre-1998 election to amortize bond premium. How long do i have to file an amended tax return   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. How long do i have to file an amended tax return Bonds acquired before October 23, 1986. How long do i have to file an amended tax return   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit. How long do i have to file an amended tax return Bonds acquired after October 22, 1986, but before 1988. How long do i have to file an amended tax return    The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you choose to treat it as an offset to interest income on the bond. How long do i have to file an amended tax return Expenses of Producing Income You deduct investment expenses (other than interest expenses) as miscellaneous itemized deductions on Schedule A (Form 1040). How long do i have to file an amended tax return To be deductible, these expenses must be ordinary and necessary expenses paid or incurred: To produce or collect income, or To manage property held for producing income. How long do i have to file an amended tax return The expenses must be directly related to the income or income-producing property, and the income must be taxable to you. How long do i have to file an amended tax return The deduction for most income-producing expenses is subject to a 2% limit that also applies to certain other miscellaneous itemized deductions. How long do i have to file an amended tax return The amount deductible is limited to the total of these miscellaneous deductions that is more than 2% of your adjusted gross income. How long do i have to file an amended tax return For information on how to report expenses of producing income, see How To Report Investment Expenses , later. How long do i have to file an amended tax return Attorney or accounting fees. How long do i have to file an amended tax return   You can deduct attorney or accounting fees that are necessary to produce or collect taxable income. How long do i have to file an amended tax return However, in some cases, attorney or accounting fees are part of the basis of property. How long do i have to file an amended tax return See Basis of Investment Property in chapter 4. How long do i have to file an amended tax return Automatic investment service and dividend reinvestment plans. How long do i have to file an amended tax return   A bank may offer its checking account customers an automatic investment service so that, for a charge, each customer can choose to invest a part of the checking account each month in common stock. How long do i have to file an amended tax return Or a bank that is a dividend disbursing agent for a number of publicly-owned corporations may set up an automatic dividend reinvestment service. How long do i have to file an amended tax return Through that service, cash dividends are reinvested in more shares of stock after the bank deducts a service charge. How long do i have to file an amended tax return   A corporation in which you own stock also may have a dividend reinvestment plan. How long do i have to file an amended tax return This plan lets you choose to use your dividends to buy more shares of stock in the corporation instead of receiving the dividends in cash. How long do i have to file an amended tax return   You can deduct the monthly service charge you pay to a bank to participate in an automatic investment service. How long do i have to file an amended tax return If you participate in a dividend reinvestment plan, you can deduct any service charge subtracted from your cash dividends before the dividends are used to buy more shares of stock. How long do i have to file an amended tax return Deduct the charges in the year you pay them. How long do i have to file an amended tax return Clerical help and office rent. How long do i have to file an amended tax return   You can deduct office expenses, such as rent and clerical help, you incurred in connection with your investments and collecting the taxable income on your investments. How long do i have to file an amended tax return Cost of replacing missing securities. How long do i have to file an amended tax return   To replace your taxable securities that are mislaid, lost, stolen, or destroyed, you may have to post an indemnity bond. How long do i have to file an amended tax return You can deduct the premium you pay to buy the indemnity bond and the related incidental expenses. How long do i have to file an amended tax return   You may, however, get a refund of part of the bond premium if the missing securities are recovered within a specified time. How long do i have to file an amended tax return Under certain types of insurance policies, you can recover some of the expenses. How long do i have to file an amended tax return   If you receive the refund in the tax year you pay the amounts, you can deduct only the difference between the expenses paid and the amount refunded. How long do i have to file an amended tax return If the refund is made in a later tax year, you must include the refund in income in the year you received it, but only to the extent that the expenses decreased your tax in the year you deducted them. How long do i have to file an amended tax return Fees to collect income. How long do i have to file an amended tax return   You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect investment income, such as your taxable bond or mortgage interest, or your dividends on shares of stock. How long do i have to file an amended tax return Fees to buy or sell. How long do i have to file an amended tax return   You cannot deduct a fee you pay to a broker to acquire investment property, such as stocks or bonds. How long do i have to file an amended tax return You must add the fee to the cost of the property. How long do i have to file an amended tax return See Basis of Investment Property in chapter 4. How long do i have to file an amended tax return    You cannot deduct any broker's fees, commissions, or option premiums you pay (or that were netted out) in connection with the sale of investment property. How long do i have to file an amended tax return They can be used only to figure gain or loss from the sale. How long do i have to file an amended tax return See Reporting Capital Gains and Losses , in chapter 4, for more information about the treatment of these sale expenses. How long do i have to file an amended tax return Investment counsel and advice. How long do i have to file an amended tax return   You can deduct fees you pay for counsel and advice about investments that produce taxable income. How long do i have to file an amended tax return This includes amounts you pay for investment advisory services. How long do i have to file an amended tax return Safe deposit box rent. How long do i have to file an amended tax return   You can deduct rent you pay for a safe deposit box if you use the box to store taxable income-producing stocks, bonds, or other investment-related papers and documents. How long do i have to file an amended tax return If you also use the box to store tax-exempt securities or personal items, you can deduct only part of the rent. How long do i have to file an amended tax return See Tax-exempt income under Nondeductible Expenses, later, to figure what part you can deduct. How long do i have to file an amended tax return State and local transfer taxes. How long do i have to file an amended tax return   You cannot deduct the state and local transfer taxes you pay when you buy or sell securities. How long do i have to file an amended tax return If you pay these transfer taxes when you buy securities, you must treat them as part of the cost of the property. How long do i have to file an amended tax return If you pay these transfer taxes when you sell securities, you must treat them as a reduction in the amount realized. How long do i have to file an amended tax return Trustee's commissions for revocable trust. How long do i have to file an amended tax return   If you set up a revocable trust and have its income distributed to you, you can deduct the commission you pay the trustee for managing the trust to the extent it is to produce or collect taxable income or to manage property. How long do i have to file an amended tax return However, you cannot deduct any part of the commission used for producing or collecting tax-exempt income or for managing property that produces tax-exempt income. How long do i have to file an amended tax return   If you are a cash-basis taxpayer and pay the commissions for several years in advance, you must deduct a part of the commission each year. How long do i have to file an amended tax return You cannot deduct the entire amount in the year you pay it. How long do i have to file an amended tax return Investment expenses from pass-through entities. How long do i have to file an amended tax return   If you hold an interest in a partnership, S corporation, real estate mortgage investment conduit (REMIC), or a nonpublicly offered mutual fund, you can deduct your share of that entity's investment expenses. How long do i have to file an amended tax return A partnership or S corporation will show your share of these expenses on your Schedule K-1 (Form 1065) or Schedule K-1 (Form 1120S). How long do i have to file an amended tax return A nonpublicly offered mutual fund will indicate your share of these expenses in box 5 of Form 1099-DIV (or substitute statement). How long do i have to file an amended tax return Publicly-offered mutual funds are discussed later. How long do i have to file an amended tax return   If you hold an interest in a REMIC, any expenses relating to your residual interest investment will be shown on Schedule Q (Form 1066), line 3b. How long do i have to file an amended tax return Any expenses relating to your regular interest investment will appear in box 5 of Form 1099-INT (or substitute statement) or box 9 of Form 1099-OID (or substitute statement). How long do i have to file an amended tax return   Report your share of these investment expenses on Schedule A (Form 1040), subject to the 2% limit, in the same manner as your other investment expenses. How long do i have to file an amended tax return Including mutual fund or REMIC expenses in income. How long do i have to file an amended tax return   Your share of the investment expenses of a REMIC or a nonpublicly offered mutual fund, as described above, are considered to be indirect deductions through that pass-through entity. How long do i have to file an amended tax return You must include in your gross income an amount equal to the expenses allocated to you, whether or not you are able to claim a deduction for those expenses. How long do i have to file an amended tax return If you are a shareholder in a nonpublicly offered mutual fund, you must include on your return the full amount of ordinary dividends or other distributions of stock, as shown in box 1a of Form 1099-DIV (or substitute statement). How long do i have to file an amended tax return If you are a residual interest holder in a REMIC, you must report as ordinary income on Schedule E (Form 1040) the total amounts shown on Schedule Q (Form 1066), lines 1b and 3b. How long do i have to file an amended tax return If you are a REMIC regular interest holder, you must include the amount of any expense allocation you received on Form 1040, line 8a. How long do i have to file an amended tax return Publicly-offered mutual funds. How long do i have to file an amended tax return   Most mutual funds are publicly offered. How long do i have to file an amended tax return These mutual funds, generally, are traded on an established securities exchange. How long do i have to file an amended tax return These funds do not pass investment expenses through to you. How long do i have to file an amended tax return Instead, the dividend income they report to you in box 1a of Form 1099-DIV (or substitute statement) is already reduced by your share of investment expenses. How long do i have to file an amended tax return As a result, you cannot deduct the expenses on your return. How long do i have to file an amended tax return   Include the amount from box 1a of Form 1099-DIV (or substitute statement) in your income. How long do i have to file an amended tax return    A publicly offered mutual fund is one that: Is continuously offered pursuant to a public offering, Is regularly traded on an established securities market, and Is held by or for no fewer than 500 persons at any time during the year. How long do i have to file an amended tax return Contact your mutual fund if you are not sure whether it is publicly offered. How long do i have to file an amended tax return Nondeductible Expenses Some expenses that you incur as an investor are not deductible. How long do i have to file an amended tax return Stockholders' meetings. How long do i have to file an amended tax return   You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you have no interest other than owning stock. How long do i have to file an amended tax return This is true even if your purpose in attending is to get information that would be useful in making further investments. How long do i have to file an amended tax return Investment-related seminar. How long do i have to file an amended tax return   You cannot deduct expenses for attending a convention, seminar, or similar meeting for investment purposes. How long do i have to file an amended tax return Single-premium life insurance, endowment, and annuity contracts. How long do i have to file an amended tax return   You cannot deduct interest on money you borrow to buy or carry a single-premium life insurance, endowment, or annuity contract. How long do i have to file an amended tax return Used as collateral. How long do i have to file an amended tax return   If you use a single premium annuity contract as collateral to obtain or continue a mortgage loan, you cannot deduct any interest on the loan that is collateralized by the annuity contract. How long do i have to file an amended tax return Figure the amount of interest expense disallowed by multiplying the current interest rate on the mortgage loan by the lesser of the amount of the annuity contract used as collateral or the amount of the loan. How long do i have to file an amended tax return Borrowing on insurance. How long do i have to file an amended tax return   Generally, you cannot deduct interest on money you borrow to buy or carry a life insurance, endowment, or annuity contract if you plan to systematically borrow part or all of the increases in the cash value of the contract. How long do i have to file an amended tax return This rule applies to the interest on the total amount borrowed to buy or carry the contract, not just the interest on the borrowed increases in the cash value. How long do i have to file an amended tax return Tax-exempt income. How long do i have to file an amended tax return   You cannot deduct expenses you incur to produce tax-exempt income. How long do i have to file an amended tax return Nor can you deduct interest on money you borrow to buy tax-exempt securities or shares in a mutual fund or other regulated investment company that distributes only exempt-interest dividends. How long do i have to file an amended tax return Short-sale expenses. How long do i have to file an amended tax return   The rule disallowing a deduction for interest expenses on tax-exempt securities applies to amounts you pay in connection with personal property used in a short sale or amounts paid by others for the use of any collateral in connection with the short sale. How long do i have to file an amended tax return However, it does not apply to the expenses you incur if you deposit cash as collateral for the property used in the short sale and the cash does not earn a material return during the period of the sale. How long do i have to file an amended tax return Short sales are discussed in Short Sales in chapter 4. How long do i have to file an amended tax return Expenses for both tax-exempt and taxable income. How long do i have to file an amended tax return   You may have expenses that are for both tax-exempt and taxable income. How long do i have to file an amended tax return If you cannot specifically identify what part of the expenses is for each type of income, you can divide the expenses, using reasonable proportions based on facts and circumstances. How long do i have to file an amended tax return You must attach a statement to your return showing how you divided the expenses and stating that each deduction claimed is not based on tax-exempt income. How long do i have to file an amended tax return   One accepted method for dividing expenses is to do it in the same proportion that each type of income is to the total income. How long do i have to file an amended tax return If the expenses relate in part to capital gains and losses, include the gains, but not the losses, in figuring this proportion. How long do i have to file an amended tax return To find the part of the expenses that is for the tax-exempt income, divide your tax-exempt income by the total income and multiply your expenses by the result. How long do i have to file an amended tax return Example. How long do i have to file an amended tax return You received $6,000 interest; $4,800 was tax-exempt and $1,200 was taxable. How long do i have to file an amended tax return In earning this income, you had $500 of expenses. How long do i have to file an amended tax return You cannot specifically identify the amount of each expense item that is for each income item, so you must divide your expenses. How long do i have to file an amended tax return 80% ($4,800 tax-exempt interest divided by $6,000 total interest) of your expenses is for the tax-exempt income. How long do i have to file an amended tax return You cannot deduct $400 (80% of $500) of the expenses. How long do i have to file an amended tax return You can deduct $100 (the rest of the expenses) because they are for the taxable interest. How long do i have to file an amended tax return State income taxes. How long do i have to file an amended tax return   If you itemize your deductions, you can deduct, as taxes, state income taxes on interest income that is exempt from federal income tax. How long do i have to file an amended tax return But you cannot deduct, as either taxes or investment expenses, state income taxes on other exempt income. How long do i have to file an amended tax return Interest expense and carrying charges on straddles. How long do i have to file an amended tax return   You cannot deduct interest and carrying charges allocable to personal property that is part of a straddle. How long do i have to file an amended tax return The nondeductible interest and carrying charges are added to the basis of the straddle property. How long do i have to file an amended tax return However, this treatment does not apply if: All the offsetting positions making up the straddle either consist of one or more qualified covered call options and the optioned stock, or consist of section 1256 contracts (and the straddle is not part of a larger straddle); or The straddle is a hedging transaction. How long do i have to file an amended tax return  For information about straddles, including definitions of the terms used in this discussion, see Straddles in chapter 4. How long do i have to file an amended tax return   Interest includes any amount you pay or incur in connection with personal property used in a short sale. How long do i have to file an amended tax return However, you must first apply the rules discussed in Payments in lieu of dividends under Short Sales in chapter 4. How long do i have to file an amended tax return   To determine the interest on market discount bonds and short-term obligations that are part of a straddle, you must first apply the rules discussed under Limit on interest deduction for market discount bonds and Limit on interest deduction for short-term obligations (both under Interest Expenses, earlier). How long do i have to file an amended tax return Nondeductible amount. How long do i have to file an amended tax return   Figure the nondeductible interest and carrying charges on straddle property as follows. How long do i have to file an amended tax return Add: Interest on indebtedness incurred or continued to buy or carry the personal property, and All other amounts (including charges to insure, store, or transport the personal property) paid or incurred to carry the personal property. How long do i have to file an amended tax return Subtract from the amount in (1): Interest (including OID) includible in gross income for the year on the personal property, Any income from the personal property treated as ordinary income on the disposition of short-term government obligations or as ordinary income under the market discount and short-term bond provisions — see Discount on Debt Instruments in chapter 1, The dividends includible in gross income for the year from the personal property, and Any payment on a loan of the personal property for use in a short sale that is includible in gross income. How long do i have to file an amended tax return Basis adjustment. How long do i have to file an amended tax return   Add the nondeductible amount to the basis of your straddle property. How long do i have to file an amended tax return How To Report Investment Expenses To deduct your investment expenses, you must itemize deductions on Schedule A (Form 1040). How long do i have to file an amended tax return Enter your deductible investment interest expense on Schedule A (Form1040), line 14. How long do i have to file an amended tax return Include any deductible short sale expenses. How long do i have to file an amended tax return (See Short Sales in chapter 4 for information on these expenses. How long do i have to file an amended tax return ) Also attach a completed Form 4952 if you used that form to figure your investment interest expense. How long do i have to file an amended tax return Enter the total amount of your other investment expenses (other than interest expenses) on Schedule A (Form 1040), line 23. How long do i have to file an amended tax return List the type and amount of each expense on the dotted lines next to line 23. How long do i have to file an amended tax return (If necessary, you can show the required information on an attached statement. How long do i have to file an amended tax return ) For information on how to report amortizable bond premium, see Bond Premium Amortization , earlier in this chapter. How long do i have to file an amended tax return When To Report Investment Expenses If you use the cash method to report income and expenses, you generally deduct your expenses, except for certain prepaid interest, in the year you pay them. How long do i have to file an amended tax return If you use an accrual method, you generally deduct your expenses when you incur a liability for them, rather than when you pay them. How long do i have to file an amended tax return Also see When To Deduct Investment Interest , earlier in this chapter. How long do i have to file an amended tax return Unpaid expenses owed to related party. How long do i have to file an amended tax return   If you use an accrual method, you cannot deduct interest and other expenses owed to a related cash-basis person until payment is made and the amount is includible in the gross income of that person. How long do i have to file an amended tax return The relationship, for purposes of this rule, is determined as of the end of the tax year for which the interest or expense would otherwise be deductible. How long do i have to file an amended tax return If a deduction is denied under this rule, this rule will continue to apply even if your relationship with the person ceases to exist before the amount is includible in the gross income of that person. How long do i have to file an amended tax return   This rule generally applies to those relationships listed in chapter 4 under Related Party Transactions . How long do i have to file an amended tax return It also applies to accruals by partnerships to partners, partners to partnerships, shareholders to S corporations, and S corporations to shareholders. How long do i have to file an amended tax return   The postponement of deductions for unpaid expenses and interest under the related party rule does not apply to OID, regardless of when payment is made. How long do i have to file an amended tax return This rule also does not apply to loans with below-market interest rates or to certain payments for the use of property and services when the lender or recipient has to include payments periodically in income, even if a payment has not been made. How long do i have to file an amended tax return 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

Massachusetts Office of the Attorney General

Website: Massachusetts Office of the Attorney General

Address: Massachusetts Office of the Attorney General
Public Inquiry and Assistance Center
One Ashburton Pl., 18th Floor
Boston, MA 02108-1518

Phone Number: 617-727-8400 (Consumer Hotline)

TTY: 617-727-4765

Office of Consumer Affairs and Business Regulation

Website: Office of Consumer Affairs and Business Regulation

Address: Office of Consumer Affairs and Business Regulation
10 Park Plaza, Suite 5170
Boston, MA 02116

Phone Number: 617-973-8700

Toll-free: 1-888-283-3757 (MA, Consumer Hotline)

TTY: 1-800-720-3480

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Regional Consumer Protection Offices

Office of the Attorney General- Central Massachusetts Region

Website: Office of the Attorney General- Central Massachusetts Region

Address: Office of the Attorney General- Central Massachusetts Region
Public Inquiry and Assistance Center
10 Mechanic St.
Suite 301
Worcester, MA 01608

Phone Number: 508-792-7600

TTY: 617-727-4765

Office of the Attorney General- Southern Massachusetts Region

Website: Office of the Attorney General- Southern Massachusetts Region

Address: Office of the Attorney General- Southern Massachusetts Region
Public Inquiry and Assistance Center
105 William St., 1st Floor
New Bedford, MA 02740-6257

Phone Number: 508-990-9700 617-727-8400 (Hotline)

TTY: 617-727-4765

Office of the Attorney General- Western Massachusetts Region

Website: Office of the Attorney General- Western Massachusetts Region

Address: Office of the Attorney General- Western Massachusetts Region
Consumer Protection Division
1350 Main St., 4th Floor
Springfield, MA 01103-1629

Phone Number: 413-784-1240 617-727-8400 (Hotline)

TTY: 617-727-4765

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County Consumer Protection Offices

Springfield Mayors Office of Consumer Information

Website: Springfield Mayors Office of Consumer Information

Address: Springfield Mayors Office of Consumer Information
City Hall, Room 315
36 Court St.
Springfield, MA 01103

Phone Number: 413-787-6437

TTY: 413-787-6154

Norfolk District Attorney's Office

Website: Norfolk District Attorney's Office

Address: Norfolk District Attorney's Office
Consumer Protection Division
45 Shawmut Rd.
Canton, MA 02021

Phone Number: 781-830-4800 ext. 279

TTY: 617-727-0434

Northwestern District Attorneys Office - Franklin County

Website: Northwestern District Attorneys Office - Franklin County

Address: Northwestern District Attorneys Office - Franklin County
Consumer Protection Unit
13 Conway St.
Greenfield, MA 01301

Phone Number: 413-774-3186

Northwestern District Attorneys Office - Hampshire County

Website: Northwestern District Attorneys Office - Hampshire County

Address: Northwestern District Attorneys Office - Hampshire County
Consumer Protection Division
One Gleason Plaza
Northampton, MA 01060

Phone Number: 413-586-9225

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City Consumer Protection Offices

Boston Consumer Affairs and Licensing

Website: Boston Consumer Affairs and Licensing

Address: Boston Consumer Affairs and Licensing
One City Hall Square, Room 817
Boston, MA 02201-2039

Phone Number: 617-635-3834

Cambridge Consumers Council

Website: Cambridge Consumers Council

Address: Cambridge Consumers Council
831 Massachusetts Ave., 1st Floor
Cambridge, MA 02139

Phone Number: 617-349-6150

TTY: 617-349-6112

Newton-Brookline Consumer Office

Website: Newton-Brookline Consumer Office

Address: Newton-Brookline Consumer Office
Newton City Hall
1000 Commonwealth Ave.
Newton Centre, MA 02459

Phone Number: 617-796-1292

TTY: 617-796-1089

Revere Consumer Affairs Office

Website: Revere Consumer Affairs Office

Address: Revere Consumer Affairs Office
281 Broadway
Revere, MA 02151

Phone Number: 781-286-8114

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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.

Office of Consumer Affairs and Business Regulation

Website: Office of Consumer Affairs and Business Regulation

Address: Office of Consumer Affairs and Business Regulation
Division of Banks
Consumer Assistance Unit

1000 Washington St., 10th Floor
Boston, MA 02118-6400

Phone Number: 617-956-1500

Toll-free: 1-800-495-2265 (MA)

TTY: 617-956-1577

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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.

Division of Insurance

Website: Division of Insurance

Address: Division of Insurance
Consumer Services Section
1000 Washington St., Suite 810
Boston, MA 02118-6200

Phone Number: 617-521-7794

Toll-free: 1-877-563-4467 (MA)

TTY: 617-521-7490

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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.

Office of the Secretary of the Commonwealth

Website: Office of the Secretary of the Commonwealth

Address: Office of the Secretary of the Commonwealth
Securities Division
One Ashburton Pl., 17th Floor
McCormack Building
Boston, MA 02108

Phone Number: 617-727-3548

Toll-free: 1-800-269-5428 (MA)

TTY: 617-878-3889

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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.

Department of Public Utilities

Website: Department of Public Utilities

Address: Department of Public Utilities
Consumer Division
One South Station, Suite 2
Boston, MA 02110

Phone Number: 617-737-2836

Toll-free: 1-877-886-5066

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The How Long Do I Have To File An Amended Tax Return

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