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How To Amend My 2012 Tax Return

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How To Amend My 2012 Tax Return

How to amend my 2012 tax return Listed Property Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Listed Property DefinedPassenger Automobile Defined Dwelling Unit Other Property Used for Transportation Computers and Related Peripheral Equipment Predominant Use TestMeeting the Predominant Use Test Qualified Business Use Method of Allocating Use Applying the Predominant Use Test Deductions After Recovery Period Leased PropertyLessor Lessee What Records Must Be KeptAdequate Records Reporting Information on Form 4562 Deductions in Later Years Appendix Topics - This chapter discusses: Listed property defined The predominant use test What records must be kept Useful Items - You may want to see: Publication 463 Travel, Entertainment, and Gift Expenses 587 Business Use of Your Home (Including Use by Day-Care Providers) 917 Business Use of a Car 946 How To Depreciate Property Form (and Instructions) 2106–EZ Unreimbursed Employee Business Expenses 2106 Employee Business Expenses 4255 Recapture of Investment Credit 4562 Depreciation and Amortization This chapter discusses some special rules and recordkeeping requirements for listed property. How to amend my 2012 tax return For complete coverage of the rules, including the rules concerning passenger automobiles, see Publication 946. How to amend my 2012 tax return If listed property is not used predominantly (more than 50%) in a qualified business use as discussed inPredominant Use Test, later, the section 179 deduction is not allowable and the property must be depreciated using the straight line method. How to amend my 2012 tax return Listed Property Defined Listed property is any of the following: Any passenger automobile (defined later), Any other property used for transportation, Any property of a type generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video recording equipment), Any computer and related peripheral equipment, defined later, unless it is used only at a regular business establishment and owned or leased by the person operating the establishment. How to amend my 2012 tax return A regular business establishment includes a portion of a dwelling unit (defined later), if, and only if, that portion is used both regularly and exclusively for business as discussed in Publication 587. How to amend my 2012 tax return Any cellular telephone (or similar telecommunication equipment) placed in service or leased in a tax year beginning after 1989. How to amend my 2012 tax return Passenger Automobile Defined A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (at 6,000 pounds or less of gross vehicle weight for trucks and vans). How to amend my 2012 tax return It includes any part, component, or other item physically attached to the automobile or usually included in the purchase price of an automobile. How to amend my 2012 tax return A passenger automobile does not include: An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business, and A vehicle used directly in the trade or business of transporting persons or property for compensation or hire. How to amend my 2012 tax return Dwelling Unit A dwelling unit is a house or apartment used to provide living accommodations in a building or structure. How to amend my 2012 tax return It does not include a unit in a hotel, motel, inn, or other establishment where more than half the units are used on a transient basis. How to amend my 2012 tax return Other Property Used for Transportation Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles for transporting persons or goods. How to amend my 2012 tax return Listed property does not include: Any vehicle which, by reason of its design, is not likely to be used more than a minimal amount for personal purposes, such as clearly marked police and fire vehicles, ambulances, or hearses used for those purposes, Any vehicle that is designed to carry cargo and that has a loaded gross vehicle weight over 14,000 pounds, bucket trucks (cherry pickers), cement mixers, combines, cranes and derricks, delivery trucks with seating only for the driver (or only for the driver plus a folding jump seat), dump trucks (including garbage trucks), flatbed trucks, forklifts, qualified moving vans, qualified specialized utility repair trucks, and refrigerated trucks, Any passenger bus used for that purpose with a capacity of at least 20 passengers and school buses, Any tractor or other special purpose farm vehicle, and unmarked vehicles used by law enforcement officers if the use is officially authorized, and Any vehicle, such as a taxicab, if substantially all its use is in the trade or business of providing services to transport persons or property for compensation or hire by unrelated persons. How to amend my 2012 tax return Computers and Related Peripheral Equipment A computer is a programmable electronically activated device that: Is capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention, and Consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. How to amend my 2012 tax return Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. How to amend my 2012 tax return Computer or peripheral equipment does not include: Any equipment which is an integral part of property which is not a computer, Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment, and Equipment of a kind, used primarily for the user's amusement or entertainment, such as video games. How to amend my 2012 tax return Predominant Use Test If “listed property,” defined earlier, placed in service after June 18, 1984, is not used predominantly (more than 50%) in a qualified business use during any tax year: The section 179 deduction on the property is not allowable, and You must depreciate the property using the straight line method. How to amend my 2012 tax return Listed property placed in service before 1987. How to amend my 2012 tax return   For listed property placed in service before 1987, depreciate the property over the following period: Class of Property Listed Property Recovery Period 3-year property 5 years 5-year property 12 years 10-year property 25 years 18-year real property 40 years 19-year real property 40 years If you must use the above recovery periods for listed property not used predominantly in a trade or business, use the percentages from Table 16 titled Listed Property Not Used Predominantly (Other Than 18- or 19-year Real Property), and Table 17 for 18- or 19-year real property, near the end of this publication in the Appendix. How to amend my 2012 tax return Listed property placed in service after 1986. How to amend my 2012 tax return   For information on listed property placed in service after 1986, see Publication 946. How to amend my 2012 tax return Meeting the Predominant Use Test Listed property meets the predominant use test for any tax year if its business use is more than 50% of its total use. How to amend my 2012 tax return You must allocate the use of any item of listed property used for more than one purpose during the tax year among its various uses. How to amend my 2012 tax return The percentage of investment use of listed property cannot be used as part of the percentage of qualified business use to meet the predominant use test. How to amend my 2012 tax return However, the combined total of business and investment use is taken into account to figure your depreciation deduction for the property. How to amend my 2012 tax return Note: Property does not stop being predominantly used in a qualified business use because of a transfer at death. How to amend my 2012 tax return Example. How to amend my 2012 tax return Sarah Bradley uses a home computer 50% of the time to manage her investments. How to amend my 2012 tax return She also uses the computer 40% of the time in her part-time consumer research business. How to amend my 2012 tax return Sarah's home computer is listed property because it is not used at a regular business establishment. How to amend my 2012 tax return Because her business use of the computer does not exceed 50%, the computer is not predominantly used in a qualified business use for the tax year. How to amend my 2012 tax return Because she does not meet the predominant use test, she cannot elect a section 179 deduction for this property. How to amend my 2012 tax return Her combined rate of business/investment use for determining her depreciation deduction is 90%. How to amend my 2012 tax return Qualified Business Use A qualified business use is any use in your trade or business. How to amend my 2012 tax return However, it does not include: The use of property held merely to produce income (investment use), The leasing of property to any 5% owner or related person (to the point that the property is used by a 5% owner or person related to the owner or lessee of the property), The use of property as compensation for the performance of services by a 5% owner or related person, or The use of property as compensation for the performance of services by any person (other than a5% owner or related person) unless the value of the use is included in that person's gross income for the use of the property and income tax is withheld on that amount where required. How to amend my 2012 tax return See Employees, later. How to amend my 2012 tax return 5% owner. How to amend my 2012 tax return   A 5% owner of a business, other than a corporation, is any person who owns more than 5% of the capital or profits interest in the business. How to amend my 2012 tax return   A 5% owner of a corporation is any person who owns, or is considered to own: More than 5% of the outstanding stock of the corporation, or Stock possessing more than 5% of the total combined voting power of all stock in the corporation. How to amend my 2012 tax return Related person. How to amend my 2012 tax return   A related person is anyone related to a taxpayer as discussed under Related persons, in chapter 2 under Nonqualifying Property in Publication 946. How to amend my 2012 tax return Entertainment Use The use of listed property for entertainment, recreation, or amusement purposes is treated as a qualified business use only to the extent that expenses (other than interest and property tax expenses) for its use are deductible as ordinary and necessary business expenses. How to amend my 2012 tax return See Publication 463. How to amend my 2012 tax return Leasing or Compensatory Use of Aircraft If at least 25% of the total use of any aircraft during the tax year is for a qualified business use, the leasing or compensatory use of the aircraft by a 5% owner or related person is treated as a qualified business use. How to amend my 2012 tax return Commuting The use of a vehicle for commuting is not business use, regardless of whether work is performed during the trip. How to amend my 2012 tax return Use of Your Passenger Automobile by Another Person If someone else uses your automobile, that use is not business use unless: That use is directly connected with your business, The value of the use is property reported by you as income to the other person and tax is withheld on the income where required, or The value of the use results in a payment of fair market rent. How to amend my 2012 tax return Any payment to you for the use of the automobile is treated as a rent payment for 3). How to amend my 2012 tax return Employees Any use by an employee of his or her own listed property (or listed property rented by an employee) in performing services as an employee is not business use unless: The use is for the employer's convenience, and The use is required as a condition of employment. How to amend my 2012 tax return Use for the employer's convenience. How to amend my 2012 tax return   Whether the use of listed property is for the employer's convenience must be determined from all the facts. How to amend my 2012 tax return The use is for the employer's convenience if it is for a substantial business reason of the employer. How to amend my 2012 tax return The use of listed property during the employee's regular working hours to carry on the employer's business is generally for the employer's convenience. How to amend my 2012 tax return Use required as a condition of employment. How to amend my 2012 tax return   Whether the use of listed property is a condition of employment depends on all the facts and circumstances. How to amend my 2012 tax return The use of property must be required for the employee to perform duties properly. How to amend my 2012 tax return The employer need not explicitly require the employee to use the property. How to amend my 2012 tax return A mere statement by the employer that the use of the property is a condition of employment is not sufficient. How to amend my 2012 tax return Example 1. How to amend my 2012 tax return Virginia Sycamore is employed as a courier with We Deliver which provides local courier services. How to amend my 2012 tax return She owns and uses a motorcycle to deliver packages to downtown offices. How to amend my 2012 tax return We Deliver explicitly requires all delivery persons to own a small car or motorcycle for use in their employment. How to amend my 2012 tax return The company reimburses delivery persons for their costs. How to amend my 2012 tax return Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. How to amend my 2012 tax return Example 2. How to amend my 2012 tax return Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. How to amend my 2012 tax return He must travel to these sites on a regular basis. How to amend my 2012 tax return Uplift does not furnish an automobile or explicitly require him to use his own automobile. How to amend my 2012 tax return However, it reimburses him for any costs he incurs in traveling to the various sites. How to amend my 2012 tax return The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. How to amend my 2012 tax return Method of Allocating Use For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. How to amend my 2012 tax return You determine the percentage of qualified business use by dividing the number of miles the vehicle is driven for business purposes during the year by the total number of miles the vehicle is driven for all purposes (including business miles) during the year. How to amend my 2012 tax return For other items of listed property, allocate the property's use on the basis of the most appropriate unit of time. How to amend my 2012 tax return For example, you can determine the percentage of business use of a computer by dividing the number of hours the computer is used for business purposes during the year by the total number of hours the computer is used for all purposes (including business hours) during the year. How to amend my 2012 tax return Applying the Predominant Use Test You must apply the predominant use test for an item of listed property each year of the recovery period. How to amend my 2012 tax return First Recovery Year If any item of listed property is not used predominantly in a qualified business use in the year it is placed in service: The property is not eligible for a section 179 deduction, and The depreciation deduction must be figured using the straight line method. How to amend my 2012 tax return Note: The required use of the straight line method for an item of listed property that does not meet the predominant use test is not the same as electing the straight line method. How to amend my 2012 tax return It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. How to amend my 2012 tax return Years After the First Recovery Year If you use listed property predominantly (more than 50%) in a qualified business use in the tax year you place it in service, but not in a subsequent tax year during the recovery period, the following rules apply: Figure depreciation using the straight line method. How to amend my 2012 tax return Do this for each year, beginning with the year you no longer use the property predominantly in a qualified business use, and Figure any excess depreciation on the property and add it to: Your gross income, and The adjusted basis of your property. How to amend my 2012 tax return See Recapture of excess depreciation, next. How to amend my 2012 tax return Recapture of excess depreciation. How to amend my 2012 tax return   You must include any excess depreciation in your gross income for the first tax year the property is not predominantly used in a qualified business use. How to amend my 2012 tax return Any excess depreciation must also be added to the adjusted basis of your property. How to amend my 2012 tax return Excess depreciation is the excess (if any) of: The amount of depreciation allowable for the property (including any section 179 deduction claimed) for tax years before the first tax year the property was not predominantly used in a qualified business use, over The amount of depreciation that would have been allowable for those years if the property were not used predominantly in a qualified business use for the year it was placed in service. How to amend my 2012 tax return This means you figure your depreciation using the percentages fromTable 16 or 17. How to amend my 2012 tax return For information on investment credit recapture, see the instructions for Form 4255. How to amend my 2012 tax return Deductions After Recovery Period When listed property (other than passenger automobiles) is used for business, investment, and personal purposes, no deduction is ever allowable for the personal use. How to amend my 2012 tax return In tax years after the recovery period, you must determine if there is any unrecovered basis remaining before you compute the depreciation deduction for that tax year. How to amend my 2012 tax return To make this determination, figure the depreciation for earlier tax years as if your property were used 100% for business or investment purposes, beginning with the first tax year in which some or all use is for business or investment. How to amend my 2012 tax return See Car Used 50% or Less for Business in Publication 917. How to amend my 2012 tax return Leased Property The limitations on cost recovery deductions apply to the rental of listed property. How to amend my 2012 tax return The following discussion covers the rules that apply to the lessor (the owner of the property) and the lessee (the person who rents the property from the owner). How to amend my 2012 tax return SeeLeasing a Car in Publication 917 for a discussion of leased passenger automobiles. How to amend my 2012 tax return Lessor The limitations on cost recovery generally do not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. How to amend my 2012 tax return A person is considered regularly engaged in the business of leasing listed property only if contracts for leasing of listed property are entered into with some frequency over a continuous period of time. How to amend my 2012 tax return This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of the person's business in its entirety. How to amend my 2012 tax return Occasional or incidental leasing activity is insufficient. How to amend my 2012 tax return For example, a person leasing only one passenger automobile during a tax year is not regularly engaged in the business of leasing automobiles. How to amend my 2012 tax return An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. How to amend my 2012 tax return Lessee A lessee of listed property (other than passenger automobiles), must include an amount in gross income called the inclusion amount for the first tax year the property is not used predominantly in a qualified business use. How to amend my 2012 tax return Inclusion amount for property leased before 1987. How to amend my 2012 tax return   You determine the inclusion amount for property leased after June 18, 1984 and before 1987 by multiplying the fair market value of the property by both the average business/investment use percentage and the applicable percentage. How to amend my 2012 tax return You can find the applicable percentages for listed property that is 5- or 10-year recovery property in Tables 19 or 20 in Appendix A of Publication 946. How to amend my 2012 tax return   The lease term for listed property other than 18- or 19-year real property, and residential rental or nonresidential real property, includes options to renew. How to amend my 2012 tax return For 18- or 19-year real property and residential rental or nonresidential real property that is listed property, the period of the lease does not include any option to renew at fair market value, determined at the time of renewal. How to amend my 2012 tax return You treat two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property as one lease. How to amend my 2012 tax return Special rules. How to amend my 2012 tax return   The lessee adds the inclusion amount to gross income in the next tax year if: The lease term begins within 9 months before the close of the lessee's tax year, The lessee does not use the property predominantly in a qualified business use during that portion of the tax year, and The lease term continues into the lessee's next tax year. How to amend my 2012 tax return The lessee determines the inclusion amount by taking into account the average of the business/investment use for both tax years and the applicable percentage for the tax year the lease term begins. How to amend my 2012 tax return   If the lease term is less than one year, the amount included in gross income is the amount that bears the same ratio to the additional inclusion amount as the number of days in the lease term bears to 365. How to amend my 2012 tax return Maximum inclusion amount. How to amend my 2012 tax return   The inclusion amount cannot be more than the sum of the deductible amounts of rent allocable to the lessee's tax year in which the amount must be included in gross income. How to amend my 2012 tax return What Records Must Be Kept You cannot take any depreciation or section 179 deduction for the use of listed property (including passenger automobiles) unless you can prove business/investment use with adequate records or sufficient evidence to support your own statements. How to amend my 2012 tax return How long to keep records. How to amend my 2012 tax return   For listed property, records must be kept for as long as any excess depreciation can be recaptured (included in income). How to amend my 2012 tax return Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. How to amend my 2012 tax return It is not necessary to record information in an account book, diary, or similar record if the information is already shown on the receipt. How to amend my 2012 tax return However, your records should back up your receipts in an orderly manner. How to amend my 2012 tax return Elements of Expenditure or Use The records or other documentary evidence must support: The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses, The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year, The date of the expenditure or use, and The business or investment purpose for the expenditure or use. How to amend my 2012 tax return Written documents of your expenditure or use are generally better evidence than oral statements alone. How to amend my 2012 tax return A written record prepared at or near the time of the expenditure or use has greater value as proof of the expenditure or use. How to amend my 2012 tax return A daily log is not required. How to amend my 2012 tax return However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time and backed up by other documents is preferable to a statement prepared later. How to amend my 2012 tax return Timeliness The elements of an expenditure or use must be recorded at the time you have full knowledge of the elements. How to amend my 2012 tax return An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use is generally considered a timely record if in the regular course of business: The statement is submitted by an employee to the employer, or The statement is submitted by an independent contractor to the client or customer. How to amend my 2012 tax return For example, a log maintained on a weekly basis, which accounts for use during the week, will be considered a record made at or near the time of use. How to amend my 2012 tax return Business Purpose Supported An adequate record of business purpose must generally be in the form of a written statement. How to amend my 2012 tax return However, the amount of backup necessary to establish a business purpose depends on the facts and circumstances of each case. How to amend my 2012 tax return A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. How to amend my 2012 tax return For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. How to amend my 2012 tax return Business Use Supported An adequate record contains enough information on each element of every business or investment use. How to amend my 2012 tax return The amount of detail required to support the use depends on the facts and circumstances. How to amend my 2012 tax return For example, a taxpayer whose only business use of a truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. How to amend my 2012 tax return Although an adequate record generally must be written, a record of the business use of listed property, such as a computer or automobile, can be prepared in a computer memory device using a logging program. How to amend my 2012 tax return Separate or Combined Expenditures or Uses Each use by you is normally considered a separate use. How to amend my 2012 tax return However, repeated uses can be combined as a single item. How to amend my 2012 tax return Each expenditure is recorded as a separate item and not combined with other expenditures. How to amend my 2012 tax return If you choose, however, amounts spent for the use of listed property during a tax year, such as for gasoline or automobile repairs, can be combined. How to amend my 2012 tax return If these expenses are combined, you do not need to support the business purpose of each expense. How to amend my 2012 tax return Instead, you can divide the expenses based on the total business use of the listed property. How to amend my 2012 tax return Uses which can be considered part of a single use, such as a round trip or uninterrupted business use, can be accounted for by a single record. How to amend my 2012 tax return For example, use of a truck to make deliveries at several locations which begin and end at the business premises and can include a stop at the business in between deliveries can be accounted for by a single record of miles driven. How to amend my 2012 tax return Use of a passenger automobile by a salesperson for a business trip away from home over a period of time can be accounted for by a single record of miles traveled. How to amend my 2012 tax return Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. How to amend my 2012 tax return Confidential Information If any of the information on the elements of an expenditure or use is confidential, it does not need to be in the account book or similar record if it is recorded at or near the time of the expenditure or use. How to amend my 2012 tax return It must be kept elsewhere and made available as support to the district director on request. How to amend my 2012 tax return Substantial Compliance If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the district director's satisfaction, you can establish this element by any evidence the district director deems adequate. How to amend my 2012 tax return If you fail to establish that you have substantially complied with the adequate records requirement for an element of an expenditure or use to the district director's satisfaction, you must establish the element: By your own oral or written statement containing detailed information as to the element, and By other evidence sufficient to establish the element. How to amend my 2012 tax return If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. How to amend my 2012 tax return If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. How to amend my 2012 tax return Sampling You can maintain an adequate record for portions of a tax year and use that record to support your business and investment use for the entire tax year if it can be shown by other evidence that the periods for which an adequate record is maintained are representative of use throughout the year. How to amend my 2012 tax return Loss of Records When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. How to amend my 2012 tax return Reporting Information on Form 4562 If you claim a deduction for any listed property, you must provide the requested information on page 2, Section B of Form 4562. How to amend my 2012 tax return If you claim a deduction for any vehicle, you must answer certain questions onpage 2 of Form 4562 to provide information about the vehicle use. How to amend my 2012 tax return Employees. How to amend my 2012 tax return   Employees claiming the standard mileage rate or actual expenses (including depreciation) must use Form 2106 instead of Part V of Form 4562. How to amend my 2012 tax return Employees claiming the standard mileage rate may be able to use Form 2106–EZ. How to amend my 2012 tax return Employer who provides vehicles to employees. How to amend my 2012 tax return   An employer who provides vehicles to employees must obtain enough information from those employees to provide the requested information onForm 4562. How to amend my 2012 tax return   An employer who provides more than five vehicles to employees need not include any information on his or her tax return. How to amend my 2012 tax return Instead, the employer must obtain the information from his or her employees and indicate on his or her return that the information was obtained and is being retained. How to amend my 2012 tax return   You do not need to provide the information requested on page 2 of Form 4562 if, as an employer: You can satisfy the requirements of a written policy statement for vehicles either not used for personal purposes, or not used for personal purposes other than commuting, or You treat all vehicle use by employees as personal use. How to amend my 2012 tax return See the instructions for Form 4562. How to amend my 2012 tax return Deductions in Later Years When listed property is used for business, investment, and personal purposes, no deduction is allowable for its personal use either in the current year or any later tax year. How to amend my 2012 tax return In later years, you must determine if there is any remaining unadjusted or unrecovered basis before you compute the depreciation deduction for that tax year. How to amend my 2012 tax return In making this determination, figure the depreciation deductions for earlier tax years as if the listed property were used 100% for business or investment purposes in those years, beginning with the first tax year in which some or all of the property use is for business or investment. How to amend my 2012 tax return For more information about deductions after the recovery period for automobiles, see Publication 917. How to amend my 2012 tax return Appendix The following tables are for use in figuring depreciation deductions under the ACRS system. How to amend my 2012 tax return Table 1. How to amend my 2012 tax return 15-Year Real Property* (Other Than Low-Inclome Housing) Table 3. How to amend my 2012 tax return Low-Income Housing* Table 6 - Table 9 Table 6 - Table 9 Table 10 - Table 13 Table 14 - Table 17 Prev  Up  Next   Home   More Online Publications
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The How To Amend My 2012 Tax Return

How to amend my 2012 tax return 5. How to amend my 2012 tax return   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. How to amend my 2012 tax return Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Reminder Foreign income. How to amend my 2012 tax return   If you are a U. How to amend my 2012 tax return S. How to amend my 2012 tax return citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. How to amend my 2012 tax return S. How to amend my 2012 tax return law. How to amend my 2012 tax return This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. How to amend my 2012 tax return This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). How to amend my 2012 tax return If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. How to amend my 2012 tax return For details, see Publication 54, Tax Guide for U. How to amend my 2012 tax return S. How to amend my 2012 tax return Citizens and Resident Aliens Abroad. How to amend my 2012 tax return Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. How to amend my 2012 tax return The following topics are included. How to amend my 2012 tax return Bonuses and awards. How to amend my 2012 tax return Special rules for certain employees. How to amend my 2012 tax return Sickness and injury benefits. How to amend my 2012 tax return The chapter explains what income is included in the employee's gross income and what is not included. How to amend my 2012 tax return Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income Employee Compensation This section discusses various types of employee compensation including fringe benefits, retirement plan contributions, stock options, and restricted property. How to amend my 2012 tax return Form W-2. How to amend my 2012 tax return    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. How to amend my 2012 tax return Include your pay on line 7 of Form 1040 or Form 1040A, or on line 1 of Form 1040EZ, even if you do not receive a Form W-2. How to amend my 2012 tax return   If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. How to amend my 2012 tax return These wages must be included on line 7 of Form 1040. How to amend my 2012 tax return See Form 8919 for more information. How to amend my 2012 tax return Childcare providers. How to amend my 2012 tax return    If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. How to amend my 2012 tax return If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. How to amend my 2012 tax return You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. How to amend my 2012 tax return Babysitting. How to amend my 2012 tax return   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. How to amend my 2012 tax return Miscellaneous Compensation This section discusses different types of employee compensation. How to amend my 2012 tax return Advance commissions and other earnings. How to amend my 2012 tax return   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. How to amend my 2012 tax return    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. How to amend my 2012 tax return If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), or you may be able to take a credit for that year. How to amend my 2012 tax return See Repayments in chapter 12. How to amend my 2012 tax return Allowances and reimbursements. How to amend my 2012 tax return    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. How to amend my 2012 tax return If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. How to amend my 2012 tax return Back pay awards. How to amend my 2012 tax return    Include in income amounts you are awarded in a settlement or judgment for back pay. How to amend my 2012 tax return These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. How to amend my 2012 tax return They should be reported to you by your employer on Form W-2. How to amend my 2012 tax return Bonuses and awards. How to amend my 2012 tax return   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. How to amend my 2012 tax return These include prizes such as vacation trips for meeting sales goals. How to amend my 2012 tax return If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. How to amend my 2012 tax return However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. How to amend my 2012 tax return Employee achievement award. How to amend my 2012 tax return   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. How to amend my 2012 tax return However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. How to amend my 2012 tax return Your employer can tell you whether your award is a qualified plan award. How to amend my 2012 tax return Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. How to amend my 2012 tax return   However, the exclusion does not apply to the following awards: A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. How to amend my 2012 tax return A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. How to amend my 2012 tax return Example. How to amend my 2012 tax return Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. How to amend my 2012 tax return Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. How to amend my 2012 tax return However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 – $1,600) in his income. How to amend my 2012 tax return Differential wage payments. How to amend my 2012 tax return   This is any payment made to you by an employer for any period during which you are, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages you would have received from the employer during that period. How to amend my 2012 tax return These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. How to amend my 2012 tax return The payments are reported as wages on Form W-2. How to amend my 2012 tax return Government cost-of-living allowances. How to amend my 2012 tax return   Most payments received by U. How to amend my 2012 tax return S. How to amend my 2012 tax return Government civilian employees for working abroad are taxable. How to amend my 2012 tax return However, certain cost-of-living allowances are tax free. How to amend my 2012 tax return Publication 516, U. How to amend my 2012 tax return S. How to amend my 2012 tax return Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. How to amend my 2012 tax return Nonqualified deferred compensation plans. How to amend my 2012 tax return   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. How to amend my 2012 tax return This amount is shown on Form W-2, box 12, using code Y. How to amend my 2012 tax return This amount is not included in your income. How to amend my 2012 tax return   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. How to amend my 2012 tax return This amount is included in your wages shown on Form W-2, box 1. How to amend my 2012 tax return It is also shown on Form W-2, box 12, using code Z. How to amend my 2012 tax return Note received for services. How to amend my 2012 tax return    If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. How to amend my 2012 tax return When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. How to amend my 2012 tax return Do not include that part again in your income. How to amend my 2012 tax return Include the rest of the payment in your income in the year of payment. How to amend my 2012 tax return   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. How to amend my 2012 tax return Severance pay. How to amend my 2012 tax return   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. How to amend my 2012 tax return Accrued leave payment. How to amend my 2012 tax return    If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. How to amend my 2012 tax return   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. How to amend my 2012 tax return You can reduce gross wages by the amount you repaid in the same tax year in which you received it. How to amend my 2012 tax return Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on the return and the wages on your Forms W-2. How to amend my 2012 tax return Outplacement services. How to amend my 2012 tax return   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. How to amend my 2012 tax return    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). How to amend my 2012 tax return Sick pay. How to amend my 2012 tax return   Pay you receive from your employer while you are sick or injured is part of your salary or wages. How to amend my 2012 tax return In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. How to amend my 2012 tax return A state sickness or disability fund. How to amend my 2012 tax return An association of employers or employees. How to amend my 2012 tax return An insurance company, if your employer paid for the plan. How to amend my 2012 tax return However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. How to amend my 2012 tax return For more information, see Publication 525. How to amend my 2012 tax return Social security and Medicare taxes paid by employer. How to amend my 2012 tax return   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. How to amend my 2012 tax return The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. How to amend my 2012 tax return However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. How to amend my 2012 tax return Stock appreciation rights. How to amend my 2012 tax return   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. How to amend my 2012 tax return When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. How to amend my 2012 tax return You include the cash payment in your income in the year you use the right. How to amend my 2012 tax return Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. How to amend my 2012 tax return Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. How to amend my 2012 tax return Accounting period. How to amend my 2012 tax return   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. How to amend my 2012 tax return Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. How to amend my 2012 tax return The general rule: benefits are reported for a full calendar year (January 1–December 31). How to amend my 2012 tax return The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. How to amend my 2012 tax return For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. How to amend my 2012 tax return  Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. How to amend my 2012 tax return   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). How to amend my 2012 tax return Form W-2. How to amend my 2012 tax return   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. How to amend my 2012 tax return Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). How to amend my 2012 tax return However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). How to amend my 2012 tax return Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. How to amend my 2012 tax return Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . How to amend my 2012 tax return For information on the items covered in this section, other than Long-term care coverage, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. How to amend my 2012 tax return Long-term care coverage. How to amend my 2012 tax return    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. How to amend my 2012 tax return However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. How to amend my 2012 tax return This amount will be reported as wages in box 1 of your Form W-2. How to amend my 2012 tax return   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. How to amend my 2012 tax return Archer MSA contributions. How to amend my 2012 tax return    Contributions by your employer to your Archer MSA generally are not included in your income. How to amend my 2012 tax return Their total will be reported in box 12 of Form W-2 with code R. How to amend my 2012 tax return You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. How to amend my 2012 tax return File the form with your return. How to amend my 2012 tax return Health flexible spending arrangement (health FSA). How to amend my 2012 tax return   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. How to amend my 2012 tax return Note. How to amend my 2012 tax return Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. How to amend my 2012 tax return The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. How to amend my 2012 tax return For more information, see Notice 2012-40, 2012-26 I. How to amend my 2012 tax return R. How to amend my 2012 tax return B. How to amend my 2012 tax return 1046, available at www. How to amend my 2012 tax return irs. How to amend my 2012 tax return gov/irb/2012-26 IRB/ar09. How to amend my 2012 tax return html. How to amend my 2012 tax return Health reimbursement arrangement (HRA). How to amend my 2012 tax return   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. How to amend my 2012 tax return Health savings accounts (HSA). How to amend my 2012 tax return   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. How to amend my 2012 tax return Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. How to amend my 2012 tax return Contributions made by your employer are not included in your income. How to amend my 2012 tax return Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. How to amend my 2012 tax return Distributions not used for qualified medical expenses are included in your income. How to amend my 2012 tax return See Publication 969 for the requirements of an HSA. How to amend my 2012 tax return   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. How to amend my 2012 tax return The contributions are treated as a distribution of money and are not included in the partner's gross income. How to amend my 2012 tax return Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. How to amend my 2012 tax return In both situations, the partner can deduct the contribution made to the partner's HSA. How to amend my 2012 tax return   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. How to amend my 2012 tax return The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. How to amend my 2012 tax return Qualified HSA funding distribution. How to amend my 2012 tax return   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. How to amend my 2012 tax return See Publication 590 for the requirements for these qualified HSA funding distributions. How to amend my 2012 tax return Failure to maintain eligibility. How to amend my 2012 tax return   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. How to amend my 2012 tax return If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. How to amend my 2012 tax return This income is also subject to an additional 10% tax. How to amend my 2012 tax return Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. How to amend my 2012 tax return See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. How to amend my 2012 tax return Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. How to amend my 2012 tax return They also are included as social security and Medicare wages in boxes 3 and 5. How to amend my 2012 tax return However, they are not included as wages in box 1. How to amend my 2012 tax return To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. How to amend my 2012 tax return File the form with your return. How to amend my 2012 tax return De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. How to amend my 2012 tax return In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. How to amend my 2012 tax return Holiday gifts. How to amend my 2012 tax return   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. How to amend my 2012 tax return However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. How to amend my 2012 tax return Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. How to amend my 2012 tax return For more information, see Publication 970, Tax Benefits for Education. How to amend my 2012 tax return Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. How to amend my 2012 tax return However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. How to amend my 2012 tax return For exceptions, see Entire cost excluded , and Entire cost taxed , later. How to amend my 2012 tax return If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. How to amend my 2012 tax return Also, it is shown separately in box 12 with code C. How to amend my 2012 tax return Group-term life insurance. How to amend my 2012 tax return   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. How to amend my 2012 tax return Permanent benefits. How to amend my 2012 tax return   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. How to amend my 2012 tax return Your employer should be able to tell you the amount to include in your income. How to amend my 2012 tax return Accidental death benefits. How to amend my 2012 tax return   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. How to amend my 2012 tax return Former employer. How to amend my 2012 tax return   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. How to amend my 2012 tax return Also, it is shown separately in box 12 with code C. How to amend my 2012 tax return Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. How to amend my 2012 tax return You must pay these taxes with your income tax return. How to amend my 2012 tax return Include them on line 60, Form 1040, and follow the instructions for line 60. How to amend my 2012 tax return For more information, see the Instructions for Form 1040. How to amend my 2012 tax return Two or more employers. How to amend my 2012 tax return   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. How to amend my 2012 tax return If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. How to amend my 2012 tax return You must figure how much to include in your income. How to amend my 2012 tax return Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. How to amend my 2012 tax return Figuring the taxable cost. How to amend my 2012 tax return   Use the following worksheet to figure the amount to include in your income. How to amend my 2012 tax return     Worksheet 5-1. How to amend my 2012 tax return Figuring the Cost of Group-Term Life Insurance To Include in Income 1. How to amend my 2012 tax return Enter the total amount of your insurance coverage from your employer(s) 1. How to amend my 2012 tax return   2. How to amend my 2012 tax return Limit on exclusion for employer-provided group-term life insurance coverage 2. How to amend my 2012 tax return 50,000 3. How to amend my 2012 tax return Subtract line 2 from line 1 3. How to amend my 2012 tax return   4. How to amend my 2012 tax return Divide line 3 by $1,000. How to amend my 2012 tax return Figure to the nearest tenth 4. How to amend my 2012 tax return   5. How to amend my 2012 tax return Go to Table 5-1. How to amend my 2012 tax return Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. How to amend my 2012 tax return   6. How to amend my 2012 tax return Multiply line 4 by line 5 6. How to amend my 2012 tax return   7. How to amend my 2012 tax return Enter the number of full months of coverage at this cost. How to amend my 2012 tax return 7. How to amend my 2012 tax return   8. How to amend my 2012 tax return Multiply line 6 by line 7 8. How to amend my 2012 tax return   9. How to amend my 2012 tax return Enter the premiums you paid per month 9. How to amend my 2012 tax return       10. How to amend my 2012 tax return Enter the number of months you paid the premiums 10. How to amend my 2012 tax return       11. How to amend my 2012 tax return Multiply line 9 by line 10. How to amend my 2012 tax return 11. How to amend my 2012 tax return   12. How to amend my 2012 tax return Subtract line 11 from line 8. How to amend my 2012 tax return Include this amount in your income as wages 12. How to amend my 2012 tax return      Table 5-1. How to amend my 2012 tax return Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. How to amend my 2012 tax return 05 25 through 29 . How to amend my 2012 tax return 06 30 through 34 . How to amend my 2012 tax return 08 35 through 39 . How to amend my 2012 tax return 09 40 through 44 . How to amend my 2012 tax return 10 45 through 49 . How to amend my 2012 tax return 15 50 through 54 . How to amend my 2012 tax return 23 55 through 59 . How to amend my 2012 tax return 43 60 through 64 . How to amend my 2012 tax return 66 65 through 69 1. How to amend my 2012 tax return 27 70 and older 2. How to amend my 2012 tax return 06 Example. How to amend my 2012 tax return You are 51 years old and work for employers A and B. How to amend my 2012 tax return Both employers provide group-term life insurance coverage for you for the entire year. How to amend my 2012 tax return Your coverage is $35,000 with employer A and $45,000 with employer B. How to amend my 2012 tax return You pay premiums of $4. How to amend my 2012 tax return 15 a month under the employer B group plan. How to amend my 2012 tax return You figure the amount to include in your income as shown in Worksheet 5-1. How to amend my 2012 tax return Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. How to amend my 2012 tax return Worksheet 5-1. How to amend my 2012 tax return Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. How to amend my 2012 tax return Enter the total amount of your insurance coverage from your employer(s) 1. How to amend my 2012 tax return 80,000 2. How to amend my 2012 tax return Limit on exclusion for employer-provided group-term life insurance coverage 2. How to amend my 2012 tax return 50,000 3. How to amend my 2012 tax return Subtract line 2 from line 1 3. How to amend my 2012 tax return 30,000 4. How to amend my 2012 tax return Divide line 3 by $1,000. How to amend my 2012 tax return Figure to the nearest tenth 4. How to amend my 2012 tax return 30. How to amend my 2012 tax return 0 5. How to amend my 2012 tax return Go to Table 5-1. How to amend my 2012 tax return Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. How to amend my 2012 tax return . How to amend my 2012 tax return 23 6. How to amend my 2012 tax return Multiply line 4 by line 5 6. How to amend my 2012 tax return 6. How to amend my 2012 tax return 90 7. How to amend my 2012 tax return Enter the number of full months of coverage at this cost. How to amend my 2012 tax return 7. How to amend my 2012 tax return 12 8. How to amend my 2012 tax return Multiply line 6 by line 7 8. How to amend my 2012 tax return 82. How to amend my 2012 tax return 80 9. How to amend my 2012 tax return Enter the premiums you paid per month 9. How to amend my 2012 tax return 4. How to amend my 2012 tax return 15     10. How to amend my 2012 tax return Enter the number of months you paid the premiums 10. How to amend my 2012 tax return 12     11. How to amend my 2012 tax return Multiply line 9 by line 10. How to amend my 2012 tax return 11. How to amend my 2012 tax return 49. How to amend my 2012 tax return 80 12. How to amend my 2012 tax return Subtract line 11 from line 8. How to amend my 2012 tax return Include this amount in your income as wages 12. How to amend my 2012 tax return 33. How to amend my 2012 tax return 00 Entire cost excluded. How to amend my 2012 tax return   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. How to amend my 2012 tax return You are permanently and totally disabled and have ended your employment. How to amend my 2012 tax return Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. How to amend my 2012 tax return A charitable organization (defined in chapter 24) to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. How to amend my 2012 tax return (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. How to amend my 2012 tax return ) The plan existed on January 1, 1984, and You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. How to amend my 2012 tax return Entire cost taxed. How to amend my 2012 tax return   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply: The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. How to amend my 2012 tax return You are a key employee and your employer's plan discriminates in favor of key employees. How to amend my 2012 tax return Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. How to amend my 2012 tax return Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. How to amend my 2012 tax return You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. How to amend my 2012 tax return Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. How to amend my 2012 tax return A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. How to amend my 2012 tax return Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. How to amend my 2012 tax return However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. How to amend my 2012 tax return Exclusion limit. How to amend my 2012 tax return   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. How to amend my 2012 tax return   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. How to amend my 2012 tax return   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. How to amend my 2012 tax return   If the benefits have a value that is more than these limits, the excess must be included in your income. How to amend my 2012 tax return You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. How to amend my 2012 tax return Commuter highway vehicle. How to amend my 2012 tax return   This is a highway vehicle that seats at least six adults (not including the driver). How to amend my 2012 tax return At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). How to amend my 2012 tax return Transit pass. How to amend my 2012 tax return   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. How to amend my 2012 tax return Qualified parking. How to amend my 2012 tax return   This is parking provided to an employee at or near the employer's place of business. How to amend my 2012 tax return It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. How to amend my 2012 tax return It does not include parking at or near the employee's home. How to amend my 2012 tax return Qualified bicycle commuting. How to amend my 2012 tax return   This is reimbursement based on the number of qualified bicycle commuting months for the year. How to amend my 2012 tax return A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. How to amend my 2012 tax return The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. How to amend my 2012 tax return Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. How to amend my 2012 tax return (Your employer can tell you whether your retirement plan is qualified. How to amend my 2012 tax return ) However, the cost of life insurance coverage included in the plan may have to be included. How to amend my 2012 tax return See Group-Term Life Insurance , earlier, under Fringe Benefits. How to amend my 2012 tax return If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. How to amend my 2012 tax return However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. How to amend my 2012 tax return For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. How to amend my 2012 tax return S. How to amend my 2012 tax return Civil Service Retirement Benefits, if you are a federal employee or retiree). How to amend my 2012 tax return Elective deferrals. How to amend my 2012 tax return   If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. How to amend my 2012 tax return The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. How to amend my 2012 tax return An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. How to amend my 2012 tax return However, it is included in wages subject to social security and Medicare taxes. How to amend my 2012 tax return   Elective deferrals include elective contributions to the following retirement plans. How to amend my 2012 tax return Cash or deferred arrangements (section 401(k) plans). How to amend my 2012 tax return The Thrift Savings Plan for federal employees. How to amend my 2012 tax return Salary reduction simplified employee pension plans (SARSEP). How to amend my 2012 tax return Savings incentive match plans for employees (SIMPLE plans). How to amend my 2012 tax return Tax-sheltered annuity plans (403(b) plans). How to amend my 2012 tax return Section 501(c)(18)(D) plans. How to amend my 2012 tax return Section 457 plans. How to amend my 2012 tax return Qualified automatic contribution arrangements. How to amend my 2012 tax return   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. How to amend my 2012 tax return You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. How to amend my 2012 tax return The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. How to amend my 2012 tax return   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. How to amend my 2012 tax return Overall limit on deferrals. How to amend my 2012 tax return   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3) and (5) above. How to amend my 2012 tax return The limit for SIMPLE plans is $12,000. How to amend my 2012 tax return The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. How to amend my 2012 tax return The limit for section 457 plans is the lesser of your includible compensation or $17,500. How to amend my 2012 tax return Amounts deferred under specific plan limits are part of the overall limit on deferrals. How to amend my 2012 tax return Designated Roth contributions. How to amend my 2012 tax return   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. How to amend my 2012 tax return Designated Roth contributions are treated as elective deferrals, except that they are included in income. How to amend my 2012 tax return Excess deferrals. How to amend my 2012 tax return   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. How to amend my 2012 tax return However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. How to amend my 2012 tax return   If you set aside more than the limit, the excess generally must be included in your income for that year, unless you have an excess deferral of a designated Roth contribution. How to amend my 2012 tax return See Publication 525 for a discussion of the tax treatment of excess deferrals. How to amend my 2012 tax return Catch-up contributions. How to amend my 2012 tax return   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. How to amend my 2012 tax return Stock Options If you receive a nonstatutory option to buy or sell stock or other property as payment for your services, you usually will have income when you receive the option, when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option. How to amend my 2012 tax return However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. How to amend my 2012 tax return Your employer can tell you which kind of option you hold. How to amend my 2012 tax return For more information, see Publication 525. How to amend my 2012 tax return Restricted Property In most cases, if you receive property for your services, you must include its fair market value in your income in the year you receive the property. How to amend my 2012 tax return However, if you receive stock or other property that has certain restrictions that affect its value, you do not include the value of the property in your income until it has substantially vested. How to amend my 2012 tax return (You can choose to include the value of the property in your income in the year it is transferred to you. How to amend my 2012 tax return ) For more information, see Restricted Property in Publication 525. How to amend my 2012 tax return Dividends received on restricted stock. How to amend my 2012 tax return   Dividends you receive on restricted stock are treated as compensation and not as dividend income. How to amend my 2012 tax return Your employer should include these payments on your Form W-2. How to amend my 2012 tax return Stock you chose to include in income. How to amend my 2012 tax return   Dividends you receive on restricted stock you chose to include in your income in the year transferred are treated the same as any other dividends. How to amend my 2012 tax return Report them on your return as dividends. How to amend my 2012 tax return For a discussion of dividends, see chapter 8. How to amend my 2012 tax return    For information on how to treat dividends reported on both your Form W-2 and Form 1099-DIV, see Dividends received on restricted stock in Publication 525. How to amend my 2012 tax return Special Rules for Certain Employees This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers. How to amend my 2012 tax return Clergy Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. How to amend my 2012 tax return , in addition to your salary. How to amend my 2012 tax return If the offering is made to the religious institution, it is not taxable to you. How to amend my 2012 tax return If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. How to amend my 2012 tax return However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. How to amend my 2012 tax return See chapter 24. How to amend my 2012 tax return Pension. How to amend my 2012 tax return    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. How to amend my 2012 tax return It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. How to amend my 2012 tax return Housing. How to amend my 2012 tax return    Special rules for housing apply to members of the clergy. How to amend my 2012 tax return Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. How to amend my 2012 tax return However, the exclusion cannot be more than the reasonable pay for your service. How to amend my 2012 tax return If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. How to amend my 2012 tax return The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. How to amend my 2012 tax return However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. How to amend my 2012 tax return For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. How to amend my 2012 tax return Members of Religious Orders If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order. How to amend my 2012 tax return Services performed for the order. How to amend my 2012 tax return   If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order. How to amend my 2012 tax return   If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. How to amend my 2012 tax return Any wages you earn as an agent of an order that you turn over to the order are not included in your income. How to amend my 2012 tax return Example. How to amend my 2012 tax return You are a member of a church order and have taken a vow of poverty. How to amend my 2012 tax return You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. How to amend my 2012 tax return You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. How to amend my 2012 tax return However, you remain under the general direction and control of the order. How to amend my 2012 tax return You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income. How to amend my 2012 tax return Services performed outside the order. How to amend my 2012 tax return   If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: They are the kind of services that are ordinarily the duties of members of the order. How to amend my 2012 tax return They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. How to amend my 2012 tax return If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. How to amend my 2012 tax return Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. How to amend my 2012 tax return Example. How to amend my 2012 tax return Mark Brown is a member of a religious order and has taken a vow of poverty. How to amend my 2012 tax return He renounces all claims to his earnings and turns over his earnings to the order. How to amend my 2012 tax return Mark is a schoolteacher. How to amend my 2012 tax return He was instructed by the superiors of the order to get a job with a private tax-exempt school. How to amend my 2012 tax return Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. How to amend my 2012 tax return Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. How to amend my 2012 tax return The wages Mark earns working for the school are included in his income. How to amend my 2012 tax return Foreign Employer Special rules apply if you work for a foreign employer. How to amend my 2012 tax return U. How to amend my 2012 tax return S. How to amend my 2012 tax return citizen. How to amend my 2012 tax return   If you are a U. How to amend my 2012 tax return S. How to amend my 2012 tax return citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income. How to amend my 2012 tax return Social security and Medicare taxes. How to amend my 2012 tax return   You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. How to amend my 2012 tax return However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. How to amend my 2012 tax return This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. How to amend my 2012 tax return Employees of international organizations or foreign governments. How to amend my 2012 tax return   Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). How to amend my 2012 tax return   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. How to amend my 2012 tax return You are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). How to amend my 2012 tax return Your work is like the work done by employees of the United States in foreign countries. How to amend my 2012 tax return The foreign government gives an equal exemption to employees of the United States in its country. How to amend my 2012 tax return Waiver of alien status. How to amend my 2012 tax return   If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. How to amend my 2012 tax return See Foreign Employer in Publication 525. How to amend my 2012 tax return Employment abroad. How to amend my 2012 tax return   For information on the tax treatment of income earned abroad, see Publication 54. How to amend my 2012 tax return Military Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. How to amend my 2012 tax return Allowances generally are not taxed. How to amend my 2012 tax return For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. How to amend my 2012 tax return Differential wage payments. How to amend my 2012 tax return   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. How to amend my 2012 tax return These wages are subject to income tax withholding and are reported on a Form W-2. How to amend my 2012 tax return See the discussion under Miscellaneous Compensation , earlier. How to amend my 2012 tax return Military retirement pay. How to amend my 2012 tax return   If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. How to amend my 2012 tax return Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan. How to amend my 2012 tax return   For more detailed discussion of survivor annuities, see chapter 10. How to amend my 2012 tax return Disability. How to amend my 2012 tax return   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. How to amend my 2012 tax return Veterans' benefits. How to amend my 2012 tax return   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). How to amend my 2012 tax return The following amounts paid to veterans or their families are not taxable. How to amend my 2012 tax return Education, training, and subsistence allowances. How to amend my 2012 tax return Disability compensation and pension payments for disabilities paid either to veterans or their families. How to amend my 2012 tax return Grants for homes designed for wheelchair living. How to amend my 2012 tax return Grants for motor vehicles for veterans who lost their sight or the use of their limbs. How to amend my 2012 tax return Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. How to amend my 2012 tax return Interest on insurance dividends you leave on deposit with the VA. How to amend my 2012 tax return Benefits under a dependent-care assistance program. How to amend my 2012 tax return The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. How to amend my 2012 tax return Payments made under the compensated work therapy program. How to amend my 2012 tax return Any bonus payment by a state or political subdivision because of service in a combat zone. How to amend my 2012 tax return Volunteers The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions. How to amend my 2012 tax return Peace Corps. How to amend my 2012 tax return   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. How to amend my 2012 tax return Taxable allowances. How to amend my 2012 tax return   The following allowances must be included in your income and reported as wages: Allowances paid to your spouse and minor children while you are a volunteer leader training in the United States. How to amend my 2012 tax return Living allowances designated by the Director of the Peace Corps as basic compensation. How to amend my 2012 tax return These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. How to amend my 2012 tax return Leave allowances. How to amend my 2012 tax return Readjustment allowances or termination payments. How to amend my 2012 tax return These are considered received by you when credited to your account. How to amend my 2012 tax return Example. How to amend my 2012 tax return Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. How to amend my 2012 tax return Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. How to amend my 2012 tax return Volunteers in Service to America (VISTA). How to amend my 2012 tax return   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. How to amend my 2012 tax return National Senior Services Corps programs. How to amend my 2012 tax return   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. How to amend my 2012 tax return Retired Senior Volunteer Program (RSVP). How to amend my 2012 tax return Foster Grandparent Program. How to amend my 2012 tax return Senior Companion Program. How to amend my 2012 tax return Service Corps of Retired Executives (SCORE). How to amend my 2012 tax return   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. How to amend my 2012 tax return Volunteer tax counseling. How to amend my 2012 tax return   Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE). How to amend my 2012 tax return   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. How to amend my 2012 tax return See chapter 24. How to amend my 2012 tax return Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. How to amend my 2012 tax return In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. How to amend my 2012 tax return If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. How to amend my 2012 tax return However, certain payments may not be taxable to you. How to amend my 2012 tax return Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. How to amend my 2012 tax return In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. How to amend my 2012 tax return Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. How to amend my 2012 tax return Cost paid by you. How to amend my 2012 tax return   If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. How to amend my 2012 tax return If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. How to amend my 2012 tax return See Reimbursement in a later year in chapter 21. How to amend my 2012 tax return Cafeteria plans. How to amend my 2012 tax return   In most cases, if you are covered by an accident or health insurance plan through a cafeteria plan, and the amount of the insurance premiums was not included in your income, you are not considered to have paid the premiums and you must include any benefits you receive in your income. How to amend my 2012 tax return If the amount of the premiums was included in your income, you are considered to have paid the premiums, and any benefits you receive are not taxable. How to amend my 2012 tax return Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. How to amend my 2012 tax return You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. How to amend my 2012 tax return Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. How to amend my 2012 tax return You may be entitled to a tax credit if you were permanently and totally disabled when you retired. How to amend my 2012 tax return For information on this credit and the definition of permanent and total disability, see chapter 33. How to amend my 2012 tax return Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. How to amend my 2012 tax return Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. How to amend my 2012 tax return The rules for reporting pensions are explained in How To Report in chapter 10. How to amend my 2012 tax return For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. How to amend my 2012 tax return Retirement and profit-sharing plans. How to amend my 2012 tax return   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. How to amend my 2012 tax return The payments must be reported as a pension or annuity. How to amend my 2012 tax return For more information on pensions, see chapter 10. How to amend my 2012 tax return Accrued leave payment. How to amend my 2012 tax return   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. How to amend my 2012 tax return The payment is not a disability payment. How to amend my 2012 tax return Include it in your income in the tax year you receive it. How to amend my 2012 tax return Military and Government Disability Pensions Certain military and government disability pensions are not taxable. How to amend my 2012 tax return Service-connected disability. How to amend my 2012 tax return   You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services. How to amend my 2012 tax return The armed forces of any country. How to amend my 2012 tax return The National Oceanic and Atmospheric Administration. How to amend my 2012 tax return The Public Health Service. How to amend my 2012 tax return The Foreign Service. How to amend my 2012 tax return Conditions for exclusion. How to amend my 2012 tax return   Do not include the disability payments in your income if any of the following conditions apply. How to amend my 2012 tax return You were entitled to receive a disability payment before September 25, 1975. How to amend my 2012 tax return You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975. How to amend my 2012 tax return You receive the disability payments for a combat-related injury. How to amend my 2012 tax return This is a personal injury or sickness that Results directly from armed conflict, Takes place while you are engaged in extra-hazardous service, Takes place under conditions simulating war, including training exercises such as maneuvers, or Is caused by an instrumentality of war. How to amend my 2012 tax return You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. How to amend my 2012 tax return Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. How to amend my 2012 tax return Pension based on years of service. How to amend my 2012 tax return   If you receive a disability pension based on years of service, in most cases you must include it in your income. How to amend my 2012 tax return However, if the pension qualifies for the exclusion for a service-connected disability (discussed earlier), do not include in income the part of your pension that you would have received if the pension had been based on a percentage of disability. How to amend my 2012 tax return You must include the rest of your pension in your income. How to amend my 2012 tax return Retroactive VA determination. How to amend my 2012 tax return   If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. How to amend my 2012 tax return You can claim a refund of any tax paid on the excludable amount (subject to the statute of limitations) by filing an amended return on Form 1040X for each previous year during the retroactive period. How to amend my 2012 tax return You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. How to amend my 2012 tax return The letter must show the amount withheld and the effective date of the benefit. How to amend my 2012 tax return   If you receive a lump-sum disability severance payment and are later awarded VA disability benefits, exclude 100% of the severance benefit from your income. How to amend my 2012 tax return However, you must include in your income any lump-sum readjustment or other nondisability severance payment you received on release from active duty, even if you are later given a retroactive disability rating by the VA. How to amend my 2012 tax return Special statute of limitations. How to amend my 2012 tax return   In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. How to amend my 2012 tax return However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended by a 1-year period beginning on the date of the determination. How to amend my 2012 tax return This 1-year extended period applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination. How to amend my 2012 tax return Example. How to amend my 2012 tax return You retired in 2007 and receive a pension based on your years of service. How to amend my 2012 tax return On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. How to amend my 2012 tax return Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. How to amend my 2012 tax return However, under the special limitation period, you can also file a claim for 2009 as long as you file the claim by August 1, 2014. How to amend my 2012 tax return You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. How to amend my 2012 tax return Terrorist attack or military action. How to amend my 2012 tax return   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. How to amend my 2012 tax return Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. How to amend my 2012 tax return Amounts you receive from them (other than policyholder dividends or premium refunds) in most cases are excludable from income as amounts received for personal injury or sickness. How to amend my 2012 tax return To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return. How to amend my 2012 tax return A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. How to amend my 2012 tax return The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits, and In most cases, not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. How to amend my 2012 tax return Qualified long-term care services. How to amend my 2012 tax return   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services, and Required by a chronically ill individual and provided pursuant to a plan of care as prescribed by a licensed health care practitioner. How to amend my 2012 tax return Chronically ill individual. How to amend my 2012 tax return   A chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as one of the following: An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. How to amend my 2012 tax return Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. How to amend my 2012 tax return An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. How to amend my 2012 tax return Limit on exclusion. How to amend my 2012 tax return   You generally can exclude from gross income up to $320 a day for 2013. How to amend my 2012 tax return See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. How to amend my 2012 tax return Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. How to amend my 2012 tax return The exemption also applies to your survivors. How to amend my 2012 tax return The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. How to amend my 2012 tax return If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. How to amend my 2012 tax return For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. How to amend my 2012 tax return Return to work. How to amend my 2012 tax return    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. How to amend my 2012 tax return Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. How to amend my 2012 tax return Railroad sick pay. How to amend my 2012 tax return    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. How to amend my 2012 tax return However, do not include them in your income if they are for an on-the-job injury. How to amend my 2012 tax return   If you received income because of a disability, see Disability Pensions , earlier. How to amend my 2012 tax return Federal Employees' Compensation Act (FECA). How to amend my 2012 tax return   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. How to amend my 2012 tax return However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. How to amend my 2012 tax return Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. How to amend my 2012 tax return Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. How to amend my 2012 tax return    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. How to amend my 2012 tax return For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. How to amend my 2012 tax return    You can deduct the amount you spend to buy back sick leave for an earlier year to be eligible for nontaxable FECA benefits for that period. How to amend my 2012 tax return It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). How to amend my 2012 tax return If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. How to amend my 2012 tax return Do not deduct it separately. How to amend my 2012 tax return Other compensation. How to amend my 2012 tax return   Many other amounts you receive as compensation for sickness or injury are not taxable. How to amend my 2012 tax return These include the following amounts. How to amend my 2012 tax return Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. How to amend my 2012 tax return Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. How to amend my 2012 tax return Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. How to amend my 2012 tax return Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. How to amend my 2012 tax return This compensation must be based only on the injury and not on the period of your absence from work. How to amend my 2012 tax return These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. How to amend my 2012 tax return Reimbursement for medical care. How to amend my 2012 tax return    A reimbursement for medical care is generally not taxable. How to amend my 2012 tax return However, it may reduce your medical expense deduction. How to amend my 2012 tax return For more information, see chapter 21. How to amend my 2012 tax return Prev  Up  Next   Home   More Online Publications