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How To File Amended 2012 Tax Return

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How To File Amended 2012 Tax Return

How to file amended 2012 tax return 8. How to file amended 2012 tax return   Paying Tax Through Withholding or Estimated Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Notification of Alien Status Withholding From CompensationWithholding on Wages Withholding on Pensions Withholding on Tip Income Independent Contractors Withholding From Other IncomeTax Withheld on Partnership Income Withholding on Scholarships and Fellowship Grants Income Entitled to Tax Treaty BenefitsStudents, teachers, and researchers. How to file amended 2012 tax return Tax Withheld on Real Property Sales Social Security and Medicare TaxesStudents and Exchange Visitors Agricultural Workers Self-Employment Tax International Social Security Agreements Estimated Tax Form 1040-ES (NR)Fiscal year. How to file amended 2012 tax return Introduction This chapter discusses how to pay your U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax as you earn or receive income during the year. How to file amended 2012 tax return In general, the federal income tax is a pay as you go tax. How to file amended 2012 tax return There are two ways to pay as you go. How to file amended 2012 tax return Withholding. How to file amended 2012 tax return If you are an employee, your employer probably withholds income tax from your pay. How to file amended 2012 tax return Tax may also be withheld from certain other income—including pensions, bonuses, commissions, and gambling winnings. How to file amended 2012 tax return In each case, the amount withheld is paid to the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Treasury in your name. How to file amended 2012 tax return Estimated tax. How to file amended 2012 tax return If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. How to file amended 2012 tax return People who are in business for themselves generally will have to pay their tax this way. How to file amended 2012 tax return You may have to pay estimated tax if you receive income such as dividends, interest, rent, and royalties. How to file amended 2012 tax return Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. How to file amended 2012 tax return Topics - This chapter discusses: How to notify your employer of your alien status, Income subject to withholding of income tax, Exemptions from withholding, Social security and Medicare taxes, and Estimated tax rules. How to file amended 2012 tax return Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 901 U. How to file amended 2012 tax return S. How to file amended 2012 tax return Tax Treaties Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) W-8ECI Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States W-9 Request for Taxpayer Identification Number and Certification 1040-ES (NR) U. How to file amended 2012 tax return S. How to file amended 2012 tax return Estimated Tax for Nonresident Alien Individuals 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual 8288-B Application for Withholding Certificate for Dispositions by Foreign Persons of U. How to file amended 2012 tax return S. How to file amended 2012 tax return Real Property Interests 13930 Application for Central Withholding Agreement See chapter 12 for information about getting these publications and forms. How to file amended 2012 tax return Notification of Alien Status You must let your employer know whether you are a resident or a nonresident alien so your employer can withhold the correct amount of tax from your wages. How to file amended 2012 tax return If you are a resident alien under the rules discussed in chapter 1, you must file Form W-9 or a similar statement with your employer. How to file amended 2012 tax return If you are a nonresident alien under those rules, you must furnish to your employer Form 8233 or Form W-8BEN, establishing that you are a foreign person, or Form W-4, establishing that your compensation is subject to graduated withholding at the same rates as resident aliens or U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return If you are a resident alien and you receive income other than wages (such as dividends and royalties) from sources within the United States, file Form W-9 or similar statement with the withholding agent (generally, the payer of the income) so the agent will not withhold tax on the income at the 30% (or lower treaty) rate. How to file amended 2012 tax return If you receive this type of income as a nonresident alien, file Form W-8BEN with the withholding agent so that the agent will withhold tax at the 30% (or lower treaty) rate. How to file amended 2012 tax return However, if the income is effectively connected with a U. How to file amended 2012 tax return S. How to file amended 2012 tax return trade or business, file Form W-8ECI instead. How to file amended 2012 tax return Withholding From Compensation The following discussion generally applies only to nonresident aliens. How to file amended 2012 tax return Tax is withheld from resident aliens in the same manner as U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return Wages and other compensation paid to a nonresident alien for services performed as an employee are usually subject to graduated withholding at the same rates as resident aliens and U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return Therefore, your compensation, unless it is specifically excluded from the term “wages” by law, or is exempt from tax by treaty, is subject to graduated withholding. How to file amended 2012 tax return Withholding on Wages If you are an employee and you receive wages subject to graduated withholding, you will be required to fill out a Form W-4. How to file amended 2012 tax return Also fill out Form W-4 for a scholarship or fellowship grant to the extent it represents payment for past, present, or future services and for which you are not claiming a tax treaty withholding exemption on Form 8233 (discussed later under Income Entitled to Tax Treaty Benefits). How to file amended 2012 tax return These are services you are required to perform as an employee and as a condition of receiving the scholarship or fellowship (or tuition reduction). How to file amended 2012 tax return Nonresident aliens should fill out Form W-4 using the following instructions instead of the instructions on the Form W-4. How to file amended 2012 tax return This is because of the restrictions on a nonresident alien's filing status, the limited number of personal exemptions a nonresident alien is allowed, and because a nonresident alien cannot claim the standard deduction. How to file amended 2012 tax return Enter your social security number (SSN) on line 2. How to file amended 2012 tax return Do not enter an individual taxpayer identification number (ITIN). How to file amended 2012 tax return Check only “Single” marital status on line 3 (regardless of your actual marital status). How to file amended 2012 tax return Claim only one allowance on line 5, unless you are a resident of Canada, Mexico, or South Korea, or a U. How to file amended 2012 tax return S. How to file amended 2012 tax return national. How to file amended 2012 tax return Write “Nonresident Alien” or “NRA” on the dotted line on line 6. How to file amended 2012 tax return You can request additional withholding on line 6 at your option. How to file amended 2012 tax return Do not claim “Exempt” withholding status on line 7. How to file amended 2012 tax return A U. How to file amended 2012 tax return S. How to file amended 2012 tax return national is an individual who, although not a U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizen, owes his or her allegiance to the United States. How to file amended 2012 tax return U. How to file amended 2012 tax return S. How to file amended 2012 tax return nationals include American Samoans, and Northern Mariana Islanders who chose to become U. How to file amended 2012 tax return S. How to file amended 2012 tax return nationals instead of U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return See Withholding on Scholarships and Fellowship Grants later, for how to fill out Form W-4 if you receive a U. How to file amended 2012 tax return S. How to file amended 2012 tax return source scholarship or fellowship grant that is not a payment for services. How to file amended 2012 tax return Students and business apprentices from India. How to file amended 2012 tax return   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you may claim an additional withholding allowance for the standard deduction. How to file amended 2012 tax return You can claim an additional withholding allowance for your spouse only if your spouse will have no gross income for 2013 and cannot be claimed as a dependent on another U. How to file amended 2012 tax return S. How to file amended 2012 tax return taxpayer's 2013 return. How to file amended 2012 tax return You may also claim an additional withholding allowance for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return Household employees. How to file amended 2012 tax return   If you work as a household employee, your employer does not have to withhold income tax. How to file amended 2012 tax return However, you may agree to voluntary income tax withholding by filing a Form W-4 with your employer. How to file amended 2012 tax return The agreement goes into effect when your employer accepts the agreement by beginning the withholding. How to file amended 2012 tax return You or your employer may end the agreement by letting the other know in writing. How to file amended 2012 tax return Agricultural workers. How to file amended 2012 tax return   If you are an agricultural worker on an H-2A visa, your employer does not have to withhold income tax. How to file amended 2012 tax return However, your employer will withhold income tax only if you and your employer agree to withhold. How to file amended 2012 tax return In that case, you must provide your employer with a properly completed Form W-4. How to file amended 2012 tax return You can find more information about not having tax withheld at www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. How to file amended 2012 tax return Wages Exempt From Withholding Wages that are exempt from U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax under an income tax treaty are generally exempt from withholding. How to file amended 2012 tax return For information on how to claim this exemption from withholding, see Income Entitled to Tax Treaty Benefits , later. How to file amended 2012 tax return Wages paid to aliens who are residents of American Samoa, Canada, Mexico, Puerto Rico, or the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Virgin Islands may be exempt from withholding. How to file amended 2012 tax return The following paragraphs explain these exemptions. How to file amended 2012 tax return Residents of Canada or Mexico engaged in transportation-related employment. How to file amended 2012 tax return   Certain residents of Canada or Mexico who enter or leave the United States at frequent intervals are not subject to withholding on their wages. How to file amended 2012 tax return These persons either: Perform duties in transportation service between the United States and Canada or Mexico, or Perform duties connected to the construction, maintenance, or operation of a waterway, viaduct, dam, or bridge crossed by, or crossing, the boundary between the United States and Canada or the boundary between the United States and Mexico. How to file amended 2012 tax return    This employment is subject to withholding of social security and Medicare taxes unless the services are performed for a railroad. How to file amended 2012 tax return   To qualify for the exemption from withholding during a tax year, a Canadian or Mexican resident must give the employer a statement in duplicate with name, address, and identification number, certifying that the resident: Is not a U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizen or resident, Is a resident of Canada or Mexico, whichever applies, and Expects to perform duties previously described during the tax year in question. How to file amended 2012 tax return   The statement can be in any form, but it must be dated and signed by the employee and must include a written declaration that it is made under the penalties of perjury. How to file amended 2012 tax return Residents of American Samoa and Puerto Rico. How to file amended 2012 tax return   If you are a nonresident alien employee who is a resident of American Samoa or Puerto Rico, wages for services performed in American Samoa or Puerto Rico are generally not subject to withholding unless you are an employee of the United States or any of its agencies in American Samoa or Puerto Rico. How to file amended 2012 tax return Residents of the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Virgin Islands. How to file amended 2012 tax return   Nonresident aliens who are bona fide residents of the U. How to file amended 2012 tax return S Virgin Islands are not subject to withholding of U. How to file amended 2012 tax return S. How to file amended 2012 tax return tax on income earned while temporarily employed in the United States. How to file amended 2012 tax return This is because those persons pay their income tax to the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Virgin Islands. How to file amended 2012 tax return To avoid having tax withheld on income earned in the United States, bona fide residents of the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Virgin Islands should write a letter, in duplicate, to their employers, stating that they are bona fide residents of the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Virgin Islands and expect to pay tax on all income to the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Virgin Islands. How to file amended 2012 tax return Withholding on Pensions If you receive a pension as a result of personal services performed in the United States, the pension income is subject to the 30% (or lower treaty) rate of withholding. How to file amended 2012 tax return You may, however, have tax withheld at graduated rates on the portion of the pension that arises from the performance of services in the United States after December 31, 1986. How to file amended 2012 tax return You must fill out Form W-8BEN and give it to the withholding agent or payer before the income is paid or credited to you. How to file amended 2012 tax return Withholding on Tip Income Tips you receive during the year for services performed in the United States are subject to U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax. How to file amended 2012 tax return Include them in taxable income. How to file amended 2012 tax return In addition, tips received while working for one employer, amounting to $20 or more in a month, are subject to graduated withholding. How to file amended 2012 tax return Independent Contractors If there is no employee-employer relationship between you and the person for whom you perform services, your compensation is subject to the 30% (or lower treaty) rate of withholding. How to file amended 2012 tax return However, if you are engaged in a trade or business in the United States during the tax year, your compensation for personal services as an independent contractor (independent personal services) may be entirely or partly exempt from withholding if you reach an agreement with the Internal Revenue Service on the amount of withholding required. How to file amended 2012 tax return An agreement that you reach with the IRS regarding withholding from your compensation for independent personal services is effective for payments covered by the agreement after it is agreed to by all parties. How to file amended 2012 tax return You must agree to timely file an income tax return for the current tax year. How to file amended 2012 tax return Central withholding agreements. How to file amended 2012 tax return   If you are a nonresident alien entertainer or athlete performing or participating in athletic events in the United States, you may be able to enter into a withholding agreement with the IRS for reduced withholding provided certain requirements are met. How to file amended 2012 tax return Under no circumstances will such a withholding agreement reduce taxes withheld to less than the anticipated amount of income tax liability. How to file amended 2012 tax return   File Form 13930 and the required attachments with the IRS to request a central withholding agreement. How to file amended 2012 tax return Either you or your authorized representative can file the form. How to file amended 2012 tax return It should be sent to the IRS at least 45 days before the tour begins or the event occurs. How to file amended 2012 tax return Exceptions will be considered on a case by case basis. How to file amended 2012 tax return   For more information on the CWA program, go to www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/Individuals/International-Taxpayers/Central-Withholding-Agreements. How to file amended 2012 tax return Final payment exemption. How to file amended 2012 tax return   Your final payment of compensation during the tax year for independent personal services may be entirely or partly exempt from withholding. How to file amended 2012 tax return This exemption is available only once during your tax year and applies to a maximum of $5,000 of compensation. How to file amended 2012 tax return To obtain this exemption, you or your agent must give the following statements and information to the Commissioner or his delegate. How to file amended 2012 tax return A statement by each withholding agent from whom you have received gross income effectively connected with a trade or business in the United States during the tax year, showing the amount of income paid and the tax withheld. How to file amended 2012 tax return Each statement must be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. How to file amended 2012 tax return A statement by the withholding agent from whom you expect to receive the final payment of compensation, showing the amount of the payment and the amount of tax that would be withheld if a final payment exemption were not granted. How to file amended 2012 tax return This statement must also be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. How to file amended 2012 tax return A statement by you that you do not intend to receive any other income effectively connected with a trade or business in the United States during the current tax year. How to file amended 2012 tax return The amount of tax that has been withheld or paid under any other provision of the Internal Revenue Code or regulations for any income effectively connected with your trade or business in the United States during the current tax year. How to file amended 2012 tax return The amount of your outstanding tax liabilities, if any, including interest and penalties, from the current tax year or prior tax periods. How to file amended 2012 tax return Any provision of an income tax treaty under which a partial or complete exemption from withholding may be claimed, the country of your residence, and a statement of sufficient facts to justify an exemption under the treaty. How to file amended 2012 tax return A statement signed by you, and verified by a declaration that it is made under penalties of perjury, that all the information given is true and that to your knowledge no relevant information has been omitted. How to file amended 2012 tax return   If satisfied with the information, the IRS will determine the amount of your tentative income tax for the tax year on gross income effectively connected with your trade or business in the United States. How to file amended 2012 tax return Ordinary and necessary business expenses can be taken into account if proven to the satisfaction of the Commissioner or his delegate. How to file amended 2012 tax return   The Commissioner or his delegate will send you a letter, directed to the withholding agent, showing the amount of the final payment of compensation that is exempt from withholding and the amount that can be paid to you because of the exemption. How to file amended 2012 tax return You must give two copies of the letter to the withholding agent and must also attach a copy of the letter to your income tax return for the tax year for which the exemption is effective. How to file amended 2012 tax return Allowance for Personal Exemption Withholding on payments for independent personal services is generally based on the amount of your compensation payment minus the value of one exemption ($3,950 for 2014). How to file amended 2012 tax return To determine the income for independent personal services performed in the United States to which the 30% (or lower treaty) rate will apply, you are allowed one personal exemption if you are not a U. How to file amended 2012 tax return S. How to file amended 2012 tax return national and are not a resident of Canada, Mexico, or South Korea. How to file amended 2012 tax return For purposes of 30% withholding, the exemption is prorated at $10. How to file amended 2012 tax return 82 a day in 2014 for the period that labor or personal services are performed in the United States. How to file amended 2012 tax return To claim an exemption from withholding on the personal exemption amount, fill out the applicable parts of Form 8233 and give it to the withholding agent. How to file amended 2012 tax return Example. How to file amended 2012 tax return Eric Johannsen, who is a resident of Country X worked under a contract with a U. How to file amended 2012 tax return S. How to file amended 2012 tax return firm (not as an employee) in the United States for 100 days during 2014 before returning to his country. How to file amended 2012 tax return He earned $6,000 for the services performed (not considered wages) in the United States. How to file amended 2012 tax return Eric is married and has three dependent children. How to file amended 2012 tax return His wife is not employed and has no income subject to U. How to file amended 2012 tax return S. How to file amended 2012 tax return tax. How to file amended 2012 tax return The amount of the personal exemption to be allowed against the income for his personal services performed within the United States in 2014 is $1,082 (100 days × $10. How to file amended 2012 tax return 82), and withholding at 30% is applied against the balance. How to file amended 2012 tax return Thus, $1,475. How to file amended 2012 tax return 40 in tax is withheld from Eric's earnings (30% of $4,918 ($6,000 − $1,082). How to file amended 2012 tax return U. How to file amended 2012 tax return S. How to file amended 2012 tax return nationals or residents of Canada, Mexico, or South Korea. How to file amended 2012 tax return   If you are a nonresident alien who is a resident of Canada, Mexico, or South Korea, or who is a national of the United States, you are subject to the same 30% withholding on your compensation for independent personal services performed in the United States. How to file amended 2012 tax return However, if you are a U. How to file amended 2012 tax return S. How to file amended 2012 tax return national or a resident of Canada or Mexico, you are allowed the same personal exemptions as U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return For the 30% (or lower treaty) rate withholding, you can take $10. How to file amended 2012 tax return 82 per day for each allowable exemption in 2014. How to file amended 2012 tax return If you are a resident of South Korea, you are allowed personal exemptions for yourself and for your spouse and children who live with you in the United States at any time during the tax year. How to file amended 2012 tax return However, the additional exemptions for your spouse and children must be further prorated as explained in chapter 5 under Exemptions . How to file amended 2012 tax return Students and business apprentices from India. How to file amended 2012 tax return   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you are allowed an exemption for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. How to file amended 2012 tax return S. How to file amended 2012 tax return taxpayer's 2014 return. How to file amended 2012 tax return You are also allowed an exemption for each dependent not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return For the 30% (or lower treaty rate) withholding on compensation for independent personal services performed in the United States, you are allowed $10. How to file amended 2012 tax return 82 per day for each allowable exemption in 2014. How to file amended 2012 tax return Refund of Taxes Withheld in Error Multi-level marketing. How to file amended 2012 tax return   If you are a distributor for a multi-level marketing company who had taxes withheld in error, file a U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax return (Form 1040NR, Form 1040NR-EZ, or Form 1120-F) or, if a tax return has already been filed, a claim for refund (Form 1040X or amended Form 1120-F) to recover the amount withheld in error. How to file amended 2012 tax return You must also attach to the U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax return or claim for refund supporting information that includes, but is not limited to, the following items. How to file amended 2012 tax return A copy of your Form W-2, Form 1042-S, or Form 1099 to prove the amount of taxes withheld. How to file amended 2012 tax return A statement explaining why income reported on your Form W-2, Form 1042-S, or Form 1099 is not subject to U. How to file amended 2012 tax return S. How to file amended 2012 tax return taxation. How to file amended 2012 tax return A statement listing all the dates you entered and left the United States during the taxable year. How to file amended 2012 tax return If the compensation is multi-year compensation, the statement must list all the dates you entered and left the United States during each of the taxable years to which the compensation is attributable. How to file amended 2012 tax return A copy of any documents or records that show the number of days you actually were present in the United States during the years listed. How to file amended 2012 tax return A statement providing: (a) the number of days (or unit of time less than a day, if appropriate) that personal services were performed in the United States in connection with recruiting, training, and supporting your lower-tier distributors; and (b) the total number of days (or unit of time less than a day, if appropriate) that personal services were performed globally in connection with recruiting, training, and supporting your lower-tier distributors. How to file amended 2012 tax return Any further relevant document or record supporting your claim that the taxes were withheld in error. How to file amended 2012 tax return Withholding From Other Income Other income subject to 30% withholding generally includes fixed or determinable income such as interest (other than portfolio interest), dividends, pensions and annuities, and gains from certain sales and exchanges, discussed in chapter 4. How to file amended 2012 tax return It also includes 85% of social security benefits paid to nonresident aliens. How to file amended 2012 tax return Refund of taxes withheld in error on social security benefits paid to resident aliens. How to file amended 2012 tax return   Social security benefits paid to a lawful permanent resident (green card holder) are not subject to 30% withholding. How to file amended 2012 tax return For U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax purposes, green card holders continue to be resident aliens until their lawful permanent resident status under immigration laws is either taken away or is administratively or judicially determined to have been abandoned. How to file amended 2012 tax return See Green Card Test in chapter 1. How to file amended 2012 tax return If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. How to file amended 2012 tax return SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. How to file amended 2012 tax return If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. How to file amended 2012 tax return You must also attach the following to your Form 1040 or 1040A. How to file amended 2012 tax return A copy of Form SSA-1042S, Social Security Benefit Statement. How to file amended 2012 tax return A copy of the “green card. How to file amended 2012 tax return ” A signed declaration that includes the following statements: The SSA should not have withheld income tax from my social security benefits because I am a U. How to file amended 2012 tax return S. How to file amended 2012 tax return lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. How to file amended 2012 tax return I am filing a U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax return for the tax year as a resident alien reporting all of my worldwide income. How to file amended 2012 tax return I have not claimed benefits for the tax year under an income tax treaty as the resident of a country other than the United States. How to file amended 2012 tax return Other income not subject to withholding of 30% (or lower treaty) rate. How to file amended 2012 tax return   The following income is not subject to withholding at the 30% (or lower treaty) rate if you file Form W-8ECI with the payer of the income. How to file amended 2012 tax return Income (other than compensation) that is effectively connected with your U. How to file amended 2012 tax return S. How to file amended 2012 tax return trade or business. How to file amended 2012 tax return Income from real property that you choose to treat as effectively connected with a U. How to file amended 2012 tax return S. How to file amended 2012 tax return trade or business. How to file amended 2012 tax return See Income From Real Property in chapter 4 for details about this choice. How to file amended 2012 tax return   Special rules for withholding on partnership income, scholarships, and fellowships are explained next. How to file amended 2012 tax return Tax Withheld on Partnership Income If you are a foreign partner in a U. How to file amended 2012 tax return S. How to file amended 2012 tax return or foreign partnership, the partnership will withhold tax on your share of effectively connected taxable income (ECTI) from the partnership. How to file amended 2012 tax return You may be able to reduce your ECTI subject to withholding by certain partner-level deductions. How to file amended 2012 tax return Generally, you must use Form 8804-C for this purpose. How to file amended 2012 tax return See the Instructions for Form 8804-C for more information. How to file amended 2012 tax return The withholding rate on your share of effectively connected income is generally the highest rate of tax specified under section 1 of the Code (39. How to file amended 2012 tax return 6% for 2014). How to file amended 2012 tax return However, the partnership may withhold at the highest rate that applies to a particular type of income allocable to you if you gave the partnership the appropriate documentation. How to file amended 2012 tax return Long-term capital gain is an example of a particular type of income to which the highest tax rate applies. How to file amended 2012 tax return Claim the tax withheld as a credit on your 2014 Form 1040NR. How to file amended 2012 tax return The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. How to file amended 2012 tax return A partnership that is publicly traded will withhold tax on your actual distributions of effectively connected income. How to file amended 2012 tax return In this case the partnership will give you a statement on Form 1042-S, Foreign Person's U. How to file amended 2012 tax return S. How to file amended 2012 tax return Source Income Subject to Withholding. How to file amended 2012 tax return Withholding on Scholarships and Fellowship Grants There is no withholding on a qualified scholarship received by a candidate for a degree. How to file amended 2012 tax return See chapter 3. How to file amended 2012 tax return If you are a nonresident alien student or grantee with an “F,” “J,” “M,” or “Q” visa and you receive a U. How to file amended 2012 tax return S. How to file amended 2012 tax return source grant or scholarship that is not fully exempt, the withholding agent (usually the payer of the scholarship) withholds tax at 14% (or lower treaty rate) of the taxable part of the grant or scholarship that is not a payment for services. How to file amended 2012 tax return However, if you are not a candidate for a degree and the grant does not meet certain requirements, tax will be withheld at the 30% (or lower treaty) rate. How to file amended 2012 tax return Any part of a scholarship or fellowship grant that is a payment for services is subject to graduated withholding as discussed earlier under Withholding on Wages. How to file amended 2012 tax return Alternate Withholding Procedure Your withholding agent may choose to use an alternate procedure by asking you to fill out Form W-4 and the Personal Allowances Worksheet (attached to Form W-4). How to file amended 2012 tax return Use the following instructions instead of the Form W-4 instructions to complete the worksheet. How to file amended 2012 tax return Line A. How to file amended 2012 tax return   Enter the total of the following amounts on line A. How to file amended 2012 tax return Personal exemption. How to file amended 2012 tax return   Include the prorated part of your allowable personal exemption. How to file amended 2012 tax return Figure the amount by multiplying the number of days you expect to be in the United States in 2014 by the daily exemption amount ($10. How to file amended 2012 tax return 82). How to file amended 2012 tax return Expenses. How to file amended 2012 tax return   Include expenses that will be deductible on your return. How to file amended 2012 tax return These include away-from-home expenses (meals, lodging, and transportation), certain state and local income taxes, charitable contributions, and casualty losses, discussed earlier under Itemized Deductions in chapter 5. How to file amended 2012 tax return They also include business expenses, moving expenses, and the IRA deduction discussed under Deductions in chapter 5. How to file amended 2012 tax return Nontaxable grant or scholarship. How to file amended 2012 tax return   Include the part of your grant or scholarship that is not taxable under U. How to file amended 2012 tax return S. How to file amended 2012 tax return law or under a tax treaty. How to file amended 2012 tax return Line B. How to file amended 2012 tax return   Enter -0- unless the following paragraph applies to you. How to file amended 2012 tax return   If you are a student who qualifies under Article 21(2) of the United States-India Income Tax Treaty, and you are not claiming deductions for away-from-home expenses or other itemized deductions (discussed earlier), enter the standard deduction on line B. How to file amended 2012 tax return The standard deduction amount for 2013 is $6,100. How to file amended 2012 tax return Lines C and D. How to file amended 2012 tax return   Enter -0- on both lines unless the following paragraphs apply to you. How to file amended 2012 tax return   If you are a resident of Canada, Mexico, South Korea, or a U. How to file amended 2012 tax return S. How to file amended 2012 tax return national, an additional daily exemption amount may be allowed for your spouse and each of your dependents. How to file amended 2012 tax return   If you are a resident of India who is eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you can claim an additional daily exemption amount for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. How to file amended 2012 tax return S. How to file amended 2012 tax return taxpayer's 2014 return. How to file amended 2012 tax return You can also claim an additional amount for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return   Enter any additional amount for your spouse on line C. How to file amended 2012 tax return Enter any additional amount for your dependents on line D. How to file amended 2012 tax return Lines E, F, and G. How to file amended 2012 tax return   No entries should be made on lines E, F, and G. How to file amended 2012 tax return Line H. How to file amended 2012 tax return   Add the amounts on lines A through D and enter the total on line H. How to file amended 2012 tax return Form W-4. How to file amended 2012 tax return   Complete lines 1 through 4 of Form W-4. How to file amended 2012 tax return Sign and date the form and give it with the Personal Allowances Worksheet to your withholding agent. How to file amended 2012 tax return   If you file a Form W-4 to reduce or eliminate the withholding on your scholarship or grant, you must file an annual U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax return to be allowed the exemptions and deductions you claimed on that form. How to file amended 2012 tax return If you are in the United States during more than one tax year, you must attach a statement to your yearly Form W-4 indicating that you have filed a U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax return for the previous year. How to file amended 2012 tax return If you have not been in the United States long enough to be required to file a return, you must attach a statement to your Form W-4 saying you will file a U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax return when required. How to file amended 2012 tax return After the withholding agent has accepted your Form W-4, tax will be withheld on your scholarship or grant at the graduated rates that apply to wages. How to file amended 2012 tax return The gross amount of the income is reduced by the amount on line H of the worksheet and the withholding tax is figured on the remainder. How to file amended 2012 tax return You will receive a Form 1042-S from the withholding agent (usually the payer of your grant) showing the gross amount of your taxable scholarship or fellowship grant less the withholding allowance amount, the tax rate, and the amount of tax withheld. How to file amended 2012 tax return Use this form to prepare your annual U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax return. How to file amended 2012 tax return Income Entitled to Tax Treaty Benefits If a tax treaty between the United States and your country provides an exemption from, or a reduced rate of, tax for certain items of income, you should notify the payor of the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption. How to file amended 2012 tax return Generally, you do this by filing either Form W-8BEN or Form 8233 with the withholding agent. How to file amended 2012 tax return File Form W-8BEN for income that is not personal services income. How to file amended 2012 tax return File Form 8233 for personal services income as discussed next. How to file amended 2012 tax return Employees and independent contractors. How to file amended 2012 tax return   If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal service income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received. How to file amended 2012 tax return   Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. How to file amended 2012 tax return This is because the factors on which the treaty exemption is based may not be determinable until after the close of the tax year. How to file amended 2012 tax return In this case, you must file Form 1040NR (or Form 1040NR-EZ if you qualify) to recover any overwithheld tax and to provide the IRS with proof that you are entitled to the treaty exemption. How to file amended 2012 tax return Students, teachers, and researchers. How to file amended 2012 tax return   Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of this publication to the Form 8233 and give it to the withholding agent. How to file amended 2012 tax return For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties. How to file amended 2012 tax return   If you received a scholarship or fellowship and personal services income from the same withholding agent, use Form 8233 to claim an exemption from withholding based on a tax treaty for both types of income. How to file amended 2012 tax return Special events and promotions. How to file amended 2012 tax return   Withholding at the full 30% rate is required for payments made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from rock music festivals, boxing promotions, and other entertainment or sporting events, unless the withholding agent has been specifically advised otherwise by letter from the IRS. How to file amended 2012 tax return Form 13930 is used to request a reduction in withholding. How to file amended 2012 tax return Withholding may be required even if the income may be exempt from taxation by provisions of a tax treaty. How to file amended 2012 tax return One reason for this is that the partial or complete exemption is usually based on factors that cannot be determined until after the close of the tax year. How to file amended 2012 tax return You will be required to pay U. How to file amended 2012 tax return S. How to file amended 2012 tax return tax, at the time of your departure from the United States, on any income for which you incorrectly claimed a treaty exemption. How to file amended 2012 tax return For more details on treaty provisions that apply to compensation, see Publication 901. How to file amended 2012 tax return Tax Withheld on Real Property Sales If you are a nonresident alien and you dispose of a U. How to file amended 2012 tax return S. How to file amended 2012 tax return real property interest, the transferee (buyer) of the property generally must withhold a tax equal to 10% of the amount realized on the disposition. How to file amended 2012 tax return A distribution by a qualified investment entity to a nonresident alien shareholder that is treated as gain from the sale or exchange of a U. How to file amended 2012 tax return S. How to file amended 2012 tax return real property interest by the shareholder is subject to withholding at 35%. How to file amended 2012 tax return Withholding is also required on certain distributions and other transactions by domestic or foreign corporations, partnerships, trusts, and estates. How to file amended 2012 tax return These rules are covered in Publication 515. How to file amended 2012 tax return For information on the tax treatment of dispositions of U. How to file amended 2012 tax return S. How to file amended 2012 tax return real property interests, see Real Property Gain or Loss in chapter 4. How to file amended 2012 tax return If you are a partner in a domestic partnership, and the partnership disposes of a U. How to file amended 2012 tax return S. How to file amended 2012 tax return real property interest at a gain, the partnership will withhold tax on the amount of gain allocable to its foreign partners. How to file amended 2012 tax return Your share of the income and tax withheld will be reported to you on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U. How to file amended 2012 tax return S. How to file amended 2012 tax return Source Income Subject to Withholding (in the case of a publicly traded partnership). How to file amended 2012 tax return Withholding is not required in the following situations. How to file amended 2012 tax return The property is acquired by the buyer for use as a residence and the amount realized (sales price) is not more than $300,000. How to file amended 2012 tax return The property disposed of is an interest in a domestic corporation if any class of stock of the corporation is regularly traded on an established securities market. How to file amended 2012 tax return However, this exception does not apply to certain dispositions of substantial amounts of non-publicly traded interests in publicly traded corporations. How to file amended 2012 tax return The property disposed of is an interest in a U. How to file amended 2012 tax return S. How to file amended 2012 tax return corporation that is not regularly traded on an established market and you (the seller) give the buyer a copy of a statement issued by the corporation certifying that the interest is not a U. How to file amended 2012 tax return S. How to file amended 2012 tax return real property interest. How to file amended 2012 tax return You (the seller) give the buyer a certification stating, under penalties of perjury, that you are not a foreign person, and containing your name, U. How to file amended 2012 tax return S. How to file amended 2012 tax return taxpayer identification number, and home address. How to file amended 2012 tax return You can give the certification to a qualified substitute. How to file amended 2012 tax return The qualified substitute gives the buyer a statement, under penalties of perjury, that the certification is in the possession of the qualified substitute. How to file amended 2012 tax return For this purpose, a qualified substitute is (a) the person (including any attorney or title company) responsible for closing the transaction, other than your agent, and (b) the buyer's agent. How to file amended 2012 tax return The buyer receives a withholding certificate from the Internal Revenue Service. How to file amended 2012 tax return You give the buyer written notice that you are not required to recognize any gain or loss on the transfer because of a nonrecognition provision in the Internal Revenue Code or a provision in a U. How to file amended 2012 tax return S. How to file amended 2012 tax return tax treaty. How to file amended 2012 tax return The buyer must file a copy of the notice with the Ogden Service Center, P. How to file amended 2012 tax return O. How to file amended 2012 tax return Box 409101, Ogden, UT 84409. How to file amended 2012 tax return You must verify the notice as true and sign it under penalties of perjury. How to file amended 2012 tax return The notice must contain the following information. How to file amended 2012 tax return A statement that the notice is a notice of nonrecognition under regulation section 1. How to file amended 2012 tax return 1445-2(d)(2). How to file amended 2012 tax return Your name, taxpayer identification number, and home address. How to file amended 2012 tax return A statement that you are not required to recognize any gain or loss on the transfer. How to file amended 2012 tax return A brief description of the transfer. How to file amended 2012 tax return A brief summary of the law and facts supporting your claim that recognition of gain or loss is not required. How to file amended 2012 tax return You may not give the buyer a written notice for any of the following transfers: the sale of your main home on which you exclude gain, a like-kind exchange that does not qualify for nonrecognition treatment in its entirety, or a deferred like-kind exchange that has not been completed at the time the buyer must file Form 8288. How to file amended 2012 tax return Instead, a withholding certificate (described next) must be obtained. How to file amended 2012 tax return The amount you realize on the transfer of a U. How to file amended 2012 tax return S. How to file amended 2012 tax return real property interest is zero. How to file amended 2012 tax return The property is acquired by the United States, a U. How to file amended 2012 tax return S. How to file amended 2012 tax return state or possession, a political subdivision, or the District of Columbia. How to file amended 2012 tax return The distribution is from a domestically controlled qualified investment entity (QIE) and is treated as a distribution of a U. How to file amended 2012 tax return S. How to file amended 2012 tax return real property interest only because an interest in the entity was disposed of in an applicable wash sale transaction. How to file amended 2012 tax return For the definition of a QIE, see Qualified investment entities under Real Property Gain or Loss, earlier. How to file amended 2012 tax return See Wash sale under Real Property Gain or Loss in chapter 4. How to file amended 2012 tax return The certifications in (3) and (4) must be disregarded by the buyer if the buyer or qualified substitute has actual knowledge, or receives notice from a seller's or buyer's agent (or substitute), that they are false. How to file amended 2012 tax return This also applies to the qualified substitute's statement under (4). How to file amended 2012 tax return Withholding certificates. How to file amended 2012 tax return   The tax required to be withheld on a disposition can be reduced or eliminated under a withholding certificate issued by the IRS. How to file amended 2012 tax return Either you or the buyer can request a withholding certificate. How to file amended 2012 tax return   A withholding certificate can be issued due to any of the following. How to file amended 2012 tax return The IRS determines that reduced withholding is appropriate because either: The amount required to be withheld would be more than your maximum tax liability, or Withholding of the reduced amount would not jeopardize collection of the tax. How to file amended 2012 tax return All of your realized gain is exempt from U. How to file amended 2012 tax return S. How to file amended 2012 tax return tax. How to file amended 2012 tax return You or the buyer enters into an agreement for the payment of tax providing security for the tax liability. How to file amended 2012 tax return   Get Publication 515 and Form 8288-B for information on procedures to request a withholding certificate. How to file amended 2012 tax return Credit for tax withheld. How to file amended 2012 tax return   The buyer must report and pay over the withheld tax within 20 days after the transfer using Form 8288, U. How to file amended 2012 tax return S. How to file amended 2012 tax return Withholding Tax Return for Dispositions by Foreign Persons of U. How to file amended 2012 tax return S. How to file amended 2012 tax return Real Property Interests. How to file amended 2012 tax return This form is filed with the IRS with copies A and B of Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. How to file amended 2012 tax return S. How to file amended 2012 tax return Real Property Interests. How to file amended 2012 tax return Copy B of this statement will be stamped received by the IRS and returned to you (the seller) if the statement is complete and includes your taxpayer identification number (TIN). How to file amended 2012 tax return You must file Copy B with your tax return to take credit for the tax withheld. How to file amended 2012 tax return   A stamped copy of Form 8288-A will not be provided to you if your TIN is not included on that form. How to file amended 2012 tax return The IRS will send you a letter requesting the TIN and providing instructions for how to get a TIN. How to file amended 2012 tax return When you provide the IRS with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A. How to file amended 2012 tax return Social Security and Medicare Taxes If you work as an employee in the United States, you must pay social security and Medicare taxes in most cases. How to file amended 2012 tax return Your payments of these taxes contribute to your coverage under the U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security system. How to file amended 2012 tax return Social security coverage provides retirement benefits, survivors and disability benefits, and medical insurance (Medicare) benefits to individuals who meet certain eligibility requirements. How to file amended 2012 tax return In most cases, the first $113,700 of taxable wages received in 2013 for services performed in the United States is subject to social security tax. How to file amended 2012 tax return All taxable wages are subject to Medicare tax. How to file amended 2012 tax return Your employer deducts these taxes from each wage payment. How to file amended 2012 tax return Your employer must deduct these taxes even if you do not expect to qualify for social security or Medicare benefits. How to file amended 2012 tax return You can claim a credit for excess social security tax on your income tax return if you have more than one employer and the amount deducted from your combined wages for 2013 is more than $7,049. How to file amended 2012 tax return 40. How to file amended 2012 tax return Use the appropriate worksheet in chapter 3 of Publication 505, Tax Withholding and Estimated Tax, to figure your credit. How to file amended 2012 tax return If any one employer deducted more than $7,049. How to file amended 2012 tax return 40, you cannot claim a credit for that amount. How to file amended 2012 tax return Ask your employer to refund the excess. How to file amended 2012 tax return If your employer does not refund the excess, you can file a claim for refund using Form 843. How to file amended 2012 tax return In general, U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security and Medicare taxes apply to payments of wages for services performed as an employee in the United States, regardless of the citizenship or residence of either the employee or the employer. How to file amended 2012 tax return In limited situations, these taxes apply to wages for services performed outside the United States. How to file amended 2012 tax return Your employer should be able to tell you if social security and Medicare taxes apply to your wages. How to file amended 2012 tax return You cannot make voluntary payments if no taxes are due. How to file amended 2012 tax return Additional Medicare Tax. How to file amended 2012 tax return   Beginning in 2013, in addition to the Medicare tax, a 0. How to file amended 2012 tax return 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $250,000 if married filing jointly, $125,000 if married filing separately, or $200,000 for any other filing status. How to file amended 2012 tax return   There are no special rules for nonresident aliens for purposes of Additional Medicare Tax. How to file amended 2012 tax return Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. How to file amended 2012 tax return   Your employer is responsible for withholding the 0. How to file amended 2012 tax return 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in the calendar year. How to file amended 2012 tax return If you intend to file a joint return and you anticipate that you and your spouse's individual wages are not going to be more than $200,000 but your combined wages and self-employment income are going to be more than $250,000, you may want to request additional withholding on Form W-4 and/or make estimated tax payments. How to file amended 2012 tax return   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). How to file amended 2012 tax return    See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. How to file amended 2012 tax return For more information on Additional Medicare Tax, go to IRS. How to file amended 2012 tax return gov and enter “Additional Medicare Tax” in the search box. How to file amended 2012 tax return   Self-employed individuals may also be required to pay Additional Medicare Tax. How to file amended 2012 tax return See Self-Employment Tax , later. How to file amended 2012 tax return Students and Exchange Visitors Generally, services performed by you as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. How to file amended 2012 tax return This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. How to file amended 2012 tax return These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment. How to file amended 2012 tax return Social security and Medicare taxes will be withheld from your pay for these services if you are considered a resident alien as discussed in chapter 1, even though your nonimmigrant classification (“F,” “J,” “M,” or “Q”) remains the same. How to file amended 2012 tax return Services performed by a spouse or minor child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security. How to file amended 2012 tax return Nonresident Alien Students If you are a nonresident alien temporarily admitted to the United States as a student, you generally are not permitted to work for a wage or salary or to engage in business while you are in the United States. How to file amended 2012 tax return In some cases, a student admitted to the United States in “F-1,” “M-1,” or “J-1” status is granted permission to work. How to file amended 2012 tax return Social security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien. How to file amended 2012 tax return Any student who is enrolled and regularly attending classes at a school may be exempt from social security and Medicare taxes on pay for services performed for that school. How to file amended 2012 tax return The U. How to file amended 2012 tax return S. How to file amended 2012 tax return Citizenship and Immigration Services (USCIS) permits on-campus work for students in “F-1” status if it does not displace a U. How to file amended 2012 tax return S. How to file amended 2012 tax return resident. How to file amended 2012 tax return On-campus work means work performed on the school's premises. How to file amended 2012 tax return On-campus work includes work performed at an off-campus location that is educationally affiliated with the school. How to file amended 2012 tax return On-campus work under the terms of a scholarship, fellowship, or assistantship is considered part of the academic program of a student taking a full course of study and is permitted by the USCIS. How to file amended 2012 tax return Social security and Medicare taxes are not withheld from pay for this work unless the student is considered a resident alien. How to file amended 2012 tax return If services performed by a nonresident alien student are not considered as performed to carry out the purpose for which the student was admitted to the United States, social security and Medicare taxes will be withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. How to file amended 2012 tax return Exchange Visitors Exchange visitors are temporarily admitted to the United States under section 101(a)(15)(J) of the Immigration and Nationality Act. How to file amended 2012 tax return Social security and Medicare taxes are not withheld on pay for services of an exchange visitor who has been given permission to work and who possesses or obtains a letter of authorization from the sponsor unless the exchange visitor is considered a resident alien. How to file amended 2012 tax return If services performed by an exchange visitor are not considered as performed to carry out the purpose for which the visitor was admitted to the United States, social security and Medicare taxes are withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. How to file amended 2012 tax return Nonresident aliens temporarily admitted to the United States as participants in international cultural exchange programs under section 101(a)(15)(Q) of the Immigration and Nationality Act may be exempt from social security and Medicare taxes. How to file amended 2012 tax return The employer must be the petitioner through whom the alien obtained the “Q” visa. How to file amended 2012 tax return Social security and Medicare taxes are not withheld from pay for this work unless the alien is considered a resident alien. How to file amended 2012 tax return Refund of Taxes Withheld in Error If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. How to file amended 2012 tax return If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. How to file amended 2012 tax return Attach the following items to Form 843. How to file amended 2012 tax return A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld. How to file amended 2012 tax return A copy of your visa. How to file amended 2012 tax return Form I-94 (or other documentation showing your dates of arrival or departure). How to file amended 2012 tax return If you have an F-1 visa, documentation showing permission to work in the U. How to file amended 2012 tax return S. How to file amended 2012 tax return If you have a J-1 visa, documentation showing permission to work in the U. How to file amended 2012 tax return S. How to file amended 2012 tax return If you are engaged in optional practical training or employment due to severe economic necessity, documentation showing permission to work in the U. How to file amended 2012 tax return S. How to file amended 2012 tax return A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. How to file amended 2012 tax return If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer or on Form 8316 claiming your employer will not issue the refund. How to file amended 2012 tax return If you were exempt from social security and Medicare tax for only part of the year, pay statements showing the tax paid during the period you were exempt. How to file amended 2012 tax return File Form 843 (with attachments) with the Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0038. How to file amended 2012 tax return Do not use Form 843 to request a refund of Additional Medicare Tax. How to file amended 2012 tax return If Additional Medicare Tax was withheld from your pay in error, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959 with Form 1040 or 1040NR. How to file amended 2012 tax return If Additional Medicare Tax was withheld in error in a prior year for which you already filed Form 1040 or 1040NR, you must file Form 1040X, Amended U. How to file amended 2012 tax return S. How to file amended 2012 tax return Individual Income Tax Return, for the prior year in which the wages or compensation were originally received to recover the Additional Medicare Tax withheld in error. How to file amended 2012 tax return See the Instructions for Form 1040X. How to file amended 2012 tax return Agricultural Workers Agricultural workers temporarily admitted into the United States on H-2A visas are exempt from social security and Medicare taxes on compensation paid to them for services performed in connection with the H-2A visa. How to file amended 2012 tax return You can find more information about not having tax withheld at www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. How to file amended 2012 tax return Self-Employment Tax Self-employment tax is the social security and Medicare taxes for individuals who are self-employed. How to file amended 2012 tax return Nonresident aliens are not subject to self-employment tax unless an international social security agreement in effect determines that they are covered under the U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security system. How to file amended 2012 tax return Residents of the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are considered U. How to file amended 2012 tax return S. How to file amended 2012 tax return residents for this purpose and are subject to the self-employment tax. How to file amended 2012 tax return Resident aliens must pay self-employment tax under the same rules that apply to U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens. How to file amended 2012 tax return However, a resident alien employed by an international organization, a foreign government, or a wholly-owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United States. How to file amended 2012 tax return Self-employment income you receive while you are a resident alien is subject to self-employment tax even if it was paid for services you performed as a nonresident alien. How to file amended 2012 tax return Example. How to file amended 2012 tax return Bill Jones is an author engaged in the business of writing books. How to file amended 2012 tax return Bill had several books published in a foreign country while he was a citizen and resident of that country. How to file amended 2012 tax return During 2013, Bill entered the United States as a resident alien. How to file amended 2012 tax return After becoming a U. How to file amended 2012 tax return S. How to file amended 2012 tax return resident, he continued to receive royalties from his foreign publisher. How to file amended 2012 tax return Bill reports his income and expenses on the cash basis (he reports income on his tax return when received and deducts expenses when paid). How to file amended 2012 tax return Bill's 2013 self-employment income includes the royalties received after he became a U. How to file amended 2012 tax return S. How to file amended 2012 tax return resident even though the books were published while he was a nonresident alien. How to file amended 2012 tax return This royalty income is subject to self-employment tax. How to file amended 2012 tax return Reporting self-employment tax. How to file amended 2012 tax return   Use Schedule SE (Form 1040) to report and figure your self-employment tax. How to file amended 2012 tax return Then enter the tax on Form 1040, line 56, or Form 1040NR, line 54. How to file amended 2012 tax return Attach Schedule SE to Form 1040 or Form 1040NR. How to file amended 2012 tax return Additional Medicare Tax. How to file amended 2012 tax return   Self-employed individuals must pay a 0. How to file amended 2012 tax return 9% Additional Medicare Tax on self-employment income that exceeds one of the following threshold amounts (based on your filing status): Married filing jointly — $250,000; Married filing separately — $125,000; Single, Head of household, or Qualifying widow(er) — $200,000. How to file amended 2012 tax return   If you have both wages and self-employment income, the threshold amount for applying the Additional Medicare Tax on the self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. How to file amended 2012 tax return A self-employment loss should not be considered for purposes of this tax   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). How to file amended 2012 tax return   See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. How to file amended 2012 tax return For more information on Additional Medicare Tax, go to IRS. How to file amended 2012 tax return gov and enter “Additional Medicare Tax” in the search box. How to file amended 2012 tax return Deduction for employer-equivalent portion of self-employment tax. How to file amended 2012 tax return   If you must pay self-employment tax, you can deduct a portion of the self-employment tax paid in figuring your adjusted gross income. How to file amended 2012 tax return This deduction is figured on Schedule SE (Form 1040). How to file amended 2012 tax return Note. How to file amended 2012 tax return No portion of the Additional Medicare Tax is deductible for self-employment tax. How to file amended 2012 tax return More information. How to file amended 2012 tax return   Get Publication 334, Tax Guide for Small Business, for more information about self-employment tax. How to file amended 2012 tax return International Social Security Agreements The United States has entered into social security agreements with foreign countries to coordinate social security coverage and taxation of workers employed for part or all of their working careers in one of the countries. How to file amended 2012 tax return These agreements are commonly referred to as totalization agreements. How to file amended 2012 tax return Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. How to file amended 2012 tax return The agreements generally make sure that social security taxes (including self-employment tax) are paid only to one country. How to file amended 2012 tax return Agreements are in effect with the following countries. How to file amended 2012 tax return Australia. How to file amended 2012 tax return Austria. How to file amended 2012 tax return Belgium. How to file amended 2012 tax return Canada. How to file amended 2012 tax return Chile. How to file amended 2012 tax return Czech Republic. How to file amended 2012 tax return Denmark. How to file amended 2012 tax return Finland. How to file amended 2012 tax return France. How to file amended 2012 tax return Germany. How to file amended 2012 tax return Greece. How to file amended 2012 tax return Ireland. How to file amended 2012 tax return Italy. How to file amended 2012 tax return Japan. How to file amended 2012 tax return Korea, South. How to file amended 2012 tax return Luxembourg. How to file amended 2012 tax return The Netherlands. How to file amended 2012 tax return Norway. How to file amended 2012 tax return Poland. How to file amended 2012 tax return Portugal. How to file amended 2012 tax return Spain. How to file amended 2012 tax return Sweden. How to file amended 2012 tax return Switzerland. How to file amended 2012 tax return The United Kingdom. How to file amended 2012 tax return Agreements with other countries are expected to enter into force in the future. How to file amended 2012 tax return Employees. How to file amended 2012 tax return   Generally, under these agreements, you are subject to social security taxes only in the country where you are working. How to file amended 2012 tax return However, if you are temporarily sent to work for the same employer in the United States and your pay would normally be subject to social security taxes in both countries, most agreements provide that you remain covered only by the social security system of the country from which you were sent. How to file amended 2012 tax return You can get more information on any agreement by contacting the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Social Security Administration at the address given later. How to file amended 2012 tax return If you have access to the Internet, you can get more information at www. How to file amended 2012 tax return socialsecurity. How to file amended 2012 tax return gov/international. How to file amended 2012 tax return   To establish that your pay is subject only to foreign social security taxes and is exempt from U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security taxes (including the Medicare tax) under an agreement, you or your employer should request a certificate of coverage from the appropriate agency of the foreign country. How to file amended 2012 tax return This will usually be the same agency to which you or your employer pays your foreign social security taxes. How to file amended 2012 tax return The foreign agency will be able to tell you what information is needed for them to issue the certificate. How to file amended 2012 tax return Your employer should keep a copy of the certificate because it may be needed to show why you are exempt from U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security taxes. How to file amended 2012 tax return Only wages paid on or after the effective date of the agreement can be exempt from U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security taxes. How to file amended 2012 tax return    Some of the countries with which the United States has agreements will not issue certificates of coverage. How to file amended 2012 tax return In this case, either you or your employer should request a statement that your wages are not covered by the U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security system. How to file amended 2012 tax return Request the statement from the following address. How to file amended 2012 tax return U. How to file amended 2012 tax return S. How to file amended 2012 tax return Social Security Administration Office of International Programs P. How to file amended 2012 tax return O. How to file amended 2012 tax return Box 17741 Baltimore, MD 21235-7741 Self-employed individuals. How to file amended 2012 tax return   Under most agreements, self-employed individuals are covered by the social security system of the country where they reside. How to file amended 2012 tax return However, under some agreements, you may be exempt from U. How to file amended 2012 tax return S. How to file amended 2012 tax return self-employment tax if you temporarily transfer your business activity to or from the United States. How to file amended 2012 tax return   If you believe that your self-employment income is subject only to U. How to file amended 2012 tax return S. How to file amended 2012 tax return self-employment tax and is exempt from foreign social security taxes, request a certificate of coverage from the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Social Security Administration at the address given earlier. How to file amended 2012 tax return This certificate will establish your exemption from foreign social security taxes. How to file amended 2012 tax return   To establish that your self-employment income is subject only to foreign social security taxes and is exempt from U. How to file amended 2012 tax return S. How to file amended 2012 tax return self-employment tax, request a certificate of coverage from the appropriate agency of the foreign country. How to file amended 2012 tax return If the foreign country will not issue the certificate, you should request a statement that your income is not covered by the U. How to file amended 2012 tax return S. How to file amended 2012 tax return social security system. How to file amended 2012 tax return Request it from the U. How to file amended 2012 tax return S. How to file amended 2012 tax return Social Security Administration at the address given earlier. How to file amended 2012 tax return Attach a photocopy of either statement to Form 1040 each year you are exempt. How to file amended 2012 tax return Also print “Exempt, see attached statement” on the line for self-employment tax. How to file amended 2012 tax return Estimated Tax Form 1040-ES (NR) You may have income from which no U. How to file amended 2012 tax return S. How to file amended 2012 tax return income tax is withheld. How to file amended 2012 tax return Or the amount of tax withheld may be less than the income tax you estimate you will owe at the end of the year. How to file amended 2012 tax return If so, you may have to pay estimated tax. How to file amended 2012 tax return Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax and you expect your withholding and certain refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 income tax return, or 100% of the tax shown on your 2013 income tax return (if your 2013 return covered all 12 months of the year). How to file amended 2012 tax return If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above if you are not a farmer or fisherman. How to file amended 2012 tax return Item (2) does not apply if you did not file a 2013 return. How to file amended 2012 tax return A nonresident alien should use Form 1040-ES (NR) to figure and pay estimated tax. How to file amended 2012 tax return If you pay by check, make it payable to the "United States Treasury. How to file amended 2012 tax return " How to estimate your tax for 2014. How to file amended 2012 tax return   If you filed a 2013 return on Form 1040NR or Form 1040NR-EZ and expect your income, number of exemptions, and total deductions for 2014 to be nearly the same, you should use your 2013 return as a guide to complete the Estimated Tax Worksheet in the Form 1040-ES (NR) instructions. How to file amended 2012 tax return If you did not file a return for 2013, or if your income, exemptions, deductions, or credits will be different for 2014, you must estimate these amounts. How to file amended 2012 tax return Figure your estimated tax liability using the Tax Rate Schedule in the 2014 Form 1040-ES (NR) instructions for your filing status. How to file amended 2012 tax return Note. How to file amended 2012 tax return If you expect to be a resident of Puerto Rico during the entire year, use Form 1040-ES or Formulario 1040-ES (PR). How to file amended 2012 tax return When to pay estimated tax. How to file amended 2012 tax return   Make your first estimated tax payment by the due date for filing the previous year's Form 1040NR or Form 1040NR-EZ. How to file amended 2012 tax return If you have wages subject to the same withholding rules that apply to U. How to file amended 2012 tax return S. How to file amended 2012 tax return citizens, you must file Form 1040NR or Form 1040NR-EZ and make your first estimated tax payment by April 15, 2014. How to file amended 2012 tax return If you do not have wages subject to withholding, file your income tax return and make your first estimated tax payment by June 16, 2014. How to file amended 2012 tax return   If your first estimated tax payment is due April 15, 2014, you can pay your estimated tax in full at that time or in four equal installments by the dates shown next. How to file amended 2012 tax return 1st installment April 15, 2014 2nd installment June 16, 2014 3rd installment Sept. How to file amended 2012 tax return 15, 2014 4th installment Jan. How to file amended 2012 tax return 15, 2015 If your first payment is not due until June 16, 2014, you can pay your estimated tax in full at that time or: ½ of your estimated tax by June 16, 2014, 1/4 of the tax by September 15, 2014, and 1/4 by January 15, 2015. How to file amended 2012 tax return    You do not have to make the payment due January 15, 2015, if you file your 2014 Form 1040NR or 1040NR-EZ by February 2, 2015, and pay the entire balance due with your return. How to file amended 2012 tax return Fiscal year. How to file amended 2012 tax return   If your return is not on a calendar year basis, your due dates are the 15th day of the 4th, 6th, and 9th months of your fiscal year, and the 1st month of the following fiscal year. How to file amended 2012 tax return If any date falls on a Saturday, Sunday, or legal holiday, use the next day that is not a Saturday, Sunday, or legal holiday. How to file amended 2012 tax return Changes in income, deductions, or exemptions. How to file amended 2012 tax return   Even if you are not required to make an estimated tax payment in April or June, your circumstances may change so that you will have to make estimated tax payments later. How to file amended 2012 tax return This can happen if you receive additional income or if any of your deductions are reduced or eliminated. How to file amended 2012 tax return If so, see the instructions for Form 1040-ES (NR) and Publication 505 for information on figuring your estimated tax. How to file amended 2012 tax return Amended estimated tax. How to file amended 2012 tax return   If, after you have made estimated tax payments, you find your estimated tax is substantially increased or decreased because of a change in your income or exemptions, you should adjust your remaining estimated tax payments. How to file amended 2012 tax return To do this, see the instructions for Form 1040-ES (NR) and Publication 505. How to file amended 2012 tax return Penalty for failure to pay estimated income tax. How to file amended 2012 tax return   You will be subject to a penalty for underpayment of installments of estimated tax except in certain situations. How to file amended 2012 tax return These situations are explained on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. How to file amended 2012 tax return Prev  Up  Next   Home   More Online Publications
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The How To File Amended 2012 Tax Return

How to file amended 2012 tax return 8. How to file amended 2012 tax return   Amortization Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: How To Deduct Amortization Starting a BusinessBusiness Start-Up Costs Costs of Organizing a Corporation Costs of Organizing a Partnership How To Amortize Getting a Lease Section 197 IntangiblesSection 197 Intangibles Defined Assets That Are Not Section 197 Intangibles Safe Harbor for Creative Property Costs Anti-Churning Rules Incorrect Amount of Amortization Deducted Disposition of Section 197 Intangibles Reforestation Costs Geological and Geophysical Costs Pollution Control FacilitiesNew identifiable treatment facility. How to file amended 2012 tax return Research and Experimental Costs Optional Write-off of Certain Tax Preferences Introduction Amortization is a method of recovering (deducting) certain capital costs over a fixed period of time. How to file amended 2012 tax return It is similar to the straight line method of depreciation. How to file amended 2012 tax return The various amortizable costs covered in this chapter are included in the list below. How to file amended 2012 tax return However, this chapter does not discuss amortization of bond premium. How to file amended 2012 tax return For information on that topic, see chapter 3 of Publication 550, Investment Income and Expenses. How to file amended 2012 tax return Topics - This chapter discusses: Deducting amortization Amortizing costs of starting a business Amortizing costs of getting a lease Amortizing costs of section 197 intangibles Amortizing reforestation costs Amortizing costs of geological and geophysical costs Amortizing costs of pollution control facilities Amortizing costs of research and experimentation Amortizing costs of certain tax preferences Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 4626 Alternative Minimum Tax—Corporations 6251 Alternative Minimum Tax—Individuals See chapter 12 for information about getting publications and forms. How to file amended 2012 tax return How To Deduct Amortization To deduct amortization that begins during the current tax year, complete Part VI of Form 4562 and attach it to your income tax return. How to file amended 2012 tax return To report amortization from previous years, in addition to amortization that begins in the current year, list on Form 4562 each item separately. How to file amended 2012 tax return For example, in 2012, you began to amortize a lease. How to file amended 2012 tax return In 2013, you began to amortize a second lease. How to file amended 2012 tax return Report amortization from the new lease on line 42 of your 2013 Form 4562. How to file amended 2012 tax return Report amortization from the 2012 lease on line 43 of your 2013 Form 4562. How to file amended 2012 tax return If you do not have any new amortizable expenses for the current year, you are not required to complete Form 4562 (unless you are claiming depreciation). How to file amended 2012 tax return Report the current year's deduction for amortization that began in a prior year directly on the “Other deduction” or “Other expense line” of your return. How to file amended 2012 tax return Starting a Business When you start a business, treat all eligible costs you incur before you begin operating the business as capital expenditures which are part of your basis in the business. How to file amended 2012 tax return Generally, you recover costs for particular assets through depreciation deductions. How to file amended 2012 tax return However, you generally cannot recover other costs until you sell the business or otherwise go out of business. How to file amended 2012 tax return For a discussion on how to treat these costs, see If your attempt to go into business is unsuccessful under Capital Expenses in chapter 1. How to file amended 2012 tax return For costs paid or incurred after September 8, 2008, you can deduct a limited amount of start-up and organizational costs. How to file amended 2012 tax return The costs that are not deducted currently can be amortized ratably over a 180-month period. How to file amended 2012 tax return The amortization period starts with the month you begin operating your active trade or business. How to file amended 2012 tax return You are not required to attach a statement to make this election. How to file amended 2012 tax return You can choose to forgo this election by affirmatively electing to capitalize your start-up costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. How to file amended 2012 tax return Once made, the election to either amortize or capitalize start-up costs is irrevocable and applies to all start-up costs that are related to your trade or business. How to file amended 2012 tax return See Regulations sections 1. How to file amended 2012 tax return 195-1, 1. How to file amended 2012 tax return 248-1, and 1. How to file amended 2012 tax return 709-1. How to file amended 2012 tax return For costs paid or incurred after October 22, 2004, and before September 9, 2008, you can elect to deduct a limited amount of business start-up and organizational costs in the year your active trade or business begins. How to file amended 2012 tax return Any costs not deducted can be amortized ratably over a 180-month period, beginning with the month you begin business. How to file amended 2012 tax return If the election is made, you must attach any statement required by Regulations sections 1. How to file amended 2012 tax return 195-1(b), 1. How to file amended 2012 tax return 248-1(c), and 1. How to file amended 2012 tax return 709-1(c), as in effect before September 9, 2008. How to file amended 2012 tax return Note. How to file amended 2012 tax return You can apply the provisions of Regulations sections 1. How to file amended 2012 tax return 195-1, 1. How to file amended 2012 tax return 248-1, and 1. How to file amended 2012 tax return 709-1 to all business start-up and organizational costs paid or incurred after October 22, 2004, provided the period of limitations on assessment has not expired for the year of the election. How to file amended 2012 tax return Otherwise, the provisions under Regulations sections 1. How to file amended 2012 tax return 195-1(b), 1. How to file amended 2012 tax return 248-1(c), and 1. How to file amended 2012 tax return 709-1(c), as in effect before September 9, 2008, will apply. How to file amended 2012 tax return For costs paid or incurred before October 23, 2004, you can elect to amortize business start-up and organization costs over an amortization period of 60 months or more. How to file amended 2012 tax return See How To Make the Election , later. How to file amended 2012 tax return The cost must qualify as one of the following. How to file amended 2012 tax return A business start-up cost. How to file amended 2012 tax return An organizational cost for a corporation. How to file amended 2012 tax return An organizational cost for a partnership. How to file amended 2012 tax return Business Start-Up Costs Start-up costs are amounts paid or incurred for: (a) creating an active trade or business; or (b) investigating the creation or acquisition of an active trade or business. How to file amended 2012 tax return Start-up costs include amounts paid or incurred in connection with an existing activity engaged in for profit; and for the production of income in anticipation of the activity becoming an active trade or business. How to file amended 2012 tax return Qualifying costs. How to file amended 2012 tax return   A start-up cost is amortizable if it meets both of the following tests. How to file amended 2012 tax return It is a cost you could deduct if you paid or incurred it to operate an existing active trade or business (in the same field as the one you entered into). How to file amended 2012 tax return It is a cost you pay or incur before the day your active trade or business begins. How to file amended 2012 tax return   Start-up costs include amounts paid for the following: An analysis or survey of potential markets, products, labor supply, transportation facilities, etc. How to file amended 2012 tax return Advertisements for the opening of the business. How to file amended 2012 tax return Salaries and wages for employees who are being trained and their instructors. How to file amended 2012 tax return Travel and other necessary costs for securing prospective distributors, suppliers, or customers. How to file amended 2012 tax return Salaries and fees for executives and consultants, or for similar professional services. How to file amended 2012 tax return Nonqualifying costs. How to file amended 2012 tax return   Start-up costs do not include deductible interest, taxes, or research and experimental costs. How to file amended 2012 tax return See Research and Experimental Costs , later. How to file amended 2012 tax return Purchasing an active trade or business. How to file amended 2012 tax return   Amortizable start-up costs for purchasing an active trade or business include only investigative costs incurred in the course of a general search for or preliminary investigation of the business. How to file amended 2012 tax return These are costs that help you decide whether to purchase a business. How to file amended 2012 tax return Costs you incur in an attempt to purchase a specific business are capital expenses that you cannot amortize. How to file amended 2012 tax return Example. How to file amended 2012 tax return On June 1st, you hired an accounting firm and a law firm to assist you in the potential purchase of XYZ, Inc. How to file amended 2012 tax return They researched XYZ's industry and analyzed the financial projections of XYZ, Inc. How to file amended 2012 tax return In September, the law firm prepared and submitted a letter of intent to XYZ, Inc. How to file amended 2012 tax return The letter stated that a binding commitment would result only after a purchase agreement was signed. How to file amended 2012 tax return The law firm and accounting firm continued to provide services including a review of XYZ's books and records and the preparation of a purchase agreement. How to file amended 2012 tax return On October 22nd, you signed a purchase agreement with XYZ, Inc. How to file amended 2012 tax return All amounts paid or incurred to investigate the business before October 22nd are amortizable investigative costs. How to file amended 2012 tax return Amounts paid on or after that date relate to the attempt to purchase the business and therefore must be capitalized. How to file amended 2012 tax return Disposition of business. How to file amended 2012 tax return   If you completely dispose of your business before the end of the amortization period, you can deduct any remaining deferred start-up costs. How to file amended 2012 tax return However, you can deduct these deferred start-up costs only to the extent they qualify as a loss from a business. How to file amended 2012 tax return Costs of Organizing a Corporation Amounts paid to organize a corporation are the direct costs of creating the corporation. How to file amended 2012 tax return Qualifying costs. How to file amended 2012 tax return   To qualify as an organizational cost, it must be: For the creation of the corporation, Chargeable to a capital account (see chapter 1), Amortized over the life of the corporation if the corporation had a fixed life, and Incurred before the end of the first tax year in which the corporation is in business. How to file amended 2012 tax return   A corporation using the cash method of accounting can amortize organizational costs incurred within the first tax year, even if it does not pay them in that year. How to file amended 2012 tax return   Examples of organizational costs include: The cost of temporary directors. How to file amended 2012 tax return The cost of organizational meetings. How to file amended 2012 tax return State incorporation fees. How to file amended 2012 tax return The cost of legal services. How to file amended 2012 tax return Nonqualifying costs. How to file amended 2012 tax return   The following items are capital expenses that cannot be amortized: Costs for issuing and selling stock or securities, such as commissions, professional fees, and printing costs. How to file amended 2012 tax return Costs associated with the transfer of assets to the corporation. How to file amended 2012 tax return Costs of Organizing a Partnership The costs to organize a partnership are the direct costs of creating the partnership. How to file amended 2012 tax return Qualifying costs. How to file amended 2012 tax return   A partnership can amortize an organizational cost only if it meets all the following tests. How to file amended 2012 tax return It is for the creation of the partnership and not for starting or operating the partnership trade or business. How to file amended 2012 tax return It is chargeable to a capital account (see chapter 1). How to file amended 2012 tax return It could be amortized over the life of the partnership if the partnership had a fixed life. How to file amended 2012 tax return It is incurred by the due date of the partnership return (excluding extensions) for the first tax year in which the partnership is in business. How to file amended 2012 tax return However, if the partnership uses the cash method of accounting and pays the cost after the end of its first tax year, see Cash method partnership under How To Amortize, later. How to file amended 2012 tax return It is for a type of item normally expected to benefit the partnership throughout its entire life. How to file amended 2012 tax return   Organizational costs include the following fees. How to file amended 2012 tax return Legal fees for services incident to the organization of the partnership, such as negotiation and preparation of the partnership agreement. How to file amended 2012 tax return Accounting fees for services incident to the organization of the partnership. How to file amended 2012 tax return Filing fees. How to file amended 2012 tax return Nonqualifying costs. How to file amended 2012 tax return   The following costs cannot be amortized. How to file amended 2012 tax return The cost of acquiring assets for the partnership or transferring assets to the partnership. How to file amended 2012 tax return The cost of admitting or removing partners, other than at the time the partnership is first organized. How to file amended 2012 tax return The cost of making a contract concerning the operation of the partnership trade or business including a contract between a partner and the partnership. How to file amended 2012 tax return The costs for issuing and marketing interests in the partnership such as brokerage, registration, and legal fees and printing costs. How to file amended 2012 tax return These “syndication fees” are capital expenses that cannot be depreciated or amortized. How to file amended 2012 tax return Liquidation of partnership. How to file amended 2012 tax return   If a partnership is liquidated before the end of the amortization period, the unamortized amount of qualifying organizational costs can be deducted in the partnership's final tax year. How to file amended 2012 tax return However, these costs can be deducted only to the extent they qualify as a loss from a business. How to file amended 2012 tax return How To Amortize Deduct start-up and organizational costs in equal amounts over the applicable amortization period (discussed earlier). How to file amended 2012 tax return You can choose an amortization period for start-up costs that is different from the period you choose for organizational costs, as long as both are not less than the applicable amortization period. How to file amended 2012 tax return Once you choose an amortization period, you cannot change it. How to file amended 2012 tax return To figure your deduction, divide your total start-up or organizational costs by the months in the amortization period. How to file amended 2012 tax return The result is the amount you can deduct for each month. How to file amended 2012 tax return Cash method partnership. How to file amended 2012 tax return   A partnership using the cash method of accounting can deduct an organizational cost only if it has been paid by the end of the tax year. How to file amended 2012 tax return However, any cost the partnership could have deducted as an organizational cost in an earlier tax year (if it had been paid that year) can be deducted in the tax year of payment. How to file amended 2012 tax return How To Make the Election To elect to amortize start-up or organizational costs, you must complete and attach Form 4562 to your return for the first tax year you are in business. How to file amended 2012 tax return You may also be required to attach an accompanying statement (described later) to your return. How to file amended 2012 tax return For start-up or organizational costs paid or incurred after September 8, 2008, an accompanying statement is not required. How to file amended 2012 tax return Generally, for start-up or organizational costs paid or incurred before September 9, 2008, and after October 22, 2004, unless you choose to apply Regulations sections 1. How to file amended 2012 tax return 195-1, 1. How to file amended 2012 tax return 248-1, and 1. How to file amended 2012 tax return 709-1, you must also attach an accompanying statement to elect to amortize the costs. How to file amended 2012 tax return If you have both start-up and organizational costs, attach a separate statement (if required) to your return for each type of cost. How to file amended 2012 tax return See Starting a Business , earlier, for more information. How to file amended 2012 tax return Generally, you must file the return by the due date (including any extensions). How to file amended 2012 tax return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). How to file amended 2012 tax return For more information, see the instructions for Part VI of Form 4562. How to file amended 2012 tax return You can choose to forgo the election to amortize by affirmatively electing to capitalize your start-up or organizational costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. How to file amended 2012 tax return Note. How to file amended 2012 tax return The election to either amortize or capitalize start-up or organizational costs is irrevocable and applies to all start-up and organizational costs that are related to the trade or business. How to file amended 2012 tax return If your business is organized as a corporation or partnership, only the corporation or partnership can elect to amortize its start-up or organizational costs. How to file amended 2012 tax return A shareholder or partner cannot make this election. How to file amended 2012 tax return You, as a shareholder or partner, cannot amortize any costs you incur in setting up your corporation or partnership. How to file amended 2012 tax return Only the corporation or partnership can amortize these costs. How to file amended 2012 tax return However, you, as an individual, can elect to amortize costs you incur to investigate an interest in an existing partnership. How to file amended 2012 tax return These costs qualify as business start-up costs if you acquire the partnership interest. How to file amended 2012 tax return Start-up costs election statement. How to file amended 2012 tax return   If you elect to amortize your start-up costs, attach a separate statement (if required) that contains the following information. How to file amended 2012 tax return A description of the business to which the start-up costs relate. How to file amended 2012 tax return A description of each start-up cost incurred. How to file amended 2012 tax return The month your active business began (or was acquired). How to file amended 2012 tax return The number of months in your amortization period (which is generally 180 months). How to file amended 2012 tax return Filing the statement early. How to file amended 2012 tax return   You can elect to amortize your start-up costs by filing the statement with a return for any tax year before the year your active business begins. How to file amended 2012 tax return If you file the statement early, the election becomes effective in the month of the tax year your active business begins. How to file amended 2012 tax return Revised statement. How to file amended 2012 tax return   You can file a revised statement to include any start-up costs not included in your original statement. How to file amended 2012 tax return However, you cannot include on the revised statement any cost you previously treated on your return as a cost other than a start-up cost. How to file amended 2012 tax return You can file the revised statement with a return filed after the return on which you elected to amortize your start-up costs. How to file amended 2012 tax return Organizational costs election statement. How to file amended 2012 tax return   If you elect to amortize your corporation's or partnership's organizational costs, attach a separate statement (if required) that contains the following information. How to file amended 2012 tax return A description of each cost. How to file amended 2012 tax return The amount of each cost. How to file amended 2012 tax return The date each cost was incurred. How to file amended 2012 tax return The month your corporation or partnership began active business (or acquired the business). How to file amended 2012 tax return The number of months in your amortization period (which is generally 180 months). How to file amended 2012 tax return Partnerships. How to file amended 2012 tax return   The statement prepared for a cash basis partnership must also indicate the amount paid before the end of the year for each cost. How to file amended 2012 tax return   You do not need to separately list any partnership organizational cost that is less than $10. How to file amended 2012 tax return Instead, you can list the total amount of these costs with the dates the first and last costs were incurred. How to file amended 2012 tax return   After a partnership makes the election to amortize organizational costs, it can later file an amended return to include additional organizational costs not included in the partnership's original return and statement. How to file amended 2012 tax return Getting a Lease If you get a lease for business property, you may recover the cost of acquiring the lease by amortizing it over the term of the lease. How to file amended 2012 tax return The term of the lease for amortization purposes generally includes all renewal options (and any other period for which you and the lessor reasonably expect the lease to be renewed). How to file amended 2012 tax return However, renewal periods are not included if 75% or more of the cost of acquiring the lease is for the term of the lease remaining on the acquisition date (not including any period for which you may choose to renew, extend, or continue the lease). How to file amended 2012 tax return For more information on the costs of getting a lease, see Cost of Getting a Lease in  chapter 3. How to file amended 2012 tax return How to amortize. How to file amended 2012 tax return   Enter your deduction in Part VI of Form 4562 if you are deducting amortization that begins during the current year, or on the appropriate line of your tax return if you are not otherwise required to file Form 4562. How to file amended 2012 tax return Section 197 Intangibles Generally, you may amortize the capitalized costs of “section 197 intangibles” (defined later) ratably over a 15-year period. How to file amended 2012 tax return You must amortize these costs if you hold the section 197 intangibles in connection with your trade or business or in an activity engaged in for the production of income. How to file amended 2012 tax return You may not be able to amortize section 197 intangibles acquired in a transaction that did not result in a significant change in ownership or use. How to file amended 2012 tax return See Anti-Churning Rules, later. How to file amended 2012 tax return Your amortization deduction each year is the applicable part of the intangible's adjusted basis (for purposes of determining gain), figured by amortizing it ratably over 15 years (180 months). How to file amended 2012 tax return The 15-year period begins with the later of: The month the intangible is acquired, or The month the trade or business or activity engaged in for the production of income begins. How to file amended 2012 tax return You cannot deduct amortization for the month you dispose of the intangible. How to file amended 2012 tax return If you pay or incur an amount that increases the basis of an amortizable section 197 intangible after the 15-year period begins, amortize it over the remainder of the 15-year period beginning with the month the basis increase occurs. How to file amended 2012 tax return You are not allowed any other depreciation or amortization deduction for an amortizable section 197 intangible. How to file amended 2012 tax return Tax-exempt use property subject to a lease. How to file amended 2012 tax return   The amortization period for any section 197 intangible leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership), shall not be less than 125 percent of the lease term. How to file amended 2012 tax return Cost attributable to other property. How to file amended 2012 tax return   The rules for section 197 intangibles do not apply to any amount that is included in determining the cost of property that is not a section 197 intangible. How to file amended 2012 tax return For example, if the cost of computer software is not separately stated from the cost of hardware or other tangible property and you consistently treat it as part of the cost of the hardware or other tangible property, these rules do not apply. How to file amended 2012 tax return Similarly, none of the cost of acquiring real property held for the production of rental income is considered the cost of goodwill, going concern value, or any other section 197 intangible. How to file amended 2012 tax return Section 197 Intangibles Defined The following assets are section 197 intangibles and must be amortized over 180 months: Goodwill; Going concern value; Workforce in place; Business books and records, operating systems, or any other information base, including lists or other information concerning current or prospective customers; A patent, copyright, formula, process, design, pattern, know-how, format, or similar item; A customer-based intangible; A supplier-based intangible; Any item similar to items (3) through (7); A license, permit, or other right granted by a governmental unit or agency (including issuances and renewals); A covenant not to compete entered into in connection with the acquisition of an interest in a trade or business; Any franchise, trademark, or trade name; and A contract for the use of, or a term interest in, any item in this list. How to file amended 2012 tax return You cannot amortize any of the intangibles listed in items (1) through (8) that you created rather than acquired unless you created them in acquiring assets that make up a trade or business or a substantial part of a trade or business. How to file amended 2012 tax return Goodwill. How to file amended 2012 tax return   This is the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor. How to file amended 2012 tax return Going concern value. How to file amended 2012 tax return   This is the additional value of a trade or business that attaches to property because the property is an integral part of an ongoing business activity. How to file amended 2012 tax return It includes value based on the ability of a business to continue to function and generate income even though there is a change in ownership (but does not include any other section 197 intangible). How to file amended 2012 tax return It also includes value based on the immediate use or availability of an acquired trade or business, such as the use of earnings during any period in which the business would not otherwise be available or operational. How to file amended 2012 tax return Workforce in place, etc. How to file amended 2012 tax return   This includes the composition of a workforce (for example, its experience, education, or training). How to file amended 2012 tax return It also includes the terms and conditions of employment, whether contractual or otherwise, and any other value placed on employees or any of their attributes. How to file amended 2012 tax return   For example, you must amortize the part of the purchase price of a business that is for the existence of a highly skilled workforce. How to file amended 2012 tax return Also, you must amortize the cost of acquiring an existing employment contract or relationship with employees or consultants. How to file amended 2012 tax return Business books and records, etc. How to file amended 2012 tax return   This includes the intangible value of technical manuals, training manuals or programs, data files, and accounting or inventory control systems. How to file amended 2012 tax return It also includes the cost of customer lists, subscription lists, insurance expirations, patient or client files, and lists of newspaper, magazine, radio, and television advertisers. How to file amended 2012 tax return Patents, copyrights, etc. How to file amended 2012 tax return   This includes package design, computer software, and any interest in a film, sound recording, videotape, book, or other similar property, except as discussed later under Assets That Are Not Section 197 Intangibles . How to file amended 2012 tax return Customer-based intangible. How to file amended 2012 tax return   This is the composition of market, market share, and any other value resulting from the future provision of goods or services because of relationships with customers in the ordinary course of business. How to file amended 2012 tax return For example, you must amortize the part of the purchase price of a business that is for the existence of the following intangibles. How to file amended 2012 tax return A customer base. How to file amended 2012 tax return A circulation base. How to file amended 2012 tax return An undeveloped market or market growth. How to file amended 2012 tax return Insurance in force. How to file amended 2012 tax return A mortgage servicing contract. How to file amended 2012 tax return An investment management contract. How to file amended 2012 tax return Any other relationship with customers involving the future provision of goods or services. How to file amended 2012 tax return   Accounts receivable or other similar rights to income for goods or services provided to customers before the acquisition of a trade or business are not section 197 intangibles. How to file amended 2012 tax return Supplier-based intangible. How to file amended 2012 tax return   A supplier-based intangible is the value resulting from the future acquisitions, (through contract or other relationships with suppliers in the ordinary course of business) of goods or services that you will sell or use. How to file amended 2012 tax return The amount you pay or incur for supplier-based intangibles includes, for example, any portion of the purchase price of an acquired trade or business that is attributable to the existence of a favorable relationship with persons providing distribution services (such as a favorable shelf or display space or a retail outlet), or the existence of favorable supply contracts. How to file amended 2012 tax return Do not include any amount required to be paid for the goods or services to honor the terms of the agreement or other relationship. How to file amended 2012 tax return Also, see Assets That Are Not Section 197 Intangibles below. How to file amended 2012 tax return Government-granted license, permit, etc. How to file amended 2012 tax return   This is any right granted by a governmental unit or an agency or instrumentality of a governmental unit. How to file amended 2012 tax return For example, you must amortize the capitalized costs of acquiring (including issuing or renewing) a liquor license, a taxicab medallion or license, or a television or radio broadcasting license. How to file amended 2012 tax return Covenant not to compete. How to file amended 2012 tax return   Section 197 intangibles include a covenant not to compete (or similar arrangement) entered into in connection with the acquisition of an interest in a trade or business, or a substantial portion of a trade or business. How to file amended 2012 tax return An interest in a trade or business includes an interest in a partnership or a corporation engaged in a trade or business. How to file amended 2012 tax return   An arrangement that requires the former owner to perform services (or to provide property or the use of property) is not similar to a covenant not to compete to the extent the amount paid under the arrangement represents reasonable compensation for those services or for that property or its use. How to file amended 2012 tax return Franchise, trademark, or trade name. How to file amended 2012 tax return   A franchise, trademark, or trade name is a section 197 intangible. How to file amended 2012 tax return You must amortize its purchase or renewal costs, other than certain contingent payments that you can deduct currently. How to file amended 2012 tax return For information on currently deductible contingent payments, see chapter 11. How to file amended 2012 tax return Professional sports franchise. How to file amended 2012 tax return   A franchise engaged in professional sports and any intangible assets acquired in connection with acquiring the franchise (including player contracts) is a section 197 intangible amortizable over a 15-year period. How to file amended 2012 tax return Contract for the use of, or a term interest in, a section 197 intangible. How to file amended 2012 tax return   Section 197 intangibles include any right under a license, contract, or other arrangement providing for the use of any section 197 intangible. How to file amended 2012 tax return It also includes any term interest in any section 197 intangible, whether the interest is outright or in trust. How to file amended 2012 tax return Assets That Are Not Section 197 Intangibles The following assets are not section 197 intangibles. How to file amended 2012 tax return Any interest in a corporation, partnership, trust, or estate. How to file amended 2012 tax return Any interest under an existing futures contract, foreign currency contract, notional principal contract, interest rate swap, or similar financial contract. How to file amended 2012 tax return Any interest in land. How to file amended 2012 tax return Most computer software. How to file amended 2012 tax return (See Computer software , later. How to file amended 2012 tax return ) Any of the following assets not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. How to file amended 2012 tax return An interest in a film, sound recording, video tape, book, or similar property. How to file amended 2012 tax return A right to receive tangible property or services under a contract or from a governmental agency. How to file amended 2012 tax return An interest in a patent or copyright. How to file amended 2012 tax return Certain rights that have a fixed duration or amount. How to file amended 2012 tax return (See Rights of fixed duration or amount , later. How to file amended 2012 tax return ) An interest under either of the following. How to file amended 2012 tax return An existing lease or sublease of tangible property. How to file amended 2012 tax return A debt that was in existence when the interest was acquired. How to file amended 2012 tax return A right to service residential mortgages unless the right is acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. How to file amended 2012 tax return Certain transaction costs incurred by parties to a corporate organization or reorganization in which any part of a gain or loss is not recognized. How to file amended 2012 tax return Intangible property that is not amortizable under the rules for section 197 intangibles can be depreciated if it meets certain requirements. How to file amended 2012 tax return You generally must use the straight line method over its useful life. How to file amended 2012 tax return For certain intangibles, the depreciation period is specified in the law and regulations. How to file amended 2012 tax return For example, the depreciation period for computer software that is not a section 197 intangible is generally 36 months. How to file amended 2012 tax return For more information on depreciating intangible property, see Intangible Property under What Method Can You Use To Depreciate Your Property? in chapter 1 of Publication 946. How to file amended 2012 tax return Computer software. How to file amended 2012 tax return   Section 197 intangibles do not include the following types of computer software. How to file amended 2012 tax return Software that meets all the following requirements. How to file amended 2012 tax return It is, or has been, readily available for purchase by the general public. How to file amended 2012 tax return It is subject to a nonexclusive license. How to file amended 2012 tax return It has not been substantially modified. How to file amended 2012 tax return This requirement is considered met if the cost of all modifications is not more than the greater of 25% of the price of the publicly available unmodified software or $2,000. How to file amended 2012 tax return Software that is not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. How to file amended 2012 tax return Computer software defined. How to file amended 2012 tax return   Computer software includes all programs designed to cause a computer to perform a desired function. How to file amended 2012 tax return It also includes any database or similar item that is in the public domain and is incidental to the operation of qualifying software. How to file amended 2012 tax return Rights of fixed duration or amount. How to file amended 2012 tax return   Section 197 intangibles do not include any right under a contract or from a governmental agency if the right is acquired in the ordinary course of a trade or business (or in an activity engaged in for the production of income) but not as part of a purchase of a trade or business and either: Has a fixed life of less than 15 years, or Is of a fixed amount that, except for the rules for section 197 intangibles, would be recovered under a method similar to the unit-of-production method of cost recovery. How to file amended 2012 tax return However, this does not apply to the following intangibles. How to file amended 2012 tax return Goodwill. How to file amended 2012 tax return Going concern value. How to file amended 2012 tax return A covenant not to compete. How to file amended 2012 tax return A franchise, trademark, or trade name. How to file amended 2012 tax return A customer-related information base, customer-based intangible, or similar item. How to file amended 2012 tax return Safe Harbor for Creative Property Costs If you are engaged in the trade or business of film production, you may be able to amortize the creative property costs for properties not set for production within 3 years of the first capitalized transaction. How to file amended 2012 tax return You may amortize these costs ratably over a 15-year period beginning on the first day of the second half of the tax year in which you properly write off the costs for financial accounting purposes. How to file amended 2012 tax return If, during the 15-year period, you dispose of the creative property rights, you must continue to amortize the costs over the remainder of the 15-year period. How to file amended 2012 tax return Creative property costs include costs paid or incurred to acquire and develop screenplays, scripts, story outlines, motion picture production rights to books and plays, and other similar properties for purposes of potential future film development, production, and exploitation. How to file amended 2012 tax return Amortize these costs using the rules of Revenue Procedure 2004-36. How to file amended 2012 tax return For more information, see Revenue Procedure 2004-36, 2004-24 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 1063, available at  www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2004-24_IRB/ar16. How to file amended 2012 tax return html. How to file amended 2012 tax return A change in the treatment of creative property costs is a change in method of accounting. How to file amended 2012 tax return Anti-Churning Rules Anti-churning rules prevent you from amortizing most section 197 intangibles if the transaction in which you acquired them did not result in a significant change in ownership or use. How to file amended 2012 tax return These rules apply to goodwill and going concern value, and to any other section 197 intangible that is not otherwise depreciable or amortizable. How to file amended 2012 tax return Under the anti-churning rules, you cannot use 15-year amortization for the intangible if any of the following conditions apply. How to file amended 2012 tax return You or a related person (defined later) held or used the intangible at any time from July 25, 1991, through August 10, 1993. How to file amended 2012 tax return You acquired the intangible from a person who held it at any time during the period in (1) and, as part of the transaction, the user did not change. How to file amended 2012 tax return You granted the right to use the intangible to a person (or a person related to that person) who held or used it at any time during the period in (1). How to file amended 2012 tax return This applies only if the transaction in which you granted the right and the transaction in which you acquired the intangible are part of a series of related transactions. How to file amended 2012 tax return See Related person , later, for more information. How to file amended 2012 tax return Exceptions. How to file amended 2012 tax return   The anti-churning rules do not apply in the following situations. How to file amended 2012 tax return You acquired the intangible from a decedent and its basis was stepped up to its fair market value. How to file amended 2012 tax return The intangible was amortizable as a section 197 intangible by the seller or transferor you acquired it from. How to file amended 2012 tax return This exception does not apply if the transaction in which you acquired the intangible and the transaction in which the seller or transferor acquired it are part of a series of related transactions. How to file amended 2012 tax return The gain-recognition exception, discussed later, applies. How to file amended 2012 tax return Related person. How to file amended 2012 tax return   For purposes of the anti-churning rules, the following are related persons. How to file amended 2012 tax return An individual and his or her brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. How to file amended 2012 tax return ), and lineal descendants (children, grandchildren, etc. How to file amended 2012 tax return ). How to file amended 2012 tax return A corporation and an individual who owns, directly or indirectly, more than 20% of the value of the corporation's outstanding stock. How to file amended 2012 tax return Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 20%” is substituted for “at least 80%” in that definition and the determination is made without regard to subsections (a)(4) and (e)(3)(C) of section 1563. How to file amended 2012 tax return (For an exception, see section 1. How to file amended 2012 tax return 197-2(h)(6)(iv) of the regulations. How to file amended 2012 tax return ) A trust fiduciary and a corporation if more than 20% of the value of the corporation's outstanding stock is owned, directly or indirectly, by or for the trust or grantor of the trust. How to file amended 2012 tax return The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. How to file amended 2012 tax return The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. How to file amended 2012 tax return The executor and beneficiary of an estate. How to file amended 2012 tax return A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization (or whose family members control it). How to file amended 2012 tax return A corporation and a partnership if the same persons own more than 20% of the value of the outstanding stock of the corporation and more than 20% of the capital or profits interest in the partnership. How to file amended 2012 tax return Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 20% of the value of the outstanding stock of each corporation. How to file amended 2012 tax return Two partnerships if the same persons own, directly or indirectly, more than 20% of the capital or profits interests in both partnerships. How to file amended 2012 tax return A partnership and a person who owns, directly or indirectly, more than 20% of the capital or profits interests in the partnership. How to file amended 2012 tax return Two persons who are engaged in trades or businesses under common control (as described in section 41(f)(1) of the Internal Revenue Code). How to file amended 2012 tax return When to determine relationship. How to file amended 2012 tax return   Persons are treated as related if the relationship existed at the following time. How to file amended 2012 tax return In the case of a single transaction, immediately before or immediately after the transaction in which the intangible was acquired. How to file amended 2012 tax return In the case of a series of related transactions (or a series of transactions that comprise a qualified stock purchase under section 338(d)(3) of the Internal Revenue Code), immediately before the earliest transaction or immediately after the last transaction. How to file amended 2012 tax return Ownership of stock. How to file amended 2012 tax return   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. How to file amended 2012 tax return Rule 1. How to file amended 2012 tax return   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. How to file amended 2012 tax return Rule 2. How to file amended 2012 tax return   An individual is considered to own the stock directly or indirectly owned by or for his or her family. How to file amended 2012 tax return Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. How to file amended 2012 tax return Rule 3. How to file amended 2012 tax return   An individual owning (other than by applying Rule 2) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. How to file amended 2012 tax return Rule 4. How to file amended 2012 tax return   For purposes of applying Rule 1, 2, or 3, treat stock constructively owned by a person under Rule 1 as actually owned by that person. How to file amended 2012 tax return Do not treat stock constructively owned by an individual under Rule 2 or 3 as owned by the individual for reapplying Rule 2 or 3 to make another person the constructive owner of the stock. How to file amended 2012 tax return Gain-recognition exception. How to file amended 2012 tax return   This exception to the anti-churning rules applies if the person you acquired the intangible from (the transferor) meets both of the following requirements. How to file amended 2012 tax return That person would not be related to you (as described under Related person , earlier) if the 20% test for ownership of stock and partnership interests were replaced by a 50% test. How to file amended 2012 tax return That person chose to recognize gain on the disposition of the intangible and pay income tax on the gain at the highest tax rate. How to file amended 2012 tax return See chapter 2 in Publication 544 for information on making this choice. How to file amended 2012 tax return   If this exception applies, the anti-churning rules apply only to the amount of your adjusted basis in the intangible that is more than the gain recognized by the transferor. How to file amended 2012 tax return Notification. How to file amended 2012 tax return   If the person you acquired the intangible from chooses to recognize gain under the rules for this exception, that person must notify you in writing by the due date of the return on which the choice is made. How to file amended 2012 tax return Anti-abuse rule. How to file amended 2012 tax return   You cannot amortize any section 197 intangible acquired in a transaction for which the principal purpose was either of the following. How to file amended 2012 tax return To avoid the requirement that the intangible be acquired after August 10, 1993. How to file amended 2012 tax return To avoid any of the anti-churning rules. How to file amended 2012 tax return More information. How to file amended 2012 tax return   For more information about the anti-churning rules, including additional rules for partnerships, see Regulations section 1. How to file amended 2012 tax return 197-2(h). How to file amended 2012 tax return Incorrect Amount of Amortization Deducted If you later discover that you deducted an incorrect amount for amortization for a section 197 intangible in any year, you may be able to make a correction for that year by filing an amended return. How to file amended 2012 tax return See Amended Return , next. How to file amended 2012 tax return If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amortization. How to file amended 2012 tax return See Changing Your Accounting Method , later. How to file amended 2012 tax return Amended Return If you deducted an incorrect amount for amortization, you can file an amended return to correct the following. How to file amended 2012 tax return A mathematical error made in any year. How to file amended 2012 tax return A posting error made in any year. How to file amended 2012 tax return An amortization deduction for a section 197 intangible for which you have not adopted a method of accounting. How to file amended 2012 tax return When to file. How to file amended 2012 tax return   If an amended return is allowed, you must file it by the later of the following dates. How to file amended 2012 tax return 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. How to file amended 2012 tax return (A return filed early is considered filed on the due date. How to file amended 2012 tax return ) 2 years from the time you paid your tax for that year. How to file amended 2012 tax return Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. How to file amended 2012 tax return File Form 3115, Application for Change in Accounting Method, to request a change to a permissible method of accounting for amortization. How to file amended 2012 tax return The following are examples of a change in method of accounting for amortization. How to file amended 2012 tax return A change in the amortization method, period of recovery, or convention of an amortizable asset. How to file amended 2012 tax return A change in the accounting for amortizable assets from a single asset account to a multiple asset account (pooling), or vice versa. How to file amended 2012 tax return A change in the accounting for amortizable assets from one type of multiple asset account to a different type of multiple asset account. How to file amended 2012 tax return Changes in amortization that are not a change in method of accounting include the following: A change in computing amortization in the tax year in which your use of the asset changes. How to file amended 2012 tax return An adjustment in the useful life of an amortizable asset. How to file amended 2012 tax return Generally, the making of a late amortization election or the revocation of a timely valid amortization election. How to file amended 2012 tax return Any change in the placed-in-service date of an amortizable asset. How to file amended 2012 tax return See Regulations section 1. How to file amended 2012 tax return 446-1(e)(2)(ii)(a) for more information and examples. How to file amended 2012 tax return Automatic approval. How to file amended 2012 tax return   In some instances, you may be able to get automatic approval from the IRS to change your method of accounting for amortization. How to file amended 2012 tax return For a list of automatic accounting method changes, see the Instructions for Form 3115. How to file amended 2012 tax return Also see the Instructions for Form 3115 for more information on getting approval, automatic approval procedures, and a list of exceptions to the automatic approval process. How to file amended 2012 tax return For more information, see Revenue Procedure 2006-12, as modified by Revenue Procedure 2006-37, and Revenue Procedure 2008-52, as amplified, clarified, and modified by Revenue Procedure 2009-39, as clarified and modified by Revenue Procedure 2011-14, as modified and amplified by Revenue Procedure 2011-22, as modified by Revenue Procedure 2012-39, or any successor. How to file amended 2012 tax return See Revenue Procedure 2006-12, 2006-3 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 310, available at  www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2006-03_IRB/ar14. How to file amended 2012 tax return html. How to file amended 2012 tax return  See Revenue Procedure 2006-37, 2006-38 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 499, available at  www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2006-38_IRB/ar10. How to file amended 2012 tax return html. How to file amended 2012 tax return  See Revenue Procedure 2008-52, 2008-36 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 587, available at www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2008-36_IRB/ar09. How to file amended 2012 tax return html. How to file amended 2012 tax return  See Revenue Procedure 2009-39, 2009-38 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 371, available at  www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2009-38_IRB/ar08. How to file amended 2012 tax return html. How to file amended 2012 tax return  See Revenue Procedure 2011-14, 2011-4 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 330, available at  www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2011-04_IRB/ar08. How to file amended 2012 tax return html. How to file amended 2012 tax return  See Revenue Procedure 2011-22, 2011-18 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 737, available at  www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2011-18_IRB/ar08. How to file amended 2012 tax return html. How to file amended 2012 tax return Also, see Revenue Procedure 2012-39, 2012-41 I. How to file amended 2012 tax return R. How to file amended 2012 tax return B. How to file amended 2012 tax return 470 available at www. How to file amended 2012 tax return irs. How to file amended 2012 tax return gov/irb/2012-41_IRB/index. How to file amended 2012 tax return html. How to file amended 2012 tax return Disposition of Section 197 Intangibles A section 197 intangible is treated as depreciable property used in your trade or business. How to file amended 2012 tax return If you held the intangible for more than 1 year, any gain on its disposition, up to the amount of allowable amortization, is ordinary income (section 1245 gain). How to file amended 2012 tax return If multiple section 197 intangibles are disposed of in a single transaction or a series of related transactions, treat all of the section 197 intangibles as if they were a single asset for purposes of determining the amount of gain that is ordinary income. How to file amended 2012 tax return Any remaining gain, or any loss, is a section 1231 gain or loss. How to file amended 2012 tax return If you held the intangible 1 year or less, any gain or loss on its disposition is an ordinary gain or loss. How to file amended 2012 tax return For more information on ordinary or capital gain or loss on business property, see chapter 3 in Publication 544. How to file amended 2012 tax return Nondeductible loss. How to file amended 2012 tax return   You cannot deduct any loss on the disposition or worthlessness of a section 197 intangible that you acquired in the same transaction (or series of related transactions) as other section 197 intangibles you still have. How to file amended 2012 tax return Instead, increase the adjusted basis of each remaining amortizable section 197 intangible by a proportionate part of the nondeductible loss. How to file amended 2012 tax return Figure the increase by multiplying the nondeductible loss on the disposition of the intangible by the following fraction. How to file amended 2012 tax return The numerator is the adjusted basis of each remaining intangible on the date of the disposition. How to file amended 2012 tax return The denominator is the total adjusted bases of all remaining amortizable section 197 intangibles on the date of the disposition. How to file amended 2012 tax return Covenant not to compete. How to file amended 2012 tax return   A covenant not to compete, or similar arrangement, is not considered disposed of or worthless before you dispose of your entire interest in the trade or business for which you entered into the covenant. How to file amended 2012 tax return Nonrecognition transfers. How to file amended 2012 tax return   If you acquire a section 197 intangible in a nonrecognition transfer, you are treated as the transferor with respect to the part of your adjusted basis in the intangible that is not more than the transferor's adjusted basis. How to file amended 2012 tax return You amortize this part of the adjusted basis over the intangible's remaining amortization period in the hands of the transferor. How to file amended 2012 tax return Nonrecognition transfers include transfers to a corporation, partnership contributions and distributions, like-kind exchanges, and involuntary conversions. How to file amended 2012 tax return   In a like-kind exchange or involuntary conversion of a section 197 intangible, you must continue to amortize the part of your adjusted basis in the acquired intangible that is not more than your adjusted basis in the exchanged or converted intangible over the remaining amortization period of the exchanged or converted intangible. How to file amended 2012 tax return Amortize over a new 15-year period the part of your adjusted basis in the acquired intangible that is more than your adjusted basis in the exchanged or converted intangible. How to file amended 2012 tax return Example. How to file amended 2012 tax return You own a section 197 intangible you have amortized for 4 full years. How to file amended 2012 tax return It has a remaining unamortized basis of $30,000. How to file amended 2012 tax return You exchange the asset plus $10,000 for a like-kind section 197 intangible. How to file amended 2012 tax return The nonrecognition provisions of like-kind exchanges apply. How to file amended 2012 tax return You amortize $30,000 of the $40,000 adjusted basis of the acquired intangible over the 11 years remaining in the original 15-year amortization period for the transferred asset. How to file amended 2012 tax return You amortize the other $10,000 of adjusted basis over a new 15-year period. How to file amended 2012 tax return For more information, see Regulations section 1. How to file amended 2012 tax return 197-2(g). How to file amended 2012 tax return Reforestation Costs You can elect to deduct a limited amount of reforestation costs paid or incurred during the tax year. How to file amended 2012 tax return See Reforestation Costs in chapter 7. How to file amended 2012 tax return You can elect to amortize the qualifying costs that are not deducted currently over an 84-month period. How to file amended 2012 tax return There is no limit on the amount of your amortization deduction for reforestation costs paid or incurred during the tax year. How to file amended 2012 tax return The election to amortize reforestation costs incurred by a partnership, S corporation, or estate must be made by the partnership, corporation, or estate. How to file amended 2012 tax return A partner, shareholder, or beneficiary cannot make that election. How to file amended 2012 tax return A partner's or shareholder's share of amortizable costs is figured under the general rules for allocating items of income, loss, deduction, etc. How to file amended 2012 tax return , of a partnership or S corporation. How to file amended 2012 tax return The amortizable costs of an estate are divided between the estate and the income beneficiary based on the income of the estate allocable to each. How to file amended 2012 tax return Qualifying costs. How to file amended 2012 tax return   Reforestation costs are the direct costs of planting or seeding for forestation or reforestation. How to file amended 2012 tax return Qualifying costs include only those costs you must capitalize and include in the adjusted basis of the property. How to file amended 2012 tax return They include costs for the following items. How to file amended 2012 tax return Site preparation. How to file amended 2012 tax return Seeds or seedlings. How to file amended 2012 tax return Labor. How to file amended 2012 tax return Tools. How to file amended 2012 tax return Depreciation on equipment used in planting and seeding. How to file amended 2012 tax return Qualifying costs do not include costs for which the government reimburses you under a cost-sharing program, unless you include the reimbursement in your income. How to file amended 2012 tax return Qualified timber property. How to file amended 2012 tax return   Qualified timber property is property that contains trees in significant commercial quantities. How to file amended 2012 tax return It can be a woodlot or other site that you own or lease. How to file amended 2012 tax return The property qualifies only if it meets all of the following requirements. How to file amended 2012 tax return It is located in the United States. How to file amended 2012 tax return It is held for the growing and cutting of timber you will either use in, or sell for use in, the commercial production of timber products. How to file amended 2012 tax return It consists of at least one acre planted with tree seedlings in the manner normally used in forestation or reforestation. How to file amended 2012 tax return Qualified timber property does not include property on which you have planted shelter belts or ornamental trees, such as Christmas trees. How to file amended 2012 tax return Amortization period. How to file amended 2012 tax return   The 84-month amortization period starts on the first day of the first month of the second half of the tax year you incur the costs (July 1 for a calendar year taxpayer), regardless of the month you actually incur the costs. How to file amended 2012 tax return You can claim amortization deductions for no more than 6 months of the first and last (eighth) tax years of the period. How to file amended 2012 tax return Life tenant and remainderman. How to file amended 2012 tax return   If one person holds the property for life with the remainder going to another person, the life tenant is entitled to the full amortization for qualifying reforestation costs incurred by the life tenant. How to file amended 2012 tax return Any remainder interest in the property is ignored for amortization purposes. How to file amended 2012 tax return Recapture. How to file amended 2012 tax return   If you dispose of qualified timber property within 10 years after the tax year you incur qualifying reforestation expenses, report any gain as ordinary income up to the amortization you took. How to file amended 2012 tax return See chapter 3 of Publication 544 for more information. How to file amended 2012 tax return How to make the election. How to file amended 2012 tax return   To elect to amortize qualifying reforestation costs, complete Part VI of Form 4562 and attach a statement that contains the following information. How to file amended 2012 tax return A description of the costs and the dates you incurred them. How to file amended 2012 tax return A description of the type of timber being grown and the purpose for which it is grown. How to file amended 2012 tax return Attach a separate statement for each property for which you amortize reforestation costs. How to file amended 2012 tax return   Generally, you must make the election on a timely filed return (including extensions) for the tax year in which you incurred the costs. How to file amended 2012 tax return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). How to file amended 2012 tax return Attach Form 4562 and the statement to the amended return and write “Filed pursuant to section 301. How to file amended 2012 tax return 9100-2” on Form 4562. How to file amended 2012 tax return File the amended return at the same address you filed the original return. How to file amended 2012 tax return Revoking the election. How to file amended 2012 tax return   You must get IRS approval to revoke your election to amortize qualifying reforestation costs. How to file amended 2012 tax return Your application to revoke the election must include your name, address, the years for which your election was in effect, and your reason for revoking it. How to file amended 2012 tax return Please provide your daytime telephone number (optional), in case we need to contact you. How to file amended 2012 tax return You, or your duly authorized representative, must sign the application and file it at least 90 days before the due date (without extensions) for filing your income tax return for the first tax year for which your election is to end. How to file amended 2012 tax return    Send the application to: Internal Revenue Service Associate Chief Counsel Passthroughs and Special Industries CC:PSI:6 1111 Constitution Ave. How to file amended 2012 tax return NW, IR-5300 Washington, DC 20224 Geological and Geophysical Costs You can amortize the cost of geological and geophysical expenses paid or incurred in connection with oil and gas exploration or development within the United States. How to file amended 2012 tax return These costs can be amortized ratably over a 24-month period beginning on the mid-point of the tax year in which the expenses were paid or incurred. How to file amended 2012 tax return For major integrated oil companies (as defined in section 167(h)(5)), these costs must be amortized ratably over a 5-year period for costs paid or incurred after May 17, 2006 (a 7-year period for costs paid or incurred after December 19, 2007). How to file amended 2012 tax return If you retire or abandon the property during the amortization period, no amortization deduction is allowed in the year of retirement or abandonment. How to file amended 2012 tax return Pollution Control Facilities You can elect to amortize the cost of a certified pollution control facility over 60 months. How to file amended 2012 tax return However, see Atmospheric pollution control facilities for an exception. How to file amended 2012 tax return The cost of a pollution control facility that is not eligible for amortization can be depreciated under the regular rules for depreciation. How to file amended 2012 tax return Also, you can claim a special depreciation allowance on a certified pollution control facility that is qualified property even if you elect to amortize its cost. How to file amended 2012 tax return You must reduce its cost (amortizable basis) by the amount of any special allowance you claim. How to file amended 2012 tax return See chapter 3 of Publication 946. How to file amended 2012 tax return A certified pollution control facility is a new identifiable treatment facility used in connection with a plant or other property in operation before 1976, to reduce or control water or atmospheric pollution or contamination. How to file amended 2012 tax return The facility must do so by removing, changing, disposing, storing, or preventing the creation or emission of pollutants, contaminants, wastes, or heat. How to file amended 2012 tax return The facility must be certified by state and federal certifying authorities. How to file amended 2012 tax return The facility must not significantly increase the output or capacity, extend the useful life, or reduce the total operating costs of the plant or other property. How to file amended 2012 tax return Also, it must not significantly change the nature of the manufacturing or production process or facility. How to file amended 2012 tax return The federal certifying authority will not certify your property to the extent it appears you will recover (over the property's useful life) all or part of its cost from the profit based on its operation (such as through sales of recovered wastes). How to file amended 2012 tax return The federal certifying authority will describe the nature of the potential cost recovery. How to file amended 2012 tax return You must then reduce the amortizable basis of the facility by this potential recovery. How to file amended 2012 tax return New identifiable treatment facility. How to file amended 2012 tax return   A new identifiable treatment facility is tangible depreciable property that is identifiable as a treatment facility. How to file amended 2012 tax return It does not include a building and its structural components unless the building is exclusively a treatment facility. How to file amended 2012 tax return Atmospheric pollution control facilities. How to file amended 2012 tax return   Certain atmospheric pollution control facilities can be amortized over 84 months. How to file amended 2012 tax return To qualify, the following must apply. How to file amended 2012 tax return The facility must be acquired and placed in service after April 11, 2005. How to file amended 2012 tax return If acquired, the original use must begin with you after April 11, 2005. How to file amended 2012 tax return The facility must be used in connection with an electric generation plant or other property placed in operation after December 31, 1975, that is primarily coal fired. How to file amended 2012 tax return If you construct, reconstruct, or erect the facility, only the basis attributable to the construction, reconstruction, or erection completed after April 11, 2005, qualifies. How to file amended 2012 tax return Basis reduction for corporations. How to file amended 2012 tax return   A corporation must reduce the amortizable basis of a pollution control facility by 20% before figuring the amortization deduction. How to file amended 2012 tax return More information. How to file amended 2012 tax return   For more information on the amortization of pollution control facilities, see Code sections 169 and 291(c) and the related regulations. How to file amended 2012 tax return Research and Experimental Costs You can elect to amortize your research and experimental costs, deduct them as current business expenses, or write them off over a 10-year period (see Optional write-off method below). How to file amended 2012 tax return If you elect to amortize these costs, deduct them in equal amounts over 60 months or more. How to file amended 2012 tax return The amortization period begins the month you first receive an economic benefit from the costs. How to file amended 2012 tax return For a definition of “research and experimental costs” and information on deducting them as current business expenses, see chapter 7. How to file amended 2012 tax return Optional write-off method. How to file amended 2012 tax return   Rather than amortize these costs or deduct them as a current expense, you have the option of deducting (writing off) research and experimental costs ratably over a 10-year period beginning with the tax year in which you incurred the costs. How to file amended 2012 tax return For more information, see Optional Write-off of Certain Tax Preferences , later, and section 59(e) of the Internal Revenue Code. How to file amended 2012 tax return Costs you can amortize. How to file amended 2012 tax return   You can amortize costs chargeable to a capital account (see chapter 1) if you meet both of the following requirements. How to file amended 2012 tax return You paid or incurred the costs in your trade or business. How to file amended 2012 tax return You are not deducting the costs currently. How to file amended 2012 tax return How to make the election. How to file amended 2012 tax return   To elect to amortize research and experimental costs, complete Part VI of Form 4562 and attach it to your income tax return. How to file amended 2012 tax return Generally, you must file the return by the due date (including extensions). How to file amended 2012 tax return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). How to file amended 2012 tax return Attach Form 4562 to the amended return and write “Filed pursuant to section 301. How to file amended 2012 tax return 9100-2” on Form 4562. How to file amended 2012 tax return File the amended return at the same address you filed the original return. How to file amended 2012 tax return   Your election is binding for the year it is made and for all later years unless you obtain approval from the IRS to change to a different method. How to file amended 2012 tax return Optional Write-off of Certain Tax Preferences You can elect to amortize certain tax preference items over an optional period beginning in the tax year in which you incurred the costs. How to file amended 2012 tax return If you make this election, there is no AMT adjustment. How to file amended 2012 tax return The applicable costs and the optional recovery periods are as follows: Circulation costs — 3 years, Intangible drilling and development costs — 60 months, Mining exploration and development costs — 10 years, and Research and experimental costs — 10 years. How to file amended 2012 tax return How to make the election. How to file amended 2012 tax return   To elect to amortize qualifying costs over the optional recovery period, complete Part VI of Form 4562 and attach a statement containing the following information to your return for the tax year in which the election begins: Your name, address, and taxpayer identification number; and The type of cost and the specific amount of the cost for which you are making the election. How to file amended 2012 tax return   Generally, the election must be made on a timely filed return (including extensions) for the tax year in which you incurred the costs. How to file amended 2012 tax return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). How to file amended 2012 tax return Attach Form 4562 to the amended return and write “Filed pursuant to section 301. How to file amended 2012 tax return 9100-2” on Form 4562. How to file amended 2012 tax return File the amended return at the same address you filed the original return. How to file amended 2012 tax return Revoking the election. How to file amended 2012 tax return   You must obtain consent from the IRS to revoke your election. How to file amended 2012 tax return Your request to revoke the election must be submitted to the IRS in the form of a letter ruling before the end of the tax year in which the optional recovery period ends. How to file amended 2012 tax return The request must contain all of the information necessary to demonstrate the rare and unusual circumstances that would justify granting revocation. How to file amended 2012 tax return If the request for revocation is approved, any unamortized costs are deductible in the year the revocation is effective. How to file amended 2012 tax return Prev  Up  Next   Home   More Online Publications