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How To File Late Tax Returns

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How To File Late Tax Returns

How to file late tax returns Publication 15-B - Main Content Table of Contents 1. How to file late tax returns Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. How to file late tax returns Fringe Benefit Exclusion RulesAccident and Health Benefits Achievement Awards Adoption Assistance Athletic Facilities De Minimis (Minimal) Benefits Dependent Care Assistance Educational Assistance Employee Discounts Employee Stock Options Employer-Provided Cell Phones Group-Term Life Insurance Coverage Health Savings Accounts Lodging on Your Business Premises Meals Moving Expense Reimbursements No-Additional-Cost Services Retirement Planning Services Transportation (Commuting) Benefits Tuition Reduction Working Condition Benefits 3. How to file late tax returns Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. How to file late tax returns Rules for Withholding, Depositing, and ReportingTransfer of property. How to file late tax returns Amount of deposit. How to file late tax returns Limitation. How to file late tax returns Conformity rules. How to file late tax returns Election not to withhold income tax. How to file late tax returns How To Get Tax Help 1. How to file late tax returns Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. How to file late tax returns For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. How to file late tax returns Performance of services. How to file late tax returns   A person who performs services for you does not have to be your employee. How to file late tax returns A person may perform services for you as an independent contractor, partner, or director. How to file late tax returns Also, for fringe benefit purposes, treat a person who agrees not to perform services (such as under a covenant not to compete) as performing services. How to file late tax returns Provider of benefit. How to file late tax returns   You are the provider of a fringe benefit if it is provided for services performed for you. How to file late tax returns You are considered the provider of a fringe benefit even if a third party, such as your client or customer, provides the benefit to your employee for services the employee performs for you. How to file late tax returns For example, if, in exchange for goods or services, your customer provides day care services as a fringe benefit to your employees for services they provide for you as their employer, then you are the provider of this fringe benefit even though the customer is actually providing the day care. How to file late tax returns Recipient of benefit. How to file late tax returns   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. How to file late tax returns That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. How to file late tax returns For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. How to file late tax returns Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. How to file late tax returns Section 2 discusses the exclusions that apply to certain fringe benefits. How to file late tax returns Any benefit not excluded under the rules discussed in section 2 is taxable. How to file late tax returns Including taxable benefits in pay. How to file late tax returns   You must include in a recipient's pay the amount by which the value of a fringe benefit is more than the sum of the following amounts. How to file late tax returns Any amount the law excludes from pay. How to file late tax returns Any amount the recipient paid for the benefit. How to file late tax returns The rules used to determine the value of a fringe benefit are discussed in section 3. How to file late tax returns   If the recipient of a taxable fringe benefit is your employee, the benefit is subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. How to file late tax returns However, you can use special rules to withhold, deposit, and report the employment taxes. How to file late tax returns These rules are discussed in section 4. How to file late tax returns   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. How to file late tax returns However, you may have to report the benefit on one of the following information returns. How to file late tax returns If the recipient receives the benefit as: Use: An independent contractor Form 1099-MISC, Miscellaneous Income A partner Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. How to file late tax returns For more information, see the instructions for the forms listed above. How to file late tax returns Cafeteria Plans A cafeteria plan, including a flexible spending arrangement, is a written plan that allows your employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. How to file late tax returns If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. How to file late tax returns Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. How to file late tax returns However, a cafeteria plan can include a qualified 401(k) plan as a benefit. How to file late tax returns Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. How to file late tax returns Qualified benefits. How to file late tax returns   A cafeteria plan can include the following benefits discussed in section 2. How to file late tax returns Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). How to file late tax returns Adoption assistance. How to file late tax returns Dependent care assistance. How to file late tax returns Group-term life insurance coverage (including costs that cannot be excluded from wages). How to file late tax returns Health savings accounts (HSAs). How to file late tax returns Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. How to file late tax returns Benefits not allowed. How to file late tax returns   A cafeteria plan cannot include the following benefits discussed in section 2. How to file late tax returns Archer MSAs. How to file late tax returns See Accident and Health Benefits in section 2. How to file late tax returns Athletic facilities. How to file late tax returns De minimis (minimal) benefits. How to file late tax returns Educational assistance. How to file late tax returns Employee discounts. How to file late tax returns Employer-provided cell phones. How to file late tax returns Lodging on your business premises. How to file late tax returns Meals. How to file late tax returns Moving expense reimbursements. How to file late tax returns No-additional-cost services. How to file late tax returns Transportation (commuting) benefits. How to file late tax returns Tuition reduction. How to file late tax returns Working condition benefits. How to file late tax returns It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). How to file late tax returns $2,500 limit on a health flexible spending arrangement (FSA). How to file late tax returns   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. How to file late tax returns For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. How to file late tax returns   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). How to file late tax returns While cafeteria plans generally must be amended on a prospective basis, an amendment that is adopted on or before December 31, 2014, may be made effective retroactively, provided that in operation the cafeteria plan meets the limit for plan years beginning after December 31, 2012. How to file late tax returns A cafeteria plan that does not limit health FSA contributions to the dollar limit is not a cafeteria plan and all benefits offered under the plan are includible in the employee's gross income. How to file late tax returns   For more information, see Notice 2012-40, 2012-26 I. How to file late tax returns R. How to file late tax returns B. How to file late tax returns 1046, available at www. How to file late tax returns irs. How to file late tax returns gov/irb/2012-26_IRB/ar09. How to file late tax returns html. How to file late tax returns Employee. How to file late tax returns   For these plans, treat the following individuals as employees. How to file late tax returns A current common-law employee. How to file late tax returns See section 2 in Publication 15 (Circular E) for more information. How to file late tax returns A full-time life insurance agent who is a current statutory employee. How to file late tax returns A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file late tax returns Exception for S corporation shareholders. How to file late tax returns   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file late tax returns A 2% shareholder for this purpose is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file late tax returns Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file late tax returns Plans that favor highly compensated employees. How to file late tax returns   If your plan favors highly compensated employees as to eligibility to participate, contributions, or benefits, you must include in their wages the value of taxable benefits they could have selected. How to file late tax returns A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. How to file late tax returns   A highly compensated employee for this purpose is any of the following employees. How to file late tax returns An officer. How to file late tax returns A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. How to file late tax returns An employee who is highly compensated based on the facts and circumstances. How to file late tax returns A spouse or dependent of a person described in (1), (2), or (3). How to file late tax returns Plans that favor key employees. How to file late tax returns   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. How to file late tax returns A plan favors key employees if more than 25% of the total of the nontaxable benefits you provide for all employees under the plan go to key employees. How to file late tax returns However, a plan you maintain under a collective bargaining agreement does not favor key employees. How to file late tax returns   A key employee during 2014 is generally an employee who is either of the following. How to file late tax returns An officer having annual pay of more than $170,000. How to file late tax returns An employee who for 2014 is either of the following. How to file late tax returns A 5% owner of your business. How to file late tax returns A 1% owner of your business whose annual pay was more than $150,000. How to file late tax returns Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. How to file late tax returns Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. How to file late tax returns Eligible employer. How to file late tax returns   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. How to file late tax returns If your business was not in existence throughout the preceding year, you are eligible if you reasonably expect to employ an average of 100 or fewer employees in the current year. How to file late tax returns If you establish a simple cafeteria plan in a year that you employ an average of 100 or fewer employees, you are considered an eligible employer for any subsequent year as long as you do not employ an average of 200 or more employees in a subsequent year. How to file late tax returns Eligibility and participation requirements. How to file late tax returns   These requirements are met if all employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate and each employee eligible to participate in the plan may elect any benefit available under the plan. How to file late tax returns You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year, Have less than 1 year of service with you as of any day during the plan year, Are covered under a collective bargaining agreement, or Are nonresident aliens working outside the United States whose income did not come from a U. How to file late tax returns S. How to file late tax returns source. How to file late tax returns Contribution requirements. How to file late tax returns   You must make a contribution to provide qualified benefits on behalf of each qualified employee in an amount equal to: A uniform percentage (not less than 2%) of the employee’s compensation for the plan year, or An amount which is at least 6% of the employee’s compensation for the plan year or twice the amount of the salary reduction contributions of each qualified employee, whichever is less. How to file late tax returns If the contribution requirements are met using option (2), the rate of contribution to any salary reduction contribution of a highly compensated or key employee can not be greater than the rate of contribution to any other employee. How to file late tax returns More information. How to file late tax returns   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. How to file late tax returns 2. How to file late tax returns Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. How to file late tax returns These rules exclude all or part of the value of certain benefits from the recipient's pay. How to file late tax returns The excluded benefits are not subject to federal income tax withholding. How to file late tax returns Also, in most cases, they are not subject to social security, Medicare, or federal unemployment (FUTA) tax and are not reported on Form W-2. How to file late tax returns This section discusses the exclusion rules for the following fringe benefits. How to file late tax returns Accident and health benefits. How to file late tax returns Achievement awards. How to file late tax returns Adoption assistance. How to file late tax returns Athletic facilities. How to file late tax returns De minimis (minimal) benefits. How to file late tax returns Dependent care assistance. How to file late tax returns Educational assistance. How to file late tax returns Employee discounts. How to file late tax returns Employee stock options. How to file late tax returns Employer-provided cell phones. How to file late tax returns Group-term life insurance coverage. How to file late tax returns Health savings accounts (HSAs). How to file late tax returns Lodging on your business premises. How to file late tax returns Meals. How to file late tax returns Moving expense reimbursements. How to file late tax returns No-additional-cost services. How to file late tax returns Retirement planning services. How to file late tax returns Transportation (commuting) benefits. How to file late tax returns Tuition reduction. How to file late tax returns Working condition benefits. How to file late tax returns See Table 2-1, later, for an overview of the employment tax treatment of these benefits. How to file late tax returns Table 2-1. How to file late tax returns Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. How to file late tax returns ) Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. How to file late tax returns Exempt, except for certain payments to S corporation employees who are 2% shareholders. How to file late tax returns Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). How to file late tax returns Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. How to file late tax returns De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). How to file late tax returns Educational assistance Exempt up to $5,250 of benefits each year. How to file late tax returns (See Educational Assistance , later in this section. How to file late tax returns ) Employee discounts Exempt3 up to certain limits. How to file late tax returns (See Employee Discounts , later in this section. How to file late tax returns ) Employee stock options See Employee Stock Options , later in this section. How to file late tax returns Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. How to file late tax returns Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. How to file late tax returns (Special rules apply to former employees. How to file late tax returns ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. How to file late tax returns (See Health Savings Accounts , later in this section. How to file late tax returns ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. How to file late tax returns Meals Exempt if furnished on your business premises for your convenience. How to file late tax returns Exempt if de minimis. How to file late tax returns Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. How to file late tax returns No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($130), qualified parking ($250), or qualified bicycle commuting reimbursement6 ($20). How to file late tax returns (See Transportation (Commuting) Benefits , later in this section. How to file late tax returns ) Exempt if de minimis. How to file late tax returns Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). How to file late tax returns Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. How to file late tax returns 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. How to file late tax returns 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. How to file late tax returns 4 Exemption does not apply to certain key employees under a plan that favors those employees. How to file late tax returns 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. How to file late tax returns 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. How to file late tax returns 7 You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. How to file late tax returns Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. How to file late tax returns Also, show it in box 12 with code “C. How to file late tax returns ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. How to file late tax returns Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. How to file late tax returns Contributions to the cost of accident or health insurance including qualified long-term care insurance. How to file late tax returns Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. How to file late tax returns Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). How to file late tax returns This exclusion also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are either of the following. How to file late tax returns Payments or reimbursements of medical expenses. How to file late tax returns Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). How to file late tax returns The payments must be figured without regard to any period of absence from work. How to file late tax returns Accident or health plan. How to file late tax returns   This is an arrangement that provides benefits for your employees, their spouses, their dependents, and their children (under age 27) in the event of personal injury or sickness. How to file late tax returns The plan may be insured or noninsured and does not need to be in writing. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat the following individuals as employees. How to file late tax returns A current common-law employee. How to file late tax returns A full-time life insurance agent who is a current statutory employee. How to file late tax returns A retired employee. How to file late tax returns A former employee you maintain coverage for based on the employment relationship. How to file late tax returns A widow or widower of an individual who died while an employee. How to file late tax returns A widow or widower of a retired employee. How to file late tax returns For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file late tax returns Special rule for certain government plans. How to file late tax returns   For certain government accident and health plans, payments to a deceased plan participant's beneficiary may qualify for the exclusion from gross income if the other requirements for exclusion are met. How to file late tax returns See section 105(j) for details. How to file late tax returns Exception for S corporation shareholders. How to file late tax returns   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file late tax returns A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file late tax returns Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file late tax returns Exclusion from wages. How to file late tax returns   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. How to file late tax returns Exception for certain long-term care benefits. How to file late tax returns   You cannot exclude contributions to the cost of long-term care insurance from an employee's wages subject to federal income tax withholding if the coverage is provided through a flexible spending or similar arrangement. How to file late tax returns This is a benefit program that reimburses specified expenses up to a maximum amount that is reasonably available to the employee and is less than five times the total cost of the insurance. How to file late tax returns However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. How to file late tax returns S corporation shareholders. How to file late tax returns   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. How to file late tax returns However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. How to file late tax returns Exception for highly compensated employees. How to file late tax returns   If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. How to file late tax returns However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. How to file late tax returns   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. How to file late tax returns   A highly compensated employee for this exception is any of the following individuals. How to file late tax returns One of the five highest paid officers. How to file late tax returns An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. How to file late tax returns An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). How to file late tax returns   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. How to file late tax returns COBRA premiums. How to file late tax returns   The exclusion for accident and health benefits applies to amounts you pay to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). How to file late tax returns The exclusion applies regardless of the length of employment, whether you directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary. How to file late tax returns Achievement Awards This exclusion applies to the value of any tangible personal property you give to an employee as an award for either length of service or safety achievement. How to file late tax returns The exclusion does not apply to awards of cash, cash equivalents, gift certificates, or other intangible property such as vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, and other securities. How to file late tax returns The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat the following individuals as employees. How to file late tax returns A current employee. How to file late tax returns A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. How to file late tax returns A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file late tax returns Exception for S corporation shareholders. How to file late tax returns   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file late tax returns A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file late tax returns Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file late tax returns Exclusion from wages. How to file late tax returns   You can generally exclude the value of achievement awards you give to an employee from the employee's wages if their cost is not more than the amount you can deduct as a business expense for the year. How to file late tax returns The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). How to file late tax returns See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. How to file late tax returns    To determine for 2014 whether an achievement award is a “qualified plan award” under the deduction rules described in Publication 535, treat any employee who received more than $115,000 in pay for 2013 as a highly compensated employee. How to file late tax returns   If the cost of awards given to an employee is more than your allowable deduction, include in the employee's wages the larger of the following amounts. How to file late tax returns The part of the cost that is more than your allowable deduction (up to the value of the awards). How to file late tax returns The amount by which the value of the awards exceeds your allowable deduction. How to file late tax returns Exclude the remaining value of the awards from the employee's wages. How to file late tax returns Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. How to file late tax returns It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. How to file late tax returns To determine whether your plan meets this test, do not consider employees excluded from your plan who are covered by a collective bargaining agreement, if there is evidence that adoption assistance was a subject of good-faith bargaining. How to file late tax returns It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). How to file late tax returns A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. How to file late tax returns You give reasonable notice of the plan to eligible employees. How to file late tax returns Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. How to file late tax returns For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file late tax returns The employee was a 5% owner at any time during the year or the preceding year. How to file late tax returns The employee received more than $115,000 in pay for the preceding year. How to file late tax returns You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file late tax returns You must exclude all payments or reimbursements you make under an adoption assistance program for an employee's qualified adoption expenses from the employee's wages subject to federal income tax withholding. How to file late tax returns However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. How to file late tax returns For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. How to file late tax returns You must report all qualifying adoption expenses you paid or reimbursed under your adoption assistance program for each employee for the year in box 12 of the employee's Form W-2. How to file late tax returns Use code “T” to identify this amount. How to file late tax returns Exception for S corporation shareholders. How to file late tax returns   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. How to file late tax returns A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file late tax returns Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, including using the benefit as a reduction in distributions to the 2% shareholder. How to file late tax returns Athletic Facilities You can exclude the value of an employee's use of an on-premises gym or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children. How to file late tax returns For this purpose, an employee's dependent child is a child or stepchild who is the employee's dependent or who, if both parents are deceased, has not attained the age of 25. How to file late tax returns On-premises facility. How to file late tax returns   The athletic facility must be located on premises you own or lease. How to file late tax returns It does not have to be located on your business premises. How to file late tax returns However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat the following individuals as employees. How to file late tax returns A current employee. How to file late tax returns A former employee who retired or left on disability. How to file late tax returns A widow or widower of an individual who died while an employee. How to file late tax returns A widow or widower of a former employee who retired or left on disability. How to file late tax returns A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file late tax returns A partner who performs services for a partnership. How to file late tax returns De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. How to file late tax returns A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. How to file late tax returns Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. How to file late tax returns Examples of de minimis benefits include the following. How to file late tax returns Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. How to file late tax returns See Employer-Provided Cell Phones , later in this section, for details. How to file late tax returns Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes. How to file late tax returns Holiday gifts, other than cash, with a low fair market value. How to file late tax returns Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. How to file late tax returns Meals. How to file late tax returns See Meals , later in this section, for details. How to file late tax returns Occasional parties or picnics for employees and their guests. How to file late tax returns Occasional tickets for theater or sporting events. How to file late tax returns Transportation fare. How to file late tax returns See Transportation (Commuting) Benefits , later in this section, for details. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat any recipient of a de minimis benefit as an employee. How to file late tax returns Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay for or provide to an employee under a dependent care assistance program that covers only your employees. How to file late tax returns The services must be for a qualifying person's care and must be provided to allow the employee to work. How to file late tax returns These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. How to file late tax returns For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat the following individuals as employees. How to file late tax returns A current employee. How to file late tax returns A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file late tax returns Yourself (if you are a sole proprietor). How to file late tax returns A partner who performs services for a partnership. How to file late tax returns Exclusion from wages. How to file late tax returns   You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. How to file late tax returns   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. How to file late tax returns This limit is reduced to $2,500 for married employees filing separate returns. How to file late tax returns   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. How to file late tax returns Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. How to file late tax returns For more information on the earned income limit, see Publication 503. How to file late tax returns Exception for highly compensated employees. How to file late tax returns   You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the benefits provided under the program do not favor highly compensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. How to file late tax returns   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file late tax returns The employee was a 5% owner at any time during the year or the preceding year. How to file late tax returns The employee received more than $115,000 in pay for the preceding year. How to file late tax returns You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file late tax returns Form W-2. How to file late tax returns   Report the value of all dependent care assistance you provide to an employee under a dependent care assistance program in box 10 of the employee's Form W-2. How to file late tax returns Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. How to file late tax returns Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. How to file late tax returns Example. How to file late tax returns   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. How to file late tax returns In addition, it provides occasional on-site dependent care to its employees at no cost. How to file late tax returns Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. How to file late tax returns In addition, Emily used the on-site dependent care several times. How to file late tax returns The fair market value of the on-site care was $700. How to file late tax returns Emily's Form W-2 should report $5,200 of dependent care assistance in box 10 ($4,500 flexible spending arrangement plus $700 on-site dependent care). How to file late tax returns Boxes 1, 3, and 5 should include $200 (the amount in excess of the nontaxable assistance), and applicable taxes should be withheld on that amount. How to file late tax returns Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. How to file late tax returns The exclusion also applies to graduate level courses. How to file late tax returns Educational assistance means amounts you pay or incur for your employees' education expenses. How to file late tax returns These expenses generally include the cost of books, equipment, fees, supplies, and tuition. How to file late tax returns However, these expenses do not include the cost of a course or other education involving sports, games, or hobbies, unless the education: Has a reasonable relationship to your business, or Is required as part of a degree program. How to file late tax returns Education expenses do not include the cost of tools or supplies (other than textbooks) your employee is allowed to keep at the end of the course. How to file late tax returns Nor do they include the cost of lodging, meals, or transportation. How to file late tax returns Educational assistance program. How to file late tax returns   An educational assistance program is a separate written plan that provides educational assistance only to your employees. How to file late tax returns The program qualifies only if all of the following tests are met. How to file late tax returns The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. How to file late tax returns To determine whether your program meets this test, do not consider employees excluded from your program who are covered by a collective bargaining agreement if there is evidence that educational assistance was a subject of good-faith bargaining. How to file late tax returns The program does not provide more than 5% of its benefits during the year for shareholders or owners. How to file late tax returns A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. How to file late tax returns The program does not allow employees to choose to receive cash or other benefits that must be included in gross income instead of educational assistance. How to file late tax returns You give reasonable notice of the program to eligible employees. How to file late tax returns Your program can cover former employees if their employment is the reason for the coverage. How to file late tax returns   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file late tax returns The employee was a 5% owner at any time during the year or the preceding year. How to file late tax returns The employee received more than $115,000 in pay for the preceding year. How to file late tax returns You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat the following individuals as employees. How to file late tax returns A current employee. How to file late tax returns A former employee who retired, left on disability, or was laid off. How to file late tax returns A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file late tax returns Yourself (if you are a sole proprietor). How to file late tax returns A partner who performs services for a partnership. How to file late tax returns Exclusion from wages. How to file late tax returns   You can exclude up to $5,250 of educational assistance you provide to an employee under an educational assistance program from the employee's wages each year. How to file late tax returns Assistance over $5,250. How to file late tax returns   If you do not have an educational assistance plan, or you provide an employee with assistance exceeding $5,250, you must include the value of these benefits as wages, unless the benefits are working condition benefits. How to file late tax returns Working condition benefits may be excluded from wages. How to file late tax returns Property or a service provided is a working condition benefit to the extent that if the employee paid for it, the amount paid would have been deductible as a business or depreciation expense. How to file late tax returns See Working Condition Benefits , later, in this section. How to file late tax returns Employee Discounts This exclusion applies to a price reduction you give an employee on property or services you offer to customers in the ordinary course of the line of business in which the employee performs substantial services. How to file late tax returns However, it does not apply to discounts on real property or discounts on personal property of a kind commonly held for investment (such as stocks or bonds). How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat the following individuals as employees. How to file late tax returns A current employee. How to file late tax returns A former employee who retired or left on disability. How to file late tax returns A widow or widower of an individual who died while an employee. How to file late tax returns A widow or widower of an employee who retired or left on disability. How to file late tax returns A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file late tax returns A partner who performs services for a partnership. How to file late tax returns Exclusion from wages. How to file late tax returns   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. How to file late tax returns For a discount on services, 20% of the price you charge nonemployee customers for the service. How to file late tax returns For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. How to file late tax returns   Determine your gross profit percentage in the line of business based on all property you offer to customers (including employee customers) and your experience during the tax year immediately before the tax year in which the discount is available. How to file late tax returns To figure your gross profit percentage, subtract the total cost of the property from the total sales price of the property and divide the result by the total sales price of the property. How to file late tax returns Exception for highly compensated employees. How to file late tax returns   You cannot exclude from the wages of a highly compensated employee any part of the value of a discount that is not available on the same terms to one of the following groups. How to file late tax returns All of your employees. How to file late tax returns A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. How to file late tax returns   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file late tax returns The employee was a 5% owner at any time during the year or the preceding year. How to file late tax returns The employee received more than $115,000 in pay for the preceding year. How to file late tax returns You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file late tax returns Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. How to file late tax returns Wages for social security, Medicare, and federal unemployment (FUTA) taxes do not include remuneration resulting from the exercise, after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or from any disposition of stock acquired by exercising such an option. How to file late tax returns The IRS will not apply these taxes to an exercise before October 23, 2004, of an incentive stock option or an employee stock purchase plan option or to a disposition of stock acquired by such exercise. How to file late tax returns Additionally, federal income tax withholding is not required on the income resulting from a disqualifying disposition of stock acquired by the exercise after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or on income equal to the discount portion of stock acquired by the exercise, after October 22, 2004, of an employee stock purchase plan option resulting from any disposition of the stock. How to file late tax returns The IRS will not apply federal income tax withholding upon the disposition of stock acquired by the exercise, before October 23, 2004, of an incentive stock option or an employee stock purchase plan option. How to file late tax returns However, the employer must report as income in box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option. How to file late tax returns An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V. How to file late tax returns ” See Regulations section 1. How to file late tax returns 83-7. How to file late tax returns An employee who transfers his or her interest in nonstatutory stock options to the employee's former spouse incident to a divorce is not required to include an amount in gross income upon the transfer. How to file late tax returns The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. How to file late tax returns See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. How to file late tax returns You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. How to file late tax returns irs. How to file late tax returns gov/pub/irs-irbs/irb02-19. How to file late tax returns pdf. How to file late tax returns See Revenue Ruling 2004-60, 2004-24 I. How to file late tax returns R. How to file late tax returns B. How to file late tax returns 1051, available at www. How to file late tax returns irs. How to file late tax returns gov/irb/2004-24_IRB/ar13. How to file late tax returns html. How to file late tax returns For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. How to file late tax returns Employer-Provided Cell Phones The value of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a working condition fringe benefit. How to file late tax returns Personal use of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a de minimis fringe benefit. How to file late tax returns For the rules relating to these types of benefits, see De Minimis (Minimal) Benefits , earlier in this section, and Working Condition Benefits , later in this section. How to file late tax returns Noncompensatory business purposes. How to file late tax returns   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. How to file late tax returns Examples of substantial business reasons include the employer's: Need to contact the employee at all times for work-related emergencies, Requirement that the employee be available to speak with clients at times when the employee is away from the office, and Need to speak with clients located in other time zones at times outside the employee's normal workday. How to file late tax returns Cell phones provided to promote goodwill, boost morale, or attract prospective employees. How to file late tax returns   You cannot exclude from an employee's wages the value of a cell phone provided to promote goodwill of an employee, to attract a prospective employee, or as a means of providing additional compensation to an employee. How to file late tax returns Additional information. How to file late tax returns   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. How to file late tax returns R. How to file late tax returns B. How to file late tax returns 407, available at  www. How to file late tax returns irs. How to file late tax returns gov/irb/2011-38_IRB/ar07. How to file late tax returns html. How to file late tax returns Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. How to file late tax returns It provides a general death benefit that is not included in income. How to file late tax returns You provide it to a group of employees. How to file late tax returns See The 10-employee rule , later. How to file late tax returns It provides an amount of insurance to each employee based on a formula that prevents individual selection. How to file late tax returns This formula must use factors such as the employee's age, years of service, pay, or position. How to file late tax returns You provide it under a policy you directly or indirectly carry. How to file late tax returns Even if you do not pay any of the policy's cost, you are considered to carry it if you arrange for payment of its cost by your employees and charge at least one employee less than, and at least one other employee more than, the cost of his or her insurance. How to file late tax returns Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. How to file late tax returns Group-term life insurance does not include the following insurance. How to file late tax returns Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. How to file late tax returns Life insurance on the life of your employee's spouse or dependent. How to file late tax returns However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. How to file late tax returns See De Minimis (Minimal) Benefits , earlier in this section. How to file late tax returns Insurance provided under a policy that provides a permanent benefit (an economic value that extends beyond 1 policy year, such as paid-up or cash surrender value), unless certain requirements are met. How to file late tax returns See Regulations section 1. How to file late tax returns 79-1 for details. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat the following individuals as employees. How to file late tax returns A current common-law employee. How to file late tax returns A full-time life insurance agent who is a current statutory employee. How to file late tax returns An individual who was formerly your employee under (1) or (2). How to file late tax returns A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. How to file late tax returns Exception for S corporation shareholders. How to file late tax returns   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file late tax returns A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file late tax returns Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file late tax returns The 10-employee rule. How to file late tax returns   Generally, life insurance is not group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year. How to file late tax returns   For this rule, count employees who choose not to receive the insurance unless, to receive it, they must contribute to the cost of benefits other than the group-term life insurance. How to file late tax returns For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. How to file late tax returns However, do not count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. How to file late tax returns A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy. How to file late tax returns Exceptions. How to file late tax returns   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. How to file late tax returns   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. How to file late tax returns If evidence that the employee is insurable is required, it is limited to a medical questionnaire (completed by the employee) that does not require a physical. How to file late tax returns You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts. How to file late tax returns You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. How to file late tax returns See Regulations section 1. How to file late tax returns 79-1 for details. How to file late tax returns   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. How to file late tax returns You provide the insurance under a common plan covering your employees and the employees of at least one other employer who is not related to you. How to file late tax returns The insurance is restricted to, but mandatory for, all your employees who belong to, or are represented by, an organization (such as a union) that carries on substantial activities besides obtaining insurance. How to file late tax returns Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. How to file late tax returns   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. How to file late tax returns They were 65 or older. How to file late tax returns They customarily work 20 hours or less a week or 5 months or less in a calendar year. How to file late tax returns They have not been employed for the waiting period given in the policy. How to file late tax returns This waiting period cannot be more than 6 months. How to file late tax returns Exclusion from wages. How to file late tax returns   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. How to file late tax returns You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. How to file late tax returns In addition, you do not have to withhold federal income tax or pay FUTA tax on any group-term life insurance you provide to an employee. How to file late tax returns Coverage over the limit. How to file late tax returns   You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. How to file late tax returns Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. How to file late tax returns Also, show it in box 12 with code “C. How to file late tax returns ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. How to file late tax returns   Figure the monthly cost of the insurance to include in the employee's wages by multiplying the number of thousands of dollars of all insurance coverage over $50,000 (figured to the nearest $100) by the cost shown in Table 2-2. How to file late tax returns For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. How to file late tax returns You must prorate the cost from the table if less than a full month of coverage is involved. How to file late tax returns Table 2-2. How to file late tax returns Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . How to file late tax returns 05 25 through 29 . How to file late tax returns 06 30 through 34 . How to file late tax returns 08 35 through 39 . How to file late tax returns 09 40 through 44 . How to file late tax returns 10 45 through 49 . How to file late tax returns 15 50 through 54 . How to file late tax returns 23 55 through 59 . How to file late tax returns 43 60 through 64 . How to file late tax returns 66 65 through 69 1. How to file late tax returns 27 70 and older 2. How to file late tax returns 06 You figure the total cost to include in the employee's wages by multiplying the monthly cost by the number of full months' coverage at that cost. How to file late tax returns Example. How to file late tax returns Tom's employer provides him with group-term life insurance coverage of $200,000. How to file late tax returns Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. How to file late tax returns Tom's employer must include $170 in his wages. How to file late tax returns The $200,000 of insurance coverage is reduced by $50,000. How to file late tax returns The yearly cost of $150,000 of coverage is $270 ($. How to file late tax returns 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. How to file late tax returns The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. How to file late tax returns The employer also enters $170 in box 12 with code “C. How to file late tax returns ” Coverage for dependents. How to file late tax returns   Group-term life insurance coverage paid by the employer for the spouse or dependents of an employee may be excludable from income as a de minimis fringe benefit if the face amount is not more than $2,000. How to file late tax returns If the face amount is greater than $2,000, the entire cost of the dependent coverage must be included in income unless the amount over $2,000 is purchased with employee contributions on an after-tax basis. How to file late tax returns The cost of the insurance is determined by using Table 2-2. How to file late tax returns Former employees. How to file late tax returns   When group-term life insurance over $50,000 is provided to an employee (including retirees) after his or her termination, the employee share of social security and Medicare taxes on that period of coverage is paid by the former employee with his or her tax return and is not collected by the employer. How to file late tax returns You are not required to collect those taxes. How to file late tax returns Use the table above to determine the amount of social security and Medicare taxes owed by the former employee for coverage provided after separation from service. How to file late tax returns Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. How to file late tax returns ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. How to file late tax returns Exception for key employees. How to file late tax returns   Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. How to file late tax returns This exception generally does not apply to church plans. How to file late tax returns When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. How to file late tax returns Include the cost in boxes 1, 3, and 5 of Form W-2. How to file late tax returns However, you do not have to withhold federal income tax or pay FUTA tax on the cost of any group-term life insurance you provide to an employee. How to file late tax returns   For this purpose, the cost of the insurance is the greater of the following amounts. How to file late tax returns The premiums you pay for the employee's insurance. How to file late tax returns See Regulations section 1. How to file late tax returns 79-4T(Q&A 6) for more information. How to file late tax returns The cost you figure using Table 2-2. How to file late tax returns   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. How to file late tax returns See section 416(i) of the Internal Revenue Code for more information. How to file late tax returns An officer having annual pay of more than $170,000. How to file late tax returns An individual who for 2014 was either of the following. How to file late tax returns A 5% owner of your business. How to file late tax returns A 1% owner of your business whose annual pay was more than $150,000. How to file late tax returns   A former employee who was a key employee upon retirement or separation from service is also a key employee. How to file late tax returns   Your plan does not favor key employees as to participation if at least one of the following is true. How to file late tax returns It benefits at least 70% of your employees. How to file late tax returns At least 85% of the participating employees are not key employees. How to file late tax returns It benefits employees who qualify under a set of rules you set up that do not favor key employees. How to file late tax returns   Your plan meets this participation test if it is part of a cafeteria plan (discussed in section 1) and it meets the participation test for those plans. How to file late tax returns   When applying this test, do not consider employees who: Have not completed 3 years of service, Are part-time or seasonal, Are nonresident aliens who receive no U. How to file late tax returns S. How to file late tax returns source earned income from you, or Are not included in the plan but are in a unit of employees covered by a collective bargaining agreement, if the benefits provided under the plan were the subject of good-faith bargaining between you and employee representatives. How to file late tax returns   Your plan does not favor key employees as to benefits if all benefits available to participating key employees are also available to all other participating employees. How to file late tax returns Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. How to file late tax returns S corporation shareholders. How to file late tax returns   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provide the 2% shareholder in his or her wages. How to file late tax returns When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. How to file late tax returns Include the cost in boxes 1, 3, and 5 of Form W-2. How to file late tax returns However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder. How to file late tax returns Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. How to file late tax returns Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. How to file late tax returns Contributions to the account are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. How to file late tax returns The medical expenses must not be reimbursable by insurance or other sources and their payment from HSA funds (distribution) will not give rise to a medical expense deduction on the individual's federal income tax return. How to file late tax returns For more information about HSAs, visit the Department of Treasury's website at www. How to file late tax returns treasury. How to file late tax returns gov and enter “HSA” in the search box. How to file late tax returns Eligibility. How to file late tax returns   A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3) or insurance for accidents, disability, dental care, vision care, or long-term care. How to file late tax returns For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage and $12,700 for family coverage. How to file late tax returns   There are no income limits that restrict an individual's eligibility to contribute to an HSA nor is there a requirement that the account owner have earned income to make a contribution. How to file late tax returns Exceptions. How to file late tax returns   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. How to file late tax returns Also, an employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) generally disqualifies the individual (and employer) from making contributions to his or her HSA. How to file late tax returns However, an individual may qualify to participate in an HSA if he or she is participating in only a limited-purpose FSA or HRA or a post-deductible FSA. How to file late tax returns For more information, see Other employee health plans in Publication 969. How to file late tax returns Employer contributions. How to file late tax returns   Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. How to file late tax returns For 2014, you can contribute up to $3,300 for self-only coverage or $6,550 for family coverage to a qualified individual's HSA. How to file late tax returns   The contribution amounts listed above are increased by $1,000 for a qualified individual who is age 55 or older at any time during the year. How to file late tax returns For two qualified individuals who are married to each other and who each are age 55 or older at any time during the year, each spouse's contribution limit is increased by $1,000 provided each spouse has a separate HSA. How to file late tax returns No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. How to file late tax returns Nondiscrimination rules. How to file late tax returns    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. How to file late tax returns Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. How to file late tax returns   For guidance on employer comparable contributions to HSAs under section 4980G in instances where an employee has not established an HSA by December 31 and in instances where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses, see Regulations section 54. How to file late tax returns 4980G-4. How to file late tax returns Exception. How to file late tax returns   The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee. How to file late tax returns A highly compensated employee for 2014 is an employee who meets either of the following tests. How to file late tax returns The employee was a 5% owner at any time during the year or the preceding year. How to file late tax returns The employee received more than $115,000 in pay for the preceding year. How to file late tax returns You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file late tax returns Partnerships and S corporations. How to file late tax returns   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. How to file late tax returns Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. How to file late tax returns Cafeteria plans. How to file late tax returns   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. How to file late tax returns However, cafeteria plan nondiscrimination rules still apply. How to file late tax returns For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. How to file late tax returns Contributions that favor lower-paid employees are not prohibited. How to file late tax returns Reporting requirements. How to file late tax returns   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. How to file late tax returns ” The trustee or custodian of the HSA, generally a bank or insurance company, reports distributions from the HSA using Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. How to file late tax returns Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. How to file late tax returns It is furnished on your business premises. How to file late tax returns It is furnished for your convenience. How to file late tax returns The employee must accept it as a condition of employment. How to file late tax returns Different tests may apply to lodging furnished by educational institutions. How to file late tax returns See section 119(d) of the Internal Revenue Code for details. How to file late tax returns The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. How to file late tax returns On your business premises. How to file late tax returns   For this exclusion, your business premises is generally your employee's place of work. How to file late tax returns For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. How to file late tax returns For your convenience. How to file late tax returns   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. How to file late tax returns You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. How to file late tax returns This is true even if a law or an employment contract provides that the lodging is furnished as pay. How to file late tax returns However, a written statement that the lodging is furnished for your convenience is not sufficient. How to file late tax returns Condition of employment. How to file late tax returns   Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. How to file late tax returns Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. How to file late tax returns   It does not matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. How to file late tax returns Example. How to file late tax returns A hospital gives Joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. How to file late tax returns If Joan chooses to live at the hospital, the hospital cannot exclude the value of the lodging from her wages because she is not required to live at the hospital to properly perform the duties of her employment. How to file late tax returns S corporation shareholders. How to file late tax returns   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. How to file late tax returns A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file late tax returns Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file late tax returns Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. How to file late tax returns De Minimis Meals You can exclude any occasional meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. How to file late tax returns The exclusion applies, for example, to the following items. How to file late tax returns Coffee, doughnuts, or soft drinks. How to file late tax returns Occasional meals or meal money provided to enable an employee to work overtime. How to file late tax returns However, the exclusion does not apply to meal money figured on the basis of hours worked. How to file late tax returns Occasional parties or picnics for employees and their guests. How to file late tax returns This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. How to file late tax returns For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later. How to file late tax returns If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. How to file late tax returns The 50% limit on deductions for the cost of meals does not apply. How to file late tax returns The deduction limit on meals is discussed in chapter 2 of Publication 535. How to file late tax returns Employee. How to file late tax returns   For this exclusion, treat any recipient of a de minimis meal as
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The How To File Late Tax Returns

How to file late tax returns Publication 504 - Main Content Table of Contents Filing StatusUnmarried persons. How to file late tax returns Married persons. How to file late tax returns Same-sex marriage. How to file late tax returns Exception. How to file late tax returns Married Filing Jointly Married Filing Separately Head of Household ExemptionsPersonal Exemptions Exemptions for Dependents Phaseout of Exemptions AlimonyInvalid decree. How to file late tax returns Amended instrument. How to file late tax returns General Rules Instruments Executed After 1984 Instruments Executed Before 1985 Qualified Domestic Relations OrderRollovers. How to file late tax returns Individual Retirement Arrangements Property SettlementsTransfer Between Spouses Gift Tax on Property Settlements Sale of Jointly-Owned Property Costs of Getting a Divorce Tax Withholding and Estimated Tax Community PropertyCommunity Income Alimony (Community Income) How To Get Tax Help Filing Status Your filing status is used in determining whether you must file a return, your standard deduction, and the correct tax. How to file late tax returns It may also be used in determining whether you can claim certain other deductions and credits. How to file late tax returns The filing status you can choose depends partly on your marital status on the last day of your tax year. How to file late tax returns Marital status. How to file late tax returns   If you are unmarried, your filing status is single or, if you meet certain requirements, head of household or qualifying widow(er). How to file late tax returns If you are married, your filing status is either married filing a joint return or married filing a separate return. How to file late tax returns For information about the single and qualifying widow(er) filing statuses, see Publication 501. How to file late tax returns Unmarried persons. How to file late tax returns   You are unmarried for the whole year if either of the following applies. How to file late tax returns You have obtained a final decree of divorce or separate maintenance by the last day of your tax year. How to file late tax returns You must follow your state law to determine if you are divorced or legally separated. How to file late tax returns Exception. How to file late tax returns If you and your spouse obtain a divorce in one year for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to remarry each other and do so in the next tax year, you and your spouse must file as married individuals. How to file late tax returns You have obtained a decree of annulment, which holds that no valid marriage ever existed. How to file late tax returns You must file amended returns (Form 1040X, Amended U. How to file late tax returns S. How to file late tax returns Individual Income Tax Return) for all tax years affected by the annulment that are not closed by the statute of limitations. How to file late tax returns The statute of limitations generally does not end until 3 years (including extensions) after the date you file your original return or within 2 years after the date you pay the tax. How to file late tax returns On the amended return you will change your filing status to single or, if you meet certain requirements, head of household. How to file late tax returns Married persons. How to file late tax returns   You are married for the whole year if you are separated but you have not obtained a final decree of divorce or separate maintenance by the last day of your tax year. How to file late tax returns An interlocutory decree is not a final decree. How to file late tax returns Same-sex marriage. How to file late tax returns   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. How to file late tax returns The term "spouse" includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. How to file late tax returns However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. How to file late tax returns For more details, see Publication 501. How to file late tax returns Exception. How to file late tax returns   If you live apart from your spouse, under certain circumstances, you may be considered unmarried and can file as head of household. How to file late tax returns See Head of Household , later. How to file late tax returns Married Filing Jointly If you are married, you and your spouse can choose to file a joint return. How to file late tax returns If you file jointly, you both must include all your income, exemptions, deductions, and credits on that return. How to file late tax returns You can file a joint return even if one of you had no income or deductions. How to file late tax returns If both you and your spouse have income, you should usually figure your tax on both a joint return and separate returns (using the filing status of married filing separately) to see which gives the two of you the lower combined tax. How to file late tax returns Nonresident alien. How to file late tax returns   To file a joint return, at least one of you must be a U. How to file late tax returns S. How to file late tax returns citizen or resident alien at the end of the tax year. How to file late tax returns If either of you was a nonresident alien at any time during the tax year, you can file a joint return only if you agree to treat the nonresident spouse as a resident of the United States. How to file late tax returns This means that your combined worldwide incomes are subject to U. How to file late tax returns S. How to file late tax returns income tax. How to file late tax returns These rules are explained in Publication 519, U. How to file late tax returns S. How to file late tax returns Tax Guide for Aliens. How to file late tax returns Signing a joint return. How to file late tax returns   Both you and your spouse generally must sign the return, or it will not be considered a joint return. How to file late tax returns Joint and individual liability. How to file late tax returns   Both you and your spouse may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. How to file late tax returns This means that one spouse may be held liable for all the tax due even if all the income was earned by the other spouse. How to file late tax returns Divorced taxpayers. How to file late tax returns   If you are divorced, you are jointly and individually responsible for any tax, interest, and penalties due on a joint return for a tax year ending before your divorce. How to file late tax returns This responsibility applies even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. How to file late tax returns Relief from joint liability. How to file late tax returns   In some cases, a spouse may be relieved of the tax, interest, and penalties on a joint return. How to file late tax returns You can ask for relief no matter how small the liability. How to file late tax returns   There are three types of relief available. How to file late tax returns Innocent spouse relief. How to file late tax returns Separation of liability, which applies to joint filers who are divorced, widowed, legally separated, or who have not lived together for the 12 months ending on the date election of this relief is filed. How to file late tax returns Equitable relief. How to file late tax returns   Married persons who live in community property states, but who did not file joint returns, may also qualify for relief from liability arising from community property law or for equitable relief. How to file late tax returns See Relief from liability arising from community property law , later, under Community Property. How to file late tax returns    Each kind of relief has different requirements. How to file late tax returns You must file Form 8857 to request relief under any of these categories. How to file late tax returns Publication 971 explains these kinds of relief and who may qualify for them. How to file late tax returns You can also find information on our website at IRS. How to file late tax returns gov. How to file late tax returns Tax refund applied to spouse's debts. How to file late tax returns   The overpayment shown on your joint return may be used to pay the past-due amount of your spouse's debts. How to file late tax returns This includes your spouse's federal tax, state income tax, child or spousal support payments, or a federal nontax debt, such as a student loan. How to file late tax returns You can get a refund of your share of the overpayment if you qualify as an injured spouse. How to file late tax returns Injured spouse. How to file late tax returns   You are an injured spouse if you file a joint return and all or part of your share of the overpayment was, or is expected to be, applied against your spouse's past-due debts. How to file late tax returns An injured spouse can get a refund for his or her share of the overpayment that would otherwise be used to pay the past-due amount. How to file late tax returns   To be considered an injured spouse, you must: Have made and reported tax payments (such as federal income tax withheld from wages or estimated tax payments), or claimed a refundable tax credit, such as the earned income credit or additional child tax credit on the joint return, and Not be legally obligated to pay the past-due amount. How to file late tax returns Note. How to file late tax returns If the injured spouse's permanent home is in a community property state, then the injured spouse must only meet (2). How to file late tax returns For more information, see Publication 555. How to file late tax returns    Refunds that involve community property states must be divided according to local law. How to file late tax returns If you live in a community property state in which all community property is subject to the debts of either spouse, your entire refund is generally used to pay those debts. How to file late tax returns   If you are an injured spouse, you must file Form 8379 to have your portion of the overpayment refunded to you. How to file late tax returns Follow the instructions for the form. How to file late tax returns   If you have not filed your joint return and you know that your joint refund will be offset, file Form 8379 with your return. How to file late tax returns You should receive your refund within 14 weeks from the date the paper return is filed or within 11 weeks from the date the return is filed electronically. How to file late tax returns   If you filed your joint return and your joint refund was offset, file Form 8379 by itself. How to file late tax returns When filed after offset, it can take up to 8 weeks to receive your refund. How to file late tax returns Do not attach the previously filed tax return, but do include copies of all Forms W-2, Wage and Tax Statement, and W-2G, Certain Gambling Winnings, for both spouses and any Forms 1099 that show income tax withheld. How to file late tax returns    An injured spouse claim is different from an innocent spouse relief request. How to file late tax returns An injured spouse uses Form 8379 to request an allocation of the tax overpayment attributed to each spouse. How to file late tax returns An innocent spouse uses Form 8857 to request relief from joint liability for tax, interest, and penalties on a joint return for items of the other spouse (or former spouse) that were incorrectly reported on or omitted from the joint return. How to file late tax returns For information on innocent spouses, see Relief from joint liability, earlier. How to file late tax returns Married Filing Separately If you and your spouse file separate returns, you should each report only your own income, exemptions, deductions, and credits on your individual return. How to file late tax returns You can file a separate return even if only one of you had income. How to file late tax returns For information on exemptions you can claim on your separate return, see Exemptions , later. How to file late tax returns Community or separate income. How to file late tax returns   If you live in a community property state and file a separate return, your income may be separate income or community income for income tax purposes. How to file late tax returns For more information, see Community Income under Community Property, later. How to file late tax returns Separate liability. How to file late tax returns   If you and your spouse file separately, you each are responsible only for the tax due on your own return. How to file late tax returns Itemized deductions. How to file late tax returns   If you and your spouse file separate returns and one of you itemizes deductions, the other spouse cannot use the standard deduction and should also itemize deductions. How to file late tax returns Table 1. How to file late tax returns Itemized Deductions on Separate Returns This table shows itemized deductions you can claim on your married filing separate return whether you paid the expenses separately with your own funds or jointly with your spouse. How to file late tax returns  Caution: If you live in a community property state, these rules do not apply. How to file late tax returns See Community Property. How to file late tax returns IF you paid . How to file late tax returns . How to file late tax returns . How to file late tax returns AND you . How to file late tax returns . How to file late tax returns . How to file late tax returns THEN you can deduct on your separate federal return. How to file late tax returns . How to file late tax returns . How to file late tax returns   medical expenses   paid with funds deposited in a joint checking account in which you and your spouse have an equal interest     half of the total medical expenses, subject to certain limits, unless you can show that you alone paid the expenses. How to file late tax returns     state income tax   file a separate state income tax return     the state income tax you alone paid during the year. How to file late tax returns         file a joint state income tax return and you and your spouse are jointly and individually liable for the full amount of the state income tax     the state income tax you alone paid during the year. How to file late tax returns         file a joint state income tax return and you  are liable for only your own share of state  income tax     the smaller of: the state income tax you alone paid during the year, or the total state income tax you and your spouse paid during the year multiplied by the following fraction. How to file late tax returns The numerator is your gross income and the denominator  is your combined gross income. How to file late tax returns     property tax   paid the tax on property held as tenants by the entirety     the property tax you alone paid. How to file late tax returns     mortgage interest   paid the interest on a qualified home1 held  as tenants by the entirety     the mortgage interest you alone paid. How to file late tax returns     casualty loss   have a casualty loss on a home you own  as tenants by the entirety     half of the loss, subject to the deduction limits. How to file late tax returns Neither spouse may report the total casualty loss. How to file late tax returns 1 For more information on a qualified home and deductible mortgage interest, see Publication 936, Home Mortgage Interest Deduction. How to file late tax returns Dividing itemized deductions. How to file late tax returns   You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse. How to file late tax returns See Table 1, later. How to file late tax returns Separate returns may give you a higher tax. How to file late tax returns   Some married couples file separate returns because each wants to be responsible only for his or her own tax. How to file late tax returns There is no joint liability. How to file late tax returns But in almost all instances, if you file separate returns, you will pay more combined federal tax than you would with a joint return. How to file late tax returns This is because the following special rules apply if you file a separate return. How to file late tax returns Your tax rate generally will be higher than it would be on a joint return. How to file late tax returns Your exemption amount for figuring the alternative minimum tax will be half of that allowed a joint return filer. How to file late tax returns You cannot take the credit for child and dependent care expenses in most cases. How to file late tax returns You cannot take the earned income credit. How to file late tax returns You cannot take the exclusion or credit for adoption expenses in most cases. How to file late tax returns You cannot take the credit for higher education expenses (American opportunity and lifetime learning credits), the deduction for student loan interest, or the tuition and fees deduction. How to file late tax returns You cannot exclude the interest from qualified savings bonds that you used for higher education expenses. How to file late tax returns If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You will have to include in income more (up to 85%) of any social security or equivalent railroad retirement benefits you received. How to file late tax returns Your income limits that reduce the child tax credit, the retirement savings contributions credit, itemized deductions, and the deduction for personal exemptions are half of the limits for a joint return filer. How to file late tax returns Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). How to file late tax returns Your basic standard deduction, if allowable, is half of that allowed a joint return filer. How to file late tax returns See Itemized deductions , earlier. How to file late tax returns Joint return after separate returns. How to file late tax returns   If either you or your spouse (or both of you) file a separate return, you generally can change to a joint return within 3 years from the due date (not including extensions) of the separate return or returns. How to file late tax returns This applies to a return either of you filed claiming married filing separately, single, or head of household filing status. How to file late tax returns Use Form 1040X to change your filing status. How to file late tax returns Separate returns after joint return. How to file late tax returns   After the due date of your return, you and your spouse cannot file separate returns if you previously filed a joint return. How to file late tax returns Exception. How to file late tax returns   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. How to file late tax returns The personal representative has 1 year from the due date (including extensions) of the joint return to make the change. How to file late tax returns Head of Household Filing as head of household has the following advantages. How to file late tax returns You can claim the standard deduction even if your spouse files a separate return and itemizes deductions. How to file late tax returns Your standard deduction is higher than is allowed if you claim a filing status of single or married filing separately. How to file late tax returns Your tax rate usually will be lower than it is if you claim a filing status of single or married filing separately. How to file late tax returns You may be able to claim certain credits (such as the dependent care credit and the earned income credit) you cannot claim if your filing status is married filing separately. How to file late tax returns Income limits that reduce your child tax credit, retirement savings contributions credit, itemized deductions, and the deduction for personal exemptions are higher than the income limits if you claim a filing status of married filing separately. How to file late tax returns Requirements. How to file late tax returns   You may be able to file as head of household if you meet all the following requirements. How to file late tax returns You are unmarried or “considered unmarried” on the last day of the year. How to file late tax returns You paid more than half the cost of keeping up a home for the year. How to file late tax returns A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). How to file late tax returns However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. How to file late tax returns See Special rule for parent , later, under Qualifying person. How to file late tax returns Considered unmarried. How to file late tax returns   You are considered unmarried on the last day of the tax year if you meet all the following tests. How to file late tax returns You file a separate return. How to file late tax returns A separate return includes a return claiming married filing separately, single, or head of household filing status. How to file late tax returns You paid more than half the cost of keeping up your home for the tax year. How to file late tax returns Your spouse did not live in your home during the last 6 months of the tax year. How to file late tax returns Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. How to file late tax returns See Temporary absences , later. How to file late tax returns Your home was the main home of your child, stepchild, or foster child for more than half the year. How to file late tax returns (See Qualifying person , later, for rules applying to a child's birth, death, or temporary absence during the year. How to file late tax returns ) You must be able to claim an exemption for the child. How to file late tax returns However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rule described later in Special rule for divorced or separated parents (or parents who live apart) under Exemptions for Dependents. How to file late tax returns The general rules for claiming an exemption for a dependent are shown later in Table 3. How to file late tax returns    If you were considered married for part of the year and lived in a community property state (one of the states listed later under Community Property), special rules may apply in determining your income and expenses. How to file late tax returns See Publication 555 for more information. How to file late tax returns Nonresident alien spouse. How to file late tax returns   If your spouse was a nonresident alien at any time during the tax year, and you have not chosen to treat your spouse as a resident alien, you are considered unmarried for head of household purposes. How to file late tax returns However, your spouse is not a qualifying person for head of household purposes. How to file late tax returns You must have another qualifying person and meet the other requirements to file as head of household. How to file late tax returns Keeping up a home. How to file late tax returns   You are keeping up a home only if you pay more than half the cost of its upkeep for the year. How to file late tax returns This includes rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. How to file late tax returns This does not include the cost of clothing, education, medical treatment, vacations, life insurance, or transportation for any member of the household. How to file late tax returns Qualifying person. How to file late tax returns    Table 2, later, shows who can be a qualifying person. How to file late tax returns Any person not described in Table 2 is not a qualifying person. How to file late tax returns   Generally, the qualifying person must live with you for more than half of the year. How to file late tax returns Table 2. How to file late tax returns Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. How to file late tax returns See the text of this publication for the other requirements you must meet to claim head of household filing status. How to file late tax returns IF the person is your . How to file late tax returns . How to file late tax returns . How to file late tax returns AND . How to file late tax returns . How to file late tax returns . How to file late tax returns THEN that person is . How to file late tax returns . How to file late tax returns . How to file late tax returns   qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2 he or she is single a qualifying person, whether or not you can claim an exemption for the person. How to file late tax returns     he or she is married and you can claim an exemption for him or her a qualifying person. How to file late tax returns     he or she is married and you cannot claim an exemption for him or her not a qualifying person. How to file late tax returns 3     qualifying relative4 who is your father or mother you can claim an exemption for him or her5 a qualifying person. How to file late tax returns 6     you cannot claim an exemption for him or her not a qualifying person. How to file late tax returns     qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests) he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 and you can claim an exemption for him or her5 a qualifying person. How to file late tax returns     he or she did not live with you more than half the year not a qualifying person. How to file late tax returns     he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 and is your qualifying relative only because he or she lived with you all year as a member of your household not a qualifying person. How to file late tax returns     you cannot claim an exemption for him or her not a qualifying person. How to file late tax returns   1 A person cannot qualify more than one taxpayer to use the head of household filing status for the year. How to file late tax returns 2 See Table 3, later, for the tests that must be met to be a qualifying child. How to file late tax returns Note. How to file late tax returns If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of Divorced or Separated Parents (or Parents Who Live Apart) under Exemptions for Dependents, later. How to file late tax returns If you are the custodial parent and those rules apply, the child is generally your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. How to file late tax returns 3 This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. How to file late tax returns 4 See Table 3, later, for the tests that must be met to be a qualifying relative. How to file late tax returns 5 If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. How to file late tax returns See Multiple Support Agreement in Publication 501. How to file late tax returns 6 See Special rule for parent . How to file late tax returns Special rule for parent. How to file late tax returns   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. How to file late tax returns However, you must be able to claim an exemption for your father or mother. How to file late tax returns Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. How to file late tax returns You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. How to file late tax returns Death or birth. How to file late tax returns   If the person for whom you kept up a home was born or died in 2013, you still may be able to file as head of household. How to file late tax returns If the person is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. How to file late tax returns If the person is anyone else, see Publication 501. How to file late tax returns Temporary absences. How to file late tax returns   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. How to file late tax returns It must be reasonable to assume that the absent person will return to the home after the temporary absence. How to file late tax returns You must continue to keep up the home during the absence. How to file late tax returns Kidnapped child. How to file late tax returns   You may be eligible to file as head of household even if the child who is your qualifying person has been kidnapped. How to file late tax returns You can claim head of household filing status if all the following statements are true. How to file late tax returns The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. How to file late tax returns In the year of the kidnapping, the child lived with you for more than half the part of the year before the kidnapping. How to file late tax returns You would have qualified for head of household filing status if the child had not been kidnapped. How to file late tax returns   This treatment applies for all years until the earlier of: The year the child is returned, The year there is a determination that the child is dead, or The year the child would have reached age 18. How to file late tax returns More information. How to file late tax returns   For more information on filing as head of household, see Publication 501. How to file late tax returns Exemptions You can deduct $3,900 for each exemption you claim in 2013. How to file late tax returns However, if your adjusted gross income is more than $150,000, see Phaseout of Exemptions , later. How to file late tax returns There are two types of exemptions: personal exemptions and exemptions for dependents. How to file late tax returns If you are entitled to claim an exemption for a dependent (such as your child), that dependent cannot claim his or her personal exemption on his or her own tax return. How to file late tax returns Personal Exemptions You can claim your own exemption unless someone else can claim it. How to file late tax returns If you are married, you may be able to take an exemption for your spouse. How to file late tax returns These are called personal exemptions. How to file late tax returns Exemption for Your Spouse Your spouse is never considered your dependent. How to file late tax returns Joint return. How to file late tax returns   On a joint return, you can claim one exemption for yourself and one for your spouse. How to file late tax returns   If your spouse had any gross income, you can claim his or her exemption only if you file a joint return. How to file late tax returns Separate return. How to file late tax returns   If you file a separate return, you can take an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. How to file late tax returns If your spouse is the dependent of another taxpayer, you cannot claim an exemption for your spouse even if the other taxpayer does not actually claim your spouse's exemption. How to file late tax returns Alimony paid. How to file late tax returns   If you paid alimony to your spouse, you cannot take an exemption for your spouse. How to file late tax returns This is because alimony is gross income to the spouse who received it. How to file late tax returns Divorced or separated spouse. How to file late tax returns   If you obtained a final decree of divorce or separate maintenance during the year, you cannot take your former spouse's exemption. How to file late tax returns This rule applies even if you provided all of your former spouse's support. How to file late tax returns Exemptions for Dependents You are allowed one exemption for each person you can claim as a dependent. How to file late tax returns You can claim an exemption for a dependent even if your dependent files a return. How to file late tax returns The term “dependent” means: A qualifying child, or A qualifying relative. How to file late tax returns Table 3 shows the tests that must be met to be either a qualifying child or qualifying relative, plus the additional requirements for claiming an exemption for a dependent. How to file late tax returns For detailed information, see Publication 501. How to file late tax returns   Dependent not allowed a personal exemption. How to file late tax returns If you can claim an exemption for your dependent, the dependent cannot claim his or her own exemption on his or her own tax return. How to file late tax returns This is true even if you do not claim the dependent's exemption on your return. How to file late tax returns It is also true if the decedent's exemption on your return is reduced or eliminated under the phaseout rule described under Phaseout of Exemptions, later. How to file late tax returns Table 3. How to file late tax returns Overview of the Rules for Claiming an Exemption for a Dependent Caution. How to file late tax returns This table is only an overview of the rules. How to file late tax returns For details, see Publication 501. How to file late tax returns • You cannot claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer. How to file late tax returns • You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns. How to file late tax returns • You cannot claim a person as a dependent unless that person is a U. How to file late tax returns S. How to file late tax returns citizen, U. How to file late tax returns S. How to file late tax returns resident alien, U. How to file late tax returns S. How to file late tax returns national, or a resident of Canada or Mexico. How to file late tax returns 1 • You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative. How to file late tax returns   Tests To Be a Qualifying Child   Tests To Be a Qualifying Relative 1. How to file late tax returns     2. How to file late tax returns       3. How to file late tax returns    4. How to file late tax returns    5. How to file late tax returns    The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. How to file late tax returns   The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled. How to file late tax returns   The child must have lived with you for more than half of the year. How to file late tax returns 2   The child must not have provided more than half of his or her own support for the year. How to file late tax returns   The child is not filing a joint return for the year (unless that joint return is filed only as a claim for refund of withheld income tax or estimated tax paid). How to file late tax returns   1. How to file late tax returns    2. How to file late tax returns       3. How to file late tax returns    4. How to file late tax returns The person cannot be your qualifying child or the qualifying child of anyone else. How to file late tax returns   The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 or (b) must live with you all year as a member of your household 2 (and your relationship must not violate local law). How to file late tax returns   The person's gross income for the year must be less than $3,900. How to file late tax returns 3   You must provide more than half of the person's total support for the year. How to file late tax returns 4 If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. How to file late tax returns See Special Rule for Qualifying Child of More Than One Person , later, to find out which person is the person entitled to claim the child as a qualifying child. How to file late tax returns     1 Exception exists for certain adopted children. How to file late tax returns 2 Exceptions exist for temporary absences, children who were born or died during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children. How to file late tax returns 3 Exception exists for persons who are disabled and have income from a sheltered workshop. How to file late tax returns 4 Exceptions exist for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children. How to file late tax returns See Publication 501. How to file late tax returns You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year if you claimed an exemption for that child. How to file late tax returns For more information, see the instructions for your tax return if you file Form 1040A or 1040. How to file late tax returns Children of Divorced or Separated Parents (or Parents Who Live Apart) In most cases, because of the residency test (see item 3 under Tests To Be a Qualifying Child in Table 3), a child of divorced or separated parents is the qualifying child of the custodial parent. How to file late tax returns However, the child will be treated as the qualifying child of the noncustodial parent if the special rule (discussed next) applies. How to file late tax returns Special rule for divorced or separated parents (or parents who live apart). How to file late tax returns   A child will be treated as the qualifying child of his or her noncustodial parent if all four of the following statements are true. How to file late tax returns The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of the year, whether or not they are or were married. How to file late tax returns The child received over half of his or her support for the year from the parents. How to file late tax returns The child is in the custody of one or both parents for more than half of the year. How to file late tax returns Either of the following applies. How to file late tax returns The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. How to file late tax returns (If the decree or agreement went into effect after 1984, see Divorce decree or separation agreement that went into effect after 1984 and before 2009 , later. How to file late tax returns A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during 2013. How to file late tax returns See Child support under pre-1985 agreement , later. How to file late tax returns Custodial parent and noncustodial parent. How to file late tax returns   The custodial parent is the parent with whom the child lived for the greater number of nights during the year. How to file late tax returns The other parent is the noncustodial parent. How to file late tax returns   If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year. How to file late tax returns   A child is treated as living with a parent for a night if the child sleeps: At that parent's home, whether or not the parent is present, or In the company of the parent, when the child does not sleep at a parent's home (for example, the parent and child are on vacation together). How to file late tax returns Equal number of nights. How to file late tax returns   If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income. How to file late tax returns December 31. How to file late tax returns   The night of December 31 is treated as part of the year in which it begins. How to file late tax returns For example, December 31, 2013, is treated as part of 2013. How to file late tax returns Emancipated child. How to file late tax returns   If a child is emancipated under state law, the child is treated as not living with either parent. How to file late tax returns See Examples 5 and 6 . How to file late tax returns Absences. How to file late tax returns    If a child was not with either parent on a particular night (because, for example, the child was staying at a friend's house), the child is treated as living with the parent with whom the child normally would have lived for that night, except for the absence. How to file late tax returns But if it cannot be determined with which parent the child normally would have lived or if the child would not have lived with either parent that night, the child is treated as not living with either parent that night. How to file late tax returns Parent works at night. How to file late tax returns   If, due to a parent's nighttime work schedule, a child lives for a greater number of days but not nights with the parent who works at night, that parent is treated as the custodial parent. How to file late tax returns On a school day, the child is treated as living at the primary residence registered with the school. How to file late tax returns Example 1 – child lived with one parent greater number of nights. How to file late tax returns You and your child’s other parent are divorced. How to file late tax returns In 2013, your child lived with you 210 nights and with the other parent 156 nights. How to file late tax returns You are the custodial parent. How to file late tax returns Example 2 – child is away at camp. How to file late tax returns In 2013, your daughter lives with each parent for alternate weeks. How to file late tax returns In the summer, she spends 6 weeks at summer camp. How to file late tax returns During the time she is at camp, she is treated as living with you for 3 weeks and with her other parent, your ex-spouse, for 3 weeks because this is how long she would have lived with each parent if she had not attended summer camp. How to file late tax returns Example 3 – child lived same number of days with each parent. How to file late tax returns Your son lived with you 180 nights during the year and lived the same number of nights with his other parent, your ex-spouse. How to file late tax returns Your adjusted gross income is $40,000. How to file late tax returns Your ex-spouse's adjusted gross income is $25,000. How to file late tax returns You are treated as your son's custodial parent because you have the higher adjusted gross income. How to file late tax returns Example 4 – child is at parent’s home but with other parent. How to file late tax returns Your son normally lives with you during the week and with his other parent, your ex-spouse, every other weekend. How to file late tax returns You become ill and are hospitalized. How to file late tax returns The other parent lives in your home with your son for 10 consecutive days while you are in the hospital. How to file late tax returns Your son is treated as living with you during this 10-day period because he was living in your home. How to file late tax returns Example 5 – child emancipated in May. How to file late tax returns When your son turned age 18 in May 2013, he became emancipated under the law of the state where he lives. How to file late tax returns As a result, he is not considered in the custody of his parents for more than half of the year. How to file late tax returns The special rule for children of divorced or separated parents (or parents who live apart) does not apply. How to file late tax returns Example 6 – child emancipated in August. How to file late tax returns Your daughter lives with you from January 1, 2013, until May 31, 2013, and lives with her other parent, your ex-spouse, from June 1, 2013, through the end of the year. How to file late tax returns She turns 18 and is emancipated under state law on August 1, 2013. How to file late tax returns Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2013. How to file late tax returns You are the custodial parent. How to file late tax returns Written declaration. How to file late tax returns    The custodial parent must use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. How to file late tax returns The noncustodial parent must attach a copy of the form or statement to his or her tax return. How to file late tax returns   The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all future years, as specified in the declaration. How to file late tax returns Divorce decree or separation agreement that went into effect after 1984 and before 2009. How to file late tax returns   If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. How to file late tax returns To be able to do this, the decree or agreement must state all three of the following. How to file late tax returns The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support. How to file late tax returns The custodial parent will not claim the child as a dependent for the year. How to file late tax returns The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent. How to file late tax returns   The noncustodial parent must attach all of the following pages of the decree or agreement to his or her return. How to file late tax returns The cover page (write the other parent's social security number on this page). How to file late tax returns The pages that include all of the information identified in items (1) through (3) above. How to file late tax returns The signature page with the other parent's signature and the date of the agreement. How to file late tax returns Post-2008 divorce decree or separation agreement. How to file late tax returns   If the decree or agreement went into effect after 2008, a noncustodial parent claiming an exemption for a child cannot attach pages from a divorce decree or separation agreement instead of Form 8332. How to file late tax returns The custodial parent must sign either a Form 8332 or a similar statement. How to file late tax returns The only purpose of this statement must be to release the custodial parent's claim to the child's exemption. How to file late tax returns The noncustodial parent must attach a copy to his or her return. How to file late tax returns The form or statement must release the custodial parent's claim to the child without any conditions. How to file late tax returns For example, the release must not depend on the noncustodial parent paying support. How to file late tax returns    The noncustodial parent must attach the required information even if it was filed with a return in an earlier year. How to file late tax returns Revocation of release of claim to an exemption. How to file late tax returns   The custodial parent can revoke a release of claim to exemption that he or she previously released to the noncustodial parent on Form 8332 or a similar statement. How to file late tax returns In order for the revocation to be effective for 2013, the custodial parent must have given (or made reasonable efforts to give) written notice of the revocation to the noncustodial parent in 2012 or earlier. How to file late tax returns The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation. How to file late tax returns Remarried parent. How to file late tax returns   If you remarry, the support provided by your new spouse is treated as provided by you. How to file late tax returns Child support under pre-1985 agreement. How to file late tax returns   All child support payments actually received from the noncustodial parent under a pre-1985 agreement are considered used for the support of the child, even if such amounts are not actually spent for child support. How to file late tax returns Example. How to file late tax returns Under a pre-1985 agreement, the noncustodial parent provides $1,200 for the child's support. How to file late tax returns This amount is considered support provided by the noncustodial parent even if the $1,200 was actually spent on things other than support. How to file late tax returns Parents who never married. How to file late tax returns   The special rule for divorced or separated parents also applies to parents who never married and lived apart at all times during the last 6 months of the year. How to file late tax returns Alimony. How to file late tax returns   Payments to your spouse that are includible in his or her gross income as either alimony, separate maintenance payments, or similar payments from an estate or trust, are not treated as a payment for the support of a dependent. How to file late tax returns Special Rule for Qualifying Child of More Than One Person If your qualifying child is not a qualifying child of anyone else, this special rule does not apply to you and you do not need to read about it. How to file late tax returns This is also true if your qualifying child is not a qualifying child of anyone else except your spouse with whom you file a joint return. How to file late tax returns If a child is treated as the qualifying child of the noncustodial parent under the Special rule for divorced or separated parents (or parents who live apart), earlier, see Applying this special rule to divorced or separated parents (or parents who live apart), later. How to file late tax returns Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. How to file late tax returns (For a description of these tests, see list items 1 through 5 under Tests To Be a Qualifying Child in Table 3). How to file late tax returns Although the child meets the conditions to be a qualifying child of each of these persons, only one person can actually use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). How to file late tax returns The exemption for the child. How to file late tax returns The child tax credit. How to file late tax returns Head of household filing status. How to file late tax returns The credit for child and dependent care expenses. How to file late tax returns The exclusion from income for dependent care benefits. How to file late tax returns The earned income credit. How to file late tax returns The other person cannot take any of these benefits based on this qualifying child. How to file late tax returns In other words, you and the other person cannot agree to divide these tax benefits between you. How to file late tax returns The other person cannot take any of these tax benefits unless he or she has a different qualifying child. How to file late tax returns Tiebreaker rules. How to file late tax returns   To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply. How to file late tax returns If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. How to file late tax returns If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. How to file late tax returns If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. How to file late tax returns If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. How to file late tax returns If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. How to file late tax returns If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' total AGI evenly between them; see Publication 501 for details. How to file late tax returns   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. How to file late tax returns Example 1—separated parents. How to file late tax returns You, your husband, and your 10-year-old son lived together until August 1, 2013, when your husband moved out of the household. How to file late tax returns In August and September, your son lived with you. How to file late tax returns For the rest of the year, your son lived with your husband, the boy's father. How to file late tax returns Your son is a qualifying child of both you and your husband because your son lived with each of you for more than half the year and because he met the relationship, age, support, and joint return tests for both of you. How to file late tax returns At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. How to file late tax returns You and your husband will file separate returns. How to file late tax returns Your husband agrees to let you treat your son as a qualifying child. How to file late tax returns This means, if your husband does not claim your son as a qualifying child, you can claim your son as a dependent and treat him as a qualifying child for the child tax credit and exclusion for dependent care benefits, if you qualify for each of those tax benefits. How to file late tax returns However, you cannot claim head of household filing status because you and your husband did not live apart the last 6 months of the year. How to file late tax returns And, as a result of your filing status being married filing separately, you cannot claim the earned income credit or the credit for child and dependent care expenses. How to file late tax returns Example 2—separated parents claim same child. How to file late tax returns The facts are the same as in Example 1 except that you and your husband both claim your son as a qualifying child. How to file late tax returns In this case, only your husband will be allowed to treat your son as a qualifying child. How to file late tax returns This is because, during 2013, the boy lived with him longer than with you. How to file late tax returns If you claimed an exemption, the child tax credit, or the exclusion for dependent care benefits for your son, the IRS will disallow your claim to all these tax benefits, unless you have another qualifying child. How to file late tax returns In addition, because you and your husband did not live apart the last 6 months of the year, your husband cannot claim head of household filing status. How to file late tax returns And, as a result of his filing status being married filing separately, he cannot claim the earned income credit or the credit for child and dependent care expenses. How to file late tax returns Applying this special rule to divorced or separated parents (or parents who live apart). How to file late tax returns   If a child is treated as the qualifying child of the noncustodial parent under the special rule for divorced or separated parents (or parents who live apart) described earlier, only the noncustodial parent can claim an exemption and the child tax credit for the child. How to file late tax returns However, the noncustodial parent cannot claim the child as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. How to file late tax returns Only the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for those four tax benefits. How to file late tax returns If the child is the qualifying child of more than one person for those tax benefits, the tiebreaker rules determine which person can treat the child as a qualifying child. How to file late tax returns Example 1. How to file late tax returns You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. How to file late tax returns Your AGI is $10,000. How to file late tax returns Your mother's AGI is $25,000. How to file late tax returns Your son's father does not live with you or your son. How to file late tax returns Under the rules for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child if he meets all the requirements to do so. How to file late tax returns Because of this, you cannot claim an exemption or the child tax credit for your son. How to file late tax returns However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. How to file late tax returns You and your mother did not have any child care expenses or dependent care benefits, but the boy is a qualifying child of both you and your mother for head of household filing status and the earned income credit because he meets the relationship, age, residency, support, and joint return tests for both you and your mother. How to file late tax returns (Note: The support test does not apply for the earned income credit. How to file late tax returns ) However, you agree to let your mother claim your son. How to file late tax returns This means she can claim him for head of household filing status and the earned income credit if she qualifies for each and if you do not claim him as a qualifying child for the earned income credit. How to file late tax returns (You cannot claim head of household filing status because your mother paid the entire cost of keeping up the home. How to file late tax returns ) Example 2. How to file late tax returns The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. How to file late tax returns Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. How to file late tax returns Example 3. How to file late tax returns The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the earned income credit. How to file late tax returns Your mother also claims him as a qualifying child for head of household filing status. How to file late tax returns You, as the child's parent, will be the only one allowed to claim your son as a qualifying child for the earned income credit. How to file late tax returns The IRS will disallow your mother's claim to the earned income credit and head of household filing status unless she has another qualifying child. How to file late tax returns Phaseout of Exemptions The amount you can claim as a deduction for exemptions is reduced once your adjusted gross income (AGI) goes above a certain level for your filing status. How to file late tax returns These levels are as follows:    Filing Status AGI Level That Reduces Exemption Amount Married filing separately $150,000 Single 250,000 Head of household 275,000 Married filing jointly 300,000 Qualifying widow(er) 300,000 You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown above for your filing status. How to file late tax returns If your AGI exceeds the amount shown above by more than $122,500 ($61,250 if married filing separately), the amount of your deduction for exemptions is reduced to zero. How to file late tax returns If your AGI exceeds the level for your filing status, use the Deduction for Exemptions Worksheet found in the instructions for Form 1040 or Form 1040NR to figure the amount of your deduction for exemptions. How to file late tax returns Alimony Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. How to file late tax returns It does not include voluntary payments that are not made under a divorce or separation instrument. How to file late tax returns Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. How to file late tax returns Although this discussion is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. How to file late tax returns To be alimony, a payment must meet certain requirements. How to file late tax returns There are some differences between the requirements that apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. How to file late tax returns The general requirements that apply to payments regardless of when the divorce or separation instrument was executed and the specific requirements that apply to post-1984 instruments (and, in certain cases, some pre-1985 instruments) are discussed in this publication. How to file late tax returns See, Instruments Executed Before 1985 , later, if you are looking for information on where to find the specific requirements that apply to pre-1985 instruments. How to file late tax returns Spouse or former spouse. How to file late tax returns   Unless otherwise stated, the term “spouse” includes former spouse. How to file late tax returns Divorce or separation instrument. How to file late tax returns   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. How to file late tax returns This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). How to file late tax returns Invalid decree. How to file late tax returns   Payments under a divorce decree can be alimony even if the decree's validity is in question. How to file late tax returns A divorce decree is valid for tax purposes until a court having proper jurisdiction holds it invalid. How to file late tax returns Amended instrument. How to file late tax returns   An amendment to a divorce decree may change the nature of your payments. How to file late tax returns Amendments are not ordinarily retroactive for federal tax purposes. How to file late tax returns However, a retroactive amendment to a divorce decree correcting a clerical error to reflect the original intent of the court will generally be effective retroactively for federal tax purposes. How to file late tax returns Example 1. How to file late tax returns A court order retroactively corrected a mathematical error under your divorce decree to express the original intent to spread the payments over more than 10 years. How to file late tax returns This change also is effective retroactively for federal tax purposes. How to file late tax returns Example 2. How to file late tax returns Your original divorce decree did not fix any part of the payment as child support. How to file late tax returns To reflect the true intention of the court, a court order retroactively corrected the error by designating a part of the payment as child support. How to file late tax returns The amended order is effective retroactively for federal tax purposes. How to file late tax returns Deducting alimony paid. How to file late tax returns   You can deduct alimony you paid, whether or not you itemize deductions on your return. How to file late tax returns You must file Form 1040. How to file late tax returns You cannot use Form 1040A, 1040EZ, or 1040NR. How to file late tax returns Enter the amount of alimony you paid on Form 1040, line 31a. How to file late tax returns In the space provided on line 31b, enter your spouse's social security number (SSN) or IRS individual taxpayer identification number (ITIN). How to file late tax returns If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. How to file late tax returns Show the SSN or ITIN and amount paid to each other recipient on an attached statement. How to file late tax returns Enter your total payments on line 31a. How to file late tax returns If you do not provide your spouse's SSN or ITIN, you may have to pay a $50 penalty and your deduction may be disallowed. How to file late tax returns Reporting alimony received. How to file late tax returns   Report alimony you received as income on Form 1040, line 11, or on Schedule NEC (Form 1040NR), line 12. How to file late tax returns You cannot use Form 1040A, 1040EZ, or 1040NR-EZ. How to file late tax returns    You must give the person who paid the alimony your SSN or ITIN. How to file late tax returns If you do not, you may have to pay a $50 penalty. How to file late tax returns Withholding on nonresident aliens. How to file late tax returns   If you are a U. How to file late tax returns S. How to file late tax returns citizen or resident alien and you pay alimony to a nonresident alien spouse, you may have to withhold income tax at a rate of 30% on each payment. How to file late tax returns However, many tax treaties provide for an exemption from withholding for alimony payments. How to file late tax returns For more information, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. How to file late tax returns General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. How to file late tax returns Payments not alimony. How to file late tax returns   Not all payments under a divorce or separation instrument are alimony. How to file late tax returns Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained later under Community Property , Payments to keep up the payer's property, or Use of the payer's property. How to file late tax returns Example. How to file late tax returns Under your written separation agreement, your spouse lives rent-free in a home you own and you must pay the mortgage, real estate taxes, insurance, repairs, and utilities for the home. How to file late tax returns Because you own the home and the debts are yours, your payments for the mortgage, real estate taxes, insurance, and repairs are not alimony. How to file late tax returns Neither is the value of your spouse's use of the home. How to file late tax returns If they otherwise qualify, you can deduct the payments for utilities as alimony. How to file late tax returns Your spouse must report them as income. How to file late tax returns If you itemize deductions, you can deduct the real estate taxes and, if the home is a qualified home, you can also include the interest on the mortgage in figuring your deductible interest. How to file late tax returns However, if your spouse owned the home, see Example 2 under Payments to a third party, later. How to file late tax returns If you owned the home jointly with your spouse, see Table 4. How to file late tax returns For more information on a qualified home and deductible mortgage interest, see Publication 936, Home Mortgage Interest Deduction. How to file late tax returns Child support. How to file late tax returns   To determine whether a payment is child support, see the discussion under Instruments Executed After 1984 , later. How to file late tax returns If your divorce or separation agreement was executed before 1985, see the 2004 revision of Publication 504 available at www. How to file late tax returns irs. How to file late tax returns gov/formspubs. How to file late tax returns Underpayment. How to file late tax returns   If both alimony and child support payments are called for by your divorce or separation instrument, and you pay less than the total required, the payments apply first to child support and then to alimony. How to file late tax returns Example. How to file late tax returns Your divorce decree calls for you to pay your former spouse $200 a month ($2,400 ($200 x 12) a year) as child support and $150 a month ($1,800 ($150 x 12) a year) as alimony. How to file late tax returns If you pay the full amount of $4,200 ($2,400 + $1,800) during the year, you can deduct $1,800 as alimony and your former spouse must report $1,800 as alimony received. How to file late tax returns If you pay only $3,600 during the year, $2,400 is child support. How to file late tax returns You can deduct only $1,200 ($3,600 – $2,400) as alimony and your former spouse must report $1,200 as alimony received. How to file late tax returns Payments to a third party. How to file late tax returns   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. How to file late tax returns These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. How to file late tax returns ), taxes, tuition, etc. How to file late tax returns The payments are treated as received by your spouse and then paid to the third party. How to file late tax returns Example 1. How to file late tax returns Under your divorce decree, you must pay your former spouse's medical and dental expenses. How to file late tax returns If the payments otherwise qualify, you can deduct them as alimony on your return. How to file late tax returns Your former spouse must report them as alimony received and can include them in figuring deductible medical expenses. How to file late tax returns Example 2. How to file late tax returns Under your separation agreement, you must pay the real estate taxes, mortgage payments, and insurance premiums on a home owned by your spouse. How to file late tax returns If they otherwise qualify, you can deduct the payments as alimony on your return, and your spouse must report them as alimony received. How to file late tax returns If itemizing deductions, your spouse can deduct the real estate taxes and, if the home is a qualified home, also include the interest on the mortgage in figuring deductible interest. How to file late tax returns However, if you owned the home, see the example under Payments not alimony , earlier. How to file late tax returns If you owned the home jointly with your spouse, see Table 4. How to file late tax returns Life insurance premiums. How to file late tax returns   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. How to file late tax returns Payments for jointly-owned home. How to file late tax returns   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse or former spouse, some of your payments may be alimony. How to file late tax returns See Table 4. How to file late tax returns   However, if your spouse owned the home, see Example 2 under Payments to a third party, earlier. How to file late tax returns If you owned the home, see the example under Payments not alimony , earlier. How to file late tax returns Table 4. How to file late tax returns Expenses for a Jointly-Owned Home Use the table below to find how much of your payment is alimony and how much you can claim as an itemized deduction. How to file late tax returns IF you must pay all of the . How to file late tax returns . How to file late tax returns . How to file late tax returns AND your home is . How to file late tax returns . How to file late tax returns . How to file late tax returns THEN you can deduct and your spouse (or former spouse) must include as alimony . How to file late tax returns . How to file late tax returns . How to file late tax returns AND you can claim as an itemized deduction . How to file late tax returns . How to file late tax returns . How to file late tax returns   mortgage payments (principal and interest) jointly owned half of the total payments half of the interest as interest expense (if the home is a qualified home). How to file late tax returns 1   real estate taxes and home insurance held as tenants in common half of the total payments half of the real estate taxes2 and none of the home insurance. How to file late tax returns     held as tenants by the entirety or in joint tenancy none of the payments all of the real estate taxes and none of the home insurance. How to file late tax returns 1 Your spouse (or former spouse) can deduct the other half of the interest if the home is a qualified home. How to file late tax returns  2 Your spouse (or former spouse) can deduct the other half of the real estate taxes. How to file late tax returns Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. How to file late tax returns Exception for instruments executed before 1985. How to file late tax returns   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. How to file late tax returns A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. How to file late tax returns A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. How to file late tax returns   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, see the 2004 revision of Publication 504 available at www. How to file late tax returns irs. How to file late tax returns gov/formspubs. How to file late tax returns Example 1. How to file late tax returns In November 1984, you and your former spouse executed a written separation agreement. How to file late tax returns In February 1985, a decree of divorce was substituted for the written separation agreement. How to file late tax returns The decree of divorce did not change the terms for the alimony you pay your former spouse. How to file late tax returns The decree of divorce is treated as executed before 1985. How to file late tax returns Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. How to file late tax returns Example 2. How to file late tax returns The facts are the same as in Example 1 except that the decree of divorce changed the amount of the alimony. How to file late tax returns In this example, the decree of divorce is not treated as executed before 1985. How to file late tax returns The alimony payments are subject to the rules for payments under instruments executed after 1984. How to file late tax returns Alimony Requirements A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. How to file late tax returns The payment is in cash. How to file late tax returns The instrument does not designate the payment as not alimony. How to file late tax returns The spouses are not members of the same household at the time the payments are made. How to file late tax returns This requirement applies only if the spouses are legally separated under a decree of divorce or separate maintenance. How to file late tax returns There is no liability to make any payment (in cash or property) after the death of the recipient spouse. How to file late tax returns The payment is not treated as child support. How to file late tax returns Each of these requirements is discussed next. How to file late tax returns Cash payment requirement. How to file late tax returns   Only cash payments, including checks and money orders, qualify as alimony. How to file late tax returns The following do not qualify as alimony. How to file late tax returns Transfers of services or property (including a debt instrument of a third party or an annuity contract). How to file late tax returns Execution of a debt instrument by the payer. How to file late tax returns The use of the payer's property. How to file late tax returns Payments to a third party. How to file late tax returns   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. How to file late tax returns See Payments to a third party under General Rules, earlier. How to file late tax returns   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. How to file late tax returns The payments are in lieu of payments of alimony directly to your spouse. How to file late tax returns The written request states that both spouses intend the payments to be treated as alimony. How to file late tax returns You receive the written request from your spouse before you file your return for the year you made the payments. How to file late tax returns Payments designated as not alimony. How to file late tax returns   You and your spouse can designate that otherwise qualifying payments are not alimony. How to file late tax returns You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. How to file late tax returns For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). How to file late tax returns If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. How to file late tax returns   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. How to file late tax returns The copy must be attached each year the designation applies. How to file late tax returns Spouses cannot be members of the same household. How to file late tax returns   Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. How to file late tax returns A home you formerly shared is considered one household, even if you physically separate yourselves in the home. How to file late tax returns   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. How to file late tax returns Exception. How to file late tax returns   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. How to file late tax returns Liability for payments after death of recipient spouse. How to file late tax returns   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony whether made before or after the death. How to file late tax returns If all of the payments would continue, then none of the payments made before or after the death are alimony. How to file late tax returns   The divorce or separation instrument does not have to expressly state that the payments cease upon the