File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Income Tax Software

Federal Tax Ez Form 2011StatetaxformsState Taxes Free FileH & R Block OnlineH&r Block 2011 Tax SoftwareI Need To File 2012 TaxesTaxesCan I Still E File My 2012 Tax ReturnHow To Amend Your Income Tax ReturnHow To File Tax Extension2012 1040 Ez FormH R Block TaxesFiling An Amended Tax ReturnWhen Is The Last Day To File Taxes 20122013 State Tax ReturnWhere Can I File 2012 Taxes Online Free1040nr Form 20111040 Estimated Tax FormWww Irs Gov 1040xFile My 2011 Tax ReturnInstructionsFree Tax Help For Seniors2010 Tax Return FormHow To File 2012 TaxesWww 1040ez ComFree Ez Tax FormFiling 1040x1040x Online Free1090ez FormOnline 1040ezFederal Income Tax Forms 2011Irs Tax Form 1040ezDo I Have To File State Taxes2011 1040 EzTaxact 2013Irs Gov2012 Amended Tax ReturnTax Extension 2011Forms 1040 EsDo I File Taxes Amend Previous Years

Income Tax Software

Income tax software Publication 516 - Main Content Table of Contents U. Income tax software S. Income tax software Tax ReturnFiling Information Foreign Bank Accounts U. Income tax software S. Income tax software Government Payments Foreign Earned Income Exclusion Tax Treaty Benefits Allowances, Differentials, and Special Pay Other Income Deductions and Credits — Business Expenses Deductions and Credits — Nonbusiness Expenses Foreign Taxes Local (Foreign) Tax ReturnTax Treaty Benefits Other Agreements Double Withholding How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Income tax software U. Income tax software S. Income tax software Tax Return Filing Information If you are a U. Income tax software S. Income tax software citizen or green card holder living or traveling outside the United States, you are generally required to file income tax returns in the same way as those residing in the United States. Income tax software However, the special rules explained in the following discussions may apply to you. Income tax software See also Tax Treaty Benefits, later. Income tax software When To File and Pay Most individual tax returns cover a calendar year, January through December. Income tax software The regular due date for these tax returns is April 15 of the following year. Income tax software If April 15 falls on a Saturday, Sunday, or legal holiday, your tax return is considered timely filed if it is filed by the next business day that is not a Saturday, Sunday, or legal holiday. Income tax software If you get an extension, you are allowed additional time to file and, in some circumstances, pay your tax. Income tax software You must pay interest on any tax not paid by the regular due date. Income tax software Your return is considered filed on time if it is mailed from and officially postmarked in a foreign country on or before the due date (including extensions), or given to a designated international private delivery service before midnight of the last date prescribed for filing. Income tax software See your tax form instructions for a list of private delivery services that have been designated by the IRS to meet this “timely mailing as timely filing/paying” rule for tax returns and payments. Income tax software If your return is filed late, the postmark or delivery service date does not determine the date of filing. Income tax software In that case, your return is considered filed when it is received by the IRS. Income tax software Extensions You may be able to get an extension of time to file your return and pay your tax. Income tax software Automatic 2-month extension. Income tax software   You can get an automatic 2-month extension (to June 15, for a calendar year return) to file your return and pay your tax if you are a U. Income tax software S. Income tax software citizen or resident and, on the regular due date of your return, you are living outside the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico. Income tax software To get this extension, you must attach a statement to your return explaining how you qualified. Income tax software You will owe interest on any tax not paid by the regular due date of your return. Income tax software Married taxpayers. Income tax software   If you file a joint return, either you or your spouse can qualify for the automatic extension. Income tax software If you and your spouse file separate returns, the extension applies only to the spouse who qualifies. Income tax software Additional extension. Income tax software   You can apply for an additional extension of time to file your return by filing Form 4868. Income tax software You must file Form 4868 by the due date for your income tax return. Income tax software   Generally, you must file it by April 15. Income tax software However, if you qualify for the automatic 2-month extension, you generally must file Form 4868 by June 15. Income tax software Check the box on line 8 of Form 4868. Income tax software Payment of tax. Income tax software   You should estimate and pay any additional tax you owe when you file Form 4868 to avoid being charged a late-payment penalty. Income tax software The late-payment penalty applies if, through withholding, etc. Income tax software , you paid less than 90% of your actual tax liability by the original due date of your income tax return. Income tax software Even if the late-payment penalty does not apply, you will be charged interest on any unpaid tax liability from the original due date of the return until the tax is paid. Income tax software Electronic filing. Income tax software   You can file for the additional extension by phone, using your home computer, or through a tax professional. Income tax software See Form 4868 for more information. Income tax software Limit on additional extensions. Income tax software   You generally cannot get a total extension of more than 6 months. Income tax software However, if you are outside the United States and meet certain tests, you may be able to get a longer extension. Income tax software   For more information, see Publication 54. Income tax software Foreign Bank Accounts You must file Form TD F 90-22. Income tax software 1 if at any time during the year you had an interest in, or signature or other authority over, a bank account, securities account, or other financial account in a foreign country. Income tax software This applies if the combined assets in the account(s) were more than $10,000. Income tax software Do not include accounts in a U. Income tax software S. Income tax software military banking facility operated by a U. Income tax software S. Income tax software financial institution. Income tax software File the completed form by June 30 of the following year with the Department of the Treasury at the address shown on that form. Income tax software Do not attach it to Form 1040. Income tax software If you are required to file Form TD F 90-22. Income tax software 1 but do not do so, you may have to pay a penalty of up to $10,000 (more if the failure to file is willful). Income tax software You also may be required to file Form 8938 with your U. Income tax software S. Income tax software income tax return to report your interest in foreign bank accounts and other specified foreign financial assets. Income tax software For taxpayers living abroad, you generally do not have to file Form 8938 unless the total value of your specified foreign financial assets is more than $200,000 ($400,000 if married filing jointly) on the last day of the tax year or more than $300,000 ($600,000 if married filing jointly) at any time during the tax year. Income tax software For more information, see Form 8938 and its instructions. Income tax software U. Income tax software S. Income tax software Government Payments Wages earned for performing services outside the United States is foreign income, regardless of your employer. Income tax software If you are a U. Income tax software S. Income tax software citizen or resident alien, you must report all income from worldwide sources on your tax return unless it is exempt by U. Income tax software S. Income tax software law. Income tax software This applies to earned income (such as wages) as well as unearned income (such as interest, dividends, and capital gains). Income tax software If you are a nonresident alien, your income from sources outside the United States is not subject to U. Income tax software S. Income tax software tax. Income tax software Foreign Earned Income Exclusion Employees of the U. Income tax software S. Income tax software Government are not entitled to the foreign earned income exclusion or the foreign housing exclusion/deduction under section 911 because “foreign earned income ”does not include amounts paid by the U. Income tax software S. Income tax software Government as an employee. Income tax software But see Other Employment, later. Income tax software Special Situations In the following two situations, your pay is from the U. Income tax software S. Income tax software Government and does not qualify for the foreign earned income exclusion. Income tax software U. Income tax software S. Income tax software agency reimbursed by foreign country. Income tax software   If you are a U. Income tax software S. Income tax software Government employee paid by a U. Income tax software S. Income tax software agency to perform services in a foreign country, your pay is from the U. Income tax software S. Income tax software Government and does not qualify the foreign earned income exclusion or the foreign housing exclusion/deduction. Income tax software This is true even if the U. Income tax software S. Income tax software agency is reimbursed by the foreign government. Income tax software Employees of post exchanges, etc. Income tax software   If you are an employee of an Armed Forces post exchange, officers' and enlisted personnel club, Embassy commissary, or similar instrumentality of the U. Income tax software S. Income tax software Government, the earnings you receive are paid by the U. Income tax software S. Income tax software Government. Income tax software This is true whether they are paid from appropriated or nonappropriated funds. Income tax software These earnings are not eligible for the foreign earned income exclusion or the foreign housing exclusion/deduction. Income tax software Tax Treaty Benefits Most income tax treaties contain an article relating to remuneration from government services. Income tax software Even if you are working in a foreign country with which the United States has an income tax treaty in force and the treaty article that applies to government services says that your government pay is taxable only in the foreign country, the treaty will likely contain a “saving clause”, which provides that the United States may tax its citizens and its residents as if the treaty had not come into effect. Income tax software In some treaties, the government service article is an exception to the saving clause, but often only for individuals who are not U. Income tax software S. Income tax software citizens or green card holders. Income tax software Consequently, if you are a U. Income tax software S. Income tax software citizen or green card holder, you will generally not be entitled to reduce your U. Income tax software S. Income tax software tax on your government pay. Income tax software If you are neither a U. Income tax software S. Income tax software citizen nor green card holder, and you are treated as a resident of the treaty country under the treaty residence article (after application of the so-called “tie-breaker” rule), then you may be entitled to benefits under the government service article. Income tax software Review the treaty text carefully. Income tax software U. Income tax software S. Income tax software citizens must always file Form 1040. Income tax software Non-U. Income tax software S. Income tax software citizens who are treated as a resident of a treaty country under the treaty residence article (after application of the so-called “tie-breaker” rule) may file Form 1040NR and attach Form 8833. Income tax software If you pay or accrue taxes to the foreign country on your pay, you may be able to relieve double taxation with a foreign tax credit. Income tax software Most income tax treaties contain an article providing relief from double taxation. Income tax software Many treaties contain special foreign tax credit rules for U. Income tax software S. Income tax software citizens who are residents of a treaty country. Income tax software For more information on the mechanics of the foreign tax credit, see Foreign Taxes, later. Income tax software Allowances, Differentials, and Special Pay Most payments received by U. Income tax software S. Income tax software Government civilian employees for working abroad, including pay differentials, are taxable. Income tax software However, certain foreign areas allowances, cost of living allowances, and travel allowances are tax free. Income tax software The following discussions explain the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. Income tax software Pay differentials. Income tax software   Pay differentials you receive as financial incentives for employment abroad are taxable. Income tax software Your employer should have included these differentials as wages on your Form W-2, Wage and Tax Statement. Income tax software   Generally, pay differentials are given for employment under adverse conditions (such as severe climate) or because the post of duty is located in a hazardous or isolated area that may be outside the United States. Income tax software The area does not have to be a qualified hazardous duty area as discussed in Publication 3. Income tax software Pay differentials include: Post differentials, Special incentive differentials, and Danger pay. Income tax software Foreign areas allowances. Income tax software   Certain foreign areas allowances are tax free. Income tax software Your employer should not have included these allowances as wages on your Form W-2. Income tax software   Tax-free foreign areas allowances are allowances (other than post differentials) received under the following laws. Income tax software Title I, chapter 9, of the Foreign Service Act of 1980. Income tax software Section 4 of the Central Intelligence Agency Act of 1949, as amended. Income tax software Title II of the Overseas Differentials and Allowances Act. Income tax software Subsection (e) or (f) of the first section of the Administrative Expenses Act of 1946, as amended, or section 22 of that Act. Income tax software These allowances cover such expenses as: Certain repairs to a leased home, Education of dependents in special situations, Motor vehicle shipment, Separate maintenance for dependents, Temporary quarters, Transportation for medical treatment, and Travel, moving, and storage. Income tax software Allowances received by foreign service employees for representation expenses are also tax free under the above provisions. Income tax software Cost-of-living allowances. Income tax software   If you are stationed outside the continental United States or in Alaska, your gross income does not include cost-of-living allowances (other than amounts received under Title II of the Overseas Differentials and Allowances Act) granted by regulations approved by the President of the United States. Income tax software The cost-of-living portion of any other allowance (for example, a living and quarters allowance) is not included even if the underlying allowance is included in gross income. Income tax software Cost-of-living allowances are not included on your Form W-2. Income tax software Federal court employees. Income tax software   If you are a federal court employee, the preceding paragraph also applies to you. Income tax software The cost-of-living allowance must be granted by rules similar to regulations approved by the President. Income tax software American Institute in Taiwan. Income tax software   If you are an employee of the American Institute in Taiwan, allowances you receive are exempt from U. Income tax software S. Income tax software tax if they are equivalent to tax-exempt allowances received by civilian employees of the U. Income tax software S. Income tax software Government. Income tax software Federal reemployment payments after serving with an international organization. Income tax software   If you are a federal employee who is reemployed by a federal agency after serving with an international organization, you must include in income any reemployment payments you receive. Income tax software These payments are equal to the difference between the pay, allowances, post differential, and other monetary benefits paid by the international organization and the pay and other benefits that would have been paid by the federal agency had you been detailed to the international agency. Income tax software Allowances or reimbursements for travel and transportation expenses. Income tax software   See How To Report Business Expenses, later, for a discussion on whether a reimbursement or allowance for travel or transportation is included in your income. Income tax software Lodging furnished to a principal representative of the United States. Income tax software   If you are a principal representative of the United States stationed in a foreign country, you do not have to include in income the value of lodging (including utilities) provided to you as an official residence. Income tax software However, amounts paid by the U. Income tax software S. Income tax software government for your usual costs of operating and maintaining your household are taxable. Income tax software If amounts are withheld from your pay to cover these expenses, you cannot exclude or deduct those amounts from your income. Income tax software Peace Corps. Income tax software   If you are a Peace Corps volunteer or volunteer leader, some allowances you receive are taxable and others are not. Income tax software Taxable allowances. Income tax software   The following allowances must be included on your Form W-2 and reported on your return as wages. Income tax software If you are a volunteer leader, allowances paid to your spouse and minor children while you are training in the United States. Income tax software The part of living allowances designated by the Director of the Peace Corps as basic compensation. Income tax software This is the part for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. Income tax software Leave allowances. Income tax software Readjustment allowances or “termination payments. Income tax software ” Taxable allowances are considered received by you when credited to your account. Income tax software Example. Income tax software Gary Carpenter, a Peace Corps volunteer, gets $175 a month during his period of service, to be paid to him in a lump sum at the end of his tour of duty. Income tax software Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. Income tax software Nontaxable allowances. Income tax software   These generally include travel allowances and the part of living allowances for housing, utilities, food, clothing, and household supplies. Income tax software These allowances should not be included on your Form W-2. Income tax software These allowances are tax free whether paid by the U. Income tax software S. Income tax software Government or the foreign country in which you are stationed. Income tax software Other Income Other employment. Income tax software   If, in addition to your U. Income tax software S. Income tax software government pay, you receive income from a private employer or self-employment, you may qualify to claim the foreign earned income exclusion and the foreign housing exclusion and deduction under section 911 based on this other income provided you meet either the bona fide residence test or the physical presence test. Income tax software In addition, if your spouse is a U. Income tax software S. Income tax software citizen or resident alien who earns income in a foreign country that is paid by a private employer or is from self-employment, he or she may also qualify for the exclusion or the deduction. Income tax software For more information, see Publication 54. Income tax software The tax treaty rules relating to income from personal services generally apply to income from private employment. Income tax software As discussed above, the saving clause applies to you if you are a U. Income tax software S. Income tax software citizen or if you are a resident of the United States under the treaty residence article (after application of the so-called “tie-breaker” rule). Income tax software Sale of personal property. Income tax software   If you have a gain from the sale of your personal property (such as an automobile or a home appliance), whether directly or through a favorable exchange rate in converting the proceeds to U. Income tax software S. Income tax software dollars, the excess of the amount received in U. Income tax software S. Income tax software dollars over the cost or other basis of the property is a capital gain. Income tax software Capital gains are reported on Schedule D (Form 1040), Capital Gains and Losses. Income tax software However, losses from sales of your personal property, whether directly or through an unfavorable exchange rate, are not deductible. Income tax software Sale of your home. Income tax software   All or part of the gain on the sale of your main home, within or outside the United States, may be taxable. Income tax software Losses are not deductible. Income tax software   You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return). Income tax software Generally, you must have owned and used the home as your main residence for two of the five years preceding the date of sale. Income tax software   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse is serving on qualified official extended duty as a member of the Foreign Service of the United States, as an employee of the intelligence community, or as an employee or volunteer of the Peace Corps. Income tax software   For detailed information on selling your home, see Publication 523. Income tax software Deductions and Credits — Business Expenses You may deduct certain expenses such as travel expenses, transportation expenses, and other expenses connected to your employment. Income tax software Travel Expenses Subject to certain limits, you can deduct your unreimbursed ordinary and necessary expenses of traveling away from home in connection with the performance of your official duties. Income tax software These expenses include such items as travel costs, meals, lodging, baggage charges, local transportation costs (such as taxi fares), tips, and dry cleaning and laundry fees. Income tax software Your home for tax purposes (tax home) is your regular post of duty regardless of where you maintain your family home. Income tax software Your tax home is not limited to the Embassy, consulate, or duty station. Income tax software It includes the entire city or general area in which your principal place of employment is located. Income tax software Traveling away from home. Income tax software   You are traveling away from home if you meet both of the following requirements. Income tax software Your duties require you to be away from the general area of your tax home substantially longer than an ordinary day's work. Income tax software You need to get sleep or rest to meet the demands of your work while away from home. Income tax software This requirement is not satisfied by merely napping in your car. Income tax software You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Income tax software Temporary assignment. Income tax software   If your assignment or job away from your tax home is temporary, your tax home does not change. Income tax software You are considered to be away from home for the whole period, and your travel expenses are deductible. Income tax software Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less. Income tax software   However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Income tax software An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than one year, whether or not it actually lasts for more than one year. Income tax software   You must determine whether your assignment is temporary or indefinite when you start work. Income tax software If you expect employment to last for one year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Income tax software Employment that is initially temporary may become indefinite due to changed circumstances. Income tax software A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Income tax software Exception for federal crime investigations or prosecutions. Income tax software   If you are a federal employee participating in a federal crime investigation or prosecution, you may be able to deduct travel expenses even if you are away from your tax home for more than one year. Income tax software This exception to the one-year rule applies if the Attorney General certifies that you are traveling for the federal government in a temporary duty status to prosecute, or provide support services for the investigation or prosecution of, a federal crime. Income tax software Limit on meals and entertainment. Income tax software   You can generally deduct only 50% of the cost of your unreimbursed business-related meals and entertainment. Income tax software However, the limit does not apply to expenses reimbursed under a U. Income tax software S. Income tax software Government expense allowance arrangement. Income tax software Individuals subject to hours of service limits. Income tax software   You can deduct 80% of your unreimbursed business-related meal expenses if the meals take place during or incident to any period subject to the Department of Transportation's hours of service limits. Income tax software   Individuals subject to the Department of Transportation's “hours of service” limits include the following. Income tax software Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. Income tax software Interstate truck operators and bus drivers who are under Department of Transportation regulations. Income tax software Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. Income tax software Certain merchant mariners who are under Coast Guard regulations. Income tax software Primary purpose of trip must be for business. Income tax software   If your trip was entirely for business, your unreimbursed travel expenses are generally deductible. Income tax software However, if you spend some of your time on nonbusiness activities, part of your expenses may not be deductible. Income tax software   If your trip was mainly personal, you cannot deduct your travel expenses to and from your destination. Income tax software This applies even if you engage in business activities while there. Income tax software However, you can deduct any expenses while at your destination that are directly related to your business. Income tax software Expenses paid for others. Income tax software   You generally cannot deduct travel expenses of your spouse, dependents, or other individuals who go with you on a trip. Income tax software Home leave. Income tax software   The Foreign Service Act requires U. Income tax software S. Income tax software citizens who are members of the foreign service to take a leave of absence after completing 3 years of continuous service abroad. Income tax software This period is called “home leave” and can be used to take care of certain personal matters such as medical and dental checkups, buying a new wardrobe, and visiting relatives. Income tax software   The amounts paid for your travel, meals, and lodging while on home leave are deductible as travel or business expenses subject to the rules and limits discussed earlier. Income tax software You must be able to verify these amounts in order to claim them. Income tax software Amounts paid on behalf of your family while on home leave are personal living expenses and are not deductible. Income tax software More information. Income tax software   See chapter 1 of Publication 463 for more information on travel expenses. Income tax software Transportation Expenses You can deduct allowable transportation expenses that are directly related to your official duties. Income tax software Transportation expenses include the cost of transportation by air, rail, bus, or taxi, and the cost of driving and maintaining your car. Income tax software They do not include expenses you have when traveling away from home overnight. Income tax software Those expenses are deductible as travel expenses and are discussed earlier. Income tax software Commuting. Income tax software   You cannot deduct your transportation costs of going between your home and your regular business location. Income tax software These costs are personal commuting expenses. Income tax software   If you have one or more regular business locations but must work at a temporary location, you can deduct the costs of commuting to that temporary place of work. Income tax software   If you work at two or more places in the same day, you can deduct your expenses of getting from one place of work to the other. Income tax software More information. Income tax software   For more information on transportation expenses, see chapter 4 of Publication 463. Income tax software Other Employee Business Expenses You may be able to deduct other unreimbursed expenses that are connected with your employment. Income tax software Membership dues. Income tax software   You can deduct membership dues you pay to professional societies that relate to your business or profession. Income tax software Subscriptions. Income tax software   You can deduct subscriptions to professional publications that relate to your business or profession. Income tax software Educational expenses. Income tax software   Generally, educational expenses are considered to be personal expenses and are not deductible. Income tax software However, under some circumstances, educational expenses are deductible as business expenses. Income tax software   You can deduct educational expenses as business expenses if the education: Maintains or improves skills needed in your present position, or Meets the express requirements of your agency to keep your present position, salary, or status. Income tax software   You cannot deduct educational expenses as business expenses if the education: Is needed to enable you to meet minimum educational requirements for qualification in your present position, Is a part of a program of study that can qualify you for a new position, or Is for travel as a form of education. Income tax software These rules apply even if the education is required by your agency or it maintains or improves skills required in your work. Income tax software   See Publication 970, Tax Benefits for Education, for more information on educational expenses. Income tax software    Educational expenses that are not work related, such as costs of sending children to college, are personal expenses that you cannot deduct. Income tax software However, you may be eligible for other tax benefits such as the American opportunity and lifetime learning credits; contributions to a Coverdell education savings account or qualified tuition program; deduction for student loan interest; and exclusion from income of certain savings bond interest. Income tax software These benefits are explained in Publication 970. Income tax software Foreign service representation expenses. Income tax software   If you are an employee of the U. Income tax software S. Income tax software Foreign Service and your position requires you to establish and maintain favorable relations in foreign countries, you may receive a nontaxable allowance for representation expenses. Income tax software If your expenses are more than the allowance you receive, you can deduct the excess expenses as an itemized deduction on Schedule A (Form 1040) if you meet one of the following conditions. Income tax software You have a certificate from the Secretary of State attesting that the expenses were incurred for the benefit of the United States, and would be reimbursable under appropriate legislation if the agency had sufficient funds for these reimbursements. Income tax software The expenses, while specifically not reimbursable under State Department regulations, were ordinary and necessary business expenses incurred in the performance of your official duties. Income tax software    To deduct any expenses for travel, entertainment, and gifts, including those certified by the Secretary of State, you must meet the rules for recordkeeping and accounting to your employer. Income tax software These rules are explained in Publication 463. Income tax software Representation expenses. Income tax software   These are expenses that further the interest of the United States abroad. Income tax software They include certain entertainment, gifts, costs of official functions, and rental of ceremonial dress. Income tax software They generally do not include costs of passenger vehicles (such as cars or aircraft), printing or engraving, membership fees, or amounts a principal representative must pay personally to cover the usual costs of operating and maintaining an official residence. Income tax software   Chapters 300 and 400 of the Standardized Regulations (Government Civilians, Foreign Area) provide more detail on what expenses are allowable as representation expenses. Income tax software These regulations are available on the Internet at www. Income tax software state. Income tax software gov/m/a/als. Income tax software Look under “Standardized Regulations (DSSR)” and click on “DSSR Table of Contents. Income tax software ” Publication 463 and Publication 529, Miscellaneous Deductions, provide more detail on what expenses are allowable as ordinary and necessary business expenses. Income tax software Impairment-related work expenses. Income tax software   If you are an employee with a physical or mental disability, you can deduct attendant-care services at your place of work and other expenses in connection with work that are necessary for you to be able to work. Income tax software Attendant care includes a reader for a blind person and a helper for a person with a physical disability. Income tax software These expenses are reported on Form 2106 or 2106-EZ and carried to Schedule A (Form 1040). Income tax software They are not subject to the 2%-of-adjusted- gross-income limit on miscellaneous itemized deductions. Income tax software Loss on conversion of U. Income tax software S. Income tax software dollars into foreign currency. Income tax software   The conversion of U. Income tax software S. Income tax software dollars into foreign currency at an official rate of exchange that is not as favorable as the free market rate does not result in a deductible loss. Income tax software Recordkeeping Rules If you claim a deduction for unreimbursed business expenses, you must keep timely and adequate records of all your business expenses. Income tax software For example, you must keep records and supporting evidence to prove the following elements about deductions for travel expenses (including meals and lodging while away from home). Income tax software The amount of each separate expense for travel away from home, such as the cost of your transportation, lodging, or meals. Income tax software You may total your incidental expenses if you list them in reasonable categories such as daily meals, gasoline and oil, and taxi fares. Income tax software For each trip away from home, the dates you left and returned and the number of days spent on business. Income tax software The destination or area of your travel, described by the name of the city, town, or similar designation. Income tax software The business reason for your travel or the business benefit gained or expected to be gained from your travel. Income tax software How to record your expenses. Income tax software   Records for proof of your expenses should be kept in an account book, diary, statement of expense, or similar record. Income tax software They should be supported by other records, such as receipts or canceled checks, in sufficient detail to establish the elements for these expenses. Income tax software You do not need to duplicate information in an account book or diary that is shown on a receipt as long as your records and receipts complement each other in an orderly manner. Income tax software   Each expense should be recorded separately in your records. Income tax software However, some items can be totaled in reasonable categories. Income tax software You can make one daily entry for categories such as taxi fares, telephone calls, meals while away from home, gas and oil, and other incidental costs of travel. Income tax software You may record tips separately or with the cost of the service. Income tax software    Documentary evidence generally is required to support all lodging expenses while traveling away from home. Income tax software It is also required for any other expense of $75 or more, except transportation charges if the evidence is not readily available. Income tax software Documentary evidence is a receipt, paid bill, or similar proof sufficient to support an expense. Income tax software It ordinarily will be considered adequate if it shows the amount, date, place, and essential business character of the expense. Income tax software    A canceled check by itself does not prove a business cost. Income tax software You must have other evidence to show that the check was used for a business purpose. Income tax software Your records must be timely. Income tax software   Record the elements for the expense in your account book or other record at or near the time of the expense. Income tax software A timely-kept record has more value than statements prepared later when, generally, there is a lack of accurate recall. Income tax software Confidential information. Income tax software   You do not need to put confidential information relating to an element of a deductible expense (such as the place, business purpose, or business relationship) in your account book, diary, or other record. Income tax software However, you do have to record the information elsewhere at or near the time of the expense and have it available to fully prove that element of the expense. Income tax software How To Report Business Expenses As a U. Income tax software S. Income tax software Government employee, your business expense reimbursements are generally paid under an accountable plan and are not included in your wages on your Form W-2. Income tax software If your expenses are not more than the reimbursements, you do not need to show your expenses or reimbursements on your return. Income tax software However, if you do not account to your employer for a travel advance or if you do not return any excess advance within a reasonable period of time, the advance (or excess) will be included in your wages on your Form W-2. Income tax software If you are entitled to a reimbursement from your employer but you do not claim it, you cannot deduct the expenses to which that unclaimed reimbursement applies. Income tax software Form 2106 or Form 2106-EZ. Income tax software   You must complete Form 2106 or 2106-EZ to deduct your expenses. Income tax software Also, if your actual expenses are more than your reimbursements, you can complete Form 2106 or 2106-EZ to deduct your excess expenses. Income tax software Generally, you must include all of your expenses and reimbursements on Form 2106 or 2106-EZ and carry your allowable expense to Schedule A (Form 1040). Income tax software Your allowable expense is then generally subject to the 2%-of-adjusted-gross-income limit. Income tax software Form 2106-EZ. Income tax software   You may be able to use Form 2106-EZ instead of the more complex Form 2106 for reporting unreimbursed employee business expenses. Income tax software You can use Form 2106-EZ if you meet both of the following conditions. Income tax software You are not reimbursed by your employer for any expenses. Income tax software (Amounts your employer included in your wages on your Form W-2 are not considered reimbursements. Income tax software ) If you claim car expenses, you use the standard mileage rate. Income tax software Deductions and Credits — Nonbusiness Expenses In addition to deductible business expenses, you may be entitled to deduct certain other expenses. Income tax software Moving Expenses If you changed job locations or started a new job, you may be able to deduct the reasonable expenses of moving yourself, your family, and your household goods and personal effects to your new home. Income tax software However, you cannot deduct any expenses for which you received a tax-free allowance as a U. Income tax software S. Income tax software Government employee. Income tax software To deduct moving expenses, your move must be closely related to the start of work and you must meet the distance test and the time test. Income tax software Closely related to the start of work. Income tax software   The move must be closely related, both in time and in place, to the start of work at the new location. Income tax software In general, you must have incurred your moving expenses within one year from the time you first report to your new job or business. Income tax software   A move generally is not considered closely related in place to the start of work if the distance from your new home to the new job location is more than the distance from your former home to the new job location. Income tax software A move that does not meet this requirement may qualify if you can show that you must live at the new home as a condition of employment, or you will spend less time or money commuting from the new home to the new job. Income tax software Distance test. Income tax software   Your new main job location must be at least 50 miles farther from your former home than your old main job location was. Income tax software If you did not have an old job location, your new job location must be at least 50 miles from your former home. Income tax software Time test. Income tax software   If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location. Income tax software Deductible moving expenses. Income tax software   Moving expenses that can be deducted include the reasonable costs of: Moving household goods and personal effects (including packing, crating, in-transit storage, and insurance) of both you and members of your household, and Transportation and lodging for yourself and members of your household for one trip from your former home to your new home (including costs of getting passports). Income tax software    The cost of your meals is not a deductible moving expense. Income tax software   The costs of moving household goods include the reasonable expenses of moving household goods and personal effects to and from storage. Income tax software For a foreign move, the costs also include expenses of storing the goods and effects for part or all of the period that your new job location abroad continues to be your main job location. Income tax software Expenses must be reasonable. Income tax software   You can deduct only those expenses that are reasonable for the circumstances of your move. Income tax software For example, the costs of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. Income tax software Members of your household. Income tax software   A member of your household includes anyone who has both your former home and new home as his or her home. Income tax software It does not include a tenant or employee unless you can claim that person as a dependent. Income tax software Retirees. Income tax software   You can deduct the costs of moving to the United States when you permanently retire if both your former main job location and former home were outside the United States and its possessions. Income tax software You do not have to meet the time test described earlier. Income tax software Survivors. Income tax software   You can deduct moving expenses for a move to the United States if you are the spouse or dependent of a person whose main job location at the time of death was outside the United States and its possessions. Income tax software The move must begin within 6 months after the decedent's death. Income tax software It must be from the decedent's former home outside the United States, and that home must also have been your home. Income tax software You do not have to meet the time test described earlier. Income tax software How to report moving expenses. Income tax software   Use Form 3903 to report your moving expenses and figure your allowable deduction. Income tax software Claim the deduction as an adjustment to income on Form 1040. Income tax software (You cannot deduct moving expenses on Form 1040A or Form 1040EZ. Income tax software ) Reimbursements. Income tax software   Generally, you must include reimbursements of, or payments for, nondeductible moving expenses in gross income for the year paid. Income tax software You also must include in gross income reimbursements paid to you under a nonaccountable plan. Income tax software However, there is an exception for the tax-free foreign areas allowances described earlier under Allowances, Differentials, and Special Pay. Income tax software Additional information. Income tax software   For additional information about moving expenses, see Publication 521. Income tax software Other Itemized Deductions You may be able to claim other itemized deductions not connected to your employment. Income tax software Contributions. Income tax software   You can deduct contributions to qualified organizations created or organized in or under the laws of the United States or its possessions. Income tax software You cannot deduct contributions you make directly to foreign organizations (except for certain Canadian, Israeli, and Mexican charities), churches, and governments. Income tax software For more information, see Publication 526, Charitable Contributions. Income tax software Real estate tax and home mortgage interest. Income tax software   If you receive a tax-free housing allowance, your itemized deductions for real estate taxes and home mortgage interest are limited. Income tax software You must reduce the amount of each deduction that would otherwise be allowable by the amount of each expense that is related to the tax-free allowance. Income tax software Example. Income tax software Adam is an IRS employee working overseas who receives a $6,300 tax-free housing and utility allowance. Income tax software During the year, Adam used the allowance, with other funds, to provide a home for himself. Income tax software His expenses for this home totaled $8,400 and consisted of mortgage principal ($500), insurance ($400), real estate taxes ($1,400), mortgage interest ($4,000), and utility costs ($2,100). Income tax software Adam did not have any other expenses related to providing a home for himself. Income tax software Adam must reduce his deductions for home mortgage interest and real estate taxes. Income tax software He figures a reasonable way to reduce them is to multiply them by a fraction: its numerator is $6,300 (the total housing and utility allowance) and its denominator is $8,400 (the total of all payments to which the housing and utility allowance applies). Income tax software The result is 3/4. Income tax software Adam reduces his otherwise allowable home mortgage interest deduction by $3,000 (the $4,000 he paid ×3/4) and his otherwise allowable real estate tax deduction by $1,050 (the $1,400 he paid × 3/4). Income tax software He can deduct $1,000 of his mortgage interest ($4,000 − $3,000) and $350 of his real estate taxes ($1,400 − $1,050) when he itemizes his deductions. Income tax software Exception to the reduction. Income tax software   If you receive a tax-free housing allowance as a member of the military or the clergy, you do not have to reduce your deductions for real estate tax and home mortgage interest expenses you are otherwise entitled to deduct. Income tax software Required statement. Income tax software   If you receive a tax-free housing allowance and have real estate tax or home mortgage interest expenses, attach a statement to your tax return. Income tax software The statement must contain all of the following information. Income tax software The amount of each type of tax-free income you received, such as a tax-free housing allowance or tax-free representation allowance. Income tax software The amount of otherwise deductible expenses attributable to each type of tax-free income. Income tax software The amount attributable to each type of tax-free income that was not directly attributable to that type of tax-free income. Income tax software An explanation of how you determined the amounts not directly attributable to each type of tax-free income. Income tax software   The statement must also indicate that none of the amounts deducted on your return are in any way attributable to tax-free income. Income tax software Foreign Taxes If you pay or accrue taxes to a foreign government, you generally can choose to either claim them as a credit against your U. Income tax software S. Income tax software income tax liability or deduct them as an itemized deduction when figuring your taxable income. Income tax software Do not include the foreign taxes paid or accrued as withheld income taxes in the Payments section of Form 1040. Income tax software Foreign tax credit. Income tax software   Your foreign tax credit is subject to a limit based on your taxable income from foreign sources. Income tax software If you choose to figure a credit against your U. Income tax software S. Income tax software tax liability for the foreign taxes, you generally must complete Form 1116 and attach it to your U. Income tax software S. Income tax software income tax return. Income tax software    You cannot claim a credit for foreign taxes paid on amounts excluded from gross income under the foreign earned income or housing exclusions. Income tax software If all your foreign income is exempt from U. Income tax software S. Income tax software tax, you will not be able to claim a foreign tax credit. Income tax software   If, because of the limit on the credit, you cannot use the full amount of qualified foreign taxes paid or accrued in the tax year, you are allowed to carry the excess back 1 year and then forward 10 years. Income tax software Exemption from limit. Income tax software   You can elect to not be subject to the foreign tax limit if you meet all the following conditions. Income tax software Your only foreign income is passive income, such as interest, dividends, and royalties. Income tax software The total of all your foreign taxes is not more than $300 ($600 for joint tax returns). Income tax software The foreign income and taxes are reported to you on a payee statement, such as Form 1099-DIV, Dividends and Distributions, or 1099-INT, Interest Income. Income tax software If you make the election, you can claim a foreign tax credit without filing Form 1116. Income tax software However, you cannot carry back or carry over any unused foreign tax to or from this year. Income tax software See the instructions for the appropriate line in the Tax and Credits section of Form 1040. Income tax software Foreign tax deduction. Income tax software   If you choose to deduct all foreign income taxes on your U. Income tax software S. Income tax software income tax return, itemize the deduction on Schedule A (Form 1040). Income tax software You cannot deduct foreign taxes paid on income you exclude under the foreign earned income or housing exclusions. Income tax software Example. Income tax software Dennis and Christina are married and live and work in Country X. Income tax software Dennis works for the U. Income tax software S. Income tax software Government and Christina is employed by a private company. Income tax software They pay income tax to Country X on Christina's income only. Income tax software Dennis and Christina file a joint tax return and exclude all of Christina's income. Income tax software They cannot claim a foreign tax credit or take a deduction for the taxes paid to Country X. Income tax software Deduction for other foreign taxes. Income tax software   The deduction for foreign taxes other than foreign income taxes is not related to the foreign tax credit. Income tax software You can take deductions for these miscellaneous foreign taxes and also claim the foreign tax credit for income taxes paid to a foreign country. Income tax software   You can deduct real property taxes you pay that are imposed on you by a foreign country. Income tax software You take this deduction on Schedule A (Form 1040). Income tax software You cannot deduct other foreign taxes, such as personal property taxes, unless you incurred the expenses in a trade or business or in the production of income. Income tax software More information. Income tax software   The foreign tax credit and deduction, their limits, and carryback and carryover provisions are discussed in detail in Publication 514. Income tax software Local (Foreign) Tax Return As a U. Income tax software S. Income tax software Government employee, you are expected to observe and fulfill all tax obligations imposed by the host country government. Income tax software Check with local tax authorities to determine whether you are considered a tax resident of your host country, whether you are required to file a host country tax return and whether you owe taxes to the host country. Income tax software Tax Treaty Benefits As discussed earlier, most income tax treaties contain an article relating to remuneration from government services. Income tax software Review the treaty text carefully to determine whether your U. Income tax software S. Income tax software Government remuneration is taxable in the host country. Income tax software You will first have to determine whether you are a resident of your host country under the treaty residence article (after application of the so-called “tie-breaker” rule). Income tax software If you or your spouse receives income from a private employer or self-employment, review the tax treaty rules relating to income from personal services to determine whether that income is taxable in the host country. Income tax software If you pay or accrue taxes to both the host country and the United States, you may be able to relieve double taxation with a foreign tax credit. Income tax software Most income tax treaties contain an article providing relief from double taxation. Income tax software Many treaties contain special foreign tax credit rules for U. Income tax software S. Income tax software citizens who are residents of a treaty country. Income tax software For more information about the foreign tax credit, see Foreign Taxes, earlier. Income tax software Other Agreements The United States may be a party to agreements other than income tax treaties that may affect your tax obligations to the host country. Income tax software For example, consular employees may be exempt from host country tax under the Vienna Convention on Consular Relations or bilateral consular agreements. Income tax software Similarly, certain diplomatic staff may be exempt from host country tax under the Vienna Convention on Diplomatic Relations. Income tax software Check with the appropriate U. Income tax software S. Income tax software Embassy for more information. Income tax software Double Withholding If your U. Income tax software S. Income tax software government pay is subject to withholding in both the United States and the foreign country, you may reduce the amount of U. Income tax software S. Income tax software tax that is withheld from your pay if you expect to be entitled to a foreign tax credit on your U. Income tax software S. Income tax software income tax return on this income. Income tax software Complete Worksheet 1-6 in Publication 505, Tax Withholding and Estimated Tax, to determine how to revise Form W-4, Employee’s Withholding Allowance Certificate. Income tax software How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Income tax software By selecting the method that is best for you, you will have quick and easy access to tax help. Income tax software Free help with your tax return. Income tax software   Free help in preparing your return is available nationwide from IRS-certified volunteers. Income tax software The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income, elderly, disabled, and limited English proficient taxpayers. Income tax software The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Income tax software Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Income tax software Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Income tax software To find the nearest VITA or TCE site, visit IRS. Income tax software gov or call 1-800-906-9887 or 1-800-829-1040. Income tax software   As part of the TCE program, AARP offers the Tax-Aide counseling program. Income tax software To find the nearest AARP Tax-Aide site, visit AARP's website at www. Income tax software aarp. Income tax software org/money/taxaide or call 1-888-227-7669. Income tax software   For more information on these programs, go to IRS. Income tax software gov and enter “VITA” in the search box. Income tax software Internet. Income tax software You can access the IRS website at IRS. Income tax software gov 24 hours a day, 7 days a week to: E-file your return. Income tax software Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Income tax software Check the status of your 2012 refund. Income tax software Go to IRS. Income tax software gov and click on Where’s My Refund. Income tax software Information about your return will generally be available within 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail your paper return. Income tax software If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Income tax software Have your 2012 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Income tax software Where's My Refund? has a new look this year! The tool will include a tracker that displays progress through three stages: (1) return received, (2) refund approved, and (3) refund sent. Income tax software Where's My Refund? will provide an actual personalized refund date as soon as the IRS processes your tax return and approves your refund. Income tax software So in a change from previous filing seasons, you won't get an estimated refund date right away. Income tax software Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Income tax software You can obtain a free transcript online at IRS. Income tax software gov by clicking on Order a Return or Account Transcript under “Tools. Income tax software ” For a transcript by phone, call 1-800-908-9946 and follow the prompts in the recorded message. Income tax software You will be prompted to provide your SSN or Individual Taxpayer Identification Number (ITIN), date of birth, street address and ZIP code. Income tax software Download forms, including talking tax forms, instructions, and publications. Income tax software Order IRS products. Income tax software Research your tax questions. Income tax software Search publications by topic or keyword. Income tax software Use the Internal Revenue Code, regulations, or other official guidance. Income tax software View Internal Revenue Bulletins (IRBs) published in the last few years. Income tax software Figure your withholding allowances using the IRS Withholding Calculator at www. Income tax software irs. Income tax software gov/individuals. Income tax software Determine if Form 6251 (Alternative Minimum Tax— Individuals), must be filed by using our Alternative Minimum Tax (AMT) Assistant available at IRS. Income tax software gov by typing Alternative Minimum Tax Assistant in the search box. Income tax software Sign up to receive local and national tax news by email. Income tax software Get information on starting and operating a small business. Income tax software Phone. Income tax software Many services are available by phone. Income tax software   Ordering forms, instructions, and publications. Income tax software Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions (limited to 5 years). Income tax software You should receive your order within 10 days. Income tax software Asking tax questions. Income tax software Call the IRS with your tax questions at 1-800-829-1040. Income tax software Solving problems. Income tax software You can get face-to-face help solving tax problems most business days in IRS Taxpayer Assistance Centers (TAC). Income tax software An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Income tax software Call your local Taxpayer Assistance Center for an appointment. Income tax software To find the number, go to www. Income tax software irs. Income tax software gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Income tax software TTY/TDD equipment. Income tax software If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Income tax software The TTY/TDD telephone number is for individuals who are deaf, hard of hearing, or have a speech disability. Income tax software These individuals can also access the IRS through relay services such as the Federal Relay Service at www. Income tax software gsa. Income tax software gov/fedrelay. Income tax software TeleTax topics. Income tax software Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Income tax software Checking the status of your 2012 refund. Income tax software To check the status of your 2012 refund, call 1-800-829-1954 or 1-800-829-4477 (automated Where's My Refund? information 24 hours a day, 7 days a week). Income tax software Information about your return will generally be available within 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail your paper return. Income tax software If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Income tax software Have your 2012 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Income tax software Where's My Refund? will provide an actual personalized refund date as soon as the IRS processes your tax return and approves your refund. Income tax software Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Income tax software Outside the U. Income tax software S. Income tax software If you are outside the United States, taxpayer assistance is available at the following U. Income tax software S Embassies or consulate. Income tax software Beijing, China (86) (10) 8531-3983 Frankfurt, Germany (49) (69) 7535-3834 London, England (44) (20) 7894-0476 Paris, France (33) (1) 4312-2555 Please contact the office for times when assistance will be available. Income tax software If you cannot get to one of these offices, taxpayer assistance is available at (267) 941-1000 (not a toll free call). Income tax software If you are in a U. Income tax software S. Income tax software territory (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and U. Income tax software S. Income tax software Virgin Islands) and have a tax question, you can call 1-800-829-1040. Income tax software Evaluating the quality of our telephone services. Income tax software To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Income tax software One method is for a second IRS representative to listen in on or record random telephone calls. Income tax software Another is to ask some callers to complete a short survey at the end of the call. Income tax software Walk-in. Income tax software Some products and services are available on a walk-in basis. Income tax software   Products. Income tax software You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Income tax software Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Income tax software Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Income tax software Services. Income tax software You can walk in to your local TAC most business days for personal, face-to-face tax help. Income tax software An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Income tax software If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Income tax software No appointment is necessary—just walk in. Income tax software Before visiting, check www. Income tax software irs. Income tax software gov/localcontacts for hours of operation and services provided. Income tax software If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested by calling your local TAC. Income tax software You can leave a message and a representative will call you back within 2 business days. Income tax software All other issues will be handled without an appointment. Income tax software To call your local TAC, go to  www. Income tax software irs. Income tax software gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Income tax software Outside the U. Income tax software S. Income tax software If you are outside the United States during the filing period (January to mid-June), you can get the necessary federal tax forms and publications from most U. Income tax software S. Income tax software Embassies and consulates. Income tax software Mail. Income tax software You can send your order for forms, instructions, and publications to the address below. Income tax software You should receive a response within 10 days after your request is received. Income tax software  Internal Revenue Service 1201 N. Income tax software Mitsubishi Motorway Bloomington, IL 61705-6613 Outside the U. Income tax software S. Income tax software If you are outside the United States, you can get tax assistance by writing to the address below. Income tax software  Internal Revenue Service International Accounts Philadelphia, PA 19255-0725 Taxpayer Advocate Service. Income tax software   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Income tax software Its job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. Income tax software TAS offers free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. Income tax software Remember, the worst thing you can do is nothing at all. Income tax software   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. Income tax software You face (or your business is facing) an immediate threat of adverse action. Income tax software You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. Income tax software   If you qualify for help, they will do everything they can to get your problem resolved. Income tax software You will be assigned to one advocate who will be with you at every turn. Income tax software TAS has offices in every state, the District of Columbia, and Puerto Rico. Income tax software Although TAS is independent within the IRS, their advocates know how to work with the IRS to get your problems resolved. Income tax software And its services are always free. Income tax software   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. Income tax software The TAS tax toolkit at www. Income tax software TaxpayerAdvocate. Income tax software irs. Income tax software gov can help you understand these rights. Income tax software   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. Income tax software irs. Income tax software gov/advocate. Income tax software You can also call the toll-free number at 1-877-777-4778. Income tax software Deaf and hard of hearing individuals who have access to TTY/TDD equipment can call 1-800-829-4059. Income tax software These individuals can also access the IRS through relay services such as the Federal Relay Service at www. Income tax software gsa. Income tax software gov/fedrelay. Income tax software   TAS also handles large-scale or systemic problems that affect many taxpayers. Income tax software If you know of one of these broad issues, please report it through the Systemic Advocacy Management System at www. Income tax software irs. Income tax software gov/advocate. Income tax software    Outside the U. Income tax software S. Income tax software If you live outside of the United States, you can call the Taxpayer Advocate at (787) 522-8601 in English or (787) 522-8600 in Spanish. Income tax software You can contact the Taxpayer Advocate at: Internal Revenue Service Taxpayer Advocate Service City View Plaza, 48 Carr 165, Suite 2000 Guaynabo, P. Income tax software R. Income tax software 00968-8000 Low Income Taxpayer Clinics (LITCs). Income tax software   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. Income tax software Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. Income tax software These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. Income tax software Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. Income tax software For more information and to find a clinic near you, see the LITC page on www. Income tax software irs. Income tax software gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. Income tax software This publication is also available by calling 1-800-TAX-FORM (1-800-829-3676) or at your local IRS office. Income tax software Free tax services. Income tax software   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. Income tax software Learn about free tax information from the IRS, including publications, services, and education and assistance programs. Income tax software The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. Income tax software The majority of the information and services listed in this publication are available to you free of charge. Income tax software If there is a fee associated with a resource or service, it is listed in the publication. Income tax software   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Income tax software DVD for tax products. Income tax software You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Income tax software Prior-year forms, instructions, and publications. Income tax software Tax Map: an electronic research tool and finding aid. Income tax software Tax law frequently asked questions. Income tax software Tax Topics from the IRS telephone response system. Income tax software Internal Revenue Code—Title 26 of the U. Income tax software S. Income tax software Code. Income tax software Links to other Internet-based tax research materials. Income tax software Fill-in, print, and save features for most tax forms. Income tax software Internal Revenue Bulletins. Income tax software Toll-free and email technical support. Income tax software Two releases during the year. Income tax software  – The first release will ship the beginning of January 2013. Income tax software  – The final release will ship the beginning of March 2013. Income tax software Purchase the DVD from National Technical Information Service (NTIS) at www. Income tax software irs. Income tax software gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). Income tax software Prev  Up  Next   Home   More Online Publications
Español

Department of Defense Inspector General

The Department of Defense Inspector General combats waste, fraud, and abuse by conducting audits and investigations. The Office of the Inspector General reports its findings to the secretary of defense and to Congress.

Contact the Agency or Department

Website: Department of Defense Inspector General

E-mail:

Address: 4800 Mark Center Dr
Alexandria, VA 22350-1500

Phone Number: (703) 604-8324

The Income Tax Software

Income tax software 26. Income tax software   Car Expenses and Other Employee Business Expenses Table of Contents What's New Introduction Useful Items - You may want to see: Travel ExpensesTraveling Away From Home Tax Home Temporary Assignment or Job What Travel Expenses Are Deductible? Travel in the United States Travel Outside the United States Conventions Entertainment Expenses50% Limit What Entertainment Expenses Are Deductible? What Entertainment Expenses Are Not Deductible? Gift Expenses Transportation ExpensesArmed Forces reservists. Income tax software Parking fees. Income tax software Advertising display on car. Income tax software Car pools. Income tax software Hauling tools or instruments. Income tax software Union members' trips from a union hall. Income tax software Car Expenses RecordkeepingHow To Prove Expenses How Long To Keep Records and Receipts How To ReportGifts. Income tax software Statutory employees. Income tax software Reimbursements Completing Forms 2106 and 2106-EZ Special Rules What's New Standard mileage rate. Income tax software  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. Income tax software Car expenses and use of the standard mileage rate are explained under Transportation Expenses , later. Income tax software Depreciation limits on cars, trucks, and vans. Income tax software  For 2013, the first-year limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). Income tax software For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). Income tax software For more information, see Depreciation limits in Publication 463. Income tax software Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. Income tax software An ordinary expense is one that is common and accepted in your trade or business. Income tax software A necessary expense is one that is helpful and appropriate for your business. Income tax software An expense does not have to be required to be considered necessary. Income tax software This chapter explains the following. Income tax software What expenses are deductible. Income tax software How to report your expenses on your return. Income tax software What records you need to prove your expenses. Income tax software How to treat any expense reimbursements you may receive. Income tax software Who does not need to use this chapter. Income tax software   If you are an employee, you will not need to read this chapter if all of the following are true. Income tax software You fully accounted to your employer for your work-related expenses. Income tax software You received full reimbursement for your expenses. Income tax software Your employer required you to return any excess reimbursement and you did so. Income tax software There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. Income tax software If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. Income tax software See Reimbursements , later, if you would like more information on reimbursements and accounting to your employer. Income tax software    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. Income tax software Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming Form 2106 Employee Business Expenses Form 2106-EZ Unreimbursed Employee Business Expenses Travel Expenses If you temporarily travel away from your tax home, you can use this section to determine if you have deductible travel expenses. Income tax software This section discusses: Traveling away from home, Tax home, Temporary assignment or job, and What travel expenses are deductible. Income tax software It also discusses the standard meal allowance, rules for travel inside and outside the United States, and deductible convention expenses. Income tax software Travel expenses defined. Income tax software   For tax purposes, travel expenses are the ordinary and necessary expenses (defined earlier) of traveling away from home for your business, profession, or job. Income tax software   You will find examples of deductible travel expenses in Table 26-1 . Income tax software Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Income tax software This rest requirement is not satisfied by merely napping in your car. Income tax software You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Income tax software Example 1. Income tax software You are a railroad conductor. Income tax software You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Income tax software During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Income tax software You are considered to be away from home. Income tax software Example 2. Income tax software You are a truck driver. Income tax software You leave your terminal and return to it later the same day. Income tax software You get an hour off at your turnaround point to eat. Income tax software Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Income tax software Members of the Armed Forces. Income tax software   If you are a member of the U. Income tax software S. Income tax software Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Income tax software You cannot deduct your expenses for meals and lodging. Income tax software You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Income tax software If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Income tax software    A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home aboard ship for travel expense purposes. Income tax software Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Income tax software Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Income tax software It includes the entire city or general area in which your business or work is located. Income tax software If you have more than one regular place of business, your tax home is your main place of business. Income tax software See Main place of business or work , later. Income tax software If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Income tax software See No main place of business or work , later. Income tax software If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Income tax software As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Income tax software Main place of business or work. Income tax software   If you have more than one place of business or work, consider the following when determining which one is your main place of business or work. Income tax software The total time you ordinarily spend in each place. Income tax software The level of your business activity in each place. Income tax software Whether your income from each place is significant or insignificant. Income tax software Example. Income tax software You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Income tax software You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Income tax software Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Income tax software No main place of business or work. Income tax software   You may have a tax home even if you do not have a regular or main place of business or work. Income tax software Your tax home may be the home where you regularly live. Income tax software Factors used to determine tax home. Income tax software   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Income tax software You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Income tax software You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Income tax software You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Income tax software   If you satisfy all three factors, your tax home is the home where you regularly live. Income tax software If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Income tax software If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Income tax software Example. Income tax software You are single and live in Boston in an apartment you rent. Income tax software You have worked for your employer in Boston for a number of years. Income tax software Your employer enrolls you in a 12-month executive training program. Income tax software You do not expect to return to work in Boston after you complete your training. Income tax software During your training, you do not do any work in Boston. Income tax software Instead, you receive classroom and on-the-job training throughout the United States. Income tax software You keep your apartment in Boston and return to it frequently. Income tax software You use your apartment to conduct your personal business. Income tax software You also keep up your community contacts in Boston. Income tax software When you complete your training, you are transferred to Los Angeles. Income tax software You do not satisfy factor (1) because you did not work in Boston. Income tax software You satisfy factor (2) because you had duplicate living expenses. Income tax software You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Income tax software Therefore, you have a tax home in Boston. Income tax software Tax home different from family home. Income tax software   If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Income tax software You also cannot deduct the cost of meals and lodging while at your tax home. Income tax software See Example 1 . Income tax software   If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Income tax software See Example 2 . Income tax software Example 1. Income tax software You are a truck driver and you and your family live in Tucson. Income tax software You are employed by a trucking firm that has its terminal in Phoenix. Income tax software At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Income tax software You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Income tax software This is because Phoenix is your tax home. Income tax software Example 2. Income tax software Your family home is in Pittsburgh, where you work 12 weeks a year. Income tax software The rest of the year you work for the same employer in Baltimore. Income tax software In Baltimore, you eat in restaurants and sleep in a rooming house. Income tax software Your salary is the same whether you are in Pittsburgh or Baltimore. Income tax software Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Income tax software You cannot deduct any expenses you have for meals and lodging there. Income tax software However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Income tax software You can deduct the cost of your round trip between Baltimore and Pittsburgh. Income tax software You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Income tax software Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Income tax software It may not be practical to return to your tax home from this other location at the end of each work day. Income tax software Temporary assignment vs. Income tax software indefinite assignment. Income tax software   If your assignment or job away from your main place of work is temporary, your tax home does not change. Income tax software You are considered to be away from home for the whole period you are away from your main place of work. Income tax software You can deduct your travel expenses if they otherwise qualify for deduction. Income tax software Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Income tax software   However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Income tax software An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Income tax software   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Income tax software You may be able to deduct the cost of relocating to your new tax home as a moving expense. Income tax software See Publication 521 for more information. Income tax software Exception for federal crime investigations or prosecutions. Income tax software   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Income tax software This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year, provided you meet the other requirements for deductibility. Income tax software   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate or prosecute, or provide support services for the investigation or prosecution of a federal crime. Income tax software Determining temporary or indefinite. Income tax software   You must determine whether your assignment is temporary or indefinite when you start work. Income tax software If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Income tax software An assignment or job that is initially temporary may become indefinite due to changed circumstances. Income tax software A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Income tax software Going home on days off. Income tax software   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Income tax software You cannot deduct the cost of your meals and lodging there. Income tax software However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Income tax software You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Income tax software   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Income tax software In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Income tax software Probationary work period. Income tax software   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Income tax software You cannot deduct any of your expenses for meals and lodging during the probationary period. Income tax software What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Income tax software You can deduct ordinary and necessary expenses you have when you travel away from home on business. Income tax software The type of expense you can deduct depends on the facts and your circumstances. Income tax software Table 26-1 summarizes travel expenses you may be able to deduct. Income tax software You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Income tax software When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Income tax software You can use a log, diary, notebook, or any other written record to keep track of your expenses. Income tax software The types of expenses you need to record, along with supporting documentation, are described in Table 26-2 , later. Income tax software Separating costs. Income tax software   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Income tax software You must have a reasonable basis for making this allocation. Income tax software For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Income tax software Travel expenses for another individual. Income tax software   If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Income tax software Employee. Income tax software   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Income tax software Business associate. Income tax software   If a business associate travels with you and meets the conditions in (2) and (3) above, you can deduct the travel expenses you have for that person. Income tax software A business associate is someone with whom you could reasonably expect to engage or deal in the active conduct of your business. Income tax software A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Income tax software Bona fide business purpose. Income tax software   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Income tax software Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Income tax software Example. Income tax software Jerry drives to Chicago on business and takes his wife, Linda, with him. Income tax software Linda is not Jerry's employee. Income tax software Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Income tax software The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Income tax software Her expenses are not deductible. Income tax software Jerry pays $199 a day for a double room. Income tax software A single room costs $149 a day. Income tax software He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Income tax software If he uses public transportation, he can deduct only his fare. Income tax software Table 26-1. Income tax software Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. Income tax software IF you have expenses for. Income tax software . Income tax software . Income tax software THEN you can deduct the cost of. Income tax software . Income tax software . Income tax software transportation travel by airplane, train, bus, or car between your home and your business destination. Income tax software If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Income tax software If you travel by ship, see Luxury Water Travel and Cruise ships (under Conventions) in Publication 463 for additional rules and limits. Income tax software taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Income tax software baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Income tax software car operating and maintaining your car when traveling away from home on business. Income tax software You can deduct actual expenses or the standard mileage rate as well as business-related tolls and parking. Income tax software If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Income tax software lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Income tax software Meals include amounts spent for food, beverages, taxes, and related tips. Income tax software See Meals and Incidental Expenses for additional rules and limits. Income tax software cleaning dry cleaning and laundry. Income tax software telephone business calls while on your business trip. Income tax software This includes business communication by fax machine or other communication devices. Income tax software tips tips you pay for any expenses in this chart. Income tax software other other similar ordinary and necessary expenses related to your business travel. Income tax software These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Income tax software Meals and Incidental Expenses You can deduct the cost of meals in either of the following situations. Income tax software It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Income tax software The meal is business-related entertainment. Income tax software Business-related entertainment is discussed under Entertainment Expenses , later. Income tax software The following discussion deals only with meals (and incidental expenses) that are not business-related entertainment. Income tax software Lavish or extravagant. Income tax software   You cannot deduct expenses for meals that are lavish or extravagant. Income tax software An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Income tax software Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Income tax software 50% limit on meals. Income tax software   You can figure your meal expenses using either of the following methods. Income tax software Actual cost. Income tax software The standard meal allowance. Income tax software Both of these methods are explained below. Income tax software But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Income tax software   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Income tax software If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Income tax software The 50% limit is explained later under Entertainment Expenses . Income tax software Accountable and nonaccountable plans are discussed later under Reimbursements . Income tax software Actual cost. Income tax software   You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Income tax software If you use this method, you must keep records of your actual cost. Income tax software Standard meal allowance. Income tax software   Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Income tax software It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Income tax software The set amount varies depending on where and when you travel. Income tax software In this chapter, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Income tax software If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Income tax software See Recordkeeping , later. Income tax software Incidental expenses. Income tax software   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Income tax software Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Income tax software Incidental expenses only method. Income tax software   You can use an optional method (instead of actual cost) for deducting incidental expenses only. Income tax software The amount of the deduction is $5 a day. Income tax software You can use this method only if you did not pay or incur any meal expenses. Income tax software You cannot use this method on any day that you use the standard meal allowance. Income tax software    Federal employees should refer to the Federal Travel Regulations at  www. Income tax software gsa. Income tax software gov. Income tax software Find “What GSA Offers” and click on “Regulations: FMR, FTR, & FAR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Income tax software 50% limit may apply. Income tax software   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Income tax software If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Income tax software The 50% limit is explained later under Entertainment Expenses . Income tax software Accountable and nonaccountable plans are discussed later under Reimbursements . Income tax software There is no optional standard lodging amount similar to the standard meal allowance. Income tax software Your allowable lodging expense deduction is your actual cost. Income tax software Who can use the standard meal allowance. Income tax software   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Income tax software   Use of the standard meal allowance for other travel. Income tax software    You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Income tax software You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Income tax software You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Income tax software Amount of standard meal allowance. Income tax software   The standard meal allowance is the federal M&IE rate. Income tax software For travel in 2013, the daily rate for most small localities in the United States is $46. Income tax software   Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Income tax software You can find this information (organized by state) on the Internet at www. Income tax software gsa. Income tax software gov. Income tax software Click on “Per Diem Rates,” then select “2013” for the period January 1, 2013 – September 30, 2013, and select “2014” for the period October 1, 2013 – December 31, 2013. Income tax software However, you can apply the rates in effect before October 1, 2013, for expenses of all travel within the United States for 2013 instead of the updated rates. Income tax software You must consistently use either the rates for the first 9 months for all of 2013 or the updated rates for the period of October 1, 2013, through December 31, 2013. Income tax software   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Income tax software If you work in the transportation industry, however, see Special rate for transportation workers , later. Income tax software Standard meal allowance for areas outside the continental United States. Income tax software    The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Income tax software The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Income tax software S. Income tax software Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Income tax software The Department of State establishes per diem rates for all other foreign areas. Income tax software    You can access per diem rates for non-foreign areas outside the continental United States at: www. Income tax software defensetravel. Income tax software dod. Income tax software mil/site/perdiemCalc. Income tax software cfm. Income tax software You can access all other foreign per diem rates at www. Income tax software state. Income tax software gov/travel/. Income tax software Click on “Travel Per Diem Allowances for Foreign Areas” under “Foreign Per Diem Rates,” to obtain the latest foreign per diem rates. Income tax software Special rate for transportation workers. Income tax software   You can use a special standard meal allowance if you work in the transportation industry. Income tax software You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Income tax software If this applies to you, you can claim a standard daily meal allowance of $59 ($65 for travel outside the continental United States). Income tax software   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Income tax software If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Income tax software Travel for days you depart and return. Income tax software   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Income tax software You can do so by one of two methods. Income tax software Method 1: You can claim 3/4 of the standard meal allowance. Income tax software Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Income tax software Example. Income tax software Jen is employed in New Orleans as a convention planner. Income tax software In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Income tax software She left her home in New Orleans at 10 a. Income tax software m. Income tax software on Wednesday and arrived in Washington, DC, at 5:30 p. Income tax software m. Income tax software After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Income tax software m. Income tax software Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Income tax software Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Income tax software Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Income tax software For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Income tax software Travel in the United States The following discussion applies to travel in the United States. Income tax software For this purpose, the United States includes only the 50 states and the District of Columbia. Income tax software The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Income tax software See Part of Trip Outside the United States , later. Income tax software Trip Primarily for Business You can deduct all your travel expenses if your trip was entirely business related. Income tax software If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. Income tax software These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Income tax software Example. Income tax software You work in Atlanta and take a business trip to New Orleans in May. Income tax software On your way home, you stop in Mobile to visit your parents. Income tax software You spend $1,996 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Income tax software If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,696. Income tax software You can deduct $1,696 for your trip, including the cost of round-trip transportation to and from New Orleans. Income tax software The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Income tax software Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Income tax software However, you can deduct any expenses you have while at your destination that are directly related to your business. Income tax software A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Income tax software The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Income tax software Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later under Travel Outside the United States for that part of the trip. Income tax software For the part of your trip that is inside the United States, use the rules for travel in the United States. Income tax software Travel outside the United States does not include travel from one point in the United States to another point in the United States. Income tax software The following discussion can help you determine whether your trip was entirely within the United States. Income tax software Public transportation. Income tax software   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Income tax software Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Income tax software Example. Income tax software You fly from New York to Puerto Rico with a scheduled stop in Miami. Income tax software You return to New York nonstop. Income tax software The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Income tax software Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Income tax software Private car. Income tax software   Travel by private car in the United States is travel between points in the United States, even when you are on your way to a destination outside the United States. Income tax software Example. Income tax software You travel by car from Denver to Mexico City and return. Income tax software Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Income tax software The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Income tax software Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Income tax software For this purpose, the United States includes only the 50 states and the District of Columbia. Income tax software How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Income tax software See chapter 1 of Publication 463 for information on luxury water travel. Income tax software Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Income tax software Travel entirely for business. Income tax software   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Income tax software Travel considered entirely for business. Income tax software   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Income tax software Exception 1 - No substantial control. Income tax software   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Income tax software The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Income tax software   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, Are not related to your employer, and Are not a managing executive. Income tax software    “Related to your employer” is defined later in this chapter under Per Diem and Car Allowances . Income tax software   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Income tax software    A self-employed person generally has substantial control over arranging business trips. Income tax software Exception 2 - Outside United States no more than a week. Income tax software   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Income tax software One week means 7 consecutive days. Income tax software In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Income tax software Exception 3 - Less than 25% of time on personal activities. Income tax software   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Income tax software For this purpose, count both the day your trip began and the day it ended. Income tax software Exception 4 - Vacation not a major consideration. Income tax software   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Income tax software Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on nonbusiness activities, you generally cannot deduct all of your travel expenses. Income tax software You can only deduct the business portion of your cost of getting to and from your destination. Income tax software You must allocate the costs between your business and nonbusiness activities to determine your deductible amount. Income tax software These travel allocation rules are discussed in chapter 1 of Publication 463. Income tax software You do not have to allocate your travel expense deduction if you meet one of the four exceptions listed earlier under Travel considered entirely for business. Income tax software In those cases, you can deduct the total cost of getting to and from your destination. Income tax software Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Income tax software If you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Income tax software Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Income tax software You cannot deduct the travel expenses for your family. Income tax software If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Income tax software Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Income tax software You can deduct your travel expenses only if your attendance is connected to your own trade or business. Income tax software Convention agenda. Income tax software   The convention agenda or program generally shows the purpose of the convention. Income tax software You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Income tax software The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Income tax software Conventions held outside the North American area. Income tax software    See chapter 1 of Publication 463 for information on conventions held outside the North American area. Income tax software Entertainment Expenses You may be able to deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. Income tax software You can deduct entertainment expenses only if they are both ordinary and necessary (defined earlier in the Introduction ) and meet one of the following tests. Income tax software Directly-related test. Income tax software Associated test. Income tax software Both of these tests are explained in chapter 2 of Publication 463. Income tax software The amount you can deduct for entertainment expenses may be limited. Income tax software Generally, you can deduct only 50% of your unreimbursed entertainment expenses. Income tax software This limit is discussed next. Income tax software 50% Limit In general, you can deduct only 50% of your business-related meal and entertainment expenses. Income tax software (If you are subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal and entertainment expenses. Income tax software See Individuals subject to “hours of service” limits , later. Income tax software ) The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed. Income tax software Figure 26-A summarizes the general rules explained in this section. Income tax software The 50% limit applies to business meals or entertainment expenses you have while: Traveling away from home (whether eating alone or with others) on business, Entertaining customers at your place of business, a restaurant, or other location, or Attending a business convention or reception, business meeting, or business luncheon at a club. Income tax software Included expenses. Income tax software   Expenses subject to the 50% limit include: Taxes and tips relating to a business meal or entertainment activity, Cover charges for admission to a nightclub, Rent paid for a room in which you hold a dinner or cocktail party, and Amounts paid for parking at a sports arena. Income tax software However, the cost of transportation to and from a business meal or a business-related entertainment activity is not subject to the 50% limit. Income tax software Application of 50% limit. Income tax software   The 50% limit on meal and entertainment expenses applies if the expense is otherwise deductible and is not covered by one of the exceptions discussed later in this section. Income tax software   The 50% limit also applies to certain meal and entertainment expenses that are not business related. Income tax software It applies to meal and entertainment expenses incurred for the production of income, including rental or royalty income. Income tax software It also applies to the cost of meals included in deductible educational expenses. Income tax software When to apply the 50% limit. Income tax software   You apply the 50% limit after determining the amount that would otherwise qualify for a deduction. Income tax software You first have to determine the amount of meal and entertainment expenses that would be deductible under the other rules discussed in this chapter. Income tax software Example 1. Income tax software You spend $200 for a business-related meal. Income tax software If $110 of that amount is not allowable because it is lavish and extravagant, the remaining $90 is subject to the 50% limit. Income tax software Your deduction cannot be more than $45 (. Income tax software 50 × $90). Income tax software Example 2. Income tax software You purchase two tickets to a concert and give them to a client. Income tax software You purchased the tickets through a ticket agent. Income tax software You paid $200 for the two tickets, which had a face value of $80 each ($160 total). Income tax software Your deduction cannot be more than $80 (. Income tax software 50 × $160). Income tax software Exceptions to the 50% Limit Generally, business-related meal and entertainment expenses are subject to the 50% limit. Income tax software Figure 26-A can help you determine if the 50% limit applies to you. Income tax software Your meal or entertainment expense is not subject to the 50% limit if the expense meets one of the following exceptions. Income tax software Employee's reimbursed expenses. Income tax software   If you are an employee, you are not subject to the 50% limit on expenses for which your employer reimburses you under an accountable plan. Income tax software Accountable plans are discussed later under Reimbursements . Income tax software Individuals subject to “hours of service” limits. Income tax software   You can deduct a higher percentage of your meal expenses while traveling away from your tax home if the meals take place during or incident to any period subject to the Department of Transportation's “hours of service” limits. Income tax software The percentage is 80%. Income tax software   Individuals subject to the Department of Transportation's “hours of service” limits include the following persons. Income tax software Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. Income tax software Interstate truck operators and bus drivers who are under Department of Transportation regulations. Income tax software Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. Income tax software Certain merchant mariners who are under Coast Guard regulations. Income tax software Other exceptions. Income tax software   There are also exceptions for the self-employed, advertising expenses, selling meals or entertainment, and charitable sports events. Income tax software These are discussed in Publication 463. Income tax software Figure 26-A. Income tax software Does the 50% Limit Apply to Your Expenses? There are exceptions to these rules. Income tax software See Exceptions to the 50% Limit . Income tax software Please click here for the text description of the image. Income tax software Entertainment expenses: 50% limit What Entertainment Expenses Are Deductible? This section explains different types of entertainment expenses you may be able to deduct. Income tax software Entertainment. Income tax software    Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. Income tax software Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; or on hunting, fishing, vacation, and similar trips. Income tax software A meal as a form of entertainment. Income tax software   Entertainment includes the cost of a meal you provide to a customer or client, whether the meal is a part of other entertainment or by itself. Income tax software A meal expense includes the cost of food, beverages, taxes, and tips for the meal. Income tax software To deduct an entertainment-related meal, you or your employee must be present when the food or beverages are provided. Income tax software You cannot claim the cost of your meal both as an entertainment expense and as a travel expense. Income tax software Separating costs. Income tax software   If you have one expense that includes the costs of entertainment and other services (such as lodging or transportation), you must allocate that expense between the cost of entertainment and the cost of other services. Income tax software You must have a reasonable basis for making this allocation. Income tax software For example, you must allocate your expenses if a hotel includes entertainment in its lounge on the same bill with your room charge. Income tax software Taking turns paying for meals or entertainment. Income tax software   If a group of business acquaintances take turns picking up each others' meal or entertainment checks without regard to whether any business purposes are served, no member of the group can deduct any part of the expense. Income tax software Lavish or extravagant expenses. Income tax software   You cannot deduct expenses for entertainment that are lavish or extravagant. Income tax software An expense is not considered lavish or extravagant if it is reasonable considering the facts and circumstances. Income tax software Expenses will not be disallowed just because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Income tax software Trade association meetings. Income tax software    You can deduct entertainment expenses that are directly related to, and necessary for, attending business meetings or conventions of certain exempt organizations if the expenses of your attendance are related to your active trade or business. Income tax software These organizations include business leagues, chambers of commerce, real estate boards, trade associations, and professional associations. Income tax software Entertainment tickets. Income tax software   Generally, you cannot deduct more than the face value of an entertainment ticket, even if you paid a higher price. Income tax software For example, you cannot deduct service fees you pay to ticket agencies or brokers or any amount over the face value of the tickets you pay to scalpers. Income tax software What Entertainment Expenses Are Not Deductible? This section explains different types of entertainment expenses you generally may not be able to deduct. Income tax software Club dues and membership fees. Income tax software   You cannot deduct dues (including initiation fees) for membership in any club organized for: Business, Pleasure, Recreation, or Other social purpose. Income tax software This rule applies to any membership organization if one of its principal purposes is either: To conduct entertainment activities for members or their guests, or To provide members or their guests with access to entertainment facilities. Income tax software   The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. Income tax software You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Income tax software Entertainment facilities. Income tax software   Generally, you cannot deduct any expense for the use of an entertainment facility. Income tax software This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection. Income tax software   An entertainment facility is any property you own, rent, or use for entertainment. Income tax software Examples include a yacht, hunting lodge, fishing camp, swimming pool, tennis court, bowling alley, car, airplane, apartment, hotel suite, or home in a vacation resort. Income tax software Out-of-pocket expenses. Income tax software   You can deduct out-of-pocket expenses, such as for food and beverages, catering, gas, and fishing bait, that you provided during entertainment at a facility. Income tax software These are not expenses for the use of an entertainment facility. Income tax software However, these expenses are subject to the directly-related and associated tests and to the 50% Limit discussed earlier. Income tax software Additional information. Income tax software   For more information on entertainment expenses, including discussions of the directly-related and associated tests, see chapter 2 of Publication 463. Income tax software Gift Expenses If you give gifts in the course of your trade or business, you can deduct all or part of the cost. Income tax software This section explains the limits and rules for deducting the costs of gifts. Income tax software $25 limit. Income tax software   You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year. Income tax software A gift to a company that is intended for the eventual personal use or benefit of a particular person or a limited class of people will be considered an indirect gift to that particular person or to the individuals within that class of people who receive the gift. Income tax software   If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. Income tax software This rule does not apply if you have a bona fide, independent business connection with that family member and the gift is not intended for the customer's eventual use or benefit. Income tax software   If you and your spouse both give gifts, both of you are treated as one taxpayer. Income tax software It does not matter whether you have separate businesses, are separately employed, or whether each of you has an independent connection with the recipient. Income tax software If a partnership gives gifts, the partnership and the partners are treated as one taxpayer. Income tax software Incidental costs. Income tax software   Incidental costs, such as engraving on jewelry, or packaging, insuring, and mailing, are generally not included in determining the cost of a gift for purposes of the $25 limit. Income tax software   A cost is incidental only if it does not add substantial value to the gift. Income tax software For example, the cost of customary gift wrapping is an incidental cost. Income tax software However, the purchase of an ornamental basket for packaging fruit is not an incidental cost if the value of the basket is substantial compared to the value of the fruit. Income tax software Exceptions. Income tax software   The following items are not considered gifts for purposes of the $25 limit. Income tax software An item that costs $4 or less and: Has your name clearly and permanently imprinted on the gift, and Is one of a number of identical items you widely distribute. Income tax software Examples include pens, desk sets, and plastic bags and cases. Income tax software Signs, display racks, or other promotional material to be used on the business premises of the recipient. Income tax software Gift or entertainment. Income tax software   Any item that might be considered either a gift or entertainment generally will be considered entertainment. Income tax software However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. Income tax software    If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. Income tax software You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. Income tax software    If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. Income tax software You cannot choose, in this case, to treat the cost of the tickets as a gift expense. Income tax software Transportation Expenses This section discusses expenses you can deduct for business transportation when you are not traveling away from home as defined earlier under Travel Expenses . Income tax software These expenses include the cost of transportation by air, rail, bus, taxi, etc. Income tax software , and the cost of driving and maintaining your car. Income tax software Transportation expenses include the ordinary and necessary costs of all of the following. Income tax software Getting from one workplace to another in the course of your business or profession when you are traveling within the area of your tax home. Income tax software (Tax home is defined earlier under Travel Expenses . Income tax software ) Visiting clients or customers. Income tax software Going to a business meeting away from your regular workplace. Income tax software Getting from your home to a temporary workplace when you have one or more regular places of work. Income tax software These temporary workplaces can be either within the area of your tax home or outside that area. Income tax software Transportation expenses do not include expenses you have while traveling away from home overnight. Income tax software Those expenses are travel expenses, discussed earlier. Income tax software However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. Income tax software See Car Expenses , later. Income tax software Illustration of transportation expenses. Income tax software    Figure 26-B illustrates the rules for when you can deduct transportation expenses when you have a regular or main job away from your home. Income tax software You may want to refer to it when deciding whether you can deduct your transportation expenses. Income tax software Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. Income tax software However, there are many exceptions for deducting transportation expenses, like whether your work location is temporary (inside or outside the metropolitan area), traveling for same trade or business, or if you have a home office. Income tax software Temporary work location. Income tax software   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. Income tax software   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. Income tax software   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. Income tax software   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. Income tax software It will not be treated as temporary after the date you determine it will last more than 1 year. Income tax software   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. Income tax software You may have deductible travel expenses as discussed earlier in this chapter. Income tax software No regular place of work. Income tax software   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. Income tax software   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. Income tax software   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. Income tax software These are nondeductible commuting expenses. Income tax software Two places of work. Income tax software   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. Income tax software However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. Income tax software   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. Income tax software You cannot deduct them. Income tax software Armed Forces reservists. Income tax software   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. Income tax software You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work , earlier. Income tax software   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. Income tax software In this case, your transportation generally is a nondeductible commuting expense. Income tax software However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. Income tax software   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. Income tax software   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. Income tax software These expenses are discussed earlier under Travel Expenses . Income tax software   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to income rather than as an itemized deduction. Income tax software See Armed Forces reservists traveling more than 100 miles from home under Special Rules, later. Income tax software Commuting expenses. Income tax software   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. Income tax software These costs are personal commuting expenses. Income tax software You cannot deduct commuting expenses no matter how far your home is from your regular place of work. Income tax software You cannot deduct commuting expenses even if you work during the commuting trip. Income tax software Example. Income tax software You sometimes use your cell phone to make business calls while commuting to and from work. Income tax software Sometimes business associates ride with you to and from work, and you have a business discussion in the car. Income tax software These activities do not change the trip from personal to business. Income tax software You cannot deduct your commuting expenses. Income tax software Parking fees. Income tax software   Fees you pay to park your car at your place of business are nondeductible commuting expenses. Income tax software You can, however, deduct business-related parking fees when visiting a customer or client. Income tax software Advertising display on car. Income tax software   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. Income tax software If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. Income tax software Car pools. Income tax software   You cannot deduct the cost of using your car in a nonprofit car pool. Income tax software Do not include payments you receive from the passengers in your income. Income tax software These payments are considered reimbursements of your expenses. Income tax software However, if you operate a car pool for a profit, you must include payments from passengers in your income. Income tax software You can then deduct your car expenses (using the rules in this chapter). Income tax software Hauling tools or instruments. Income tax software   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. Income tax software However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). Income tax software Union members' trips from a union hall. Income tax software   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. Income tax software Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. Income tax software Office in the home. Income tax software   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. Income tax software (See chapter 28 for information on determining if your home office qualifies as a principal place of business. Income tax software ) Figure 26-B. Income tax software When Are Transportation Expenses Deductible? Most employees and self-employed persons can use this chart. Income tax software (Do not use this chart if your home is your principal place of business. Income tax software See Office in the home . Income tax software ) Please click here for the text description of the image. Income tax software Figure 26-B. Income tax software Local Transportation Examples of deductible transportation. Income tax software   The following examples show when you can deduct transportation expenses based on the location of your work and your home. Income tax software Example 1. Income tax software You regularly work in an office in the city where you live. Income tax software Your employer sends you to a 1-week training session at a different office in the same city. Income tax software You travel directly from your home to the training location and return each day. Income tax software You can deduct the cost of your daily round-trip transportation between your home and the training location. Income tax software Example 2. Income tax software Your principal place of business is in your home. Income tax software You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. Income tax software Example 3. Income tax software You have no regular office, and you do not have an office in your home. Income tax software In this case, the location of your first business contact inside the metropolitan area is considered your office. Income tax software Transportation expenses between your home and this first contact are nondeductible commuting expenses. Income tax software Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. Income tax software While you cannot deduct the costs of these first and last trips, you can deduct the costs of going from one client or customer to another. Income tax software With no regular or home office, the costs of travel between two or more business contacts in a metropolitan area are deductible while the costs of travel between the home to (and from) business contacts are not deductible. Income tax software Car Expenses If you use your car for business purposes, you may be able to deduct car expenses. Income tax software You generally can use one of the two following methods to figure your deductible expenses. Income tax software Standard mileage rate. Income tax software Actual car expenses. Income tax software If you use actual car expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. Income tax software See Leasing a car under Actual Car Expenses, later. Income tax software In this chapter, “car” includes a van, pickup, or panel truck. Income tax software Rural mail carriers. Income tax software   If you are a rural mail carrier, you may be able to treat the amount of qualified reimbursement you received as the amount of your allowable expense. Income tax software Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the amount of reimbursement in your income. Income tax software   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). Income tax software You must complete Form 2106 and attach it to your Form 1040. Income tax software   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. Income tax software It is given as an equipment maintenance allowance (EMA) to employees of the U. Income tax software S. Income tax software Postal Service. Income tax software It is at the rate contained in the 1991 collective bargaining agreement. Income tax software Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. Income tax software See your employer for information on your reimbursement. Income tax software If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. Income tax software Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. Income tax software For 2013, the standard mileage rate for business use is 56½ cents per mile. Income tax software If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year, but see Parking fees and tolls, later. Income tax software You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. Income tax software See Reimbursements under How To Report, later. Income tax software Choosing the standard mileage rate. Income tax software   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Income tax software Then in later years, you can choose to use either the standard mileage rate or actual expenses. Income tax software   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. Income tax software   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. Income tax software You cannot revoke the choice. Income tax software However, in a later year, you can switch from the standard mileage rate to the actual expenses method. Income tax software If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. Income tax software Example. Income tax software Larry is an employee who occasionally uses his own car for business purposes. Income tax software He purchased the car in 2011, but he did not claim any unreimburse