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Irs File 2012 Taxes

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Irs File 2012 Taxes

Irs file 2012 taxes Part Three -   Gains and Losses The four chapters in this part discuss investment gains and losses, including how to figure your basis in property. Irs file 2012 taxes A gain from selling or trading stocks, bonds, or other investment property may be taxed or it may be tax free, at least in part. Irs file 2012 taxes A loss may or may not be deductible. Irs file 2012 taxes These chapters also discuss gains from selling property you personally use — including the special rules for selling your home. Irs file 2012 taxes Nonbusiness casualty and theft losses are discussed in chapter 25 in Part Five. Irs file 2012 taxes Table of Contents 13. Irs file 2012 taxes   Basis of PropertyIntroduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds 14. Irs file 2012 taxes   Sale of PropertyReminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities 15. Irs file 2012 taxes   Selling Your HomeReminder Introduction Useful Items - You may want to see: Main Home Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Business Use or Rental of Home Reporting the SaleSeller-financed mortgage. Irs file 2012 taxes More information. Irs file 2012 taxes Special SituationsException for sales to related persons. Irs file 2012 taxes Recapturing (Paying Back) a Federal Mortgage Subsidy 16. Irs file 2012 taxes   Reporting Gains and Losses What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. Irs file 2012 taxes Exception 2. Irs file 2012 taxes File Form 1099-B or Form 1099-S with the IRS. Irs file 2012 taxes Capital Losses Capital Gain Tax Rates Prev  Up  Next   Home   More Online Publications
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Understanding Your CP291 Notice

We're revoking your Electing Small Business Trust (ESBT) election.


What you need to do

  • Timely file Form 1041
  • Keep this notice in your permanent records.

You may want to

  • Keep this notice in your permanent records.

Understanding your notice

Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP291, Page 1

 

Page Last Reviewed or Updated: 16-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Irs File 2012 Taxes

Irs file 2012 taxes Publication 529 - Main Content Table of Contents Deductions Subject to the 2% LimitUnreimbursed Employee Expenses Tax Preparation Fees Other Expenses Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses How To ReportWho can use Form 2106-EZ. Irs file 2012 taxes Computer used in a home office. Irs file 2012 taxes Example How To Get Tax HelpLow Income Taxpayer Clinics Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). Irs file 2012 taxes You can claim the amount of expenses that is more than 2% of your adjusted gross income. Irs file 2012 taxes You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Irs file 2012 taxes Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 37. Irs file 2012 taxes Generally, you apply the 2% limit after you apply any other deduction limit. Irs file 2012 taxes For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed later under Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging ) before you apply the 2% limit. Irs file 2012 taxes Deductions subject to the 2% limit are discussed in the following three categories. Irs file 2012 taxes Unreimbursed employee expenses (Schedule A (Form 1040), line 21 or Schedule A (Form 1040NR), line 7). Irs file 2012 taxes Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule A (Form 1040NR), line 8). Irs file 2012 taxes Other expenses (Schedule A (Form 1040), line 23 or Schedule A (Form 1040NR), line 9). Irs file 2012 taxes Unreimbursed Employee Expenses Generally, the following expenses are deducted on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Irs file 2012 taxes You can deduct only unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. Irs file 2012 taxes An expense is ordinary if it is common and accepted in your trade, business, or profession. Irs file 2012 taxes An expense is necessary if it is appropriate and helpful to your business. Irs file 2012 taxes An expense does not have to be required to be considered necessary. Irs file 2012 taxes You may be able to deduct the following items as unreimbursed employee expenses. Irs file 2012 taxes Business bad debt of an employee. Irs file 2012 taxes Business liability insurance premiums. Irs file 2012 taxes Damages paid to a former employer for breach of an employment contract. Irs file 2012 taxes Depreciation on a computer your employer requires you to use in your work. Irs file 2012 taxes Dues to a chamber of commerce if membership helps you do your job. Irs file 2012 taxes Dues to professional societies. Irs file 2012 taxes Educator expenses. Irs file 2012 taxes Home office or part of your home used regularly and exclusively in your work. Irs file 2012 taxes Job search expenses in your present occupation. Irs file 2012 taxes Laboratory breakage fees. Irs file 2012 taxes Legal fees related to your job. Irs file 2012 taxes Licenses and regulatory fees. Irs file 2012 taxes Malpractice insurance premiums. Irs file 2012 taxes Medical examinations required by an employer. Irs file 2012 taxes Occupational taxes. Irs file 2012 taxes Passport for a business trip. Irs file 2012 taxes Repayment of an income aid payment received under an employer's plan. Irs file 2012 taxes Research expenses of a college professor. Irs file 2012 taxes Rural mail carriers' vehicle expenses. Irs file 2012 taxes Subscriptions to professional journals and trade magazines related to your work. Irs file 2012 taxes Tools and supplies used in your work. Irs file 2012 taxes Travel, transportation, meals, entertainment, gifts, and local lodging related to your work. Irs file 2012 taxes Union dues and expenses. Irs file 2012 taxes Work clothes and uniforms if required and not suitable for everyday use. Irs file 2012 taxes Work-related education. Irs file 2012 taxes Business Bad Debt A business bad debt is a loss from a debt created or acquired in your trade or business. Irs file 2012 taxes Any other worthless debt is a business bad debt only if there is a very close relationship between the debt and your trade or business when the debt becomes worthless. Irs file 2012 taxes A debt has a very close relationship to your trade or business of being an employee if your main motive for incurring the debt is a business reason. Irs file 2012 taxes Example. Irs file 2012 taxes You make a bona fide loan to the corporation you work for. Irs file 2012 taxes It fails to pay you back. Irs file 2012 taxes You had to make the loan in order to keep your job. Irs file 2012 taxes You have a business bad debt as an employee. Irs file 2012 taxes More information. Irs file 2012 taxes   For more information on business bad debts, see chapter 10 in Publication 535. Irs file 2012 taxes For information on nonbusiness bad debts, see chapter 4 in Publication 550, Investment Income and Expenses. Irs file 2012 taxes Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Irs file 2012 taxes Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer if the damages are attributable to the pay you received from that employer. Irs file 2012 taxes Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. Irs file 2012 taxes For the convenience of your employer. Irs file 2012 taxes   This means that your use of the computer is for a substantial business reason of your employer. Irs file 2012 taxes You must consider all facts in making this determination. Irs file 2012 taxes Use of your computer during your regular working hours to carry on your employer's business is generally for the convenience of your employer. Irs file 2012 taxes Required as a condition of your employment. Irs file 2012 taxes   This means that you cannot properly perform your duties without the computer. Irs file 2012 taxes Whether you can properly perform your duties without it depends on all the facts and circumstances. Irs file 2012 taxes It is not necessary that your employer explicitly requires you to use your computer. Irs file 2012 taxes But neither is it enough that your employer merely states that your use of the item is a condition of your employment. Irs file 2012 taxes Example. Irs file 2012 taxes You are an engineer with an engineering firm. Irs file 2012 taxes You occasionally take work home at night rather than work late at the office. Irs file 2012 taxes You own and use a computer that is similar to the one you use at the office to complete your work at home. Irs file 2012 taxes Since your use of the computer is not for the convenience of your employer and is not required as a condition of your employment, you cannot claim a depreciation deduction for it. Irs file 2012 taxes Which depreciation method to use. Irs file 2012 taxes   The depreciation method you use depends on whether you meet the more-than-50%-use test. Irs file 2012 taxes More-than-50%-use test met. Irs file 2012 taxes   You meet this test if you use the computer more than 50% in your work. Irs file 2012 taxes If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). Irs file 2012 taxes In addition, you may be able to take the section 179 deduction for the year you place the item in service. Irs file 2012 taxes More-than-50%-use test not met. Irs file 2012 taxes   If you do not meet the more-than-50%-use test, you are limited to the straight line method of depreciation under the Alternative Depreciation System (ADS). Irs file 2012 taxes You also cannot claim the section 179 deduction. Irs file 2012 taxes (But if you use your computer in a home office, see the exception below. Irs file 2012 taxes ) Investment use. Irs file 2012 taxes   Your use of a computer in connection with investments (described later under Other Expenses ) does not count as use in your work. Irs file 2012 taxes However, you can combine your investment use with your work use in figuring your depreciation deduction. Irs file 2012 taxes Exception for computer used in a home office. Irs file 2012 taxes   The more-than-50%-use test does not apply to a computer used only in a part of your home that meets the requirements described later under Home Office . Irs file 2012 taxes You can claim accelerated depreciation using GDS for a computer used in a qualifying home office, even if you do not use it more than 50% in your work. Irs file 2012 taxes You also may be able to take a section 179 deduction for the year you place the computer in service. Irs file 2012 taxes See Computer used in a home office under How To Report, later. Irs file 2012 taxes More information. Irs file 2012 taxes   For more information on depreciation and the section 179 deduction for computers and other items used in a home office, see Business Furniture and Equipment in Publication 587. Irs file 2012 taxes Publication 946 has detailed information about the section 179 deduction and depreciation deductions using GDS and ADS. Irs file 2012 taxes Reporting your depreciation deduction. Irs file 2012 taxes    See How To Report, later, for information about reporting a deduction for depreciation. Irs file 2012 taxes You must keep records to prove your percentage of business and investment use. Irs file 2012 taxes Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. Irs file 2012 taxes Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Irs file 2012 taxes Lobbying and political activities. Irs file 2012 taxes    You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Irs file 2012 taxes See Lobbying Expenses under Nondeductible Expenses, later. Irs file 2012 taxes Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. Irs file 2012 taxes If you file Form 1040A, you can deduct these expenses on line 16. Irs file 2012 taxes If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Irs file 2012 taxes However, neither spouse can deduct more than $250 of his or her qualified expenses. Irs file 2012 taxes Eligible educator. Irs file 2012 taxes   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in school for at least 900 hours during a school year. Irs file 2012 taxes Qualified expenses. Irs file 2012 taxes   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Irs file 2012 taxes An ordinary expense is one that is common and accepted in your educational field. Irs file 2012 taxes A necessary expense is one that is helpful and appropriate for your profession as an educator. Irs file 2012 taxes An expense does not have to be required to be considered necessary. Irs file 2012 taxes   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Irs file 2012 taxes You must reduce your qualified expenses by the following amounts. Irs file 2012 taxes Excludable U. Irs file 2012 taxes S. Irs file 2012 taxes series EE and I savings bond interest from Form 8815. Irs file 2012 taxes Nontaxable qualified state tuition program earnings. Irs file 2012 taxes Nontaxable earnings from Coverdell education savings accounts. Irs file 2012 taxes Any reimbursements you received for those expenses that were not reported to you on your Form W-2, box 1. Irs file 2012 taxes Educator expenses over limit. Irs file 2012 taxes   If you were an educator in 2013 and you had qualified expenses that you cannot take as an adjustment to gross income, you can deduct the rest as an itemized deduction subject to the 2% limit. Irs file 2012 taxes Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. Irs file 2012 taxes You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. Irs file 2012 taxes The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Irs file 2012 taxes Principal place of business. Irs file 2012 taxes   If you have more than one place of business, the business part of your home is your principal place of business if: You use it regularly and exclusively for administrative or management activities of your trade or business, and You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Irs file 2012 taxes   Otherwise, the location of your principal place of business generally depends on the relative importance of the activities performed at each location and the time spent at each location. Irs file 2012 taxes You should keep records that will give the information needed to figure the deduction according to these rules. Irs file 2012 taxes Also keep canceled checks, substitute checks, or account statements and receipts of the expenses paid to prove the deductions you claim. Irs file 2012 taxes More information. Irs file 2012 taxes   See Publication 587 for more detailed information and a worksheet for figuring the deduction. Irs file 2012 taxes Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. Irs file 2012 taxes You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. Irs file 2012 taxes Employment and outplacement agency fees. Irs file 2012 taxes    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Irs file 2012 taxes Employer pays you back. Irs file 2012 taxes   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. Irs file 2012 taxes See Recoveries in Publication 525. Irs file 2012 taxes Employer pays the employment agency. Irs file 2012 taxes   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. Irs file 2012 taxes Résumé. Irs file 2012 taxes   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. Irs file 2012 taxes Travel and transportation expenses. Irs file 2012 taxes   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. Irs file 2012 taxes You can deduct the travel expenses if the trip is primarily to look for a new job. Irs file 2012 taxes The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. Irs file 2012 taxes   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. Irs file 2012 taxes    You can choose to use the standard mileage rate to figure your car expenses. Irs file 2012 taxes The 2013 rate for business use of a vehicle is 56½ cents per mile. Irs file 2012 taxes See Publication 463 for more information on travel and car expenses. Irs file 2012 taxes Legal Fees You can deduct legal fees related to doing or keeping your job. Irs file 2012 taxes Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. Irs file 2012 taxes Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Irs file 2012 taxes If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. Irs file 2012 taxes Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. Irs file 2012 taxes If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. Irs file 2012 taxes Research Expenses of a College Professor If you are a college professor, you can deduct your research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Irs file 2012 taxes You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. Irs file 2012 taxes However, you cannot deduct the cost of travel as a form of education. Irs file 2012 taxes Rural Mail Carriers' Vehicle Expenses If your expenses to use a vehicle in performing services as a rural mail carrier are more than the amount of your reimbursements, you can deduct the unreimbursed expenses. Irs file 2012 taxes See chapter 4 of Publication 463 for more information. Irs file 2012 taxes Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. Irs file 2012 taxes You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Irs file 2012 taxes For more information about depreciation, see Publication 946. Irs file 2012 taxes Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging If you are an employee and have ordinary and necessary business-related expenses for travel away from home, local transportation, entertainment, and gifts, you may be able to deduct these expenses. Irs file 2012 taxes Generally, you must file Form 2106 or Form 2106-EZ to claim these expenses. Irs file 2012 taxes Travel expenses. Irs file 2012 taxes   Travel expenses are those incurred while traveling away from home for your employer. Irs file 2012 taxes You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Irs file 2012 taxes Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment. Irs file 2012 taxes   Travel expenses may include: The cost of getting to and from your business destination (air, rail, bus, car, etc. Irs file 2012 taxes ), Meals and lodging while away from home, Taxi fares, Baggage charges, and Cleaning and laundry expenses. Irs file 2012 taxes   Travel expenses are discussed more fully in chapter 1 of Publication 463. Irs file 2012 taxes Temporary work assignment. Irs file 2012 taxes    If your assignment or job away from home in a single location is realistically expected to last (and does in fact last) for 1 year or less, it is temporary, unless there are facts and circumstances that indicate it is not. Irs file 2012 taxes Indefinite work assignment. Irs file 2012 taxes   If your assignment or job away from home in a single location is realistically expected to last for more than 1 year, it is indefinite, whether or not it actually lasts for more than 1 year. Irs file 2012 taxes If your assignment or job away from home in a single location is realistically expected to last for 1 year or less, but at some later date it is realistically expected to exceed 1 year, it will be treated as temporary (in the absence of facts and circumstances indicating otherwise) until the date that your realistic expectation changes, and it will be treated as indefinite after that date. Irs file 2012 taxes Federal crime investigation and prosecution. Irs file 2012 taxes   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule for deducting temporary travel expenses. Irs file 2012 taxes This means that you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year. Irs file 2012 taxes   To qualify, the Attorney General must certify that you are traveling: For the Federal Government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Irs file 2012 taxes Armed Forces reservists traveling more than 100 miles from home. Irs file 2012 taxes   If you are a member of a reserve component of the Armed Forces of the United States and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct some of your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Irs file 2012 taxes The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Irs file 2012 taxes The balance, if any, is reported on Schedule A. Irs file 2012 taxes   You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Naval, Marine Corps, Air Force, Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. Irs file 2012 taxes   For more information on travel expenses, see Publication 463. Irs file 2012 taxes Local transportation expenses. Irs file 2012 taxes   Local transportation expenses are the expenses of getting from one workplace to another when you are not traveling away from home. Irs file 2012 taxes They include the cost of transportation by air, rail, bus, taxi, and the cost of using your car. Irs file 2012 taxes   You can choose to use the standard mileage rate to figure your car expenses. Irs file 2012 taxes The 2013 rate for business use of a vehicle is 56½ cents per mile. Irs file 2012 taxes    In general, the costs of commuting between your residence and your place of business are nondeductible. Irs file 2012 taxes Work at two places in a day. Irs file 2012 taxes   If you work at two places in a day, whether or not for the same employer, you can generally deduct the expenses of getting from one workplace to the other. Irs file 2012 taxes Temporary work location. Irs file 2012 taxes   You can deduct expenses incurred in going between your home and a temporary work location if at least one of the following applies. Irs file 2012 taxes The work location is outside the metropolitan area where you live and normally work. Irs file 2012 taxes You have at least one regular work location (other than your home) for the same trade or business. Irs file 2012 taxes (If this applies, the distance between your home and the temporary work location does not matter. Irs file 2012 taxes )   For this purpose, a work location is generally considered temporary if your work there is realistically expected to last (and does in fact last) for 1 year or less. Irs file 2012 taxes It is not temporary if your work there is realistically expected to last for more than 1 year, even if it actually lasts for 1 year or less. Irs file 2012 taxes If your work there initially is realistically expected to last for 1 year or less, but later is realistically expected to last for more than 1 year, the work location is generally considered temporary until the date your realistic expectation changes and not temporary after that date. Irs file 2012 taxes For more information, see chapter 1 of Publication 463. Irs file 2012 taxes Home office. Irs file 2012 taxes   You can deduct expenses incurred in going between your home and a workplace if your home is your principal place of business for the same trade or business. Irs file 2012 taxes (In this situation, whether the other workplace is temporary or regular and its distance from your home do not matter. Irs file 2012 taxes ) See Home Office , earlier, for a discussion on the use of your home as your principal place of business. Irs file 2012 taxes Meals and entertainment. Irs file 2012 taxes   Generally, you can deduct entertainment expenses (including entertainment-related meals) only if they are directly related to the active conduct of your trade or business. Irs file 2012 taxes However, the expense only needs to be associated with the active conduct of your trade or business if it directly precedes or follows a substantial and bona fide business-related discussion. Irs file 2012 taxes   You can deduct only 50% of your business-related meal and entertainment expenses unless the expenses meet certain exceptions. Irs file 2012 taxes You apply this 50% limit before you apply the 2%-of-adjusted-gross-income limit. Irs file 2012 taxes Meals when subject to “hours of service” limits. Irs file 2012 taxes   You can deduct 80% of your business-related meal expenses if you consume the meals during or incident to any period subject to the Department of Transportation's “hours of service” limits. Irs file 2012 taxes You apply this 80% limit before you apply the 2%-of-adjusted-gross-income limit. Irs file 2012 taxes Gift expenses. Irs file 2012 taxes   You can generally deduct up to $25 of business gifts you give to any one individual during the year. Irs file 2012 taxes The following items do not count toward the $25 limit. Irs file 2012 taxes Identical, widely distributed items costing $4 or less that have your name clearly and permanently imprinted. Irs file 2012 taxes Signs, racks, and promotional materials to be displayed on the business premises of the recipient. Irs file 2012 taxes Local lodging. Irs file 2012 taxes   If your employer provides or requires you to obtain lodging while you are not traveling away from home, you can deduct the cost of the lodging if it is: on a temporary basis, necessary for you to participate in or be available for a business meeting or employer function, and the costs are ordinary and necessary, but not lavish or extravagant. Irs file 2012 taxes   If your employer provides the lodging or reimburses you for the cost of the lodging, you can deduct the cost only if the value or the reimbursement is included in your gross income because it is reported as wages on your Form W-2. Irs file 2012 taxes Additional information. Irs file 2012 taxes    See Publication 463 for more information on travel, transportation, meal, entertainment, and gift expenses, and reimbursements for these expenses. Irs file 2012 taxes Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Irs file 2012 taxes You can also deduct assessments for benefit payments to unemployed union members. Irs file 2012 taxes However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Irs file 2012 taxes Also, you cannot deduct contributions to a pension fund even if the union requires you to make the contributions. Irs file 2012 taxes You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Irs file 2012 taxes See Lobbying Expenses under Nondeductible Expenses, later. Irs file 2012 taxes Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Irs file 2012 taxes You must wear them as a condition of your employment. Irs file 2012 taxes The clothes are not suitable for everyday wear. Irs file 2012 taxes It is not enough that you wear distinctive clothing. Irs file 2012 taxes The clothing must be specifically required by your employer. Irs file 2012 taxes Nor is it enough that you do not, in fact, wear your work clothes away from work. Irs file 2012 taxes The clothing must not be suitable for taking the place of your regular clothing. Irs file 2012 taxes Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. Irs file 2012 taxes ). Irs file 2012 taxes Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Irs file 2012 taxes However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Irs file 2012 taxes Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Irs file 2012 taxes Protective clothing. Irs file 2012 taxes   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. Irs file 2012 taxes   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. Irs file 2012 taxes Military uniforms. Irs file 2012 taxes   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Irs file 2012 taxes However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. Irs file 2012 taxes In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Irs file 2012 taxes   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. Irs file 2012 taxes   If you are a student at an armed forces academy, you cannot deduct the cost of your uniforms if they replace regular clothing. Irs file 2012 taxes However, you can deduct the cost of insignia, shoulder boards, and related items. Irs file 2012 taxes    You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Irs file 2012 taxes Work-Related Education You can deduct expenses you have for education, even if the education may lead to a degree, if the education meets at least one of the following two tests. Irs file 2012 taxes It maintains or improves skills required in your present work. Irs file 2012 taxes It is required by your employer or the law to keep your salary, status, or job, and the requirement serves a business purpose of your employer. Irs file 2012 taxes You cannot deduct expenses you have for education, even though one or both of the preceding tests are met, if the education: Is needed to meet the minimum educational requirements to qualify you in your trade or business, or Is part of a program of study that will lead to qualifying you in a new trade or business. Irs file 2012 taxes If your education qualifies, you can deduct expenses for tuition, books, supplies, laboratory fees, and similar items, and certain transportation costs. Irs file 2012 taxes If the education qualifies you for a new trade or business, you cannot deduct the educational expenses even if you do not intend to enter that trade or business. Irs file 2012 taxes Travel as education. Irs file 2012 taxes   You cannot deduct the cost of travel that in itself constitutes a form of education. Irs file 2012 taxes For example, a French teacher who travels to France to maintain general familiarity with the French language and culture cannot deduct the cost of the trip as an educational expense. Irs file 2012 taxes More information. Irs file 2012 taxes    See Publication 970, Tax Benefits for Education, for a complete discussion of the deduction for work-related education expenses. Irs file 2012 taxes Education Expenses During Unemployment If you stop working for a year or less in order to get education in order to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Irs file 2012 taxes Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Irs file 2012 taxes Tax Preparation Fees You can usually deduct tax preparation fees on the return for the year in which you pay them. Irs file 2012 taxes Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Irs file 2012 taxes These fees include the cost of tax preparation software programs and tax publications. Irs file 2012 taxes They also include any fee you paid for electronic filing of your return. Irs file 2012 taxes See Tax preparation fees under How To Report, later. Irs file 2012 taxes Other Expenses You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit. Irs file 2012 taxes On Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9, you can deduct the ordinary and necessary expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. Irs file 2012 taxes You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonable and closely related to these purposes. Irs file 2012 taxes These other expenses include the following items. Irs file 2012 taxes Appraisal fees for a casualty loss or charitable contribution. Irs file 2012 taxes Casualty and theft losses from property used in performing services as an employee. Irs file 2012 taxes Clerical help and office rent in caring for investments. Irs file 2012 taxes Depreciation on home computers used for investments. Irs file 2012 taxes Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust. Irs file 2012 taxes Fees to collect interest and dividends. Irs file 2012 taxes Hobby expenses, but generally not more than hobby income. Irs file 2012 taxes Indirect miscellaneous deductions from pass-through entities. Irs file 2012 taxes Investment fees and expenses. Irs file 2012 taxes Legal fees related to producing or collecting taxable income or getting tax advice. Irs file 2012 taxes Loss on deposits in an insolvent or bankrupt financial institution. Irs file 2012 taxes Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you. Irs file 2012 taxes Repayments of income. Irs file 2012 taxes Repayments of social security benefits. Irs file 2012 taxes Safe deposit box rental, except for storing jewelry and other personal effects. Irs file 2012 taxes Service charges on dividend reinvestment plans. Irs file 2012 taxes Tax advice fees. Irs file 2012 taxes Trustee's fees for your IRA, if separately billed and paid. Irs file 2012 taxes If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses, later, under Nondeductible Expenses. Irs file 2012 taxes Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Irs file 2012 taxes Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. Irs file 2012 taxes First report the loss in Section B of Form 4684, Casualties and Thefts. Irs file 2012 taxes You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Irs file 2012 taxes To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Irs file 2012 taxes For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Irs file 2012 taxes Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. Irs file 2012 taxes Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. Irs file 2012 taxes The fees are deductible on the return for the year in which you paid them. Irs file 2012 taxes For example, fees charged to payments made in 2013 can be claimed on the 2013 tax return. Irs file 2012 taxes Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). Irs file 2012 taxes You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Irs file 2012 taxes But if you work as an employee and also use the computer in that work, see Depreciation on Computers under Unreimbursed Employee Expenses, earlier. Irs file 2012 taxes For more information on depreciation, see Publication 946. Irs file 2012 taxes Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. Irs file 2012 taxes Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Irs file 2012 taxes The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. Irs file 2012 taxes For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Irs file 2012 taxes Fees To Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. Irs file 2012 taxes But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Irs file 2012 taxes You must add the fee to the cost of the property. Irs file 2012 taxes You cannot deduct the fee you pay to a broker to sell securities. Irs file 2012 taxes You can use the fee only to figure gain or loss from the sale. Irs file 2012 taxes See the instructions for Schedule D (Form 1040) for information on how to report the fee. Irs file 2012 taxes Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Irs file 2012 taxes A hobby is not a business because it is not carried on to make a profit. Irs file 2012 taxes See Not-for-Profit Activities in chapter 1 of Publication 535. Irs file 2012 taxes Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Irs file 2012 taxes Deductions of pass-through entities are passed through to the partners or shareholders. Irs file 2012 taxes The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Irs file 2012 taxes Example. Irs file 2012 taxes You are a member of an investment club that is formed solely to invest in securities. Irs file 2012 taxes The club is treated as a partnership. Irs file 2012 taxes The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Irs file 2012 taxes In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Irs file 2012 taxes However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. Irs file 2012 taxes Publicly offered mutual funds. Irs file 2012 taxes   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Irs file 2012 taxes A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. Irs file 2012 taxes   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). Irs file 2012 taxes This net figure is the amount you report on your return as income. Irs file 2012 taxes You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Irs file 2012 taxes Information returns. Irs file 2012 taxes   You should receive information returns from pass-through entities. Irs file 2012 taxes Partnerships and S corporations. Irs file 2012 taxes   These entities issue Schedule K-1, which lists the items and amounts you must report, and identifies the tax return schedules and lines to use. Irs file 2012 taxes Nonpublicly offered mutual funds. Irs file 2012 taxes   These funds will send you a Form 1099-DIV, or a substitute form, showing your share of gross income and investment expenses. Irs file 2012 taxes You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Irs file 2012 taxes Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. Irs file 2012 taxes Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. Irs file 2012 taxes You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. Irs file 2012 taxes You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F) on the appropriate schedule. Irs file 2012 taxes You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). Irs file 2012 taxes See Tax Preparation Fees, earlier. Irs file 2012 taxes Unlawful discrimination claims. Irs file 2012 taxes   You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 35, rather than as a miscellaneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U. Irs file 2012 taxes S. Irs file 2012 taxes Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. Irs file 2012 taxes However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 35, is limited to the amount of the judgment or settlement you are including in income for the tax year. Irs file 2012 taxes See Publication 525 for more information. Irs file 2012 taxes Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Irs file 2012 taxes If you can reasonably estimate the amount of your loss on money you have on deposit in a financial institution that becomes insolvent or bankrupt, you can generally choose to deduct it in the current year even though its exact amount has not been finally determined. Irs file 2012 taxes If elected, the casualty loss is subject to certain deduction limitations. Irs file 2012 taxes The election is made on Form 4684. Irs file 2012 taxes Once you make this choice, you cannot change it without IRS approval. Irs file 2012 taxes If none of the deposit is federally insured, you can deduct the loss in either of the following ways. Irs file 2012 taxes As an ordinary loss (as a miscellaneous itemized deduction subject to the 2% limit). Irs file 2012 taxes Write the name of the financial institution and “Insolvent Financial Institution” beside the amount on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. Irs file 2012 taxes This deduction is limited to $20,000 ($10,000 if you are married filing separately) for each financial institution, reduced by any expected state insurance proceeds. Irs file 2012 taxes As a casualty loss. Irs file 2012 taxes Report it on Form 4684 first and then on Schedule A (Form 1040). Irs file 2012 taxes See Publication 547 for details. Irs file 2012 taxes As a nonbusiness bad debt. Irs file 2012 taxes Report it on Schedule D (Form 1040). Irs file 2012 taxes If any part of the deposit is federally insured, you can deduct the loss only as a casualty loss. Irs file 2012 taxes Exception. Irs file 2012 taxes   You cannot make this choice if you are a 1%-or-more-owner or an officer of the financial institution, or are related to such owner or officer. Irs file 2012 taxes For a definition of “related,” see Deposit in Insolvent or Bankrupt Financial Institution in chapter 4 of Publication 550. Irs file 2012 taxes Actual loss different from estimated loss. Irs file 2012 taxes   If you make this choice and your actual loss is less than your estimated loss, you must include the excess in income. Irs file 2012 taxes See Recoveries in Publication 525. Irs file 2012 taxes If your actual loss is more than your estimated loss, treat the excess loss as explained under Choice not made, next. Irs file 2012 taxes Choice not made. Irs file 2012 taxes   If you do not make this choice (or if you have an excess actual loss after choosing to deduct your estimated loss), treat your loss (or excess loss) as a nonbusiness bad debt (deductible as a short-term capital loss) in the year its amount is finally determined. Irs file 2012 taxes See Nonbusiness Bad Debts in chapter 4 of Publication 550. Irs file 2012 taxes Loss on IRA If you have a loss on your traditional IRA (or Roth IRA) investment, you can deduct the loss as a miscellaneous itemized deduction subject to the 2% limit, but only when all the amounts in all your traditional IRA (or Roth IRA) accounts have been distributed to you and the total distributions are less than your unrecovered basis. Irs file 2012 taxes For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Irs file 2012 taxes Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. Irs file 2012 taxes If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Irs file 2012 taxes If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Irs file 2012 taxes Repayments of Social Security Benefits If the total of the amounts in box 5 (net benefits for 2013) of all your Forms SSA-1099, Social Security Benefit Statement, and Forms RRB-1099, Payments By the Railroad Retirement Board, is a negative figure (a figure in parentheses), you may be able to take a miscellaneous itemized deduction subject to the 2% limit. Irs file 2012 taxes The amount you can deduct is the part of the negative figure that represents an amount you included in gross income in an earlier year. Irs file 2012 taxes The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount of your benefits for the year. Irs file 2012 taxes It will be a negative figure if the amount of benefits you repaid in 2013 (box 4) is more than the gross amount of benefits paid to you in 2013 (box 3). Irs file 2012 taxes If the deduction is more than $3,000, you will have to use a special computation to figure your tax. Irs file 2012 taxes See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Irs file 2012 taxes Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. Irs file 2012 taxes You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Irs file 2012 taxes Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Irs file 2012 taxes These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. Irs file 2012 taxes Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your IRA are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Irs file 2012 taxes Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Irs file 2012 taxes They are not subject to the 2% limit. Irs file 2012 taxes Report these items on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Irs file 2012 taxes List of Deductions Amortizable premium on taxable bonds. Irs file 2012 taxes Casualty and theft losses from income-producing property. Irs file 2012 taxes Federal estate tax on income in respect of a decedent. Irs file 2012 taxes Gambling losses up to the amount of gambling winnings. Irs file 2012 taxes Impairment-related work expenses of persons with disabilities. Irs file 2012 taxes Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Irs file 2012 taxes Losses from Ponzi-type investment schemes. Irs file 2012 taxes Repayments of more than $3,000 under a claim of right. Irs file 2012 taxes Unrecovered investment in an annuity. Irs file 2012 taxes Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. Irs file 2012 taxes You can elect to amortize the premium on taxable bonds. Irs file 2012 taxes The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Irs file 2012 taxes Pre-1998 election to amortize bond premium. Irs file 2012 taxes   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. Irs file 2012 taxes Bonds acquired after October 22, 1986, and before 1988. Irs file 2012 taxes   The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you chose to treat it as an offset to interest income on the bond. Irs file 2012 taxes Bonds acquired before October 23, 1986. Irs file 2012 taxes   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2% limit. Irs file 2012 taxes Deduction for excess premium. Irs file 2012 taxes   On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond premium allocable to a period may exceed the amount of stated interest allocable to the period. Irs file 2012 taxes If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. Irs file 2012 taxes However, the amount deductible is limited to the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated as a bond premium deduction on the bond in prior periods. Irs file 2012 taxes If any of the excess bond premium cannot be deducted because of the limit, this amount is carried forward to the next period and is treated as bond premium allocable to that period. Irs file 2012 taxes    Pre-1998 choice to amortize bond premium. Irs file 2012 taxes If you made the choice to amortize the premium on taxable bonds before 1998, you can deduct the bond premium amortization that is more than your interest income only for bonds acquired during 1998 and later years. Irs file 2012 taxes More information. Irs file 2012 taxes    For more information on bond premium, see Bond Premium Amortization in chapter 3 of Publication 550. Irs file 2012 taxes Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). Irs file 2012 taxes First report the loss in Section B of Form 4684. Irs file 2012 taxes You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Irs file 2012 taxes To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Irs file 2012 taxes For more information on casualty and theft losses, see Publication 547. Irs file 2012 taxes Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. Irs file 2012 taxes Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Irs file 2012 taxes See Publication 559 for information about figuring the amount of this deduction. Irs file 2012 taxes Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. Irs file 2012 taxes You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Irs file 2012 taxes You cannot deduct gambling losses that are more than your winnings. Irs file 2012 taxes Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR). Irs file 2012 taxes You cannot reduce your gambling winnings by your gambling losses and report the difference. Irs file 2012 taxes You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Irs file 2012 taxes Therefore, your records should show your winnings separately from your losses. Irs file 2012 taxes Diary of winnings and losses. Irs file 2012 taxes You must keep an accurate diary or similar record of your losses and winnings. Irs file 2012 taxes Your diary should contain at least the following information. Irs file 2012 taxes The date and type of your specific wager or wagering activity. Irs file 2012 taxes The name and address or location of the gambling establishment. Irs file 2012 taxes The names of other persons present with you at the gambling establishment. Irs file 2012 taxes The amount(s) you won or lost. Irs file 2012 taxes Proof of winnings and losses. Irs file 2012 taxes   In addition to your diary, you should also have other documentation. Irs file 2012 taxes You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. Irs file 2012 taxes   For specific wagering transactions, you can use the following items to support your winnings and losses. Irs file 2012 taxes    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. Irs file 2012 taxes They are not all-inclusive. Irs file 2012 taxes Your tax liability depends on your particular facts and circumstances. Irs file 2012 taxes Keno. Irs file 2012 taxes   Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records. Irs file 2012 taxes Slot machines. Irs file 2012 taxes   A record of the machine number and all winnings by date and time the machine was played. Irs file 2012 taxes Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc. Irs file 2012 taxes ). Irs file 2012 taxes   The number of the table at which you were playing. Irs file 2012 taxes Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage. Irs file 2012 taxes Bingo. Irs file 2012 taxes   A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Irs file 2012 taxes Supplemental records include any receipts from the casino, parlor, etc. Irs file 2012 taxes Racing (horse, harness, dog, etc. Irs file 2012 taxes ). Irs file 2012 taxes   A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Irs file 2012 taxes Supplemental records include unredeemed tickets and payment records from the racetrack. Irs file 2012 taxes Lotteries. Irs file 2012 taxes   A record of ticket purchases, dates, winnings, and losses. Irs file 2012 taxes Supplemental records include unredeemed tickets, payment slips, and winnings statements. Irs file 2012 taxes Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. Irs file 2012 taxes Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work. Irs file 2012 taxes Example. Irs file 2012 taxes You are blind. Irs file 2012 taxes You must use a reader to do your work. Irs file 2012 taxes You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Irs file 2012 taxes The reader's services are only for your work. Irs file 2012 taxes You can deduct your expenses for the reader as impairment-related work expenses. Irs file 2012 taxes Self-employed. Irs file 2012 taxes   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. Irs file 2012 taxes See Impairment-related work expenses. Irs file 2012 taxes , later under How To Report. Irs file 2012 taxes Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14 (only if effectively connected with a U. Irs file 2012 taxes S. Irs file 2012 taxes trade or business). Irs file 2012 taxes It is not subject to the passive activity limitations. Irs file 2012 taxes Officials Paid on a Fee Basis If you are a fee-basis official, you can claim your expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. Irs file 2012 taxes See Publication 463 for more information. Irs file 2012 taxes Performing Artists If you are a qualified performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. Irs file 2012 taxes If you are an employee, complete Form 2106 or Form 2106-EZ. Irs file 2012 taxes See Publication 463 for more information. Irs file 2012 taxes Losses From Ponzi-type Investment Schemes These losses are deductible as theft losses of income-producing property on your tax return for the year the loss was discovered. Irs file 2012 taxes You figure the deductible loss in Section B of Form 4684. Irs file 2012 taxes However, if you qualify to use Revenue Procedure 2009-20 (as modified by Revenue Procedure 2011-58) and you choose to follow the procedures in the guidance, complete Section C of Form 4684 before completing Section B. Irs file 2012 taxes Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Irs file 2012 taxes You do not need to complete Appendix A. Irs file 2012 taxes See the Form 4684 instructions and Publication 547, Casualties, Disasters, and Thefts, for more information. Irs file 2012 taxes Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid, or take a credit against your tax. Irs file 2012 taxes See Repayments in Publication 525 for more information. Irs file 2012 taxes Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. Irs file 2012 taxes If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. Irs file 2012 taxes See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities. Irs file 2012 taxes Nondeductible Expenses You cannot deduct the following expenses. Irs file 2012 taxes List of Nondeductible Expenses Adoption expenses. Irs file 2012 taxes Broker's commissions. Irs file 2012 taxes Burial or funeral expenses, including the cost of a cemetery lot. Irs file 2012 taxes Campaign expenses. Irs file 2012 taxes Capital expenses. Irs file 2012 taxes Check-writing fees. Irs file 2012 taxes Club dues. Irs file 2012 taxes Commuting expenses. Irs file 2012 taxes Fees and licenses, such as car licenses, marriage licenses, and dog tags. Irs file 2012 taxes Fines and penalties, such as parking tickets. Irs file 2012 taxes Health spa expenses. Irs file 2012 taxes Hobby losses—but see Hobby Expenses, earlier. Irs file 2012 taxes Home repairs, insurance, and rent. Irs file 2012 taxes Home security system. Irs file 2012 taxes Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535. Irs file 2012 taxes Investment-related seminars. Irs file 2012 taxes Life insurance premiums paid by the insured. Irs file 2012 taxes Lobbying expenses. Irs file 2012 taxes Losses from the sale of your home, furniture, personal car, etc. Irs file 2012 taxes Lost or misplaced cash or property. Irs file 2012 taxes Lunches with co-workers. Irs file 2012 taxes Meals while working late. Irs file 2012 taxes Medical expenses as business expenses other than medical examinations required by your employer. Irs file 2012 taxes Personal disability insurance premiums. Irs file 2012 taxes Personal legal expenses. Irs file 2012 taxes Personal, living, or family expenses. Irs file 2012 taxes Political contributions. Irs file 2012 taxes Professional accreditation fees. Irs file 2012 taxes Professional reputation, expenses to improve. Irs file 2012 taxes Relief fund contributions. Irs file 2012 taxes Residential telephone line. Irs file 2012 taxes Stockholders' meeting, expenses of attending. Irs file 2012 taxes Tax-exempt income, expenses of earning or collecting. Irs file 2012 taxes The value of wages never received or lost vacation time. Irs file 2012 taxes Travel expenses for another individual. Irs file 2012 taxes Voluntary unemployment benefit fund contributions. Irs file 2012 taxes Wristwatches. Irs file 2012 taxes Adoption Expenses You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. Irs file 2012 taxes For details, see Form 8839, Qualified Adoption Expenses. Irs file 2012 taxes Commissions Commissions paid on the purchase of securities are not deductible, either as business or nonbusiness expenses. Irs file 2012 taxes Instead, these fees must be added to the taxpayer's cost of the securities. Irs file 2012 taxes Commissions paid on the sale are deductible as business expenses only by dealers. Irs file 2012 taxes Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Irs file 2012 taxes These include qualification and registration fees for primary elections. Irs file 2012 taxes Legal fees. Irs file 2012 taxes   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Irs file 2012 taxes Capital Expenses You cannot currently deduct amounts paid to buy property that has a useful life substantially beyond the tax year or amounts paid to increase the value or prolong the life of property. Irs file 2012 taxes If you use such property in your work, you may be able to take a depreciation deduction. Irs file 2012 taxes See Publication 946. Irs file 2012 taxes If the property is a car used in your work, also see Publication 463. Irs file 2012 taxes Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. Irs file 2012 taxes Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Irs file 2012 taxes This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Irs file 2012 taxes You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. Irs file 2012 taxes Dues paid to airline, hotel, and luncheon clubs are not deductible. Irs file 2012 taxes Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Irs file 2012 taxes If you haul tools, instruments, or other items in your car to and from work, you can deduct only the additional cost of hauling the items, such as the rent on a trailer to carry the items. Irs file 2012 taxes Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Irs file 2012 taxes This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Irs file 2012 taxes Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Irs file 2012 taxes Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. Irs file 2012 taxes Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Irs file 2012 taxes However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Irs file 2012 taxes See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587. Irs file 2012 taxes Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Irs file 2012 taxes Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Irs file 2012 taxes You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Irs file 2012 taxes See Publication 504, Divorced or Separated Individuals, for information on alimony. Irs file 2012 taxes Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Irs file 2012 taxes These include expenses to: Influence legislation, Participate, or intervene, in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. Irs file 2012 taxes Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Irs file 2012 taxes Covered executive branch official. Irs file 2012 taxes   A covered executive branch official, for the purpose of (4) above, is any of the following officials. Irs file 2012 taxes The President. Irs file 2012 taxes The Vice President. Irs file 2012 taxes Any officer or employee of the White House Office of the Executive Office of the President, and the two most senior level officers of each of the other agencies in the Executive Office. Irs file 2012 taxes Any individual serving in a position in Level I of the Executive Schedule under section 5312 of Title 5, United States Code, any other individual designated by the President as having Cabinet-level status, and any immediate deputy of one of these individuals. Irs file 2012 taxes Dues used for lobbying. Irs file 2012 taxes   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. Irs file 2012 taxes Exceptions. Irs file 2012 taxes   You can deduct certain lobbying expenses if they are ordinary and necessary expenses of carrying on your trade or business. Irs file 2012 taxes You can deduct expenses for attempting to influence the legislation of any local council or similar governing body (local legislation). Irs file 2012 taxes An Indian tribal government is considered a local council or similar governing body. Irs file 2012 taxes You can deduct in-house expenses for influencing legislation or communicating directly with a covered executive branch official if the expenses for the tax year are not more than $2,000 (not counting overhead expenses). Irs file 2012 taxes If you are a professional lobbyist, you can deduct the expenses you incur in the trade or business of lobbying on behalf of another person. Irs file 2012 taxes Payments by the other person to you for lobbying activities cannot be deducted. Irs file 2012 taxes Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Irs file 2012 taxes However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Irs file 2012 taxes See Publication 547. Irs file 2012 taxes Example. Irs file 2012 taxes A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Irs file 2012 taxes The diamond falls from the ring and is never found. Irs file 2012 taxes The loss of the diamond is a casualty. Irs file 2012 taxes Lunches With Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Irs file 2012 taxes See Publication 463 for information on deductible expenses while traveling away from home. Irs file 2012 taxes Meals While Working Late You cannot deduct the cost of meals while working late. Irs file 2012 taxes However, you may be able to claim a deduction if the cost of the meals is a deductible entertainment expense, or if you are traveling away from home. Irs file 2012 taxes See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home. Irs file 2012 taxes Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Irs file 2012 taxes Custody of children. Irs file 2012 taxes Breach of promise to marry suit. Irs file 2012 taxes Civil or criminal charges resulting from a personal relationship. Irs file 2012 taxes Damages for personal injury (except certain whistleblower claims and unlawful discrimination claims). Irs file 2012 taxes For more information about unlawful discrimination claims, see Deductions Subject to the 2% Limit, earlier. Irs file 2012 taxes Preparation of a title (or defense or perfection of a title). Irs file 2012 taxes Preparation of a will. Irs file 2012 taxes Property claims or property settlement in a divorce. Irs file 2012 taxes You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Irs file 2012 taxes Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Irs file 2012 taxes Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Irs file 2012 taxes Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Irs file 2012 taxes Accounting certificate fees paid for the initial right to practice accounting. Irs file 2012 taxes Bar exam fees and incidental expenses in securing initial admission to the bar. Irs file 2012 taxes Medical and dental license fees paid to get initial licensing. Irs file 2012 taxes Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Irs file 2012 taxes Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. Irs file 2012 taxes Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. Irs file 2012 taxes Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. Irs file 2012 taxes You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Irs file 2012 taxes Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Irs file 2012 taxes You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities. Irs file 2012 taxes If you have expenses to p