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Irs Gov 1040ez Form

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Irs Gov 1040ez Form

Irs gov 1040ez form Publication 583 - Main Content Table of Contents What New Business Owners Need To Know Forms of BusinessMore information. Irs gov 1040ez form More information. Irs gov 1040ez form Exception—Community Income. Irs gov 1040ez form Exception—Qualified joint venture. Irs gov 1040ez form More information. Irs gov 1040ez form More information. Irs gov 1040ez form Identification NumbersEmployer Identification Number (EIN) Payee's Identification Number Tax Year Accounting Method Business TaxesIncome Tax Self-Employment Tax Employment Taxes Excise Taxes Depositing Taxes Information Returns PenaltiesWaiver of penalty. Irs gov 1040ez form Business ExpensesBusiness Start-Up Costs Depreciation Business Use of Your Home Car and Truck Expenses RecordkeepingWhy Keep Records? Kinds of Records To Keep How Long To Keep Records Sample Record System How to Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What New Business Owners Need To Know As a new business owner, you need to know your federal tax responsibilities. Irs gov 1040ez form Table 1 can help you learn what those responsibilities are. Irs gov 1040ez form Ask yourself each question listed in the table, then see the related discussion to find the answer. Irs gov 1040ez form In addition to knowing about federal taxes, you need to make some basic business decisions. Irs gov 1040ez form Ask yourself: What are my financial resources? What products and services will I sell? How will I market my products and services? How will I develop a strategic business plan? How will I manage my business on a day-to-day basis? How will I recruit employees? The Small Business Administration (SBA) is a federal agency that can help you answer these types of questions. Irs gov 1040ez form For information on how to contact the SBA, see How to Get More Information, later. Irs gov 1040ez form Forms of Business The most common forms of business are the sole proprietorship, partnership, and corporation. Irs gov 1040ez form When beginning a business, you must decide which form of business to use. Irs gov 1040ez form Legal and tax considerations enter into this decision. Irs gov 1040ez form Only tax considerations are discussed in this publication. Irs gov 1040ez form Your form of business determines which income tax return form you have to file. Irs gov 1040ez form See Table 2 to find out which form you have to file. Irs gov 1040ez form Sole proprietorships. Irs gov 1040ez form   A sole proprietorship is an unincorporated business that is owned by one individual. Irs gov 1040ez form It is the simplest form of business organization to start and maintain. Irs gov 1040ez form The business has no existence apart from you, the owner. Irs gov 1040ez form Its liabilities are your personal liabilities. Irs gov 1040ez form You undertake the risks of the business for all assets owned, whether or not used in the business. Irs gov 1040ez form You include the income and expenses of the business on your personal tax return. Irs gov 1040ez form More information. Irs gov 1040ez form   For more information on sole proprietorships, see Publication 334, Tax Guide for Small Business. Irs gov 1040ez form If you are a farmer, see Publication 225, Farmer's Tax Guide. Irs gov 1040ez form Partnerships. Irs gov 1040ez form   A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Irs gov 1040ez form Each person contributes money, property, labor, or skill, and expects to share in the profits and losses of the business. Irs gov 1040ez form   A partnership must file an annual information return to report the income, deductions, gains, losses, etc. Irs gov 1040ez form , from its operations, but it does not pay income tax. Irs gov 1040ez form Instead, it “passes through” any profits or losses to its partners. Irs gov 1040ez form Each partner includes his or her share of the partnership's items on his or her tax return. Irs gov 1040ez form More information. Irs gov 1040ez form   For more information on partnerships, see Publication 541, Partnerships. Irs gov 1040ez form Husband and wife business. Irs gov 1040ez form   If you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Irs gov 1040ez form Do not use Schedule C or C-EZ. Irs gov 1040ez form Instead, file Form 1065, U. Irs gov 1040ez form S. Irs gov 1040ez form Return of Partnership Income. Irs gov 1040ez form For more information, see Publication 541, Partnerships. Irs gov 1040ez form Exception—Community Income. Irs gov 1040ez form   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Irs gov 1040ez form S. Irs gov 1040ez form possession, you can treat the business either as a sole proprietorship or a partnership. Irs gov 1040ez form The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Irs gov 1040ez form A change in your reporting position will be treated as a conversion of the entity. Irs gov 1040ez form Exception—Qualified joint venture. Irs gov 1040ez form   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. Irs gov 1040ez form Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. Irs gov 1040ez form For an explanation of "material participation," see the Instructions for Schedule C, line G. Irs gov 1040ez form   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Irs gov 1040ez form Each of you must file a separate Schedule C or C-EZ and a separate Schedule SE. Irs gov 1040ez form For more information, see Qualified Joint Venture in the Instructions for Schedule SE. Irs gov 1040ez form Corporations. Irs gov 1040ez form   In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. Irs gov 1040ez form A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. Irs gov 1040ez form A corporation can also take special deductions. Irs gov 1040ez form   The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. Irs gov 1040ez form However, shareholders cannot deduct any loss of the corporation. Irs gov 1040ez form More information. Irs gov 1040ez form   For more information on corporations, see Publication 542, Corporations. Irs gov 1040ez form S corporations. Irs gov 1040ez form   An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. Irs gov 1040ez form Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. Irs gov 1040ez form On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of nonseparately stated income or loss. Irs gov 1040ez form More information. Irs gov 1040ez form   For more information on S corporations, see the instructions for Form 2553, Election by a Small Business Corporation, and Form 1120S, U. Irs gov 1040ez form S. Irs gov 1040ez form Income Tax Return for an S Corporation. Irs gov 1040ez form Limited liability company. Irs gov 1040ez form   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Irs gov 1040ez form The members of an LLC are not personally liable for its debts. Irs gov 1040ez form An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in regulations section 301. Irs gov 1040ez form 7701-3. Irs gov 1040ez form For more information, see the instructions for Form 8832, Entity Classification Election. Irs gov 1040ez form Identification Numbers You must have a taxpayer identification number so the IRS can process your returns. Irs gov 1040ez form The two most common kinds of taxpayer identification numbers are the social security number (SSN) and the employer identification number (EIN). Irs gov 1040ez form An SSN is issued to individuals by the Social Security Administration (SSA) and is in the following format: 000–00–0000. Irs gov 1040ez form An EIN is issued to individuals (sole proprietors), partnerships, corporations, and other entities by the IRS and is in the following format: 00–0000000. Irs gov 1040ez form You must include your taxpayer identification number (SSN or EIN) on all returns and other documents you send to the IRS. Irs gov 1040ez form You must also furnish your number to other persons who use your identification number on any returns or documents they send to the IRS. Irs gov 1040ez form This includes returns or documents filed to report the following information. Irs gov 1040ez form Interest, dividends, royalties, etc. Irs gov 1040ez form , paid to you. Irs gov 1040ez form Any amount paid to you as a dependent care provider. Irs gov 1040ez form Certain other amounts paid to you that total $600 or more for the year. Irs gov 1040ez form If you do not furnish your identification number as required, you may be subject to penalties. Irs gov 1040ez form See Penalties, later. Irs gov 1040ez form Employer Identification Number (EIN) EINs are used to identify the tax accounts of employers, certain sole proprietors, corporations, partnerships, estates, trusts, and other entities. Irs gov 1040ez form If you don't already have an EIN, you need to get one if you: Have employees, Have a qualified retirement plan, Operate your business as a corporation or partnership, or File returns for: Employment taxes, or Excise taxes. Irs gov 1040ez form Applying for an EIN. Irs gov 1040ez form   You may apply for an EIN: Online—Click on the EIN link at www. Irs gov 1040ez form irs. Irs gov 1040ez form gov/businesses/small. Irs gov 1040ez form The EIN is issued immediately once the application information is validated. Irs gov 1040ez form By telephone at 1-800-829-4933. Irs gov 1040ez form By mailing or faxing Form SS-4, Application for Employer Identification Number. Irs gov 1040ez form When to apply. Irs gov 1040ez form   You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. Irs gov 1040ez form If you apply by mail, file Form SS-4 at least 4 weeks before you need an EIN. Irs gov 1040ez form If you apply by telephone or through the IRS website, you can get an EIN immediately. Irs gov 1040ez form If you apply by fax, you can get an EIN within 4 business days. Irs gov 1040ez form   If you do not receive your EIN by the time a return is due, file your return anyway. Irs gov 1040ez form Write “Applied for” and the date you applied for the number in the space for the EIN. Irs gov 1040ez form Do not use your social security number as a substitute for an EIN on your tax returns. Irs gov 1040ez form More than one EIN. Irs gov 1040ez form   You should have only one EIN. Irs gov 1040ez form If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. Irs gov 1040ez form Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Irs gov 1040ez form The IRS will tell you which number to use. Irs gov 1040ez form More information. Irs gov 1040ez form   For more information about EINs, see Publication 1635, Understanding Your EIN. Irs gov 1040ez form Payee's Identification Number In the operation of a business, you will probably make certain payments you must report on information returns (discussed later under Information Returns). Irs gov 1040ez form The forms used to report these payments must include the payee's identification number. Irs gov 1040ez form Employee. Irs gov 1040ez form   If you have employees, you must get an SSN from each of them. Irs gov 1040ez form Record the name and SSN of each employee exactly as they are shown on the employee's social security card. Irs gov 1040ez form If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. Irs gov 1040ez form This may occur, for example, if the employee's name has changed due to marriage or divorce. Irs gov 1040ez form   If your employee does not have an SSN, he or she should file Form SS-5, Application for a Social Security Card, with the SSA. Irs gov 1040ez form This form is available at SSA offices or by calling 1-800-772-1213. Irs gov 1040ez form It is also available from the SSA website at www. Irs gov 1040ez form ssa. Irs gov 1040ez form gov. Irs gov 1040ez form Other payee. Irs gov 1040ez form   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. Irs gov 1040ez form If you make reportable payments to an organization, such as a corporation or partnership, you must get its EIN. Irs gov 1040ez form   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. Irs gov 1040ez form This form is available from IRS offices or by calling 1-800-829-3676. Irs gov 1040ez form It is also available from the IRS website at IRS. Irs gov 1040ez form gov. Irs gov 1040ez form    If the payee does not provide you with an identification number, you may have to withhold part of the payments as backup withholding. Irs gov 1040ez form For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. Irs gov 1040ez form Tax Year You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. Irs gov 1040ez form A tax year is usually 12 consecutive months. Irs gov 1040ez form There are two kinds of tax years. Irs gov 1040ez form Calendar tax year. Irs gov 1040ez form A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. Irs gov 1040ez form Fiscal tax year. Irs gov 1040ez form A fiscal tax year is 12 consecutive months ending on the last day of any month except December. Irs gov 1040ez form A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Irs gov 1040ez form If you file your first tax return using the calendar tax year and you later begin business as a sole proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you must continue to use the calendar year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. Irs gov 1040ez form You must use a calendar tax year if: You keep no books. Irs gov 1040ez form You have no annual accounting period. Irs gov 1040ez form Your present tax year does not qualify as a fiscal year. Irs gov 1040ez form You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations. Irs gov 1040ez form For more information, see Publication 538, Accounting Periods and Methods. Irs gov 1040ez form First-time filer. Irs gov 1040ez form   If you have never filed an income tax return, you can adopt either a calendar tax year or a fiscal tax year. Irs gov 1040ez form You adopt a tax year by filing your first income tax return using that tax year. Irs gov 1040ez form You have not adopted a tax year if you merely did any of the following. Irs gov 1040ez form Filed an application for an extension of time to file an income tax return. Irs gov 1040ez form Filed an application for an employer identification number. Irs gov 1040ez form Paid estimated taxes for that tax year. Irs gov 1040ez form Changing your tax year. Irs gov 1040ez form   Once you have adopted your tax year, you may have to get IRS approval to change it. Irs gov 1040ez form To get approval, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year. Irs gov 1040ez form You may have to pay a fee. Irs gov 1040ez form For more information, see Publication 538. Irs gov 1040ez form Accounting Method An accounting method is a set of rules used to determine when and how income and expenses are reported. Irs gov 1040ez form You choose an accounting method for your business when you file your first income tax return. Irs gov 1040ez form There are two basic accounting methods. Irs gov 1040ez form Cash method. Irs gov 1040ez form Under the cash method, you report income in the tax year you receive it. Irs gov 1040ez form You usually deduct or capitalize expenses in the tax year you pay them. Irs gov 1040ez form Accrual method. Irs gov 1040ez form Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. Irs gov 1040ez form You deduct or capitalize expenses in the tax year you incur them, whether or not you pay them that year. Irs gov 1040ez form For other methods, see Publication 538. Irs gov 1040ez form If you need inventories to show income correctly, you must generally use an accrual method of accounting for purchases and sales. Irs gov 1040ez form Inventories include goods held for sale in the normal course of business. Irs gov 1040ez form They also include raw materials and supplies that will physically become a part of merchandise intended for sale. Irs gov 1040ez form Inventories are explained in Publication 538. Irs gov 1040ez form Certain small business taxpayers can use the cash method of accounting and can also account for inventoriable items as materials and supplies that are not incidental. Irs gov 1040ez form For more information, see Publication 538. Irs gov 1040ez form You must use the same accounting method to figure your taxable income and to keep your books. Irs gov 1040ez form Also, you must use an accounting method that clearly shows your income. Irs gov 1040ez form In general, any accounting method that consistently uses accounting principles suitable for your trade or business clearly shows income. Irs gov 1040ez form An accounting method clearly shows income only if it treats all items of gross income and expense the same from year to year. Irs gov 1040ez form More than one business. Irs gov 1040ez form   When you own more than one business, you can use a different accounting method for each business if the method you use for each clearly shows your income. Irs gov 1040ez form You must keep a complete and separate set of books and records for each business. Irs gov 1040ez form Changing your method of accounting. Irs gov 1040ez form   Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. Irs gov 1040ez form A change in accounting method not only includes a change in your overall system of accounting, but also a change in the treatment of any material item. Irs gov 1040ez form For examples of changes that require approval and information on how to get approval for the change, see Publication 538. Irs gov 1040ez form Business Taxes The form of business you operate determines what taxes you must pay and how you pay them. Irs gov 1040ez form The following are the four general kinds of business taxes. Irs gov 1040ez form Income tax. Irs gov 1040ez form Self-employment tax. Irs gov 1040ez form Employment taxes. Irs gov 1040ez form Excise taxes. Irs gov 1040ez form See Table 2 for the forms you file to report these taxes. Irs gov 1040ez form You may want to get Publication 509. Irs gov 1040ez form It has tax calendars that tell you when to file returns and make tax payments. Irs gov 1040ez form Income Tax All businesses except partnerships must file an annual income tax return. Irs gov 1040ez form Partnerships file an information return. Irs gov 1040ez form Which form you use depends on how your business is organized. Irs gov 1040ez form See Table 2 to find out which return you have to file. Irs gov 1040ez form The federal income tax is a pay-as-you-go tax. Irs gov 1040ez form You must pay the tax as you earn or receive income during the year. Irs gov 1040ez form An employee usually has income tax withheld from his or her pay. Irs gov 1040ez form If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Irs gov 1040ez form If you are not required to make estimated tax payments, you may pay any tax due when you file your return. Irs gov 1040ez form Table 2. Irs gov 1040ez form Which Forms Must I File? IF you are a. Irs gov 1040ez form . Irs gov 1040ez form . Irs gov 1040ez form   THEN you may be liable for. Irs gov 1040ez form . Irs gov 1040ez form . Irs gov 1040ez form   Use Form. Irs gov 1040ez form . Irs gov 1040ez form . Irs gov 1040ez form Sole proprietor   Income tax   1040 and Schedule C 1 or C-EZ (Schedule F 1 for farm business)     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES     Employment taxes:         • Social security and Medicare   taxes and income tax   withholding   941 or 944 (943 for farm employees)     • Federal unemployment (FUTA)   tax   940     Excise taxes   See Excise Taxes Partnership   Annual return of income   1065     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes Partner in a partnership (individual)   Income tax   1040 and Schedule E 2     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES Corporation or S corporation   Income tax   1120 (corporation) 2  1120S (S corporation) 2     Estimated tax   1120-W (corporation only)     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes S corporation shareholder   Income tax   1040 and Schedule E 2     Estimated tax   1040-ES 1 File a separate schedule for each business. Irs gov 1040ez form 2 Various other schedules may be needed. Irs gov 1040ez form Estimated tax. Irs gov 1040ez form   Generally, you must pay taxes on income, including self-employment tax (discussed next), by making regular payments of estimated tax during the year. Irs gov 1040ez form Sole proprietors, partners, and S corporation shareholders. Irs gov 1040ez form   You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Irs gov 1040ez form Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. Irs gov 1040ez form For more information, see Publication 505, Tax Withholding and Estimated Tax. Irs gov 1040ez form Corporations. Irs gov 1040ez form   You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Irs gov 1040ez form Use Form 1120-W, Estimated Tax for Corporations, to figure the estimated tax. Irs gov 1040ez form You must deposit the payments as explained later under Depositing Taxes. Irs gov 1040ez form For more information, see Publication 542. Irs gov 1040ez form Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Irs gov 1040ez form Your payments of SE tax contribute to your coverage under the social security system. Irs gov 1040ez form Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Irs gov 1040ez form You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. Irs gov 1040ez form Your net earnings from self-employment were $400 or more. Irs gov 1040ez form You had church employee income of $108. Irs gov 1040ez form 28 or more. Irs gov 1040ez form Use Schedule SE (Form 1040) to figure your SE tax. Irs gov 1040ez form For more information, see Publication 334, Tax Guide for Small Business. Irs gov 1040ez form You can deduct a portion of your SE tax as an adjustment to income on your Form 1040. Irs gov 1040ez form The Social Security Administration (SSA) time limit for posting self-employment income. Irs gov 1040ez form   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Irs gov 1040ez form If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. Irs gov 1040ez form The SSA will not change its records to increase your self-employment income. Irs gov 1040ez form Employment Taxes This section briefly discusses the employment taxes you must pay, the forms you must file to report them, and other forms that must be filed when you have employees. Irs gov 1040ez form Employment taxes include the following. Irs gov 1040ez form Social security and Medicare taxes. Irs gov 1040ez form Federal income tax withholding. Irs gov 1040ez form Federal unemployment (FUTA) tax. Irs gov 1040ez form If you have employees, you will need to get Publication 15, Circular E, Employer's Tax Guide. Irs gov 1040ez form If you have agricultural employees, get Publication 51, Circular A, Agricultural Employer's Tax Guide. Irs gov 1040ez form These publications explain your tax responsibilities as an employer. Irs gov 1040ez form If you are not sure whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. Irs gov 1040ez form That publication has information to help you determine whether an individual is an employee or an independent contractor. Irs gov 1040ez form If you classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty. Irs gov 1040ez form An independent contractor is someone who is self-employed. Irs gov 1040ez form Generally, you do not have to withhold or pay any taxes on payments to an independent contractor. Irs gov 1040ez form Federal Income, Social Security, and Medicare Taxes You generally must withhold federal income tax from your employee's wages. Irs gov 1040ez form To figure how much federal income tax to withhold from each wage payment, use the employee's Form W-4 (discussed later under Hiring Employees) and the methods described in Publication 15. Irs gov 1040ez form Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Irs gov 1040ez form Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Irs gov 1040ez form Medicare tax pays for benefits under the hospital insurance part of FICA. Irs gov 1040ez form You withhold part of these taxes from your employee's wages and you pay a part yourself. Irs gov 1040ez form To find out how much social security and Medicare tax to withhold and to pay, see Publication 15. Irs gov 1040ez form Which form do I file?   Report these taxes on Form 941, Employer's QUARTERLY Federal Tax Return, or Form 944, Employer's ANNUAL Federal Tax Return. Irs gov 1040ez form (Farm employers use Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Irs gov 1040ez form ) Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. Irs gov 1040ez form You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. Irs gov 1040ez form You pay FUTA tax only from your own funds. Irs gov 1040ez form Employees do not pay this tax or have it withheld from their pay. Irs gov 1040ez form Which form do I file?   Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Irs gov 1040ez form See Publication 15 to find out if you can use this form. Irs gov 1040ez form Hiring Employees Have the employees you hire fill out Form I-9 and Form W-4. Irs gov 1040ez form Form I-9. Irs gov 1040ez form   You must verify that each new employee is legally eligible to work in the United States. Irs gov 1040ez form Both you and the employee must complete the U. Irs gov 1040ez form S. Irs gov 1040ez form Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. Irs gov 1040ez form You can get the form from USCIS offices or from the USCIS website at www. Irs gov 1040ez form uscis. Irs gov 1040ez form gov. Irs gov 1040ez form Call the USCIS at 1-800-375-5283 for more information about your responsibilities. Irs gov 1040ez form Form W-4. Irs gov 1040ez form   Each employee must fill out Form W-4, Employee's Withholding Allowance Certificate. Irs gov 1040ez form You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages. Irs gov 1040ez form For more information, see Publication 15. Irs gov 1040ez form Employees claiming more than 10 withholding allowances. Irs gov 1040ez form   An employer of an employee who claims more than 10 withholding allowances for wages paid can use several methods of withholding. Irs gov 1040ez form See section 16 of Publication 15. Irs gov 1040ez form Form W-2 Wage Reporting After the calendar year is over, you must furnish copies of Form W-2, Wage and Tax Statement, to each employee to whom you paid wages during the year. Irs gov 1040ez form You must also send copies to the Social Security Administration. Irs gov 1040ez form See Information Returns, later, for more information on Form W-2. Irs gov 1040ez form Excise Taxes This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following. Irs gov 1040ez form Manufacture or sell certain products. Irs gov 1040ez form Operate certain kinds of businesses. Irs gov 1040ez form Use various kinds of equipment, facilities, or products. Irs gov 1040ez form Receive payment for certain services. Irs gov 1040ez form For more information on excise taxes, see Publication 510, Excise Taxes. Irs gov 1040ez form Form 720. Irs gov 1040ez form   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. Irs gov 1040ez form Environmental taxes. Irs gov 1040ez form Communications and air transportation taxes. Irs gov 1040ez form Fuel taxes. Irs gov 1040ez form Tax on the first retail sale of heavy trucks, trailers, and tractors. Irs gov 1040ez form Manufacturers taxes on the sale or use of a variety of different articles. Irs gov 1040ez form Form 2290. Irs gov 1040ez form   There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. Irs gov 1040ez form The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Irs gov 1040ez form Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. Irs gov 1040ez form For more information, see the instructions for Form 2290. Irs gov 1040ez form Form 730. Irs gov 1040ez form   If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering. Irs gov 1040ez form Use Form 730, Monthly Tax Return for Wagers, to figure the tax on the wagers you receive. Irs gov 1040ez form Form 11-C. Irs gov 1040ez form   Use Form 11-C, Occupational Tax and Registration Return for Wagering, to register for any wagering activity and to pay the federal occupational tax on wagering. Irs gov 1040ez form Depositing Taxes You generally have to deposit employment taxes, certain excise taxes, corporate income tax, and S corporation taxes before you file your return. Irs gov 1040ez form Generally, taxpayers are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS). Irs gov 1040ez form Any business that has a federal tax obligation and requests a new EIN will automatically be enrolled in EFTPS. Irs gov 1040ez form Through the mail, the business will receive an EFTPS PIN package that contains instructions for activating its EFTPS enrollment. Irs gov 1040ez form Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. Irs gov 1040ez form The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. Irs gov 1040ez form You must give a copy of each information return you are required to file to the recipient or payer. Irs gov 1040ez form In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. Irs gov 1040ez form For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. Irs gov 1040ez form Form 1099-MISC. Irs gov 1040ez form   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your trade or business. Irs gov 1040ez form These payments include the following items. Irs gov 1040ez form Payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, or directors. Irs gov 1040ez form Rent payments of $600 or more, other than rents paid to real estate agents. Irs gov 1040ez form Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. Irs gov 1040ez form Royalty payments of $10 or more. Irs gov 1040ez form Payments to certain crew members by operators of fishing boats. Irs gov 1040ez form You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. Irs gov 1040ez form Form W-2. Irs gov 1040ez form   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. Irs gov 1040ez form For more information on what to report on Form W-2, see the Instructions for Forms W-2 and W-3. Irs gov 1040ez form Form 8300. Irs gov 1040ez form   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction or two or more related business transactions. Irs gov 1040ez form Cash includes U. Irs gov 1040ez form S. Irs gov 1040ez form and foreign coin and currency. Irs gov 1040ez form It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. Irs gov 1040ez form For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). Irs gov 1040ez form Penalties The law provides penalties for not filing returns or paying taxes as required. Irs gov 1040ez form Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. Irs gov 1040ez form Failure to file tax returns. Irs gov 1040ez form   If you do not file your tax return by the due date, you may have to pay a penalty. Irs gov 1040ez form The penalty is based on the tax not paid by the due date. Irs gov 1040ez form See your tax return instructions for more information about this penalty. Irs gov 1040ez form Failure to pay tax. Irs gov 1040ez form   If you do not pay your taxes by the due date, you will have to pay a penalty for each month, or part of a month, that your taxes are not paid. Irs gov 1040ez form For more information, see your tax return instructions. Irs gov 1040ez form Failure to withhold, deposit, or pay taxes. Irs gov 1040ez form   If you do not withhold income, social security, or Medicare taxes from employees, or if you withhold taxes but do not deposit them or pay them to the IRS, you may be subject to a penalty of the unpaid tax, plus interest. Irs gov 1040ez form You may also be subject to penalties if you deposit the taxes late. Irs gov 1040ez form For more information, see Publication 15. Irs gov 1040ez form Failure to follow information reporting requirements. Irs gov 1040ez form   The following penalties apply if you are required to file information returns. Irs gov 1040ez form For more information, see the General Instructions for Certain Information Returns. Irs gov 1040ez form Failure to file information returns. Irs gov 1040ez form A penalty applies if you do not file information returns by the due date, if you do not include all required information, or if you report incorrect information. Irs gov 1040ez form Failure to furnish correct payee statements. Irs gov 1040ez form A penalty applies if you do not furnish a required statement to a payee by the due date, if you do not include all required information, or if you report incorrect information. Irs gov 1040ez form Waiver of penalty. Irs gov 1040ez form   These penalties will not apply if you can show that the failures were due to reasonable cause and not willful neglect. Irs gov 1040ez form   In addition, there is no penalty for failure to include all the required information, or for including incorrect information, on a de minimis number of information returns if you correct the errors by August 1 of the year the returns are due. Irs gov 1040ez form (To be considered de minimis, the number of returns cannot exceed the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. Irs gov 1040ez form ) Failure to supply taxpayer identification number. Irs gov 1040ez form   If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer identification number of another person where required on a return, statement, or other document, you may be subject to a penalty of $50 for each failure. Irs gov 1040ez form You may also be subject to the $50 penalty if you do not give your taxpayer identification number to another person when it is required on a return, statement, or other document. Irs gov 1040ez form Business Expenses You can deduct business expenses on your income tax return. Irs gov 1040ez form These are the current operating costs of running your business. Irs gov 1040ez form To be deductible, a business expense must be both ordinary and necessary. Irs gov 1040ez form An ordinary expense is one that is common and accepted in your field of business, trade, or profession. Irs gov 1040ez form A necessary expense is one that is helpful and appropriate for your business, trade, or profession. Irs gov 1040ez form An expense does not have to be indispensable to be considered necessary. Irs gov 1040ez form The following are brief explanations of some expenses that are of interest to people starting a business. Irs gov 1040ez form There are many other expenses that you may be able to deduct. Irs gov 1040ez form See your form instructions and Publication 535, Business Expenses. Irs gov 1040ez form Business Start-Up Costs Business start-up costs are the expenses you incur before you actually begin business operations. Irs gov 1040ez form Your business start-up costs will depend on the type of business you are starting. Irs gov 1040ez form They may include costs for advertising, travel, surveys, and training. Irs gov 1040ez form These costs are generally capital expenses. Irs gov 1040ez form You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (discussed next). Irs gov 1040ez form You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. Irs gov 1040ez form The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Irs gov 1040ez form Any remaining cost must be amortized. Irs gov 1040ez form For more information about amortizing start-up and organizational costs, see chapter 7 in Publication 535. Irs gov 1040ez form Depreciation If property you acquire to use in your business has a useful life that extends substantially beyond the year it is placed in service, you generally cannot deduct the entire cost as a business expense in the year you acquire it. Irs gov 1040ez form You must spread the cost over more than one tax year and deduct part of it each year. Irs gov 1040ez form This method of deducting the cost of business property is called depreciation. Irs gov 1040ez form Business property you must depreciate includes the following items. Irs gov 1040ez form Office furniture. Irs gov 1040ez form Buildings. Irs gov 1040ez form Machinery and equipment. Irs gov 1040ez form You can choose to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. Irs gov 1040ez form This deduction is known as the “section 179 deduction. Irs gov 1040ez form ” For more information about depreciation and the section 179 deduction, see Publication 946, How To Depreciate Property. Irs gov 1040ez form Depreciation must be taken in the year it is allowable. Irs gov 1040ez form Allowable depreciation not taken in a prior year cannot be taken in the current year. Irs gov 1040ez form If you do not deduct the correct depreciation, you may be able to make a correction by filing Form 1040X, Amended U. Irs gov 1040ez form S. Irs gov 1040ez form Individual Income Tax Return, or by changing your accounting method. Irs gov 1040ez form For more information on how to correct depreciation deductions, see chapter 1 in Publication 946. Irs gov 1040ez form Business Use of Your Home To deduct expenses related to the business use of part of your home, you must meet specific requirements. Irs gov 1040ez form Even then, your deduction may be limited. Irs gov 1040ez form To qualify to claim expenses for business use of your home, you must meet both the following tests. Irs gov 1040ez form Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use, later), Regular, For your trade or business, AND The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) you use in connection with your trade or business. Irs gov 1040ez form Exclusive use. Irs gov 1040ez form   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Irs gov 1040ez form The area used for business can be a room or other separately identifiable space. Irs gov 1040ez form The space does not need to be marked off by a permanent partition. Irs gov 1040ez form   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Irs gov 1040ez form Exceptions to exclusive use. Irs gov 1040ez form   You do not have to meet the exclusive use test if either of the following applies. Irs gov 1040ez form You use part of your home for the storage of inventory or product samples. Irs gov 1040ez form You use part of your home as a daycare facility. Irs gov 1040ez form For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Irs gov 1040ez form Principal place of business. Irs gov 1040ez form   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. Irs gov 1040ez form You use it exclusively and regularly for administrative or management activities of your trade or business. Irs gov 1040ez form You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Irs gov 1040ez form   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. Irs gov 1040ez form The relative importance of the activities performed at each location. Irs gov 1040ez form If the relative importance factor does not determine your principal place of business, the time spent at each location. Irs gov 1040ez form    If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Irs gov 1040ez form However, for other ways to qualify to deduct home office expenses, see Publication 587. Irs gov 1040ez form Which form do I file?   If you file Schedule C (Form 1040), use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. Irs gov 1040ez form If you file Schedule F (Form 1040) or you are a partner, you can use the worksheet in Publication 587. Irs gov 1040ez form More information. Irs gov 1040ez form   For more information about business use of your home, see Publication 587. Irs gov 1040ez form Car and Truck Expenses If you use your car or truck in your business, you can deduct the costs of operating and maintaining it. Irs gov 1040ez form You generally can deduct either your actual expenses or the standard mileage rate. Irs gov 1040ez form Actual expenses. Irs gov 1040ez form   If you deduct actual expenses, you can deduct the cost of the following items: Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. Irs gov 1040ez form You can divide your expenses based on the miles driven for each purpose. Irs gov 1040ez form Example. Irs gov 1040ez form You are the sole proprietor of a flower shop. Irs gov 1040ez form You drove your van 20,000 miles during the year. Irs gov 1040ez form 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use. Irs gov 1040ez form You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. Irs gov 1040ez form Standard mileage rate. Irs gov 1040ez form   Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. Irs gov 1040ez form You can use the standard mileage rate for a vehicle you own or lease. Irs gov 1040ez form The standard mileage rate is a specified amount of money you can deduct for each business mile you drive. Irs gov 1040ez form It is announced annually by the IRS. Irs gov 1040ez form To figure your deduction, multiply your business miles by the standard mileage rate for the year. Irs gov 1040ez form    Generally, if you use the standard mileage rate, you cannot deduct your actual expenses. Irs gov 1040ez form However, you may be able to deduct business-related parking fees, tolls, interest on your car loan, and certain state and local taxes. Irs gov 1040ez form Choosing the standard mileage rate. Irs gov 1040ez form   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. Irs gov 1040ez form In later years, you can choose to use either the standard mileage rate or actual expenses. Irs gov 1040ez form   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). Irs gov 1040ez form Additional information. Irs gov 1040ez form   For more information about the rules for claiming car and truck expenses, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. Irs gov 1040ez form Recordkeeping This part explains why you must keep records, what kinds of records you must keep, and how to keep them. Irs gov 1040ez form It also explains how long you must keep your records for federal tax purposes. Irs gov 1040ez form A sample recordkeeping system is illustrated at the end of this part. Irs gov 1040ez form Why Keep Records? Everyone in business must keep records. Irs gov 1040ez form Good records will help you do the following. Irs gov 1040ez form Monitor the progress of your business. Irs gov 1040ez form   You need good records to monitor the progress of your business. Irs gov 1040ez form Records can show whether your business is improving, which items are selling, or what changes you need to make. Irs gov 1040ez form Good records can increase the likelihood of business success. Irs gov 1040ez form Prepare your financial statements. Irs gov 1040ez form   You need good records to prepare accurate financial statements. Irs gov 1040ez form These include income (profit and loss) statements and balance sheets. Irs gov 1040ez form These statements can help you in dealing with your bank or creditors and help you manage your business. Irs gov 1040ez form An income statement shows the income and expenses of the business for a given period of time. Irs gov 1040ez form A balance sheet shows the assets, liabilities, and your equity in the business on a given date. Irs gov 1040ez form Identify source of receipts. Irs gov 1040ez form   You will receive money or property from many sources. Irs gov 1040ez form Your records can identify the source of your receipts. Irs gov 1040ez form You need this information to separate business from nonbusiness receipts and taxable from nontaxable income. Irs gov 1040ez form Keep track of deductible expenses. Irs gov 1040ez form   You may forget expenses when you prepare your tax return unless you record them when they occur. Irs gov 1040ez form Prepare your tax returns. Irs gov 1040ez form   You need good records to prepare your tax returns. Irs gov 1040ez form These records must support the income, expenses, and credits you report. Irs gov 1040ez form Generally, these are the same records you use to monitor your business and prepare your financial statements. Irs gov 1040ez form Support items reported on tax returns. Irs gov 1040ez form   You must keep your business records available at all times for inspection by the IRS. Irs gov 1040ez form If the IRS examines any of your tax returns, you may be asked to explain the items reported. Irs gov 1040ez form A complete set of records will speed up the examination. Irs gov 1040ez form Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. Irs gov 1040ez form You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. Irs gov 1040ez form The business you are in affects the type of records you need to keep for federal tax purposes. Irs gov 1040ez form You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. Irs gov 1040ez form See Accounting Method, earlier. Irs gov 1040ez form If you are in more than one business, you should keep a complete and separate set of records for each business. Irs gov 1040ez form A corporation should keep minutes of board of directors' meetings. Irs gov 1040ez form Your recordkeeping system should include a summary of your business transactions. Irs gov 1040ez form This summary is ordinarily made in your books (for example, accounting journals and ledgers). Irs gov 1040ez form Your books must show your gross income, as well as your deductions and credits. Irs gov 1040ez form For most small businesses, the business checkbook (discussed later) is the main source for entries in the business books. Irs gov 1040ez form In addition, you must keep supporting documents, explained later. Irs gov 1040ez form Electronic records. Irs gov 1040ez form   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Irs gov 1040ez form When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Irs gov 1040ez form An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. Irs gov 1040ez form The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. Irs gov 1040ez form All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Irs gov 1040ez form Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. Irs gov 1040ez form   The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. Irs gov 1040ez form You still have the responsibility of retaining any other books and records that are required to be retained. Irs gov 1040ez form   The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. Irs gov 1040ez form This test is not considered an examination and the results must be shared with you. Irs gov 1040ez form If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. Irs gov 1040ez form If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copy books and records in a manner that allows you and the IRS to determine your correct tax. Irs gov 1040ez form For details on electronic storage system requirements, see Revenue Procedure 97-22, available in Internal Revenue Bulletin 1997-13. Irs gov 1040ez form Supporting Documents Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. Irs gov 1040ez form Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Irs gov 1040ez form These documents contain information you need to record in your books. Irs gov 1040ez form It is important to keep these documents because they support the entries in your books and on your tax return. Irs gov 1040ez form Keep them in an orderly fashion and in a safe place. Irs gov 1040ez form For instance, organize them by year and type of income or expense. Irs gov 1040ez form Gross receipts. Irs gov 1040ez form   Gross receipts are the income you receive from your business. Irs gov 1040ez form You should keep supporting documents that show the amounts and sources of your gross receipts. Irs gov 1040ez form Documents that show gross receipts include the following. Irs gov 1040ez form Cash register tapes. Irs gov 1040ez form Bank deposit slips. Irs gov 1040ez form Receipt books. Irs gov 1040ez form Invoices. Irs gov 1040ez form Credit card charge slips. Irs gov 1040ez form Forms 1099-MISC. Irs gov 1040ez form Purchases. Irs gov 1040ez form   Purchases are the items you buy and resell to customers. Irs gov 1040ez form If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Irs gov 1040ez form Your supporting documents should show the amount paid and that the amount was for purchases. Irs gov 1040ez form Documents for purchases include the following. Irs gov 1040ez form Canceled checks. Irs gov 1040ez form Cash register tape receipts. Irs gov 1040ez form Credit card sales slips. Irs gov 1040ez form Invoices. Irs gov 1040ez form These records will help you determine the value of your inventory at the end of the year. Irs gov 1040ez form See Publication 538 for information on methods for valuing inventory. Irs gov 1040ez form Expenses. Irs gov 1040ez form   Expenses are the costs you incur (other than purchases) to carry on your business. Irs gov 1040ez form Your supporting documents should show the amount paid and that the amount was for a business expense. Irs gov 1040ez form Documents for expenses include the following. Irs gov 1040ez form Canceled checks. Irs gov 1040ez form Cash register tapes. Irs gov 1040ez form Account statements. Irs gov 1040ez form Credit card sales slips. Irs gov 1040ez form Invoices. Irs gov 1040ez form Petty cash slips for small cash payments. Irs gov 1040ez form    A petty cash fund allows you to make small payments without having to write checks for small amounts. Irs gov 1040ez form Each time you make a payment from this fund, you should make out a petty cash slip and attach it to your receipt as proof of payment. Irs gov 1040ez form Travel, transportation, entertainment, and gift expenses. Irs gov 1040ez form   Specific recordkeeping rules apply to these expenses. Irs gov 1040ez form For more information, see Publication 463. Irs gov 1040ez form Employment taxes. Irs gov 1040ez form   There are specific employment tax records you must keep. Irs gov 1040ez form For a list, see Publication 15. Irs gov 1040ez form Assets. Irs gov 1040ez form   Assets are the property, such as machinery and furniture you own and use in your business. Irs gov 1040ez form You must keep records to verify certain information about your business assets. Irs gov 1040ez form You need records to figure the annual depreciation and the gain or loss when you sell the assets. Irs gov 1040ez form Your records should show the following information. Irs gov 1040ez form When and how you acquired the asset. Irs gov 1040ez form Purchase price. Irs gov 1040ez form Cost of any improvements. Irs gov 1040ez form Section 179 deduction taken. Irs gov 1040ez form Deductions taken for depreciation. Irs gov 1040ez form Deductions taken for casualty losses, such as losses resulting from fires or storms. Irs gov 1040ez form How you used the asset. Irs gov 1040ez form When and how you disposed of the asset. Irs gov 1040ez form Selling price. Irs gov 1040ez form Expenses of sale. Irs gov 1040ez form   The following documents may show this information. Irs gov 1040ez form Purchase and sales invoices. Irs gov 1040ez form Real estate closing statements. Irs gov 1040ez form Canceled checks. Irs gov 1040ez form What if I don't have a canceled check?   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. Irs gov 1040ez form These include account statements prepared for the financial institution by a third party. Irs gov 1040ez form These account statements must be highly legible. Irs gov 1040ez form The following table lists acceptable account statements. Irs gov 1040ez form  IF payment is by. Irs gov 1040ez form . Irs gov 1040ez form . Irs gov 1040ez form THEN the statement must show the. Irs gov 1040ez form . Irs gov 1040ez form . Irs gov 1040ez form Check Check number. Irs gov 1040ez form Amount. Irs gov 1040ez form Payee's name. Irs gov 1040ez form Date the check amount was posted to the account by the financial institution. Irs gov 1040ez form Electronic funds transfer Amount transferred. Irs gov 1040ez form Payee's name. Irs gov 1040ez form Date the transfer was posted to the account by the financial institution. Irs gov 1040ez form Credit card Amount charged. Irs gov 1040ez form Payee's name. Irs gov 1040ez form Transaction date. Irs gov 1040ez form    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. Irs gov 1040ez form You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. Irs gov 1040ez form Recording Business Transactions A good recordkeeping system includes a summary of your business transactions. Irs gov 1040ez form (Your business transactions are shown on the supporting documents just discussed. Irs gov 1040ez form ) Business transactions are ordinarily summarized in books called journals and ledgers. Irs gov 1040ez form You can buy them at your local stationery or office supply store. Irs gov 1040ez form A journal is a book where you record each business transaction shown on your supporting documents. Irs gov 1040ez form You may have to keep separate journals for transactions that occur frequently. Irs gov 1040ez form A ledger is a book that contains the totals from all of your journals. Irs gov 1040ez form It is organized into different accounts. Irs gov 1040ez form Whether you keep journals and ledgers and how you keep them depends on the type of business you are in. Irs gov 1040ez form For example, a recordkeeping system for a small business might include the following items. Irs gov 1040ez form Business checkbook. Irs gov 1040ez form Daily summary of cash receipts. Irs gov 1040ez form Monthly summary of cash receipts. Irs gov 1040ez form Check disbursements journal. Irs gov 1040ez form Depreciation worksheet. Irs gov 1040ez form Employee compensation record. Irs gov 1040ez form The business checkbook is explained next. Irs gov 1040ez form The other items are illustrated later under Sample Record System. Irs gov 1040ez form The system you use to record business transactions will be more effective if you follow good recordkeeping practices. Irs gov 1040ez form For example, record expenses when they occur, and identify the source of recorded receipts. Irs gov 1040ez form Generally, it is best to record transactions on a daily basis. Irs gov 1040ez form Business checkbook. Irs gov 1040ez form   One of the first things you should do when you start a business is open a business checking account. Irs gov 1040ez form You should keep your business account separate from your personal checking account. Irs gov 1040ez form   The business checkbook is your basic source of information for recording your business expenses. Irs gov 1040ez form You should deposit all daily receipts in your business checking account. Irs gov 1040ez form You should check your account for errors by reconciling it. Irs gov 1040ez form See Reconciling the checking account, later. Irs gov 1040ez form   Consider using a checkbook that allows enough space to identify the source of deposits as business income, personal funds, or loans. Irs gov 1040ez form You should also note on the deposit slip the source of the deposit and keep copies of all slips. Irs gov 1040ez form   You should make all payments by check to document business expenses. Irs gov 1040ez form Write checks payable to yourself only when making withdrawals from your business for personal use. Irs gov 1040ez form Avoid writing checks payable to cash. Irs gov 1040ez form If you must write a check for cash to pay a business expense, include the receipt for the cash payment in your records. Irs gov 1040ez form If you cannot get a receipt for a cash payment, you should make an adequate explanation in your records at the time of payment. Irs gov 1040ez form    Use the business account for business purposes only. Irs gov 1040ez form Indicate the source of deposits and the type of expense in the checkbook. Irs gov 1040ez form Reconciling the checking account. Irs gov 1040ez form   When you receive your bank statement, make sure the statement, your checkbook, and your books agree. Irs gov 1040ez form The statement balance may not agree with the balance in your checkbook and books if the statement: Includes bank charges you did not enter in your books and subtract from your checkbook balance, or Does not include deposits made after the statement date or checks that did not clear your account before the statement date. Irs gov 1040ez form   By reconciling your checking account, you will: Verify how much money you have in the account, Make sure that your checkbook and books reflect all bank charges and the correct balance in the checking account, and Correct any errors in your bank statement, checkbook, and books. Irs gov 1040ez form    You should reconcile your checking account each month. Irs gov 1040ez form     Before you reconcile your monthly bank statement, check your own figures. Irs gov 1040ez form Begin with the balance shown in your checkbook at the end of the previous month. Irs gov 1040ez form To this balance, add the total cash deposited during the month and subtract the total cash disbursements. Irs gov 1040ez form   After checking your figures, the result should agree with your checkbook balance at the end of the month. Irs gov 1040ez form If the result does not agree, you may have made an error in recording a check or deposit. Irs gov 1040ez form You can find the error by doing the following. Irs gov 1040ez form Adding the amounts on your check stubs and comparing that total with the total in the “amount of check” column in your check disbursements journal. Irs gov 1040ez form If the totals do not agree, check the individual amounts to see if an error was made in your check stub record or in the related entry in your check disbursements journal. Irs gov 1040ez form Adding the deposit amounts in your checkbook. Irs gov 1040ez form Compare that total with the monthly total in your cash receipt book, if you have one. Irs gov 1040ez form If the totals do not agree, check the individual amounts to find any errors. Irs gov 1040ez form   If your checkbook and journal entries still disagree, then refigure the running balance in your checkbook to make sure additions and subtractions are correct. Irs gov 1040ez form   When your checkbook balance agrees with the balance figured from the journal entries, you may begin reconciling your checkbook with the bank statement. Irs gov 1040ez form Many banks print a reconciliation worksheet on the back of the statement. Irs gov 1040ez form   To reconcile your account, follow these steps. Irs gov 1040ez form Compare the deposits listed on the bank statement with the deposits shown in your checkbook. Irs gov 1040ez form Note all differences in the dollar amounts. Irs gov 1040ez form Compare each canceled check, including both check number and dollar amount, with the entry in your checkbook. Irs gov 1040ez form Note all differences in the dollar amounts. Irs gov 1040ez form Mark the check number in the checkbook as having cleared the bank. Irs gov 1040ez form After accounting for all checks returned by the bank, those not marked in your checkbook are your outstanding checks. Irs gov 1040ez form Prepare a bank reconciliation. Irs gov 1040ez form One is illustrated later under Sample Record System. Irs gov 1040ez form Update your checkbook and journals for items shown on the reconciliation as not recorded (such as service charges) or recorded incorrectly. Irs gov 1040ez form At this point, the adjusted bank statement balance should equal your adjusted checkbook balance. Irs gov 1040ez form If you still have differences, check the previous steps to find the errors. Irs gov 1040ez form   Table 3. Irs gov 1040ez form Period of Limitations IF you. Irs gov 1040ez form . Irs gov 1040ez form . Irs gov 1040ez form   THEN the period is. Irs gov 1040ez form . Irs gov 1040ez form . Irs gov 1040ez form 1. Irs gov 1040ez form Owe additional tax and situations (2), (3), and (4), below, do not apply to you   3 years 2. Irs gov 1040ez form Do not report income that you should report and it is more than 25% of the gross income shown on the return   6 years 3. Irs gov 1040ez form File a fraudulent return   Not limited 4. Irs gov 1040ez form Do not file a return   Not limited 5. Irs gov 1040ez form File a claim for credit or refund after you filed your return   Later of: 3 years or  2 years after tax   was paid 6. Irs gov 1040ez form File a claim for a loss from worthless securities or a bad debt deduction   7 years Bookkeeping System You must decide whether to use a single-entry or a double-entry bookkeeping system. Irs gov 1040ez form The single-entry system of bookkeeping is the simplest to maintain, but it may not be suitable for everyone. Irs gov 1040ez form You may find the double-entry system better because it has built-in checks and balances to assure accuracy and control. Irs gov 1040ez form Single-entry. Irs gov 1040ez form   A single-entry system is based on the income statement (profit or loss statement). Irs gov 1040ez form It can be a simple and practical system if you are starting a small business. Irs gov 1040ez form The system records the flow of income and expenses through the use of: A daily summary of cash receipts, and Monthly summaries of cash receipts and disbursements. Irs gov 1040ez form Double-entry. Irs gov 1040ez form   A double-entry bookkeeping system uses journals and ledgers. Irs gov 1040ez form Transactions are first entered in a journal and then posted to ledger accounts. Irs gov 1040ez form These accounts show income, expenses, assets (property a business owns), liabilities (debts of a business), and net worth (excess of assets over liabilities). Irs gov 1040ez form You close income and expense accounts at the end of each tax year. Irs gov 1040ez form You keep asset, liability, and net worth accounts open on a permanent basis. Irs gov 1040ez form   In the double-entry system, each account has a left side for debits and a right side for credits. Irs gov 1040ez form It is self-balancing because you record every transaction as a debit entry in one account and as a credit entry in another. Irs gov 1040ez form   Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. Irs gov 1040ez form If the amounts do not balance, you have made an error and you must find and correct it. Irs gov 1040ez form   An example of a journal entry exhibiting a payment of rent in October is shown next. Irs gov 1040ez form General Journal Date Description of Entry Debit  Credit Oct. Irs gov 1040ez form 5 Rent expense 780. Irs gov 1040ez form 00     Cash   780. Irs gov 1040ez form 00                 Computerized System There are computer software packages you can use for recordkeeping. Irs gov 1040ez form They can be purchased in many retail stores. Irs gov 1040ez form These packages are very helpful and relatively easy to use; they require very little knowledge of bookkeeping and accounting. Irs gov 1040ez form If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. Irs gov 1040ez form To meet this qualification, the machine-sensible records must reconcile with your books and return. Irs gov 1040ez form These records must provide enough detail to identify the underlying source documents. Irs gov 1040ez form You must also keep all machine-sensible records and a complete description of the computerized portion of your recordkeeping system. Irs gov 1040ez form This documentation must be sufficiently detailed to show all of the following items. Irs gov 1040ez form Functions being performed as the data flows through the system. Irs gov 1040ez form Controls used to ensure accurate and reliable processing. Irs gov 1040ez form Controls used to prevent the unauthorized addition, alteration, or deletion of retained records. Irs gov 1040ez form Charts of accounts and detailed account descriptions. Irs gov 1040ez form See Revenue Procedure 98-25 in Cumulative Bulletin 1998-1 for more information. Irs gov 1040ez form How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Irs gov 1040ez form Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out. Irs gov 1040ez form The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. Irs gov 1040ez form Table 3 contains the periods of limitations that apply to income tax returns. Irs gov 1040ez form Unless otherwise stated, the years refer to the period after the return was filed. Irs gov 1040ez form Returns filed before the due date are treated as filed on the due date. Irs gov 1040ez form Keep copies of your filed tax returns. Irs gov 1040ez form They help in preparing future tax returns and making computations if you file an amended return. Irs gov 1040ez form Employment taxes. Irs gov 1040ez form   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. Irs gov 1040ez form For more information about recordkeeping for employment taxes, see Publication 15. Irs gov 1040ez form Assets. Irs gov 1040ez form   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. Irs gov 1040ez form You must keep these records to figure any depreciation, amortization, or depletion deduction, and to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. Irs gov 1040ez form   Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. Irs gov 1040ez form You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. Irs gov 1040ez form Records for nontax purposes. Irs gov 1040ez form   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. Irs gov 1040ez form For example, your insurance company or creditors may require you to keep them longer than the IRS does. Irs gov 1040ez form Sample Record System This example illustrates a single-entry system used by Henry Brown, who is the sole proprietor of a small automobile body shop. Irs gov 1040ez form Henry uses part-time help, has no inventory of items held for sale, and uses the cash method of accounting. Irs gov 1040ez form These sample records should not be viewed as a recommendation of how to keep your records. Irs gov 1040ez form They are intended only to show how one business keeps its records. Irs gov 1040ez form 1. Irs gov 1040ez form Daily Summary of Cash Receipts This summary is a record of cash sales for the day. Irs gov 1040ez form It accounts for cash at the end of the day over the amount in the Change and Petty Cash Fund at the beginning of the day. Irs gov 1040ez form Henry takes the cash sales entry from his cash register tape. Irs gov 1040ez form If he had no cash register, he would simply total his cash sale slips and any other cash received that day. Irs gov 1040ez form He carries the total receipts shown in this summary for January 3 ($267. Irs gov 1040ez form 80), including cash sales ($263. Irs gov 1040ez form 60) and sales tax ($4. Irs gov 1040ez form 20), to the Monthly Summary of Cash Receipts. Irs gov 1040ez form Petty cash fund. Irs gov 1040ez form   Henry uses a petty cash fund to make small payments without having to write checks for small amounts. Irs gov 1040ez form Each time he makes a payment from this fund, he makes out a petty cash slip and attaches it to his receipt as proof of payment. Irs gov 1040ez form He sets up a fixed amount ($50) in his petty cash fund. Irs gov 1040ez form The total of the unspent petty cash and the amounts on the petty cash slips should equal the fixed amount of the fund. Irs gov 1040ez form When the totals on the petty cash slips approach the fixed amount, he brings the cash in the fund back to the fixed amount by writing a check to “Petty Cash” for the total of the outstanding slips. Irs gov 1040ez form (See the Check Disbursements Journal entry for check number 92. Irs gov 1040ez form ) This restores the fund to its fixed amount of $50. Irs gov 1040ez form He then summarizes the slips and enters them in the proper columns in the monthly check disbursements journal. Irs gov 1040ez form 2. Irs gov 1040ez form Monthly Summary of Cash Receipts This shows the income activity for the month. Irs gov 1040ez form Henry carries the total monthly net sales shown in this summary for January ($4,865. Irs gov 1040ez form 05) to his Annual Summary. Irs gov 1040ez form To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. Irs gov 1040ez form He cannot take a deduction for sales tax turned over to the state because he only collected the tax. Irs gov 1040ez form He does not include the tax in his income. Irs gov 1040ez form 3. Irs gov 1040ez form Check Disbursements Journal Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. Irs gov 1040ez form All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal. Irs gov 1040ez form Frequent expenses have their own headings across the sheet. Irs gov 1040ez form He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. Irs gov 1040ez form Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage. Irs gov 1040ez form Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. Irs gov 1040ez form If he did, he would record them in the journal, even though he could not deduct them as business expenses. Irs gov 1040ez form Henry carries the January total of expenses for materials ($1,083. Irs gov 1040ez form 50) to the Annual Summary. Irs gov 1040ez form Similarly, he enters the monthly total of expenses for telephone, truck/auto, etc. Irs gov 1040ez form , in the appropriate columns of that summary. Irs gov 1040ez form 4. Irs gov 1040ez form Employee Compensation Record This record shows the following information. Irs gov 1040ez form The number of hours Henry's employee worked in a pay period. Irs gov 1040ez form The employee's total pay for the period. Irs gov 1040ez form The deductions Henry withheld in figuring the employee's net pay. Irs gov 1040ez form The monthly gross payroll. Irs gov 1040ez form Henry carries the January gross payroll ($520) to the Annual Summary. Irs gov 1040ez form 5. Irs gov 1040ez form Annual Summary This annual summary of monthly cash receipts and expense totals provides the final amounts to enter on Henry's tax return. Irs gov 1040ez form He figures the cash receipts total from the total of monthly cash receipts shown in the Monthly Summary of Cash Receipts. Irs gov 1040ez form He figures the expense totals from the totals of monthly expense items shown in the Check Disbursements Journal. Irs gov 1040ez form As in the journal, he keeps each major expense in a separate column. Irs gov 1040ez form Henry carries the cash receipts total shown in the annual summary ($47,440. Irs gov 1040ez form 9
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The Irs Gov 1040ez Form

Irs gov 1040ez form 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 gov 1040ez form Computer used in a home office. Irs gov 1040ez form 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 gov 1040ez form You can claim the amount of expenses that is more than 2% of your adjusted gross income. Irs gov 1040ez form You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Irs gov 1040ez form Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 37. Irs gov 1040ez form Generally, you apply the 2% limit after you apply any other deduction limit. Irs gov 1040ez form 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 gov 1040ez form Deductions subject to the 2% limit are discussed in the following three categories. Irs gov 1040ez form Unreimbursed employee expenses (Schedule A (Form 1040), line 21 or Schedule A (Form 1040NR), line 7). Irs gov 1040ez form Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule A (Form 1040NR), line 8). Irs gov 1040ez form Other expenses (Schedule A (Form 1040), line 23 or Schedule A (Form 1040NR), line 9). Irs gov 1040ez form Unreimbursed Employee Expenses Generally, the following expenses are deducted on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Irs gov 1040ez form 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 gov 1040ez form An expense is ordinary if it is common and accepted in your trade, business, or profession. Irs gov 1040ez form An expense is necessary if it is appropriate and helpful to your business. Irs gov 1040ez form An expense does not have to be required to be considered necessary. Irs gov 1040ez form You may be able to deduct the following items as unreimbursed employee expenses. Irs gov 1040ez form Business bad debt of an employee. Irs gov 1040ez form Business liability insurance premiums. Irs gov 1040ez form Damages paid to a former employer for breach of an employment contract. Irs gov 1040ez form Depreciation on a computer your employer requires you to use in your work. Irs gov 1040ez form Dues to a chamber of commerce if membership helps you do your job. Irs gov 1040ez form Dues to professional societies. Irs gov 1040ez form Educator expenses. Irs gov 1040ez form Home office or part of your home used regularly and exclusively in your work. Irs gov 1040ez form Job search expenses in your present occupation. Irs gov 1040ez form Laboratory breakage fees. Irs gov 1040ez form Legal fees related to your job. Irs gov 1040ez form Licenses and regulatory fees. Irs gov 1040ez form Malpractice insurance premiums. Irs gov 1040ez form Medical examinations required by an employer. Irs gov 1040ez form Occupational taxes. Irs gov 1040ez form Passport for a business trip. Irs gov 1040ez form Repayment of an income aid payment received under an employer's plan. Irs gov 1040ez form Research expenses of a college professor. Irs gov 1040ez form Rural mail carriers' vehicle expenses. Irs gov 1040ez form Subscriptions to professional journals and trade magazines related to your work. Irs gov 1040ez form Tools and supplies used in your work. Irs gov 1040ez form Travel, transportation, meals, entertainment, gifts, and local lodging related to your work. Irs gov 1040ez form Union dues and expenses. Irs gov 1040ez form Work clothes and uniforms if required and not suitable for everyday use. Irs gov 1040ez form Work-related education. Irs gov 1040ez form Business Bad Debt A business bad debt is a loss from a debt created or acquired in your trade or business. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form Example. Irs gov 1040ez form You make a bona fide loan to the corporation you work for. Irs gov 1040ez form It fails to pay you back. Irs gov 1040ez form You had to make the loan in order to keep your job. Irs gov 1040ez form You have a business bad debt as an employee. Irs gov 1040ez form More information. Irs gov 1040ez form   For more information on business bad debts, see chapter 10 in Publication 535. Irs gov 1040ez form For information on nonbusiness bad debts, see chapter 4 in Publication 550, Investment Income and Expenses. Irs gov 1040ez form Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form For the convenience of your employer. Irs gov 1040ez form   This means that your use of the computer is for a substantial business reason of your employer. Irs gov 1040ez form You must consider all facts in making this determination. Irs gov 1040ez form 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 gov 1040ez form Required as a condition of your employment. Irs gov 1040ez form   This means that you cannot properly perform your duties without the computer. Irs gov 1040ez form Whether you can properly perform your duties without it depends on all the facts and circumstances. Irs gov 1040ez form It is not necessary that your employer explicitly requires you to use your computer. Irs gov 1040ez form But neither is it enough that your employer merely states that your use of the item is a condition of your employment. Irs gov 1040ez form Example. Irs gov 1040ez form You are an engineer with an engineering firm. Irs gov 1040ez form You occasionally take work home at night rather than work late at the office. Irs gov 1040ez form You own and use a computer that is similar to the one you use at the office to complete your work at home. Irs gov 1040ez form 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 gov 1040ez form Which depreciation method to use. Irs gov 1040ez form   The depreciation method you use depends on whether you meet the more-than-50%-use test. Irs gov 1040ez form More-than-50%-use test met. Irs gov 1040ez form   You meet this test if you use the computer more than 50% in your work. Irs gov 1040ez form If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). Irs gov 1040ez form In addition, you may be able to take the section 179 deduction for the year you place the item in service. Irs gov 1040ez form More-than-50%-use test not met. Irs gov 1040ez form   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 gov 1040ez form You also cannot claim the section 179 deduction. Irs gov 1040ez form (But if you use your computer in a home office, see the exception below. Irs gov 1040ez form ) Investment use. Irs gov 1040ez form   Your use of a computer in connection with investments (described later under Other Expenses ) does not count as use in your work. Irs gov 1040ez form However, you can combine your investment use with your work use in figuring your depreciation deduction. Irs gov 1040ez form Exception for computer used in a home office. Irs gov 1040ez form   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 gov 1040ez form 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 gov 1040ez form You also may be able to take a section 179 deduction for the year you place the computer in service. Irs gov 1040ez form See Computer used in a home office under How To Report, later. Irs gov 1040ez form More information. Irs gov 1040ez form   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 gov 1040ez form Publication 946 has detailed information about the section 179 deduction and depreciation deductions using GDS and ADS. Irs gov 1040ez form Reporting your depreciation deduction. Irs gov 1040ez form    See How To Report, later, for information about reporting a deduction for depreciation. Irs gov 1040ez form You must keep records to prove your percentage of business and investment use. Irs gov 1040ez form 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 gov 1040ez form Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Irs gov 1040ez form Lobbying and political activities. Irs gov 1040ez form    You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Irs gov 1040ez form See Lobbying Expenses under Nondeductible Expenses, later. Irs gov 1040ez form 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 gov 1040ez form If you file Form 1040A, you can deduct these expenses on line 16. Irs gov 1040ez form If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Irs gov 1040ez form However, neither spouse can deduct more than $250 of his or her qualified expenses. Irs gov 1040ez form Eligible educator. Irs gov 1040ez form   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 gov 1040ez form Qualified expenses. Irs gov 1040ez form   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 gov 1040ez form An ordinary expense is one that is common and accepted in your educational field. Irs gov 1040ez form A necessary expense is one that is helpful and appropriate for your profession as an educator. Irs gov 1040ez form An expense does not have to be required to be considered necessary. Irs gov 1040ez form   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Irs gov 1040ez form You must reduce your qualified expenses by the following amounts. Irs gov 1040ez form Excludable U. Irs gov 1040ez form S. Irs gov 1040ez form series EE and I savings bond interest from Form 8815. Irs gov 1040ez form Nontaxable qualified state tuition program earnings. Irs gov 1040ez form Nontaxable earnings from Coverdell education savings accounts. Irs gov 1040ez form Any reimbursements you received for those expenses that were not reported to you on your Form W-2, box 1. Irs gov 1040ez form Educator expenses over limit. Irs gov 1040ez form   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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Irs gov 1040ez form Principal place of business. Irs gov 1040ez form   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 gov 1040ez form   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 gov 1040ez form You should keep records that will give the information needed to figure the deduction according to these rules. Irs gov 1040ez form Also keep canceled checks, substitute checks, or account statements and receipts of the expenses paid to prove the deductions you claim. Irs gov 1040ez form More information. Irs gov 1040ez form   See Publication 587 for more detailed information and a worksheet for figuring the deduction. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form Employment and outplacement agency fees. Irs gov 1040ez form    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Irs gov 1040ez form Employer pays you back. Irs gov 1040ez form   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 gov 1040ez form See Recoveries in Publication 525. Irs gov 1040ez form Employer pays the employment agency. Irs gov 1040ez form   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 gov 1040ez form Résumé. Irs gov 1040ez form   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 gov 1040ez form Travel and transportation expenses. Irs gov 1040ez form   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 gov 1040ez form You can deduct the travel expenses if the trip is primarily to look for a new job. Irs gov 1040ez form 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 gov 1040ez form   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 gov 1040ez form    You can choose to use the standard mileage rate to figure your car expenses. Irs gov 1040ez form The 2013 rate for business use of a vehicle is 56½ cents per mile. Irs gov 1040ez form See Publication 463 for more information on travel and car expenses. Irs gov 1040ez form Legal Fees You can deduct legal fees related to doing or keeping your job. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form However, you cannot deduct the cost of travel as a form of education. Irs gov 1040ez form 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 gov 1040ez form See chapter 4 of Publication 463 for more information. Irs gov 1040ez form 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 gov 1040ez form You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Irs gov 1040ez form For more information about depreciation, see Publication 946. Irs gov 1040ez form 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 gov 1040ez form Generally, you must file Form 2106 or Form 2106-EZ to claim these expenses. Irs gov 1040ez form Travel expenses. Irs gov 1040ez form   Travel expenses are those incurred while traveling away from home for your employer. Irs gov 1040ez form You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Irs gov 1040ez form Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment. Irs gov 1040ez form   Travel expenses may include: The cost of getting to and from your business destination (air, rail, bus, car, etc. Irs gov 1040ez form ), Meals and lodging while away from home, Taxi fares, Baggage charges, and Cleaning and laundry expenses. Irs gov 1040ez form   Travel expenses are discussed more fully in chapter 1 of Publication 463. Irs gov 1040ez form Temporary work assignment. Irs gov 1040ez form    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 gov 1040ez form Indefinite work assignment. Irs gov 1040ez form   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 gov 1040ez form 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 gov 1040ez form Federal crime investigation and prosecution. Irs gov 1040ez form   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 gov 1040ez form 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 gov 1040ez form   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 gov 1040ez form Armed Forces reservists traveling more than 100 miles from home. Irs gov 1040ez form   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 gov 1040ez form 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 gov 1040ez form The balance, if any, is reported on Schedule A. Irs gov 1040ez form   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 gov 1040ez form   For more information on travel expenses, see Publication 463. Irs gov 1040ez form Local transportation expenses. Irs gov 1040ez form   Local transportation expenses are the expenses of getting from one workplace to another when you are not traveling away from home. Irs gov 1040ez form They include the cost of transportation by air, rail, bus, taxi, and the cost of using your car. Irs gov 1040ez form   You can choose to use the standard mileage rate to figure your car expenses. Irs gov 1040ez form The 2013 rate for business use of a vehicle is 56½ cents per mile. Irs gov 1040ez form    In general, the costs of commuting between your residence and your place of business are nondeductible. Irs gov 1040ez form Work at two places in a day. Irs gov 1040ez form   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 gov 1040ez form Temporary work location. Irs gov 1040ez form   You can deduct expenses incurred in going between your home and a temporary work location if at least one of the following applies. Irs gov 1040ez form The work location is outside the metropolitan area where you live and normally work. Irs gov 1040ez form You have at least one regular work location (other than your home) for the same trade or business. Irs gov 1040ez form (If this applies, the distance between your home and the temporary work location does not matter. Irs gov 1040ez form )   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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form For more information, see chapter 1 of Publication 463. Irs gov 1040ez form Home office. Irs gov 1040ez form   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 gov 1040ez form (In this situation, whether the other workplace is temporary or regular and its distance from your home do not matter. Irs gov 1040ez form ) See Home Office , earlier, for a discussion on the use of your home as your principal place of business. Irs gov 1040ez form Meals and entertainment. Irs gov 1040ez form   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 gov 1040ez form 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 gov 1040ez form   You can deduct only 50% of your business-related meal and entertainment expenses unless the expenses meet certain exceptions. Irs gov 1040ez form You apply this 50% limit before you apply the 2%-of-adjusted-gross-income limit. Irs gov 1040ez form Meals when subject to “hours of service” limits. Irs gov 1040ez form   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 gov 1040ez form You apply this 80% limit before you apply the 2%-of-adjusted-gross-income limit. Irs gov 1040ez form Gift expenses. Irs gov 1040ez form   You can generally deduct up to $25 of business gifts you give to any one individual during the year. Irs gov 1040ez form The following items do not count toward the $25 limit. Irs gov 1040ez form Identical, widely distributed items costing $4 or less that have your name clearly and permanently imprinted. Irs gov 1040ez form Signs, racks, and promotional materials to be displayed on the business premises of the recipient. Irs gov 1040ez form Local lodging. Irs gov 1040ez form   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 gov 1040ez form   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 gov 1040ez form Additional information. Irs gov 1040ez form    See Publication 463 for more information on travel, transportation, meal, entertainment, and gift expenses, and reimbursements for these expenses. Irs gov 1040ez form Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Irs gov 1040ez form You can also deduct assessments for benefit payments to unemployed union members. Irs gov 1040ez form However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Irs gov 1040ez form Also, you cannot deduct contributions to a pension fund even if the union requires you to make the contributions. Irs gov 1040ez form You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Irs gov 1040ez form See Lobbying Expenses under Nondeductible Expenses, later. Irs gov 1040ez form Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Irs gov 1040ez form You must wear them as a condition of your employment. Irs gov 1040ez form The clothes are not suitable for everyday wear. Irs gov 1040ez form It is not enough that you wear distinctive clothing. Irs gov 1040ez form The clothing must be specifically required by your employer. Irs gov 1040ez form Nor is it enough that you do not, in fact, wear your work clothes away from work. Irs gov 1040ez form The clothing must not be suitable for taking the place of your regular clothing. Irs gov 1040ez form 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 gov 1040ez form ). Irs gov 1040ez form Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Irs gov 1040ez form 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 gov 1040ez form Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Irs gov 1040ez form Protective clothing. Irs gov 1040ez form   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 gov 1040ez form   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 gov 1040ez form Military uniforms. Irs gov 1040ez form   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Irs gov 1040ez form 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 gov 1040ez form In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Irs gov 1040ez form   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 gov 1040ez form   If you are a student at an armed forces academy, you cannot deduct the cost of your uniforms if they replace regular clothing. Irs gov 1040ez form However, you can deduct the cost of insignia, shoulder boards, and related items. Irs gov 1040ez form    You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Irs gov 1040ez form 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 gov 1040ez form It maintains or improves skills required in your present work. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form If your education qualifies, you can deduct expenses for tuition, books, supplies, laboratory fees, and similar items, and certain transportation costs. Irs gov 1040ez form 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 gov 1040ez form Travel as education. Irs gov 1040ez form   You cannot deduct the cost of travel that in itself constitutes a form of education. Irs gov 1040ez form 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 gov 1040ez form More information. Irs gov 1040ez form    See Publication 970, Tax Benefits for Education, for a complete discussion of the deduction for work-related education expenses. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form Tax Preparation Fees You can usually deduct tax preparation fees on the return for the year in which you pay them. Irs gov 1040ez form Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Irs gov 1040ez form These fees include the cost of tax preparation software programs and tax publications. Irs gov 1040ez form They also include any fee you paid for electronic filing of your return. Irs gov 1040ez form See Tax preparation fees under How To Report, later. Irs gov 1040ez form Other Expenses You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form These other expenses include the following items. Irs gov 1040ez form Appraisal fees for a casualty loss or charitable contribution. Irs gov 1040ez form Casualty and theft losses from property used in performing services as an employee. Irs gov 1040ez form Clerical help and office rent in caring for investments. Irs gov 1040ez form Depreciation on home computers used for investments. Irs gov 1040ez form Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust. Irs gov 1040ez form Fees to collect interest and dividends. Irs gov 1040ez form Hobby expenses, but generally not more than hobby income. Irs gov 1040ez form Indirect miscellaneous deductions from pass-through entities. Irs gov 1040ez form Investment fees and expenses. Irs gov 1040ez form Legal fees related to producing or collecting taxable income or getting tax advice. Irs gov 1040ez form Loss on deposits in an insolvent or bankrupt financial institution. Irs gov 1040ez form Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you. Irs gov 1040ez form Repayments of income. Irs gov 1040ez form Repayments of social security benefits. Irs gov 1040ez form Safe deposit box rental, except for storing jewelry and other personal effects. Irs gov 1040ez form Service charges on dividend reinvestment plans. Irs gov 1040ez form Tax advice fees. Irs gov 1040ez form Trustee's fees for your IRA, if separately billed and paid. Irs gov 1040ez form If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses, later, under Nondeductible Expenses. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form First report the loss in Section B of Form 4684, Casualties and Thefts. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form The fees are deductible on the return for the year in which you paid them. Irs gov 1040ez form For example, fees charged to payments made in 2013 can be claimed on the 2013 tax return. Irs gov 1040ez form 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 gov 1040ez form You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Irs gov 1040ez form 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 gov 1040ez form For more information on depreciation, see Publication 946. Irs gov 1040ez form 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 gov 1040ez form Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Irs gov 1040ez form 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 gov 1040ez form For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Irs gov 1040ez form 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 gov 1040ez form But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Irs gov 1040ez form You must add the fee to the cost of the property. Irs gov 1040ez form You cannot deduct the fee you pay to a broker to sell securities. Irs gov 1040ez form You can use the fee only to figure gain or loss from the sale. Irs gov 1040ez form See the instructions for Schedule D (Form 1040) for information on how to report the fee. Irs gov 1040ez form Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Irs gov 1040ez form A hobby is not a business because it is not carried on to make a profit. Irs gov 1040ez form See Not-for-Profit Activities in chapter 1 of Publication 535. Irs gov 1040ez form Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Irs gov 1040ez form Deductions of pass-through entities are passed through to the partners or shareholders. Irs gov 1040ez form 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 gov 1040ez form Example. Irs gov 1040ez form You are a member of an investment club that is formed solely to invest in securities. Irs gov 1040ez form The club is treated as a partnership. Irs gov 1040ez form The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Irs gov 1040ez form In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Irs gov 1040ez form 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 gov 1040ez form Publicly offered mutual funds. Irs gov 1040ez form   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Irs gov 1040ez form 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 gov 1040ez form   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 gov 1040ez form This net figure is the amount you report on your return as income. Irs gov 1040ez form 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 gov 1040ez form Information returns. Irs gov 1040ez form   You should receive information returns from pass-through entities. Irs gov 1040ez form Partnerships and S corporations. Irs gov 1040ez form   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 gov 1040ez form Nonpublicly offered mutual funds. Irs gov 1040ez form   These funds will send you a Form 1099-DIV, or a substitute form, showing your share of gross income and investment expenses. Irs gov 1040ez form You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). Irs gov 1040ez form See Tax Preparation Fees, earlier. Irs gov 1040ez form Unlawful discrimination claims. Irs gov 1040ez form   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 gov 1040ez form S. Irs gov 1040ez form Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. Irs gov 1040ez form 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 gov 1040ez form See Publication 525 for more information. Irs gov 1040ez form Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Irs gov 1040ez form 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 gov 1040ez form If elected, the casualty loss is subject to certain deduction limitations. Irs gov 1040ez form The election is made on Form 4684. Irs gov 1040ez form Once you make this choice, you cannot change it without IRS approval. Irs gov 1040ez form If none of the deposit is federally insured, you can deduct the loss in either of the following ways. Irs gov 1040ez form As an ordinary loss (as a miscellaneous itemized deduction subject to the 2% limit). Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form As a casualty loss. Irs gov 1040ez form Report it on Form 4684 first and then on Schedule A (Form 1040). Irs gov 1040ez form See Publication 547 for details. Irs gov 1040ez form As a nonbusiness bad debt. Irs gov 1040ez form Report it on Schedule D (Form 1040). Irs gov 1040ez form If any part of the deposit is federally insured, you can deduct the loss only as a casualty loss. Irs gov 1040ez form Exception. Irs gov 1040ez form   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 gov 1040ez form For a definition of “related,” see Deposit in Insolvent or Bankrupt Financial Institution in chapter 4 of Publication 550. Irs gov 1040ez form Actual loss different from estimated loss. Irs gov 1040ez form   If you make this choice and your actual loss is less than your estimated loss, you must include the excess in income. Irs gov 1040ez form See Recoveries in Publication 525. Irs gov 1040ez form If your actual loss is more than your estimated loss, treat the excess loss as explained under Choice not made, next. Irs gov 1040ez form Choice not made. Irs gov 1040ez form   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 gov 1040ez form See Nonbusiness Bad Debts in chapter 4 of Publication 550. Irs gov 1040ez form 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 gov 1040ez form For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Irs gov 1040ez form 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 gov 1040ez form If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Irs gov 1040ez form If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount of your benefits for the year. Irs gov 1040ez form 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 gov 1040ez form If the deduction is more than $3,000, you will have to use a special computation to figure your tax. Irs gov 1040ez form See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Irs gov 1040ez form 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 gov 1040ez form You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Irs gov 1040ez form Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Irs gov 1040ez form They are not subject to the 2% limit. Irs gov 1040ez form Report these items on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Irs gov 1040ez form List of Deductions Amortizable premium on taxable bonds. Irs gov 1040ez form Casualty and theft losses from income-producing property. Irs gov 1040ez form Federal estate tax on income in respect of a decedent. Irs gov 1040ez form Gambling losses up to the amount of gambling winnings. Irs gov 1040ez form Impairment-related work expenses of persons with disabilities. Irs gov 1040ez form Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Irs gov 1040ez form Losses from Ponzi-type investment schemes. Irs gov 1040ez form Repayments of more than $3,000 under a claim of right. Irs gov 1040ez form Unrecovered investment in an annuity. Irs gov 1040ez form 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 gov 1040ez form You can elect to amortize the premium on taxable bonds. Irs gov 1040ez form The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Irs gov 1040ez form Pre-1998 election to amortize bond premium. Irs gov 1040ez form   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 gov 1040ez form Bonds acquired after October 22, 1986, and before 1988. Irs gov 1040ez form   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 gov 1040ez form Bonds acquired before October 23, 1986. Irs gov 1040ez form   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2% limit. Irs gov 1040ez form Deduction for excess premium. Irs gov 1040ez form   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 gov 1040ez form If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form    Pre-1998 choice to amortize bond premium. Irs gov 1040ez form 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 gov 1040ez form More information. Irs gov 1040ez form    For more information on bond premium, see Bond Premium Amortization in chapter 3 of Publication 550. Irs gov 1040ez form 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 gov 1040ez form First report the loss in Section B of Form 4684. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form For more information on casualty and theft losses, see Publication 547. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form See Publication 559 for information about figuring the amount of this deduction. Irs gov 1040ez form 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 gov 1040ez form You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Irs gov 1040ez form You cannot deduct gambling losses that are more than your winnings. Irs gov 1040ez form Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR). Irs gov 1040ez form You cannot reduce your gambling winnings by your gambling losses and report the difference. Irs gov 1040ez form 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 gov 1040ez form Therefore, your records should show your winnings separately from your losses. Irs gov 1040ez form Diary of winnings and losses. Irs gov 1040ez form You must keep an accurate diary or similar record of your losses and winnings. Irs gov 1040ez form Your diary should contain at least the following information. Irs gov 1040ez form The date and type of your specific wager or wagering activity. Irs gov 1040ez form The name and address or location of the gambling establishment. Irs gov 1040ez form The names of other persons present with you at the gambling establishment. Irs gov 1040ez form The amount(s) you won or lost. Irs gov 1040ez form Proof of winnings and losses. Irs gov 1040ez form   In addition to your diary, you should also have other documentation. Irs gov 1040ez form 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 gov 1040ez form   For specific wagering transactions, you can use the following items to support your winnings and losses. Irs gov 1040ez form    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. Irs gov 1040ez form They are not all-inclusive. Irs gov 1040ez form Your tax liability depends on your particular facts and circumstances. Irs gov 1040ez form Keno. Irs gov 1040ez form   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 gov 1040ez form Slot machines. Irs gov 1040ez form   A record of the machine number and all winnings by date and time the machine was played. Irs gov 1040ez form Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc. Irs gov 1040ez form ). Irs gov 1040ez form   The number of the table at which you were playing. Irs gov 1040ez form Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage. Irs gov 1040ez form Bingo. Irs gov 1040ez form   A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Irs gov 1040ez form Supplemental records include any receipts from the casino, parlor, etc. Irs gov 1040ez form Racing (horse, harness, dog, etc. Irs gov 1040ez form ). Irs gov 1040ez form   A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Irs gov 1040ez form Supplemental records include unredeemed tickets and payment records from the racetrack. Irs gov 1040ez form Lotteries. Irs gov 1040ez form   A record of ticket purchases, dates, winnings, and losses. Irs gov 1040ez form Supplemental records include unredeemed tickets, payment slips, and winnings statements. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form Example. Irs gov 1040ez form You are blind. Irs gov 1040ez form You must use a reader to do your work. Irs gov 1040ez form 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 gov 1040ez form The reader's services are only for your work. Irs gov 1040ez form You can deduct your expenses for the reader as impairment-related work expenses. Irs gov 1040ez form Self-employed. Irs gov 1040ez form   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 gov 1040ez form See Impairment-related work expenses. Irs gov 1040ez form , later under How To Report. Irs gov 1040ez form 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 gov 1040ez form S. Irs gov 1040ez form trade or business). Irs gov 1040ez form It is not subject to the passive activity limitations. Irs gov 1040ez form 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 gov 1040ez form See Publication 463 for more information. Irs gov 1040ez form 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 gov 1040ez form If you are an employee, complete Form 2106 or Form 2106-EZ. Irs gov 1040ez form See Publication 463 for more information. Irs gov 1040ez form 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 gov 1040ez form You figure the deductible loss in Section B of Form 4684. Irs gov 1040ez form 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 gov 1040ez form Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Irs gov 1040ez form You do not need to complete Appendix A. Irs gov 1040ez form See the Form 4684 instructions and Publication 547, Casualties, Disasters, and Thefts, for more information. Irs gov 1040ez form 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 gov 1040ez form See Repayments in Publication 525 for more information. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities. Irs gov 1040ez form Nondeductible Expenses You cannot deduct the following expenses. Irs gov 1040ez form List of Nondeductible Expenses Adoption expenses. Irs gov 1040ez form Broker's commissions. Irs gov 1040ez form Burial or funeral expenses, including the cost of a cemetery lot. Irs gov 1040ez form Campaign expenses. Irs gov 1040ez form Capital expenses. Irs gov 1040ez form Check-writing fees. Irs gov 1040ez form Club dues. Irs gov 1040ez form Commuting expenses. Irs gov 1040ez form Fees and licenses, such as car licenses, marriage licenses, and dog tags. Irs gov 1040ez form Fines and penalties, such as parking tickets. Irs gov 1040ez form Health spa expenses. Irs gov 1040ez form Hobby losses—but see Hobby Expenses, earlier. Irs gov 1040ez form Home repairs, insurance, and rent. Irs gov 1040ez form Home security system. Irs gov 1040ez form Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535. Irs gov 1040ez form Investment-related seminars. Irs gov 1040ez form Life insurance premiums paid by the insured. Irs gov 1040ez form Lobbying expenses. Irs gov 1040ez form Losses from the sale of your home, furniture, personal car, etc. Irs gov 1040ez form Lost or misplaced cash or property. Irs gov 1040ez form Lunches with co-workers. Irs gov 1040ez form Meals while working late. Irs gov 1040ez form Medical expenses as business expenses other than medical examinations required by your employer. Irs gov 1040ez form Personal disability insurance premiums. Irs gov 1040ez form Personal legal expenses. Irs gov 1040ez form Personal, living, or family expenses. Irs gov 1040ez form Political contributions. Irs gov 1040ez form Professional accreditation fees. Irs gov 1040ez form Professional reputation, expenses to improve. Irs gov 1040ez form Relief fund contributions. Irs gov 1040ez form Residential telephone line. Irs gov 1040ez form Stockholders' meeting, expenses of attending. Irs gov 1040ez form Tax-exempt income, expenses of earning or collecting. Irs gov 1040ez form The value of wages never received or lost vacation time. Irs gov 1040ez form Travel expenses for another individual. Irs gov 1040ez form Voluntary unemployment benefit fund contributions. Irs gov 1040ez form Wristwatches. Irs gov 1040ez form Adoption Expenses You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. Irs gov 1040ez form For details, see Form 8839, Qualified Adoption Expenses. Irs gov 1040ez form Commissions Commissions paid on the purchase of securities are not deductible, either as business or nonbusiness expenses. Irs gov 1040ez form Instead, these fees must be added to the taxpayer's cost of the securities. Irs gov 1040ez form Commissions paid on the sale are deductible as business expenses only by dealers. Irs gov 1040ez form 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 gov 1040ez form These include qualification and registration fees for primary elections. Irs gov 1040ez form Legal fees. Irs gov 1040ez form   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Irs gov 1040ez form 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 gov 1040ez form If you use such property in your work, you may be able to take a depreciation deduction. Irs gov 1040ez form See Publication 946. Irs gov 1040ez form If the property is a car used in your work, also see Publication 463. Irs gov 1040ez form 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 gov 1040ez form Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Irs gov 1040ez form This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Irs gov 1040ez form 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 gov 1040ez form Dues paid to airline, hotel, and luncheon clubs are not deductible. Irs gov 1040ez form Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Irs gov 1040ez form 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 gov 1040ez form Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Irs gov 1040ez form This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Irs gov 1040ez form Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Irs gov 1040ez form 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 gov 1040ez form Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Irs gov 1040ez form 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 gov 1040ez form See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587. Irs gov 1040ez form Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Irs gov 1040ez form Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Irs gov 1040ez form You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Irs gov 1040ez form See Publication 504, Divorced or Separated Individuals, for information on alimony. Irs gov 1040ez form Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Irs gov 1040ez form 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 gov 1040ez form Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Irs gov 1040ez form Covered executive branch official. Irs gov 1040ez form   A covered executive branch official, for the purpose of (4) above, is any of the following officials. Irs gov 1040ez form The President. Irs gov 1040ez form The Vice President. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form Dues used for lobbying. Irs gov 1040ez form   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 gov 1040ez form Exceptions. Irs gov 1040ez form   You can deduct certain lobbying expenses if they are ordinary and necessary expenses of carrying on your trade or business. Irs gov 1040ez form You can deduct expenses for attempting to influence the legislation of any local council or similar governing body (local legislation). Irs gov 1040ez form An Indian tribal government is considered a local council or similar governing body. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form Payments by the other person to you for lobbying activities cannot be deducted. Irs gov 1040ez form Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Irs gov 1040ez form 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 gov 1040ez form See Publication 547. Irs gov 1040ez form Example. Irs gov 1040ez form A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Irs gov 1040ez form The diamond falls from the ring and is never found. Irs gov 1040ez form The loss of the diamond is a casualty. Irs gov 1040ez form Lunches With Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Irs gov 1040ez form See Publication 463 for information on deductible expenses while traveling away from home. Irs gov 1040ez form Meals While Working Late You cannot deduct the cost of meals while working late. Irs gov 1040ez form 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 gov 1040ez form See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home. Irs gov 1040ez form Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Irs gov 1040ez form Custody of children. Irs gov 1040ez form Breach of promise to marry suit. Irs gov 1040ez form Civil or criminal charges resulting from a personal relationship. Irs gov 1040ez form Damages for personal injury (except certain whistleblower claims and unlawful discrimination claims). Irs gov 1040ez form For more information about unlawful discrimination claims, see Deductions Subject to the 2% Limit, earlier. Irs gov 1040ez form Preparation of a title (or defense or perfection of a title). Irs gov 1040ez form Preparation of a will. Irs gov 1040ez form Property claims or property settlement in a divorce. Irs gov 1040ez form You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Irs gov 1040ez form Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Irs gov 1040ez form Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Irs gov 1040ez form Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Irs gov 1040ez form Accounting certificate fees paid for the initial right to practice accounting. Irs gov 1040ez form Bar exam fees and incidental expenses in securing initial admission to the bar. Irs gov 1040ez form Medical and dental license fees paid to get initial licensing. Irs gov 1040ez form Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Irs gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form 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 gov 1040ez form You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Irs gov 1040ez form Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Irs gov 1040ez form You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities. Irs gov 1040ez form If you have expenses to p