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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

Tax Forms Online

File 1040xAmended Tax ReturnsFill Out 1040ez OnlineDo You Need To File A Tax Return In 2014Form 1040nr Ez 2012Need To Do 2011 TaxesFree Fillable 1040x Form2012 Tax Software DownloadsTax Cut Free FileFree Taxes OnlineTurbotax FreeEz Form OnlineIrs Form 1040a Or 1040ezArmy One Source TaxesIrs 1040 FormH&r Block Free Tax FormAmend Prior Years TaxesWheres My Amended ReturnFree 2010 Tax FormsCan I E File A 2012 Tax Return1080 Ez FormFree Online State TaxesAdd 1098 T Information 1040x FormWhere To File 1040x For 2012Federal Tax Forms 2012 EzH&r Block Tax OnlineIrs Amended ReturnCan I File My 1040x OnlineState Tax ReturnsH & R Block Tax SoftwareIrse FileIrs 2012 Tax Forms 1040ezTurbo Tax 1040nrAmend 2013 Tax ReturnAmend TaxesFree Tax ServiceTurbotax For MilitaryAmend My Federal Tax ReturnFree Tax UsaTaxes Supplemental Security Income Ssi

Tax Forms Online

Tax forms online 2. Tax forms online   Accounting Methods Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Accounting MethodsCash Method Accrual Method Farm Inventory Cash Versus Accrual Method Special Methods of Accounting Combination Method Changes in Methods of Accounting Introduction You must use an accounting method that clearly shows your income and expenses. Tax forms online You must also figure your taxable income and file an income tax return for an annual accounting period called a tax year. Tax forms online This chapter discusses accounting methods. Tax forms online For information on accounting periods, see Publication 538, Accounting Periods and Methods, and the Instructions for Form 1128, Application To Adopt, Change, or Retain a Tax Year. Tax forms online Topics - This chapter discusses: Cash method Accrual method Farm inventory Special methods of accounting Changes in methods of accounting Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 535 Business Expenses Form (and Instructions) 1128 Application To Adopt, Change, or Retain a Tax Year 3115 Application for Change in Accounting Method See chapter 16 for information about getting publications and forms. Tax forms online Accounting Methods An accounting method is a set of rules used to determine when and how your income and expenses are reported on your tax return. Tax forms online Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item. Tax forms online A material item is one that affects the proper time for inclusion of income or allowance of a deduction. Tax forms online An item considered material for financial statement purposes is generally also considered material for income tax purposes. Tax forms online See Publication 538 for more information. Tax forms online You generally choose an accounting method for your farm business when you file your first income tax return that includes a Schedule F (Form 1040), Profit or Loss From Farming. Tax forms online If you later want to change your accounting method, you generally must get IRS approval. Tax forms online How to obtain IRS approval is discussed later under Changes in Methods of Accounting . Tax forms online Types of accounting methods. Tax forms online   Generally, you can use any of the following accounting methods. Tax forms online Each method is discussed in detail below. Tax forms online Cash method. Tax forms online Accrual method. Tax forms online Special methods of accounting for certain items of income and expenses. Tax forms online Combination (hybrid) method using elements of two or more of the above. Tax forms online Business and other items. Tax forms online   You can account for business and personal items using different accounting methods. Tax forms online For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. Tax forms online Two or more businesses. Tax forms online   If you operate two or more separate and distinct businesses, you can use a different accounting method for each business. Tax forms online Generally, no business is separate and distinct unless a complete and separate set of books and records is maintained for each business. Tax forms online Cash Method Most farmers use the cash method because they find it easier to keep records using the cash method. Tax forms online However, certain farm corporations and partnerships and all tax shelters must use an accrual method of accounting. Tax forms online See Accrual Method Required , later. Tax forms online Income Under the cash method, include in your gross income all items of income you actually or constructively received during the tax year. Tax forms online Items of income include money received as well as property or services received. Tax forms online If you receive property or services, you must include the fair market value (FMV) of the property or services in income. Tax forms online See chapter 3 for information on how to report farm income on your income tax return. Tax forms online Constructive receipt. Tax forms online   Income is constructively received when an amount is credited to your account or made available to you without restriction. Tax forms online You do not need to have possession of the income for it to be treated as income for the tax year. Tax forms online If you authorize someone to be your agent and receive income for you, you are considered to have received the income when your agent receives it. Tax forms online Income is not constructively received if your receipt of the income is subject to substantial restrictions or limitations. Tax forms online Direct payments and counter-cyclical payments. Tax forms online   If you received direct payments or counter-cyclical payments under Subtitle A or C of the Farm Security and Rural Investment Act of 2002, you will not be considered to have constructively received a payment merely because you had the option to receive it in the year before it is required to be paid. Tax forms online Delaying receipt of income. Tax forms online   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. Tax forms online You must report the income in the year the money or property is received or made available to you without restriction. Tax forms online Example. Tax forms online Frances Jones, a farmer, was entitled to receive a $10,000 payment on a grain contract in December 2013. Tax forms online She was told in December that her payment was available. Tax forms online She requested not to be paid until January 2014. Tax forms online However, she must still include this payment in her 2013 income because it was made available to her in 2013. Tax forms online Debts paid by another person or canceled. Tax forms online   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. Tax forms online If you receive income in this way, you constructively receive the income when the debt is canceled or paid. Tax forms online See Cancellation of Debt in chapter 3. Tax forms online Deferred payment contract. Tax forms online   If you sell an item under a deferred payment contract that calls for payment in a future year, there is no constructive receipt in the year of sale. Tax forms online However, if the sales contract states that you have the right to the proceeds of the sale from the buyer at any time after delivery of the item, then you must include the sales price in income in the year of the sale, regardless of when you actually receive payment. Tax forms online Example. Tax forms online You are a farmer who uses the cash method and a calendar tax year. Tax forms online You sell grain in December 2013 under a bona fide arm's-length contract that calls for payment in 2014. Tax forms online You include the proceeds from the sale in your 2014 gross income since that is the year payment is received. Tax forms online However, if the contract states that you have the right to the proceeds from the buyer at any time after the grain is delivered, you must include the sales price in your 2013 income, regardless of when you actually receive payment. Tax forms online Repayment of income. Tax forms online   If you include an amount in income and in a later year you have to repay all or part of it, then you can usually deduct the repayment in the year repaid. Tax forms online If the repayment is more than $3,000, a special rule applies. Tax forms online For details, see Repayments in chapter 11 of Publication 535, Business Expenses. Tax forms online Expenses Under the cash method, generally you deduct expenses in the tax year you pay them. Tax forms online This includes business expenses for which you contest liability. Tax forms online However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained under Uniform Capitalization Rules in chapter 6. Tax forms online See chapter 4 for information on how to deduct farm business expenses on your income tax return. Tax forms online Prepayment. Tax forms online   Generally, you cannot deduct expenses paid in advance. Tax forms online This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Tax forms online Example. Tax forms online On November 1, 2013, you signed and paid $3,600 for a 3-year (36-month) insurance contract for equipment. Tax forms online In 2013, you are allowed to deduct only $200 (2/36 x $3,600) of the cost of the policy that is attributable to 2013. Tax forms online In 2014, you'll be able to deduct $1,200 (12/36 x $3,600); in 2015, you'll be able to deduct $1,200 (12/36 x $3,600); and in 2016 you'll be able to deduct the remaining balance of $1,000. Tax forms online An exception applies if the expense qualifies for the 12-month rule. Tax forms online See Publication 538 for more information and examples. Tax forms online See chapter 4 for special rules for prepaid farm supplies and prepaid livestock feed. Tax forms online Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. Tax forms online The purpose of an accrual method of accounting is to correctly match income and expenses. Tax forms online Certain businesses engaged in farming must use an accrual method of accounting for its farm business and for sales and purchases of inventory items. Tax forms online See Accrual Method Required and Farm Inventory , later. Tax forms online Income Generally, you include an amount in income for the tax year in which all events that fix your right to receive the income have occurred, and you can determine the amount with reasonable accuracy. Tax forms online Under this rule, include an amount in income on the earliest of the following dates. Tax forms online When you receive payment. Tax forms online When the income amount is due to you. Tax forms online When you earn the income. Tax forms online When title passes. Tax forms online If you use an accrual method of accounting, complete Part III of Schedule F (Form 1040) to report your income. Tax forms online Inventory. Tax forms online   If you keep an inventory, generally you must use an accrual method of accounting to determine your gross income. Tax forms online An inventory is necessary to clearly show income when the production, purchase, or sale of merchandise is an income-producing factor. Tax forms online See Publication 538 for more information. Tax forms online Also see Farm Inventory , later, for more information on items that must be included in inventory by farmers and inventory valuation methods for farmers. Tax forms online Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both of the following apply. Tax forms online The all-events test has been met. Tax forms online This test is met when: All events have occurred that fix the fact that you have a liability, and The amount of the liability can be determined with reasonable accuracy. Tax forms online Economic performance has occurred. Tax forms online Economic performance. Tax forms online   Generally, you cannot deduct or capitalize a business expense until economic performance occurs. Tax forms online If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. Tax forms online If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. Tax forms online Example. Tax forms online Jane, who is a farmer, uses a calendar tax year and an accrual method of accounting. Tax forms online She entered into a contract with ABC Farm Consulting in 2012. Tax forms online The contract stated that Jane pay ABC Farm Consulting $2,000 in December 2012. Tax forms online It further stipulates that ABC Farm Consulting will develop a plan for integrating her farm with a larger farm operation based in a neighboring state by March 1, 2013. Tax forms online Jane paid ABC Farm Consulting $2,000 in December 2012. Tax forms online Integration of operations according to the plan began in May 2013 and they completed the integration in December 2013. Tax forms online Economic performance for Jane's liability in the contract occurs as the services are provided. Tax forms online Jane incurs the $2,000 cost in 2013. Tax forms online An exception to the economic performance rule allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. Tax forms online For more information, see Economic Performance in Publication 538. Tax forms online Special rule for related persons. Tax forms online   Business expenses and interest owed to a related person who uses the cash method of accounting are not deductible until you make the payment and the corresponding amount is includible in the related person's gross income. Tax forms online Determine the relationship for this rule as of the end of the tax year for which the expense or interest would otherwise be deductible. Tax forms online For more information, see Internal Revenue Code section 267. Tax forms online Accrual Method Required Generally, the following businesses, if engaged in farming, must use an accrual method of accounting. Tax forms online A corporation (other than a family corporation) that had gross receipts of more than $1,000,000 for any tax year beginning after 1975. Tax forms online A family corporation that had gross receipts of more than $25,000,000 for any tax year beginning after 1985. Tax forms online A partnership with a corporation as a partner, if that corporation meets the requirements of (1) or (2) above. Tax forms online A tax shelter. Tax forms online Note. Tax forms online Items (1), (2), and (3) above do not apply to an S corporation or a business operating a nursery or sod farm, or the raising or harvesting of trees (other than fruit and nut trees). Tax forms online Family corporation. Tax forms online   A family corporation is generally a corporation that meets one of the following ownership requirements. Tax forms online Members of the same family own at least 50% of the total combined voting power of all classes of stock entitled to vote and at least 50% of the total shares of all other classes of stock of the corporation. Tax forms online Members of two families have owned, directly or indirectly, since October 4, 1976, at least 65% of the total combined voting power of all classes of voting stock and at least 65% of the total shares of all other classes of the corporation's stock. Tax forms online Members of three families have owned, directly or indirectly, since October 4, 1976, at least 50% of the total combined voting power of all classes of voting stock and at least 50% of the total shares of all other classes of the corporation's stock. Tax forms online For more information on family corporations, see Internal Revenue Code section 447. Tax forms online Tax shelter. Tax forms online   A tax shelter is a partnership, noncorporate enterprise, or S corporation that meets either of the following tests. Tax forms online Its principal purpose is the avoidance or evasion of federal income tax. Tax forms online It is a farming syndicate. Tax forms online A farming syndicate is an entity that meets either of the following tests. Tax forms online Interests in the activity have been offered for sale in an offering required to be registered with a federal or state agency with the authority to regulate the offering of securities for sale. Tax forms online More than 35% of the losses during the tax year are allocable to limited partners or limited entrepreneurs. Tax forms online   A “limited partner” is one whose personal liability for partnership debts is limited to the money or other property the partner contributed or is required to contribute to the partnership. Tax forms online   A “limited entrepreneur” is one who has an interest in an enterprise other than as a limited partner and does not actively participate in the management of the enterprise. Tax forms online Farm Inventory If you are required to keep an inventory, you should keep a complete record of your inventory as part of your farm records. Tax forms online This record should show the actual count or measurement of the inventory. Tax forms online It should also show all factors that enter into its valuation, including quality and weight, if applicable. Tax forms online Hatchery business. Tax forms online   If you are in the hatchery business, and use an accrual method of accounting, you must include in inventory eggs in the process of incubation. Tax forms online Products held for sale. Tax forms online   All harvested and purchased farm products held for sale or for feed or seed, such as grain, hay, silage, concentrates, cotton, tobacco, etc. Tax forms online , must be included in inventory. Tax forms online Supplies. Tax forms online   Supplies acquired for sale or that become a physical part of items held for sale must be included in inventory. Tax forms online Deduct the cost of supplies in the year used or consumed in operations. Tax forms online Do not include incidental supplies in inventory as these are deductible in the year of purchase. Tax forms online Livestock. Tax forms online   Livestock held primarily for sale must be included in inventory. Tax forms online Livestock held for draft, breeding, or dairy purposes can either be depreciated or included in inventory. Tax forms online See also Unit-livestock-price method , later. Tax forms online If you are in the business of breeding and raising chinchillas, mink, foxes, or other fur-bearing animals, these animals are livestock for inventory purposes. Tax forms online Growing crops. Tax forms online   Generally, growing crops are not required to be included in inventory. Tax forms online However, if the crop has a preproductive period of more than 2 years, you may have to capitalize (or include in inventory) costs associated with the crop. Tax forms online See Uniform capitalization rules below. Tax forms online Also see Uniform Capitalization Rules in  chapter 6. Tax forms online Items to include in inventory. Tax forms online   Your inventory should include all items held for sale, or for use as feed, seed, etc. Tax forms online , whether raised or purchased, that are unsold at the end of the year. Tax forms online Uniform capitalization rules. Tax forms online   The following applies if you are required to use an accrual method of accounting. Tax forms online The uniform capitalization rules apply to all costs of raising a plant, even if the preproductive period of raising a plant is 2 years or less. Tax forms online The costs of animals are subject to the uniform capitalization rules. Tax forms online Inventory valuation methods. Tax forms online   The following methods, described below, are those generally available for valuing inventory. Tax forms online The method you use must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. Tax forms online Cost. Tax forms online Lower of cost or market. Tax forms online Farm-price method. Tax forms online Unit-livestock-price method. Tax forms online Cost and lower of cost or market methods. Tax forms online   See Publication 538 for information on these valuation methods. Tax forms online If you value your livestock inventory at cost or the lower of cost or market, you do not need IRS approval to change to the unit-livestock-price method. Tax forms online However, if you value your livestock inventory using the farm-price method, then you must obtain permission from the IRS to change to the unit-livestock-price method. Tax forms online Farm-price method. Tax forms online   Under this method, each item, whether raised or purchased, is valued at its market price less the direct cost of disposition. Tax forms online Market price is the current price at the nearest market in the quantities you usually sell. Tax forms online Cost of disposition includes broker's commissions, freight, hauling to market, and other marketing costs. Tax forms online If you use this method, you must use it for your entire inventory, except that livestock can be inventoried under the unit-livestock-price method. Tax forms online Unit-livestock-price method. Tax forms online   This method recognizes the difficulty of establishing the exact costs of producing and raising each animal. Tax forms online You group or classify livestock according to type and age and use a standard unit price for each animal within a class or group. Tax forms online The unit price you assign should reasonably approximate the normal costs incurred in producing the animals in such classes. Tax forms online Unit prices and classifications are subject to approval by the IRS on examination of your return. Tax forms online You must annually reevaluate your unit livestock prices and adjust the prices upward or downward to reflect increases or decreases in the costs of raising livestock. Tax forms online IRS approval is not required for these adjustments. Tax forms online Any other changes in unit prices or classifications do require IRS approval. Tax forms online   If you use this method, include all raised livestock in inventory, regardless of whether they are held for sale or for draft, breeding, sport, or dairy purposes. Tax forms online This method accounts only for the increase in cost of raising an animal to maturity. Tax forms online It does not provide for any decrease in the animal's market value after it reaches maturity. Tax forms online Also, if you raise cattle, you are not required to inventory hay you grow to feed your herd. Tax forms online   Do not include sold or lost animals in the year-end inventory. Tax forms online If your records do not show which animals were sold or lost, treat the first animals acquired as sold or lost. Tax forms online The animals on hand at the end of the year are considered those most recently acquired. Tax forms online   You must include in inventory all livestock purchased primarily for sale. Tax forms online You can choose either to include in inventory or depreciate livestock purchased for draft, breeding, sport or dairy purposes. Tax forms online However, you must be consistent from year to year, regardless of the method you have chosen. Tax forms online You cannot change your method without obtaining approval from the IRS. Tax forms online   You must include in inventory animals purchased after maturity or capitalize them at their purchase price. Tax forms online If the animals are not mature at purchase, increase the cost at the end of each tax year according to the established unit price. Tax forms online However, in the year of purchase, do not increase the cost of any animal purchased during the last 6 months of the year. Tax forms online This “no increase” rule does not apply to tax shelters which must make an adjustment for any animal purchased during the year. Tax forms online It also does not apply to taxpayers that must make an adjustment to reasonably reflect the particular period in the year in which animals are purchased, if necessary to avoid significant distortions in income. Tax forms online Uniform capitalization rules. Tax forms online   A farmer can determine costs required to be allocated under the uniform capitalization rules by using the farm-price or unit-livestock-price inventory method. Tax forms online This applies to any plant or animal, even if the farmer does not hold or treat the plant or animal as inventory property. Tax forms online Cash Versus Accrual Method The following examples compare the cash and accrual methods of accounting. Tax forms online Example 1. Tax forms online You are a farmer who uses an accrual method of accounting. Tax forms online You keep your books on the calendar year basis. Tax forms online You sell grain in December 2013 but you are not paid until January 2014. Tax forms online Because the accrual method was used and 2013 was the tax year in which the grain was sold, you must both include the sales proceeds and deduct the costs incurred in producing the grain on your 2013 tax return. Tax forms online Example 2. Tax forms online Assume the same facts as in Example 1 except that you use the cash method and there was no constructive receipt of the sales proceeds in 2013. Tax forms online Under this method, you include the sales proceeds in income for 2014, the year you receive payment. Tax forms online Deduct the costs of producing the grain in the year you pay for them. Tax forms online Special Methods of Accounting There are special methods of accounting for certain items of income and expense. Tax forms online Crop method. Tax forms online   If you do not harvest and dispose of your crop in the same tax year that you plant it, you can, with IRS approval, use the crop method of accounting. Tax forms online You cannot use the crop method for any tax return, including your first tax return, unless you receive approval from the IRS. Tax forms online Under this method, you deduct the entire cost of producing the crop, including the expense of seed or young plants, in the year you realize income from the crop. Tax forms online    See chapter 4 for details on deducting the costs of operating a farm. Tax forms online Also see Regulations section 1. Tax forms online 162-12. Tax forms online Other special methods. Tax forms online   Other special methods of accounting apply to the following items. Tax forms online Amortization, see chapter 7. Tax forms online Casualties, see chapter 11. Tax forms online Condemnations, see chapter 11. Tax forms online Depletion, see chapter 7. Tax forms online Depreciation, see chapter 7. Tax forms online Farm business expenses, see chapter 4. Tax forms online Farm income, see chapter 3. Tax forms online Installment sales, see chapter 10. Tax forms online Soil and water conservation expenses, see chapter 5. Tax forms online Thefts, see chapter 11. Tax forms online Combination Method Generally, you can use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. Tax forms online However, the following restrictions apply. Tax forms online If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. Tax forms online If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. Tax forms online Changes in Methods of Accounting A change in your method of accounting includes a change in: Your overall method, such as from the cash method to an accrual method, and Your treatment of any material item, such as a change in your method of valuing inventory (for example, a change from the farm-price method to the unit-livestock-price method, discussed earlier). Tax forms online Generally, once you have set up your accounting method, you must receive approval from the IRS before you can change to another method of accounting. Tax forms online You may also have to pay a fee. Tax forms online To obtain approval, you must generally file Form 3115. Tax forms online There are instances when you can obtain automatic consent to change certain methods of accounting. Tax forms online See the List of Automatic Accounting Method Changes located in the Instructions for Form 3115. Tax forms online For more information on changes in methods of accounting, see Form 3115 and the Instructions for Form 3115. Tax forms online Also see Publication 538. Tax forms online Prev  Up  Next   Home   More Online Publications
Español

Better Business Bureaus (BBBs) are nonprofit organizations that encourage honest advertising and selling practices and are supported primarily by local businesses. They offer a variety of consumer services, including consumer education materials; business reports, particularly unanswered or unsettled complaints or other problems; mediation and arbitration services; and information about charities and other organizations that are seeking public donations. They also provide ratings (A, B, C, D, or F) of local companies to express the BBB's confidence that the company operates in a trustworthy manner and demonstrates a willingness to resolve customer concerns.

New Castle, DE

Website: Better Business Bureau

Email: info@delaware.bbb.org

Address: Better Business Bureau
60 Reads Way
New Castle, DE 19720

Phone Number: 302-221-5255

The Tax Forms Online

Tax forms online 4. Tax forms online   Retirement Savings Contributions Credit (Saver's Credit) Table of Contents What's New Introduction Full-time student. Tax forms online Adjusted gross income. Tax forms online Distributions received by spouse. Tax forms online Testing period. Tax forms online What's New Modified AGI limit for retirement savings contributions credit increased. Tax forms online  For 2013, you may be able to claim the retirement savings contributions credit if your modified AGI is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). Tax forms online Introduction You may be able to take a tax credit if you make eligible contributions (defined later) to a qualified retirement plan, an eligible deferred compensation plan, or an individual retirement arrangement (IRA). Tax forms online You may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). Tax forms online This credit could reduce the federal income tax you pay dollar for dollar. Tax forms online    Can you claim the credit?   If you make eligible contributions to a qualified retirement plan, an eligible deferred compensation plan, or an IRA, you can claim the credit if all of the following apply. Tax forms online You were born before January 2, 1996. Tax forms online You are not a full-time student (explained next). Tax forms online No one else, such as your parent(s), claims an exemption for you on their tax return. Tax forms online Your adjusted gross income (defined below) is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). Tax forms online Full-time student. Tax forms online   You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government. Tax forms online You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full time. Tax forms online Adjusted gross income. Tax forms online   This is generally the amount on line 38 of your 2013 Form 1040; line 22 of your 2013 Form 1040A; or line 37 of your 2013 Form 1040NR. Tax forms online However, you must add to that amount any exclusion or deduction claimed for the year for: Foreign earned income, Foreign housing costs, Income for bona fide residents of American Samoa, and Income from Puerto Rico. Tax forms online Eligible contributions. Tax forms online   These include: Contributions to a traditional or Roth IRA, Salary reduction contributions (elective deferrals, including amounts designated as after-tax Roth contributions) to: A 401(k) plan (including a SIMPLE 401(k)), A section 403(b) annuity, An eligible deferred compensation plan of a state or local government (a governmental 457 plan), A SIMPLE IRA plan, or A salary reduction SEP, and Contributions to a section 501(c)(18) plan. Tax forms online They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or section 403(b) annuity. Tax forms online For purposes of the credit, an employee contribution will be voluntary as long as it is not required as a condition of employment. Tax forms online Reducing eligible contributions. Tax forms online   Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included above under Eligible contributions. Tax forms online Also reduce your eligible contributions by any distribution from a Roth IRA that is not rolled over, even if the distribution is not taxable. Tax forms online   Do not reduce your eligible contributions by any of the following. Tax forms online The portion of any distribution which is not includible in income because it is a trustee-to-trustee transfer or a rollover distribution. Tax forms online Distributions that are taxable as the result of an in-plan rollover to your designated Roth account. Tax forms online Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if: The distribution is made before the due date (including extensions) of your tax return for that year, You do not take a deduction for the contribution, and The distribution includes any income attributable to the contribution. Tax forms online Loans from a qualified employer plan treated as a distribution. Tax forms online Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals). Tax forms online Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k). Tax forms online Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA. Tax forms online Distributions from a military retirement plan. Tax forms online Distributions from an inherited IRA by a nonspousal beneficiary. Tax forms online Distributions received by spouse. Tax forms online   Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit. Tax forms online Testing period. Tax forms online   The testing period consists of the year for which you claim the credit, the period after the end of that year and before the due date (including extensions) for filing your return for that year, and the 2 tax years before that year. Tax forms online Example. Tax forms online You and your spouse filed joint returns in 2011 and 2012, and plan to do so in 2013 and 2014. Tax forms online You received a taxable distribution from a qualified plan in 2011 and a taxable distribution from an eligible deferred compensation plan in 2012. Tax forms online Your spouse received taxable distributions from a Roth IRA in 2013 and tax-free distributions from a Roth IRA in 2014 before April 15. Tax forms online You made eligible contributions to an IRA in 2013 and you otherwise qualify for this credit. Tax forms online You must reduce the amount of your qualifying contributions in 2013 by the total of the distributions you received in 2011, 2012, 2013, and 2014. Tax forms online Maximum eligible contributions. Tax forms online   After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person. Tax forms online Effect on other credits. Tax forms online   The amount of this credit will not change the amount of your refundable tax credits. Tax forms online A refundable tax credit, such as the earned income credit or the refundable amount of your child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes. Tax forms online Maximum credit. Tax forms online   This is a nonrefundable credit. Tax forms online The amount of the credit in any year cannot be more than the amount of tax that you would otherwise pay (not counting any refundable credits) in any year. Tax forms online If your tax liability is reduced to zero because of other nonrefundable credits, such as the credit for child and dependent care expenses, then you will not be entitled to this credit. Tax forms online How to figure and report the credit. Tax forms online   The amount of the credit you can get is based on the contributions you make and your credit rate. Tax forms online Your credit rate can be as low as 10% or as high as 50%. Tax forms online Your credit rate depends on your income and your filing status. Tax forms online See Form 8880 to determine your credit rate. Tax forms online   The maximum contribution taken into account is $2,000 per person. Tax forms online On a joint return, up to $2,000 is taken into account for each spouse. Tax forms online   Figure the credit on Form 8880. Tax forms online Report the credit on line 50 of your Form 1040; line 32 of your Form 1040A; or line 47 of your Form 1040NR and attach Form 8880 to your return. Tax forms online Prev  Up  Next   Home   More Online Publications