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Tax Software 2012

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Tax Software 2012

Tax software 2012 6. Tax software 2012   Estimated Tax Table of Contents Who Must Make Estimated Tax Payments Estimated tax is a method used to pay tax on income that is not subject to withholding. Tax software 2012 This income includes self-employment income, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Tax software 2012 Income tax generally is withheld from pensions and annuity payments you receive. Tax software 2012 However, if the tax withheld from your pension (or other) income is not enough, you may have to pay estimated tax. Tax software 2012 If you do not pay enough tax through withholding, by making estimated tax payments, or both, you may be charged a penalty. Tax software 2012 Who Must Make Estimated Tax Payments If you had a tax liability for 2013, you may have to pay estimated tax for 2014. Tax software 2012 In most cases, you must pay estimated tax for 2014 if both of the following apply. Tax software 2012 You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Tax software 2012 You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Tax software 2012 The 2013 tax return must cover all 12 months. Tax software 2012 If all of your income will be subject to income tax withholding, you probably do not need to make estimated tax payments. Tax software 2012 For more information on estimated tax, see Publication 505. Tax software 2012 Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Severe Storms, Straight-line Winds and Flooding in Illinois

Updated 7/03/2013 to include Putnam and Warren counties.

Updated 5/31/2013 to include Brown, Calhoun, Clark,  Douglas, Henry, Pike, Whiteside, and Winnebago counties.

Updated 5/23/2013 to include Bureau, Crawford, Henderson, Knox, Livingston, Marshall, Mason, McDonough, Peoria, Rock Island, Schuyler, Stark, Tazewell and Woodford counties.

IL/KS/MO 2013-28, May. 14, 2013

CHICAGO — Victims of severe storms, straight-line winds, and flooding that began on April 16, 2013 in parts of Illinois may qualify for tax relief from the Internal Revenue Service.

The President has declared Brown, Bureau, Calhoun, Clark, Cook, Crawford, DeKalb, Douglas, DuPage, Fulton, Grundy, Henderson, Henry, Kane, Kendall, Knox, Lake, LaSalle, Livingston, Marshall, Mason, McDonough, McHenry, Peoria, Pike, Putnam, Rock Island, Schuyler, Stark, Tazewell,  Warren, Whiteside, Will, Winnebago and Woodford  counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after April 16, and on or before July 1, have been postponed to July 1, 2013. This includes the June 17 deadline for second quarter estimated tax payments.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after April 16, and on or before May 1, as long as the deposits are made by May 1, 2013.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until July 1 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after April 16 and on or before July 1.

The IRS also gives affected taxpayers until July 1 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after April 16 and on or before July 1.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after April 16 and on or before May 1provided the taxpayer makes these deposits by May 1.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Illinois/Severe Storms, Straight-line Winds, and Flooding” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

 

Related Information

Disaster Assistance and Emergency Relief for Individuals and Businesses

Recent IRS Disaster Relief Announcements

 

Page Last Reviewed or Updated: 03-Jul-2013

The Tax Software 2012

Tax software 2012 18. Tax software 2012   Alimony Table of Contents IntroductionSpouse or former spouse. Tax software 2012 Divorce or separation instrument. Tax software 2012 Useful Items - You may want to see: General RulesMortgage payments. Tax software 2012 Taxes and insurance. Tax software 2012 Other payments to a third party. Tax software 2012 Instruments Executed After 1984Payments to a third party. Tax software 2012 Exception. Tax software 2012 Substitute payments. Tax software 2012 Specifically designated as child support. Tax software 2012 Contingency relating to your child. Tax software 2012 Clearly associated with a contingency. Tax software 2012 How To Deduct Alimony Paid How To Report Alimony Received Recapture Rule Introduction This chapter discusses the rules that apply if you pay or receive alimony. Tax software 2012 It covers the following topics. Tax software 2012 What payments are alimony. Tax software 2012 What payments are not alimony, such as child support. Tax software 2012 How to deduct alimony you paid. Tax software 2012 How to report alimony you received as income. Tax software 2012 Whether you must recapture the tax benefits of alimony. Tax software 2012 Recapture means adding back in your income all or part of a deduction you took in a prior year. Tax software 2012 Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. Tax software 2012 It does not include voluntary payments that are not made under a divorce or separation instrument. Tax software 2012 Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. Tax software 2012 Although this chapter is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. Tax software 2012 To be alimony, a payment must meet certain requirements. Tax software 2012 Different requirements generally apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. Tax software 2012 This chapter discusses the rules for payments under instruments executed after 1984. Tax software 2012 If you need the rules for payments under pre-1985 instruments, get and keep a copy of the 2004 version of Publication 504. Tax software 2012 That was the last year the information on pre-1985 instruments was included in Publication 504. Tax software 2012 Use Table 18-1 in this chapter as a guide to determine whether certain payments are considered alimony. Tax software 2012 Definitions. Tax software 2012   The following definitions apply throughout this chapter. Tax software 2012 Spouse or former spouse. Tax software 2012   Unless otherwise stated, the term “spouse” includes former spouse. Tax software 2012 Divorce or separation instrument. Tax software 2012   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. Tax software 2012 This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). Tax software 2012 Useful Items - You may want to see: Publication 504 Divorced or Separated Individuals General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. Tax software 2012 Payments not alimony. Tax software 2012   Not all payments under a divorce or separation instrument are alimony. Tax software 2012 Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained under Community Property in Publication 504, Payments to keep up the payer's property, or Use of the payer's property. Tax software 2012 Payments to a third party. Tax software 2012   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. Tax software 2012 These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. Tax software 2012 ), taxes, tuition, etc. Tax software 2012 The payments are treated as received by your spouse and then paid to the third party. Tax software 2012 Life insurance premiums. Tax software 2012   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. Tax software 2012 Payments for jointly-owned home. Tax software 2012   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse, some of your payments may be alimony. Tax software 2012 Mortgage payments. Tax software 2012   If you must pay all the mortgage payments (principal and interest) on a jointly-owned home, and they otherwise qualify as alimony, you can deduct one-half of the total payments as alimony. Tax software 2012 If you itemize deductions and the home is a qualified home, you can claim one-half of the interest in figuring your deductible interest. Tax software 2012 Your spouse must report one-half of the payments as alimony received. Tax software 2012 If your spouse itemizes deductions and the home is a qualified home, he or she can claim one-half of the interest on the mortgage in figuring deductible interest. Tax software 2012 Taxes and insurance. Tax software 2012   If you must pay all the real estate taxes or insurance on a home held as tenants in common, you can deduct one-half of these payments as alimony. Tax software 2012 Your spouse must report one-half of these payments as alimony received. Tax software 2012 If you and your spouse itemize deductions, you can each claim one-half of the real estate taxes and none of the home insurance. Tax software 2012    If your home is held as tenants by the entirety or joint tenants, none of your payments for taxes or insurance are alimony. Tax software 2012 But if you itemize deductions, you can claim all of the real estate taxes and none of the home insurance. Tax software 2012 Other payments to a third party. Tax software 2012   If you made other third-party payments, see Publication 504 to see whether any part of the payments qualifies as alimony. Tax software 2012 Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. Tax software 2012 Exception for instruments executed before 1985. Tax software 2012   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. Tax software 2012 A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. Tax software 2012 A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. Tax software 2012   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, get the 2004 version of Publication 504 at www. Tax software 2012 irs. Tax software 2012 gov/pub504. Tax software 2012 Example 1. Tax software 2012 In November 1984, you and your former spouse executed a written separation agreement. Tax software 2012 In February 1985, a decree of divorce was substituted for the written separation agreement. Tax software 2012 The decree of divorce did not change the terms for the alimony you pay your former spouse. Tax software 2012 The decree of divorce is treated as executed before 1985. Tax software 2012 Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. Tax software 2012 Example 2. Tax software 2012 Assume the same facts as in Example 1 except that the decree of divorce changed the amount of the alimony. Tax software 2012 In this example, the decree of divorce is not treated as executed before 1985. Tax software 2012 The alimony payments are subject to the rules for payments under instruments executed after 1984. Tax software 2012 Alimony requirements. Tax software 2012   A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. Tax software 2012 The payment is in cash. Tax software 2012 The instrument does not designate the payment as not alimony. Tax software 2012 Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. Tax software 2012 There is no liability to make any payment (in cash or property) after the death of the recipient spouse. Tax software 2012 The payment is not treated as child support. Tax software 2012 Each of these requirements is discussed below. Tax software 2012 Cash payment requirement. Tax software 2012   Only cash payments, including checks and money orders, qualify as alimony. Tax software 2012 The following do not qualify as alimony. Tax software 2012 Transfers of services or property (including a debt instrument of a third party or an annuity contract). Tax software 2012 Execution of a debt instrument by the payer. Tax software 2012 The use of the payer's property. Tax software 2012 Payments to a third party. Tax software 2012   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. Tax software 2012 See Payments to a third party under General Rules, earlier. Tax software 2012   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. Tax software 2012 The payments are in lieu of payments of alimony directly to your spouse. Tax software 2012 The written request states that both spouses intend the payments to be treated as alimony. Tax software 2012 You receive the written request from your spouse before you file your return for the year you made the payments. Tax software 2012 Payments designated as not alimony. Tax software 2012   You and your spouse can designate that otherwise qualifying payments are not alimony. Tax software 2012 You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. Tax software 2012 For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). Tax software 2012 If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. Tax software 2012   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. Tax software 2012 The copy must be attached each year the designation applies. Tax software 2012 Spouses cannot be members of the same household. Tax software 2012    Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. Tax software 2012 A home you formerly shared is considered one household, even if you physically separate yourselves in the home. Tax software 2012   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. Tax software 2012 Exception. Tax software 2012   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. Tax software 2012 Table 18-1. Tax software 2012 Alimony Requirements (Instruments Executed After 1984) Payments ARE alimony if all of the following are true: Payments are NOT alimony if any of the following are true: Payments are required by a divorce or separation instrument. Tax software 2012 Payments are not required by a divorce or separation instrument. Tax software 2012 Payer and recipient spouse do not file a joint return with each other. Tax software 2012 Payer and recipient spouse file a joint return with each other. Tax software 2012 Payment is in cash (including checks or money orders). Tax software 2012 Payment is: Not in cash, A noncash property settlement, Spouse's part of community income, or To keep up the payer's property. Tax software 2012 Payment is not designated in the instrument as not alimony. Tax software 2012 Payment is designated in the instrument as not alimony. Tax software 2012 Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. Tax software 2012 Spouses legally separated under a decree of divorce or separate maintenance are members of the same household. Tax software 2012 Payments are not required after death of the recipient spouse. Tax software 2012 Payments are required after death of the recipient spouse. Tax software 2012 Payment is not treated as child support. Tax software 2012 Payment is treated as child support. Tax software 2012 These payments are deductible by the payer and includible in income by the recipient. Tax software 2012 These payments are neither deductible by the payer nor includible in income by the recipient. Tax software 2012 Liability for payments after death of recipient spouse. Tax software 2012   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony, whether made before or after the death. Tax software 2012 If all of the payments would continue, then none of the payments made before or after the death are alimony. Tax software 2012   The divorce or separation instrument does not have to expressly state that the payments cease upon the death of your spouse if, for example, the liability for continued payments would end under state law. Tax software 2012 Example. Tax software 2012 You must pay your former spouse $10,000 in cash each year for 10 years. Tax software 2012 Your divorce decree states that the payments will end upon your former spouse's death. Tax software 2012 You must also pay your former spouse or your former spouse's estate $20,000 in cash each year for 10 years. Tax software 2012 The death of your spouse would not terminate these payments under state law. Tax software 2012 The $10,000 annual payments may qualify as alimony. Tax software 2012 The $20,000 annual payments that do not end upon your former spouse's death are not alimony. Tax software 2012 Substitute payments. Tax software 2012   If you must make any payments in cash or property after your spouse's death as a substitute for continuing otherwise qualifying payments before the death, the otherwise qualifying payments are not alimony. Tax software 2012 To the extent that your payments begin, accelerate, or increase because of the death of your spouse, otherwise qualifying payments you made may be treated as payments that were not alimony. Tax software 2012 Whether or not such payments will be treated as not alimony depends on all the facts and circumstances. Tax software 2012 Example 1. Tax software 2012 Under your divorce decree, you must pay your former spouse $30,000 annually. Tax software 2012 The payments will stop at the end of 6 years or upon your former spouse's death, if earlier. Tax software 2012 Your former spouse has custody of your minor children. Tax software 2012 The decree provides that if any child is still a minor at your spouse's death, you must pay $10,000 annually to a trust until the youngest child reaches the age of majority. Tax software 2012 The trust income and corpus (principal) are to be used for your children's benefit. Tax software 2012 These facts indicate that the payments to be made after your former spouse's death are a substitute for $10,000 of the $30,000 annual payments. Tax software 2012 Of each of the $30,000 annual payments, $10,000 is not alimony. Tax software 2012 Example 2. Tax software 2012 Under your divorce decree, you must pay your former spouse $30,000 annually. Tax software 2012 The payments will stop at the end of 15 years or upon your former spouse's death, if earlier. Tax software 2012 The decree provides that if your former spouse dies before the end of the 15-year period, you must pay the estate the difference between $450,000 ($30,000 × 15) and the total amount paid up to that time. Tax software 2012 For example, if your spouse dies at the end of the tenth year, you must pay the estate $150,000 ($450,000 − $300,000). Tax software 2012 These facts indicate that the lump-sum payment to be made after your former spouse's death is a substitute for the full amount of the $30,000 annual payments. Tax software 2012 None of the annual payments are alimony. Tax software 2012 The result would be the same if the payment required at death were to be discounted by an appropriate interest factor to account for the prepayment. Tax software 2012 Child support. Tax software 2012   A payment that is specifically designated as child support or treated as specifically designated as child support under your divorce or separation instrument is not alimony. Tax software 2012 The amount of child support may vary over time. Tax software 2012 Child support payments are not deductible by the payer and are not taxable to the recipient. Tax software 2012 Specifically designated as child support. Tax software 2012   A payment will be treated as specifically designated as child support to the extent that the payment is reduced either: On the happening of a contingency relating to your child, or At a time that can be clearly associated with the contingency. Tax software 2012 A payment may be treated as specifically designated as child support even if other separate payments are specifically designated as child support. Tax software 2012 Contingency relating to your child. Tax software 2012   A contingency relates to your child if it depends on any event relating to that child. Tax software 2012 It does not matter whether the event is certain or likely to occur. Tax software 2012 Events relating to your child include the child's: Becoming employed, Dying, Leaving the household, Leaving school, Marrying, or Reaching a specified age or income level. Tax software 2012 Clearly associated with a contingency. Tax software 2012   Payments that would otherwise qualify as alimony are presumed to be reduced at a time clearly associated with the happening of a contingency relating to your child only in the following situations. Tax software 2012 The payments are to be reduced not more than 6 months before or after the date the child will reach 18, 21, or local age of majority. Tax software 2012 The payments are to be reduced on two or more occasions that occur not more than 1 year before or after a different one of your children reaches a certain age from 18 to 24. Tax software 2012 This certain age must be the same for each child, but need not be a whole number of years. Tax software 2012 In all other situations, reductions in payments are not treated as clearly associated with the happening of a contingency relating to your child. Tax software 2012   Either you or the IRS can overcome the presumption in the two situations above. Tax software 2012 This is done by showing that the time at which the payments are to be reduced was determined independently of any contingencies relating to your children. Tax software 2012 For example, if you can show that the period of alimony payments is customary in the local jurisdiction, such as a period equal to one-half of the duration of the marriage, you can overcome the presumption and may be able to treat the amount as alimony. Tax software 2012 How To Deduct Alimony Paid You can deduct alimony you paid, whether or not you itemize deductions on your return. Tax software 2012 You must file Form 1040. Tax software 2012 You cannot use Form 1040A or Form 1040EZ. Tax software 2012 Enter the amount of alimony you paid on Form 1040, line 31a. Tax software 2012 In the space provided on line 31b, enter your spouse's social security number (SSN) or individual taxpayer identification number (ITIN). Tax software 2012 If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. Tax software 2012 Show the SSN or ITIN and amount paid to each other recipient on an attached statement. Tax software 2012 Enter your total payments on line 31a. Tax software 2012 You must provide your spouse's SSN or ITIN. Tax software 2012 If you do not, you may have to pay a $50 penalty and your deduction may be disallowed. Tax software 2012 For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Tax software 2012 How To Report Alimony Received Report alimony you received as income on Form 1040, line 11. Tax software 2012 You cannot use Form 1040A or Form 1040EZ. Tax software 2012 You must give the person who paid the alimony your SSN or ITIN. Tax software 2012 If you do not, you may have to pay a $50 penalty. Tax software 2012 Recapture Rule If your alimony payments decrease or end during the first 3 calendar years, you may be subject to the recapture rule. Tax software 2012 If you are subject to this rule, you have to include in income in the third year part of the alimony payments you previously deducted. Tax software 2012 Your spouse can deduct in the third year part of the alimony payments he or she previously included in income. Tax software 2012 The 3-year period starts with the first calendar year you make a payment qualifying as alimony under a decree of divorce or separate maintenance or a written separation agreement. Tax software 2012 Do not include any time in which payments were being made under temporary support orders. Tax software 2012 The second and third years are the next 2 calendar years, whether or not payments are made during those years. Tax software 2012 The reasons for a reduction or end of alimony payments that can require a recapture include: A change in your divorce or separation instrument, A failure to make timely payments, A reduction in your ability to provide support, or A reduction in your spouse's support needs. Tax software 2012 When to apply the recapture rule. Tax software 2012   You are subject to the recapture rule in the third year if the alimony you pay in the third year decreases by more than $15,000 from the second year or the alimony you pay in the second and third years decreases significantly from the alimony you pay in the first year. Tax software 2012   When you figure a decrease in alimony, do not include the following amounts. Tax software 2012 Payments made under a temporary support order. Tax software 2012 Payments required over a period of at least 3 calendar years that vary because they are a fixed part of your income from a business or property, or from compensation for employment or self-employment. Tax software 2012 Payments that decrease because of the death of either spouse or the remarriage of the spouse receiving the payments before the end of the third year. Tax software 2012 Figuring the recapture. Tax software 2012   You can use Worksheet 1 in Publication 504 to figure recaptured alimony. Tax software 2012 Including the recapture in income. Tax software 2012   If you must include a recapture amount in income, show it on Form 1040, line 11 (“Alimony received”). Tax software 2012 Cross out “received” and enter “recapture. Tax software 2012 ” On the dotted line next to the amount, enter your spouse's last name and SSN or ITIN. Tax software 2012 Deducting the recapture. Tax software 2012   If you can deduct a recapture amount, show it on Form 1040, line 31a (“Alimony paid”). Tax software 2012 Cross out “paid” and enter “recapture. Tax software 2012 ” In the space provided, enter your spouse's SSN or ITIN. Tax software 2012 Prev  Up  Next   Home   More Online Publications