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Turbotax Business Fed E File 2012

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Turbotax Business Fed E File 2012

Turbotax business fed e file 2012 1. Turbotax business fed e file 2012   Travel Table of Contents Traveling Away From HomeTax Home Tax Home Different From Family Home Temporary Assignment or Job What Travel Expenses Are Deductible?Employee. Turbotax business fed e file 2012 Business associate. Turbotax business fed e file 2012 Bona fide business purpose. Turbotax business fed e file 2012 Meals Travel in the United States Travel Outside the United States Luxury Water Travel Conventions If you temporarily travel away from your tax home, you can use this chapter to determine if you have deductible travel expenses. Turbotax business fed e file 2012 This chapter discusses: Traveling away from home, Temporary assignment or job, and What travel expenses are deductible. Turbotax business fed e file 2012 It also discusses the standard meal allowance, rules for travel inside and outside the United States, luxury water travel, and deductible convention expenses. Turbotax business fed e file 2012 Travel expenses defined. Turbotax business fed e file 2012   For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Turbotax business fed e file 2012   An ordinary expense is one that is common and accepted in your trade or business. Turbotax business fed e file 2012 A necessary expense is one that is helpful and appropriate for your business. Turbotax business fed e file 2012 An expense does not have to be required to be considered necessary. Turbotax business fed e file 2012   You will find examples of deductible travel expenses in Table 1-1 , later. Turbotax business fed e file 2012 Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Turbotax business fed e file 2012 This rest requirement is not satisfied by merely napping in your car. Turbotax business fed e file 2012 You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 You are a railroad conductor. Turbotax business fed e file 2012 You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Turbotax business fed e file 2012 During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Turbotax business fed e file 2012 You are considered to be away from home. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 You are a truck driver. Turbotax business fed e file 2012 You leave your terminal and return to it later the same day. Turbotax business fed e file 2012 You get an hour off at your turnaround point to eat. Turbotax business fed e file 2012 Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Turbotax business fed e file 2012 Members of the Armed Forces. Turbotax business fed e file 2012   If you are a member of the U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Turbotax business fed e file 2012 You cannot deduct your expenses for meals and lodging. Turbotax business fed e file 2012 You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Turbotax business fed e file 2012 If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Turbotax business fed e file 2012   A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home (explained next) aboard the ship for travel expense purposes. Turbotax business fed e file 2012 Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Turbotax business fed e file 2012 Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Turbotax business fed e file 2012 It includes the entire city or general area in which your business or work is located. Turbotax business fed e file 2012 If you have more than one regular place of business, your tax home is your main place of business. Turbotax business fed e file 2012 See Main place of business or work , later. Turbotax business fed e file 2012 If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Turbotax business fed e file 2012 See No main place of business or work , later. Turbotax business fed e file 2012 If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Turbotax business fed e file 2012 As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Turbotax business fed e file 2012 Main place of business or work. Turbotax business fed e file 2012   If you have more than one place of work, consider the following when determining which one is your main place of business or work. Turbotax business fed e file 2012 The total time you ordinarily spend in each place. Turbotax business fed e file 2012 The level of your business activity in each place. Turbotax business fed e file 2012 Whether your income from each place is significant or insignificant. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Turbotax business fed e file 2012 You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Turbotax business fed e file 2012 Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Turbotax business fed e file 2012 No main place of business or work. Turbotax business fed e file 2012   You may have a tax home even if you do not have a regular or main place of work. Turbotax business fed e file 2012 Your tax home may be the home where you regularly live. Turbotax business fed e file 2012 Factors used to determine tax home. Turbotax business fed e file 2012   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Turbotax business fed e file 2012 You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Turbotax business fed e file 2012 You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Turbotax business fed e file 2012 You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Turbotax business fed e file 2012   If you satisfy all three factors, your tax home is the home where you regularly live. Turbotax business fed e file 2012 If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Turbotax business fed e file 2012 If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 You are single and live in Boston in an apartment you rent. Turbotax business fed e file 2012 You have worked for your employer in Boston for a number of years. Turbotax business fed e file 2012 Your employer enrolls you in a 12-month executive training program. Turbotax business fed e file 2012 You do not expect to return to work in Boston after you complete your training. Turbotax business fed e file 2012 During your training, you do not do any work in Boston. Turbotax business fed e file 2012 Instead, you receive classroom and on-the-job training throughout the United States. Turbotax business fed e file 2012 You keep your apartment in Boston and return to it frequently. Turbotax business fed e file 2012 You use your apartment to conduct your personal business. Turbotax business fed e file 2012 You also keep up your community contacts in Boston. Turbotax business fed e file 2012 When you complete your training, you are transferred to Los Angeles. Turbotax business fed e file 2012 You do not satisfy factor (1) because you did not work in Boston. Turbotax business fed e file 2012 You satisfy factor (2) because you had duplicate living expenses. Turbotax business fed e file 2012 You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Turbotax business fed e file 2012 Therefore, you have a tax home in Boston. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 You are an outside salesperson with a sales territory covering several states. Turbotax business fed e file 2012 Your employer's main office is in Newark, but you do not conduct any business there. Turbotax business fed e file 2012 Your work assignments are temporary, and you have no way of knowing where your future assignments will be located. Turbotax business fed e file 2012 You have a room in your married sister's house in Dayton. Turbotax business fed e file 2012 You stay there for one or two weekends a year, but you do no work in the area. Turbotax business fed e file 2012 You do not pay your sister for the use of the room. Turbotax business fed e file 2012 You do not satisfy any of the three factors listed earlier. Turbotax business fed e file 2012 You are an itinerant and have no tax home. Turbotax business fed e file 2012 Tax Home Different From Family Home If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Turbotax business fed e file 2012 You also cannot deduct the cost of meals and lodging while at your tax home. Turbotax business fed e file 2012 See Example 1 , later. Turbotax business fed e file 2012 If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Turbotax business fed e file 2012 See Example 2 , later. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 You are a truck driver and you and your family live in Tucson. Turbotax business fed e file 2012 You are employed by a trucking firm that has its terminal in Phoenix. Turbotax business fed e file 2012 At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Turbotax business fed e file 2012 You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Turbotax business fed e file 2012 This is because Phoenix is your tax home. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 Your family home is in Pittsburgh, where you work 12 weeks a year. Turbotax business fed e file 2012 The rest of the year you work for the same employer in Baltimore. Turbotax business fed e file 2012 In Baltimore, you eat in restaurants and sleep in a rooming house. Turbotax business fed e file 2012 Your salary is the same whether you are in Pittsburgh or Baltimore. Turbotax business fed e file 2012 Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Turbotax business fed e file 2012 You cannot deduct any expenses you have for meals and lodging there. Turbotax business fed e file 2012 However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Turbotax business fed e file 2012 You can deduct the cost of your round trip between Baltimore and Pittsburgh. Turbotax business fed e file 2012 You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Turbotax business fed e file 2012 Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Turbotax business fed e file 2012 It may not be practical to return to your tax home from this other location at the end of each work day. Turbotax business fed e file 2012 Temporary assignment vs. Turbotax business fed e file 2012 indefinite assignment. Turbotax business fed e file 2012   If your assignment or job away from your main place of work is temporary, your tax home does not change. Turbotax business fed e file 2012 You are considered to be away from home for the whole period you are away from your main place of work. Turbotax business fed e file 2012 You can deduct your travel expenses if they otherwise qualify for deduction. Turbotax business fed e file 2012 Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Turbotax business fed e file 2012    However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Turbotax business fed e file 2012 An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Turbotax business fed e file 2012   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Turbotax business fed e file 2012 You may be able to deduct the cost of relocating to your new tax home as a moving expense. Turbotax business fed e file 2012 See Publication 521 for more information. Turbotax business fed e file 2012 Exception for federal crime investigations or prosecutions. Turbotax business fed e file 2012   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Turbotax business fed e file 2012 This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year provided you meet the other requirements for deductibility. Turbotax business fed e file 2012   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Turbotax business fed e file 2012 Determining temporary or indefinite. Turbotax business fed e file 2012   You must determine whether your assignment is temporary or indefinite when you start work. Turbotax business fed e file 2012 If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Turbotax business fed e file 2012 An assignment or job that is initially temporary may become indefinite due to changed circumstances. Turbotax business fed e file 2012 A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Turbotax business fed e file 2012   The following examples illustrate whether an assignment or job is temporary or indefinite. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 You are a construction worker. Turbotax business fed e file 2012 You live and regularly work in Los Angeles. Turbotax business fed e file 2012 You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. Turbotax business fed e file 2012 Your tax home is Los Angeles. Turbotax business fed e file 2012 Because of a shortage of work, you took a job on a construction project in Fresno. Turbotax business fed e file 2012 Your job was scheduled to end in 8 months. Turbotax business fed e file 2012 The job actually lasted 10 months. Turbotax business fed e file 2012 You realistically expected the job in Fresno to last 8 months. Turbotax business fed e file 2012 The job actually did last less than 1 year. Turbotax business fed e file 2012 The job is temporary and your tax home is still in Los Angeles. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. Turbotax business fed e file 2012 The job actually was completed in 10 months. Turbotax business fed e file 2012 Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. Turbotax business fed e file 2012 You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home. Turbotax business fed e file 2012 Example 3. Turbotax business fed e file 2012 The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. Turbotax business fed e file 2012 After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months). Turbotax business fed e file 2012 Initially, you realistically expected the job in Fresno to last for only 9 months. Turbotax business fed e file 2012 However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for 1 year or less. Turbotax business fed e file 2012 You can only deduct your travel expenses for the first 8 months. Turbotax business fed e file 2012 You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite. Turbotax business fed e file 2012 Going home on days off. Turbotax business fed e file 2012   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Turbotax business fed e file 2012 You cannot deduct the cost of your meals and lodging there. Turbotax business fed e file 2012 However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Turbotax business fed e file 2012 You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Turbotax business fed e file 2012   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Turbotax business fed e file 2012 In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Turbotax business fed e file 2012 Probationary work period. Turbotax business fed e file 2012   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Turbotax business fed e file 2012 You cannot deduct any of your expenses for meals and lodging during the probationary period. Turbotax business fed e file 2012 What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Turbotax business fed e file 2012 You can deduct ordinary and necessary expenses you have when you travel away from home on business. Turbotax business fed e file 2012 The type of expense you can deduct depends on the facts and your circumstances. Turbotax business fed e file 2012 Table 1-1 summarizes travel expenses you may be able to deduct. Turbotax business fed e file 2012 You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Turbotax business fed e file 2012 When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Turbotax business fed e file 2012 You can use a log, diary, notebook, or any other written record to keep track of your expenses. Turbotax business fed e file 2012 The types of expenses you need to record, along with supporting documentation, are described in Table 5-1 (see chapter 5). Turbotax business fed e file 2012 Separating costs. Turbotax business fed e file 2012   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Turbotax business fed e file 2012 You must have a reasonable basis for making this allocation. Turbotax business fed e file 2012 For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Turbotax business fed e file 2012 Travel expenses for another individual. Turbotax business fed e file 2012    If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Turbotax business fed e file 2012 Employee. Turbotax business fed e file 2012   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Turbotax business fed e file 2012 Business associate. Turbotax business fed e file 2012   If a business associate travels with you and meets the conditions in (2) and (3), earlier, you can deduct the travel expenses you have for that person. Turbotax business fed e file 2012 A business associate is someone with whom you could reasonably expect to actively conduct business. Turbotax business fed e file 2012 A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Turbotax business fed e file 2012 Bona fide business purpose. Turbotax business fed e file 2012   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Turbotax business fed e file 2012 Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Turbotax business fed e file 2012 Table 1-1. Turbotax business fed e file 2012 Travel Expenses You Can Deduct   This chart summarizes expenses you can deduct when you travel away from home for business purposes. Turbotax business fed e file 2012 IF you have expenses for. Turbotax business fed e file 2012 . Turbotax business fed e file 2012 . Turbotax business fed e file 2012 THEN you can deduct the cost of. Turbotax business fed e file 2012 . Turbotax business fed e file 2012 . Turbotax business fed e file 2012 transportation travel by airplane, train, bus, or car between your home and your business destination. Turbotax business fed e file 2012 If you were provided with a free ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Turbotax business fed e file 2012 If you travel by ship, see Luxury Water Travel and Cruise Ships (under Conventions) for additional rules and limits. Turbotax business fed e file 2012 taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Turbotax business fed e file 2012 baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Turbotax business fed e file 2012 car operating and maintaining your car when traveling away from home on business. Turbotax business fed e file 2012 You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. Turbotax business fed e file 2012 If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Turbotax business fed e file 2012 lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Turbotax business fed e file 2012 Meals include amounts spent for food, beverages, taxes, and related tips. Turbotax business fed e file 2012 See Meals for additional rules and limits. Turbotax business fed e file 2012 cleaning dry cleaning and laundry. Turbotax business fed e file 2012 telephone business calls while on your business trip. Turbotax business fed e file 2012 This includes business communication by fax machine or other communication devices. Turbotax business fed e file 2012 tips tips you pay for any expenses in this chart. Turbotax business fed e file 2012 other other similar ordinary and necessary expenses related to your business travel. Turbotax business fed e file 2012 These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 Jerry drives to Chicago on business and takes his wife, Linda, with him. Turbotax business fed e file 2012 Linda is not Jerry's employee. Turbotax business fed e file 2012 Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Turbotax business fed e file 2012 The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Turbotax business fed e file 2012 Her expenses are not deductible. Turbotax business fed e file 2012 Jerry pays $199 a day for a double room. Turbotax business fed e file 2012 A single room costs $149 a day. Turbotax business fed e file 2012 He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Turbotax business fed e file 2012 If he uses public transportation, he can deduct only his fare. Turbotax business fed e file 2012 Meals You can deduct the cost of meals in either of the following situations. Turbotax business fed e file 2012 It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Turbotax business fed e file 2012 The meal is business-related entertainment. Turbotax business fed e file 2012 Business-related entertainment is discussed in chapter 2 . Turbotax business fed e file 2012 The following discussion deals only with meals that are not business-related entertainment. Turbotax business fed e file 2012 Lavish or extravagant. Turbotax business fed e file 2012   You cannot deduct expenses for meals that are lavish or extravagant. Turbotax business fed e file 2012 An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Turbotax business fed e file 2012 Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Turbotax business fed e file 2012 50% limit on meals. Turbotax business fed e file 2012   You can figure your meals expense using either of the following methods. Turbotax business fed e file 2012 Actual cost. Turbotax business fed e file 2012 The standard meal allowance. Turbotax business fed e file 2012 Both of these methods are explained below. Turbotax business fed e file 2012 But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Turbotax business fed e file 2012   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Turbotax business fed e file 2012 If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Turbotax business fed e file 2012 Chapter 2 discusses the 50% Limit in more detail, and chapter 6 discusses accountable and nonaccountable plans. Turbotax business fed e file 2012 Actual Cost You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Turbotax business fed e file 2012 If you use this method, you must keep records of your actual cost. Turbotax business fed e file 2012 Standard Meal Allowance Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Turbotax business fed e file 2012 It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Turbotax business fed e file 2012 The set amount varies depending on where and when you travel. Turbotax business fed e file 2012 In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Turbotax business fed e file 2012 If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Turbotax business fed e file 2012 See the recordkeeping rules for travel in chapter 5 . Turbotax business fed e file 2012 Incidental expenses. Turbotax business fed e file 2012   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Turbotax business fed e file 2012   Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Turbotax business fed e file 2012 Incidental-expenses-only method. Turbotax business fed e file 2012   You can use an optional method (instead of actual cost) for deducting incidental expenses only. Turbotax business fed e file 2012 The amount of the deduction is $5 a day. Turbotax business fed e file 2012 You can use this method only if you did not pay or incur any meal expenses. Turbotax business fed e file 2012 You cannot use this method on any day that you use the standard meal allowance. Turbotax business fed e file 2012 This method is subject to the proration rules for partial days. Turbotax business fed e file 2012 See Travel for days you depart and return , later in this chapter. Turbotax business fed e file 2012 Note. Turbotax business fed e file 2012 The incidental-expenses-only method is not subject to the 50% limit discussed below. Turbotax business fed e file 2012 Federal employees should refer to the Federal Travel Regulations at www. Turbotax business fed e file 2012 gsa. Turbotax business fed e file 2012 gov. Turbotax business fed e file 2012 Find the “Most Requested Links” on the upper left and click on “Regulations: FAR, FMR, FTR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Turbotax business fed e file 2012 50% limit may apply. Turbotax business fed e file 2012   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Turbotax business fed e file 2012 If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Turbotax business fed e file 2012 The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6. Turbotax business fed e file 2012 There is no optional standard lodging amount similar to the standard meal allowance. Turbotax business fed e file 2012 Your allowable lodging expense deduction is your actual cost. Turbotax business fed e file 2012 Who can use the standard meal allowance. Turbotax business fed e file 2012   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Turbotax business fed e file 2012 Use of the standard meal allowance for other travel. Turbotax business fed e file 2012   You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Turbotax business fed e file 2012 You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Turbotax business fed e file 2012 You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Turbotax business fed e file 2012 Amount of standard meal allowance. Turbotax business fed e file 2012   The standard meal allowance is the federal M&IE rate. Turbotax business fed e file 2012 For travel in 2013, the rate for most small localities in the United States is $46 a day. Turbotax business fed e file 2012    Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Turbotax business fed e file 2012    You can find this information (organized by state) on the Internet at www. Turbotax business fed e file 2012 gsa. Turbotax business fed e file 2012 gov/perdiem. Turbotax business fed e file 2012 Enter a zip code or select a city and state for the per diem rates for the current fiscal year. Turbotax business fed e file 2012 Per diem rates for prior fiscal years are available by using the drop down menu under “Search by State. Turbotax business fed e file 2012 ”   Per diem rates are listed by the Federal government's fiscal year which runs from October 1 to September 30. Turbotax business fed e file 2012 You can choose to use the rates from the 2013 fiscal year per diem tables or the rates from the 2014 fiscal year tables, but you must consistently use the same tables for all travel you are reporting on your income tax return for the year. Turbotax business fed e file 2012   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Turbotax business fed e file 2012 If you work in the transportation industry, however, see Special rate for transportation workers , later. Turbotax business fed e file 2012 Standard meal allowance for areas outside the continental United States. Turbotax business fed e file 2012   The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Turbotax business fed e file 2012 The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Turbotax business fed e file 2012 The Department of State establishes per diem rates for all other foreign areas. Turbotax business fed e file 2012    You can access per diem rates for non-foreign areas outside the continental United States at: www. Turbotax business fed e file 2012 defensetravel. Turbotax business fed e file 2012 dod. Turbotax business fed e file 2012 mil/site/perdiemCalc. Turbotax business fed e file 2012 cfm. Turbotax business fed e file 2012 You can access all other foreign per diem rates at: www. Turbotax business fed e file 2012 state. Turbotax business fed e file 2012 gov/travel/. Turbotax business fed e file 2012 Click on “Travel Per Diem Allowances for Foreign Areas,” under “Foreign Per Diem Rates” to obtain the latest foreign per diem rates. Turbotax business fed e file 2012 Special rate for transportation workers. Turbotax business fed e file 2012   You can use a special standard meal allowance if you work in the transportation industry. Turbotax business fed e file 2012 You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Turbotax business fed e file 2012 If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). Turbotax business fed e file 2012   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Turbotax business fed e file 2012 If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Turbotax business fed e file 2012 Travel for days you depart and return. Turbotax business fed e file 2012   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Turbotax business fed e file 2012 You can do so by one of two methods. Turbotax business fed e file 2012 Method 1: You can claim 3/4 of the standard meal allowance. Turbotax business fed e file 2012 Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 Jen is employed in New Orleans as a convention planner. Turbotax business fed e file 2012 In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Turbotax business fed e file 2012 She left her home in New Orleans at 10 a. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 on Wednesday and arrived in Washington, DC, at 5:30 p. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Turbotax business fed e file 2012 Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Turbotax business fed e file 2012 Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Turbotax business fed e file 2012 For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Turbotax business fed e file 2012 Travel in the United States The following discussion applies to travel in the United States. Turbotax business fed e file 2012 For this purpose, the United States includes the 50 states and the District of Columbia. Turbotax business fed e file 2012 The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Turbotax business fed e file 2012 See Part of Trip Outside the United States , later. Turbotax business fed e file 2012 Trip Primarily for Business You can deduct all of your travel expenses if your trip was entirely business related. Turbotax business fed e file 2012 If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. Turbotax business fed e file 2012 These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 You work in Atlanta and take a business trip to New Orleans in May. Turbotax business fed e file 2012 Your business travel totals 850 miles round trip. Turbotax business fed e file 2012 On your way, you stop in Mobile to visit your parents. Turbotax business fed e file 2012 You spend $2,120 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Turbotax business fed e file 2012 If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,820. Turbotax business fed e file 2012 You can deduct $1,820 for your trip, including the cost of round-trip transportation to and from New Orleans. Turbotax business fed e file 2012 The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Turbotax business fed e file 2012 Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Turbotax business fed e file 2012 However, you can deduct any expenses you have while at your destination that are directly related to your business. Turbotax business fed e file 2012 A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Turbotax business fed e file 2012 The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Turbotax business fed e file 2012 Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later in this chapter under Travel Outside the United States for that part of the trip. Turbotax business fed e file 2012 For the part of your trip that is inside the United States, use the rules for travel in the United States. Turbotax business fed e file 2012 Travel outside the United States does not include travel from one point in the United States to another point in the United States. Turbotax business fed e file 2012 The following discussion can help you determine whether your trip was entirely within the United States. Turbotax business fed e file 2012 Public transportation. Turbotax business fed e file 2012   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Turbotax business fed e file 2012 Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 You fly from New York to Puerto Rico with a scheduled stop in Miami. Turbotax business fed e file 2012 You return to New York nonstop. Turbotax business fed e file 2012 The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Turbotax business fed e file 2012 Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Turbotax business fed e file 2012 Private car. Turbotax business fed e file 2012   Travel by private car in the United States is travel between points in the United States, even though you are on your way to a destination outside the United States. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 You travel by car from Denver to Mexico City and return. Turbotax business fed e file 2012 Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Turbotax business fed e file 2012 The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Turbotax business fed e file 2012 Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Turbotax business fed e file 2012 For this purpose, the United States includes the 50 states and the District of Columbia. Turbotax business fed e file 2012 How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Turbotax business fed e file 2012 Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Turbotax business fed e file 2012 Travel entirely for business. Turbotax business fed e file 2012   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Turbotax business fed e file 2012 Travel considered entirely for business. Turbotax business fed e file 2012   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Turbotax business fed e file 2012 Exception 1 - No substantial control. Turbotax business fed e file 2012   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Turbotax business fed e file 2012 The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Turbotax business fed e file 2012   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, and Are not related to your employer, or Are not a managing executive. Turbotax business fed e file 2012    “Related to your employer” is defined later in chapter 6 under Per Diem and Car Allowances . Turbotax business fed e file 2012   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Turbotax business fed e file 2012   A self-employed person generally has substantial control over arranging business trips. Turbotax business fed e file 2012 Exception 2 - Outside United States no more than a week. Turbotax business fed e file 2012   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Turbotax business fed e file 2012 One week means 7 consecutive days. Turbotax business fed e file 2012 In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 You traveled to Brussels primarily for business. Turbotax business fed e file 2012 You left Denver on Tuesday and flew to New York. Turbotax business fed e file 2012 On Wednesday, you flew from New York to Brussels, arriving the next morning. Turbotax business fed e file 2012 On Thursday and Friday, you had business discussions, and from Saturday until Tuesday, you were sightseeing. Turbotax business fed e file 2012 You flew back to New York, arriving Wednesday afternoon. Turbotax business fed e file 2012 On Thursday, you flew back to Denver. Turbotax business fed e file 2012 Although you were away from your home in Denver for more than a week, you were not outside the United States for more than a week. Turbotax business fed e file 2012 This is because the day you depart does not count as a day outside the United States. Turbotax business fed e file 2012 You can deduct your cost of the round-trip flight between Denver and Brussels. Turbotax business fed e file 2012 You can also deduct the cost of your stay in Brussels for Thursday and Friday while you conducted business. Turbotax business fed e file 2012 However, you cannot deduct the cost of your stay in Brussels from Saturday through Tuesday because those days were spent on nonbusiness activities. Turbotax business fed e file 2012 Exception 3 - Less than 25% of time on personal activities. Turbotax business fed e file 2012   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Turbotax business fed e file 2012 For this purpose, count both the day your trip began and the day it ended. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 You flew from Seattle to Tokyo, where you spent 14 days on business and 5 days on personal matters. Turbotax business fed e file 2012 You then flew back to Seattle. Turbotax business fed e file 2012 You spent 1 day flying in each direction. Turbotax business fed e file 2012 Because only 5/21 (less than 25%) of your total time abroad was for nonbusiness activities, you can deduct as travel expenses what it would have cost you to make the trip if you had not engaged in any nonbusiness activity. Turbotax business fed e file 2012 The amount you can deduct is the cost of the round-trip plane fare and 16 days of meals (subject to the 50% limit), lodging, and other related expenses. Turbotax business fed e file 2012 Exception 4 - Vacation not a major consideration. Turbotax business fed e file 2012   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Turbotax business fed e file 2012 Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on other activities, you generally cannot deduct all of your travel expenses. Turbotax business fed e file 2012 You can only deduct the business portion of your cost of getting to and from your destination. Turbotax business fed e file 2012 You must allocate the costs between your business and other activities to determine your deductible amount. Turbotax business fed e file 2012 See Travel allocation rules , later. Turbotax business fed e file 2012 You do not have to allocate your travel expenses if you meet one of the four exceptions listed earlier under Travel considered entirely for business . Turbotax business fed e file 2012 In those cases, you can deduct the total cost of getting to and from your destination. Turbotax business fed e file 2012 Travel allocation rules. Turbotax business fed e file 2012   If your trip outside the United States was primarily for business, you must allocate your travel time on a day-to-day basis between business days and nonbusiness days. Turbotax business fed e file 2012 The days you depart from and return to the United States are both counted as days outside the United States. Turbotax business fed e file 2012   To figure the deductible amount of your round-trip travel expenses, use the following fraction. Turbotax business fed e file 2012 The numerator (top number) is the total number of business days outside the United States. Turbotax business fed e file 2012 The denominator (bottom number) is the total number of business and nonbusiness days of travel. Turbotax business fed e file 2012 Counting business days. Turbotax business fed e file 2012   Your business days include transportation days, days your presence was required, days you spent on business, and certain weekends and holidays. Turbotax business fed e file 2012 Transportation day. Turbotax business fed e file 2012   Count as a business day any day you spend traveling to or from a business destination. Turbotax business fed e file 2012 However, if because of a nonbusiness activity you do not travel by a direct route, your business days are the days it would take you to travel a reasonably direct route to your business destination. Turbotax business fed e file 2012 Extra days for side trips or nonbusiness activities cannot be counted as business days. Turbotax business fed e file 2012 Presence required. Turbotax business fed e file 2012   Count as a business day any day your presence is required at a particular place for a specific business purpose. Turbotax business fed e file 2012 Count it as a business day even if you spend most of the day on nonbusiness activities. Turbotax business fed e file 2012 Day spent on business. Turbotax business fed e file 2012   If your principal activity during working hours is the pursuit of your trade or business, count the day as a business day. Turbotax business fed e file 2012 Also, count as a business day any day you are prevented from working because of circumstances beyond your control. Turbotax business fed e file 2012 Certain weekends and holidays. Turbotax business fed e file 2012   Count weekends, holidays, and other necessary standby days as business days if they fall between business days. Turbotax business fed e file 2012 But if they follow your business meetings or activity and you remain at your business destination for nonbusiness or personal reasons, do not count them as business days. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 Your tax home is New York City. Turbotax business fed e file 2012 You travel to Quebec, where you have a business appointment on Friday. Turbotax business fed e file 2012 You have another appointment on the following Monday. Turbotax business fed e file 2012 Because your presence was required on both Friday and Monday, they are business days. Turbotax business fed e file 2012 Because the weekend is between business days, Saturday and Sunday are counted as business days. Turbotax business fed e file 2012 This is true even though you use the weekend for sightseeing, visiting friends, or other nonbusiness activity. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 If, in Example 1, you had no business in Quebec after Friday, but stayed until Monday before starting home, Saturday and Sunday would be nonbusiness days. Turbotax business fed e file 2012 Nonbusiness activity on the way to or from your business destination. Turbotax business fed e file 2012   If you stopped for a vacation or other nonbusiness activity either on the way from the United States to your business destination, or on the way back to the United States from your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Turbotax business fed e file 2012   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends. Turbotax business fed e file 2012   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Turbotax business fed e file 2012 The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 You live in New York. Turbotax business fed e file 2012 On May 4 you flew to Paris to attend a business conference that began on May 5. Turbotax business fed e file 2012 The conference ended at noon on May 14. Turbotax business fed e file 2012 That evening you flew to Dublin where you visited with friends until the afternoon of May 21, when you flew directly home to New York. Turbotax business fed e file 2012 The primary purpose for the trip was to attend the conference. Turbotax business fed e file 2012 If you had not stopped in Dublin, you would have arrived home the evening of May 14. Turbotax business fed e file 2012 You do not meet any of the exceptions that would allow you to consider your travel entirely for business. Turbotax business fed e file 2012 May 4 through May 14 (11 days) are business days and May 15 through May 21 (7 days) are nonbusiness days. Turbotax business fed e file 2012 You can deduct the cost of your meals (subject to the 50% limit), lodging, and other business-related travel expenses while in Paris. Turbotax business fed e file 2012 You cannot deduct your expenses while in Dublin. Turbotax business fed e file 2012 You also cannot deduct 7/18 of what it would have cost you to travel round-trip between New York and Dublin. Turbotax business fed e file 2012 You paid $750 to fly from New York to Paris, $400 to fly from Paris to Dublin, and $700 to fly from Dublin back to New York. Turbotax business fed e file 2012 Round-trip airfare from New York to Dublin would have been $1,250. Turbotax business fed e file 2012 You figure the deductible part of your air travel expenses by subtracting 7/18 of the round-trip fare and other expenses you would have had in traveling directly between New York and Dublin ($1,250 × 7/18 = $486) from your total expenses in traveling from New York to Paris to Dublin and back to New York ($750 + $400 + $700 = $1,850). Turbotax business fed e file 2012 Your deductible air travel expense is $1,364 ($1,850 − $486). Turbotax business fed e file 2012 Nonbusiness activity at, near, or beyond business destination. Turbotax business fed e file 2012   If you had a vacation or other nonbusiness activity at, near, or beyond your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Turbotax business fed e file 2012   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your business destination and a return to the point where travel outside the United States ends. Turbotax business fed e file 2012   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Turbotax business fed e file 2012 The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Turbotax business fed e file 2012   None of your travel expenses for nonbusiness activities at, near, or beyond your business destination are deductible. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 Assume that the dates are the same as in the previous example but that instead of going to Dublin for your vacation, you fly to Venice, Italy, for a vacation. Turbotax business fed e file 2012 You cannot deduct any part of the cost of your trip from Paris to Venice and return to Paris. Turbotax business fed e file 2012 In addition, you cannot deduct 7/18 of the airfare and other expenses from New York to Paris and back to New York. Turbotax business fed e file 2012 You can deduct 11/18 of the round-trip plane fare and other travel expenses from New York to Paris, plus your meals (subject to the 50% limit), lodging, and any other business expenses you had in Paris. Turbotax business fed e file 2012 (Assume these expenses total $4,939. Turbotax business fed e file 2012 ) If the round-trip plane fare and other travel-related expenses (such as food during the trip) are $1,750, you can deduct travel costs of $1,069 (11/18 × $1,750), plus the full $4,939 for the expenses you had in Paris. Turbotax business fed e file 2012 Other methods. Turbotax business fed e file 2012   You can use another method of counting business days if you establish that it more clearly reflects the time spent on other than business activities outside the United States. Turbotax business fed e file 2012 Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Turbotax business fed e file 2012 However, if you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 The university from which you graduated has a continuing education program for members of its alumni association. Turbotax business fed e file 2012 This program consists of trips to various foreign countries where academic exercises and conferences are set up to acquaint individuals in most occupations with selected facilities in several regions of the world. Turbotax business fed e file 2012 However, none of the conferences are directed toward specific occupations or professions. Turbotax business fed e file 2012 It is up to each participant to seek out specialists and organizational settings appropriate to his or her occupational interests. Turbotax business fed e file 2012 Three-hour sessions are held each day over a 5-day period at each of the selected overseas facilities where participants can meet with individual practitioners. Turbotax business fed e file 2012 These sessions are composed of a variety of activities including workshops, mini-lectures, role playing, skill development, and exercises. Turbotax business fed e file 2012 Professional conference directors schedule and conduct the sessions. Turbotax business fed e file 2012 Participants can choose those sessions they wish to attend. Turbotax business fed e file 2012 You can participate in this program since you are a member of the alumni association. Turbotax business fed e file 2012 You and your family take one of the trips. Turbotax business fed e file 2012 You spend about 2 hours at each of the planned sessions. Turbotax business fed e file 2012 The rest of the time you go touring and sightseeing with your family. Turbotax business fed e file 2012 The trip lasts less than 1 week. Turbotax business fed e file 2012 Your travel expenses for the trip are not deductible since the trip was primarily a vacation. Turbotax business fed e file 2012 However, registration fees and any other incidental expenses you have for the five planned sessions you attended that are directly related and beneficial to your business are deductible business expenses. Turbotax business fed e file 2012 These expenses should be specifically stated in your records to ensure proper allocation of your deductible business expenses. Turbotax business fed e file 2012 Luxury Water Travel If you travel by ocean liner, cruise ship, or other form of luxury water transportation for business purposes, there is a daily limit on the amount you can deduct. Turbotax business fed e file 2012 The limit is twice the highest federal per diem rate allowable at the time of your travel. Turbotax business fed e file 2012 (Generally, the federal per diem is the amount paid to federal government employees for daily living expenses when they travel away from home, but in the United States, for business purposes. Turbotax business fed e file 2012 ) Daily limit on luxury water travel. Turbotax business fed e file 2012   The highest federal per diem rate allowed and the daily limit for luxury water travel in 2013 is shown in the following table. Turbotax business fed e file 2012   2013 Dates Highest Federal Per Diem Daily Limit on Luxury Water Travel   Jan. Turbotax business fed e file 2012 1 – Mar. Turbotax business fed e file 2012 31 $367 $734   Apr. Turbotax business fed e file 2012 1 – June 30 312 624   July 1 – Aug. Turbotax business fed e file 2012 31 310 620   Sept. Turbotax business fed e file 2012 1 – Sept. Turbotax business fed e file 2012 30 366 732   Oct. Turbotax business fed e file 2012 1 – Dec. Turbotax business fed e file 2012 31 374 748 Example. Turbotax business fed e file 2012 Caroline, a travel agent, traveled by ocean liner from New York to London, England, on business in May. Turbotax business fed e file 2012 Her expense for the 6-day cruise was $5,200. Turbotax business fed e file 2012 Caroline's deduction for the cruise cannot exceed $3,744 (6 days × $624 daily limit). Turbotax business fed e file 2012 Meals and entertainment. Turbotax business fed e file 2012   If your expenses for luxury water travel include separately stated amounts for meals or entertainment, those amounts are subject to the 50% limit on meals and entertainment before you apply the daily limit. Turbotax business fed e file 2012 For a discussion of the 50% Limit , see chapter 2. Turbotax business fed e file 2012 Example. Turbotax business fed e file 2012 In the previous example, Caroline's luxury water travel had a total cost of $5,200. Turbotax business fed e file 2012 Of that amount, $3,700 was separately stated as meals and entertainment. Turbotax business fed e file 2012 Caroline, who is self-employed, is not reimbursed for any of her travel expenses. Turbotax business fed e file 2012 Caroline figures her deductible travel expenses as follows. Turbotax business fed e file 2012 Meals and entertainment $3,700   50% limit × . Turbotax business fed e file 2012 50   Allowable meals &     entertainment $1,850   Other travel expenses + 1,800   Allowable cost before the daily limit $3,650 Daily limit for May 2013 $624   Times number of days × 6   Maximum luxury water travel     deduction $3,744 Amount of allowable deduction $3,650 Caroline's deduction for her cruise is limited to $3,650, even though the limit on luxury water travel is slightly higher. Turbotax business fed e file 2012 Not separately stated. Turbotax business fed e file 2012   If your meal or entertainment charges are not separately stated or are not clearly identifiable, you do not have to allocate any portion of the total charge to meals or entertainment. Turbotax business fed e file 2012 Exceptions The daily limit on luxury water travel (discussed earlier) does not apply to expenses you have to attend a convention, seminar, or meeting on board a cruise ship. Turbotax business fed e file 2012 See Cruise Ships under Conventions. Turbotax business fed e file 2012 Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Turbotax business fed e file 2012 You cannot deduct the travel expenses for your family. Turbotax business fed e file 2012 If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Turbotax business fed e file 2012 Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Turbotax business fed e file 2012 You can deduct your travel expenses only if your attendance is connected to your own trade or business. Turbotax business fed e file 2012 Convention agenda. Turbotax business fed e file 2012   The convention agenda or program generally shows the purpose of the convention. Turbotax business fed e file 2012 You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Turbotax business fed e file 2012 The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Turbotax business fed e file 2012 Conventions Held Outside the North American Area You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless: The meeting is directly related to your trade or business, and It is reasonable to hold the meeting outside the North American area. Turbotax business fed e file 2012 See Reasonableness test , later. Turbotax business fed e file 2012 If the meeting meets these requirements, you also must satisfy the rules for deducting expenses for business trips in general, discussed earlier under Travel Outside the United States . Turbotax business fed e file 2012 North American area. Turbotax business fed e file 2012   The North American area includes the following locations. Turbotax business fed e file 2012 American Samoa Johnston Island Antigua and Barbuda Kingman Reef Aruba Marshall Islands Bahamas Mexico Baker Island Micronesia Barbados Midway Islands Bermuda Netherlands Antilles Canada Northern Mariana Costa Rica Islands Dominica Palau Dominican Republic Palmyra Atoll Grenada Panama Guam Puerto Rico Guyana Trinidad and Tobago Honduras USA Howland Island U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 Virgin Islands Jamaica Wake Island Jarvis Island   The North American area also includes U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 islands, cays, and reefs that are possessions of the United States and not part of the fifty states or the District of Columbia. Turbotax business fed e file 2012 Reasonableness test. Turbotax business fed e file 2012   The following factors are taken into account to determine if it was reasonable to hold the meeting outside the North American area. Turbotax business fed e file 2012 The purpose of the meeting and the activities taking place at the meeting. Turbotax business fed e file 2012 The purposes and activities of the sponsoring organizations or groups. Turbotax business fed e file 2012 The homes of the active members of the sponsoring organizations and the places at which other meetings of the sponsoring organizations or groups have been or will be held. Turbotax business fed e file 2012 Other relevant factors you may present. Turbotax business fed e file 2012 Cruise Ships You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. Turbotax business fed e file 2012 All ships that sail are considered cruise ships. Turbotax business fed e file 2012 You can deduct these expenses only if all of the following requirements are met. Turbotax business fed e file 2012 The convention, seminar, or meeting is directly related to your trade or business. Turbotax business fed e file 2012 The cruise ship is a vessel registered in the United States. Turbotax business fed e file 2012 All of the cruise ship's ports of call are in the United States or in possessions of the United States. Turbotax business fed e file 2012 You attach to your return a written statement signed by you that includes information about: The total days of the trip (not including the days of transportation to and from the cruise ship port), The number of hours each day that you devoted to scheduled business activities, and A program of the scheduled business activities of the meeting. Turbotax business fed e file 2012 You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes: A schedule of the business activities of each day of the meeting, and The number of hours you attended the scheduled business activities. Turbotax business fed e file 2012 Prev  Up  Next   Home   More Online Publications
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The Turbotax Business Fed E File 2012

Turbotax business fed e file 2012 Publication 3920 - Main Contents Table of Contents Tax ForgivenessYears Eligible for Tax Forgiveness Amount of Tax Forgiven Refund of Taxes Paid How To Claim Tax Forgiveness Payments to SurvivorsSeptember 11th Victim Compensation Fund of 2001 Qualified Disaster Relief Payments Disability Payments Death Benefits Canceled Debt Payments to Survivors of Public Safety Officers Postponed Tax DeadlinesCovered area. Turbotax business fed e file 2012 Disaster Area Losses Estate Tax Reduction Structured Settlement Factoring Transactions Illustrated Worksheets B and C Additional Worksheets How To Get Tax Help Tax Forgiveness The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. Turbotax business fed e file 2012 Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. Turbotax business fed e file 2012 Any forgiven tax liability owed to the IRS will not have to be paid. Turbotax business fed e file 2012 Any forgiven tax liability that has already been paid will be refunded. Turbotax business fed e file 2012 (See Refund of Taxes Paid, later. Turbotax business fed e file 2012 ) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. Turbotax business fed e file 2012 Then read Amount of Tax Forgiven. Turbotax business fed e file 2012 Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. Turbotax business fed e file 2012 Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. Turbotax business fed e file 2012 See Minimum Amount of Relief later under Amount of Tax Forgiven. Turbotax business fed e file 2012 Years Eligible for Tax Forgiveness The following paragraphs explain which years are eligible for tax forgiveness. Turbotax business fed e file 2012 Oklahoma City attack. Turbotax business fed e file 2012   For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. Turbotax business fed e file 2012 His income tax is forgiven for 1994 and 1995. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. Turbotax business fed e file 2012 She subsequently died of her wounds in 1996. Turbotax business fed e file 2012 Her income tax is forgiven for 1994, 1995, and 1996. Turbotax business fed e file 2012 September 11 attacks and anthrax attacks. Turbotax business fed e file 2012   For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 A Pentagon employee died in the September 11 attack. Turbotax business fed e file 2012 Her income tax is forgiven for 2000 and 2001. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. Turbotax business fed e file 2012 His income tax liability is forgiven for 2000, 2001, and 2002. Turbotax business fed e file 2012 Amount of Tax Forgiven The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. Turbotax business fed e file 2012 On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness. Turbotax business fed e file 2012 To figure the tax to be forgiven, use the following worksheets. Turbotax business fed e file 2012 Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er). Turbotax business fed e file 2012 Use Worksheet B for any eligible year the decedent filed a joint return. Turbotax business fed e file 2012 See the illustrated Worksheet B near the end of this publication. Turbotax business fed e file 2012 Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. Turbotax business fed e file 2012 Instead, complete Worksheet C and file a return for the decedent's last tax year. Turbotax business fed e file 2012 See Minimum Amount of Relief, later. Turbotax business fed e file 2012 If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times. Turbotax business fed e file 2012 In English–7 a. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 to 10 p. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 local time. Turbotax business fed e file 2012 In Spanish–8 a. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 to 9:30 p. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 local time. Turbotax business fed e file 2012 Both spouses died. Turbotax business fed e file 2012   If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. Turbotax business fed e file 2012 Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). Turbotax business fed e file 2012 If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. Turbotax business fed e file 2012 However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. Turbotax business fed e file 2012 The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B. Turbotax business fed e file 2012 Residents of community property states. Turbotax business fed e file 2012   If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. Turbotax business fed e file 2012 Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative. Turbotax business fed e file 2012 Worksheet B. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Turbotax business fed e file 2012 1       2 Enter the decedent's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 2       3 Enter the decedent's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 4       5 Subtract line 4 from line 3. Turbotax business fed e file 2012 5       6 Enter the surviving spouse's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 6       7 Enter the surviving spouse's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Turbotax business fed e file 2012 8       9 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Add lines 5 and 9. Turbotax business fed e file 2012 10       11 Enter the total tax from the joint return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 11       12 Add lines 4 and 8. Turbotax business fed e file 2012 12       13 Subtract line 12 from line 11. Turbotax business fed e file 2012 13       14 Divide line 5 by line 10. Turbotax business fed e file 2012 Enter the result as a decimal. Turbotax business fed e file 2012 14       15 Tax to be forgiven. Turbotax business fed e file 2012 Multiply line 13 by line 14 and enter the result. Turbotax business fed e file 2012 15       Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Worksheet B. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Turbotax business fed e file 2012 1       2 Enter the decedent's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 2       3 Enter the decedent's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 4       5 Subtract line 4 from line 3. Turbotax business fed e file 2012 5       6 Enter the surviving spouse's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 6       7 Enter the surviving spouse's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Turbotax business fed e file 2012 8       9 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Add lines 5 and 9. Turbotax business fed e file 2012 10       11 Enter the total tax from the joint return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 11       12 Add lines 4 and 8. Turbotax business fed e file 2012 12       13 Subtract line 12 from line 11. Turbotax business fed e file 2012 13       14 Divide line 5 by line 10. Turbotax business fed e file 2012 Enter the result as a decimal. Turbotax business fed e file 2012 14       15 Tax to be forgiven. Turbotax business fed e file 2012 Multiply line 13 by line 14 and enter the result. Turbotax business fed e file 2012 15       Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Instructions for Worksheet B Table 1. Turbotax business fed e file 2012 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Turbotax business fed e file 2012 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Turbotax business fed e file 2012 ** File Form 4506 to get a transcript of the decedent's account. Turbotax business fed e file 2012 Table 1. Turbotax business fed e file 2012 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Turbotax business fed e file 2012 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Turbotax business fed e file 2012 ** File Form 4506 to get a transcript of the decedent's account. Turbotax business fed e file 2012 Lines 2 and 6. Turbotax business fed e file 2012   Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns. Turbotax business fed e file 2012   Allocate wages and salaries to the spouse who performed the services and received the Form W-2. Turbotax business fed e file 2012 Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. Turbotax business fed e file 2012 Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate. Turbotax business fed e file 2012   Allocate business deductions to the owner of the business. Turbotax business fed e file 2012 Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate. Turbotax business fed e file 2012 Lines 3 and 7. Turbotax business fed e file 2012   Figure the total tax as if a separate return had been filed. Turbotax business fed e file 2012 The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. Turbotax business fed e file 2012 When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2. Turbotax business fed e file 2012   When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. Turbotax business fed e file 2012 If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. Turbotax business fed e file 2012 Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit. Turbotax business fed e file 2012 Line 4. Turbotax business fed e file 2012   Enter the total, if any, of the following taxes. Turbotax business fed e file 2012 Self-employment tax. Turbotax business fed e file 2012 Social security and Medicare tax on tip income not reported to employer. Turbotax business fed e file 2012 Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Turbotax business fed e file 2012 Tax on excess accumulation in qualified retirement plans. Turbotax business fed e file 2012 Household employment taxes. Turbotax business fed e file 2012 Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Turbotax business fed e file 2012 Tax on golden parachute payments. Turbotax business fed e file 2012 Minimum Amount of Relief The minimum amount of relief is $10,000. Turbotax business fed e file 2012 If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. Turbotax business fed e file 2012 The IRS will refund the difference as explained under Refund of Taxes Paid. Turbotax business fed e file 2012 Use Worksheet C to figure the additional tax payment. Turbotax business fed e file 2012 But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. Turbotax business fed e file 2012 The $6,400 is eligible for forgiveness. Turbotax business fed e file 2012 The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. Turbotax business fed e file 2012 The IRS will treat $10,000 as a tax payment for 2001. Turbotax business fed e file 2012 Income received after date of death. Turbotax business fed e file 2012   Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. Turbotax business fed e file 2012 Examples are the final paycheck or dividends on stock owned by the decedent. Turbotax business fed e file 2012 However, this income is exempt from income tax and is not included on Form 1041 if it is received: After the date of the decedent's death, and Before the end of the decedent's tax year (determined without regard to death). Turbotax business fed e file 2012 Nonqualifying income. Turbotax business fed e file 2012   The following income is not exempt from tax. Turbotax business fed e file 2012 The tax on it is not eligible for forgiveness. Turbotax business fed e file 2012 Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks. Turbotax business fed e file 2012 Amounts that would not have been payable but for an action taken after September 11, 2001. Turbotax business fed e file 2012 The following are examples of nonqualifying income. Turbotax business fed e file 2012 Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent. Turbotax business fed e file 2012 Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason. Turbotax business fed e file 2012 Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack. Turbotax business fed e file 2012 Interest on savings bonds cashed by the beneficiary of the decedent. Turbotax business fed e file 2012 If you are responsible for the estate of a decedent, see Publication 559. Turbotax business fed e file 2012 Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due. Turbotax business fed e file 2012 Instructions for lines 2–9 of Worksheet C. Turbotax business fed e file 2012   The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. Turbotax business fed e file 2012 To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. Turbotax business fed e file 2012 Or, if special requirements are met, you can use the alternative computation instead. Turbotax business fed e file 2012 See Alternative computation, later. Turbotax business fed e file 2012   You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. Turbotax business fed e file 2012 Use Form 1041 to figure what the taxable income would be without including the exempt income. Turbotax business fed e file 2012 Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)). Turbotax business fed e file 2012 Alternative computation. Turbotax business fed e file 2012   Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. Turbotax business fed e file 2012 You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met. Turbotax business fed e file 2012 The estate claimed an income distribution deduction on line 18 (Form 1041). Turbotax business fed e file 2012 Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate. Turbotax business fed e file 2012 If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if: Form 1041 was not required because exempt income was received, and The estate would have claimed an income distribution deduction if the exempt income were taxable. Turbotax business fed e file 2012 If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. Turbotax business fed e file 2012 Complete the rest of Worksheet C to determine the additional payment allowed. Turbotax business fed e file 2012 Worksheet C. Turbotax business fed e file 2012 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Turbotax business fed e file 2012 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Turbotax business fed e file 2012 1 Minimum relief amount. Turbotax business fed e file 2012 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Turbotax business fed e file 2012 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Turbotax business fed e file 2012 3       4 Add lines 2 and 3. Turbotax business fed e file 2012 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 5       6 Add lines 4 and 5. Turbotax business fed e file 2012 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Turbotax business fed e file 2012 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Turbotax business fed e file 2012 8       9 Tax on exempt income. Turbotax business fed e file 2012 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Turbotax business fed e file 2012 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Turbotax business fed e file 2012 10       11 Add lines 9 and 10. Turbotax business fed e file 2012 11   12 Additional payment allowed. Turbotax business fed e file 2012 If line 11 is $10,000 or more, enter -0- and stop here. Turbotax business fed e file 2012 No additional amount is allowed as a tax payment. Turbotax business fed e file 2012 Otherwise, subtract line 11 from line 1 and enter the result. Turbotax business fed e file 2012 12   Note. Turbotax business fed e file 2012 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Turbotax business fed e file 2012 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Turbotax business fed e file 2012 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Turbotax business fed e file 2012 Write "Sec. Turbotax business fed e file 2012 692(d)(2) Payment" and the amount to the right of the entry space. Turbotax business fed e file 2012 Also indicate whether a Form 1041 is being filed for the decedent's estate. Turbotax business fed e file 2012 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Turbotax business fed e file 2012 Write “Sec. Turbotax business fed e file 2012 692(d)(2) Payment” on the dotted line to the left of the entry space. Turbotax business fed e file 2012 Worksheet C. Turbotax business fed e file 2012 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Turbotax business fed e file 2012 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Turbotax business fed e file 2012 1 Minimum relief amount. Turbotax business fed e file 2012 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Turbotax business fed e file 2012 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Turbotax business fed e file 2012 3       4 Add lines 2 and 3. Turbotax business fed e file 2012 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 5       6 Add lines 4 and 5. Turbotax business fed e file 2012 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Turbotax business fed e file 2012 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Turbotax business fed e file 2012 8       9 Tax on exempt income. Turbotax business fed e file 2012 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Turbotax business fed e file 2012 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Turbotax business fed e file 2012 10       11 Add lines 9 and 10. Turbotax business fed e file 2012 11   12 Additional payment allowed. Turbotax business fed e file 2012 If line 11 is $10,000 or more, enter -0- and stop here. Turbotax business fed e file 2012 No additional amount is allowed as a tax payment. Turbotax business fed e file 2012 Otherwise, subtract line 11 from line 1 and enter the result. Turbotax business fed e file 2012 12   Note. Turbotax business fed e file 2012 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Turbotax business fed e file 2012 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Turbotax business fed e file 2012 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Turbotax business fed e file 2012 Write "Sec. Turbotax business fed e file 2012 692(d)(2) Payment" and the amount to the right of the entry space. Turbotax business fed e file 2012 Also indicate whether a Form 1041 is being filed for the decedent's estate. Turbotax business fed e file 2012 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Turbotax business fed e file 2012 Write “Sec. Turbotax business fed e file 2012 692(d)(2) Payment” on the dotted line to the left of the entry space. Turbotax business fed e file 2012 Worksheet D. Turbotax business fed e file 2012 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Turbotax business fed e file 2012 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Turbotax business fed e file 2012 5   6 Estate's tax on exempt income. Turbotax business fed e file 2012 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Turbotax business fed e file 2012 Figure the total tax that would have been payable by all beneficiaries. Turbotax business fed e file 2012 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Turbotax business fed e file 2012 Add the amounts by which each beneficiary's income tax is increased. Turbotax business fed e file 2012 7   8 Add lines 6 and 7. Turbotax business fed e file 2012 Enter this amount on line 9 of Worksheet C. Turbotax business fed e file 2012 8   Worksheet D. Turbotax business fed e file 2012 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Turbotax business fed e file 2012 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Turbotax business fed e file 2012 5   6 Estate's tax on exempt income. Turbotax business fed e file 2012 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Turbotax business fed e file 2012 Figure the total tax that would have been payable by all beneficiaries. Turbotax business fed e file 2012 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Turbotax business fed e file 2012 Add the amounts by which each beneficiary's income tax is increased. Turbotax business fed e file 2012 7   8 Add lines 6 and 7. Turbotax business fed e file 2012 Enter this amount on line 9 of Worksheet C. Turbotax business fed e file 2012 8   Refund of Taxes Paid The IRS will refund the following forgiven income tax liabilities. Turbotax business fed e file 2012 Income tax liabilities that have been paid. Turbotax business fed e file 2012 Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. Turbotax business fed e file 2012 See Minimum Amount of Relief, earlier. Turbotax business fed e file 2012 Example 1. Turbotax business fed e file 2012 A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. Turbotax business fed e file 2012 The total, $14,000, is eligible for tax forgiveness. Turbotax business fed e file 2012 However, he paid only $13,000 of that amount. Turbotax business fed e file 2012 The IRS will refund the $13,000 paid. Turbotax business fed e file 2012 Example 2. Turbotax business fed e file 2012 A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. Turbotax business fed e file 2012 The child qualifies for the minimum relief of $10,000. Turbotax business fed e file 2012 The $10,000 is treated as a tax payment for 2001 and will be refunded. Turbotax business fed e file 2012 Period for filing a claim for credit or refund. Turbotax business fed e file 2012   To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Turbotax business fed e file 2012 For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. Turbotax business fed e file 2012 To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return. Turbotax business fed e file 2012 Extension of time for victims of Oklahoma City attack. Turbotax business fed e file 2012   The period described above has been extended for victims of the Oklahoma City attack. Turbotax business fed e file 2012 Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return. Turbotax business fed e file 2012 How To Claim Tax Forgiveness Use the following procedures to claim income tax forgiveness. Turbotax business fed e file 2012 Which Form To Use The form you use depends on whether an income tax return for the eligible year was already filed for the decedent. Turbotax business fed e file 2012 Return required but not yet filed. Turbotax business fed e file 2012   File Form 1040 if the decedent was a U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 citizen or resident. Turbotax business fed e file 2012 File Form 1040NR if the decedent was a nonresident alien. Turbotax business fed e file 2012 A nonresident alien is someone who is not a U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 citizen or resident. Turbotax business fed e file 2012 Return required and already filed. Turbotax business fed e file 2012   File a separate Form 1040X for each year you are claiming tax relief. Turbotax business fed e file 2012 Return not required and not filed. Turbotax business fed e file 2012   File Form 1040 only for the year of death if the decedent was a U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 citizen or resident. Turbotax business fed e file 2012 File Form 1040NR if the decedent was a nonresident alien. Turbotax business fed e file 2012 Return not required but already filed. Turbotax business fed e file 2012   File Form 1040X only for the year of death. Turbotax business fed e file 2012 How to complete the returns. Turbotax business fed e file 2012   Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. Turbotax business fed e file 2012 Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. Turbotax business fed e file 2012 If filing Form 1040 or Form 1040NR, also attach any Forms W–2. Turbotax business fed e file 2012 If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C. Turbotax business fed e file 2012 Also, please write one of the following across the top of page 1 of each return. Turbotax business fed e file 2012 KITA—Oklahoma City KITA—9/11 KITA—Anthrax “KITA” means “killed in terrorist attack. Turbotax business fed e file 2012 ” Need a copy of a previously filed return?   You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. Turbotax business fed e file 2012 If you need a copy, use Form 4506. Turbotax business fed e file 2012 The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. Turbotax business fed e file 2012 Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. Turbotax business fed e file 2012 Send Form 4506 to the address shown in the form instructions. Turbotax business fed e file 2012 Taxpayer identification number. Turbotax business fed e file 2012   A taxpayer identification number must be furnished on the decedent's returns. Turbotax business fed e file 2012 This is usually the decedent's social security number (SSN). Turbotax business fed e file 2012 However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). Turbotax business fed e file 2012 If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 income tax return for any tax year, do not apply for an ITIN. Turbotax business fed e file 2012 You may claim a refund by filing Form 1040NR without an SSN or ITIN. Turbotax business fed e file 2012 Necessary Documents Please attach the following documents to the return or amended return. Turbotax business fed e file 2012 Proof of death. Turbotax business fed e file 2012   Attach a copy of the death certificate. Turbotax business fed e file 2012 If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate. Turbotax business fed e file 2012 Form 1310. Turbotax business fed e file 2012   You must send Form 1310 with all returns and claims for refund, unless either of the following applies. Turbotax business fed e file 2012 You are a surviving spouse filing an original or amended joint return with the decedent. Turbotax business fed e file 2012 You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return. Turbotax business fed e file 2012 A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. Turbotax business fed e file 2012 A copy of the decedent's will cannot be accepted as evidence that you are the personal representative. Turbotax business fed e file 2012      If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. Turbotax business fed e file 2012 Include a statement saying an amended return will be filed as soon as the necessary tax information is available. Turbotax business fed e file 2012 Where To File The IRS has set up a special office for processing returns and claims for tax forgiveness. Turbotax business fed e file 2012 Use one of the addresses shown below. Turbotax business fed e file 2012 Where you file the returns or claims depends on whether you use the U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 Postal Service or a private delivery service. Turbotax business fed e file 2012 Please do not send these returns or claims to any of the addresses shown in the tax form instructions. Turbotax business fed e file 2012 U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 Postal Service. Turbotax business fed e file 2012   If you use the U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 Postal Service, file these returns and claims at the following address. Turbotax business fed e file 2012 Internal Revenue Service P. Turbotax business fed e file 2012 O. Turbotax business fed e file 2012 Box 4053 Woburn, MA 01888 Private delivery service. Turbotax business fed e file 2012   Private delivery services cannot deliver items to P. Turbotax business fed e file 2012 O. Turbotax business fed e file 2012 boxes. Turbotax business fed e file 2012 If you use a private delivery service, file these returns and claims at the following address. Turbotax business fed e file 2012 Internal Revenue Service Stop 661 310 Lowell St. Turbotax business fed e file 2012 Andover, MA 01810 Designated private delivery services. Turbotax business fed e file 2012   You can use the following private delivery services to file these returns and claims. Turbotax business fed e file 2012 Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service. Turbotax business fed e file 2012 DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight. Turbotax business fed e file 2012 Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day. Turbotax business fed e file 2012 United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Turbotax business fed e file 2012 M. Turbotax business fed e file 2012 , UPS Worldwide Express Plus, and UPS Worldwide Express. Turbotax business fed e file 2012 The private delivery service can tell you how to get written proof of the mailing date. Turbotax business fed e file 2012 Payments to Survivors The following section discusses the tax treatment of certain amounts received by survivors. Turbotax business fed e file 2012 September 11th Victim Compensation Fund of 2001 Payments from the September 11th Victim Compensation Fund of 2001 are not included in income. Turbotax business fed e file 2012 Qualified Disaster Relief Payments Qualified disaster relief payments are not included in income. Turbotax business fed e file 2012 These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). Turbotax business fed e file 2012 No withholding applies to these payments. Turbotax business fed e file 2012 Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses. Turbotax business fed e file 2012 Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack. Turbotax business fed e file 2012 Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. Turbotax business fed e file 2012 (A personal residence can be a rented residence or one you own. Turbotax business fed e file 2012 ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack. Turbotax business fed e file 2012 Qualified disaster relief payments also include the following. Turbotax business fed e file 2012 Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack. Turbotax business fed e file 2012 Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack. Turbotax business fed e file 2012 Qualified disaster relief payments do not include: Insurance or other reimbursements for expenses, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Turbotax business fed e file 2012 Disability Payments For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income. Turbotax business fed e file 2012 Death Benefits Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. Turbotax business fed e file 2012 Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. Turbotax business fed e file 2012 However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack. Turbotax business fed e file 2012 If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. Turbotax business fed e file 2012 For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. Turbotax business fed e file 2012 If that period has expired, you are granted an extension. Turbotax business fed e file 2012 You have until January 22, 2003, to file Form 1040X to exclude the death benefits. Turbotax business fed e file 2012 On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. Turbotax business fed e file 2012 102(b)(2). Turbotax business fed e file 2012 ” Canceled Debt Canceled debt is not included in your income (or the income of the estate) if: You (or the estate) were liable, or became liable, for the debt of a decedent, and The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks. Turbotax business fed e file 2012 The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt. Turbotax business fed e file 2012 Payments to Survivors of Public Safety Officers If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income. Turbotax business fed e file 2012 Bureau of Justice Assistance payments. Turbotax business fed e file 2012   If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance. Turbotax business fed e file 2012 Government plan annuity. Turbotax business fed e file 2012   If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. Turbotax business fed e file 2012 This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer. Turbotax business fed e file 2012 For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews. Turbotax business fed e file 2012 More information. Turbotax business fed e file 2012   For more information, see Publication 559. Turbotax business fed e file 2012 Postponed Tax Deadlines The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. Turbotax business fed e file 2012 The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Turbotax business fed e file 2012 If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Turbotax business fed e file 2012 Affected taxpayers. Turbotax business fed e file 2012   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Turbotax business fed e file 2012 Any individual whose main home is located in a covered area (defined later). Turbotax business fed e file 2012 Any business entity or sole proprietor whose principal place of business is located in a covered area. Turbotax business fed e file 2012 Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. Turbotax business fed e file 2012 The main home or principal place of business does not have to be located in the covered area. Turbotax business fed e file 2012 Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area. Turbotax business fed e file 2012 Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area. Turbotax business fed e file 2012 The spouse on a joint return with a taxpayer who is eligible for postponements. Turbotax business fed e file 2012 Any other person determined by the IRS to be affected by a terrorist attack. Turbotax business fed e file 2012 Covered area. Turbotax business fed e file 2012   This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year. Turbotax business fed e file 2012 Abatement of interest. Turbotax business fed e file 2012   The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement. Turbotax business fed e file 2012 Disaster Area Losses If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return. Turbotax business fed e file 2012 You must make this choice to deduct your loss on your 2000 return by the later of the following dates. Turbotax business fed e file 2012 The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer). Turbotax business fed e file 2012 The due date (with extensions) for the 2000 return. Turbotax business fed e file 2012 For more information about disaster area losses, see Publication 547. Turbotax business fed e file 2012 Estate Tax Reduction The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. Turbotax business fed e file 2012 The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. Turbotax business fed e file 2012 The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. Turbotax business fed e file 2012 These credits may reduce or eliminate the estate tax due. Turbotax business fed e file 2012 A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid. Turbotax business fed e file 2012 Recovery from the September 11th Victim Compensation Fund. Turbotax business fed e file 2012   The value of claims for a decedent's pain and suffering is normally included in the gross estate. Turbotax business fed e file 2012 However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. Turbotax business fed e file 2012 Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund. Turbotax business fed e file 2012 Which estates must file a return. Turbotax business fed e file 2012   For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. Turbotax business fed e file 2012 Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. Turbotax business fed e file 2012 Use Form 4768, Application for Extension of Time To File a Return and/or Pay U. Turbotax business fed e file 2012 S. Turbotax business fed e file 2012 Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension. Turbotax business fed e file 2012 Where to file. Turbotax business fed e file 2012   Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print. Turbotax business fed e file 2012 Internal Revenue Service E & G Department/Stop 824T 201 W. Turbotax business fed e file 2012 Rivercenter Blvd. Turbotax business fed e file 2012 Covington, KY 41011 More information. Turbotax business fed e file 2012   For more information on the federal estate tax, see the instructions for Form 706. Turbotax business fed e file 2012 Structured Settlement Factoring Transactions A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. Turbotax business fed e file 2012 The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. Turbotax business fed e file 2012 However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. Turbotax business fed e file 2012 For information about these requirements, see Internal Revenue Code section 5891. Turbotax business fed e file 2012 Worksheet B Illustrated. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Turbotax business fed e file 2012 1 2000 2001   2 Enter the decedent's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 2 $17,259 $14,295   3 Enter the decedent's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 4 3,532 3,109   5 Subtract line 4 from line 3. Turbotax business fed e file 2012 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions for line 2. Turbotax business fed e file 2012 6 29,025 29,850   7 Enter the surviving spouse's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Turbotax business fed e file 2012 8 0 0   9 Subtract line 8 from line 7. Turbotax business fed e file 2012 9 5,277 5,391   10 Add lines 5 and 9. Turbotax business fed e file 2012 10 7,868 7,532   11 Enter the total tax from the joint return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 11 10,789 9,728   12 Add lines 4 and 8. Turbotax business fed e file 2012 12 3,532 3,109   13 Subtract line 12 from line 11. Turbotax business fed e file 2012 13 7,257 6,619   14 Divide line 5 by line 10. Turbotax business fed e file 2012 Enter the result as a decimal. Turbotax business fed e file 2012 14 . Turbotax business fed e file 2012 329 . Turbotax business fed e file 2012 284   15 Tax to be forgiven. Turbotax business fed e file 2012 Multiply line 13 by line 14 and enter the result. Turbotax business fed e file 2012 15 $2,388 $1,880   Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Worksheet B Illustrated. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Turbotax business fed e file 2012 1 2000 2001   2 Enter the decedent's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 2 $17,259 $14,295   3 Enter the decedent's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 4 3,532 3,109   5 Subtract line 4 from line 3. Turbotax business fed e file 2012 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions for line 2. Turbotax business fed e file 2012 6 29,025 29,850   7 Enter the surviving spouse's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Turbotax business fed e file 2012 8 0 0   9 Subtract line 8 from line 7. Turbotax business fed e file 2012 9 5,277 5,391   10 Add lines 5 and 9. Turbotax business fed e file 2012 10 7,868 7,532   11 Enter the total tax from the joint return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 11 10,789 9,728   12 Add lines 4 and 8. Turbotax business fed e file 2012 12 3,532 3,109   13 Subtract line 12 from line 11. Turbotax business fed e file 2012 13 7,257 6,619   14 Divide line 5 by line 10. Turbotax business fed e file 2012 Enter the result as a decimal. Turbotax business fed e file 2012 14 . Turbotax business fed e file 2012 329 . Turbotax business fed e file 2012 284   15 Tax to be forgiven. Turbotax business fed e file 2012 Multiply line 13 by line 14 and enter the result. Turbotax business fed e file 2012 15 $2,388 $1,880   Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Illustrated Worksheets B and C A wife lost her husband in the September 11 attack on the World Trade Center. Turbotax business fed e file 2012 They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. Turbotax business fed e file 2012 The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities. Turbotax business fed e file 2012 After the husband died, his estate received income of $4,000. Turbotax business fed e file 2012 Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. Turbotax business fed e file 2012 This net profit is exempt from income tax as explained earlier under Income received after date of death. Turbotax business fed e file 2012 The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more. Turbotax business fed e file 2012 To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. Turbotax business fed e file 2012 She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000. Turbotax business fed e file 2012 To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. Turbotax business fed e file 2012 To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C. Turbotax business fed e file 2012   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728 Worksheet C Illustrated. Turbotax business fed e file 2012 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Turbotax business fed e file 2012 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Turbotax business fed e file 2012 1 Minimum relief amount. Turbotax business fed e file 2012 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Turbotax business fed e file 2012 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Turbotax business fed e file 2012 3 0     4 Add lines 2 and 3. Turbotax business fed e file 2012 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 5 1,000     6 Add lines 4 and 5. Turbotax business fed e file 2012 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Turbotax business fed e file 2012 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Turbotax business fed e file 2012 8 435     9 Tax on exempt income. Turbotax business fed e file 2012 Subtract line 8 from line 7. Turbotax business fed e file 2012 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Turbotax business fed e file 2012 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Turbotax business fed e file 2012 10 4,268     11 Add lines 9 and 10. Turbotax business fed e file 2012 11 $4,543 12 Additional payment allowed. Turbotax business fed e file 2012 If line 11 is $10,000 or more, enter -0- and stop here. Turbotax business fed e file 2012 No additional amount is allowed as a tax payment. Turbotax business fed e file 2012 Otherwise, subtract line 11 from line 1 and enter the result. Turbotax business fed e file 2012 12 $5,457 Note. Turbotax business fed e file 2012 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Turbotax business fed e file 2012 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Turbotax business fed e file 2012 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Turbotax business fed e file 2012 Write "Sec. Turbotax business fed e file 2012 692(d)(2) Payment" and the amount to the right of the entry space. Turbotax business fed e file 2012 Also indicate whether a Form 1041 is being filed for the decedent's estate. Turbotax business fed e file 2012 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Turbotax business fed e file 2012 Write “Sec. Turbotax business fed e file 2012 692(d)(2) Payment” on the dotted line to the left of the entry space. Turbotax business fed e file 2012 Worksheet C Illustrated. Turbotax business fed e file 2012 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Turbotax business fed e file 2012 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Turbotax business fed e file 2012 1 Minimum relief amount. Turbotax business fed e file 2012 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Turbotax business fed e file 2012 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Turbotax business fed e file 2012 3 0     4 Add lines 2 and 3. Turbotax business fed e file 2012 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 5 1,000     6 Add lines 4 and 5. Turbotax business fed e file 2012 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Turbotax business fed e file 2012 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Turbotax business fed e file 2012 8 435     9 Tax on exempt income. Turbotax business fed e file 2012 Subtract line 8 from line 7. Turbotax business fed e file 2012 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Turbotax business fed e file 2012 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Turbotax business fed e file 2012 10 4,268     11 Add lines 9 and 10. Turbotax business fed e file 2012 11 $4,543 12 Additional payment allowed. Turbotax business fed e file 2012 If line 11 is $10,000 or more, enter -0- and stop here. Turbotax business fed e file 2012 No additional amount is allowed as a tax payment. Turbotax business fed e file 2012 Otherwise, subtract line 11 from line 1 and enter the result. Turbotax business fed e file 2012 12 $5,457 Note. Turbotax business fed e file 2012 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Turbotax business fed e file 2012 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Turbotax business fed e file 2012 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Turbotax business fed e file 2012 Write "Sec. Turbotax business fed e file 2012 692(d)(2) Payment" and the amount to the right of the entry space. Turbotax business fed e file 2012 Also indicate whether a Form 1041 is being filed for the decedent's estate. Turbotax business fed e file 2012 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Turbotax business fed e file 2012 Write “Sec. Turbotax business fed e file 2012 692(d)(2) Payment” on the dotted line to the left of the entry space. Turbotax business fed e file 2012 Additional Worksheets The following additional worksheets are provided for your convenience. Turbotax business fed e file 2012 Worksheet A. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Turbotax business fed e file 2012 1       2 Enter the total tax from the decedent's income tax return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Turbotax business fed e file 2012 (These taxes are not eligible for forgiveness. Turbotax business fed e file 2012 )           a Self-employment tax. Turbotax business fed e file 2012 3a         b Social security and Medicare tax on tip income not reported to employer. Turbotax business fed e file 2012 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Turbotax business fed e file 2012 3c         d Tax on excess accumulation in qualified retirement plans. Turbotax business fed e file 2012 3d         e Household employment taxes. Turbotax business fed e file 2012 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Turbotax business fed e file 2012 3f         g Tax on golden parachute payments. Turbotax business fed e file 2012 3g       4 Add lines 3a through 3g. Turbotax business fed e file 2012 4       5 Tax to be forgiven. Turbotax business fed e file 2012 Subtract line 4 from line 2. Turbotax business fed e file 2012 5       Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Worksheet A. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Turbotax business fed e file 2012 1       2 Enter the total tax from the decedent's income tax return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Turbotax business fed e file 2012 (These taxes are not eligible for forgiveness. Turbotax business fed e file 2012 )           a Self-employment tax. Turbotax business fed e file 2012 3a         b Social security and Medicare tax on tip income not reported to employer. Turbotax business fed e file 2012 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Turbotax business fed e file 2012 3c         d Tax on excess accumulation in qualified retirement plans. Turbotax business fed e file 2012 3d         e Household employment taxes. Turbotax business fed e file 2012 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Turbotax business fed e file 2012 3f         g Tax on golden parachute payments. Turbotax business fed e file 2012 3g       4 Add lines 3a through 3g. Turbotax business fed e file 2012 4       5 Tax to be forgiven. Turbotax business fed e file 2012 Subtract line 4 from line 2. Turbotax business fed e file 2012 5       Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Worksheet B. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Turbotax business fed e file 2012 1       2 Enter the decedent's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 2       3 Enter the decedent's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 4       5 Subtract line 4 from line 3. Turbotax business fed e file 2012 5       6 Enter the surviving spouse's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 6       7 Enter the surviving spouse's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Turbotax business fed e file 2012 8       9 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Add lines 5 and 9. Turbotax business fed e file 2012 10       11 Enter the total tax from the joint return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 11       12 Add lines 4 and 8. Turbotax business fed e file 2012 12       13 Subtract line 12 from line 11. Turbotax business fed e file 2012 13       14 Divide line 5 by line 10. Turbotax business fed e file 2012 Enter the result as a decimal. Turbotax business fed e file 2012 14       15 Tax to be forgiven. Turbotax business fed e file 2012 Multiply line 13 by line 14 and enter the result. Turbotax business fed e file 2012 15       Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Worksheet B. Turbotax business fed e file 2012 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Turbotax business fed e file 2012 1       2 Enter the decedent's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 2       3 Enter the decedent's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 4       5 Subtract line 4 from line 3. Turbotax business fed e file 2012 5       6 Enter the surviving spouse's taxable income. Turbotax business fed e file 2012 Figure taxable income as if a separate return had been filed. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 6       7 Enter the surviving spouse's total tax. Turbotax business fed e file 2012 See the instructions. Turbotax business fed e file 2012 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Turbotax business fed e file 2012 8       9 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Add lines 5 and 9. Turbotax business fed e file 2012 10       11 Enter the total tax from the joint return. Turbotax business fed e file 2012 See Table 1 on page 5 for the line number for years before 2002. Turbotax business fed e file 2012 11       12 Add lines 4 and 8. Turbotax business fed e file 2012 12       13 Subtract line 12 from line 11. Turbotax business fed e file 2012 13       14 Divide line 5 by line 10. Turbotax business fed e file 2012 Enter the result as a decimal. Turbotax business fed e file 2012 14       15 Tax to be forgiven. Turbotax business fed e file 2012 Multiply line 13 by line 14 and enter the result. Turbotax business fed e file 2012 15       Note. Turbotax business fed e file 2012 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Turbotax business fed e file 2012 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Turbotax business fed e file 2012 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Turbotax business fed e file 2012 The IRS will determine the amount to be refunded. Turbotax business fed e file 2012 Worksheet C. Turbotax business fed e file 2012 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Turbotax business fed e file 2012 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Turbotax business fed e file 2012 1 Minimum tax forgiveness. Turbotax business fed e file 2012 Note. Turbotax business fed e file 2012 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Turbotax business fed e file 2012 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Turbotax business fed e file 2012 3       4 Add lines 2 and 3. Turbotax business fed e file 2012 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 5       6 Add lines 4 and 5. Turbotax business fed e file 2012 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Turbotax business fed e file 2012 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Turbotax business fed e file 2012 8       9 Tax on exempt income. Turbotax business fed e file 2012 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Turbotax business fed e file 2012 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Turbotax business fed e file 2012 10       11 Add lines 9 and 10. Turbotax business fed e file 2012 11   12 Additional payment allowed. Turbotax business fed e file 2012 If line 11 is $10,000 or more, enter -0- and stop here. Turbotax business fed e file 2012 No additional amount is allowed as a tax payment. Turbotax business fed e file 2012 Otherwise, subtract line 11 from line 1 and enter the result. Turbotax business fed e file 2012 12   Note. Turbotax business fed e file 2012 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Turbotax business fed e file 2012 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Turbotax business fed e file 2012 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Turbotax business fed e file 2012 Write "Sec. Turbotax business fed e file 2012 692(d)(2) Payment" and the amount to the right of the entry space. Turbotax business fed e file 2012 Also indicate whether a Form 1041 is being filed for the decedent's estate. Turbotax business fed e file 2012 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Turbotax business fed e file 2012 Write “Sec. Turbotax business fed e file 2012 692(d)(2) Payment” on the dotted line to the left of the entry space. Turbotax business fed e file 2012 Worksheet C. Turbotax business fed e file 2012 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Turbotax business fed e file 2012 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Turbotax business fed e file 2012 1 Minimum tax forgiveness. Turbotax business fed e file 2012 Note. Turbotax business fed e file 2012 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Turbotax business fed e file 2012 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Turbotax business fed e file 2012 3       4 Add lines 2 and 3. Turbotax business fed e file 2012 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Turbotax business fed e file 2012 (See Income received after date of death on page 5. Turbotax business fed e file 2012 ) 5       6 Add lines 4 and 5. Turbotax business fed e file 2012 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Turbotax business fed e file 2012 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Turbotax business fed e file 2012 8       9 Tax on exempt income. Turbotax business fed e file 2012 Subtract line 8 from line 7. Turbotax business fed e file 2012 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Turbotax business fed e file 2012 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Turbotax business fed e file 2012 10       11 Add lines 9 and 10. Turbotax business fed e file 2012 11   12 Additional payment allowed. Turbotax business fed e file 2012 If line 11 is $10,000 or more, enter -0- and stop here. Turbotax business fed e file 2012 No additional amount is allowed as a tax payment. Turbotax business fed e file 2012 Otherwise, subtract line 11 from line 1 and enter the result. Turbotax business fed e file 2012 12   Note. Turbotax business fed e file 2012 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Turbotax business fed e file 2012 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Turbotax business fed e file 2012 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Turbotax business fed e file 2012 Write "Sec. Turbotax business fed e file 2012 692(d)(2) Payment" and the amount to the right of the entry space. Turbotax business fed e file 2012 Also indicate whether a Form 1041 is being filed for the decedent's estate. Turbotax business fed e file 2012 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Turbotax business fed e file 2012 Write “Sec. Turbotax business fed e file 2012 692(d)(2) Payment” on the dotted line to the left of the entry space. Turbotax business fed e file 2012 How To Get Tax Help Special IRS assistance. Turbotax business fed e file 2012   The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. Turbotax business fed e file 2012 We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks. Turbotax business fed e file 2012 Call 1–866–562–5227 Monday through Friday In English–7 a. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 to 10 p. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 local time In Spanish–8 a. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 to 9:30 p. Turbotax business fed e file 2012 m. Turbotax business fed e file 2012 local time   The IRS web site at www. Turbotax business fed e file 2012 irs. Turbotax business fed e file 2012 gov has notices and other tax relief information. Turbotax business fed e file 2012 Check it periodically for any new guidance or to see if Congress has enacted new legislation. Turbotax business fed e file 2012   Business taxpayers affected by the attacks can e-mail their questions to corp. Turbotax business fed e file 2012 disaster. Turbotax business fed e file 2012 relief@irs. Turbotax business fed e file 2012 gov. Turbotax business fed e file 2012   For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www. Turbotax business fed e file 2012 fema. Turbotax business fed e file 2012 gov. Turbotax business fed e file 2012 Other help from the IRS. Turbotax business fed e file 2012   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Turbotax business fed e file 2012 By selecting the method that is best for you, you will have quick and easy access to tax help. Turbotax business fed e file 2012 Contacting your Taxpayer Advocate. Turbotax business fed e file 2012   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. Turbotax business fed e file 2012   The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. Turbotax business fed e file 2012 While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. Turbotax business fed e file 2012   To contact your Taxpayer Advocate: Call the Taxpayer Advocate at 1–877–777–4778. Turbotax business fed e file 2012 Call the IRS at 1–800–829–1040. Turbotax business fed e file 2012 Call, write, or fax the Taxpayer Advocate office in your area. Turbotax business fed e file 2012 Call 1–800–829–4059 if you are a TTY/TDD user. Turbotax business fed e file 2012   For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS. Turbotax business fed e file 2012 Free tax services. Turbotax business fed e file 2012   To find out what services are available, get Publication 910, Guide to Free Tax Services. Turbotax business fed e file 2012 It contains a list of free tax publications and an index of tax topics. Turbotax business fed e file 2012 It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Turbotax business fed e file 2012 Personal computer. Turbotax business fed e file 2012 With your personal computer and modem, you can access the IRS on the Internet at www. Turbotax business fed e file 2012 irs. Turbotax business fed e file 2012 gov. Turbotax business fed e file 2012 While visiting our web site, you can: Find answers to questions you may have. Turbotax business fed e file 2012 Download forms and publications or search for forms and pub