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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

Turbotax Login Online

2011 Tax Form 1040Free 1040x Tax Forms1040 Us Individual Income Tax Return 2012Amended Returns1040 VBack Tax HomeAmend Tax Return OnlineIrs Forms 1040x DownloadHow Can I Amend My 2012 Tax ReturnHow To File A Free State Tax ReturnIrs Gov Free FileForm 1040ez Instructions2012 1040xFree Tax Preparation SoftwareHow Do I Amend My 2011 Tax ReturnHelp With 1040xFree E File State And Federal TaxesFree Irs Tax Filing2005 Tax Filing1040 Ez Form OnlineHr BlockCan I Still E File 2011 TaxesIncome Taxes 20122012 TaxWww Irs Gov 1040x Form1040nr FreeIrs Forms 1040940 Ez FormWhat Is A 1040nr2009 Amended Tax Return InstructionsFree Irs FormsIrs Gov Form1040ezTax Form For MilitaryWww Irs Gov 1040x InstructionsFiling Form 1040xTurbotax For 2011 TaxesTurbo Tax For 2011 Tax YearMilitary Tax Free ZonesFile Form 1040x OnlineState Taxes For Free

Turbotax Login Online

Turbotax login online 1. Turbotax login online   Investment Income Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: General InformationSSN for joint account. Turbotax login online Custodian account for your child. Turbotax login online Penalty for failure to supply SSN. Turbotax login online Certification. Turbotax login online Underreported interest and dividends. Turbotax login online How to stop backup withholding due to underreporting. Turbotax login online How to stop backup withholding due to an incorrect identification number. Turbotax login online Reporting backup withholding. Turbotax login online Nonresident aliens. Turbotax login online Penalties. Turbotax login online Savings account with parent as trustee. Turbotax login online Interest IncomeInterest not reported on Form 1099-INT. Turbotax login online Nominees. Turbotax login online Incorrect amount. Turbotax login online Information reporting requirement. Turbotax login online Taxable Interest — General Below-Market Loans U. Turbotax login online S. Turbotax login online Savings Bonds U. Turbotax login online S. Turbotax login online Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Discount on Debt InstrumentsOriginal Issue Discount (OID) Market Discount Bonds Discount on Short-Term Obligations Election To Report All Interest as OID When To Report Interest IncomeConstructive receipt. Turbotax login online How To Report Interest IncomeSchedule B (Form 1040A or 1040). Turbotax login online Worksheet for savings bonds distributed from a retirement or profit-sharing plan. Turbotax login online File Form 1099-INT with the IRS. Turbotax login online Dividends and Other DistributionsDividends not reported on Form 1099-DIV. Turbotax login online Nominees. Turbotax login online Ordinary Dividends Capital Gain Distributions Nondividend Distributions Liquidating Distributions Distributions of Stock and Stock Rights Other Distributions How To Report Dividend IncomeElection. Turbotax login online Independent contractor. Turbotax login online Investment interest deducted. Turbotax login online Exception 1. Turbotax login online Exception 2. Turbotax login online Undistributed capital gains. Turbotax login online File Form 1099-DIV with the IRS. Turbotax login online Stripped Preferred Stock REMICs, FASITs, and Other CDOsREMICs Collateralized Debt Obligations (CDOs) FASITs S CorporationsLimit on losses and deductions. Turbotax login online Passive activity losses. Turbotax login online Form 8582. Turbotax login online Investment ClubsInvestments in name of member. Turbotax login online Tax Treatment of the Club Topics - This chapter discusses: Interest Income , Discount on Debt Instruments , When To Report Interest Income , How To Report Interest Income , Dividends and Other Distributions , How To Report Dividend Income , Stripped Preferred Stock , Real estate mortgage investment conduits (REMICs), financial asset securitization investment trusts (FASITs), and other collateralized debt obligations (CDOs) , S Corporations , and Investment Clubs . Turbotax login online Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 537 Installment Sales 590 Individual Retirement Arrangements (IRAs) 925 Passive Activity and At-Risk Rules 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses 1040 U. Turbotax login online S. Turbotax login online Individual Income Tax Return 1040A U. Turbotax login online S. Turbotax login online Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1099 General Instructions for Certain Information Returns 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 3115 Application for Change in Accounting Method 6251 Alternative Minimum Tax — Individuals 8582 Passive Activity Loss Limitations 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends 8815 Exclusion of Interest From Series EE and I U. Turbotax login online S. Turbotax login online Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. Turbotax login online S. Turbotax login online Savings Bonds Issued After 1989 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets 8960 Net Investment Income Tax—Individuals, Estates, and Trusts See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Turbotax login online General Information A few items of general interest are covered here. Turbotax login online Recordkeeping. Turbotax login online You should keep a list showing sources and investment income amounts you receive during the year. Turbotax login online Also keep the forms you receive showing your investment income (Forms 1099-INT, Interest Income, and 1099-DIV, Dividends and Distributions, for example) as an important part of your records. Turbotax login online Net investment income tax (NIIT). Turbotax login online   Beginning in 2013, you may be subject to the NIIT. Turbotax login online The NIIT is a 3. Turbotax login online 8% tax on the lesser of your net investment income or the amount of your modified adjusted gross income (MAGI) that is over a threshold amount based on your filing status. Turbotax login online    Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household (with qualifying person) $200,000 Qualifying Widow(er) with dependent child $250,000    For more information, see Form 8960 and Instructions for Form 8960. Turbotax login online Tax on unearned income of certain children. Turbotax login online   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Turbotax login online This may happen if all of the following are true. Turbotax login online The child had more than $2,000 of unearned income. Turbotax login online The child is required to file a tax return. Turbotax login online The child was: Under age 18 at the end of 2013, Age 18 at the end of 2013 and did not have earned income that was more than half of the child's support, or A full-time student over age 18 and under age 24 at the end of 2013 and did not have earned income that was more than half of the child's support. Turbotax login online At least one of the child's parents was alive at the end of 2013. Turbotax login online The child does not file a joint return for 2013. Turbotax login online A child born on January 1, 1996, is considered to be age 18 at the end of 2013; a child born on January 1, 1995, is considered to be age 19 at the end of 2013; a child born on January 1, 1990, is considered to be age 24 at the end of 2013. Turbotax login online   If all of these statements are true, Form 8615 must be completed and attached to the child's tax return. Turbotax login online If any of these statements is not true, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Turbotax login online    However, the parent can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Turbotax login online Use Form 8814 for this purpose. Turbotax login online   For more information about the tax on unearned income of children and the parents' election, see Publication 929, Tax Rules for Children and Dependents. Turbotax login online Beneficiary of an estate or trust. Turbotax login online   Interest, dividends, and other investment income you receive as a beneficiary of an estate or trust is generally taxable income. Turbotax login online You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Turbotax login online , from the fiduciary. Turbotax login online Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Turbotax login online Social security number (SSN). Turbotax login online   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. Turbotax login online This includes payers of interest and dividends. Turbotax login online If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. Turbotax login online SSN for joint account. Turbotax login online   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. Turbotax login online (For information on who owns the funds in a joint account, see Joint accounts , later. Turbotax login online ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. Turbotax login online This is because only one name and SSN can be shown on Form 1099. Turbotax login online   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. Turbotax login online For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. Turbotax login online Custodian account for your child. Turbotax login online   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. Turbotax login online For example, you must give your child's SSN to the payer of dividends on stock owned by your child, even though the dividends are paid to you as custodian. Turbotax login online Penalty for failure to supply SSN. Turbotax login online   You will be subject to a penalty if, when required, you fail to: Include your SSN on any return, statement, or other document, Give your SSN to another person who must include it on any return, statement, or other document, or Include the SSN of another person on any return, statement, or other document. Turbotax login online The penalty is $50 for each failure up to a maximum penalty of $100,000 for any calendar year. Turbotax login online   You will not be subject to this penalty if you can show that your failure to provide the SSN was due to reasonable cause and not to willful neglect. Turbotax login online   If you fail to supply an SSN, you may also be subject to backup withholding. Turbotax login online Backup withholding. Turbotax login online   Your investment income is generally not subject to regular withholding. Turbotax login online However, it may be subject to backup withholding to ensure that income tax is collected on the income. Turbotax login online Under backup withholding, the bank, broker, or other payer of interest, original issue discount (OID), dividends, cash patronage dividends, or royalties must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Turbotax login online   Backup withholding applies if: You do not give the payer your identification number (either a social security number or an employer identification number) in the required manner, The IRS notifies the payer that you gave an incorrect identification number, The IRS notifies the payer that you are subject to backup withholding on interest or dividends because you have underreported interest or dividends on your income tax return, or You are required, but fail, to certify that you are not subject to backup withholding for the reason described in (3). Turbotax login online Certification. Turbotax login online   For new accounts paying interest or dividends, you must certify under penalties of perjury that your SSN is correct and that you are not subject to backup withholding. Turbotax login online Your payer will give you a Form W-9, Request for Taxpayer Identification Number and Certification, or similar form, to make this certification. Turbotax login online If you fail to make this certification, backup withholding may begin immediately on your new account or investment. Turbotax login online Underreported interest and dividends. Turbotax login online   You will be considered to have underreported your interest and dividends if the IRS has determined for a tax year that: You failed to include any part of a reportable interest or dividend payment required to be shown on your return, or You were required to file a return and to include a reportable interest or dividend payment on that return, but you failed to file the return. Turbotax login online How to stop backup withholding due to underreporting. Turbotax login online   If you have been notified that you underreported interest or dividends, you can request a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. Turbotax login online You must show that at least one of the following situations applies. Turbotax login online No underreporting occurred. Turbotax login online You have a bona fide dispute with the IRS about whether underreporting occurred. Turbotax login online Backup withholding will cause or is causing an undue hardship, and it is unlikely that you will underreport interest and dividends in the future. Turbotax login online You have corrected the underreporting by filing a return if you did not previously file one and by paying all taxes, penalties, and interest due for any underreported interest or dividend payments. Turbotax login online   If the IRS determines that backup withholding should stop, it will provide you with a certification and will notify the payers who were sent notices earlier. Turbotax login online How to stop backup withholding due to an incorrect identification number. Turbotax login online   If you have been notified by a payer that you are subject to backup withholding because you have provided an incorrect SSN or employer identification number, you can stop it by following the instructions the payer gives you. Turbotax login online Reporting backup withholding. Turbotax login online   If backup withholding is deducted from your interest or dividend income or other reportable payment, the bank or other business must give you an information return for the year (for example, a Form 1099-INT) indicating the amount withheld. Turbotax login online The information return will show any backup withholding as “Federal income tax withheld. Turbotax login online ” Nonresident aliens. Turbotax login online    Generally, payments made to nonresident aliens are not subject to backup withholding. Turbotax login online You can use Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to certify exempt status. Turbotax login online However, this does not exempt you from the 30% (or lower treaty) withholding rate that may apply to your investment income. Turbotax login online For information on the 30% rate, see Publication 519, U. Turbotax login online S. Turbotax login online Tax Guide for Aliens. Turbotax login online Penalties. Turbotax login online   There are civil and criminal penalties for giving false information to avoid backup withholding. Turbotax login online The civil penalty is $500. Turbotax login online The criminal penalty, upon conviction, is a fine of up to $1,000, or imprisonment of up to 1 year, or both. Turbotax login online Where to report investment income. Turbotax login online   Table 1-1 gives an overview of the forms and schedules to use to report some common types of investment income. Turbotax login online But see the rest of this publication for detailed information about reporting investment income. Turbotax login online Joint accounts. Turbotax login online   If two or more persons hold property (such as a savings account, bond, or stock) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest or dividends from the property is determined by local law. Turbotax login online Community property states. Turbotax login online   If you are married and receive a distribution that is community income, one-half of the distribution is generally considered to be received by each spouse. Turbotax login online If you file separate returns, you must each report one-half of any taxable distribution. Turbotax login online See Publication 555, Community Property, for more information on community income. Turbotax login online   If the distribution is not considered community property and you and your spouse file separate returns, each of you must report your separate taxable distributions. Turbotax login online Example. Turbotax login online You and your spouse have a joint money market account. Turbotax login online Under state law, half the income from the account belongs to you, and half belongs to your spouse. Turbotax login online If you file separate returns, you each report half the income. Turbotax login online Income from property given to a child. Turbotax login online   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. Turbotax login online   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. Turbotax login online Savings account with parent as trustee. Turbotax login online   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. Turbotax login online The savings account legally belongs to the child. Turbotax login online The parents are not legally permitted to use any of the funds to support the child. Turbotax login online Table 1-1. Turbotax login online Where To Report Common Types of Investment Income (For detailed information about reporting investment income, see the rest of this publication, especially How To Report Interest Income and How To Report Dividend Income in chapter 1. Turbotax login online ) Type of Income If you file Form 1040, report on . Turbotax login online . Turbotax login online . Turbotax login online If you can file Form 1040A, report on . Turbotax login online . Turbotax login online . Turbotax login online If you can file Form 1040EZ, report on . Turbotax login online . Turbotax login online . Turbotax login online Tax-exempt interest (Form 1099-INT, box 8) Line 8b Line 8b Space to the left of line 2 (enter “TEI” and the amount) Taxable interest that totals $1,500 or less Line 8a (You may need to file Schedule B as well. Turbotax login online ) Line 8a (You may need to file Schedule B as well. Turbotax login online ) Line 2 Taxable interest that totals more than $1,500 Line 8a; also use Schedule B, line 1 Line 8a; also use Schedule B, line 1   Savings bond interest you will exclude because of higher education expenses Schedule B; also use Form 8815 Schedule B; also use Form 8815   Ordinary dividends that total $1,500 or less Line 9a (You may need to file Schedule B as well. Turbotax login online ) Line 9a (You may need to file Schedule B as well. Turbotax login online )   Ordinary dividends that total more than $1,500 Line 9a; also use Schedule B, line 5 Line 9a; also use Schedule B, line 5   Qualified dividends (if you do not have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2 Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2   Qualified dividends (if you have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, line 2 You cannot use Form 1040A    You cannot use Form 1040EZ Capital gain distributions (if you do not have to file Schedule D) Line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3 Line 10; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3   Capital gain distributions (if you have to file Schedule D) Schedule D, line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     Section 1250, 1202, or collectibles gain (Form 1099-DIV, box 2b, 2c, or 2d) Form 8949 and Schedule D     Nondividend distributions (Form 1099-DIV, box 3) Generally not reported*     Undistributed capital gains (Form 2439, boxes 1a - 1d) Schedule D     Gain or loss from sales of stocks or bonds Line 13; also use Form 8949, Schedule D, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet You cannot use Form 1040A   Gain or loss from exchanges of like-kind investment property Line 13; also use Schedule D, Form 8824, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     *Report any amounts in excess of your basis in your mutual fund shares on Form 8949. Turbotax login online Use Part II if you held the shares more than 1 year. Turbotax login online Use Part I if you held your mutual fund shares 1 year or less. Turbotax login online For details on Form 8949, see Reporting Capital Gains and Losses in chapter 4, and the Instructions for Form 8949. Turbotax login online Accuracy-related penalty. Turbotax login online   An accuracy-related penalty of 20% can be charged for underpayments of tax due to negligence or disregard of rules or regulations or substantial understatement of tax. Turbotax login online For information on the penalty and any interest that applies, see Penalties in chapter 2. Turbotax login online Interest Income This section discusses the tax treatment of different types of interest income. Turbotax login online In general, any interest that you receive or that is credited to your account and can be withdrawn is taxable income. Turbotax login online (It does not have to be entered in your passbook. Turbotax login online ) Exceptions to this rule are discussed later. Turbotax login online Form 1099-INT. Turbotax login online   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. Turbotax login online This form shows you the interest you received during the year. Turbotax login online Keep this form for your records. Turbotax login online You do not have to attach it to your tax return. Turbotax login online   Report on your tax return the total interest income you receive for the tax year. Turbotax login online Interest not reported on Form 1099-INT. Turbotax login online   Even if you do not receive Form 1099-INT, you must still report all of your interest income. Turbotax login online For example, you may receive distributive shares of interest from partnerships or S corporations. Turbotax login online This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Turbotax login online , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Turbotax login online Nominees. Turbotax login online   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. Turbotax login online   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on Nominee distributions , later, under How To Report Interest Income. Turbotax login online Incorrect amount. Turbotax login online   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Turbotax login online The new Form 1099-INT you receive will be marked “Corrected. Turbotax login online ” Form 1099-OID. Turbotax login online   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. Turbotax login online For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. Turbotax login online Exempt-interest dividends. Turbotax login online   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Turbotax login online (However, see Information reporting requirement , next. Turbotax login online ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Turbotax login online You do not reduce your basis for distributions that are exempt-interest dividends. Turbotax login online Information reporting requirement. Turbotax login online   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. Turbotax login online This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. Turbotax login online See How To Report Interest Income , later. Turbotax login online Note. Turbotax login online Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Turbotax login online The exempt-interest dividends subject to the alternative minimum tax are shown in box 11 of Form 1099-DIV. Turbotax login online See Form 6251 and its instructions for more information about this tax. Turbotax login online Private activity bonds are discussed later under State or Local Government Obligations. Turbotax login online Interest on VA dividends. Turbotax login online   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. Turbotax login online This includes interest paid on dividends on converted United States Government Life Insurance policies and on National Service Life Insurance policies. Turbotax login online Individual retirement arrangements (IRAs). Turbotax login online   Interest on a Roth IRA generally is not taxable. Turbotax login online Interest on a traditional IRA is tax deferred. Turbotax login online You generally do not include it in your income until you make withdrawals from the IRA. Turbotax login online See Publication 590 for more information. Turbotax login online Taxable Interest — General Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. Turbotax login online The following are some sources of taxable interest. Turbotax login online Dividends that are actually interest. Turbotax login online   Certain distributions commonly called dividends are actually interest. Turbotax login online You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. Turbotax login online  The “dividends” will be shown as interest income on Form 1099-INT. Turbotax login online Money market funds. Turbotax login online   Money market funds are offered by nonbank financial institutions such as mutual funds and stock brokerage houses, and pay dividends. Turbotax login online Generally, amounts you receive from money market funds should be reported as dividends, not as interest. Turbotax login online Certificates of deposit and other deferred interest accounts. Turbotax login online   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. Turbotax login online You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. Turbotax login online The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. Turbotax login online If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. Turbotax login online Interest subject to penalty for early withdrawal. Turbotax login online   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. Turbotax login online You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. Turbotax login online See Penalty on early withdrawal of savings under How To Report Interest Income, later, for more information on how to report the interest and deduct the penalty. Turbotax login online Money borrowed to invest in certificate of deposit. Turbotax login online   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. Turbotax login online You must report the total interest you earn on the certificate in your income. Turbotax login online If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. Turbotax login online See Interest Expenses in chapter 3. Turbotax login online Example. Turbotax login online You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. Turbotax login online The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. Turbotax login online The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. Turbotax login online The bank also gives you a statement showing that you paid $310 interest for 2013. Turbotax login online You must include the $575 in your income. Turbotax login online If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you can deduct $310, subject to the net investment income limit. Turbotax login online Gift for opening account. Turbotax login online   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. Turbotax login online   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. Turbotax login online For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. Turbotax login online The value is determined by the cost to the financial institution. Turbotax login online Example. Turbotax login online You open a savings account at your local bank and deposit $800. Turbotax login online The account earns $20 interest. Turbotax login online You also receive a $15 calculator. Turbotax login online If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. Turbotax login online You must report $35 interest income on your tax return. Turbotax login online Interest on insurance dividends. Turbotax login online   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. Turbotax login online However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. Turbotax login online Prepaid insurance premiums. Turbotax login online   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. Turbotax login online U. Turbotax login online S. Turbotax login online obligations. Turbotax login online   Interest on U. Turbotax login online S. Turbotax login online obligations, such as U. Turbotax login online S. Turbotax login online Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. Turbotax login online Interest on tax refunds. Turbotax login online   Interest you receive on tax refunds is taxable income. Turbotax login online Interest on condemnation award. Turbotax login online   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. Turbotax login online Installment sale payments. Turbotax login online   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. Turbotax login online That interest is taxable when you receive it. Turbotax login online If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. Turbotax login online See Unstated Interest and Original Issue Discount (OID) in Publication 537. Turbotax login online Interest on annuity contract. Turbotax login online   Accumulated interest on an annuity contract you sell before its maturity date is taxable. Turbotax login online Usurious interest. Turbotax login online   Usurious interest is interest charged at an illegal rate. Turbotax login online This is taxable as interest unless state law automatically changes it to a payment on the principal. Turbotax login online Interest income on frozen deposits. Turbotax login online   Exclude from your gross income interest on frozen deposits. Turbotax login online A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state in which the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. Turbotax login online   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). Turbotax login online If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income for information about reporting this interest income exclusion on your tax return. Turbotax login online   The interest you exclude is treated as credited to your account in the following year. Turbotax login online You must include it in income in the year you can withdraw it. Turbotax login online Example. Turbotax login online $100 of interest was credited on your frozen deposit during the year. Turbotax login online You withdrew $80 but could not withdraw any more as of the end of the year. Turbotax login online You must include $80 in your income and exclude $20 from your income for the year. Turbotax login online You must include the $20 in your income for the year you can withdraw it. Turbotax login online Bonds traded flat. Turbotax login online    If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. Turbotax login online The defaulted or unpaid interest is not income and is not taxable as interest if paid later. Turbotax login online When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. Turbotax login online Interest that accrues after the date of purchase, however, is taxable interest income for the year received or accrued. Turbotax login online See Bonds Sold Between Interest Dates , later in this chapter. Turbotax login online Below-Market Loans If you make a below-market gift or demand loan, you must report as interest income any forgone interest (defined later) from that loan. Turbotax login online The below-market loan rules and exceptions are described in this section. Turbotax login online For more information, see section 7872 of the Internal Revenue Code and its regulations. Turbotax login online If you receive a below-market loan, you may be able to deduct the forgone interest as well as any interest you actually paid, but not if it is personal interest. Turbotax login online Loans subject to the rules. Turbotax login online   The rules for below-market loans apply to: Gift loans, Pay-related loans, Corporation-shareholder loans, Tax avoidance loans, and Certain loans made to qualified continuing care facilities under a continuing care contract. Turbotax login online A pay-related loan is any below-market loan between an employer and an employee or between an independent contractor and a person for whom the contractor provides services. Turbotax login online A tax avoidance loan is any below-market loan where the avoidance of federal tax is one of the main purposes of the interest arrangement. Turbotax login online Forgone interest. Turbotax login online   For any period, forgone interest is: The amount of interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. Turbotax login online Applicable federal rate. Turbotax login online   Applicable federal rates are published by the IRS each month in the Internal Revenue Bulletin. Turbotax login online Some IRS offices have these bulletins available for research. Turbotax login online See chapter 5, How To Get Tax Help , for other ways to get this information. Turbotax login online Rules for below-market loans. Turbotax login online   The rules that apply to a below-market loan depend on whether the loan is a gift loan, demand loan, or term loan. Turbotax login online Gift and demand loans. Turbotax login online   A gift loan is any below-market loan where the forgone interest is in the nature of a gift. Turbotax login online   A demand loan is a loan payable in full at any time upon demand by the lender. Turbotax login online A demand loan is a below-market loan if no interest is charged or if interest is charged at a rate below the applicable federal rate. Turbotax login online   A demand loan or gift loan that is a below-market loan is generally treated as an arm's-length transaction in which the lender is treated as having made: A loan to the borrower in exchange for a note that requires the payment of interest at the applicable federal rate, and An additional payment to the borrower in an amount equal to the forgone interest. Turbotax login online The borrower is generally treated as transferring the additional payment back to the lender as interest. Turbotax login online The lender must report that amount as interest income. Turbotax login online   The lender's additional payment to the borrower is treated as a gift, dividend, contribution to capital, pay for services, or other payment, depending on the substance of the transaction. Turbotax login online The borrower may have to report this payment as taxable income, depending on its classification. Turbotax login online These transfers are considered to occur annually, generally on December 31. Turbotax login online Term loans. Turbotax login online   A term loan is any loan that is not a demand loan. Turbotax login online A term loan is a below-market loan if the amount of the loan is more than the present value of all payments due under the loan. Turbotax login online   A lender who makes a below-market term loan other than a gift loan is treated as transferring an additional lump-sum cash payment to the borrower (as a dividend, contribution to capital, etc. Turbotax login online ) on the date the loan is made. Turbotax login online The amount of this payment is the amount of the loan minus the present value, at the applicable federal rate, of all payments due under the loan. Turbotax login online An equal amount is treated as original issue discount (OID). Turbotax login online The lender must report the annual part of the OID as interest income. Turbotax login online The borrower may be able to deduct the OID as interest expense. Turbotax login online See Original Issue Discount (OID) , later. Turbotax login online Exceptions to the below-market loan rules. Turbotax login online   Exceptions to the below-market loan rules are discussed here. Turbotax login online Exception for loans of $10,000 or less. Turbotax login online   The rules for below-market loans do not apply to any day on which the total outstanding amount of loans between the borrower and lender is $10,000 or less. Turbotax login online This exception applies only to: Gift loans between individuals if the gift loan is not directly used to buy or carry income-producing assets, and Pay-related loans or corporation-shareholder loans if the avoidance of federal tax is not a principal purpose of the interest arrangement. Turbotax login online This exception does not apply to a term loan described in (2) earlier that previously has been subject to the below-market loan rules. Turbotax login online Those rules will continue to apply even if the outstanding balance is reduced to $10,000 or less. Turbotax login online Exception for loans to continuing care facilities. Turbotax login online   Loans to qualified continuing care facilities under continuing care contracts are not subject to the rules for below-market loans for the calendar year if the lender or the lender's spouse is age 62 or older at the end of the year. Turbotax login online For the definitions of qualified continuing care facility and continuing care contract, see Internal Revenue Code section 7872(h). Turbotax login online Exception for loans without significant tax effect. Turbotax login online   Loans are excluded from the below-market loan rules if their interest arrangements do not have a significant effect on the federal tax liability of the borrower or the lender. Turbotax login online These loans include: Loans made available by the lender to the general public on the same terms and conditions that are consistent with the lender's customary business practice; Loans subsidized by a federal, state, or municipal government that are made available under a program of general application to the public; Certain employee-relocation loans; Certain loans from a foreign person, unless the interest income would be effectively connected with the conduct of a U. Turbotax login online S. Turbotax login online trade or business and would not be exempt from U. Turbotax login online S. Turbotax login online tax under an income tax treaty; Gift loans to a charitable organization, contributions to which are deductible, if the total outstanding amount of loans between the organization and lender is $250,000 or less at all times during the tax year; and Other loans on which the interest arrangement can be shown to have no significant effect on the federal tax liability of the lender or the borrower. Turbotax login online For a loan described in (6) above, all the facts and circumstances are used to determine if the interest arrangement has a significant effect on the federal tax liability of the lender or borrower. Turbotax login online Some factors to be considered are: Whether items of income and deduction generated by the loan offset each other; The amount of these items; The cost to you of complying with the below-market loan rules, if they were to apply; and Any reasons other than taxes for structuring the transaction as a below-market loan. Turbotax login online If you structure a transaction to meet this exception and one of the principal purposes of that structure is the avoidance of federal tax, the loan will be considered a tax-avoidance loan, and this exception will not apply. Turbotax login online Limit on forgone interest for gift loans of $100,000 or less. Turbotax login online   For gift loans between individuals, if the outstanding loans between the lender and borrower total $100,000 or less, the forgone interest to be included in income by the lender and deducted by the borrower is limited to the amount of the borrower's net investment income for the year. Turbotax login online If the borrower's net investment income is $1,000 or less, it is treated as zero. Turbotax login online This limit does not apply to a loan if the avoidance of federal tax is one of the main purposes of the interest arrangement. Turbotax login online Effective dates. Turbotax login online    These rules apply to term loans made after June 6, 1984, and to demand loans outstanding after that date. Turbotax login online U. Turbotax login online S. Turbotax login online Savings Bonds This section provides tax information on U. Turbotax login online S. Turbotax login online savings bonds. Turbotax login online It explains how to report the interest income on these bonds and how to treat transfers of these bonds. Turbotax login online U. Turbotax login online S. Turbotax login online savings bonds currently offered to individuals include Series EE bonds and Series I bonds. Turbotax login online For other information on U. Turbotax login online S. Turbotax login online savings bonds, write to:  For Series HH/H: Bureau of the Fiscal Service Division of Customer Assistance P. Turbotax login online O. Turbotax login online Box 2186 Parkersburg, WV 26106-2186  For Series EE and I paper savings bonds: Bureau of the Fiscal Service Division of Customer Assistance P. Turbotax login online O. Turbotax login online Box 7012 Parkersburg, WV 26106-7012  For Series EE and I electronic bonds: Bureau of the Fiscal Service  Division of Customer Assistance P. Turbotax login online O. Turbotax login online Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. Turbotax login online treasurydirect. Turbotax login online gov/indiv/indiv. Turbotax login online htm. Turbotax login online Accrual method taxpayers. Turbotax login online   If you use an accrual method of accounting, you must report interest on U. Turbotax login online S. Turbotax login online savings bonds each year as it accrues. Turbotax login online You cannot postpone reporting interest until you receive it or until the bonds mature. Turbotax login online Cash method taxpayers. Turbotax login online   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. Turbotax login online S. Turbotax login online savings bonds when you receive it. Turbotax login online But see Reporting options for cash method taxpayers , later. Turbotax login online Series HH bonds. Turbotax login online   These bonds were issued at face value. Turbotax login online Interest is paid twice a year by direct deposit to your bank account. Turbotax login online If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. Turbotax login online   Series HH bonds were first offered in 1980 and last offered in August 2004. Turbotax login online Before 1980, series H bonds were issued. Turbotax login online Series H bonds are treated the same as series HH bonds. Turbotax login online If you are a cash method taxpayer, you must report the interest when you receive it. Turbotax login online   Series H bonds have a maturity period of 30 years. Turbotax login online Series HH bonds mature in 20 years. Turbotax login online The last series H bonds matured in 2009. Turbotax login online The last series HH bonds will mature in 2024. Turbotax login online Series EE and series I bonds. Turbotax login online   Interest on these bonds is payable when you redeem the bonds. Turbotax login online The difference between the purchase price and the redemption value is taxable interest. Turbotax login online Series EE bonds. Turbotax login online   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. Turbotax login online Before July 1980, series E bonds were issued. Turbotax login online The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. Turbotax login online Paper series EE and series E bonds are issued at a discount. Turbotax login online The face value is payable to you at maturity. Turbotax login online Electronic series EE bonds are issued at their face value. Turbotax login online The face value plus accrued interest is payable to you at maturity. Turbotax login online As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. Turbotax login online    Owners of paper series EE bonds can convert them to electronic bonds. Turbotax login online These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). Turbotax login online Series I bonds. Turbotax login online   Series I bonds were first offered in 1998. Turbotax login online These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. Turbotax login online The face value plus all accrued interest is payable to you at maturity. Turbotax login online Reporting options for cash method taxpayers. Turbotax login online   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. Turbotax login online Method 1. Turbotax login online Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature. Turbotax login online (However, see Savings bonds traded , later. Turbotax login online )  Note. Turbotax login online Series EE bonds issued in 1983 matured in 2013. Turbotax login online If you have used method 1, you generally must report the interest on these bonds on your 2013 return. Turbotax login online The last series E bonds were issued in 1980 and matured in 2010. Turbotax login online If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. Turbotax login online Method 2. Turbotax login online Choose to report the increase in redemption value as interest each year. Turbotax login online  You must use the same method for all series EE, series E, and series I bonds you own. Turbotax login online If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. Turbotax login online If you plan to cash your bonds in the same year you will pay for higher educational expenses, you may want to use method 1 because you may be able to exclude the interest from your income. Turbotax login online To learn how, see Education Savings Bond Program, later. Turbotax login online Change from method 1. Turbotax login online   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. Turbotax login online In the year of change, you must report all interest accrued to date and not previously reported for all your bonds. Turbotax login online   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. Turbotax login online Change from method 2. Turbotax login online   To change from method 2 to method 1, you must request permission from the IRS. Turbotax login online Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. Turbotax login online You have typed or printed the following number at the top: “131. Turbotax login online ” It includes your name and social security number under “131. Turbotax login online ” It includes the year of change (both the beginning and ending dates). Turbotax login online It identifies the savings bonds for which you are requesting this change. Turbotax login online It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest; and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. Turbotax login online   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). Turbotax login online   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. Turbotax login online On the statement, type or print “Filed pursuant to section 301. Turbotax login online 9100-2. Turbotax login online ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). Turbotax login online    By the date you file the original statement with your return, you must also send a signed copy to the address below. Turbotax login online    Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. Turbotax login online O. Turbotax login online Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. Turbotax login online Internal Revenue Service Attention: CC:IT&A  (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW Washington, DC 20224    Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115. Turbotax login online In that case, follow the form instructions for an automatic change. Turbotax login online No user fee is required. Turbotax login online Co-owners. Turbotax login online   If a U. Turbotax login online S. Turbotax login online savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. Turbotax login online One co-owner's funds used. Turbotax login online   If you used your funds to buy the bond, you must pay the tax on the interest. Turbotax login online This is true even if you let the other co-owner redeem the bond and keep all the proceeds. Turbotax login online Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. Turbotax login online The co-owner who redeemed the bond is a “nominee. Turbotax login online ” See Nominee distributions under How To Report Interest Income, later, for more information about how a person who is a nominee reports interest income belonging to another person. Turbotax login online Both co-owners' funds used. Turbotax login online   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. Turbotax login online Community property. Turbotax login online   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. Turbotax login online If you file separate returns, each of you generally must report one-half of the bond interest. Turbotax login online For more information about community property, see Publication 555. Turbotax login online Table 1-2. Turbotax login online   These rules are also shown in Table 1-2. Turbotax login online Child as only owner. Turbotax login online   Interest on U. Turbotax login online S. Turbotax login online savings bonds bought for and registered only in the name of your child is income to your child, even if you paid for the bonds and are named as beneficiary. Turbotax login online If the bonds are series EE, series E, or series I bonds, the interest on the bonds is income to your child in the earlier of the year the bonds are cashed or disposed of or the year the bonds mature, unless your child chooses to report the interest income each year. Turbotax login online Choice to report interest each year. Turbotax login online   The choice to report the accrued interest each year can be made either by your child or by you for your child. Turbotax login online This choice is made by filing an income tax return that shows all the interest earned to date, and by stating on the return that your child chooses to report the interest each year. Turbotax login online Either you or your child should keep a copy of this return. Turbotax login online   Unless your child is otherwise required to file a tax return for any year after making this choice, your child does not have to file a return only to report the annual accrual of U. Turbotax login online S. Turbotax login online savings bond interest under this choice. Turbotax login online However, see Tax on unearned income of certain children , earlier, under General Information. Turbotax login online Neither you nor your child can change the way you report the interest unless you request permission from the IRS, as discussed earlier under Change from method 2 . Turbotax login online Ownership transferred. Turbotax login online   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. Turbotax login online But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. Turbotax login online   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. Turbotax login online Example. Turbotax login online You bought series EE bonds entirely with your own funds. Turbotax login online You did not choose to report the accrued interest each year. Turbotax login online Later, you transfer the bonds to your former spouse under a divorce agreement. Turbotax login online You must include the deferred accrued interest, from the date of the original issue of the bonds to the date of transfer, in your income in the year of transfer. Turbotax login online Your former spouse includes in income the interest on the bonds from the date of transfer to the date of redemption. Turbotax login online Table 1-2. Turbotax login online Who Pays the Tax on U. Turbotax login online S. Turbotax login online Savings Bond Interest IF . Turbotax login online . Turbotax login online . Turbotax login online THEN the interest must be reported by . Turbotax login online . Turbotax login online . Turbotax login online you buy a bond in your name and the name of another person as co-owners, using only your own funds you. Turbotax login online you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. Turbotax login online you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. Turbotax login online you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. Turbotax login online If you file separate returns, both you and your spouse generally report one-half of the interest. Turbotax login online Purchased jointly. Turbotax login online   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. Turbotax login online The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. Turbotax login online This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. Turbotax login online   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. Turbotax login online But the new co-owner will report only his or her share of the interest earned after the transfer. Turbotax login online   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. Turbotax login online Example 1. Turbotax login online You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. Turbotax login online The bond was issued to you and your spouse as co-owners. Turbotax login online You both postpone reporting interest on the bond. Turbotax login online You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Turbotax login online At that time neither you nor your spouse has to report the interest earned to the date of reissue. Turbotax login online Example 2. Turbotax login online You bought a $1,000 series EE savings bond entirely with your own funds. Turbotax login online The bond was issued to you and your spouse as co-owners. Turbotax login online You both postponed reporting interest on the bond. Turbotax login online You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Turbotax login online You must report half the interest earned to the date of reissue. Turbotax login online Transfer to a trust. Turbotax login online   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. Turbotax login online However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. Turbotax login online You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. Turbotax login online   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. Turbotax login online See Savings bonds traded , later. Turbotax login online Decedents. Turbotax login online   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. Turbotax login online Decedent who reported interest each year. Turbotax login online   If the bonds transferred because of death were owned by a person who used an accrual method, or who used the cash method and had chosen to report the interest each year, the interest earned in the year of death up to the date of death must be reported on that person's final return. Turbotax login online The person who acquires the bonds includes in income only interest earned after the date of death. Turbotax login online Decedent who postponed reporting interest. Turbotax login online   If the transferred bonds were owned by a decedent who had used the cash method and had not chosen to report the interest each year, and who had bought the bonds entirely with his or her own funds, all interest earned before death must be reported in one of the following ways. Turbotax login online The surviving spouse or personal representative (executor, administrator, etc. Turbotax login online ) who files the final income tax return of the decedent can choose to include on that return all interest earned on the bonds before the decedent's death. Turbotax login online The person who acquires the bonds then includes in income only interest earned after the date of death. Turbotax login online If the choice in (1) is not made, the interest earned up to the date of death is income in respect of the decedent and should not be included in the decedent's final return. Turbotax login online All interest earned both before and after the decedent's death (except any part reported by the estate on its income tax return) is income to the person who acquires the bonds. Turbotax login online If that person uses the cash method and does not choose to report the interest each year, he or she can postpone reporting it until the year the bonds are cashed or disposed of or the year they mature, whichever is earlier. Turbotax login online In the year that person reports the interest, he or she can claim a deduction for any federal estate tax paid on the part of the interest included in the decedent's estate. Turbotax login online For more information on income in respect of a decedent, see Publication 559, Survivors, Executors, and Administrators. Turbotax login online Example 1. Turbotax login online Your uncle, a cash method taxpayer, died and left you a $1,000 series EE bond. Turbotax login online He had bought the bond for $500 and had not chosen to report the interest each year. Turbotax login online At the date of death, interest of $200 had accrued on the bond, and its value of $700 was included in your uncle's estate. Turbotax login online Your uncle's executor chose not to include the $200 accrued interest in your uncle's final income tax return. Turbotax login online The $200 is income in respect of the decedent. Turbotax login online You are a cash method taxpayer and do not choose to report the interest each year as it is earned. Turbotax login online If you cash the bond when it reaches maturity value of $1,000, you report $500 interest income—the difference between maturity value of $1,000 and the original cost of $500. Turbotax login online For that year, you can deduct (as a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit) any federal estate tax paid because the $200 interest was included in your uncle's estate. Turbotax login online Example 2. Turbotax login online If, in Example 1 , the executor had chosen to include the $200 accrued interest in your uncle's final return, you would report only $300 as interest when you cashed the bond at maturity. Turbotax login online $300 is the interest earned after your uncle's death. Turbotax login online Example 3. Turbotax login online If, in Example 1 , you make or have made the choice to report the increase in redemption value as interest each year, you include in gross income for the year you acquire the bond all of the unreported increase in value of all series E, series EE, and series I bonds you hold, including the $200 on the bond you inherited from your uncle. Turbotax login online Example 4. Turbotax login online When your aunt died, she owned series HH bonds that she had acquired in a trade for series EE bonds. Turbotax login online You were the beneficiary of these bonds. Turbotax login online Your aunt used the cash method and did not choose to report the interest on the series EE bonds each year as it accrued. Turbotax login online Your aunt's executor chose not to include any interest earned before your aunt's death on her final return. Turbotax login online The income in respect of the decedent is the sum of the unreported interest on the series EE bonds and the interest, if any, payable on the series HH bonds but not received as of the date of your aunt's death. Turbotax login online You must report any interest received during the year as income on your return. Turbotax login online The part of the interest payable but not received before your aunt's death is income in respect of the decedent and may qualify for the estate tax deduction. Turbotax login online For information on when to report the interest on the series EE bonds traded, see Savings bonds traded , later. Turbotax login online Savings bonds distributed from a retirement or profit-sharing plan. Turbotax login online   If you acquire a U. Turbotax login online S. Turbotax login online savings bond in a taxable distribution from a retirement or profit-sharing plan, your income for the year of distribution includes the bond's redemption value (its cost plus the interest accrued before the distribution). Turbotax login online When you redeem the bond (whether in the year of distribution or later), your interest income includes only the interest accrued after the bond was distributed. Turbotax login online To figure the interest reported as a taxable distribution and your interest income when you redeem the bond, see Worksheet for savings bonds distributed from a retirement or profit-sharing plan under How To Report Interest Income, later. Turbotax login online Savings bonds traded. Turbotax login online   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. Turbotax login online (You cannot trade series I bonds for series HH bonds. Turbotax login online After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. Turbotax login online ) Any cash you received is income up to the amount of the interest earned on the bonds traded. Turbotax login online When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. Turbotax login online Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. Turbotax login online Example. Turbotax login online You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. Turbotax login online You reported the $223 as taxable income on your tax return. Turbotax login online At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. Turbotax login online You hold the series HH bonds until maturity, when you receive $2,500. Turbotax login online You must report $300 as interest income in the year of maturity. Turbotax login online This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). Turbotax login online (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. Turbotax login online ) Choice to report interest in year of trade. Turbotax login online   You could have chosen to treat all of the previously unreported accrued interest on series EE or series E bonds traded for series HH bonds as income in the year of the trade. Turbotax login online If you made this choice, it is treated as a change from method 1. Turbotax login online See Change from method 1 under Series EE and series I bonds, earlier. Turbotax login online Form 1099-INT for U. Turbotax login online S. Turbotax login online savings bond interest. Turbotax login online   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. Turbotax login online Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. Turbotax login online However, your Form 1099-INT may show more interest than you have to include on your income tax return. Turbotax login online For example, this may happen if any of the following are true. Turbotax login online You chose to report the increase in the redemption value of the bond each year. Turbotax login online The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. Turbotax login online You received the bond from a decedent. Turbotax login online The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. Turbotax login online Ownership of the bond was transferred. Turbotax login online The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. Turbotax login online You were named as a co-owner, and the other co-owner contributed funds to buy the bond. Turbotax login online The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. Turbotax login online (See Co-owners , earlier in this section, for more information about the reporting requirements. Turbotax login online ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. Turbotax login online The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. Turbotax login online (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Turbotax login online , for the year of distribution. Turbotax login online )   For more information on including the correct amount of interest on your return, see U. Turbotax login online S. Turbotax login online savings bond interest previously reported or Nominee distributions under How To Report Interest Income, later. Turbotax login online    Interest on U. Turbotax login online S. Turbotax login online savings bonds is exempt from state and local taxes. Turbotax login online The Form 1099-INT you receive will indicate the amount that is for U. Turbotax login online S. Turbotax login online savings bonds interest in box 3. Turbotax login online Do not include this income on your state or local income tax return. Turbotax login online Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. Turbotax login online S. Turbotax login online savings bonds during the year if you pay qualified higher educational expenses during the same year. Turbotax login online This exclusion is known as the Education Savings Bond Program. Turbotax login online You do not qualify for this exclusion if your filing status is married filing separately. Turbotax login online Form 8815. Turbotax login online   Use Form 8815 to figure your exclusion. Turbotax login online Attach the form to your Form 1040 or Form 1040A. Turbotax login online Qualified U. Turbotax login online S. Turbotax login online savings bonds. Turbotax login online   A qualified U. Turbotax login online S. Turbotax login online savings bond is a series EE bond issued after 1989 or a series I bond. Turbotax login online The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). Turbotax login online You must be at least 24 years old before the bond's issue date. Turbotax login online For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. Turbotax login online    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. Turbotax login online Beneficiary. Turbotax login online   You can designate any individual (including a child) as a beneficiary of the bond. Turbotax login online Verification by IRS. Turbotax login online   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of Treasury. Turbotax login online Qualified expenses. Turbotax login online   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. Turbotax login online   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. Turbotax login online For information about these programs, see Publication 970, Tax Benefits for Education. Turbotax login online   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Turbotax login online Eligible educational institutions. Turbotax login online   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the Department of Education. Turbotax login online Reduction for certain benefits. Turbotax login online   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. Turbotax login online Tax-free part of scholarships and fellowships. Turbotax login online Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. Turbotax login online Expenses used to figure the tax-free portion of distributions from a qualified tuition program. Turbotax login online Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. Turbotax login online Any expense used in figuring the American Opportunity and lifetime learning credits. Turbotax login online For information about these benefits, see Publication 970. Turbotax login online Amount excludable. Turbotax login online   If the total proceeds (interest and principal) from the qualified U. Turbotax login online S. Turbotax login online savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. Turbotax login online If the proceeds are more than the expenses, you may be able to exclude only part of the interest. Turbotax login online   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. Turbotax login online The numer
Print - Click this link to Print this page

TEB Published Guidance

2010-2011 Priority Guidance Plan
The IRS announced the release of the 2010 - 2011 Priority Guidance Plan. Click here to see items of interest to the tax-exempt bond community.

2009-2010 Priority Guidance Plan
The IRS announced the release of the 2009 – 2010 Priority Guidance Plan. Click here to see items of interest to the tax-exempt bond community.

Internal Revenue Manual (IRM) Materials relating to Tax Exempt Bonds
The IRM contains the policies, procedural instructions and guidelines used by the Internal Revenue Service. The provided materials relate specifically to tax-exempt bonds.

Treasury Regulations
Issued guidance regarding the Service's position with respect to how the Internal Revenue Code is to be interpreted. The provided materials relate specifically to tax-exempt bonds.

Court Cases
Issued guidance rendered by the U.S. Tax Court and other federal and state courts. The provided materials relate specifically to tax-exempt bonds.

Revenue Rulings
A revenue ruling is an official interpretation by the Service of the Internal Revenue Code, related statutes, tax treaties, and regulations. It is the conclusion of the Service on how the law is applied to a specific set of facts.

Revenue Procedures
Issued guidance regarding matters of procedural importance with respect to the administration of the tax laws. The provided materials relate specifically to tax-exempt bonds.

Notices
Issued guidance regarding proposed procedural changes. Notices also request public comment with respect to the administration of the tax laws. The provided materials relate specifically to tax-exempt bonds.

Announcements
Issued guidance regarding changes in the administration of the tax laws (such as the publication of a new form or the implementation of temporary programs). The provided materials relate specifically to tax-exempt bonds.

News Releases
Issued guidance regarding the creation of new programs and/or release of new publications. The provided materials relate specifically to tax-exempt bonds.

PLRs, TAMs, FSAs, and CCAs
Copies of recently released redacted private letter rulings, technical advice and field service advice memoranda from the Office of Associate Chief Counsel (TE/GE).

Page Last Reviewed or Updated: 22-Feb-2014

The Turbotax Login Online

Turbotax login online Publication 555 - Introductory Material Table of Contents Future Developments What's New Important Reminder IntroductionOrdering forms and publications. Turbotax login online Tax questions. Turbotax login online Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 555, such as legislation enacted after it was published, go to www. Turbotax login online irs. Turbotax login online gov/pub555. Turbotax login online What's New Same-sex marriages. Turbotax login online  For federal tax purposes, individuals of the same sex are married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Turbotax login online The term "spouse" includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. Turbotax login online However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not called a marriage under state (or foreign) law are not married for federal tax purposes. Turbotax login online The word “state” as used here includes the District of Columbia, Puerto Rico, and U. Turbotax login online S. Turbotax login online territories and possessions. Turbotax login online It means any domestic jurisdiction that has the legal authority to sanction marriages. Turbotax login online The term “foreign country” means any foreign jurisdiction that has the legal authority to sanction marriages. Turbotax login online If individuals of the same sex are married, they generally must use the married filing jointly or married filing separately filing status. Turbotax login online However, if they did not live together during the last 6 months of the year, one or both of them may be able to use the head of household filing status. Turbotax login online For details, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Turbotax login online Also see Revenue Ruling 2013-17 and Answers to Frequently Asked Questions for Individuals of the Same Sex Who Are Married Under State Law on IRS. Turbotax login online gov. Turbotax login online Important Reminder Photographs of missing children. Turbotax login online  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Turbotax login online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Turbotax login online You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Turbotax login online Introduction This publication is for married taxpayers who are domiciled in one of the following community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin. Turbotax login online This publication does not address the federal tax treatment of income or property subject to the “community property” election under Alaska state laws. Turbotax login online Community property laws affect how you figure your income on your federal income tax return if you are married, live in a community property state or country, and file separate returns. Turbotax login online If you are married, your tax usually will be less if you file married filing jointly than if you file married filing separately. Turbotax login online However, sometimes it can be to your advantage to file separate returns. Turbotax login online If you and your spouse file separate returns, you have to determine your community income and your separate income. Turbotax login online Community property laws also affect your basis in property you inherit from a married person who lived in a community property state. Turbotax login online See Death of spouse , later. Turbotax login online Registered domestic partners. Turbotax login online    This publication is also for registered domestic partners who are domiciled in Nevada, Washington, or California. Turbotax login online Registered domestic partners in Nevada, Washington, or California generally must follow state community property laws and report half the combined community income of the individual and his or her registered domestic partner. Turbotax login online   Registered domestic partners are not married for federal tax purposes. Turbotax login online They can use the single filing status, or if they qualify, the head of household filing status. Turbotax login online    You can find answers to frequently asked questions by going to www. Turbotax login online irs. Turbotax login online gov/pub555 and clicking on Answers to Frequently Asked Questions for Registered Domestic Partners and Individuals in Civil Unions under Other Items You May Find Useful. Turbotax login online Comments and suggestions. Turbotax login online    We welcome your comments about this publication and your suggestions for future editions. Turbotax login online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Turbotax login online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Turbotax login online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Turbotax login online   You can send your comments from www. Turbotax login online irs. Turbotax login online gov/formspubs. Turbotax login online Click on “More Information” and then on “Give us feedback on forms and publications. Turbotax login online ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Turbotax login online Ordering forms and publications. Turbotax login online    Visit www. Turbotax login online irs. Turbotax login online gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Turbotax login online Internal Revenue Service 1201 N. Turbotax login online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Turbotax login online    If you have a tax question, check the information available on IRS. Turbotax login online gov or call 1-800-829-1040. Turbotax login online We cannot answer tax questions sent to either of the above addresses. Turbotax login online Useful Items - You may want to see: Publication 504 Divorced or Separated Individuals 505 Tax Withholding and Estimated Tax 971 Innocent Spouse Relief Form (and Instructions) 8857 Request for Innocent Spouse Relief 8958 Allocation of Tax Amounts Between Certain Individuals in Community Property States  See How To Get Tax Help near the end of this publication for information about getting these publications and forms. Turbotax login online Prev  Up  Next   Home   More Online Publications