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

1040 Amended Tax Form

State Tax Forms OnlineFile 2008 Taxes Online Free H&r Block2010 1040 Tax FormHow Do I File State Taxes For FreeAmend A 2011 Tax ReturnH&r Block AdvantageTax Form 1040 EzFree Efile State TaxTax 1040nrAmending 2011 Tax ReturnAmmending TaxesHow Do I Fill Out A 1040x2010 1040ez FormH And R Block MilitaryTurbotax Free MilitaryFree State Tax OnlineHow To Fill Out An Amended Tax FormFiling 1040ezFile Income Tax Online1040ez InstructionsPrintable 1040ez Form1040x FileH&r Block At Home Deluxe2011 Irs 1040ez Form1040How To File A 1040ez OnlineH And R Block Free Tax Preparation1040ez Tax FormIrs Tax Forms2012 Income Tax Forms 1040ezFiling State ReturnsHow Do I File My Taxes For 2010Free Amended Tax ReturnHow To File An Amended Tax Return For 2013Prior Year Tax ReturnsFree 1040ez Filing OnlineFree 1040ezAarp Tax Help1040sFree Tax Calculator

1040 Amended Tax Form

1040 amended tax form Car Expenses Table of Contents Introduction Depreciation of CarSpecial Depreciation Allowance Depreciation Limit Amended Return Election Not To Claim Special Allowance If you purchased a car after September 10, 2001, for use in your business (or as an employee) and figure your deductible expenses using the actual car expense method, new law contains provisions that may affect your depreciation deduction for that car. 1040 amended tax form Publication 463, Travel, Entertainment, Gift, and Car Expenses, contains information on figuring depreciation on your car. 1040 amended tax form However, Publication 463 does not contain the new provisions because it was printed before the law was enacted. 1040 amended tax form The new provisions are in the Supplement to Publication 463, which is reprinted below. 1040 amended tax form Supplement to Publication 463 Travel, Entertainment, Gift, and Car Expenses   Introduction This supplemental publication is for taxpayers who purchased a car for business purposes after September 10, 2001, and figure their deductible expenses, including a deduction for depreciation, using the actual car expense method. 1040 amended tax form After Publication 463 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. 1040 amended tax form Certain provisions of this new law may reduce your taxes for 2001. 1040 amended tax form The new law contains the following provisions. 1040 amended tax form A new depreciation deduction, the special depreciation allowance. 1040 amended tax form An increase in the limit on depreciation for any car for which you claim the new special depreciation allowance. 1040 amended tax form If you have already filed your 2001 return, you may wish to file an amended return to claim any of these benefits. 1040 amended tax form See Amended Return, later. 1040 amended tax form Depreciation of Car If you used the actual car expense method to figure your deduction for a car you own and use in your business (or as an employee), you generally can claim a depreciation deduction. 1040 amended tax form However, there is a limit on the depreciation deduction you can take for your car each year. 1040 amended tax form See Depreciation Limit later. 1040 amended tax form Special Depreciation Allowance The new law allows you to claim a special depreciation allowance. 1040 amended tax form This special allowance is a deduction equal to 30% of the depreciable basis of qualified property. 1040 amended tax form You figure the amount of the special depreciation allowance after any section 179 deduction you choose to claim, but before figuring your regular depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS). 1040 amended tax form See Depreciation Deduction under Actual Car Expenses in chapter 4 of Publication 463 for information about MACRS. 1040 amended tax form You can claim the special depreciation allowance only for the year the qualified property is placed in service. 1040 amended tax form Qualified property. 1040 amended tax form   Qualified property includes a car (any four-wheeled vehicle, including a truck or van not more than 6,000 pounds, that is made primarily for use on public streets, roads, and highways) that meets all of the following requirements. 1040 amended tax form You bought it new. 1040 amended tax form You bought it after September 10, 2001. 1040 amended tax form (But a car is not qualified property if a binding written contract for you to buy the car was in effect before September 11, 2001. 1040 amended tax form ) You began using it for business after September 10, 2001, and used it more than 50% in a qualified business use. 1040 amended tax form Example. 1040 amended tax form Bob bought a new car on October 15, 2001, for $20,000 and placed it in service immediately, using it 75% for business. 1040 amended tax form Bob's car is qualified property. 1040 amended tax form Bob chooses not to take a section 179 deduction for the car. 1040 amended tax form He does claim the new special depreciation allowance. 1040 amended tax form Bob first must figure the car's depreciable basis, which is $15,000 ($20,000 × . 1040 amended tax form 75). 1040 amended tax form He then figures the special depreciation allowance of $4,500 ($15,000 × . 1040 amended tax form 30). 1040 amended tax form The remaining depreciable basis of $10,500 ($15,000 - $4,500) is depreciated using MACRS (200% declining balance method, half-year convention) and results in a deduction of $2,100 ($10,500 × . 1040 amended tax form 20), for a total depreciation deduction for 2001 of $6,600 ($4,500 + $2,100). 1040 amended tax form However, Bob's depreciation deduction is limited to $5,745 ($7,660 × . 1040 amended tax form 75), as discussed next. 1040 amended tax form Depreciation Limit The limit on your depreciation deduction for 2001 is increased to $7,660 for a car that is qualified property (defined above) and for which you claim the special depreciation allowance. 1040 amended tax form The limit is increased to $23,080 if the car is an electric car. 1040 amended tax form The section 179 deduction is treated as depreciation for purposes of this limit. 1040 amended tax form If you use a car less than 100% in your business or work, the limit is $7,660 (or $23,080 for an electric car) multiplied by the percentage of business and investment use during the year. 1040 amended tax form For cars that do not qualify for (or for which you choose not to claim) the special depreciation allowance, the limit remains $3,060 ($9,280 for electric cars). 1040 amended tax form Amended Return If you filed your 2001 calendar year return before June 1, 2002, and did not claim the new special depreciation allowance for a qualified car, you can claim it by filing an amended return on Form 1040X, Amended U. 1040 amended tax form S. 1040 amended tax form Individual Income Tax Return, by April 15, 2003. 1040 amended tax form At the top of the Form 1040X, print “Filed pursuant to Revenue Procedure 2002–33. 1040 amended tax form ” If you are an employee, attach Form 2106, Employee Business Expenses (revised March 2002). 1040 amended tax form If you are self-employed, attach Form 4562, Depreciation and Amortization (revised March 2002). 1040 amended tax form Or, you can claim the special depreciation allowance by filing Form 3115, Application for Change in Accounting Method, with your 2002 return. 1040 amended tax form For details, see Revenue Procedure 2002–33. 1040 amended tax form (But, filing Form 1040X for 2001 enables you to claim the special allowance earlier than attaching Form 3115 to your 2002 return. 1040 amended tax form ) You cannot claim the special depreciation allowance on an amended return (or by using Form 3115) if you made, or are treated as having made, the election not to claim it described later. 1040 amended tax form Example. 1040 amended tax form The facts are the same as in the previous example except that Bob filed his original 2001 income tax return on April 15, 2002, and claimed a $3,000 ($20,000 x . 1040 amended tax form 75 x . 1040 amended tax form 20) depreciation deduction for his new car using MACRS. 1040 amended tax form Bob now wishes to claim the special depreciation allowance for his new car on an amended 2001 return. 1040 amended tax form Bob, who is an employee, files Form 1040X, by April 15, 2003, with an updated Form 2106 (revised March 2002) attached, increasing his total depreciation deduction to $5,745, as figured in the earlier example. 1040 amended tax form Bob's new filled-in Form 2106 is shown later. 1040 amended tax form Election Not To Claim Special Allowance You can elect not to claim the special depreciation allowance for a car by making a statement attached to, or written on, your return indicating that you are electing not to claim the special depreciation allowance for 5-year property. 1040 amended tax form As a general rule, you must make this election by the due date (including extensions) of your return. 1040 amended tax form You can have an automatic extension of 6 months from the due date of your return (excluding extensions) to make the election with an amended return. 1040 amended tax form To get this extension, you must have filed your original return by the due date (including extensions). 1040 amended tax form At the top of the statement, print “Filed pursuant to section 301. 1040 amended tax form 9100–2. 1040 amended tax form ” If you elect not to claim the special depreciation allowance for a car, you cannot claim it for any other 5-year property placed in service during the same year. 1040 amended tax form Unless you elect (or are treated as electing) not to claim the special depreciation allowance, you must reduce the car's adjusted basis by the amount of the allowance, even if the allowance was not claimed. 1040 amended tax form Deemed election for return filed before June 1, 2002. 1040 amended tax form   If you did not make the election not to claim the special depreciation allowance in the time and manner described above, you will still be treated as electing not to claim it if all of the following apply. 1040 amended tax form You filed your 2001 return before June 1, 2002. 1040 amended tax form You claimed depreciation on your return but did not claim the special depreciation allowance. 1040 amended tax form You did not file an amended 2001 return by April 15, 2003, or a Form 3115 with your 2002 return, to claim the special depreciation allowance. 1040 amended tax form Form 2106, Page 1, for Bob Smith Form 2106, Page 2, for Bob Smith Prev  Up  Next   Home   More Online Publications
Español

Susquehanna River Basin Commission

The Susquehanna River Basin Commission is an interstate body, with representatives from New York, Maryland, Pennsylvania and the federal government, that manages the environmental stewardship and economic development of the Susquehanna river and its tributaries.

Contact the Agency or Department

Website: Susquehanna River Basin Commission

E-mail:

Address: 1721 Front St
Harrisburg, PA 17102

Phone Number: (717) 238-0423

The 1040 Amended Tax Form

1040 amended tax form 11. 1040 amended tax form   Other Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Reimbursement of Travel, Meals, and EntertainmentReimbursements Miscellaneous ExpensesMeaning of generally enforced. 1040 amended tax form Kickbacks. 1040 amended tax form Form 1099-MISC. 1040 amended tax form Exception. 1040 amended tax form Tax preparation fees. 1040 amended tax form Covered executive branch official. 1040 amended tax form Exceptions to denial of deduction. 1040 amended tax form Indirect political contributions. 1040 amended tax form Type of deduction. 1040 amended tax form Repayment—$3,000 or less. 1040 amended tax form Repayment—over $3,000. 1040 amended tax form Method 1. 1040 amended tax form Method 2. 1040 amended tax form Repayment does not apply. 1040 amended tax form Year of deduction (or credit). 1040 amended tax form Telephone. 1040 amended tax form What's New Standard mileage rate. 1040 amended tax form  Beginning in 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for business use is 56. 1040 amended tax form 5 cents per mile. 1040 amended tax form For more information, see Car and truck expenses under Miscellaneous Expenses. 1040 amended tax form Introduction This chapter covers business expenses that may not have been explained to you, as a business owner, in previous chapters of this publication. 1040 amended tax form Topics - This chapter discusses: Travel, meals, and entertainment Bribes and kickbacks Charitable contributions Education expenses Lobbying expenses Penalties and fines Repayments (claim of right) Other miscellaneous expenses Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 463 Travel, Entertainment, Gift, and Car Expenses 526 Charitable Contributions 529 Miscellaneous Deductions 544 Sales and Other Dispositions of Assets 970 Tax Benefits for Education 1542 Per Diem Rates See chapter 12 for information about getting publications and forms. 1040 amended tax form Reimbursement of Travel, Meals, and Entertainment The following discussion explains how to handle any reimbursements or allowances you may provide to your employees under a reimbursement or allowance arrangement for travel, meals, and entertainment expenses. 1040 amended tax form If you are self-employed and report your income and expenses on Schedule C or C-EZ (Form 1040), see Publication 463. 1040 amended tax form To be deductible for tax purposes, expenses incurred for travel, meals, and entertainment must be ordinary and necessary expenses incurred while carrying on your trade or business. 1040 amended tax form Generally, you also must show that entertainment expenses (including meals) are directly related to, or associated with, the conduct of your trade or business. 1040 amended tax form For more information on travel, meals, and entertainment, including deductibility, see Publication 463. 1040 amended tax form Reimbursements A “reimbursement or allowance arrangement” provides for payment of advances, reimbursements, and allowances for travel, meals, and entertainment expenses incurred by your employees during the ordinary course of business. 1040 amended tax form If the expenses are substantiated, you can deduct the allowable amount on your tax return. 1040 amended tax form Because of differences between accounting methods and tax law, the amount you can deduct for tax purposes may not be the same as the amount you deduct on your business books and records. 1040 amended tax form For example, you can deduct 100% of the cost of meals on your business books and records. 1040 amended tax form However, only 50% of these costs are allowed by law as a tax deduction. 1040 amended tax form How you deduct a business expense under a reimbursement or allowance arrangement depends on whether you have: An accountable plan, or A nonaccountable plan. 1040 amended tax form If you reimburse these expenses under an accountable plan, deduct them as travel, meals, or entertainment expenses. 1040 amended tax form If you reimburse these expenses under a nonaccountable plan, report the reimbursements as wages on Form W-2, Wage and Tax Statement, and deduct them as wages on the appropriate line of your tax return. 1040 amended tax form If you make a single payment to your employees and it includes both wages and an expense reimbursement, you must specify the amount of the reimbursement and report it accordingly. 1040 amended tax form See Table 11-1 , Reporting Reimbursements. 1040 amended tax form Accountable Plans An accountable plan requires your employees to meet all of the following requirements. 1040 amended tax form Each employee must: Have paid or incurred deductible expenses while performing services as your employee, Adequately account to you for these expenses within a reasonable period of time, and Return any excess reimbursement or allowance within a reasonable period of time. 1040 amended tax form An arrangement under which you advance money to employees is treated as meeting (3) above only if the following requirements are also met. 1040 amended tax form The advance is reasonably calculated not to exceed the amount of anticipated expenses. 1040 amended tax form You make the advance within a reasonable period of time of your employee paying or incurring the expense. 1040 amended tax form If any expenses reimbursed under this arrangement are not substantiated, or an excess reimbursement is not returned within a reasonable period of time by an employee, you cannot treat these expenses as reimbursed under an accountable plan. 1040 amended tax form Instead, treat the reimbursed expenses as paid under a nonaccountable plan, discussed later. 1040 amended tax form Adequate accounting. 1040 amended tax form   Your employees must adequately account to you for their travel, meals, and entertainment expenses. 1040 amended tax form They must give you documentary evidence of their travel, mileage, and other employee business expenses. 1040 amended tax form This evidence should include items such as receipts, along with either a statement of expenses, an account book, a day-planner, or similar record in which the employee entered each expense at or near the time the expense was incurred. 1040 amended tax form Excess reimbursement or allowance. 1040 amended tax form   An excess reimbursement or allowance is any amount you pay to an employee that is more than the business-related expenses for which the employee adequately accounted. 1040 amended tax form The employee must return any excess reimbursement or other expense allowance to you within a reasonable period of time. 1040 amended tax form Reasonable period of time. 1040 amended tax form   A reasonable period of time depends on the facts and circumstances. 1040 amended tax form Generally, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. 1040 amended tax form You give an advance within 30 days of the time the employee pays or incurs the expense. 1040 amended tax form Your employees adequately account for their expenses within 60 days after the expenses were paid or incurred. 1040 amended tax form Your employees return any excess reimbursement within 120 days after the expenses were paid or incurred. 1040 amended tax form You give a periodic statement (at least quarterly) to your employees that asks them to either return or adequately account for outstanding advances and they comply within 120 days of the date of the statement. 1040 amended tax form How to deduct. 1040 amended tax form   You can claim a deduction for travel, meals, and entertainment expenses if you reimburse your employees for these expenses under an accountable plan. 1040 amended tax form Generally, the amount you can deduct for meals and entertainment is subject to a 50% limit, discussed later. 1040 amended tax form If you are a sole proprietor, or are filing as a single member limited liability company, deduct the travel reimbursement on line 24a and the deductible part of the meals and entertainment reimbursement on line 24b, Schedule C (Form 1040) or line 2, Schedule C-EZ (Form 1040). 1040 amended tax form   If you are filing an income tax return for a corporation, include the reimbursement on the Other deductions line of Form 1120, U. 1040 amended tax form S. 1040 amended tax form Corporation Income Tax Return. 1040 amended tax form If you are filing any other business income tax return, such as a partnership or S corporation return, deduct the reimbursement on the appropriate line of the return as provided in the instructions for that return. 1040 amended tax form Table 11-1. 1040 amended tax form Reporting Reimbursements IF the type of reimbursement (or other expense allowance) arrangement is under THEN the employer reports on Form W-2 An accountable plan with: Actual expense reimbursement:  Adequate accounting made and excess returned No amount. 1040 amended tax form Actual expense reimbursement:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. 1040 amended tax form Per diem or mileage allowance up to the federal rate:  Adequate accounting made and excess returned No amount. 1040 amended tax form Per diem or mileage allowance up to the federal rate:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. 1040 amended tax form The amount up to the federal rate is reported only in box 12—it is not reported in box 1. 1040 amended tax form Per diem or mileage allowance exceeds the federal rate:  Adequate accounting made up to the federal rate only and excess not returned The excess amount as wages in box 1. 1040 amended tax form The amount up to the federal rate is reported only in box 12—it is not reported in box 1. 1040 amended tax form A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan The entire amount as wages in box 1. 1040 amended tax form No reimbursement plan The entire amount as wages in box 1. 1040 amended tax form Per Diem and Car Allowances You can reimburse your employees under an accountable plan based on travel days, miles, or some other fixed allowance. 1040 amended tax form In these cases, your employee is considered to have accounted to you for the amount of the expense that does not exceed the rates established by the federal government. 1040 amended tax form Your employee must actually substantiate to you the other elements of the expense, such as time, place, and business purpose. 1040 amended tax form Federal rate. 1040 amended tax form   The federal rate can be figured using any one of the following methods. 1040 amended tax form For car expenses: The standard mileage rate. 1040 amended tax form A fixed and variable rate (FAVR). 1040 amended tax form For per diem amounts: The regular federal per diem rate. 1040 amended tax form The standard meal allowance. 1040 amended tax form The high-low rate. 1040 amended tax form Car allowance. 1040 amended tax form   Your employee is considered to have accounted to you for car expenses that do not exceed the standard mileage rate. 1040 amended tax form Beginning in 2013, the standard business mileage rate is 56. 1040 amended tax form 5 cents per mile. 1040 amended tax form   You can choose to reimburse your employees using a fixed and variable rate (FAVR) allowance. 1040 amended tax form This is an allowance that includes a combination of payments covering fixed and variable costs, such as a cents-per-mile rate to cover your employees' variable operating costs (such as gas, oil, etc. 1040 amended tax form ) plus a flat amount to cover your employees' fixed costs (such as depreciation, insurance, etc. 1040 amended tax form ). 1040 amended tax form For information on using a FAVR allowance, see Revenue Procedure 2010-51, available at www. 1040 amended tax form irs. 1040 amended tax form gov/irb/2010-51_IRB/ar14. 1040 amended tax form html and Notice 2012-72, available at www. 1040 amended tax form irs. 1040 amended tax form gov/irb/2012-50_IRB/ar10. 1040 amended tax form html. 1040 amended tax form Per diem allowance. 1040 amended tax form   If your employee actually substantiates to you the other elements (discussed earlier) of the expenses reimbursed using the per diem allowance, how you report and deduct the allowance depends on whether the allowance is for lodging and meal expenses or for meal expenses only and whether the allowance is more than the federal rate. 1040 amended tax form Regular federal per diem rate. 1040 amended tax form   The regular federal per diem rate is the highest amount the federal government will pay to its employees while away from home on travel. 1040 amended tax form It has two components: Lodging expense, and Meal and incidental expense (M&IE). 1040 amended tax form The rates are different for different locations. 1040 amended tax form Publication 1542 lists the rates in the continental United States. 1040 amended tax form Standard meal allowance. 1040 amended tax form   The federal rate for meal and incidental expenses (M&IE) is the standard meal allowance. 1040 amended tax form You can pay only an M&IE allowance to employees who travel away from home if: You pay the employee for actual expenses for lodging based on receipts submitted to you, You provide for the lodging, You pay for the actual expense of the lodging directly to the provider, You do not have a reasonable belief that lodging expenses were incurred by the employee, or The allowance is computed on a basis similar to that used in computing the employee's wages (that is, number of hours worked or miles traveled). 1040 amended tax form Internet access. 1040 amended tax form    Per diem rates are available on the Internet. 1040 amended tax form You can access per diem rates at www. 1040 amended tax form gsa. 1040 amended tax form gov/perdiemrates. 1040 amended tax form High-low method. 1040 amended tax form   This is a simplified method of computing the federal per diem rate for travel within the continental United States. 1040 amended tax form It eliminates the need to keep a current list of the per diem rate for each city. 1040 amended tax form   Under the high-low method, the per diem amount for travel during January through September of 2013 is $242 ($65 for M&IE) for certain high-cost locations. 1040 amended tax form All other areas have a per diem amount of $163 ($52 for M&IE). 1040 amended tax form The high-cost locations eligible for the higher per diem amount under the high-low method are listed in Publication 1542. 1040 amended tax form   Effective October 1, 2013, the per diem rate for high-cost locations increased to $251 ($65 for M&IE). 1040 amended tax form The rate for all other locations increased to $170 ($52 for M&IE). 1040 amended tax form For October, November, and December 2013, you can either continue to use the rates described in the preceding paragraph or change to the new rates. 1040 amended tax form However, you must use the same rate for all employees reimbursed under the high-low method. 1040 amended tax form   For more information about the high-low method, see Notice 2013-65, available at www. 1040 amended tax form irs. 1040 amended tax form gov/irb/2013-44_IRB/ar13. 1040 amended tax form html. 1040 amended tax form See Publication 1542 (available on the Internet at IRS. 1040 amended tax form gov) for the current per diem rates for all locations. 1040 amended tax form Reporting per diem and car allowances. 1040 amended tax form   The following discussion explains how to report per diem and car allowances. 1040 amended tax form The manner in which you report them depends on how the allowance compares to the federal rate. 1040 amended tax form See Table 11-1. 1040 amended tax form Allowance less than or equal to the federal rate. 1040 amended tax form   If your allowance for the employee is less than or equal to the appropriate federal rate, that allowance is not included as part of the employee's pay in box 1 of the employee's Form W-2. 1040 amended tax form Deduct the allowance as travel expenses (including meals that may be subject to the 50% limit, discussed later). 1040 amended tax form See How to deduct under Accountable Plans, earlier. 1040 amended tax form Allowance more than the federal rate. 1040 amended tax form   If your employee's allowance is more than the appropriate federal rate, you must report the allowance as two separate items. 1040 amended tax form   Include the allowance amount up to the federal rate in box 12 (code L) of the employee's Form W-2. 1040 amended tax form Deduct it as travel expenses (as explained above). 1040 amended tax form This part of the allowance is treated as reimbursed under an accountable plan. 1040 amended tax form   Include the amount that is more than the federal rate in box 1 (and in boxes 3 and 5 if they apply) of the employee's Form W-2. 1040 amended tax form Deduct it as wages subject to income tax withholding, social security, Medicare, and federal unemployment taxes. 1040 amended tax form This part of the allowance is treated as reimbursed under a nonaccountable plan as explained later under Nonaccountable Plans. 1040 amended tax form Meals and Entertainment Under an accountable plan, you can generally deduct only 50% of any otherwise deductible business-related meal and entertainment expenses you reimburse your employees. 1040 amended tax form The deduction limit applies even if you reimburse them for 100% of the expenses. 1040 amended tax form Application of the 50% limit. 1040 amended tax form   The 50% deduction limit applies to reimbursements you make to your employees for expenses they incur for meals while traveling away from home on business and for entertaining business customers at your place of business, a restaurant, or another location. 1040 amended tax form It applies to expenses incurred at a business convention or reception, business meeting, or business luncheon at a club. 1040 amended tax form The deduction limit may also apply to meals you furnish on your premises to your employees. 1040 amended tax form Related expenses. 1040 amended tax form   Taxes and tips relating to a meal or entertainment activity you reimburse to your employee under an accountable plan are included in the amount subject to the 50% limit. 1040 amended tax form Reimbursements you make for expenses, such as cover charges for admission to a nightclub, rent paid for a room to hold a dinner or cocktail party, or the amount you pay for parking at a sports arena, are all subject to the 50% limit. 1040 amended tax form However, the cost of transportation to and from an otherwise allowable business meal or a business-related entertainment activity is not subject to the 50% limit. 1040 amended tax form Amount subject to 50% limit. 1040 amended tax form   If you provide your employees with a per diem allowance only for meal and incidental expenses, the amount treated as an expense for food and beverages is the lesser of the following. 1040 amended tax form The per diem allowance. 1040 amended tax form The federal rate for M&IE. 1040 amended tax form   If you provide your employees with a per diem allowance that covers lodging, meals, and incidental expenses, you must treat an amount equal to the federal M&IE rate for the area of travel as an expense for food and beverages. 1040 amended tax form If the per diem allowance you provide is less than the federal per diem rate for the area of travel, you can treat 40% of the per diem allowance as the amount for food and beverages. 1040 amended tax form Meal expenses when subject to “hours of service” limits. 1040 amended tax form   You can deduct 80% of the cost of reimbursed meals your employees consume while away from their tax home on business during, or incident to, any period subject to the Department of Transportation's “hours of service” limits. 1040 amended tax form   See Publication 463 for a detailed discussion of individuals subject to the Department of Transportation's “hours of service” limits. 1040 amended tax form De minimis (minimal) fringe benefit. 1040 amended tax form   The 50% limit does not apply to an expense for food or beverage that is excluded from the gross income of an employee because it is a de minimis fringe benefit. 1040 amended tax form See Publication 15-B for additional information on de minimis fringe benefits. 1040 amended tax form Company cafeteria or executive dining room. 1040 amended tax form   The cost of food and beverages you provide primarily to your employees on your business premises is deductible. 1040 amended tax form This includes the cost of maintaining the facilities for providing the food and beverages. 1040 amended tax form These expenses are subject to the 50% limit unless they qualify as a de minimis fringe benefit, as just discussed, or unless they are compensation to your employees (explained later). 1040 amended tax form Employee activities. 1040 amended tax form   The expense of providing recreational, social, or similar activities (including the use of a facility) for your employees is deductible and is not subject to the 50% limit. 1040 amended tax form The benefit must be primarily for your employees who are not highly compensated. 1040 amended tax form   For this purpose, a highly compensated employee is an employee who meets either of the following requirements. 1040 amended tax form Owned a 10% or more interest in the business during the year or the preceding year. 1040 amended tax form An employee is treated as owning any interest owned by his or her brother, sister, spouse, ancestors, and lineal descendants. 1040 amended tax form Received more than $115,000 in pay for the preceding year. 1040 amended tax form You can choose to include only employees who were also in the top 20% of employees when ranked by pay for the preceding year. 1040 amended tax form   For example, the expenses for food, beverages, and entertainment for a company-wide picnic are not subject to the 50% limit. 1040 amended tax form Meals or entertainment treated as compensation. 1040 amended tax form   The 50% limit does not apply to either of the following. 1040 amended tax form Expenses for meals or entertainment that you treat as: Compensation to an employee who was the recipient of the meals or entertainment, and Wages subject to withholding of federal income tax. 1040 amended tax form Expenses for meals or entertainment if: A recipient of the meals or entertainment who is not your employee has to include the expenses in gross income as compensation for services or as a prize or award, and You include that amount on a Form 1099 issued to the recipient, if a Form 1099 is required. 1040 amended tax form Sales of meals or entertainment. 1040 amended tax form   You can deduct the cost of meals or entertainment (including the use of facilities) you sell to the public. 1040 amended tax form For example, if you run a nightclub, your expense for the entertainment you furnish to your customers, such as a floor show, is a business expense that is fully deductible. 1040 amended tax form The 50% limit does not apply to this expense. 1040 amended tax form Providing meals or entertainment to general public to promote goodwill. 1040 amended tax form   You can deduct the cost of providing meals, entertainment, or recreational facilities to the general public as a means of advertising or promoting goodwill in the community. 1040 amended tax form The 50% limit does not apply to this expense. 1040 amended tax form Director, stockholder, or employee meetings. 1040 amended tax form   You can deduct entertainment expenses directly related to business meetings of your employees, partners, stockholders, agents, or directors. 1040 amended tax form You can provide some minor social activities, but the main purpose of the meeting must be your company's business. 1040 amended tax form These expenses are subject to the 50% limit. 1040 amended tax form Trade association meetings. 1040 amended tax form   You can deduct expenses directly related to and necessary for attending business meetings or conventions of certain tax-exempt organizations. 1040 amended tax form These organizations include business leagues, chambers of commerce, real estate boards, and trade and professional associations. 1040 amended tax form Nonaccountable Plans A nonaccountable plan is an arrangement that does not meet the requirements for an accountable plan. 1040 amended tax form All amounts paid, or treated as paid, under a nonaccountable plan are reported as wages on Form W-2. 1040 amended tax form The payments are subject to income tax withholding, social security, Medicare, and federal unemployment taxes. 1040 amended tax form You can deduct the reimbursement as compensation or wages only to the extent it meets the deductibility tests for employees' pay in chapter 2. 1040 amended tax form Deduct the allowable amount as compensation or wages on the appropriate line of your income tax return, as provided in its instructions. 1040 amended tax form Miscellaneous Expenses In addition to travel, meal, and entertainment expenses, there are other expenses you can deduct. 1040 amended tax form Advertising expenses. 1040 amended tax form   You generally can deduct reasonable advertising expenses that are directly related to your business activities. 1040 amended tax form Generally, you cannot deduct amounts paid to influence legislation (i. 1040 amended tax form e. 1040 amended tax form , lobbying). 1040 amended tax form See Lobbying expenses , later. 1040 amended tax form   You can usually deduct as a business expense the cost of institutional or goodwill advertising to keep your name before the public if it relates to business you reasonably expect to gain in the future. 1040 amended tax form For example, the cost of advertising that encourages people to contribute to the Red Cross, to buy U. 1040 amended tax form S. 1040 amended tax form Savings Bonds, or to participate in similar causes is usually deductible. 1040 amended tax form Anticipated liabilities. 1040 amended tax form   Anticipated liabilities or reserves for anticipated liabilities are not deductible. 1040 amended tax form For example, assume you sold 1-year TV service contracts this year totaling $50,000. 1040 amended tax form From experience, you know you will have expenses of about $15,000 in the coming year for these contracts. 1040 amended tax form You cannot deduct any of the $15,000 this year by charging expenses to a reserve or liability account. 1040 amended tax form You can deduct your expenses only when you actually pay or accrue them, depending on your accounting method. 1040 amended tax form Bribes and kickbacks. 1040 amended tax form   Engaging in the payment of bribes or kickbacks is a serious criminal matter. 1040 amended tax form Such activity could result in criminal prosecution. 1040 amended tax form Any payments that appear to have been made, either directly or indirectly, to an official or employee of any government or an agency or instrumentality of any government are not deductible for tax purposes and are in violation of the law. 1040 amended tax form   Payments paid directly or indirectly to a person in violation of any federal or state law (but only if that state law is generally enforced, defined below) that provides for a criminal penalty or for the loss of a license or privilege to engage in a trade or business are also not allowed as a deduction for tax purposes. 1040 amended tax form Meaning of “generally enforced. 1040 amended tax form ”   A state law is considered generally enforced unless it is never enforced or enforced only for infamous persons or persons whose violations are extraordinarily flagrant. 1040 amended tax form For example, a state law is generally enforced unless proper reporting of a violation of the law results in enforcement only under unusual circumstances. 1040 amended tax form Kickbacks. 1040 amended tax form   A kickback is a payment for referring a client, patient, or customer. 1040 amended tax form The common kickback situation occurs when money or property is given to someone as payment for influencing a third party to purchase from, use the services of, or otherwise deal with the person who pays the kickback. 1040 amended tax form In many cases, the person whose business is being sought or enjoyed by the person who pays the kickback is not aware of the payment. 1040 amended tax form   For example, the Yard Corporation is in the business of repairing ships. 1040 amended tax form It returns 10% of the repair bills as kickbacks to the captains and chief officers of the vessels it repairs. 1040 amended tax form Although this practice is considered an ordinary and necessary expense of getting business, it is clearly a violation of a state law that is generally enforced. 1040 amended tax form These expenditures are not deductible for tax purposes, whether or not the owners of the shipyard are subsequently prosecuted. 1040 amended tax form Form 1099-MISC. 1040 amended tax form   It does not matter whether any kickbacks paid during the tax year are deductible on your income tax return in regards to information reporting. 1040 amended tax form See Form 1099-MISC for more information. 1040 amended tax form Car and truck expenses. 1040 amended tax form   The costs of operating a car, truck, or other vehicle in your business are deductible. 1040 amended tax form For more information on how to figure your deduction, see Publication 463. 1040 amended tax form Charitable contributions. 1040 amended tax form   Cash payments to an organization, charitable or otherwise, may be deductible as business expenses if the payments are not charitable contributions or gifts and are directly related to your business. 1040 amended tax form If the payments are charitable contributions or gifts, you cannot deduct them as business expenses. 1040 amended tax form However, corporations (other than S corporations) can deduct charitable contributions on their income tax returns, subject to limitations. 1040 amended tax form See the Instructions for Form 1120 for more information. 1040 amended tax form Sole proprietors, partners in a partnership, or shareholders in an S corporation may be able to deduct charitable contributions made by their business on Schedule A (Form 1040). 1040 amended tax form Example. 1040 amended tax form You paid $15 to a local church for a half-page ad in a program for a concert it is sponsoring. 1040 amended tax form The purpose of the ad was to encourage readers to buy your products. 1040 amended tax form Your payment is not a charitable contribution. 1040 amended tax form You can deduct it as an advertising expense. 1040 amended tax form Example. 1040 amended tax form You made a $100,000 donation to a committee organized by the local Chamber of Commerce to bring a convention to your city, intended to increase business activity, including yours. 1040 amended tax form Your payment is not a charitable contribution. 1040 amended tax form You can deduct it as a business expense. 1040 amended tax form See Publication 526 for a discussion of donated inventory, including capital gain property. 1040 amended tax form Club dues and membership fees. 1040 amended tax form   Generally, you cannot deduct amounts paid or incurred for membership in any club organized for business, pleasure, recreation, or any other social purpose. 1040 amended tax form This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. 1040 amended tax form Exception. 1040 amended tax form   The following organizations are not treated as clubs organized for business, pleasure, recreation, or other social purpose unless one of the main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. 1040 amended tax form Boards of trade. 1040 amended tax form Business leagues. 1040 amended tax form Chambers of commerce. 1040 amended tax form Civic or public service organizations. 1040 amended tax form Professional organizations such as bar associations and medical associations. 1040 amended tax form Real estate boards. 1040 amended tax form Trade associations. 1040 amended tax form Credit card convenience fees. 1040 amended tax form   Credit card companies charge a fee to businesses who accept their cards. 1040 amended tax form This fee when paid or incurred by the business can be deducted as a business expense. 1040 amended tax form Damages recovered. 1040 amended tax form   Special rules apply to compensation you receive for damages sustained as a result of patent infringement, breach of contract or fiduciary duty, or antitrust violations. 1040 amended tax form You must include this compensation in your income. 1040 amended tax form However, you may be able to take a special deduction. 1040 amended tax form The deduction applies only to amounts recovered for actual economic injury, not any additional amount. 1040 amended tax form The deduction is the smaller of the following. 1040 amended tax form The amount you received or accrued for damages in the tax year reduced by the amount you paid or incurred in the year to recover that amount. 1040 amended tax form Your losses from the injury you have not deducted. 1040 amended tax form Demolition expenses or losses. 1040 amended tax form   Amounts paid or incurred to demolish a structure are not deductible. 1040 amended tax form These amounts are added to the basis of the land where the demolished structure was located. 1040 amended tax form Any loss for the remaining undepreciated basis of a demolished structure would not be recognized until the property is disposed of. 1040 amended tax form Education expenses. 1040 amended tax form   Ordinary and necessary expenses paid for the cost of the education and training of your employees are deductible. 1040 amended tax form See Education Expenses in chapter 2. 1040 amended tax form   You can also deduct the cost of your own education (including certain related travel) related to your trade or business. 1040 amended tax form You must be able to show the education maintains or improves skills required in your trade or business, or that it is required by law or regulations, for keeping your license to practice, status, or job. 1040 amended tax form For example, an attorney can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain his or her license to practice law. 1040 amended tax form   Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. 1040 amended tax form This is true even if the education maintains or improves skills presently required in your business. 1040 amended tax form For more information on education expenses, see Publication 970. 1040 amended tax form Franchise, trademark, trade name. 1040 amended tax form   If you buy a franchise, trademark, or trade name, you can deduct the amount you pay or incur as a business expense only if your payments are part of a series of payments that are: Contingent on productivity, use, or disposition of the item, Payable at least annually for the entire term of the transfer agreement, and Substantially equal in amount (or payable under a fixed formula). 1040 amended tax form   When determining the term of the transfer agreement, include all renewal options and any other period for which you and the transferrer reasonably expect the agreement to be renewed. 1040 amended tax form   A franchise includes an agreement that gives one of the parties to the agreement the right to distribute, sell, or provide goods, services, or facilities within a specified area. 1040 amended tax form Impairment-related expenses. 1040 amended tax form   If you are disabled, you can deduct expenses necessary for you to be able to work (impairment-related expenses) as a business expense, rather than as a medical expense. 1040 amended tax form   You are disabled if you have either of the following. 1040 amended tax form A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed. 1040 amended tax form A physical or mental impairment that substantially limits one or more of your major life activities. 1040 amended tax form   The expense qualifies as a business expense if all the following apply. 1040 amended tax form Your work clearly requires the expense for you to satisfactorily perform that work. 1040 amended tax form The goods or services purchased are clearly not needed or used, other than incidentally, in your personal activities. 1040 amended tax form Their treatment is not specifically provided for under other tax law provisions. 1040 amended tax form Example. 1040 amended tax form You are blind. 1040 amended tax form You must use a reader to do your work, both at and away from your place of work. 1040 amended tax form The reader's services are only for your work. 1040 amended tax form You can deduct your expenses for the reader as a business expense. 1040 amended tax form Internet-related expenses. 1040 amended tax form   Generally, you can deduct internet-related expenses including domain registrations fees and webmaster consulting costs. 1040 amended tax form If you are starting a business you may have to amortize these expenses as start-up costs. 1040 amended tax form For more information about amortizing start-up and organizational costs, see chapter 8. 1040 amended tax form Interview expense allowances. 1040 amended tax form   Reimbursements you make to job candidates for transportation or other expenses related to interviews for possible employment are not wages. 1040 amended tax form You can deduct the reimbursements as a business expense. 1040 amended tax form However, expenses for food, beverages, and entertainment are subject to the 50% limit discussed earlier under Meals and Entertainment. 1040 amended tax form Legal and professional fees. 1040 amended tax form   Fees charged by accountants and attorneys that are ordinary and necessary expenses directly related to operating your business are deductible as business expenses. 1040 amended tax form However, usually legal fees you pay to acquire business assets are not deductible. 1040 amended tax form These costs are added to the basis of the property. 1040 amended tax form   Fees that include payments for work of a personal nature (such as drafting a will, or damages arising from a personal injury) are not allowed as a business deduction on Schedule C or C-EZ. 1040 amended tax form If the invoice includes both business and personal charges, compute the business portion as follows: multiply the total amount of the bill by a fraction, the numerator of which is the amount attributable to business matters, the denominator of which is the total amount paid. 1040 amended tax form The result is the portion of the invoice attributable to business expenses. 1040 amended tax form The portion attributable to personal matters is the difference between the total amount and the business portion (computed above). 1040 amended tax form   Legal fees relating to personal tax advice may be deductible on Schedule A (Form 1040), if you itemize deductions. 1040 amended tax form However, the deduction is subject to the 2% limitation on miscellaneous itemized deductions. 1040 amended tax form See Publication 529, Miscellaneous Deductions. 1040 amended tax form Tax preparation fees. 1040 amended tax form   The cost of hiring a tax professional, such as a C. 1040 amended tax form P. 1040 amended tax form A. 1040 amended tax form , to prepare that part of your tax return relating to your business as a sole proprietor is deductible on Schedule C or Schedule C-EZ. 1040 amended tax form Any remaining cost may be deductible on Schedule A (Form 1040) if you itemize deductions. 1040 amended tax form   You can also claim a business deduction for amounts paid or incurred in resolving asserted tax deficiencies for your business operated as a sole proprietor. 1040 amended tax form Licenses and regulatory fees. 1040 amended tax form   Licenses and regulatory fees for your trade or business paid annually to state or local governments generally are deductible. 1040 amended tax form Some licenses and fees may have to be amortized. 1040 amended tax form See chapter 8 for more information. 1040 amended tax form Lobbying expenses. 1040 amended tax form   Generally, lobbying expenses are not deductible. 1040 amended tax form Lobbying expenses include amounts paid or incurred for any of the following activities. 1040 amended tax form Influencing legislation. 1040 amended tax form Participating in or intervening in any political campaign for, or against, any candidate for public office. 1040 amended tax form Attempting to influence the general public, or segments of the public, about elections, legislative matters, or referendums. 1040 amended tax form Communicating directly with covered executive branch officials (defined later) in any attempt to influence the official actions or positions of those officials. 1040 amended tax form Researching, preparing, planning, or coordinating any of the preceding activities. 1040 amended tax form   Your expenses for influencing legislation and communicating directly with a covered executive branch official include a portion of your labor costs and general and administrative costs of your business. 1040 amended tax form For information on making this allocation, see section 1. 1040 amended tax form 162-28 of the regulations. 1040 amended tax form   You cannot claim a charitable or business expense deduction for amounts paid to an organization if both of the following apply. 1040 amended tax form The organization conducts lobbying activities on matters of direct financial interest to your business. 1040 amended tax form A principal purpose of your contribution is to avoid the rules discussed earlier that prohibit a business deduction for lobbying expenses. 1040 amended tax form   If a tax-exempt organization, other than a section 501(c)(3) organization, provides you with a notice on the part of dues that is allocable to nondeductible lobbying and political expenses, you cannot deduct that part of the dues. 1040 amended tax form Covered executive branch official. 1040 amended tax form   For purposes of this discussion, a covered executive branch official is any of the following. 1040 amended tax form The President. 1040 amended tax form The Vice President. 1040 amended tax form Any officer or employee of the White House Office of the Executive Office of the President and the two most senior level officers of each of the other agencies in the Executive Office. 1040 amended tax form Any individual who: Is serving in a position in Level I of the Executive Schedule under section 5312 of title 5, United States Code, Has been designated by the President as having Cabinet-level status, or Is an immediate deputy of an individual listed in item (a) or (b). 1040 amended tax form Exceptions to denial of deduction. 1040 amended tax form   The general denial of the deduction does not apply to the following. 1040 amended tax form Expenses of appearing before, or communicating with, any committee or member of any local council or similar governing body concerning its legislation (local legislation) if the legislation is of direct interest to you or to you and an organization of which you are a member. 1040 amended tax form An Indian tribal government is treated as a local council or similar governing body. 1040 amended tax form Any in-house expenses for influencing legislation and communicating directly with a covered executive branch official if those expenses for the tax year do not exceed $2,000 (excluding overhead expenses). 1040 amended tax form Expenses incurred by taxpayers engaged in the trade or business of lobbying (professional lobbyists) on behalf of another person (but does apply to payments by the other person to the lobbyist for lobbying activities). 1040 amended tax form Moving machinery. 1040 amended tax form   Generally, the cost of moving machinery from one city to another is a deductible expense. 1040 amended tax form So is the cost of moving machinery from one plant to another, or from one part of your plant to another. 1040 amended tax form You can deduct the cost of installing the machinery in the new location. 1040 amended tax form However, you must capitalize the costs of installing or moving newly purchased machinery. 1040 amended tax form Outplacement services. 1040 amended tax form   The costs of outplacement services you provide to your employees to help them find new employment, such as career counseling, résumé assistance, skills assessment, etc. 1040 amended tax form are deductible. 1040 amended tax form   The costs of outplacement services may cover more than one deduction category. 1040 amended tax form For example, deduct as a utilities expense the cost of telephone calls made under this service and deduct as rental expense the cost of renting machinery and equipment for this service. 1040 amended tax form   For information on whether the value of outplacement services is includable in your employees' income, see Publication 15-B. 1040 amended tax form Penalties and fines. 1040 amended tax form   Penalties paid for late performance or nonperformance of a contract are generally deductible. 1040 amended tax form For instance, you own and operate a construction company. 1040 amended tax form Under a contract, you are to finish construction of a building by a certain date. 1040 amended tax form Due to construction delays, the building is not completed and ready for occupancy on the date stipulated in the contract. 1040 amended tax form You are now required to pay an additional amount for each day that completion is delayed beyond the completion date stipulated in the contract. 1040 amended tax form These additional costs are deductible business expenses. 1040 amended tax form   On the other hand, penalties or fines paid to any government agency or instrumentality because of a violation of any law are not deductible. 1040 amended tax form These fines or penalties include the following amounts. 1040 amended tax form Paid because of a conviction for a crime or after a plea of guilty or no contest in a criminal proceeding. 1040 amended tax form Paid as a penalty imposed by federal, state, or local law in a civil action, including certain additions to tax and additional amounts and assessable penalties imposed by the Internal Revenue Code. 1040 amended tax form Paid in settlement of actual or possible liability for a fine or penalty, whether civil or criminal. 1040 amended tax form Forfeited as collateral posted for a proceeding that could result in a fine or penalty. 1040 amended tax form   Examples of nondeductible penalties and fines include the following. 1040 amended tax form Fines for violating city housing codes. 1040 amended tax form Fines paid by truckers for violating state maximum highway weight laws. 1040 amended tax form Fines for violating air quality laws. 1040 amended tax form Civil penalties for violating federal laws regarding mining safety standards and discharges into navigable waters. 1040 amended tax form   A fine or penalty does not include any of the following. 1040 amended tax form Legal fees and related expenses to defend yourself in a prosecution or civil action for a violation of the law imposing the fine or civil penalty. 1040 amended tax form Court costs or stenographic and printing charges. 1040 amended tax form Compensatory damages paid to a government. 1040 amended tax form Political contributions. 1040 amended tax form   Contributions or gifts paid to political parties or candidates are not deductible. 1040 amended tax form In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible. 1040 amended tax form Indirect political contributions. 1040 amended tax form   You cannot deduct indirect political contributions and costs of taking part in political activities as business expenses. 1040 amended tax form Examples of nondeductible expenses include the following. 1040 amended tax form Advertising in a convention program of a political party, or in any other publication if any of the proceeds from the publication are for, or intended for, the use of a political party or candidate. 1040 amended tax form Admission to a dinner or program (including, but not limited to, galas, dances, film presentations, parties, and sporting events) if any of the proceeds from the function are for, or intended for, the use of a political party or candidate. 1040 amended tax form Admission to an inaugural ball, gala, parade, concert, or similar event if identified with a political party or candidate. 1040 amended tax form Repairs. 1040 amended tax form   The cost of repairing or improving property used in your trade or business is either a deductible or capital expense. 1040 amended tax form Routine maintenance that keeps your property in a normal efficient operating condition, but that does not materially increase the value or substantially prolong the useful life of the property, is deductible in the year that it is incurred. 1040 amended tax form Otherwise, the cost must be capitalized and depreciated. 1040 amended tax form See Form 4562 and its instructions for how to compute and claim the depreciation deduction. 1040 amended tax form   The cost of repairs includes the costs of labor, supplies, and certain other items. 1040 amended tax form The value of your own labor is not deductible. 1040 amended tax form Examples of repairs include: Reconditioning floors (but not replacement), Repainting the interior and exterior walls of a building, Cleaning and repairing roofs and gutters, and Fixing plumbing leaks (but not replacement of fixtures). 1040 amended tax form Repayments. 1040 amended tax form   If you had to repay an amount you included in your income in an earlier year, you may be able to deduct the amount repaid for the year in which you repaid it. 1040 amended tax form Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. 1040 amended tax form Type of deduction. 1040 amended tax form   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. 1040 amended tax form For instance, if you repay an amount you previously reported as a capital gain, deduct the repayment as a capital loss on Form 8949. 1040 amended tax form If you reported it as self-employment income, deduct it as a business deduction on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). 1040 amended tax form   If you reported the amount as wages, unemployment compensation, or other nonbusiness ordinary income, enter it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is subject to the 2% limitation. 1040 amended tax form However, if the repayment is over $3,000 and Method 1 (discussed later) applies, deduct it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is not subject to the 2% limitation. 1040 amended tax form Repayment—$3,000 or less. 1040 amended tax form   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. 1040 amended tax form Repayment—over $3,000. 1040 amended tax form   If the amount you repaid was more than $3,000, you can deduct the repayment, as described earlier. 1040 amended tax form However, you can instead choose to take a tax credit for the year of repayment if you included the income under a “claim of right. 1040 amended tax form ” This means that at the time you included the income, it appeared that you had an unrestricted right to it. 1040 amended tax form If you qualify for this choice, figure your tax under both methods and use the method that results in less tax. 1040 amended tax form Method 1. 1040 amended tax form   Figure your tax for 2013 claiming a deduction for the repaid amount. 1040 amended tax form Method 2. 1040 amended tax form   Figure your tax for 2013 claiming a credit for the repaid amount. 1040 amended tax form Follow these steps. 1040 amended tax form Figure your tax for 2013 without deducting the repaid amount. 1040 amended tax form Refigure your tax from the earlier year without including in income the amount you repaid in 2013. 1040 amended tax form Subtract the tax in (2) from the tax shown on your return for the earlier year. 1040 amended tax form This is the amount of your credit. 1040 amended tax form Subtract the answer in (3) from the tax for 2013 figured without the deduction (step 1). 1040 amended tax form   If Method 1 results in less tax, deduct the amount repaid as discussed earlier under Type of deduction. 1040 amended tax form   If Method 2 results in less tax, claim the credit on line 71 of Form 1040, and write “I. 1040 amended tax form R. 1040 amended tax form C. 1040 amended tax form 1341” next to line 71. 1040 amended tax form Example. 1040 amended tax form For 2012, you filed a return and reported your income on the cash method. 1040 amended tax form In 2013, you repaid $5,000 included in your 2012 gross income under a claim of right. 1040 amended tax form Your filing status in 2013 and 2012 is single. 1040 amended tax form Your income and tax for both years are as follows:   2012  With Income 2012  Without Income Taxable Income $15,000 $10,000 Tax $ 1,819 $ 1,069   2013  Without Deduction 2013  With Deduction Taxable Income $49,950 $44,950 Tax $8,423 $7,173 Your tax under Method 1 is $7,173. 1040 amended tax form Your tax under Method 2 is $7,673, figured as follows: Tax previously determined for 2012 $ 1,819 Less: Tax as refigured − 1,069 Decrease in 2012 tax $ 750 Regular tax liability for 2013 $8,423 Less: Decrease in 2012 tax − 750 Refigured tax for 2013 $ 7,673 Because you pay less tax under Method 1, you should take a deduction for the repayment in 2013. 1040 amended tax form Repayment does not apply. 1040 amended tax form   This discussion does not apply to the following. 1040 amended tax form Deductions for bad debts. 1040 amended tax form Deductions from sales to customers, such as returns and allowances, and similar items. 1040 amended tax form Deductions for legal and other expenses of contesting the repayment. 1040 amended tax form Year of deduction (or credit). 1040 amended tax form   If you use the cash method of accounting, you can take the deduction (or credit, if applicable) for the tax year in which you actually make the repayment. 1040 amended tax form If you use any other accounting method, you can deduct the repayment or claim a credit for it only for the tax year in which it is a proper deduction under your accounting method. 1040 amended tax form For example, if you use the accrual method, you are entitled to the deduction or credit in the tax year in which the obligation for the repayment accrues. 1040 amended tax form Subscriptions. 1040 amended tax form   Subscriptions to professional, technical, and trade journals that deal with your business field are deductible. 1040 amended tax form Supplies and materials. 1040 amended tax form   Unless you have deducted the cost in any earlier year, you generally can deduct the cost of materials and supplies actually consumed and used during the tax year. 1040 amended tax form   If you keep incidental materials and supplies on hand, you can deduct the cost of the incidental materials and supplies you bought during the tax year if all the following requirements are met. 1040 amended tax form You do not keep a record of when they are used. 1040 amended tax form You do not take an inventory of the amount on hand at the beginning and end of the tax year. 1040 amended tax form This method does not distort your income. 1040 amended tax form   You can also deduct the cost of books, professional instruments, equipment, etc. 1040 amended tax form , if you normally use them within a year. 1040 amended tax form However, if the usefulness of these items extends substantially beyond the year they are placed in service, you generally must recover their costs through depreciation. 1040 amended tax form For more information regarding depreciation see Publication 946, How To Depreciate Property. 1040 amended tax form Utilities. 1040 amended tax form   Business expenses for heat, lights, power, telephone service, and water and sewerage are deductible. 1040 amended tax form However, any part due to personal use is not deductible. 1040 amended tax form Telephone. 1040 amended tax form   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. 1040 amended tax form However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. 1040 amended tax form Prev  Up  Next   Home   More Online Publications