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1040 Tax Form 2010

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1040 Tax Form 2010

1040 tax form 2010 Publication 526 - Main Content Table of Contents Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Expenses of Whaling Captains Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions to Donor-Advised Funds Partial Interest in Property Contributions of PropertyContributions Subject to Special Rules Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value Penalty When To DeductChecks. 1040 tax form 2010 Text message. 1040 tax form 2010 Credit card. 1040 tax form 2010 Pay-by-phone account. 1040 tax form 2010 Stock certificate. 1040 tax form 2010 Promissory note. 1040 tax form 2010 Option. 1040 tax form 2010 Borrowed funds. 1040 tax form 2010 Conditional gift. 1040 tax form 2010 Limits on Deductions50% Limit 30% Limit Special 30% Limit for Capital Gain Property 20% Limit Special 50% Limit for Qualified Conservation Contributions How To Figure Your Deduction When Limits Apply Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To ReportReporting expenses for student living with you. 1040 tax form 2010 Total deduction over $500. 1040 tax form 2010 Deduction over $5,000 for one item. 1040 tax form 2010 Vehicle donations. 1040 tax form 2010 Clothing and household items not in good used condition. 1040 tax form 2010 Easement on building in historic district. 1040 tax form 2010 Deduction over $500,000. 1040 tax form 2010 How To Get Tax HelpLow Income Taxpayer Clinics Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. 1040 tax form 2010 Most organizations, other than churches and governments, must apply to the IRS to become a qualified organization. 1040 tax form 2010 How to check whether an organization can receive deductible charitable contributions. 1040 tax form 2010   You can ask any organization whether it is a qualified organization, and most will be able to tell you. 1040 tax form 2010 Or go to IRS. 1040 tax form 2010 gov. 1040 tax form 2010 Click on “Tools” and then on “Exempt Organizations Select Check” (www. 1040 tax form 2010 irs. 1040 tax form 2010 gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). 1040 tax form 2010 This online tool will enable you to search for qualified organizations. 1040 tax form 2010 You can also call the IRS to find out if an organization is qualified. 1040 tax form 2010 Call 1-877-829-5500. 1040 tax form 2010 People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. 1040 tax form 2010 Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. 1040 tax form 2010 gsa. 1040 tax form 2010 gov/fedrelay. 1040 tax form 2010 Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. 1040 tax form 2010 A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). 1040 tax form 2010 It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. 1040 tax form 2010 Certain organizations that foster national or international amateur sports competition also qualify. 1040 tax form 2010 War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). 1040 tax form 2010 Domestic fraternal societies, orders, and associations operating under the lodge system. 1040 tax form 2010 (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. 1040 tax form 2010 ) Certain nonprofit cemetery companies or corporations. 1040 tax form 2010 (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. 1040 tax form 2010 ) The United States or any state, the District of Columbia, a U. 1040 tax form 2010 S. 1040 tax form 2010 possession (including Puerto Rico), a political subdivision of a state or U. 1040 tax form 2010 S. 1040 tax form 2010 possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. 1040 tax form 2010 (Your contribution to this type of organization is deductible only if it is to be used solely for public purposes. 1040 tax form 2010 ) Example 1. 1040 tax form 2010 You contribute cash to your city's police department to be used as a reward for information about a crime. 1040 tax form 2010 The city police department is a qualified organization, and your contribution is for a public purpose. 1040 tax form 2010 You can deduct your contribution. 1040 tax form 2010 Example 2. 1040 tax form 2010 You make a voluntary contribution to the social security trust fund, not earmarked for a specific account. 1040 tax form 2010 Because the trust fund is part of the U. 1040 tax form 2010 S. 1040 tax form 2010 Government, you contributed to a qualified organization. 1040 tax form 2010 You can deduct your contribution. 1040 tax form 2010 Examples. 1040 tax form 2010   The following list gives some examples of qualified organizations. 1040 tax form 2010 Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. 1040 tax form 2010 Most nonprofit charitable organizations such as the American Red Cross and the United Way. 1040 tax form 2010 Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. 1040 tax form 2010 This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. 1040 tax form 2010 However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . 1040 tax form 2010 Nonprofit hospitals and medical research organizations. 1040 tax form 2010 Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. 1040 tax form 2010 Nonprofit volunteer fire companies. 1040 tax form 2010 Nonprofit organizations that develop and maintain public parks and recreation facilities. 1040 tax form 2010 Civil defense organizations. 1040 tax form 2010 Canadian charities. 1040 tax form 2010   You may be able to deduct contributions to certain Canadian charitable organizations covered under an income tax treaty with Canada. 1040 tax form 2010 To deduct your contribution to a Canadian charity, you generally must have income from sources in Canada. 1040 tax form 2010 See Publication 597, Information on the United States-Canada Income Tax Treaty, for information on how to figure your deduction. 1040 tax form 2010 Mexican charities. 1040 tax form 2010   Under the U. 1040 tax form 2010 S. 1040 tax form 2010 -Mexico income tax treaty, a contribution to a Mexican charitable organization may be deductible, but only if and to the extent the contribution would have been treated as a charitable contribution to a public charity created or organized under U. 1040 tax form 2010 S. 1040 tax form 2010 law. 1040 tax form 2010 To deduct your contribution to a Mexican charity, you must have income from sources in Mexico. 1040 tax form 2010 The limits described in Limits on Deductions , later, apply and are figured using your income from Mexican sources. 1040 tax form 2010 Israeli charities. 1040 tax form 2010   Under the U. 1040 tax form 2010 S. 1040 tax form 2010 -Israel income tax treaty, a contribution to an Israeli charitable organization is deductible if and to the extent the contribution would have been treated as a charitable contribution if the organization had been created or organized under U. 1040 tax form 2010 S. 1040 tax form 2010 law. 1040 tax form 2010 To deduct your contribution to an Israeli charity, you must have income from sources in Israel. 1040 tax form 2010 The limits described in Limits on Deductions , later, apply. 1040 tax form 2010 The deduction is also limited to 25% of your adjusted gross income from Israeli sources. 1040 tax form 2010 Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. 1040 tax form 2010 A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. 1040 tax form 2010 The contributions must be made to a qualified organization and not set aside for use by a specific person. 1040 tax form 2010 If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. 1040 tax form 2010 See Contributions of Property , later. 1040 tax form 2010 Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. 1040 tax form 2010 In addition, the total of your charitable contributions deduction and certain other itemized deductions may be limited. 1040 tax form 2010 See Limits on Deductions , later. 1040 tax form 2010 Table 1 in this publication gives examples of contributions you can and cannot deduct. 1040 tax form 2010 Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. 1040 tax form 2010 Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. 1040 tax form 2010 If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. 1040 tax form 2010 For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. 1040 tax form 2010 Example 1. 1040 tax form 2010 You pay $65 for a ticket to a dinner-dance at a church. 1040 tax form 2010 Your entire $65 payment goes to the church. 1040 tax form 2010 The ticket to the dinner-dance has a fair market value of $25. 1040 tax form 2010 When you buy your ticket, you know its value is less than your payment. 1040 tax form 2010 To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). 1040 tax form 2010 You can deduct $40 as a charitable contribution to the church. 1040 tax form 2010 Example 2. 1040 tax form 2010 At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. 1040 tax form 2010 The amount you pay is no more than the fair rental value. 1040 tax form 2010 You have not made a deductible charitable contribution. 1040 tax form 2010 Athletic events. 1040 tax form 2010   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. 1040 tax form 2010   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. 1040 tax form 2010 Subtract the price of the tickets from your payment. 1040 tax form 2010 You can deduct 80% of the remaining amount as a charitable contribution. 1040 tax form 2010 Example 1. 1040 tax form 2010 You pay $300 a year for membership in a university's athletic scholarship program. 1040 tax form 2010 The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. 1040 tax form 2010 You can deduct $240 (80% of $300) as a charitable contribution. 1040 tax form 2010 Example 2. 1040 tax form 2010 The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. 1040 tax form 2010 You must subtract the usual price of a ticket ($120) from your $300 payment. 1040 tax form 2010 The result is $180. 1040 tax form 2010 Your deductible charitable contribution is $144 (80% of $180). 1040 tax form 2010 Charity benefit events. 1040 tax form 2010   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. 1040 tax form 2010   If there is an established charge for the event, that charge is the value of your benefit. 1040 tax form 2010 If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. 1040 tax form 2010 Whether you use the tickets or other privileges has no effect on the amount you can deduct. 1040 tax form 2010 However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. 1040 tax form 2010    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. 1040 tax form 2010 If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. 1040 tax form 2010 Example. 1040 tax form 2010 You pay $40 to see a special showing of a movie for the benefit of a qualified organization. 1040 tax form 2010 Printed on the ticket is “Contribution–$40. 1040 tax form 2010 ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). 1040 tax form 2010 Membership fees or dues. 1040 tax form 2010   You may be able to deduct membership fees or dues you pay to a qualified organization. 1040 tax form 2010 However, you can deduct only the amount that is more than the value of the benefits you receive. 1040 tax form 2010   You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. 1040 tax form 2010 They are not qualified organizations. 1040 tax form 2010 Certain membership benefits can be disregarded. 1040 tax form 2010   Both you and the organization can disregard the following membership benefits if you get them in return for an annual payment of $75 or less. 1040 tax form 2010 Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. 1040 tax form 2010 Admission, while you are a member, to events open only to members of the organization if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. 1040 tax form 2010 20. 1040 tax form 2010 Token items. 1040 tax form 2010   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. 1040 tax form 2010 You receive only a small item or other benefit of token value. 1040 tax form 2010 The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. 1040 tax form 2010 The organization determines whether the value of an item or benefit is substantial by using Revenue Procedures 90-12 and 92-49 and the inflation adjustment in Revenue Procedure 2012–41. 1040 tax form 2010 Written statement. 1040 tax form 2010   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. 1040 tax form 2010 The statement must say you can deduct only the amount of your payment that is more than the value of the goods or services you received. 1040 tax form 2010 It must also give you a good faith estimate of the value of those goods or services. 1040 tax form 2010   The organization can give you the statement either when it solicits or when it receives the payment from you. 1040 tax form 2010 Exception. 1040 tax form 2010   An organization will not have to give you this statement if one of the following is true. 1040 tax form 2010 The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. 1040 tax form 2010 You receive only items whose value is not substantial as described under Token items , earlier. 1040 tax form 2010 You receive only membership benefits that can be disregarded, as described under Membership fees or dues , earlier. 1040 tax form 2010 Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. 1040 tax form 2010 You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization (defined later) as part of a program of the organization to provide educational opportunities for the student, Is not your relative (defined later) or dependent (also defined later), and Is a full-time student in the twelfth or any lower grade at a school in the United States. 1040 tax form 2010 You can deduct up to $50 a month for each full calendar month the student lives with you. 1040 tax form 2010 Any month when conditions (1) through (3) above are met for 15 or more days counts as a full month. 1040 tax form 2010 Qualified organization. 1040 tax form 2010   For these purposes, a qualified organization can be any of the organizations described earlier under Types of Qualified Organizations , except those in (4) and (5). 1040 tax form 2010 For example, if you are providing a home for a student as part of a state or local government program, you cannot deduct your expenses as charitable contributions. 1040 tax form 2010 But see Foster parents under Out-of-Pocket Expenses in Giving Services, later, if you provide the home as a foster parent. 1040 tax form 2010 Relative. 1040 tax form 2010   The term “relative” means any of the following persons. 1040 tax form 2010 Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). 1040 tax form 2010 A legally adopted child is considered your child. 1040 tax form 2010 Your brother, sister, half brother, half sister, stepbrother, or stepsister. 1040 tax form 2010 Your father, mother, grandparent, or other direct ancestor. 1040 tax form 2010 Your stepfather or stepmother. 1040 tax form 2010 A son or daughter of your brother or sister. 1040 tax form 2010 A brother or sister of your father or mother. 1040 tax form 2010 Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. 1040 tax form 2010 Dependent. 1040 tax form 2010   For this purpose, the term “dependent” means: A person you can claim as a dependent, or A person you could have claimed as a dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 1040 tax form 2010    Foreign students brought to this country under a qualified international education exchange program and placed in American homes for a temporary period generally are not U. 1040 tax form 2010 S. 1040 tax form 2010 residents and cannot be claimed as dependents. 1040 tax form 2010 Qualifying expenses. 1040 tax form 2010   You may be able to deduct the cost of books, tuition, food, clothing, transportation, medical and dental care, entertainment, and other amounts you actually spend for the well-being of the student. 1040 tax form 2010 Expenses that do not qualify. 1040 tax form 2010   You cannot deduct depreciation on your home, the fair market value of lodging, and similar items not considered amounts actually spent by you. 1040 tax form 2010 Nor can you deduct general household expenses, such as taxes, insurance, and repairs. 1040 tax form 2010 Reimbursed expenses. 1040 tax form 2010   In most cases, you cannot claim a charitable contribution deduction if you are compensated or reimbursed for any part of the costs of having a student live with you. 1040 tax form 2010 However, you may be able to claim a charitable contribution deduction for the unreimbursed portion of your expenses if you are reimbursed only for an extraordinary or one-time item, such as a hospital bill or vacation trip, you paid in advance at the request of the student's parents or the sponsoring organization. 1040 tax form 2010 Mutual exchange program. 1040 tax form 2010   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. 1040 tax form 2010 Reporting expenses. 1040 tax form 2010   For a list of what you must file with your return if you deduct expenses for a student living with you, see Reporting expenses for student living with you under How To Report, later. 1040 tax form 2010 Out-of-Pocket Expenses in Giving Services Table 2. 1040 tax form 2010 Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. 1040 tax form 2010 All of the rules explained in this publication also apply. 1040 tax form 2010 See, in particular, Out-of-Pocket Expenses in Giving Services . 1040 tax form 2010 Question Answer I volunteer 6 hours a week in the office of a qualified organization. 1040 tax form 2010 The receptionist is paid $10 an hour for the same work. 1040 tax form 2010 Can I deduct $60 a week for my time? No, you cannot deduct the value of your time or services. 1040 tax form 2010  The office is 30 miles from my home. 1040 tax form 2010 Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. 1040 tax form 2010 If you do not want to figure your actual costs, you can deduct 14 cents for each mile. 1040 tax form 2010 I volunteer as a Red Cross nurse's aide at a hospital. 1040 tax form 2010 Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. 1040 tax form 2010 I pay a babysitter to watch my children while I volunteer for a qualified organization. 1040 tax form 2010 Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. 1040 tax form 2010 (If you have childcare expenses so you can work for pay, see Publication 503, Child and Dependent Care Expenses. 1040 tax form 2010 ) Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. 1040 tax form 2010 The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. 1040 tax form 2010 Table 2 contains questions and answers that apply to some individuals who volunteer their services. 1040 tax form 2010 Underprivileged youths selected by charity. 1040 tax form 2010   You can deduct reasonable unreimbursed out-of-pocket expenses you pay to allow underprivileged youths to attend athletic events, movies, or dinners. 1040 tax form 2010 The youths must be selected by a charitable organization whose goal is to reduce juvenile delinquency. 1040 tax form 2010 Your own similar expenses in accompanying the youths are not deductible. 1040 tax form 2010 Conventions. 1040 tax form 2010   If a qualified organization selects you to attend a convention as its representative, you can deduct your unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight for the convention. 1040 tax form 2010 However, see Travel , later. 1040 tax form 2010   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. 1040 tax form 2010 You also cannot deduct travel, meals and lodging, and other expenses for your spouse or children. 1040 tax form 2010   You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. 1040 tax form 2010 You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. 1040 tax form 2010 Uniforms. 1040 tax form 2010   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. 1040 tax form 2010 Foster parents. 1040 tax form 2010   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. 1040 tax form 2010 A qualified organization must select the individuals you take into your home for foster care. 1040 tax form 2010   You can deduct expenses that meet both of the following requirements. 1040 tax form 2010 They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. 1040 tax form 2010 They are incurred primarily to benefit the qualified organization. 1040 tax form 2010   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. 1040 tax form 2010 For details, see Publication 501, Exemptions, Standard Deduction, and Filing Information. 1040 tax form 2010 Example. 1040 tax form 2010 You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. 1040 tax form 2010 Your unreimbursed expenses are not deductible as charitable contributions. 1040 tax form 2010 Church deacon. 1040 tax form 2010   You can deduct as a charitable contribution any unreimbursed expenses you have while in a permanent diaconate program established by your church. 1040 tax form 2010 These expenses include the cost of vestments, books, and transportation required in order to serve in the program as either a deacon candidate or an ordained deacon. 1040 tax form 2010 Car expenses. 1040 tax form 2010   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. 1040 tax form 2010 You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. 1040 tax form 2010   If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. 1040 tax form 2010   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. 1040 tax form 2010   You must keep reliable written records of your car expenses. 1040 tax form 2010 For more information, see Car expenses under Records To Keep, later. 1040 tax form 2010 Travel. 1040 tax form 2010   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. 1040 tax form 2010 This applies whether you pay the expenses directly or indirectly. 1040 tax form 2010 You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. 1040 tax form 2010   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. 1040 tax form 2010 Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. 1040 tax form 2010 However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. 1040 tax form 2010 Example 1. 1040 tax form 2010 You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. 1040 tax form 2010 You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. 1040 tax form 2010 You participate in the activities of the group and enjoy your time with them. 1040 tax form 2010 You oversee the breaking of camp and you transport the group home. 1040 tax form 2010 You can deduct your travel expenses. 1040 tax form 2010 Example 2. 1040 tax form 2010 You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. 1040 tax form 2010 The project is sponsored by a charitable organization. 1040 tax form 2010 In most circumstances, you cannot deduct your expenses. 1040 tax form 2010 Example 3. 1040 tax form 2010 You work for several hours each morning on an archeological dig sponsored by a charitable organization. 1040 tax form 2010 The rest of the day is free for recreation and sightseeing. 1040 tax form 2010 You cannot take a charitable contribution deduction even though you work very hard during those few hours. 1040 tax form 2010 Example 4. 1040 tax form 2010 You spend the entire day attending a charitable organization's regional meeting as a chosen representative. 1040 tax form 2010 In the evening you go to the theater. 1040 tax form 2010 You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. 1040 tax form 2010 Daily allowance (per diem). 1040 tax form 2010   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. 1040 tax form 2010 You may be able to deduct any necessary travel expenses that are more than the allowance. 1040 tax form 2010 Deductible travel expenses. 1040 tax form 2010   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. 1040 tax form 2010 Because these travel expenses are not business-related, they are not subject to the same limits as business related expenses. 1040 tax form 2010 For information on business travel expenses, see Travel in Publication 463, Travel, Entertainment, Gift, and Car Expenses. 1040 tax form 2010 Expenses of Whaling Captains You may be able to deduct as a charitable contribution any reasonable and necessary whaling expenses you pay during the year to carry out sanctioned whaling activities. 1040 tax form 2010 The deduction is limited to $10,000 a year. 1040 tax form 2010 To claim the deduction, you must be recognized by the Alaska Eskimo Whaling Commission as a whaling captain charged with the responsibility of maintaining and carrying out sanctioned whaling activities. 1040 tax form 2010 Sanctioned whaling activities are subsistence bowhead whale hunting activities conducted under the management plan of the Alaska Eskimo Whaling Commission. 1040 tax form 2010 Whaling expenses include expenses for: Acquiring and maintaining whaling boats, weapons, and gear used in sanctioned whaling activities, Supplying food for the crew and other provisions for carrying out these activities, and Storing and distributing the catch from these activities. 1040 tax form 2010 You must keep records showing the time, place, date, amount, and nature of the expenses. 1040 tax form 2010 For details, see Revenue Procedure 2006-50, which is on page 944 of Internal Revenue Bulletin 2006-47 at www. 1040 tax form 2010 irs. 1040 tax form 2010 gov/pub/irs-irbs/irb06-47. 1040 tax form 2010 pdf. 1040 tax form 2010 Contributions You Cannot Deduct There are some contributions you cannot deduct and others you can deduct only in part. 1040 tax form 2010 You cannot deduct as a charitable contribution: A contribution to a specific individual, A contribution to a nonqualified organization, The part of a contribution from which you receive or expect to receive a benefit, The value of your time or services, Your personal expenses, A qualified charitable distribution from an individual retirement arrangement (IRA), Appraisal fees, Certain contributions to donor-advised funds, or Certain contributions of partial interests in property. 1040 tax form 2010 Detailed discussions of these items follow. 1040 tax form 2010 Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. 1040 tax form 2010 Contributions to fraternal societies made for the purpose of paying medical or burial expenses of members. 1040 tax form 2010 Contributions to individuals who are needy or worthy. 1040 tax form 2010 You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. 1040 tax form 2010 But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. 1040 tax form 2010 Example. 1040 tax form 2010 You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. 1040 tax form 2010 However, you cannot deduct contributions earmarked for relief of a particular individual or family. 1040 tax form 2010 Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. 1040 tax form 2010 Expenses you paid for another person who provided services to a qualified organization. 1040 tax form 2010 Example. 1040 tax form 2010 Your son does missionary work. 1040 tax form 2010 You pay his expenses. 1040 tax form 2010 You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. 1040 tax form 2010 Payments to a hospital that are for a specific patient's care or for services for a specific patient. 1040 tax form 2010 You cannot deduct these payments even if the hospital is operated by a city, state, or other qualified organization. 1040 tax form 2010 Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. 1040 tax form 2010 Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. 1040 tax form 2010 Chambers of commerce and other business leagues or organizations. 1040 tax form 2010 Civic leagues and associations. 1040 tax form 2010 Communist organizations. 1040 tax form 2010 Country clubs and other social clubs. 1040 tax form 2010 Foreign organizations other than certain Canadian, Israeli, or Mexican charitable organizations. 1040 tax form 2010 (See Canadian charities , Mexican charities , and Israeli charities under Organizations That Qualify To Receive Deductible Contributions, earlier. 1040 tax form 2010 ) Also, you cannot deduct a contribution you made to any qualifying organization if the contribution is earmarked to go to a foreign organization. 1040 tax form 2010 However, certain contributions to a qualified organization for use in a program conducted by a foreign charity may be deductible as long as they are not earmarked to go to the foreign charity. 1040 tax form 2010 For the contribution to be deductible, the qualified organization must approve the program as furthering its own exempt purposes and must keep control over the use of the contributed funds. 1040 tax form 2010 The contribution is also deductible if the foreign charity is only an administrative arm of the qualified organization. 1040 tax form 2010 Homeowners' associations. 1040 tax form 2010 Labor unions. 1040 tax form 2010 But you may be able to deduct union dues as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit, on Schedule A (Form 1040). 1040 tax form 2010 See Publication 529, Miscellaneous Deductions. 1040 tax form 2010 Political organizations and candidates. 1040 tax form 2010 Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. 1040 tax form 2010 See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. 1040 tax form 2010 These contributions include the following. 1040 tax form 2010 Contributions for lobbying. 1040 tax form 2010 This includes amounts you earmark for use in, or in connection with, influencing specific legislation. 1040 tax form 2010 Contributions to a retirement home for room, board, maintenance, or admittance. 1040 tax form 2010 Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. 1040 tax form 2010 Costs of raffles, bingo, lottery, etc. 1040 tax form 2010 You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. 1040 tax form 2010 For information on how to report gambling winnings and losses, see Deductions Not Subject to the 2% Limit in Publication 529. 1040 tax form 2010 Dues to fraternal orders and similar groups. 1040 tax form 2010 However, see Membership fees or dues under Contributions From Which You Benefit, earlier. 1040 tax form 2010 Tuition, or amounts you pay instead of tuition. 1040 tax form 2010 You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. 1040 tax form 2010 You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. 1040 tax form 2010 ” Contributions connected with split-dollar insurance arrangements. 1040 tax form 2010 You cannot deduct any part of a contribution to a charitable organization if, in connection with the contribution, the organization directly or indirectly pays, has paid, or is expected to pay any premium on any life insurance, annuity, or endowment contract for which you, any member of your family, or any other person chosen by you (other than a qualified charitable organization) is a beneficiary. 1040 tax form 2010 Example. 1040 tax form 2010 You donate money to a charitable organization. 1040 tax form 2010 The charity uses the money to purchase a cash value life insurance policy. 1040 tax form 2010 The beneficiaries under the insurance policy include members of your family. 1040 tax form 2010 Even though the charity may eventually get some benefit out of the insurance policy, you cannot deduct any part of the donation. 1040 tax form 2010 Qualified Charitable Distributions A qualified charitable distribution (QCD) is a distribution made directly by the trustee of your individual retirement arrangement (IRA), other than a SEP or SIMPLE IRA, to certain qualified organizations. 1040 tax form 2010 You must have been at least age 70½ when the distribution was made. 1040 tax form 2010 Your total QCDs for the year cannot be more than $100,000. 1040 tax form 2010 If all the requirements are met, a QCD is nontaxable, but you cannot claim a charitable contribution deduction for a QCD. 1040 tax form 2010 See Publication 590, Individual Retirement Arrangements (IRAs), for more information about QCDs. 1040 tax form 2010 Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. 1040 tax form 2010 Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. 1040 tax form 2010 The cost of meals you eat while you perform services for a qualified organization, unless it is necessary for you to be away from home overnight while performing the services. 1040 tax form 2010 Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final. 1040 tax form 2010 However, you may be able to claim a tax credit for these expenses. 1040 tax form 2010 Also, you may be able to exclude from your gross income amounts paid or reimbursed by your employer for your adoption expenses. 1040 tax form 2010 See Form 8839, Qualified Adoption Expenses, and its instructions, for more information. 1040 tax form 2010 You also may be able to claim an exemption for the child. 1040 tax form 2010 See Exemptions for Dependents in Publication 501 for more information. 1040 tax form 2010 Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property. 1040 tax form 2010 But you can claim them, subject to the 2%-of-adjusted-gross-income limit, as a miscellaneous itemized deduction on Schedule A (Form 1040). 1040 tax form 2010 See Deductions Subject to the 2% Limit in Publication 529 for more information. 1040 tax form 2010 Contributions to Donor-Advised Funds You cannot deduct a contribution to a donor-advised fund if: The qualified organization that sponsors the fund is a war veterans' organization, a fraternal society, or a nonprofit cemetery company, or You do not have an acknowledgment from that sponsoring organization that it has exclusive legal control over the assets contributed. 1040 tax form 2010 There are also other circumstances in which you cannot deduct your contribution to a donor-advised fund. 1040 tax form 2010 Generally, a donor-advised fund is a fund or account in which a donor can, because of being a donor, advise the fund how to distribute or invest amounts held in the fund. 1040 tax form 2010 For details, see Internal Revenue Code section 170(f)(18). 1040 tax form 2010 Partial Interest in Property Generally, you cannot deduct a contribution of less than your entire interest in property. 1040 tax form 2010 For details, see Partial Interest in Property under Contributions of Property, later. 1040 tax form 2010 Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. 1040 tax form 2010 However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. 1040 tax form 2010 See Giving Property That Has Increased in Value , later. 1040 tax form 2010 For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. 1040 tax form 2010 Contributions Subject to Special Rules Special rules apply if you contribute: Clothing or household items, A car, boat, or airplane, Taxidermy property, Property subject to a debt, A partial interest in property, A fractional interest in tangible personal property, A qualified conservation contribution, A future interest in tangible personal property, Inventory from your business, or A patent or other intellectual property. 1040 tax form 2010 These special rules are described next. 1040 tax form 2010 Clothing and Household Items You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. 1040 tax form 2010 Exception. 1040 tax form 2010   You can take a deduction for a contribution of an item of clothing or a household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. 1040 tax form 2010 Household items. 1040 tax form 2010   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. 1040 tax form 2010   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. 1040 tax form 2010 Fair market value. 1040 tax form 2010   To determine the fair market value of these items, use the rules under Determining Fair Market Value , later. 1040 tax form 2010 Cars, Boats, and Airplanes The following rules apply to any donation of a qualified vehicle. 1040 tax form 2010 A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. 1040 tax form 2010 Deduction more than $500. 1040 tax form 2010   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. 1040 tax form 2010 If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. 1040 tax form 2010 Form 1098-C. 1040 tax form 2010   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. 1040 tax form 2010 The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. 1040 tax form 2010   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453, U. 1040 tax form 2010 S. 1040 tax form 2010 Individual Income Tax Transmittal for an IRS e-file Return, and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. 1040 tax form 2010   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. 1040 tax form 2010    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. 1040 tax form 2010 But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. 1040 tax form 2010 Filing deadline approaching and still no Form 1098-C. 1040 tax form 2010   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. 1040 tax form 2010 Request an automatic 6-month extension of time to file your return. 1040 tax form 2010 You can get this extension by filing Form 4868, Application for Automatic Extension of Time To File U. 1040 tax form 2010 S. 1040 tax form 2010 Individual Income Tax Return. 1040 tax form 2010 For more information, see the instructions for Form 4868. 1040 tax form 2010 File the return on time without claiming the deduction for the qualified vehicle. 1040 tax form 2010 After receiving the Form 1098-C, file an amended return, Form 1040X, Amended U. 1040 tax form 2010 S. 1040 tax form 2010 Individual Income Tax Return, claiming the deduction. 1040 tax form 2010 Attach Copy B of Form 1098-C (or other statement) to the amended return. 1040 tax form 2010 Exceptions. 1040 tax form 2010   There are two exceptions to the rules just described for deductions of more than $500. 1040 tax form 2010 Exception 1—vehicle used or improved by organization. 1040 tax form 2010   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. 1040 tax form 2010 But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. 1040 tax form 2010 The Form 1098-C (or other statement) will show whether this exception applies. 1040 tax form 2010    Exception 2—vehicle given or sold to needy individual. 1040 tax form 2010   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. 1040 tax form 2010 But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. 1040 tax form 2010 The Form 1098-C (or other statement) will show whether this exception applies. 1040 tax form 2010   This exception does not apply if the organization sells the vehicle at auction. 1040 tax form 2010 In that case, you cannot deduct the vehicle's fair market value. 1040 tax form 2010 Example. 1040 tax form 2010 Anita donates a used car to a qualified organization. 1040 tax form 2010 She bought it 3 years ago for $9,000. 1040 tax form 2010 A used car guide shows the fair market value for this type of car is $6,000. 1040 tax form 2010 However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. 1040 tax form 2010 Neither exception 1 nor exception 2 applies. 1040 tax form 2010 If Anita itemizes her deductions, she can deduct $2,900 for her donation. 1040 tax form 2010 She must attach Form 1098-C and Form 8283 to her return. 1040 tax form 2010 Deduction $500 or less. 1040 tax form 2010   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. 1040 tax form 2010 But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. 1040 tax form 2010   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. 1040 tax form 2010 The statement must contain the information and meet the tests for an acknowledgment described under Contributions of $250 or More under Records To Keep, later. 1040 tax form 2010 Fair market value. 1040 tax form 2010   To determine a vehicle's fair market value, use the rules described under Determining Fair Market Value , later. 1040 tax form 2010 Donations of inventory. 1040 tax form 2010   The vehicle donation rules just described do not apply to donations of inventory. 1040 tax form 2010 For example, these rules do not apply if you are a car dealer who donates a car you had been holding for sale to customers. 1040 tax form 2010 See Inventory , later. 1040 tax form 2010 Taxidermy Property If you donate taxidermy property to a qualified organization, your deduction is limited to your basis in the property or its fair market value, whichever is less. 1040 tax form 2010 This applies if you prepared, stuffed, or mounted the property or paid or incurred the cost of preparing, stuffing, or mounting the property. 1040 tax form 2010 Your basis for this purpose includes only the cost of preparing, stuffing, and mounting the property. 1040 tax form 2010 Your basis does not include transportation or travel costs. 1040 tax form 2010 It also does not include the direct or indirect costs for hunting or killing an animal, such as equipment costs. 1040 tax form 2010 In addition, it does not include the value of your time. 1040 tax form 2010 Taxidermy property means any work of art that: Is the reproduction or preservation of an animal, in whole or in part, Is prepared, stuffed, or mounted to recreate one or more characteristics of the animal, and Contains a part of the body of the dead animal. 1040 tax form 2010 Property Subject to a Debt If you contribute property subject to a debt (such as a mortgage), you must reduce the fair market value of the property by: Any allowable deduction for interest you paid (or will pay) that is attributable to any period after the contribution, and If the property is a bond, the lesser of: Any allowable deduction for interest you paid (or will pay) to buy or carry the bond that is attributable to any period before the contribution, or The interest, including bond discount, receivable on the bond that is attributable to any period before the contribution, and that is not includible in your income due to your accounting method. 1040 tax form 2010 This prevents you from deducting the same amount as both investment interest and a charitable contribution. 1040 tax form 2010 If the recipient (or another person) assumes the debt, you must also reduce the fair market value of the property by the amount of the outstanding debt assumed. 1040 tax form 2010 The amount of the debt is also treated as an amount realized on the sale or exchange of property for purposes of figuring your taxable gain (if any). 1040 tax form 2010 For more information, see Bargain Sales under Giving Property That Has Increased in Value, later. 1040 tax form 2010 Partial Interest in Property Generally, you cannot deduct a charitable contribution of less than your entire interest in property. 1040 tax form 2010 Right to use property. 1040 tax form 2010   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. 1040 tax form 2010 Example 1. 1040 tax form 2010 You own a 10-story office building and donate rent-free use of the top floor to a charitable organization. 1040 tax form 2010 Because you still own the building, you have contributed a partial interest in the property and cannot take a deduction for the contribution. 1040 tax form 2010 Example 2. 1040 tax form 2010 Mandy White owns a vacation home at the beach that she sometimes rents to others. 1040 tax form 2010 For a fund-raising auction at her church, she donated the right to use the vacation home for 1 week. 1040 tax form 2010 At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. 1040 tax form 2010 Mandy cannot claim a deduction because of the partial interest rule. 1040 tax form 2010 Lauren cannot claim a deduction either, because she received a benefit equal to the amount of her payment. 1040 tax form 2010 See Contributions From Which You Benefit , earlier. 1040 tax form 2010 Exceptions. 1040 tax form 2010   You can deduct a charitable contribution of a partial interest in property only if that interest represents one of the following items. 1040 tax form 2010 A remainder interest in your personal home or farm. 1040 tax form 2010 A remainder interest is one that passes to a beneficiary after the end of an earlier interest in the property. 1040 tax form 2010 Example. 1040 tax form 2010 You keep the right to live in your home during your lifetime and give your church a remainder interest that begins upon your death. 1040 tax form 2010 You can deduct the value of the remainder interest. 1040 tax form 2010 An undivided part of your entire interest. 1040 tax form 2010 This must consist of a part of every substantial interest or right you own in the property and must last as long as your interest in the property lasts. 1040 tax form 2010 But see Fractional Interest in Tangible Personal Property , later. 1040 tax form 2010 Example. 1040 tax form 2010 You contribute voting stock to a qualified organization but keep the right to vote the stock. 1040 tax form 2010 The right to vote is a substantial right in the stock. 1040 tax form 2010 You have not contributed an undivided part of your entire interest and cannot deduct your contribution. 1040 tax form 2010 A partial interest that would be deductible if transferred to certain types of trusts. 1040 tax form 2010 A qualified conservation contribution (defined later). 1040 tax form 2010 For information about how to figure the value of a contribution of a partial interest in property, see Partial Interest in Property Not in Trust in Publication 561. 1040 tax form 2010 Fractional Interest in Tangible Personal Property You cannot deduct a charitable contribution of a fractional interest in tangible personal property unless all interests in the property are held immediately before the contribution by: You, or You and the qualifying organization receiving the contribution. 1040 tax form 2010 If you make an additional contribution later, the fair market value of that contribution will be determined by using the smaller of: The fair market value of the property at the time of the initial contribution, or The fair market value of the property at the time of the additional contribution. 1040 tax form 2010 Tangible personal property is defined later under Future Interest in Tangible Personal Property . 1040 tax form 2010 A fractional interest in property is an undivided portion of your entire interest in the property. 1040 tax form 2010 Example. 1040 tax form 2010 An undivided one-quarter interest in a painting that entitles an art museum to possession of the painting for 3 months of each year is a fractional interest in the property. 1040 tax form 2010 Recapture of deduction. 1040 tax form 2010   You must recapture your charitable contribution deduction by including it in your income if both of the following statements are true. 1040 tax form 2010 You contributed a fractional interest in tangible personal property after August 17, 2006. 1040 tax form 2010 You do not contribute the rest of your interests in the property to the original recipient or, if it no longer exists, another qualified organization on or before the earlier of: The date that is 10 years after the date of the initial contribution, or The date of your death. 1040 tax form 2010   Recapture is also required if the qualified organization has not taken substantial physical possession of the property and used it in a way related to the organization's purpose during the period beginning on the date of the initial contribution and ending on the earlier of: The date that is 10 years after the date of the initial contribution, or The date of your death. 1040 tax form 2010 Additional tax. 1040 tax form 2010   If you must recapture your deduction, you must also pay interest and an additional tax equal to 10% of the amount recaptured. 1040 tax form 2010 Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. 1040 tax form 2010 Qualified organization. 1040 tax form 2010   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charity, or An organization controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. 1040 tax form 2010 The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. 1040 tax form 2010   A publicly supported charity is an organization of the type described in (1) under Types of Qualified Organizations , earlier, that normally receives a substantial part of its support, other than income from its exempt activities, from direct or indirect contributions from the general public or from governmental units. 1040 tax form 2010 Qualified real property interest. 1040 tax form 2010   This is any of the following interests in real property. 1040 tax form 2010 Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). 1040 tax form 2010 A remainder interest. 1040 tax form 2010 A restriction (granted in perpetuity) on the use that may be made of the real property. 1040 tax form 2010 Conservation purposes. 1040 tax form 2010   Your contribution must be made only for one of the following conservation purposes. 1040 tax form 2010 Preserving land areas for outdoor recreation by, or for the education of, the general public. 1040 tax form 2010 Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. 1040 tax form 2010 Preserving open space, including farmland and forest land, if it yields a significant public benefit. 1040 tax form 2010 The open space must be preserved either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. 1040 tax form 2010 Preserving a historically important land area or a certified historic structure. 1040 tax form 2010 Building in registered historic district. 1040 tax form 2010   If a building in a registered historic district is a certified historic structure, a contribution of a qualified real property interest that is an easement or other restriction on the exterior of the building is deductible only if it meets all of the following conditions. 1040 tax form 2010 The restriction must preserve the entire exterior of the building (including its front, sides, rear, and height) and must prohibit any change to the exterior of the building that is inconsistent with its historical character. 1040 tax form 2010 You and the organization receiving the contribution must enter into a written agreement certifying, under penalty of perjury, that the organization: Is a qualified organization with a purpose of environmental protection, land conservation, open space preservation, or historic preservation, and Has the resources to manage and enforce the restriction and a commitment to do so. 1040 tax form 2010 You must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. 1040 tax form 2010   If you claimed the rehabilitation credit for the building for any of the 5 years before the year of the contribution, your charitable deduction is reduced. 1040 tax form 2010 For more information, see Form 3468, Investment Credit, and Internal Revenue Code section 170(f)(14). 1040 tax form 2010   If you claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. 1040 tax form 2010 See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. 1040 tax form 2010 You may be able to deduct the filing fee as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit, on Schedule A (Form 1040). 1040 tax form 2010 See Deductions Subject to the 2% Limit in Publication 529 for more information. 1040 tax form 2010 More information. 1040 tax form 2010   For information about determining the fair market value of qualified conservation contributions, see Publication 561. 1040 tax form 2010 For information about the limits that apply to deductions for this type of contribution, see Limits on Deductions , later. 1040 tax form 2010 For more information about qualified conservation contributions, see Regulations section 1. 1040 tax form 2010 170A-14. 1040 tax form 2010 Future Interest in Tangible Personal Property You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. 1040 tax form 2010 But see Fractional Interest in Tangible Personal Property , earlier, and Tangible personal property put to unrelated use , later. 1040 tax form 2010 Related persons include your spouse, children, grandchildren, brothers, sisters, and parents. 1040 tax form 2010 Related organizations may include a partnership or corporation in which you have an interest, or an estate or trust with which you have a connection. 1040 tax form 2010 Tangible personal property. 1040 tax form 2010   This is any property, other than land or buildings, that can be seen or touched. 1040 tax form 2010 It includes furniture, books, jewelry, paintings, and cars. 1040 tax form 2010 Future interest. 1040 tax form 2010   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. 1040 tax form 2010 Example. 1040 tax form 2010 You own an antique car that you contribute to a museum. 1040 tax form 2010 You give up ownership, but retain the right to keep the car in your garage with your personal collection. 1040 tax form 2010 Because you keep an interest in the property, you cannot deduct the contribution. 1040 tax form 2010 If you turn the car over to the museum in a later year, giving up all rights to its use, possession, and enjoyment, you can take a deduction for the contribution in that later year. 1040 tax form 2010 Inventory If you contribute inventory (property you sell in the course of your business), the amount you can deduct is the smaller of its fair market value on the day you contributed it or its basis. 1040 tax form 2010 The basis of contributed inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. 1040 tax form 2010 You must remove the amount of your charitable contribution deduction from your opening inventory. 1040 tax form 2010 It is not part of the cost of goods sold. 1040 tax form 2010 If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. 1040 tax form 2010 Treat the inventory's cost as you would ordinarily treat it under your method of accounting. 1040 tax form 2010 For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. 1040 tax form 2010 A special rule applies to certain donations of food inventory. 1040 tax form 2010 See Food Inventory, later. 1040 tax form 2010 Patents and Other Intellectual Property If you donate intellectual property to a qualified organization, your deduction is limited to the basis of the property or the fair market value of the property, whichever is smaller. 1040 tax form 2010 Intellectual property means any of the following: Patents. 1040 tax form 2010 Copyrights (other than a copyright described in Internal Revenue Code sections 1221(a)(3) or 1231(b)(1)(C)). 1040 tax form 2010 Trademarks. 1040 tax form 2010 Trade names. 1040 tax form 2010 Trade secrets. 1040 tax form 2010 Know-how. 1040 tax form 2010 Software (other than software described in Internal Revenue Code section 197(e)(3)(A)(i)). 1040 tax form 2010 Other similar property or applications or registrations of such property. 1040 tax form 2010 Additional deduction based on income. 1040 tax form 2010   You may be able to claim additional charitable contribution deductions in the year of the contribution and years following, based on the income, if any, from the donated property. 1040 tax form 2010   The following table shows the percentage of income from the property that you can deduct for each of your tax years ending on or after the date of the contribution. 1040 tax form 2010 In the table, “tax year 1,” for example, means your first tax year ending on or after the date of the contribution. 1040 tax form 2010 However, you can take the additional deduction only to the extent the total of the amounts figured using this table is more than the amount of the deduction claimed for the original donation of the property. 1040 tax form 2010   After the legal life of the intellectual property ends, or after the 10th anniversary of the donation, whichever is earlier, no additional deduction is allowed. 1040 tax form 2010 The additional deductions cannot be taken for intellectual property donated to certain private foundations. 1040 tax form 2010 Tax year Deductible percentage 1 100% 2 100% 3 90% 4 80% 5 70% 6 60% 7 50% 8 40% 9 30% 10 20% 11 10% 12 10% Reporting requirements. 1040 tax form 2010   You must inform the organization at the time of the donation that you intend to treat the donation as a contribution subject to the provisions just discussed. 1040 tax form 2010   The organization is required to file an information return showing the income from the property, with a copy to you. 1040 tax form 2010 This is done on Form 8899, Notice of Income From Donated Intellectual Property. 1040 tax form 2010 Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. 1040 tax form 2010 Publication 561 contains a more complete discussion. 1040 tax form 2010 Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. 1040 tax form 2010 Used clothing. 1040 tax form 2010   The fair market value of used clothing and other personal items is usually far less than the price you paid for them. 1040 tax form 2010 There are no fixed formulas or methods for finding the value of items of clothing. 1040 tax form 2010   You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. 1040 tax form 2010      Also see Clothing and Household Items , earlier. 1040 tax form 2010 Example. 1040 tax form 2010    Kristin donated a coat to a thrift store operated by her church. 1040 tax form 2010 She paid $300 for the coat 3 years ago. 1040 tax form 2010 Similar coats in the thrift store sell for $50. 1040 tax form 2010 The fair market value of the coat is $50. 1040 tax form 2010 Kristin's donation is limited to $50. 1040 tax form 2010 Household items. 1040 tax form 2010   The fair market value of used household items, such as furniture, appliances, and linens, is usually much lower than the price paid when new. 1040 tax form 2010 These items may have little or no market value because they are in a worn condition, out of style, or no longer useful. 1040 tax form 2010 For these reasons, formulas (such as using a percentage of the cost to buy a new replacement item) are not acceptable in determining value. 1040 tax form 2010   You should support your valuation with photographs, canceled checks, receipts from your purchase of the items, or other evidence. 1040 tax form 2010 Magazine or newspaper articles and photographs that describe the items and statements by the recipients of the items are also useful. 1040 tax form 2010 Do not include any of this evidence with your tax return. 1040 tax form 2010   If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art in Publication 561. 1040 tax form 2010   Also see Clothing and Household Items , earlier. 1040 tax form 2010 Cars, boats, and airplanes. 1040 tax form 2010   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. 1040 tax form 2010 Boats. 1040 tax form 2010   Except for small, inexpensive boats, the valuation of boats should be based on an appraisal by a marine surveyor or appraiser because the physical condition is critical to the value. 1040 tax form 2010 Cars. 1040 tax form 2010   Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. 1040 tax form 2010 The guides may be published monthly or seasonally, and for different regions of the country. 1040 tax form 2010 These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. 1040 tax form 2010 The prices are not “official” and these publications are not considered an appraisal of any specific donated property. 1040 tax form 2010 But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. 1040 tax form 2010   These publications are sometimes available from public libraries, or from the loan officer at a bank, credit union, or finance company. 1040 tax form 2010 You can also find used car pricing information on the Internet. 1040 tax form 2010   To find the fair market value of a donated car, use the price listed in a used car guide for a private party sale, not the dealer retail value. 1040 tax form 2010 However, the fair market value may be less if the car has engine trouble, body damage, high mileage, or any type of excessive wear. 1040 tax form 2010 The fair market value of a donated car is the same as the price listed in a used car guide for a private party sale only if the guide lists a sales price for a car that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated car. 1040 tax form 2010 Example. 1040 tax form 2010 You donate a used car in poor condition to a local high school for use by students studying car repair. 1040 tax form 2010 A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. 1040 tax form 2010 However, the guide shows the price for a private party sale of the car is only $750. 1040 tax form 2010 The fair market value of the car is considered to be $750. 1040 tax form 2010 Large quantities. 1040 tax form 2010   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. 1040 tax form 2010 Example. 1040 tax form 2010 You purchase 500 bibles for $1,000. 1040 tax form 2010 The person who sells them to you says the retail value of these bibles is $3,000. 1040 tax form 2010 If you contribute the bibles to a qualified organization, you can claim a deduction only for the price at which similar numbers of the same bible are currently being sold. 1040 tax form 2010 Your charitable contribution is $1,000, unless you can show that similar numbers of that bible wer
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The 1040 Tax Form 2010

1040 tax form 2010 Publication 957 - Main Content Table of Contents 1. 1040 tax form 2010 What is Back Pay?Reporting Back Pay Back Pay Under a Statute Nonstatutory Back Pay Format for Report to the SSA Questions 2. 1040 tax form 2010 Special Wage PaymentsReporting Special Wage Payments Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments Nonqualified Deferred Compensation and Section 457 Plans Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) PlansSpecial rule for box 11 of Form W-2 (distributions and deferral in the same year). 1040 tax form 2010 1. 1040 tax form 2010 What is Back Pay? Back pay is pay received in a tax year(s) for actual or deemed employment in an earlier tax year(s). 1040 tax form 2010 For social security coverage and benefit purposes, all back pay, whether or not under a statute, is wages if it is payment for covered employment. 1040 tax form 2010 Damages for personal injury, interest, penalties, and legal fees included with back pay awards are not wages. 1040 tax form 2010 Report all back pay. 1040 tax form 2010 However, the tax year(s) for which back pay is credited as wages for social security purposes is different if it is awarded under a statute. 1040 tax form 2010 See Back Pay Under a Statute , later, for more information. 1040 tax form 2010 Reporting Back Pay The Internal Revenue Service (IRS) and the SSA consider back pay awards to be wages. 1040 tax form 2010 However, for income tax purposes, the IRS treats all back pay as wages in the year paid. 1040 tax form 2010 Employers should use Form W-2, Wage and Tax Statement, or electronic wage reports to report back pay as wages in the year they actually pay the employee. 1040 tax form 2010 The SSA no longer accepts reports on tapes, cartridges, and diskettes. 1040 tax form 2010 Example. 1040 tax form 2010 In 2012, Terry Morris earned wages of $50,000. 1040 tax form 2010 In the same year, she received $100,000 in settlement of a back pay case against her employer that covered the periods January 2007 through December 2011. 1040 tax form 2010 Her employer properly reflected social security wages of $110,100 and Medicare wages of $150,000 on her 2012 Form W-2. 1040 tax form 2010 However, if an employer did not include back pay wages on a previously filed Form W-2, magnetic media, or electronically filed wage report, the employer should prepare a wage correction report, Form W-2c, Corrected Wage and Tax Statement, or electronically filed report, to add the back pay award to the wages previously reported. 1040 tax form 2010 Example. 1040 tax form 2010 If, in the above example, Terry Morris' employer had prepared her 2012 Form W-2 reporting social security and Medicare wages of only $50,000 each, the employer would have to correct that report. 1040 tax form 2010 A Form W-2c correcting the 2012 Form W-2 would show previously reported social security and Medicare wages of $50,000 and the correct amount of $110,100 for social security wages and $150,000 for Medicare wages. 1040 tax form 2010 SSA treatment of back pay under a statute. 1040 tax form 2010   Under the law, the SSA credits back pay awarded under a statute to an individual's earnings record in the period(s) the wages should have been paid. 1040 tax form 2010 This is important because wages not credited to the proper year may result in lower social security benefits or failure to meet the requirements for benefits. 1040 tax form 2010   However, back pay under statute payments will remain posted to the employee's social security earnings record in the year reported on Form W-2 (or Form W-2c) unless the employer or employee notifies the SSA (in a separate, special report) of the back pay under a statute payment. 1040 tax form 2010 Then, the SSA can allocate the statutory back pay to the appropriate periods. 1040 tax form 2010   If a back pay award is not made under a statute, the SSA credits back pay as wages in the year paid. 1040 tax form 2010    If employers do notify the SSA of this payment, they should prepare a special report (with the information noted below) and send it to: Social Security Administration Attn: CPS Back Pay Staff 7-B-15 SWT 1500 Woodlawn Drive Baltimore, MD 21241-0001 Be sure to send this special report to the above address because the SSA handles it separately from other reports. 1040 tax form 2010    If you paid the back pay award in the same tax year to which it applies, report the wages on that year's Form W-2. 1040 tax form 2010 No further action is necessary. 1040 tax form 2010 Example. 1040 tax form 2010 In 2012, Judy Wilson received a salary of $30,000 and a back pay under statute award of $2,000 for the period January through June 2012. 1040 tax form 2010 Her employer properly reported wages of $32,000 for social security and Medicare on her 2012 Form W-2. 1040 tax form 2010 No further action is necessary. 1040 tax form 2010 Information the SSA needs to properly credit back pay under a statute (special report). 1040 tax form 2010   After you complete the special report, you or the employee should send it to the SSA when or after you submit the Form W-2 (on paper or electronically) to the SSA for the year you pay the statutory back pay to the employee. 1040 tax form 2010 There is no statute of limitations on the filing of the special report to enable the SSA to allocate the wages. 1040 tax form 2010 The special report must include the following information. 1040 tax form 2010 The employer's name, address, and employer identification number (EIN). 1040 tax form 2010 A signed statement citing the federal or state statute under which the payment was made. 1040 tax form 2010 If the statute is not identified, the SSA will assume the payment was not under a statute and will not allocate to earlier period(s). 1040 tax form 2010 The name and telephone number of a person to contact. 1040 tax form 2010 The SSA may have additional questions concerning the back pay case or the individual employee's information. 1040 tax form 2010 A list of employees receiving the payment and the following information for each employee: The tax year you paid and reported the back pay. 1040 tax form 2010 The employee's social security number (SSN). 1040 tax form 2010 The employee's name (as shown on his or her social security card). 1040 tax form 2010 The amount of the back pay award excluding any amounts specifically designated otherwise, for example, damages for personal injury, interest, penalties, and legal fees. 1040 tax form 2010 The period(s) the back pay award covers (beginning and ending dates—month and year). 1040 tax form 2010 The other wages paid subject to social security and/or Medicare taxes and reported in the same year as the back pay award (if none, show zero)*. 1040 tax form 2010 Do not include the back pay award shown in that wage report. 1040 tax form 2010 If you originally submitted the report under an establishment number, show that number and the amount of money that is to remain under that establishment number. 1040 tax form 2010 The amount to allocate to each reporting period*. 1040 tax form 2010 This includes any amount you want allocated (if applicable) to the tax year of the award payment. 1040 tax form 2010 If you do not give the SSA specific amounts to allocate, the SSA does the allocation by dividing the back pay award by the number of months or years covered by the award. 1040 tax form 2010 *Note. 1040 tax form 2010   For periods before January 1, 1978 (before January 1, 1981, for state and local government employers covered by a Section 218 agreement), show the wage amounts for each calendar quarter ending March 31, June 30, September 30, and December 31. 1040 tax form 2010 For all tax years, show and identify the social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) separately. 1040 tax form 2010 MQGE is applicable to federal employees beginning in 1983, and for certain state and local government employees beginning in 1986. 1040 tax form 2010 For tax years 1991 and later, list the social security and Medicare wages separately. 1040 tax form 2010 If you originally reported the individual's wages under an establishment or payroll record unit number, show the amount of wages to remain in the award year for that number and furnish that number to the SSA along with the EIN. 1040 tax form 2010 Back Pay Under a Statute Back pay awarded under a statute is a payment by an employer following an award, determination, or agreement approved or sanctioned by a court or government agency responsible for enforcing a federal or state statute that protects an employee's right to employment or wages. 1040 tax form 2010 Examples of pertinent statutes include: Age Discrimination in Employment Act, Americans with Disabilities Act, Equal Pay Act, Fair Labor Standards Act, National Labor Relations Act, State minimum wage laws, and State statutes that protect rights to employment and wages. 1040 tax form 2010 Payments based on laws that have a similar effect to those listed above also may qualify as payments made under a statute. 1040 tax form 2010 Back pay awards, under some of the statutes listed above, may be compensation for personal injury and not pay for employment. 1040 tax form 2010 Such awards are not wages for social security coverage purposes. 1040 tax form 2010 If a court-approved or sanctioned settlement agreement states that the agreement is not an admission of discrimination, liability, or act of wrongdoing, the statement does not change the nature of a back pay award. 1040 tax form 2010 The payments made in such a settlement may still be back pay and wages under the rules discussed here. 1040 tax form 2010 Nonstatutory Back Pay A payment for back wages negotiated between an employer and employee without an award, determination, or agreement approved or sanctioned by a court or government agency, the payment is not made under a statute. 1040 tax form 2010 Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are back pay and are wages. 1040 tax form 2010 However, they are not payments made under a statute. 1040 tax form 2010 If you are uncertain whether the back pay award was under a qualified statute, you may need to contact your personnel department or legal counsel or the attorney who filed the suit. 1040 tax form 2010 Format for Report to the SSA Use the format shown in Table 1, later, to send the SSA the information needed to properly credit back pay under a statute. 1040 tax form 2010 In a cover letter, include: Name and address of the employer, Statute under which you paid the back pay, Name and telephone number of the employer contact, and Signature of the reporting official. 1040 tax form 2010 Under certain circumstances, back pay may be a special wage payment and excluded from wages counted under the social security earnings test. 1040 tax form 2010 If you pay back pay to an employee age 61 or older, report it to the SSA in accordance with this section. 1040 tax form 2010 Read Special Wage Payments, later, for additional reporting instructions. 1040 tax form 2010 Questions If you have questions concerning back pay under a statute, call the SSA at 1-800-772-6270. 1040 tax form 2010 Exception. 1040 tax form 2010   If you are a state or local government employer who was covered by an agreement under Section 218 of the Social Security Act before January 1, 1987, and you paid a back pay award before January 1, 1987, which you did not report to the SSA, contact your state Social Security Administrator's office. 1040 tax form 2010 Table 1. 1040 tax form 2010 Format for Report (Under Covering Letter) to Request SSA to Allocate Back Pay Under Statute Wages Employer's EIN: xx-xxxxxxx Tax Year in Which Award Payment Was Paid: 2012 (1) SSN and Employee Name (2)1 Award Amount and Period(s) (3)2,3 Other Soc. 1040 tax form 2010 Sec. 1040 tax form 2010 /Med. 1040 tax form 2010 Wages Paid In Award Year (4)3 Allocation     Soc. 1040 tax form 2010 Sec. 1040 tax form 2010 Med. 1040 tax form 2010 /MQGE Year Soc. 1040 tax form 2010 Sec. 1040 tax form 2010 Med. 1040 tax form 2010 /MQGE xxx-xx-xxxx HELEN T. 1040 tax form 2010 SMITH $100,000 1/2009 - 12/2012 $40,000 $40,000 2009 2010 2011 2012 $20,000 25,000 27,000 28,000 $20,000 25,000 27,000 28,000 xxx-xx-xxxx SAM W. 1040 tax form 2010 EVANS 30,000 7/89-12/91 -0- -0- 1989 1990 1991   6,000 12,000 12,000 xxx-xx-xxxx ROLAND S. 1040 tax form 2010 ADAMS 15,000 7/80-12/81 -0- -0- 9/80 12/80 1981 3,500 3,500 8,000   1Exclude amounts specifically designated as damages, penalties, etc. 1040 tax form 2010  2Exclude the amount of back pay, if any, included in that amount. 1040 tax form 2010  3For periods before January 1, 1978 (and for state and local government (Section 218) employers before January 1, 1981), show the wage amounts by calendar quarters. 1040 tax form 2010 The social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) must be shown separately FOR ALL YEARS. 1040 tax form 2010 (Wages subject ONLY to MQGE would be shown in the Medicare/MQGE column; no wages would be shown in the Soc. 1040 tax form 2010 Sec. 1040 tax form 2010 column. 1040 tax form 2010 ) For tax years 1991 and later, the social security and Medicare wages must be listed separately. 1040 tax form 2010 Explanation of examples. 1040 tax form 2010 Helen T. 1040 tax form 2010 Smith–The back pay award, excluding interest, was $100,000 for the periods 1/2009-12/2012. 1040 tax form 2010 In 2012, this employee was also paid $40,000 in other wages. 1040 tax form 2010 (Her Form W-2 for 2012 reported $110,100 for social security and $140,000 for Medicare. 1040 tax form 2010 The SSA allocation will result in adjusted posted wages of $68,000 for social security and $68,000 for Medicare for 2012. 1040 tax form 2010 ) Sam W. 1040 tax form 2010 Evans–The back pay award was $30,000 for the periods 7/89-12/91. 1040 tax form 2010 This employee was hired in 1989 and was subject to MQGE only. 1040 tax form 2010 He was no longer employed by this governmental employer in 2012. 1040 tax form 2010 (His Form W-2 for 2012 reported $30,000 for social security and $30,000 for Medicare. 1040 tax form 2010 After the SSA allocation, he will not have any net posted wages for 2012. 1040 tax form 2010 ) Roland S. 1040 tax form 2010 Adams–The back pay award was $15,000 for the periods 7/80-12/81. 1040 tax form 2010 He was no longer employed by this state and local government (Section 218) employer in 2012. 1040 tax form 2010 (His Form W-2 for 2012 reported $15,000 for social security and $15,000 for Medicare; after the SSA allocation, he will not have any net posted wages for 2012. 1040 tax form 2010 ) If the state Social Security Administrator's office needs more information, they can contact the SSA at the following address:   Social Security Administration Office of Income Security Programs Office of Earnings and Program Integrity Policy 6401 Security Boulevard 2506 OPS Baltimore, MD 21235 2. 1040 tax form 2010 Special Wage Payments A special wage payment (SWP) is an amount paid by an employer to an employee (or former employee) for services performed in a prior year. 1040 tax form 2010 Employers should report to the SSA special wage payments made to employees and former employees who are recipients of social security retirement benefits. 1040 tax form 2010 Special wage payments made to a retired employee receiving social security or to an employee who continues to work while receiving social security benefits may reduce the benefits the individual receives if not reported to the SSA. 1040 tax form 2010 Special wage payments may include (but are not limited to): Accumulated sick and vacation pay, Back pay, Bonuses, Deferred compensation, Payments because of retirement, Sales commissions, Severance pay, and Stock options. 1040 tax form 2010 Note. 1040 tax form 2010 Payments made after retirement that are part of the normal payroll cycle should not be routinely reported as special wage payments. 1040 tax form 2010 Earnings Test. 1040 tax form 2010   Benefits paid to a social security beneficiary under full retirement age may be reduced if the beneficiary continues to work. 1040 tax form 2010 The SSA uses the information in boxes 1, 3, and 5 of Form W-2 to determine the beneficiary's current year earnings. 1040 tax form 2010 Special wage payments, which are for services performed in a prior year, will increase the current year earnings on Form W-2, which also may result in a reduction in the beneficiary's benefits. 1040 tax form 2010 If a benefit is reduced because of a special wage payment, the beneficiary must get documentation from the employer before the SSA can restore the deducted portion. 1040 tax form 2010 Therefore, employer reports of special wage payments help prevent incorrect benefit reductions. 1040 tax form 2010 Reporting Special Wage Payments Employers must report special wage payments for income tax purposes and social security and Medicare taxes in the year received. 1040 tax form 2010 Report income, social security, and/or Medicare taxes for special wage payments on Form W-2. 1040 tax form 2010 See Nonqualified Deferred Compensation and Section 457 Plans, later, for reporting nonqualified deferred compensation plan deferrals and payments on Form W-2. 1040 tax form 2010 In addition, report to the SSA special wage payments made during the reporting year to retired employees and employees who continue to work while receiving social security benefits. 1040 tax form 2010 Submit reports after the close of the tax year. 1040 tax form 2010 To avoid delays in processing, submit reports in time to reach the SSA by April 1. 1040 tax form 2010 Use one of the following reporting methods. 1040 tax form 2010 Electronic reporting. 1040 tax form 2010   Special wage payment files can be sent electronically by logging onto Business Services Online (BSO) via the socialsecurity. 1040 tax form 2010 gov website. 1040 tax form 2010 BSO enables organizations and authorized individuals to conduct business with and submit confidential information to the Social Security Administration. 1040 tax form 2010 You must register to use this website. 1040 tax form 2010 The web address is www. 1040 tax form 2010 socialsecurity. 1040 tax form 2010 gov/bso/bsowelcome. 1040 tax form 2010 htm. 1040 tax form 2010   Use the specifications and record layout shown in  Table 2, later. 1040 tax form 2010 Only one file at a time may be submitted. 1040 tax form 2010 If your file is large (>10MB), or you have a slow internet connection, the transmission will be faster if the file is zipped. 1040 tax form 2010 A zipped file contains a file that has been compressed to reduce its file size. 1040 tax form 2010 WinZip and PKZIP are examples of acceptable compression packages. 1040 tax form 2010   Electronic submissions not meeting the specifications in Table 2 will be rejected. 1040 tax form 2010 Paper listing. 1040 tax form 2010   A paper listing can be used to report special wage payments to several employees. 1040 tax form 2010 Use the format shown in Table 3, later. 1040 tax form 2010 Submit paper listings to the local SSA office nearest your place of business. 1040 tax form 2010 Visit www. 1040 tax form 2010 socialsecurity. 1040 tax form 2010 gov/locator to find a Social Security office near you. 1040 tax form 2010 Form SSA-131. 1040 tax form 2010   Use Form SSA-131 to report special wage payments made to an employee. 1040 tax form 2010 Also use this form to report nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in box 11 of Form W-2. 1040 tax form 2010    This image is too large to be displayed in the current screen. 1040 tax form 2010 Please click the link to view the image. 1040 tax form 2010 Publication 957 Reporting Back Pay to the Social Security Administration Instructions for Form SSA–131   EMPLOYER INSTRUCTIONS FOR COMPLETING SPECIAL WAGE PAYMENT FORM 1. 1040 tax form 2010 Provide the EIN that was used or will be used to report the employee's wages on the Form W-2. 1040 tax form 2010 2. 1040 tax form 2010 Enter the date the employee retired. 1040 tax form 2010 Enter “Not Retired” if the employee has not retired. 1040 tax form 2010 3. 1040 tax form 2010 Enter the date that the employee last performed services; was not expected to return to work; and was not subject to recall to render additional services. 1040 tax form 2010 This date should be the same as or earlier than the date in item “2”. 1040 tax form 2010 Enter “Not Retired” if the employee has not retired. 1040 tax form 2010 4. 1040 tax form 2010 Enter the wages that were paid to the employee in the tax year that were for services that were performed in years prior to the tax year or that were paid on account of retirement. 1040 tax form 2010  Examples (not all inclusive) of payments to be included: Payments in lieu of vacation that were earned in a year prior to the tax year. 1040 tax form 2010 Accumulated sick payments which were paid in a lump sum based on “retirement” as the sole condition of payment. 1040 tax form 2010 Accumulated sick payments paid at or after the date in item 3, which were earned in a year prior to the tax year. 1040 tax form 2010 Payments “on account of retirement”–dismissal, severance or termination pay paid because of retirement. 1040 tax form 2010 Bonuses which are paid pursuant to a prior contract, agreement or promise causing the employee to expect such payments regularly; or announced to induce the employee to work more steadily, rapidly or efficiently or to remain with the employer. 1040 tax form 2010 Stock Options. 1040 tax form 2010   Do not include in item “4” payments: For annual, sick, holiday, or vacation pay if used (absence from work) prior to the date of retirement (earlier of items “2” or “3”). 1040 tax form 2010 That were reported or will be reported under “Nonqualified Plans” on the Form W-2. 1040 tax form 2010 That were deducted from the employee's wages and paid to a deferred compensation plan (e. 1040 tax form 2010 g. 1040 tax form 2010 , 401k). 1040 tax form 2010 Employees health and dental plan benefits (non-covered/non-taxable for Social Security Wages). 1040 tax form 2010 Bonuses earned and paid in the tax year. 1040 tax form 2010 5. 1040 tax form 2010 Check whether payments listed in item 4 will be made for years after the tax year. 1040 tax form 2010 If yes, please show the amounts and years in which these will be paid, if known. 1040 tax form 2010 6. 1040 tax form 2010 Nonqualified deferred compensation and section 457 plans only. 1040 tax form 2010 If you were unable to report nonqualified deferred compensation or section 457 plan payments and deferrals (contributions) on Form W-2 because both payments and deferrals occurred during the year, show the amount of wages earned by the employee during the tax year. 1040 tax form 2010 Generally, the wages earned will be the compensation reported in block 1 of Form W-2 less payments from a nonqualified deferred compensation (or 457) plan, but including any amounts deferred under the plan during the tax year (See IRS Publication 957). 1040 tax form 2010 Paperwork/Privacy Act Notice: This report is authorized by regulation 20 CFR 404. 1040 tax form 2010 702. 1040 tax form 2010 The information that you provide will be used in making a determination regarding the amount of Social Security benefits payable to the above named individual. 1040 tax form 2010 While your response is voluntary, if you do not respond we may not be able to make a correct determination regarding the amount of Social Security benefits payable to the above named individual for the year in question. 1040 tax form 2010 We may also use the information you give us when we match records by computer. 1040 tax form 2010 Matching programs compare our records with those of other Federal, State, or local government agencies. 1040 tax form 2010 Many agencies may use matching programs to find or prove that a person qualifies for benefits paid by the Federal Government. 1040 tax form 2010 The law allows us to do this even if you do not agree to it. 1040 tax form 2010 Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security Offices. 1040 tax form 2010 If you want to learn more about this, contact any Social Security Office. 1040 tax form 2010 The Paperwork Reduction Act: This information collection meets the clearance requirements of 44 U. 1040 tax form 2010 S. 1040 tax form 2010 C. 1040 tax form 2010 §3507, as amended by Section 2 of the Paperwork Reduction Act of 1995. 1040 tax form 2010 You are not required to answer these questions unless we display a valid Office of Management and Budget control number. 1040 tax form 2010 We estimate that it will take you about 20 minutes to read the instructions, gather the necessary facts, and answer the questions. 1040 tax form 2010 Form SSA-131 (8-2001) EF (06-2002)   Submit Form SSA-131 to the SSA office nearest your place of business. 1040 tax form 2010 Or, the employee can submit it to the SSA office handling the claim. 1040 tax form 2010 You or the employee must submit this form before the SSA can exclude the special wage payments for purposes of the earnings test. 1040 tax form 2010 If reporting on more than one employee, complete a separate Form SSA-131 for each employee or use the paper listing format (except for reporting nonqualified and section 457 plan deferrals and payments) in Table 3. 1040 tax form 2010 Do not report payments from nonqualified deferred compensation or section 457 plans that were reported in box 11 of Form W-2. 1040 tax form 2010 Use Form SSA-131 if deferrals to and payments from nonqualified or section 457 plans occurred during the tax year. 1040 tax form 2010 Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments A nonstatutory (nonqualified) option to purchase stock which is exercised in a year after the year in which the option was earned is a special wage payment. 1040 tax form 2010 It should not count for the social security earnings test. 1040 tax form 2010 Nonstatutory (nonqualified) options exercised as special wage payments by retired employees or employees who continue to work while receiving social security benefits should be reported by employers using the above reporting methods. 1040 tax form 2010 Nonqualified Deferred Compensation and Section 457 Plans A nonqualified deferred compensation plan is a plan or arrangement established and maintained by an employer for one or more of its employees that provides for the deferral of compensation, but does not meet the requirements for a tax-qualified deferred compensation plan. 1040 tax form 2010 For social security and Medicare purposes, deferred compensation plans for employees of state and local governments (section 457 plans) are treated the same as nonqualified plans. 1040 tax form 2010 Nonqualified and section 457 plans are reported differently than other special wage payments. 1040 tax form 2010 See Reporting Amounts Deferred to Nonqualified and Section 457 Plans below for specific instructions. 1040 tax form 2010 Reporting Amounts Deferred to Nonqualified and Section 457 Plans Generally, when the related services are performed, nonqualified deferred compensation is subject to social security and Medicare tax when deferred. 1040 tax form 2010 However, if nonqualified and section 457 plans contain provisions that delay the employee's right to receive payments from the plan, a period of substantial risk of forfeiture exists. 1040 tax form 2010 The plans' deferrals, or contributions, are not subject to social security and Medicare taxes until the period of substantial risk of forfeiture ends. 1040 tax form 2010 No risk of forfeiture. 1040 tax form 2010   If there is no risk of forfeiture, report wage amounts deferred to a nonqualified deferred compensation or section 457 plan in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. 1040 tax form 2010 Example. 1040 tax form 2010 Company X's nonqualified deferred compensation plan allows the deferral of up to $20,000 of employee salaries each year. 1040 tax form 2010 The plan has no risk of forfeiture. 1040 tax form 2010 In 2012, Employee A defers $20,000 to the plan from a total salary of $200,000. 1040 tax form 2010 Form W-2 Completion Amount Box 1 $200,000 Box 3* 110,100 Box 5 200,000 *Wage base maximum for tax year 2012 Risk of forfeiture lapses before retirement. 1040 tax form 2010   If the substantial risk of forfeiture lapses before the employee retires, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. 1040 tax form 2010 The accumulated deferrals are reported along with any other social security and Medicare wages earned during the year. 1040 tax form 2010   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. 1040 tax form 2010 If the employee continues working, future deferrals are social security and Medicare wages when they are earned. 1040 tax form 2010    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. 1040 tax form 2010 Risk of forfeiture lapses at retirement. 1040 tax form 2010   When an employee's right to a payment is contingent upon working until retirement, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, as social security and/or Medicare wages in the year of retirement. 1040 tax form 2010 Add the amount to other wages paid in that year, and enter in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. 1040 tax form 2010   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. 1040 tax form 2010    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. 1040 tax form 2010 Example—risk of forfeiture. 1040 tax form 2010 At the end of the risk-of-forfeiture period for Company Y's nonqualified deferred compensation plan, Employee B's accumulated deferrals, plus interest earned by the plan, are $120,000, not including B's $20,000 deferral for this year. 1040 tax form 2010 B's wages, including this year's deferred amount, are $80,000. 1040 tax form 2010 Form W-2 Completion Amount Box 1 $60,000 Box 3* 110,100 Box 5 200,000 Box 11 120,000 *Wage base maximum for tax year 2012 Reporting Payments From Nonqualified and Nongovernmental Section 457 Plans When an employee or former employee retires and begins receiving payments (distributions) from a nonqualified or nongovernmental section 457 plan, report the payments in boxes 1 and 11 of Form W-2. 1040 tax form 2010 Report payments (distributions) from a governmental section 457 plan on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040 tax form 2010 Example. 1040 tax form 2010 Employee D retired from the XYZ company and began receiving social security benefits. 1040 tax form 2010 XYZ paid D a $12,000 bonus upon retirement for sales made in a prior year, and D received $25,000 in payments from XYZ's nonqualified deferred compensation plan. 1040 tax form 2010 In addition, D agreed to continue performing services for XYZ, but on a part-time basis for wages of $15,000 per year. 1040 tax form 2010 D made no deferrals to the nonqualified plan this year. 1040 tax form 2010 Form W-2 Completion Amount Box 1 $52,000 Box 3 27,000 Box 5 27,000 Box 11 25,000 Report the $12,000 bonus to the SSA using electronic reporting, a paper listing, or Form SSA-131. 1040 tax form 2010 For more information, see Reporting Special Wage Payments , earlier. 1040 tax form 2010 Reporting Payments and Deferrals in the Same Year Do not complete box 11 when payments (distributions) are made from a nonqualified plan and deferrals are reported in boxes 3 and/or 5 of Form W-2 (including current year deferrals). 1040 tax form 2010 Report to the SSA on Form SSA-131 the total amount the employee earned during the tax year. 1040 tax form 2010 Normally, the amount earned is the amount reported in box 1 of Form W-2 less payments from a nonqualified or section 457 plan, but including any amounts deferred under the plan during the tax year. 1040 tax form 2010 See Form SSA-131 and its instructions, earlier. 1040 tax form 2010 Example. 1040 tax form 2010 Employee K retired this year from Company XYZ and began receiving social security benefits. 1040 tax form 2010 During the year he earned wages of $50,000 and deferred $35,000 of the wages into the company's nonqualified deferred compensation plan. 1040 tax form 2010 K also received $75,000 in payments from the company's nonqualified plan. 1040 tax form 2010 Form W-2 Completion Amount Special Wage Payment $75,000 Wages 50,000 Minus: deferral 35,000 Total reported in Box 1 $90,000     Wages including deferral reported in  Boxes 3 and 5 $50,000     Leave Box 11 blank. 1040 tax form 2010 File Form SSA-131 -0-     Form SSA-131 Completion Amount from Box 1 of Form W-2 $90,000 Minus: payments from a nonqualified plan 75,000 Plus: amounts deferred into the plan during the year 35,000 Total wages earned for purposes of Form SSA-131 (item 6) $50,000 Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) Plans It is not necessary to show amounts deferred during the year under an NQDC plan subject to section 409A. 1040 tax form 2010 If you report section 409A deferrals, show the amount in box 12 of Form W-2 using code Y. 1040 tax form 2010 For more information, see Notice 2008-115, 2008-52 I. 1040 tax form 2010 R. 1040 tax form 2010 B. 1040 tax form 2010 1367, available at www. 1040 tax form 2010 irs. 1040 tax form 2010 gov/irb/2008-52_IRB/ar10. 1040 tax form 2010 html. 1040 tax form 2010 Special reporting rules apply when an NQDC plan is not compliant with section 409A (when there has been a “plan failure”). 1040 tax form 2010 Income included under section 409A from an NQDC plan is reported in box 1 and box 12 of Form W-2 using code Z. 1040 tax form 2010 See Notice 2008-115. 1040 tax form 2010 The following examples use small dollar amounts for illustrative purposes. 1040 tax form 2010 However, the amount reported in box 3 of Form W-2 is always limited by the social security earnings wage base (for example, $110,100 for 2012). 1040 tax form 2010 The term “vested” in the following examples means that the amount deferred is not subject to a substantial risk of forfeiture. 1040 tax form 2010 Conversely, the term “not vested” means that the amount deferred is subject to a substantial risk of forfeiture. 1040 tax form 2010 The examples assume that the NQDC plan is in compliance with section 409A, and that amounts deferred under the plan are not includible in gross income as they are deferred. 1040 tax form 2010 For purposes of the examples, it is assumed that the regular pay of the employee is remuneration for employment and wages for employment tax purposes except to the extent the deferral of a portion of the regular pay results in a reduction in wages. 1040 tax form 2010 Example 1: Deferral that is immediately vested (no substantial risk of forfeiture) with no distributions and no vesting of prior-year deferrals. 1040 tax form 2010 For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into her employer’s NQDC plan. 1040 tax form 2010 The deferral of $20 was vested upon deferral and there was an employer match of $10 under the plan, which was also vested. 1040 tax form 2010 Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 vested deferral) $180 Box 3 ($200 Regular pay plus $10 Employer match, vested) 210 Box 5 ($200 Regular pay plus $10 Employer match, vested) 210 Box 11 -0- Example 2: Deferral with delayed vesting (substantial risk of forfeiture) of employee and employer portions (no distributions and no vesting of prior-year deferrals). 1040 tax form 2010 For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. 1040 tax form 2010 The deferral of $20 was not vested upon deferral, and there was an employer match of $10 under the plan, which was also not vested. 1040 tax form 2010 Regular pay = $200; Deferral, not vested = $20; Employer match, not vested = $10. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, not vested) $180 Box 3 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 5 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 11 -0- Example 3: Deferral that is immediately vested with prior-year deferrals and investment earnings on the prior-year deferrals that are now vesting (no distributions). 1040 tax form 2010 For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. 1040 tax form 2010 The deferral of $20 was vested upon deferral. 1040 tax form 2010 During the year, $100 of prior-year deferrals and $15 of investment earnings on the $100 of prior-year deferrals became vested. 1040 tax form 2010 Regular pay = $200; Deferral, vested = $20; Vesting of prior-year deferrals = $100; Vesting of investment earnings on $100 of prior-year deferral = $15. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, vested) $180 Box 3 ($200 Regular pay plus $100 vested prior-year deferral plus $15 earnings on deferral) 315 Box 5 ($200 Regular pay plus $100 vested prior-year deferral plus $15 vested investment earnings on prior year deferral) 315 Box 11 ($100 vested prior-year deferral plus $15 earnings) 115 Example 4: No deferrals but there are distributions (no vesting of prior-year deferrals). 1040 tax form 2010 For the year, the employee’s regular pay was $100, and the employee deferred no pay into the employer’s NQDC plan. 1040 tax form 2010 There was no vesting of prior-year deferrals under the plan. 1040 tax form 2010 During the year, there were total distributions of $50 from the plan to the employee. 1040 tax form 2010 Regular pay = $100; Distribution = $50. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($100 Regular pay plus $50 Distribution) $150 Box 3 ($100 Regular pay ) 100 Box 5 ($100 Regular pay) 100 Box 11 ($50 Distribution) 50 Special rule for box 11 of Form W-2 (distributions and deferral in the same year). 1040 tax form 2010   If, in the same year, there are NQDC distributions and there are deferrals that are reportable in boxes 3 and/or 5 (current or prior-year deferrals) of Form W-2, do not complete box 11. 1040 tax form 2010 Instead, report on Form SSA-131 the total amount the employee earned during the year. 1040 tax form 2010 * Submit the SSA-131 to the nearest SSA office or give it to the employee. 1040 tax form 2010   *Generally, the amount earned by the employee during the tax year for purposes of item 6 of Form SSA-131 is the amount reported in box 1 of Form W-2 plus current-year deferrals that are vested (employee and employer portions) less distributions. 1040 tax form 2010 Do not consider prior-year deferrals that are vesting in the current year. 1040 tax form 2010 If there was a plan failure, the box 1 amount in this calculation should be as if there were no plan failure. 1040 tax form 2010 Example 5: Deferral that is immediately vested and there are distributions (no vesting of prior-year deferrals). 1040 tax form 2010 For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 tax form 2010 There was also an employer match of $10. 1040 tax form 2010 The deferral and employer match were vested upon deferral. 1040 tax form 2010 There was no vesting of prior-year deferrals under the plan. 1040 tax form 2010 During the year, there were total distributions of $50 from the plan to the employee. 1040 tax form 2010 Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10; Distribution = $50. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, vested) $230 Boxes 3 and 5 ($200 Regular pay plus $10 vested employer match) 210 Leave Box 11 blank. 1040 tax form 2010 File Form SSA-131 -0-     Form SSA-131 Completion Item 6 - amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $30 vested current year employee deferral and employer match) $210 Example 6: Deferral with delayed vesting and there are distributions (no vesting of prior-year deferrals). 1040 tax form 2010 For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 tax form 2010 The deferral was not vested upon deferral. 1040 tax form 2010 There was no vesting of prior-year deferrals under the plan. 1040 tax form 2010 During the year, there were total distributions of $50 from the plan to the employee. 1040 tax form 2010 Regular pay = $200; Deferral, not vested = $20; Distribution = $50. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay minus $20 deferral that is not vested) 180 Box 11 ($50 Distribution). 1040 tax form 2010 50 Example 7: Deferral that is immediately vested and there are distributions (also vesting of prior-year deferrals and earnings on those prior-year deferrals). 1040 tax form 2010 For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 tax form 2010 The deferral was vested upon deferral. 1040 tax form 2010 There was vesting of $100 of prior-year deferrals and $15 of earnings on the $100 prior-year deferral under the plan. 1040 tax form 2010 During the year, there were total distributions of $50 from the plan to the employee. 1040 tax form 2010 Regular pay = $200; Deferral, vested = $20; Distribution = $50; Vesting of prior-year deferrals ($100) and earnings on those prior-year deferrals ($15) = $115. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 vested deferral $230 Boxes 3 and 5 ($200 Regular pay Plus $115 vested prior deferral (with vested earnings on the deferral)) 315 Leave Box 11 blank. 1040 tax form 2010 File Form SSA-131 -0-     Form SSA-131 Completion Item 6, amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $20 vested current year deferral) $200 Example 8: Deferral with delayed vesting and there are distributions (vesting of prior-year deferrals, including employer matches, and earnings on those deferrals). 1040 tax form 2010 For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 tax form 2010 The deferral was not vested upon deferral. 1040 tax form 2010 There was also vesting of prior-year deferrals and employer matches and earnings on these amounts under the plan ($115). 1040 tax form 2010 During the year, there were total distributions of $50 from the plan to the employee. 1040 tax form 2010 Regular pay = $200; Deferral, not vested = $20; Distribution = $50; Vesting of prior-year deferrals and employer match = $100 plus earnings on that $100 of $15. 1040 tax form 2010 Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay plus $115 vested prior-year deferral and prior year employer match and earning on the prior year amounts minus $20 deferral that is not vested) 295 Leave Box 11 blank. 1040 tax form 2010 File Form SSA-131 -0-     Form SSA-131 Completion Item 6 ($230 Amount from Box 1 of Form W-2 minus $50 Distribution) $180 Table 2. 1040 tax form 2010 Specifications for Electronic Reporting of Special Wage Payments Record Position  Field Size   Description Start End 1 3 3 Record Type—must include only the capital letters “SWP” 4 12 9 SSN—must be numeric and may not be all zeros 13 27 15 Last Name—all capitals and no punctuation; may have blanks on right only 28 38 11 First Name—all capitals and no punctuation; may have blanks on right only 39 39 1 Middle Initial—must be either a capital letter or blank 40 48 9 EIN—must be numeric and may not be all zeros 49 59 11 Payment—must be numeric; may not be all zeros; last two digits on right are assumed to be cents; no period or dollar sign 60 63 4 Payment Year—must be only a four-digit year 64 66 3 SSA Office Code—must be numeric and may be all zeros 67 67 1 Payment Type Code—must be the capital letter “T” 68 117 50 Filler  The record format is a fixed length of 117. 1040 tax form 2010  The file format is ASCII. 1040 tax form 2010  Submit only one file at a time. 1040 tax form 2010   Table 3. 1040 tax form 2010 Sample—Paper Listing for Reporting Special Wage Payments to Several Employees Report of Special Wage PaymentsTax Year: Page of A. 1040 tax form 2010 Employer Name: EIN:   Address: Contact Name:     Phone: ( )   . 1040 tax form 2010 1) B. 1040 tax form 2010 Employee Name: (Last) (First) (MI)   C. 1040 tax form 2010 SSN: D. 1040 tax form 2010 SWP:$ E. 1040 tax form 2010 Type: Other: 2) B. 1040 tax form 2010 Employee Name: (Last) (First) (MI)   C. 1040 tax form 2010 SSN: D. 1040 tax form 2010 SWP:$ E. 1040 tax form 2010 Type: Other: 3) B. 1040 tax form 2010 Employee Name: (Last) (First) (MI)   C. 1040 tax form 2010 SSN: D. 1040 tax form 2010 SWP:$ E. 1040 tax form 2010 Type: Other: 4) B. 1040 tax form 2010 Employee Name: (Last) (First) (MI)   C. 1040 tax form 2010 SSN: D. 1040 tax form 2010 SWP:$ E. 1040 tax form 2010 Type: Other: 5) B. 1040 tax form 2010 Employee Name: (Last) (First) (MI)   C. 1040 tax form 2010 SSN: D. 1040 tax form 2010 SWP:$ E. 1040 tax form 2010 Type: Other:     INSTRUCTIONS:   Enter tax year and page number. 1040 tax form 2010   A. 1040 tax form 2010 Employer name, employer identification number (EIN), address, the name of a contact person, and a phone number where the contact person can be reached during normal business hours. 1040 tax form 2010   B. 1040 tax form 2010 Employee's name. 1040 tax form 2010   C. 1040 tax form 2010 Employee's social security number (SSN). 1040 tax form 2010   D. 1040 tax form 2010 Total amount of special wage payments made to the employee. 1040 tax form 2010   E. 1040 tax form 2010 Type of special wage payment from the following list: (1) Vacation Pay, (2) Sick Pay, (3) Severance Pay,  (4) Bonus, (5) Deferred Compensation, (6) Stock Options, and (7) Other—Please explain. 1040 tax form 2010   Do not use a paper listing for nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in block 11 of Form W-2. 1040 tax form 2010 (Get Form SSA-131. 1040 tax form 2010 )                 Prev  Up  Next   Home   More Online Publications