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1040ez Form Printable

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1040ez Form Printable

1040ez form printable Publication 521 - Main Content Table of Contents Who Can Deduct Moving ExpensesMove Related to Start of Work Distance Test Time Test Retirees or Survivors Who Move to the United States Deductible Moving ExpensesMoves to Locations in the United States Moves to Locations Outside the United States Nondeductible Expenses ReimbursementsTypes of Reimbursement Plans Tax Withholding and Estimated Tax How and When To ReportForm 3903 When To Deduct Expenses Illustrated Example Members of the Armed Forces How To Get Tax Help Who Can Deduct Moving Expenses You can deduct your moving expenses if you meet all three of the following requirements. 1040ez form printable Your move is closely related to the start of work. 1040ez form printable You meet the distance test. 1040ez form printable You meet the time test. 1040ez form printable After you have read these rules, you may want to use Figure B to help you decide if you can deduct your moving expenses. 1040ez form printable Retirees, survivors, and Armed Forces members. 1040ez form printable   Different rules may apply if you are a member of the Armed Forces or a retiree or survivor moving to the United States. 1040ez form printable These rules are discussed later in this publication. 1040ez form printable Move Related to Start of Work Your move must be closely related, both in time and in place, to the start of work at your new job location. 1040ez form printable Closely related in time. 1040ez form printable   In most cases, you can consider moving expenses incurred within 1 year from the date you first reported to work at the new location as closely related in time to the start of work. 1040ez form printable It is not necessary that you arrange to work before moving to a new location, as long as you actually go to work in that location. 1040ez form printable    Figure A. 1040ez form printable Illustration of Distance Test Please click here for the text description of the image. 1040ez form printable Figure A   If you do not move within 1 year of the date you begin work, you ordinarily cannot deduct the expenses unless you can show that circumstances existed that prevented the move within that time. 1040ez form printable Example. 1040ez form printable Your family moved more than a year after you started work at a new location. 1040ez form printable You delayed the move for 18 months to allow your child to complete high school. 1040ez form printable You can deduct your moving expenses. 1040ez form printable Closely related in place. 1040ez form printable   You can generally consider your move closely related in place to the start of work if the distance from your new home to the new job location is not more than the distance from your former home to the new job location. 1040ez form printable If your move does not meet this requirement, you may still be able to deduct moving expenses if you can show that: You are required to live at your new home as a condition of your employment, or You will spend less time or money commuting from your new home to your new job location. 1040ez form printable Home defined. 1040ez form printable   Your home means your main home (residence). 1040ez form printable It can be a house, apartment, condominium, houseboat, house trailer, or similar dwelling. 1040ez form printable It does not include other homes owned or kept up by you or members of your family. 1040ez form printable It also does not include a seasonal home, such as a summer beach cottage. 1040ez form printable Your former home means your home before you left for your new job location. 1040ez form printable Your new home means your home within the area of your new job location. 1040ez form printable Retirees or survivors. 1040ez form printable   You may be able to deduct the expenses of moving to the United States or its possessions even though the move is not related to the start of work at a new job location. 1040ez form printable You must have worked outside the United States or be a survivor of someone who did. 1040ez form printable See Retirees or Survivors Who Move to the United States, later. 1040ez form printable Distance Test Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home. 1040ez form printable For example, if your old main job location was 3 miles from your former home, your new main job location must be at least 53 miles from that former home. 1040ez form printable You can use Worksheet 1 to see if you meet this test. 1040ez form printable Worksheet 1. 1040ez form printable Distance Test   Note. 1040ez form printable Members of the Armed Forces may not have to meet this test. 1040ez form printable See Members of the Armed Forces. 1040ez form printable     1. 1040ez form printable Enter the number of miles from your old home to your new workplace 1. 1040ez form printable miles 2. 1040ez form printable Enter the number of miles from your old home to your old workplace 2. 1040ez form printable miles 3. 1040ez form printable Subtract line 2 from line 1. 1040ez form printable If zero or less, enter -0- 3. 1040ez form printable miles 4. 1040ez form printable Is line 3 at least 50 miles? □ Yes. 1040ez form printable You meet this test. 1040ez form printable  □ No. 1040ez form printable You do not meet this test. 1040ez form printable You cannot deduct your moving expenses. 1040ez form printable The distance between a job location and your home is the shortest of the more commonly traveled routes between them. 1040ez form printable The distance test considers only the location of your former home. 1040ez form printable It does not take into account the location of your new home. 1040ez form printable See Figure A, earlier. 1040ez form printable Example. 1040ez form printable You moved to a new home less than 50 miles from your former home because you changed main job locations. 1040ez form printable Your old main job location was 3 miles from your former home. 1040ez form printable Your new main job location is 60 miles from that home. 1040ez form printable Because your new main job location is 57 miles farther from your former home than the distance from your former home to your old main job location, you meet the distance test. 1040ez form printable First job or return to full-time work. 1040ez form printable   If you go to work full time for the first time, your place of work must be at least 50 miles from your former home to meet the distance test. 1040ez form printable   If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work also must be at least 50 miles from your former home. 1040ez form printable Armed Forces. 1040ez form printable   If you are in the Armed Forces and you moved because of a permanent change of station, you do not have to meet the distance test. 1040ez form printable See Members of the Armed Forces, later. 1040ez form printable Main job location. 1040ez form printable   Your main job location is usually the place where you spend most of your working time. 1040ez form printable This could be your office, plant, store, shop, or other location. 1040ez form printable If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. 1040ez form printable Union members. 1040ez form printable   If you work for several employers on a short-term basis and you get work under a union hall system (such as a construction or building trades worker), your main job location is the union hall. 1040ez form printable More than one job. 1040ez form printable   If you have more than one job at any time, your main job location depends on the facts in each case. 1040ez form printable The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. 1040ez form printable    Table 1. 1040ez form printable Satisfying the Time Test for Employees and Self-Employed Persons IF you are. 1040ez form printable . 1040ez form printable . 1040ez form printable THEN you satisfy the time test by meeting the. 1040ez form printable . 1040ez form printable . 1040ez form printable an employee 39-week test for employees. 1040ez form printable self-employed 78-week test for self-employed persons. 1040ez form printable both self-employed and an employee at the same time 78-week test for a self-employed person or the 39-week  test for an employee. 1040ez form printable Your principal place of work  determines which test applies. 1040ez form printable both self-employed and an employee, but unable to satisfy the 39-week test for employees 78-week test for self-employed persons. 1040ez form printable Time Test To deduct your moving expenses, you also must meet one of the following two time tests. 1040ez form printable The time test for employees. 1040ez form printable The time test for self-employed persons. 1040ez form printable Both of these tests are explained below. 1040ez form printable See Table 1, below, for a summary of these tests. 1040ez form printable You can deduct your moving expenses before you meet either of the time tests. 1040ez form printable See Time Test Not Yet Met, later. 1040ez form printable Time Test for Employees If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location (39-week test). 1040ez form printable Full-time employment depends on what is usual for your type of work in your area. 1040ez form printable For purposes of this test, the following four rules apply. 1040ez form printable You count only your full-time work as an employee, not any work you do as a self-employed person. 1040ez form printable You do not have to work for the same employer for all 39 weeks. 1040ez form printable You do not have to work 39 weeks in a row. 1040ez form printable You must work full time within the same general commuting area for all 39 weeks. 1040ez form printable Temporary absence from work. 1040ez form printable   You are considered to have worked full time during any week you are temporarily absent from work because of illness, strikes, lockouts, layoffs, natural disasters, or similar causes. 1040ez form printable You are also considered to have worked full time during any week you are absent from work for leave or vacation provided for in your work contract or agreement. 1040ez form printable Seasonal work. 1040ez form printable   If your work is seasonal, you are considered to be working full time during the off-season only if your work contract or agreement covers an off-season period of less than 6 months. 1040ez form printable For example, a school teacher on a 12-month contract who teaches on a full-time basis for more than 6 months is considered to have worked full time for the entire 12 months. 1040ez form printable    Figure B. 1040ez form printable Can You Deduct Expenses for a Non-Military Move Within the United States? Please click here for the text description of the image. 1040ez form printable Figure B Time Test for Self-Employed Persons If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location (78-week test). 1040ez form printable For purposes of the time test for self-employed persons, the following three rules apply. 1040ez form printable You count any full-time work you do either as an employee or as a self-employed person. 1040ez form printable You do not have to work for the same employer or be self-employed in the same trade or business for the 78 weeks. 1040ez form printable You must work within the same general commuting area for all 78 weeks. 1040ez form printable Example. 1040ez form printable You are a self-employed accountant who moves from Atlanta to New York City, and begin to work there on December 1, 2013. 1040ez form printable You pay moving expenses in 2013 and 2014 in connection with this move. 1040ez form printable On April 15, 2014, when you file your income tax return for the year 2013, you have been performing services as a self-employed individual on a full-time basis in New York City for approximately 20 weeks. 1040ez form printable Although you have not satisfied the 78-week employment condition at this time, you can deduct your 2013 moving expenses on your 2013 income tax return as there is still sufficient time remaining before December 1, 2015, to satisfy such condition. 1040ez form printable You can deduct any moving expenses you pay in 2014 on your 2014 income tax return even if you have not met the 78-week test. 1040ez form printable You have until December 1, 2015, to satisfy this requirement. 1040ez form printable Self-employment. 1040ez form printable   You are self-employed if you work as the sole owner of an unincorporated business or as a partner in a partnership carrying on a business. 1040ez form printable You are not considered self-employed if you are semi-retired, are a part-time student, or work only a few hours each week. 1040ez form printable Full-time work. 1040ez form printable   You can count only those weeks during which you work full time as a week of work. 1040ez form printable Whether you work full time during any week depends on what is usual for your type of work in your area. 1040ez form printable For example, you are a self-employed dentist and maintain office hours 4 days a week. 1040ez form printable You are considered to perform services full time if maintaining office hours 4 days a week is not unusual for other self-employed dentists in your area. 1040ez form printable Temporary absence from work. 1040ez form printable   You are considered to be self-employed on a full-time basis during any week you are temporarily absent from work because of illness, strikes, natural disasters, or similar causes. 1040ez form printable Seasonal trade or business. 1040ez form printable   If your trade or business is seasonal, the off-season weeks when no work is required or available may be counted as weeks during which you worked full time. 1040ez form printable The off-season must be less than 6 months and you must work full time before and after the off-season. 1040ez form printable Example. 1040ez form printable You own and operate a motel at a beach resort. 1040ez form printable The motel is closed for 5 months during the off-season. 1040ez form printable You work full time as the operator of the motel before and after the off-season. 1040ez form printable You are considered self-employed on a full-time basis during the weeks of the off-season. 1040ez form printable   If you were both an employee and self-employed, see Table 1 earlier, for the requirements. 1040ez form printable Example. 1040ez form printable Justin quit his job and moved from the east coast to the west coast to begin a full-time job as a cabinet-maker for C and L Cabinet Shop. 1040ez form printable He generally worked at the shop about 40 hours each week. 1040ez form printable Shortly after the move, Justin also began operating a cabinet-installation business from his home for several hours each afternoon and all day on weekends. 1040ez form printable Because Justin's principal place of business is the cabinet shop, he can satisfy the time test by meeting the 39-week test. 1040ez form printable    If Justin is unable to satisfy the requirements of the 39-week test during the 12-month period immediately following his arrival in the general location of his new principal place of work, he can satisfy the 78-week test. 1040ez form printable Joint Return If you are married, file a joint return, and both you and your spouse work full-time, either of you can satisfy the full-time work test. 1040ez form printable However, you cannot add the weeks your spouse worked to the weeks you worked to satisfy that test. 1040ez form printable Time Test Not Yet Met You can deduct your moving expenses on your 2013 tax return even though you have not met the time test by the date your 2013 return is due. 1040ez form printable You can do this if you expect to meet the 39-week test in 2014 or the 78-week test in 2014 or 2015. 1040ez form printable If you do not deduct your moving expenses on your 2013 return, and you later meet the time test, you can file an amended return for 2013 to take the deduction. 1040ez form printable See When To Deduct Expenses later, for more details. 1040ez form printable Failure to meet the time test. 1040ez form printable    If you deduct moving expenses but do not meet the time test in 2014 or 2015, you must either: Report your moving expense deduction as other income on your Form 1040 for the year you cannot meet the test, or Use Form 1040X to amend your 2013 return, figuring your tax without the moving expense deduction. 1040ez form printable Example. 1040ez form printable You arrive in the general area of your new job location, as an employee, on September 15, 2013. 1040ez form printable You deduct your moving expenses on your 2013 return, the year of the move, even though you have not yet met the time test by the date your return is due. 1040ez form printable If you do not meet the 39-week test during the 12-month period following your arrival in the general area of your new job location, you must either: Report your moving expense deduction as other income on your Form 1040 for 2014, or Use Form 1040X to amend your 2013 return, figuring your tax without the moving expense deduction. 1040ez form printable Exceptions to the Time Test You do not have to meet the time test if one of the following applies. 1040ez form printable You are in the Armed Forces and you moved because of a permanent change of station. 1040ez form printable See Members of the Armed Forces , later. 1040ez form printable Your main job location was outside the United States and you moved to the United States because you retired. 1040ez form printable See Retirees or Survivors Who Move to the United States, later. 1040ez form printable You are the survivor of a person whose main job location at the time of death was outside the United States. 1040ez form printable See Retirees or Survivors Who Move to the United States, later. 1040ez form printable Your job at the new location ends because of death or disability. 1040ez form printable You are transferred for your employer's benefit or laid off for a reason other than willful misconduct. 1040ez form printable For this exception, you must have obtained full-time employment and you must have expected to meet the test at the time you started the job. 1040ez form printable Retirees or Survivors Who Move to the United States If you are a retiree who was working abroad or a survivor of a decedent who was working abroad and you move to the United States or one of its possessions, you do not have to meet the time test, discussed earlier. 1040ez form printable However, you must meet the requirements discussed below under Retirees who were working abroad or Survivors of decedents who were working abroad. 1040ez form printable If you are living in the United States, retire, and then move and remain retired, you cannot claim a moving expense deduction for that move. 1040ez form printable United States defined. 1040ez form printable   For this section of this publication, the term “United States” includes the possessions of the United States. 1040ez form printable Retirees who were working abroad. 1040ez form printable   You can deduct moving expenses for a move to a new home in the United States when you permanently retire. 1040ez form printable However, both your former main job location and your former home must have been outside the United States. 1040ez form printable Permanently retired. 1040ez form printable   You are considered permanently retired when you cease gainful full-time employment or self-employment. 1040ez form printable If, at the time you retire, you intend your retirement to be permanent, you will be considered retired even though you later return to work. 1040ez form printable Your intention to retire permanently may be determined by: Your age and health, The customary retirement age for people who do similar work, Whether you receive retirement payments from a pension or retirement fund, and The length of time before you return to full-time work. 1040ez form printable Decedents. 1040ez form printable   Qualified deductible moving expenses are allowed on a final return (Form 1040 or 1040NR) when a taxpayer has moved and dies within the same calendar year. 1040ez form printable The personal representative filing on behalf of that taxpayer should complete and attach Form 3903 to the final return. 1040ez form printable   A personal representative can be an executor, administrator, or anyone who is in charge of the deceased person's property. 1040ez form printable For more information, see Publication 559, Survivors, Executors, and Administrators. 1040ez form printable Survivors of decedents who were working abroad. 1040ez form printable   If you are the spouse or the dependent of a person whose main job location at the time of death was outside the United States, you can deduct moving expenses if the following five requirements are met. 1040ez form printable The move is to a home in the United States. 1040ez form printable The move begins within 6 months after the decedent's death. 1040ez form printable (When a move begins is described below. 1040ez form printable ) The move is from the decedent's former home. 1040ez form printable The decedent's former home was outside the United States. 1040ez form printable The decedent's former home was also your home. 1040ez form printable When a move begins. 1040ez form printable   A move begins when one of the following events occurs. 1040ez form printable You contract for your household goods and personal effects to be moved to your home in the United States, but only if the move is completed within a reasonable time. 1040ez form printable Your household goods and personal effects are packed and on the way to your home in the United States. 1040ez form printable You leave your former home to travel to your new home in the United States. 1040ez form printable Deductible Moving Expenses If you meet the requirements discussed earlier under Who Can Deduct Moving Expenses, you can deduct the reasonable expenses of: Moving your household goods and personal effects (including in-transit or foreign-move storage expenses), and Traveling (including lodging but not meals) to your new home. 1040ez form printable You cannot deduct any expenses for meals. 1040ez form printable Reasonable expenses. 1040ez form printable   You can deduct only those expenses that are reasonable for the circumstances of your move. 1040ez form printable For example, the cost of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. 1040ez form printable If during your trip to your new home, you stop over, or make side trips for sightseeing, the additional expenses for your stopover or side trips are not deductible as moving expenses. 1040ez form printable Example. 1040ez form printable Beth's employer transferred her from Boston, Massachusetts, to Buffalo, New York. 1040ez form printable On her way to Buffalo, Beth drove into Canada to visit the Toronto Zoo. 1040ez form printable Since Beth's excursion into Canada was away from the usual Boston-Buffalo route, the expenses paid or incurred for the excursion are not deductible. 1040ez form printable Beth can only deduct what it would have cost to drive directly from Boston to Buffalo. 1040ez form printable Likewise, Beth cannot deduct any expenses, such as the cost of a hotel room, caused by the delay for sightseeing. 1040ez form printable Travel by car. 1040ez form printable   If you use your car to take yourself, members of your household, or your personal effects to your new home, you can figure your expenses by deducting either: Your actual expenses, such as the amount you pay for gas and oil for your car, if you keep an accurate record of each expense, or The standard mileage rate of 24 cents per mile. 1040ez form printable Whether you use actual expenses or the standard mileage rate to figure your expenses, you can deduct the parking fees and tolls you pay to move. 1040ez form printable You cannot deduct any part of general repairs, general maintenance, insurance, or depreciation for your car. 1040ez form printable Member of your household. 1040ez form printable   You can deduct moving expenses you pay for yourself and members of your household. 1040ez form printable A member of your household is anyone who has both your former and new home as his or her home. 1040ez form printable It does not include a tenant or employee, unless that person is your dependent. 1040ez form printable Moves to Locations in the United States If you meet the requirements under Who Can Deduct Moving Expenses, earlier, you can deduct expenses for a move to the area of a new main job location within the United States or its possessions. 1040ez form printable Your move may be from one U. 1040ez form printable S. 1040ez form printable location to another or from a foreign country to the United States. 1040ez form printable Household goods and personal effects. 1040ez form printable   You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. 1040ez form printable For purposes of moving expenses, the term “personal effects” includes, but is not limited to, movable personal property that the taxpayer owns and frequently uses. 1040ez form printable   If you use your own car to move your things, see Travel by car, earlier. 1040ez form printable   You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects. 1040ez form printable   You can deduct the cost of shipping your car and your household pets to your new home. 1040ez form printable   You can deduct the cost of moving your household goods and personal effects from a place other than your former home. 1040ez form printable Your deduction is limited to the amount it would have cost to move them from your former home. 1040ez form printable Example. 1040ez form printable Paul Brown has been living and working in North Carolina for the last 4 years. 1040ez form printable Because he has been renting a small apartment, he stored some furniture at his parents' home in Georgia. 1040ez form printable Paul got a job in Washington, DC. 1040ez form printable It cost him $900 to move the furniture from his North Carolina apartment to Washington and $3,000 to move the stored furniture from Georgia to Washington. 1040ez form printable It would have cost $1,800 to ship the stored furniture from North Carolina to Washington. 1040ez form printable He can deduct only $1,800 of the $3,000 he paid. 1040ez form printable The amount he can deduct for moving his furniture is $2,700 ($900 + $1,800). 1040ez form printable You cannot deduct the cost of moving furniture you buy on the way to your new home. 1040ez form printable   Storage expenses. 1040ez form printable   You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home. 1040ez form printable Travel expenses. 1040ez form printable   You can deduct the cost of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. 1040ez form printable This includes expenses for the day you arrive. 1040ez form printable    The day of arrival is the day you secure lodging at the new place of residence, even if the lodging is on a temporary basis. 1040ez form printable   You can include any lodging expenses you had in the area of your former home within one day after you could no longer live in your former home because your furniture had been moved. 1040ez form printable   The members of your household do not have to travel together or at the same time. 1040ez form printable However, you can only deduct expenses for one trip per person. 1040ez form printable If you use your own car, see Travel by car, earlier. 1040ez form printable Example. 1040ez form printable   In February 2013, Josh and Robyn Black moved from Minneapolis to Washington, DC, where Josh was starting a new job. 1040ez form printable Josh drove the family car to Washington, DC, a trip of 1,100 miles. 1040ez form printable His expenses were $264. 1040ez form printable 00 for mileage (1,100 miles x 24 cents per mile) plus $40 for tolls and $150 for lodging, for a total of $454. 1040ez form printable 00. 1040ez form printable One week later, Robyn flew from Minneapolis to Washington, DC. 1040ez form printable Her only expense was her $400 plane ticket. 1040ez form printable The Blacks' deduction is $854. 1040ez form printable 00 (Josh's $454. 1040ez form printable 00 + Robyn's $400). 1040ez form printable Moves to Locations Outside the United States To deduct expenses for a move outside the United States, you must move to the area of a new place of work outside the United States and its possessions. 1040ez form printable You must meet the requirements under Who Can Deduct Moving Expenses , earlier. 1040ez form printable Deductible expenses. 1040ez form printable   If your move is to a location outside the United States and its possessions, you can deduct the following expenses. 1040ez form printable The cost of moving household goods and personal effects from your former home to your new home. 1040ez form printable The cost of traveling (including lodging) from your former home to your new home. 1040ez form printable The cost of moving household goods and personal effects to and from storage. 1040ez form printable The cost of storing household goods and personal effects while you are at the new job location. 1040ez form printable The first two items were explained earlier under Moves to Locations in the United States . 1040ez form printable The last two items are discussed, later. 1040ez form printable Moving goods and effects to and from storage. 1040ez form printable   You can deduct the reasonable expenses of moving your personal effects to and from storage. 1040ez form printable Storage expenses. 1040ez form printable   You can deduct the reasonable expenses of storing your household goods and personal effects for all or part of the time the new job location remains your main job location. 1040ez form printable Moving expenses allocable to excluded foreign income. 1040ez form printable   If you live and work outside the United States, you may be able to exclude from income part or all of the income you earn in the foreign country. 1040ez form printable You may also be able to claim a foreign housing exclusion or deduction. 1040ez form printable If you claim the foreign earned income or foreign housing exclusion, you cannot deduct the part of your moving expenses that relates to the excluded income. 1040ez form printable    Publication 54, Tax Guide for U. 1040ez form printable S. 1040ez form printable Citizens and Resident Aliens Abroad, explains how to figure the part of your moving expenses that relates to excluded income. 1040ez form printable You can get the publication from most U. 1040ez form printable S. 1040ez form printable embassies and consulates, or see How To Get Tax Help at the end of this publication. 1040ez form printable Nondeductible Expenses You cannot deduct the following items as moving expenses. 1040ez form printable Any part of the purchase price of your new home. 1040ez form printable Car tags. 1040ez form printable Driver's license. 1040ez form printable Expenses of buying or selling a home (including closing costs, mortgage fees, and points). 1040ez form printable Expenses of entering into or breaking a lease. 1040ez form printable Home improvements to help sell your home. 1040ez form printable Loss on the sale of your home. 1040ez form printable Losses from disposing of memberships in clubs. 1040ez form printable Mortgage penalties. 1040ez form printable Pre-move househunting expenses. 1040ez form printable Real estate taxes. 1040ez form printable Refitting of carpet and draperies. 1040ez form printable Return trips to your former residence. 1040ez form printable Security deposits (including any given up due to the move). 1040ez form printable Storage charges except those incurred in transit and for foreign moves. 1040ez form printable No double deduction. 1040ez form printable   You cannot take a moving expense deduction and a business expense deduction for the same expenses. 1040ez form printable You must decide if your expenses are deductible as moving expenses or as business expenses. 1040ez form printable For example, expenses you have for travel, meals, and lodging while temporarily working at a place away from your regular place of work may be deductible as business expenses if you are considered away from home on business. 1040ez form printable In most cases, your work at a single location is considered temporary if it is realistically expected to last (and does in fact last) for one year or less. 1040ez form printable   See Publication 463, Travel, Entertainment, Gift, and Car Expenses, for information on deducting your business expenses. 1040ez form printable Reimbursements This section explains how to report a reimbursement (including advances and allowances) on your tax return. 1040ez form printable It covers reimbursements for any of your moving expenses discussed in this publication. 1040ez form printable It also explains the types of reimbursements on which your employer must withhold income, social security, and Medicare taxes. 1040ez form printable Types of Reimbursement Plans If you receive a reimbursement for your moving expenses, how you report this amount and your expenses depends on whether the reimbursement is paid to you under an accountable plan or a nonaccountable plan. 1040ez form printable For a quick overview of how to report your reimbursement and moving expenses, see Table 2 in the section on How and When To Report, later. 1040ez form printable Your employer should tell you what method of reimbursement is used and what records are required. 1040ez form printable Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. 1040ez form printable Your expenses must have a business connection – that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. 1040ez form printable Two examples of this are the reasonable expenses of moving your possessions from your former home to your new home, and traveling from your former home to your new home. 1040ez form printable You must adequately account to your employer for these expenses within a reasonable period of time. 1040ez form printable You must return any excess reimbursement or allowance within a reasonable period of time. 1040ez form printable Adequate accounting. 1040ez form printable   You adequately account for your moving expenses by giving your employer documentation of those expenses, such as a statement of expense, an account book, a diary, or a similar record in which you entered each expense at or near the time you had it. 1040ez form printable Documentation includes receipts, canceled checks, and bills. 1040ez form printable Reasonable period of time. 1040ez form printable   What constitutes a “reasonable period of time” depends on the facts and circumstances of your situation. 1040ez form printable However, regardless of the facts and circumstances, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. 1040ez form printable You receive an advance within 30 days of the time you have an expense. 1040ez form printable You adequately account for your expenses within 60 days after they were paid or incurred. 1040ez form printable You return any excess reimbursement within 120 days after the expense was paid or incurred. 1040ez form printable You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. 1040ez form printable Excess reimbursement. 1040ez form printable   This includes any amount you are paid (including advances and allowances) that is more than the moving expenses that you adequately accounted for to your employer within a reasonable period of time. 1040ez form printable Returning excess reimbursements. 1040ez form printable   You must be required to return any excess reimbursement for your moving expenses to the person paying the reimbursement. 1040ez form printable Excess reimbursement includes any amount for which you did not adequately account within a reasonable period of time. 1040ez form printable For example, if you received an advance and you did not spend all the money on deductible moving expenses, or you do not have proof of all your expenses, you have an excess reimbursement. 1040ez form printable You meet accountable plan rules. 1040ez form printable   If for all reimbursements you meet the three rules for an accountable plan (listed earlier), your employer should not include any reimbursements of expenses in your income in box 1 of your Form W-2, Wage and Tax Statement. 1040ez form printable Instead, your employer should include the reimbursements in box 12 of your Form W-2. 1040ez form printable Example. 1040ez form printable You lived in Boston and accepted a job in Atlanta. 1040ez form printable Under an accountable plan, your employer reimbursed you for your actual traveling expenses from Boston to Atlanta and the cost of moving your furniture to Atlanta. 1040ez form printable Your employer will include the reimbursement on your Form W-2, box 12, with Code P. 1040ez form printable If your moving expenses are more than your reimbursement, you may be able to deduct your additional expenses (see How and When To Report, later). 1040ez form printable You do not meet accountable plan rules. 1040ez form printable   You may be reimbursed by your employer, but you may not meet all three rules for part of your expenses. 1040ez form printable   If your deductible expenses are reimbursed under an otherwise accountable plan but you do not return, within a reasonable period, any reimbursement of expenses for which you did not adequately account, then only the amount for which you did adequately account is considered as paid under an accountable plan. 1040ez form printable The remaining expenses are treated as having been reimbursed under a nonaccountable plan (discussed below). 1040ez form printable Reimbursement of nondeductible expenses. 1040ez form printable   You may be reimbursed by your employer for moving expenses, some of which are deductible expenses and some of which are not deductible. 1040ez form printable The reimbursements you receive for the nondeductible expenses and any allowances for miscellaneous or unspecified expenses are treated as paid under a nonaccountable plan (see below) and are included in your income. 1040ez form printable If you are reimbursed by your employer for the taxes you must pay (including social security and Medicare taxes) because you have received taxable moving expense reimbursements, you must pay tax on this reimbursement as well, and it is treated as paid under a nonaccountable plan. 1040ez form printable Nonaccountable Plans A nonaccountable plan is a reimbursement arrangement that does not meet the three rules listed earlier under Accountable Plans. 1040ez form printable In addition, the following payments will be treated as paid under a nonaccountable plan. 1040ez form printable Excess reimbursements you fail to return to your employer. 1040ez form printable Reimbursements of nondeductible expenses. 1040ez form printable See Reimbursement of nondeductible expenses, earlier. 1040ez form printable If an arrangement pays for your moving expenses by reducing your wages, salary, or other pay, the amount of the reduction will be treated as a payment made under a nonaccountable plan. 1040ez form printable This is because you are entitled to receive the full amount of your pay regardless of whether you had any moving expenses. 1040ez form printable If you are not sure if the moving expense reimbursement arrangement is an accountable or nonaccountable plan, ask your employer. 1040ez form printable Your employer will add the amount of any reimbursement paid to you under a nonaccountable plan to your wages, salary, or other pay. 1040ez form printable Your employer will report the total in box 1 of your Form W-2. 1040ez form printable Example. 1040ez form printable To get you to work in another city, your new employer reimburses you under an accountable plan for the $7,500 loss on the sale of your home. 1040ez form printable Because this is a reimbursement of a nondeductible expense, it is treated as paid under a nonaccountable plan and must be included as income in box 1 of your Form W-2. 1040ez form printable Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Do not include in income any moving expense payment you received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. 1040ez form printable These payments are made to persons displaced from their homes, businesses, or farms by federal projects. 1040ez form printable Tax Withholding and Estimated Tax Your employer must withhold income, social security, and Medicare taxes from reimbursements and allowances paid to you that are included in your income. 1040ez form printable See Reimbursements included in income, later. 1040ez form printable Reimbursements excluded from income. 1040ez form printable   Your employer should not include in your wages reimbursements paid under an accountable plan (explained earlier) for moving expenses that you: Could deduct if you had paid or incurred them, and Did not deduct in an earlier year. 1040ez form printable These reimbursements are fringe benefits excludable from your income as qualified moving expense reimbursements. 1040ez form printable Your employer should report these reimbursements on your Form W-2, box 12, with Code P. 1040ez form printable    You cannot claim a moving expense deduction for expenses covered by reimbursements excluded from income (see Accountable Plans under Types of Reimbursement Plans, earlier). 1040ez form printable Expenses deducted in earlier year. 1040ez form printable   If you receive a reimbursement this year for moving expenses deducted in an earlier year, and the reimbursement is not included as wages in box 1 of your Form W-2, you must include the reimbursement in income on Form 1040, line 21. 1040ez form printable Your employer should show the amount of your reimbursement in box 12 of your Form W-2. 1040ez form printable Reimbursements included in income. 1040ez form printable   Your employer must include in your income any reimbursements made (or treated as made) under a nonaccountable plan, even though they are for deductible moving expenses. 1040ez form printable See Nonaccountable Plans under Types of Reimbursement Plans, earlier. 1040ez form printable Your employer also must include in your gross income as wages any reimbursements of, or payments for, nondeductible moving expenses. 1040ez form printable This includes amounts your employer reimbursed you under an accountable plan (explained earlier) for meals, househunting trips, and real estate expenses. 1040ez form printable It also includes reimbursements that exceed your deductible expenses and that you do not return to your employer. 1040ez form printable Reimbursement for deductible and nondeductible expenses. 1040ez form printable    If your employer reimburses you for both deductible and nondeductible moving expenses, your employer must determine the amount of the reimbursement that is not taxable and not subject to withholding. 1040ez form printable Your employer must treat any remaining amount as taxable wages and withhold income, social security, and Medicare taxes. 1040ez form printable Amount of income tax withheld. 1040ez form printable   If the reimbursements or allowances you receive are taxable, the amount of income tax your employer will withhold depends on several factors. 1040ez form printable It depends in part on whether income tax is withheld from your regular wages, on whether the reimbursements and allowances are added to your regular wages, and on any information you have given to your employer on Form W-4, Employee's Withholding Allowance Certificate. 1040ez form printable   Your employer can treat your reimbursements as supplemental wages and not include the reimbursements and allowances in your regular wages. 1040ez form printable The employer can withhold income tax on supplemental wages at a flat rate which may be different from your regular tax rate. 1040ez form printable Estimated tax. 1040ez form printable    If you must make estimated tax payments, you need to take into account any taxable reimbursements and deductible moving expenses in figuring your estimated tax. 1040ez form printable For details about estimated taxes, see Publication 505, Tax Withholding and Estimated Tax. 1040ez form printable How and When To Report This section explains how and when to report your moving expenses and any reimbursements or allowances you received for your move. 1040ez form printable For a quick overview, see Table 2, later. 1040ez form printable Form 3903 Use Form 3903 to figure your moving expense deduction. 1040ez form printable Use a separate Form 3903 for each move for which you are deducting expenses. 1040ez form printable Do not file Form 3903 if all of the following apply. 1040ez form printable You moved to a location outside the United States in an earlier year. 1040ez form printable You are claiming only storage fees while you were away from the United States. 1040ez form printable Any amount your employer paid for the storage fees is included as wages in box 1 of your Form W-2. 1040ez form printable Instead, enter the storage fees (after the reduction for the part that is allocable to excluded income) on Form 1040, line 26, and enter “Storage” on the dotted line next to the amount. 1040ez form printable If you meet the special rules for members of the Armed Forces, see How to complete Form 3903 for members of the Armed Forces under Members of the Armed Forces, later. 1040ez form printable Completing Form 3903. 1040ez form printable   Complete Worksheet 1, earlier, or the Distance Test Worksheet in the instructions for Form 3903 to see whether you meet the distance test. 1040ez form printable If so, complete lines 1 through 3 of the form using your actual expenses (except, if you use your own car, you can figure expenses based on the standard mileage rate, instead of actual amounts for gas and oil). 1040ez form printable Enter on line 4 the total amount of your moving expense reimbursement that was excluded from your wages. 1040ez form printable This excluded amount should be identified on Form W-2, box 12, with code P. 1040ez form printable Expenses greater than reimbursement. 1040ez form printable   If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 26. 1040ez form printable This is your moving expense deduction. 1040ez form printable Expenses equal to or less than reimbursement. 1040ez form printable    If line 3 is equal to or less than line 4, you have no moving expense deduction. 1040ez form printable Subtract line 3 from line 4 and, if the result is more than zero, include it as income on Form 1040, line 7. 1040ez form printable Table 2. 1040ez form printable Reporting Your Moving Expenses and Reimbursements IF your Form W-2 shows. 1040ez form printable . 1040ez form printable . 1040ez form printable AND you have. 1040ez form printable . 1040ez form printable . 1040ez form printable THEN. 1040ez form printable . 1040ez form printable . 1040ez form printable your reimbursement reported only  in box 12 with code P moving expenses greater than the  amount in box 12 file Form 3903 showing all allowable  expenses* and reimbursements. 1040ez form printable your reimbursement reported only  in box 12 with code P moving expenses equal to the amount  in box 12 do not file Form 3903. 1040ez form printable your reimbursement divided  between box 12 and box 1 moving expenses greater than the  amount in box 12 file Form 3903 showing all allowable  expenses,* but only the  reimbursements reported in box 12 of  Form W-2. 1040ez form printable your entire reimbursement reported  as wages in box 1 moving expenses file Form 3903 showing all allowable  expenses,* but do not show any  reimbursements. 1040ez form printable no reimbursement moving expenses file Form 3903 showing all allowable  expenses. 1040ez form printable * * See Deductible Moving Expenses, earlier, for allowable expenses. 1040ez form printable    Where to deduct. 1040ez form printable   Deduct your moving expenses on Form 1040, line 26. 1040ez form printable The amount of moving expenses you can deduct is shown on Form 3903, line 5. 1040ez form printable    You cannot deduct moving expenses on Form 1040EZ or Form 1040A. 1040ez form printable   When To Deduct Expenses You may have a choice of when to deduct your moving expenses. 1040ez form printable Expenses not reimbursed. 1040ez form printable   If you were not reimbursed, deduct your moving expenses in the year you paid or incurred the expenses. 1040ez form printable Example. 1040ez form printable In December 2012, your employer transferred you to another city in the United States, where you still work. 1040ez form printable You are single and were not reimbursed for your moving expenses. 1040ez form printable In 2012, you paid for moving your furniture and deducted these expenses on your 2012 tax return. 1040ez form printable In January 2013, you paid for travel to the new city. 1040ez form printable You can deduct these additional expenses on your 2013 tax return. 1040ez form printable Expenses reimbursed. 1040ez form printable   If you are reimbursed for your expenses and you use the cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement. 1040ez form printable If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. 1040ez form printable See Choosing when to deduct, next. 1040ez form printable   If you deduct your expenses and you receive the reimbursement in a later year, you must include the reimbursement in your income on Form 1040, line 21. 1040ez form printable Choosing when to deduct. 1040ez form printable   If you use the cash method of accounting, which is used by most individuals, you can choose to deduct moving expenses in the year your employer reimburses you if: You paid the expenses in a year before the year of reimbursement, or You paid the expenses in the year immediately after the year of reimbursement but by the due date, including extensions, for filing your return for the reimbursement year. 1040ez form printable How to make the choice. 1040ez form printable   You choose to deduct moving expenses in the year you received reimbursement by taking the deduction on your return, or amended return, for that year. 1040ez form printable    You cannot deduct any moving expenses for which you received a reimbursement that was not included in your income. 1040ez form printable Illustrated Example Tom and Peggy Smith are married and have two children. 1040ez form printable They owned a home in Detroit where Tom worked. 1040ez form printable On February 8, 2013, Tom's employer told him that he would be transferred to San Diego as of April 10 that year. 1040ez form printable Peggy flew to San Diego on March 1 to look for a new home. 1040ez form printable She put a down payment of $25,000 on a house being built and returned to Detroit on March 4. 1040ez form printable The Smiths sold their Detroit home for $1,500 less than they paid for it. 1040ez form printable They contracted to have their personal effects moved to San Diego on April 3. 1040ez form printable The family drove to San Diego where they found that their new home was not finished. 1040ez form printable They stayed in a nearby motel until the house was ready on May 1. 1040ez form printable On April 10, Tom went to work in the San Diego plant where he still works. 1040ez form printable Their records for the move show: 1) Peggy's pre-move househunting  trip:       Travel and lodging   $ 449       Meals   75   $ 524 2) Down payment on San Diego  home 25,000 3) Real estate commission paid on  sale of Detroit home 3,500 4) Loss on sale of Detroit home (not  including real estate commission) 1,500 5) Amount paid for moving personal  effects (furniture, other household  goods, etc. 1040ez form printable ) 8,000 6) Expenses of driving to San Diego:       Mileage (Start 14,278;  End 16,478) 2,200 miles at 24 cents a mile   $ 528       Lodging   180       Meals   320   1,028 7) Cost of temporary living  expenses in San Diego:       Motel rooms   $1,450       Meals   2,280   3,730 Total $43,282   Tom was reimbursed $10,907 under an accountable plan. 1040ez form printable His employer gave him the following breakdown of the reimbursement that was allowed under the employer's plan. 1040ez form printable Moving personal effects   $6,800 Travel (and lodging) to San Diego   708 Travel (and lodging) for househunting trip   449 Lodging for temporary quarters   1,450 Loss on sale of home   1,500 Total reimbursement   $10,907 The employer included this reimbursement on Tom's Form W-2 for the year. 1040ez form printable The reimbursement of allowable expenses, $7,508 for moving household goods and travel to San Diego, was included in box 12 of Form W-2. 1040ez form printable His employer identified this amount with code P. 1040ez form printable The employer included the balance, $3,399 reimbursement of nonallowable expenses, in box 1 of Form W-2 with Tom's other wages. 1040ez form printable Tom must include this amount on Form 1040, line 7. 1040ez form printable The employer withholds taxes from the $3,399, as discussed under Reimbursement for deductible and nondeductible expenses under Tax Withholding and Estimated Tax, earlier. 1040ez form printable Also, Tom's employer could have given him a separate Form W-2 for his moving expense reimbursement. 1040ez form printable To figure his tax deduction for moving expenses, Tom enters the following amounts on Form 3903. 1040ez form printable Item 5 — moving personal effects (line 1)   $8,000 Item 6 — driving to San Diego ($528 + $180)  (line 2)   708 Total tax deductible moving expenses (line 3)   $8,708 Minus: Reimbursement included in box 12  of Form W-2 (line 4)   7,508 Tax deduction for moving expenses (line 5)   $1,200   Tom's Form 3903 is shown, later. 1040ez form printable He also enters his deduction, $1,200, on Form 1040, line 26. 1040ez form printable Nondeductible expenses. 1040ez form printable   Of the $43,282 expenses that Tom and Peggy incurred, the following items totaling $34,574 ($43,282 – $8,708) cannot be deducted. 1040ez form printable Item 1 — pre-move househunting expenses of $524. 1040ez form printable Item 2 — the $25,000 down payment on the San Diego home. 1040ez form printable If any part of it were for payment of deductible taxes or interest on the mortgage on the house, that part would be deductible as an itemized deduction. 1040ez form printable Item 3 — the $3,500 real estate commission paid on the sale of the Detroit home. 1040ez form printable The commission is used to figure the gain or loss on the sale. 1040ez form printable Item 4 — the $1,500 loss on the sale of the Detroit home. 1040ez form printable Item 6 — the $320 expense for meals while driving to San Diego. 1040ez form printable (However, the lodging and car expenses are deductible. 1040ez form printable ) Item 7 — temporary living expenses of $3,730. 1040ez form printable    This image is too large to be displayed in the current screen. 1040ez form printable Please click the link to view the image. 1040ez form printable 2012 Form 3903 Moving Expenses Members of the Armed Forces If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet the distance and time tests, discussed earlier. 1040ez form printable You can deduct your unreimbursed moving expenses. 1040ez form printable A permanent change of station includes: A move from your home to your first post of active duty, A move from one permanent post of duty to another, and A move from your last post of duty to your home or to a nearer point in the United States. 1040ez form printable The move must occur within one year of ending your active duty or within the period allowed under the Joint Travel Regulations. 1040ez form printable Spouse and dependents. 1040ez form printable   If a member of the Armed Forces dies, is imprisoned, or deserts, a permanent change of station for the spouse or dependent includes a move to: The place of enlistment, The member's, spouse's, or dependent's home of record, or A nearer point in the United States. 1040ez form printable   If the military moves you, your spouse, and dependents, to or from separate locations, the moves are treated as a single move to your new main job location. 1040ez form printable Services or reimbursements provided by government. 1040ez form printable   Do not include in income the value of moving and storage services provided by the government because of a permanent change of station. 1040ez form printable In general, if the total reimbursements or allowances you receive from the government because of the move are more than your actual moving expenses, the government must include the excess in your wages on Form W-2. 1040ez form printable However, the excess portion of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance is not included in income and should not be included in box 1 of Form W-2. 1040ez form printable   If your reimbursements or allowances are less than your actual moving expenses, do not include the reimbursements or allowances in income. 1040ez form printable You can deduct the expenses that are more than your reimbursements. 1040ez form printable See Deductible Moving Expenses, earlier. 1040ez form printable How to complete Form 3903 for members of the Armed Forces. 1040ez form printable    Take the following steps. 1040ez form printable Complete lines 1 through 3 of the form, using your actual expenses. 1040ez form printable Do not include any expenses for moving services provided by the government. 1040ez form printable Also, do not include any expenses that were reimbursed by an allowance you do not have to include in your income. 1040ez form printable Enter on line 4 the total reimbursements and allowances you received from the government for the expenses claimed on lines 1 and 2. 1040ez form printable Do not include the value of moving or storage services provided by the government. 1040ez form printable Also, do not include any part of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance. 1040ez form printable Complete line 5. 1040ez form printable If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 26. 1040ez form printable This is your moving expense deduction. 1040ez form printable If line 3 is equal to or less than line 4, you do not have a moving expense deduction. 1040ez form printable Subtract line 3 from line 4 and, if the result is more than zero, enter it on Form 1040, line 7. 1040ez form printable If the military moves you, your spouse and dependents, to or from different locations, treat these moves as a single move. 1040ez form printable    Do not deduct any expenses for moving or storage services provided by the government. 1040ez form printable How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. 1040ez form printable Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. 1040ez form printable Free help with your tax return. 1040ez form printable   Free help in preparing your return is available nationwide from IRS-certified volunteers. 1040ez form printable The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. 1040ez form printable The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 1040ez form printable Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040ez form printable Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. 1040ez form printable To find the nearest VITA or TCE site, visit IRS. 1040ez form printable gov or call 1-800-906-9887. 1040ez form printable   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040ez form printable To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1040ez form printable aarp. 1040ez form printable org/money/taxaide or call 1-888-227-7669. 1040ez form printable   For more information on these programs, go to IRS. 1040ez form printable gov and enter “VITA” in the search box. 1040ez form printable Internet. 1040ez form printable IRS. 1040ez form printable gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. 1040ez form printable Apply for an Employer Identification Number (EIN). 1040ez form printable Go to IRS. 1040ez form printable gov and enter Apply for an EIN in the search box. 1040ez form printable Request an Electronic Filing PIN by going to IRS. 1040ez form printable gov and entering Electronic Filing PIN in the search box. 1040ez form printable Check the status of your 2013 refund with Where's My Refund? Go to IRS. 1040ez form printable gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040ez form printable If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1040ez form printable Check the status of your amended return. 1040ez form printable Go to IRS. 1040ez form printable gov and enter Where's My Amended Return in the search box. 1040ez form printable Download forms, instructions, and publications, including some accessible versions. 1040ez form printable Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. 1040ez form printable gov or IRS2Go. 1040ez form printable Tax return and tax account transcripts are generally available for the current year and past three years. 1040ez form printable Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1040ez form printable gov. 1040ez form printable Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 1040ez form printable Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1040ez form printable gov. 1040ez form printable Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. 1040ez form printable gov or IRS2Go. 1040ez form printable Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. 1040ez form printable An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. 1040ez form printable Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. 1040ez form printable If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. 1040ez form printable Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1040ez form printable Locate the nearest volunteer help site with the VITA Locator Tool on IRS. 1040ez form printable gov. 1040ez form printable Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040ez form printable The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040ez form printable Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. 1040ez form printable AARP offers the Tax-Aide counseling program as part of the TCE program. 1040ez form printable Visit AARP's website to find the nearest Tax-Aide location. 1040ez form printable Research your tax questions. 1040ez form printable Search publications and instructions by topic or keyword. 1040ez form printable Read the Internal Revenue Code, regulations, or other official guidance. 1040ez form printable Read Internal Revenue Bulletins. 1040ez form printable Sign up to receive local and national tax news by email. 1040ez form printable Phone. 1040ez form printable You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1040ez form printable Download the free IRS2Go mobile app from the iTunes app store or from Google Play. 1040ez form printable Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1040ez form printable Call to locate the nearest volunteer help site, 1-800-906-9887. 1040ez form printable Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040ez form printable The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040ez form printable Most VITA and TCE sites offer free electronic filing. 1040ez form printable Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 1040ez form printable Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 1040ez form printable Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. 1040ez form printable The automated Where's My Refund? information is available 24 hours a day, 7 days a week. 1040ez form printable If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1040ez form printable Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 1040ez form printable Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040ez form printable Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. 1040ez form printable Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 1040ez form printable Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). 1040ez form printable You should receive your order within 10 business days. 1040ez form printable Call to order transcripts of your tax returns or tax account, 1-800-908-9946. 1040ez form printable Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. 1040ez form printable Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. 1040ez form printable Call to ask tax questions, 1-800-829-1040. 1040ez form printable Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 1040ez form printable The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 1040ez form printable These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. 1040ez form printable gsa. 1040ez form printable gov/fedrelay. 1040ez form printable Walk-in. 1040ez form printable You can find a selection of forms, publications and services — in-person, face-to-face. 1040ez form printable Products. 1040ez form printable You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040ez form printable Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 1040ez form printable Services. 1040ez form printable You can walk in to your local TAC most business days for personal, face-to-face tax help. 1040ez form printable An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 1040ez form printable If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. 1040ez form printable No appointment is necessary—just walk in. 1040ez form printable Before visiting, check www. 1040ez form printable irs. 1040ez form printable gov/localcontacts for hours of operation and services provided. 1040ez form printable Mail. 1040ez form printable You can send your order for forms, instructions, and publications to the address below. 1040ez form printable You should receive a response within 10 business days after your request is received. 1040ez form printable  Internal Revenue Service 1201 N. 1040ez form printable Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. 1040ez form printable   The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1040ez form printable Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 1040ez form printable What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. 1040ez form printable We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 1040ez form printable You face (or your business is facing) an immediate threat of adverse action. 1040ez form printable You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 1040ez form printable   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 1040ez form printable Here's why we can help: TAS is an independent organization within the IRS. 1040ez form printable Our advocates know how to work with the IRS. 1040ez form printable Our services are free and tailored to meet your needs. 1040ez form printable We have offices in every state, the District of Columbia, and Puerto Rico. 1040ez form printable How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. 1040ez form printable irs. 1040ez form printable gov/advocate, or call us toll-free at 1-877-777-4778. 1040ez form printable How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 1040ez form printable If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 1040ez form printable irs. 1040ez form printable gov/sams. 1040ez form printable Low Income Taxpayer Clinics. 1040ez form printable   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. 1040ez form printable Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 1040ez form printable Visit www. 1040ez form printable TaxpayerAdvocate. 1040ez form printable irs. 1040ez form printable gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. 1040ez form printable Prev  Up  Next   Home   More Online Publications
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The 1040ez Form Printable

1040ez form printable Publication 925 - Main Content Table of Contents Passive Activity LimitsWho Must Use These Rules? Passive Activity Loss Passive Activity Credit Publicly Traded Partnership Excess Farm Loss Passive Activities Activities That Are Not Passive Activities Passive Activity Income and Deductions Grouping Your Activities Recharacterization of Passive Income Dispositions How To Report Your Passive Activity Loss Comprehensive ExampleGeneral Information At-Risk LimitsWho Is Affected? Activities Covered by the At-Risk Rules At-Risk Amounts Amounts Not At Risk Reductions of Amounts At Risk Recapture Rule How To Get Tax HelpLow Income Taxpayer Clinics Passive Activity Limits Who Must Use These Rules? The passive activity rules apply to: Individuals, Estates, Trusts (other than grantor trusts), Personal service corporations, and Closely held corporations. 1040ez form printable Even though the rules do not apply to grantor trusts, partnerships, and S corporations directly, they do apply to the owners of these entities. 1040ez form printable For information about personal service corporations and closely held corporations, including definitions and how the passive activity rules apply to these corporations, see Form 8810 and its instructions. 1040ez form printable Before applying the passive activity limits, you must first determine the amount of the deductions disallowed under the basis, excess farm loss, or at-risk rules. 1040ez form printable See Passive Activity Deductions, later. 1040ez form printable Passive Activity Loss Generally, the passive activity loss for the tax year is not allowed. 1040ez form printable However, there is a special allowance under which some or all of your passive activity loss may be allowed. 1040ez form printable See Special $25,000 allowance , later. 1040ez form printable Definition of passive activity loss. 1040ez form printable    Generally, your passive activity loss for the tax year is the excess of your passive activity deductions over your passive activity gross income. 1040ez form printable See Passive Activity Income and Deductions , later. 1040ez form printable   For a closely held corporation, the passive activity loss is the excess of passive activity deductions over the sum of passive activity gross income and net active income. 1040ez form printable For details on net active income, see the Instructions for Form 8810. 1040ez form printable For the definition of passive activity gross income, see Passive Activity Income , later. 1040ez form printable For the definition of passive activity deductions, see Passive Activity Deductions , later. 1040ez form printable Identification of Disallowed Passive Activity Deductions If all or a part of your passive activity loss is disallowed for the tax year, you may need to allocate the disallowed passive activity loss among different passive activities and among different deductions within a passive activity. 1040ez form printable Allocation of disallowed passive activity loss among activities. 1040ez form printable   If all or any part of your passive activity loss is disallowed for the tax year, a ratable portion of the loss (if any) from each of your passive activities is disallowed. 1040ez form printable The ratable portion of a loss from an activity is computed by multiplying the passive activity loss that is disallowed for the tax year by the fraction obtained by dividing: The loss from the activity for the tax year; by The sum of the losses for the tax year from all activities having losses for the tax year. 1040ez form printable Use Worksheet 5 of Form 8582 to figure the ratable portion of the loss from each activity that is disallowed. 1040ez form printable Loss from an activity. 1040ez form printable   The term “loss from an activity” means: The amount by which the passive activity deductions (defined later) from the activity for the tax year exceed the passive activity gross income (defined later) from the activity for the tax year; reduced by Any part of such amount that is allowed under the Special $25,000 Allowance , later. 1040ez form printable   If your passive activity gross income from significant participation passive activities (defined later) for the tax year is more than your passive activity deductions from those activities for the tax year, those activities shall be treated, solely for purposes of figuring your loss from the activity, as a single activity that does not have a loss for such taxable year. 1040ez form printable See Significant Participation Passive Activities , later. 1040ez form printable Example. 1040ez form printable John Pine holds interests in three passive activities, A, B, and C. 1040ez form printable The gross income and deductions from these activities for the taxable year are as follows:   A B C Total Gross income $7,000 $4,000 $12,000 $23,000 Deductions (16,000) (20,000) (8,000) (44,000)           Net income (loss) ($9,000) ($16,000) $4,000 ($21,000)   John Pine’s $21,000 passive activity loss for the taxable year is disallowed. 1040ez form printable Therefore, a ratable portion of the losses from activities A and B is disallowed. 1040ez form printable He figures the disallowed portion of each loss as follows: A: $21,000 x $9,000/$25,000 $7,560 B: $21,000 x $16,000/$25,000 13,440     Total $21,000 Allocation within loss activities. 1040ez form printable   If all or any part of your loss from an activity is disallowed under Allocation of disallowed passive activity loss among activities for the tax year, a ratable portion of each of your passive activity deductions (defined later), other than an excluded deduction (defined below) from such activity is disallowed. 1040ez form printable The ratable portion of a passive activity deduction is the amount of the disallowed portion of the loss from the activity for the tax year multiplied by the fraction obtained by dividing: The amount of such deduction; by The sum of all of your passive activity deductions (other than excluded deductions) from that activity from the tax year. 1040ez form printable Excluded deductions. 1040ez form printable    “Excluded deduction” means any passive activity deduction that is taken into account in computing your net income from an item of property for a taxable year in which an amount of the taxpayer's gross income from such item of property is treated as not from a passive activity. 1040ez form printable See Recharacterization of Passive Income , later. 1040ez form printable Separately identified deductions. 1040ez form printable   In identifying the deductions from an activity that are disallowed, you do not need to account separately for a deduction unless such deduction may, if separately taken into account, result in an income tax liability for any tax year different from that which would result were such deduction not taken into account separately. 1040ez form printable   Use Form 8582, Worksheet 7, for any activity if you have passive activity deductions for that activity that must be separately identified. 1040ez form printable   Deductions that must be accounted for separately include (but are not limited to) the following deductions. 1040ez form printable Deductions that arise in a rental real estate activity in tax years in which you actively participate in such activity. 1040ez form printable See Active participation , later. 1040ez form printable Deductions that arise in a rental real estate activity in tax years in which you do not actively participate in such activity. 1040ez form printable See Active participation , later. 1040ez form printable Losses from sales or exchanges of capital assets. 1040ez form printable Section 1231 losses. 1040ez form printable See Section 1231 Gains and Losses in Publication 544, Sales and Other Disposition of Assets, for more information. 1040ez form printable Carryover of Disallowed Deductions In the case of an activity with respect to which any deductions or credits are disallowed for a taxable year (the loss activity), the disallowed deductions are allocated among your activities for the next tax year in a manner that reasonably reflects the extent to which each activity continues the loss activity. 1040ez form printable The disallowed deductions or credits allocated to an activity under the preceding sentence are treated as deductions or credits from the activity for the next tax year. 1040ez form printable For more information, see Regulations section 1. 1040ez form printable 469-1(f)(4). 1040ez form printable Passive Activity Credit Generally, the passive activity credit for the tax year is disallowed. 1040ez form printable The passive activity credit is the amount by which the sum of all your credits subject to the passive activity rules exceed your regular tax liability allocable to all passive activities for the tax year. 1040ez form printable Credits that are included in figuring the general business credit are subject to the passive activity rules. 1040ez form printable See the Instructions for Form 8582-CR for more information. 1040ez form printable Publicly Traded Partnership You must apply the rules in this part separately to your income or loss from a passive activity held through a publicly traded partnership (PTP). 1040ez form printable You also must apply the limit on passive activity credits separately to your credits from a passive activity held through a PTP. 1040ez form printable You can offset deductions from passive activities of a PTP only against income or gain from passive activities of the same PTP. 1040ez form printable Likewise, you can offset credits from passive activities of a PTP only against the tax on the net passive income from the same PTP. 1040ez form printable This separate treatment rule also applies to a regulated investment company holding an interest in a PTP for the items attributable to that interest. 1040ez form printable For more information on how to apply the passive activity loss rules to PTPs, and on how to apply the limit on passive activity credits to PTPs, see Publicly Traded Partnerships (PTPs) in the Instructions for Forms 8582 and 8582-CR, respectively. 1040ez form printable Excess Farm Loss If you receive an applicable subsidy for any tax year and you have an excess farm loss for the tax year, special rules apply. 1040ez form printable These rules do not apply to C corporations. 1040ez form printable For information, see the Instructions for Schedule F (Form 1040), Profit or Loss From Farming. 1040ez form printable Passive Activities There are two kinds of passive activities. 1040ez form printable Trade or business activities in which you do not materially participate during the year. 1040ez form printable Rental activities, even if you do materially participate in them, unless you are a real estate professional. 1040ez form printable Material participation in a trade or business is discussed later, under Activities That Are Not Passive Activities . 1040ez form printable Treatment of former passive activities. 1040ez form printable   A former passive activity is an activity that was a passive activity in any earlier tax year, but is not a passive activity in the current tax year. 1040ez form printable You can deduct a prior year's unallowed loss from the activity up to the amount of your current year net income from the activity. 1040ez form printable Treat any remaining prior year unallowed loss like you treat any other passive loss. 1040ez form printable   In addition, any prior year unallowed passive activity credits from a former passive activity offset the allocable part of your current year tax liability. 1040ez form printable The allocable part of your current year tax liability is that part of this year's tax liability that is allocable to the current year net income from the former passive activity. 1040ez form printable You figure this after you reduce your net income from the activity by any prior year unallowed loss from that activity (but not below zero). 1040ez form printable Trade or Business Activities A trade or business activity is an activity that: Involves the conduct of a trade or business (that is, deductions would be allowable under section 162 of the Internal Revenue Code if other limitations, such as the passive activity rules, did not apply), Is conducted in anticipation of starting a trade or business, or Involves research or experimental expenditures that are deductible under Internal Revenue Code section 174 (or that would be deductible if you chose to deduct rather than capitalize them). 1040ez form printable A trade or business activity does not include a rental activity or the rental of property that is incidental to an activity of holding the property for investment. 1040ez form printable You generally report trade or business activities on Schedule C, C-EZ, F, or in Part II or III of Schedule E. 1040ez form printable Rental Activities A rental activity is a passive activity even if you materially participated in that activity, unless you materially participated as a real estate professional. 1040ez form printable See Real Estate Professional under Activities That Are Not Passive Activities, later. 1040ez form printable An activity is a rental activity if tangible property (real or personal) is used by customers or held for use by customers, and the gross income (or expected gross income) from the activity represents amounts paid (or to be paid) mainly for the use of the property. 1040ez form printable It does not matter whether the use is under a lease, a service contract, or some other arrangement. 1040ez form printable Exceptions. 1040ez form printable   Your activity is not a rental activity if any of the following apply. 1040ez form printable The average period of customer use of the property is 7 days or less. 1040ez form printable You figure the average period of customer use by dividing the total number of days in all rental periods by the number of rentals during the tax year. 1040ez form printable If the activity involves renting more than one class of property, multiply the average period of customer use of each class by a fraction. 1040ez form printable The numerator of the fraction is the gross rental income from that class of property and the denominator is the activity's total gross rental income. 1040ez form printable The activity's average period of customer use will equal the sum of the amounts for each class. 1040ez form printable The average period of customer use of the property, as figured in (1) above, is 30 days or less and you provide significant personal services with the rentals. 1040ez form printable Significant personal services include only services performed by individuals. 1040ez form printable To determine if personal services are significant, all relevant facts and circumstances are taken into consideration, including the frequency of the services, the type and amount of labor required to perform the services, and the value of the services relative to the amount charged for use of the property. 1040ez form printable Significant personal services do not include the following. 1040ez form printable Services needed to permit the lawful use of the property, Services to repair or improve property that would extend its useful life for a period substantially longer than the average rental, and Services that are similar to those commonly provided with long-term rentals of real estate, such as cleaning and maintenance of common areas or routine repairs. 1040ez form printable You provide extraordinary personal services in making the rental property available for customer use. 1040ez form printable Services are extraordinary personal services if they are performed by individuals and the customers' use of the property is incidental to their receipt of the services. 1040ez form printable The rental is incidental to a nonrental activity. 1040ez form printable The rental of property is incidental to an activity of holding property for investment if the main purpose of holding the property is to realize a gain from its appreciation and the gross rental income from the property is less than 2% of the smaller of the property's unadjusted basis or fair market value. 1040ez form printable The unadjusted basis of property is its cost not reduced by depreciation or any other basis adjustment. 1040ez form printable The rental of property is incidental to a trade or business activity if all of the following apply. 1040ez form printable You own an interest in the trade or business activity during the year. 1040ez form printable The rental property was used mainly in that trade or business activity during the current year, or during at least 2 of the 5 preceding tax years. 1040ez form printable Your gross rental income from the property is less than 2% of the smaller of its unadjusted basis or fair market value. 1040ez form printable Lodging provided to an employee or the employee's spouse or dependents is incidental to the activity or activities in which the employee performs services if the lodging is furnished for the employer's convenience. 1040ez form printable You customarily make the rental property available during defined business hours for nonexclusive use by various customers. 1040ez form printable You provide the property for use in a nonrental activity in your capacity as an owner of an interest in the partnership, S corporation, or joint venture conducting that activity. 1040ez form printable    If you meet any of the exceptions listed above, see the instructions for Form 8582 for information about how to report any income or loss from the activity. 1040ez form printable Special $25,000 allowance. 1040ez form printable   If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that is disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. 1040ez form printable This special allowance is an exception to the general rule disallowing the passive activity loss. 1040ez form printable Similarly, you can offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. 1040ez form printable   If you are married, filing a separate return, and lived apart from your spouse for the entire tax year, your special allowance cannot be more than $12,500. 1040ez form printable If you lived with your spouse at any time during the year and are filing a separate return, you cannot use the special allowance to reduce your nonpassive income or tax on nonpassive income. 1040ez form printable   The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. 1040ez form printable See Phaseout rule , later. 1040ez form printable Example. 1040ez form printable Kate, a single taxpayer, has $70,000 in wages, $15,000 income from a limited partnership, a $26,000 loss from rental real estate activities in which she actively participated, and is not subject to the modified adjusted gross income phaseout rule. 1040ez form printable She can use $15,000 of her $26,000 loss to offset her $15,000 passive income from the partnership. 1040ez form printable She actively participated in her rental real estate activities, so she can use the remaining $11,000 rental real estate loss to offset $11,000 of her nonpassive income (wages). 1040ez form printable Commercial revitalization deduction (CRD). 1040ez form printable   The special allowance must first be applied to losses from rental real estate activities figured without the CRD. 1040ez form printable Any remaining part of the special allowance is available for the CRD from the rental real estate activities and is not subject to the active participation rules or the phaseout based on modified adjusted gross income. 1040ez form printable You cannot claim a CRD for a building placed in service after December 31, 2009. 1040ez form printable Active participation. 1040ez form printable   Active participation is not the same as material participation (defined later). 1040ez form printable Active participation is a less stringent standard than material participation. 1040ez form printable For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. 1040ez form printable Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. 1040ez form printable   Only individuals can actively participate in rental real estate activities. 1040ez form printable However, a decedent's estate is treated as actively participating for its tax years ending less than 2 years after the decedent's death, if the decedent would have satisfied the active participation requirement for the activity for the tax year the decedent died. 1040ez form printable   A decedent's qualified revocable trust can also be treated as actively participating if both the trustee and the executor (if any) of the estate choose to treat the trust as part of the estate. 1040ez form printable The choice applies to tax years ending after the decedent's death and before: 2 years after the decedent's death if no estate tax return is required, or 6 months after the estate tax liability is finally determined if an estate tax return is required. 1040ez form printable   The choice is irrevocable and cannot be made later than the due date for the estate's first income tax return (including any extensions). 1040ez form printable   Limited partners are not treated as actively participating in a partnership's rental real estate activities. 1040ez form printable   You are not treated as actively participating in a rental real estate activity unless your interest in the activity (including your spouse's interest) was at least 10% (by value) of all interests in the activity throughout the year. 1040ez form printable   Active participation is not required to take the low-income housing credit, the rehabilitation investment credit, or CRD from rental real estate activities. 1040ez form printable Example. 1040ez form printable Mike, a single taxpayer, had the following income and loss during the tax year: Salary $42,300 Dividends 300 Interest 1,400 Rental loss (4,000) The rental loss came from a house Mike owned. 1040ez form printable He advertised and rented the house to the current tenant himself. 1040ez form printable He also collected the rents and did the repairs or hired someone to do them. 1040ez form printable Even though the rental loss is a loss from a passive activity, Mike can use the entire $4,000 loss to offset his other income because he actively participated. 1040ez form printable Phaseout rule. 1040ez form printable   The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that is more than $100,000 ($50,000 if you are married filing separately). 1040ez form printable If your modified adjusted gross income is $150,000 or more ($75,000 or more if you are married filing separately), you generally cannot use the special allowance. 1040ez form printable    Modified adjusted gross income for this purpose is your adjusted gross income figured without the following. 1040ez form printable Taxable social security and tier 1 railroad retirement benefits. 1040ez form printable Deductible contributions to individual retirement accounts (IRAs) and section 501(c)(18) pension plans. 1040ez form printable The exclusion from income of interest from qualified U. 1040ez form printable S. 1040ez form printable savings bonds used to pay qualified higher education expenses. 1040ez form printable The exclusion from income of amounts received from an employer's adoption assistance program. 1040ez form printable Passive activity income or loss included on Form 8582. 1040ez form printable Any rental real estate loss allowed because you materially participated in the rental activity as a Real Estate Professional (as discussed later, under Activities That Are Not Passive Activities). 1040ez form printable Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the instructions for Form 8582). 1040ez form printable The deduction for the employer-equivalent portion of self-employment tax. 1040ez form printable The deduction for domestic production activities. 1040ez form printable The deduction allowed for interest on student loans. 1040ez form printable The deduction for qualified tuition and related expenses. 1040ez form printable Example. 1040ez form printable During 2013, John was unmarried and was not a real estate professional. 1040ez form printable For 2013, he had $120,000 in salary and a $31,000 loss from his rental real estate activities in which he actively participated. 1040ez form printable His modified adjusted gross income is $120,000. 1040ez form printable When he files his 2013 return, he can deduct only $15,000 of his passive activity loss. 1040ez form printable He must carry over the remaining $16,000 passive activity loss to 2014. 1040ez form printable He figures his deduction and carryover as follows: Adjusted gross income, modified as required $120,000       Minus amount not subject to phaseout 100,000 Amount subject to phaseout rule $20,000 Multiply by 50% × 50% Required reduction to special allowance $10,000 Maximum special allowance $25,000 Minus required reduction (see above) 10,000 Adjusted special allowance $15,000 Passive loss from rental real estate $31,000 Deduction allowable/Adjusted  special allowance (see above) 15,000       Amount that must be carried forward $16,000 Exceptions to the phaseout rules. 1040ez form printable   A higher phaseout range applies to rehabilitation investment credits from rental real estate activities. 1040ez form printable For those credits, the phaseout of the $25,000 special allowance starts when your modified adjusted gross income exceeds $200,000 ($100,000 if you are a married individual filing a separate return and living apart at all times during the year). 1040ez form printable   There is no phaseout of the $25,000 special allowance for low-income housing credits or for the CRD. 1040ez form printable Ordering rules. 1040ez form printable   If you have more than one of the exceptions to the phaseout rules in the same tax year, you must apply the $25,000 phaseout against your passive activity losses and credits in the following order. 1040ez form printable The portion of passive activity losses not attributable to the CRD. 1040ez form printable The portion of passive activity losses attributable to the CRD. 1040ez form printable The portion of passive activity credits attributable to credits other than the rehabilitation and low-income housing credits. 1040ez form printable The portion of passive activity credits attributable to the rehabilitation credit. 1040ez form printable The portion of passive activity credits attributable to the low-income housing credit. 1040ez form printable Activities That Are Not Passive Activities The following are not passive activities. 1040ez form printable Trade or business activities in which you materially participated for the tax year. 1040ez form printable A working interest in an oil or gas well which you hold directly or through an entity that does not limit your liability (such as a general partner interest in a partnership). 1040ez form printable It does not matter whether you materially participated in the activity for the tax year. 1040ez form printable However, if your liability was limited for part of the year (for example, you converted your general partner interest to a limited partner interest during the year) and you had a net loss from the well for the year, some of your income and deductions from the working interest may be treated as passive activity gross income and passive activity deductions. 1040ez form printable  See Temporary Regulations section 1. 1040ez form printable 469-1T(e)(4)(ii). 1040ez form printable The rental of a dwelling unit that you also used for personal purposes during the year for more than the greater of 14 days or 10% of the number of days during the year that the home was rented at a fair rental. 1040ez form printable An activity of trading personal property for the account of those who own interests in the activity. 1040ez form printable See Temporary Regulations section 1. 1040ez form printable 469-1T(e)(6). 1040ez form printable Rental real estate activities in which you materially participated as a real estate professional. 1040ez form printable See Real Estate Professional , later. 1040ez form printable You should not enter income and losses from these activities on Form 8582. 1040ez form printable Instead, enter them on the forms or schedules you would normally use. 1040ez form printable Material Participation A trade or business activity is not a passive activity if you materially participated in the activity. 1040ez form printable Material participation tests. 1040ez form printable    You materially participated in a trade or business activity for a tax year if you satisfy any of the following tests. 1040ez form printable You participated in the activity for more than 500 hours. 1040ez form printable Your participation was substantially all the participation in the activity of all individuals for the tax year, including the participation of individuals who did not own any interest in the activity. 1040ez form printable You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual (including individuals who did not own any interest in the activity) for the year. 1040ez form printable The activity is a significant participation activity, and you participated in all significant participation activities for more than 500 hours. 1040ez form printable A significant participation activity is any trade or business activity in which you participated for more than 100 hours during the year and in which you did not materially participate under any of the material participation tests, other than this test. 1040ez form printable See Significant Participation Passive Activities , under Recharacterization of Passive Income, later. 1040ez form printable You materially participated in the activity for any 5 (whether or not consecutive) of the 10 immediately preceding tax years. 1040ez form printable The activity is a personal service activity in which you materially participated for any 3 (whether or not consecutive) preceding tax years. 1040ez form printable An activity is a personal service activity if it involves the performance of personal services in the fields of health (including veterinary services), law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or any other trade or business in which capital is not a material income-producing factor. 1040ez form printable Based on all the facts and circumstances, you participated in the activity on a regular, continuous, and substantial basis during the year. 1040ez form printable   You did not materially participate in the activity under test (7) if you participated in the activity for 100 hours or less during the year. 1040ez form printable Your participation in managing the activity does not count in determining whether you materially participated under this test if: Any person other than you received compensation for managing the activity, or Any individual spent more hours during the tax year managing the activity than you did (regardless of whether the individual was compensated for the management services). 1040ez form printable Participation. 1040ez form printable   In general, any work you do in connection with an activity in which you own an interest is treated as participation in the activity. 1040ez form printable Work not usually performed by owners. 1040ez form printable   You do not treat the work you do in connection with an activity as participation in the activity if both of the following are true. 1040ez form printable The work is not work that is customarily done by the owner of that type of activity. 1040ez form printable One of your main reasons for doing the work is to avoid the disallowance of any loss or credit from the activity under the passive activity rules. 1040ez form printable Participation as an investor. 1040ez form printable   You do not treat the work you do in your capacity as an investor in an activity as participation unless you are directly involved in the day-to-day management or operations of the activity. 1040ez form printable Work you do as an investor includes: Studying and reviewing financial statements or reports on operations of the activity, Preparing or compiling summaries or analyses of the finances or operations of the activity for your own use, and Monitoring the finances or operations of the activity in a nonmanagerial capacity. 1040ez form printable Spouse's participation. 1040ez form printable   Your participation in an activity includes your spouse's participation. 1040ez form printable This applies even if your spouse did not own any interest in the activity and you and your spouse do not file a joint return for the year. 1040ez form printable Proof of participation. 1040ez form printable You can use any reasonable method to prove your participation in an activity for the year. 1040ez form printable You do not have to keep contemporaneous daily time reports, logs, or similar documents if you can establish your participation in some other way. 1040ez form printable For example, you can show the services you performed and the approximate number of hours spent by using an appointment book, calendar, or narrative summary. 1040ez form printable Limited partners. 1040ez form printable   If you owned an activity as a limited partner, you generally are not treated as materially participating in the activity. 1040ez form printable However, you are treated as materially participating in the activity if you met test (1), (5), or (6) under Material participation tests , discussed earlier, for the tax year. 1040ez form printable   You are not treated as a limited partner, however, if you also were a general partner in the partnership at all times during the partnership's tax year ending with or within your tax year (or, if shorter, during that part of the partnership's tax year in which you directly or indirectly owned your limited partner interest). 1040ez form printable Retired or disabled farmer and surviving spouse of a farmer. 1040ez form printable   If you are a retired or disabled farmer, you are treated as materially participating in a farming activity if you materially participated for 5 or more of the 8 years before your retirement or disability. 1040ez form printable Similarly, if you are a surviving spouse of a farmer, you are treated as materially participating in a farming activity if the real property used in the activity meets the estate tax rules for special valuation of farm property passed from a qualifying decedent, and you actively manage the farm. 1040ez form printable Corporations. 1040ez form printable   A closely held corporation or a personal service corporation is treated as materially participating in an activity only if one or more shareholders holding more than 50% by value of the outstanding stock of the corporation materially participate in the activity. 1040ez form printable   A closely held corporation can also satisfy the material participation standard by meeting the first two requirements for the qualifying business exception from the at-risk limits. 1040ez form printable See Special exception for qualified corporations under Activities Covered by the At-Risk Rules, later. 1040ez form printable Real Estate Professional Generally, rental activities are passive activities even if you materially participated in them. 1040ez form printable However, if you qualified as a real estate professional, rental real estate activities in which you materially participated are not passive activities. 1040ez form printable For this purpose, each interest you have in a rental real estate activity is a separate activity, unless you choose to treat all interests in rental real estate activities as one activity. 1040ez form printable See the Instructions for Schedule E (Form 1040), Supplemental Income and Loss, for information about making this choice. 1040ez form printable If you qualified as a real estate professional for 2013, report income or losses from rental real estate activities in which you materially participated as nonpassive income or losses, and complete line 43 of Schedule E (Form 1040). 1040ez form printable If you also have an unallowed loss from these activities from an earlier year when you did not qualify, see Treatment of former passive activities under Passive Activities, earlier. 1040ez form printable Qualifications. 1040ez form printable   You qualified as a real estate professional for the year if you met both of the following requirements. 1040ez form printable More than half of the personal services you performed in all trades or businesses during the tax year were performed in real property trades or businesses in which you materially participated. 1040ez form printable You performed more than 750 hours of services during the tax year in real property trades or businesses in which you materially participated. 1040ez form printable   Do not count personal services you performed as an employee in real property trades or businesses unless you were a 5% owner of your employer. 1040ez form printable You were a 5% owner if you owned (or are considered to have owned) more than 5% of your employer's outstanding stock, outstanding voting stock, or capital or profits interest. 1040ez form printable   If you file a joint return, do not count your spouse's personal services to determine whether you met the preceding requirements. 1040ez form printable However, you can count your spouse's participation in an activity in determining if you materially participated. 1040ez form printable Real property trades or businesses. 1040ez form printable   A real property trade or business is a trade or business that does any of the following with real property. 1040ez form printable Develops or redevelops it. 1040ez form printable Constructs or reconstructs it. 1040ez form printable Acquires it. 1040ez form printable Converts it. 1040ez form printable Rents or leases it. 1040ez form printable Operates or manages it. 1040ez form printable Brokers it. 1040ez form printable Closely held corporations. 1040ez form printable   A closely held corporation can qualify as a real estate professional if more than 50% of the gross receipts for its tax year came from real property trades or businesses in which it materially participated. 1040ez form printable Passive Activity Income and Deductions In figuring your net income or loss from a passive activity, take into account only passive activity income and passive activity deductions. 1040ez form printable Self-charged interest. 1040ez form printable   Certain self-charged interest income or deductions may be treated as passive activity gross income or passive activity deductions if the loan proceeds are used in a passive activity. 1040ez form printable   Generally, self-charged interest income and deductions result from loans between you and a partnership or S corporation in which you had a direct or indirect ownership interest. 1040ez form printable This includes both loans you made to the partnership or S corporation and loans the partnership or S corporation made to you. 1040ez form printable   It also includes loans from one partnership or S corporation to another partnership or S corporation if each owner in the borrowing entity has the same proportional ownership interest in the lending entity. 1040ez form printable    Exception. 1040ez form printable The self-charged interest rules do not apply to your interest in a partnership or S corporation if the entity made an election under Regulations section 1. 1040ez form printable 469-7(g) to avoid the application of these rules. 1040ez form printable For more details on the self-charged interest rules, see Regulations section 1. 1040ez form printable 469-7. 1040ez form printable Passive Activity Income Passive activity income includes all income from passive activities and generally includes gain from disposition of an interest in a passive activity or property used in a passive activity. 1040ez form printable Passive activity income does not include the following items. 1040ez form printable Income from an activity that is not a passive activity. 1040ez form printable These activities are discussed under Activities That Are Not Passive Activities , earlier. 1040ez form printable Portfolio income. 1040ez form printable This includes interest, dividends, annuities, and royalties not derived in the ordinary course of a trade or business. 1040ez form printable It includes gain or loss from the disposition of property that produces these types of income or that is held for investment. 1040ez form printable The exclusion for portfolio income does not apply to self-charged interest treated as passive activity income. 1040ez form printable For more information on self-charged interest, see Self-charged interest , earlier. 1040ez form printable Personal service income. 1040ez form printable This includes salaries, wages, commissions, self-employment income from trade or business activities in which you materially participated, deferred compensation, taxable social security and other retirement benefits, and payments from partnerships to partners for personal services. 1040ez form printable Income from positive section 481 adjustments allocated to activities other than passive activities. 1040ez form printable (Section 481 adjustments are adjustments that must be made due to changes in your accounting method. 1040ez form printable ) Income or gain from investments of working capital. 1040ez form printable Income from an oil or gas property if you treated any loss from a working interest in the property for any tax year beginning after 1986 as a nonpassive loss, as discussed in item (2) under Activities That Are Not Passive Activities , earlier. 1040ez form printable This also applies to income from other oil and gas property the basis of which is determined wholly or partly by the basis of the property in the preceding sentence. 1040ez form printable Any income from intangible property, such as a patent, copyright, or literary, musical, or artistic composition, if your personal efforts significantly contributed to the creation of the property. 1040ez form printable Any other income that must be treated as nonpassive income. 1040ez form printable See Recharacterization of Passive Income , later. 1040ez form printable Overall gain from any interest in a publicly traded partnership. 1040ez form printable See Publicly Traded Partnerships (PTPs) in the instructions for Form 8582. 1040ez form printable State, local, and foreign income tax refunds. 1040ez form printable Income from a covenant not to compete. 1040ez form printable Reimbursement of a casualty or theft loss included in gross income to recover all or part of a prior year loss deduction, if the loss deduction was not a passive activity deduction. 1040ez form printable Alaska Permanent Fund dividends. 1040ez form printable Cancellation of debt income, if at the time the debt is discharged the debt is not allocated to passive activities under the interest expense allocation rules. 1040ez form printable See chapter 4 of Publication 535, Business Expenses, for information about the rules for allocating interest. 1040ez form printable Disposition of property interests. 1040ez form printable   Gain on the disposition of an interest in property generally is passive activity income if, at the time of the disposition, the property was used in an activity that was a passive activity in the year of disposition. 1040ez form printable The gain generally is not passive activity income if, at the time of disposition, the property was used in an activity that was not a passive activity in the year of disposition. 1040ez form printable An exception to this general rule may apply if you previously used the property in a different activity. 1040ez form printable Exception for more than one use in the preceding 12 months. 1040ez form printable   If you used the property in more than one activity during the 12-month period before its disposition, you must allocate the gain between the activities on a basis that reasonably reflects the property's use during that period. 1040ez form printable Any gain allocated to a passive activity is passive activity income. 1040ez form printable   For this purpose, an allocation of the gain solely to the activity in which the property was mainly used during that period reasonably reflects the property's use if the fair market value of your interest in the property is not more than the lesser of: $10,000, or 10% of the total of the fair market value of your interest in the property and the fair market value of all other property used in that activity immediately before the disposition. 1040ez form printable Exception for substantially appreciated property. 1040ez form printable   The gain is passive activity income if the fair market value of the property at disposition was more than 120% of its adjusted basis and either of the following conditions applies. 1040ez form printable You used the property in a passive activity for 20% of the time you held your interest in the property. 1040ez form printable You used the property in a passive activity for the entire 24-month period before its disposition. 1040ez form printable If neither condition applies, the gain is not passive activity income. 1040ez form printable However, it is treated as portfolio income only if you held the property for investment for more than half of the time you held it in nonpassive activities. 1040ez form printable   For this purpose, treat property you held through a corporation (other than an S corporation) or other entity whose owners receive only portfolio income as property held in a nonpassive activity and as property held for investment. 1040ez form printable Also, treat the date you agree to transfer your interest for a fixed or determinable amount as the disposition date. 1040ez form printable   If you used the property in more than one activity during the 12-month period before its disposition, this exception applies only to the part of the gain allocated to a passive activity under the rules described in the preceding discussion. 1040ez form printable Disposition of property converted to inventory. 1040ez form printable   If you disposed of property that you had converted to inventory from its use in another activity (for example, you sold condominium units you previously held for use in a rental activity), a special rule may apply. 1040ez form printable Under this rule, you disregard the property's use as inventory and treat it as if it were still used in that other activity at the time of disposition. 1040ez form printable This rule applies only if you meet all of the following conditions. 1040ez form printable At the time of disposition, you held your interest in the property in a dealing activity (an activity that involves holding the property or similar property mainly for sale to customers in the ordinary course of a trade or business). 1040ez form printable Your other activities included a nondealing activity (an activity that does not involve holding similar property for sale to customers in the ordinary course of a trade or business) in which you used the property for more than 80% of the period you held it. 1040ez form printable You did not acquire or hold your interest in the property for the main purpose of selling it to customers in the ordinary course of a trade or business. 1040ez form printable Passive Activity Deductions Generally, a deduction is a passive activity deduction for a taxable year if and only if such deduction either: Arises in connection with the conduct of an activity that is a passive activity for the tax year; or Is treated as a deduction from an activity for the tax year because it was disallowed by the passive activity rules in the preceding year and carried forward to the tax year. 1040ez form printable For purposes of item (1), above, an item of deduction arises in the taxable year in which the item would be allowable as a deduction under the taxpayer's method of accounting if taxable income for all taxable years were determined without regard to the passive activity rules and without regard to the basis, excess farm loss, and at-risk limits. 1040ez form printable See Coordination with other limitations on deductions that apply before the passive activity rules , later. 1040ez form printable Passive activity deductions generally include losses from dispositions of property used in a passive activity at the time of the disposition and losses from a disposition of less than your entire interest in a passive activity. 1040ez form printable Exceptions. 1040ez form printable   Passive activity deductions do not include the following items. 1040ez form printable Deductions for expenses (other than interest expense) that are clearly and directly allocable to portfolio income. 1040ez form printable Qualified home mortgage interest, capitalized interest expenses, and other interest expenses (other than self-charged interest) properly allocable to passive activities. 1040ez form printable For more information on self-charged interest, see Self-charged interest under Passive Activity Income and Deductions, earlier. 1040ez form printable Losses from dispositions of property that produce portfolio income or property held for investment. 1040ez form printable State, local, and foreign income taxes. 1040ez form printable Miscellaneous itemized deductions that may be disallowed because of the 2%-of-adjusted-gross-income limit. 1040ez form printable Charitable contribution deductions. 1040ez form printable Net operating loss deductions. 1040ez form printable Percentage depletion carryovers for oil and gas wells. 1040ez form printable Capital loss carrybacks and carryovers. 1040ez form printable Items of deduction from a passive activity that are disallowed under the limits on deductions that apply before the passive activity rules. 1040ez form printable See Coordination with other limitations on deductions that apply before the passive activity rules , later. 1040ez form printable Deductions and losses that would have been allowed for tax years beginning before 1987 but for basis or at-risk limits. 1040ez form printable Net negative section 481 adjustments allocated to activities other than passive activities. 1040ez form printable (Section 481 adjustments are adjustments required due to changes in accounting methods. 1040ez form printable ) Casualty and theft losses, unless losses similar in cause and severity recur regularly in the activity. 1040ez form printable The deduction for the employer-equivalent portion of self-employment tax. 1040ez form printable Coordination with other limitations on deductions that apply before the passive activity rules. 1040ez form printable   An item of deduction from a passive activity that is disallowed for a tax year under the basis or at-risk limitations is not a passive activity deduction for the tax year. 1040ez form printable The following sections provide rules for figuring the extent to which items of deduction from a passive activity are disallowed for a tax year under the basis or at-risk limitations. 1040ez form printable Proration of deductions disallowed under basis limitations. 1040ez form printable   If any amount of your distributive share of a partnership's loss for the tax year is disallowed under the basis limitation, a ratable portion of your distributive share of each item of deduction or loss of the partnership is disallowed for the tax year. 1040ez form printable For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of your distributive share of partnership loss that is disallowed for the taxable year; by The sum of your distributive shares of all items of deduction and loss of the partnership for the tax year. 1040ez form printable   If any amount of your pro rata share of an S corporation's loss for the tax year is disallowed under the basis limitation, a ratable portion of your pro rata share of each item of deduction or loss of the S corporation is disallowed for the tax year. 1040ez form printable For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of your share of S corporation loss that is disallowed for the tax year; by The sum of your pro rata shares of all items of deduction and loss of the corporation for the tax year. 1040ez form printable Proration of deductions disallowed under at-risk limitation. 1040ez form printable   If any amount of your loss from an activity (as defined in Activities Covered by the At-Risk Rules , later) is disallowed under the at-risk rules for the tax year, a ratable portion of each item of deduction or loss from the activity is disallowed for the tax year. 1040ez form printable For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of the loss from the activity that is disallowed for the tax year; by The sum of all deductions from the activity for the taxable year. 1040ez form printable Coordination of basis and at-risk limitations. 1040ez form printable   The portion of any item of deduction or loss that is disallowed for the tax year under the basis limitations is not taken into account for the taxable year in determining the loss from an activity (as defined in Activities Covered by the At-Risk Rules , later) for purposes of applying the at-risk rules. 1040ez form printable Separately identified items of deduction and loss. 1040ez form printable   In identifying the items of deduction and loss from an activity that are not disallowed under the basis and at-risk limitations (and that therefore may be treated as passive activity deductions), you need not account separately for any item of deduction or loss unless such item may, if separately taken into account, result in an income tax liability different from that which would result were such item of deduction or loss taken into account separately. 1040ez form printable   Items of deduction or loss that must be accounted for separately include (but are not limited to) items of deduction or loss that: Are attributable to separate activities. 1040ez form printable See Grouping Your Activities , later. 1040ez form printable Arise in a rental real estate activity in tax years in which you actively participate in such activity; Arise in a rental real estate activity in taxable years in which you do not actively participate in such activity; Arose in a taxable year beginning before 1987 and were not allowed for such taxable year under the basis or at-risk limitations; Are taken into account under section 613A(d) (relating to limitations on certain depletion deductions); Are taken into account under section 1211 (relating to the limitation on capital losses); Are taken into account under section 1231 (relating to property used in a trade or business and involuntary conversions). 1040ez form printable See Section 1231 Gains and Losses in Publication 544 for more information. 1040ez form printable Are attributable to pre-enactment interests in activities. 1040ez form printable See Regulations section 1. 1040ez form printable 469-11T(c). 1040ez form printable Grouping Your Activities You can treat one or more trade or business activities, or rental activities, as a single activity if those activities form an appropriate economic unit for measuring gain or loss under the passive activity rules. 1040ez form printable Grouping is important for a number of reasons. 1040ez form printable If you group two activities into one larger activity, you need only show material participation in the activity as a whole. 1040ez form printable But if the two activities are separate, you must show material participation in each one. 1040ez form printable On the other hand, if you group two activities into one larger activity and you dispose of one of the two, then you have disposed of only part of your entire interest in the activity. 1040ez form printable But if the two activities are separate and you dispose of one of them, then you have disposed of your entire interest in that activity. 1040ez form printable Grouping can also be important in determining whether you meet the 10% ownership requirement for actively participating in a rental real estate activity. 1040ez form printable Appropriate Economic Units Generally, to determine if activities form an appropriate economic unit, you must consider all the relevant facts and circumstances. 1040ez form printable You can use any reasonable method of applying the relevant facts and circumstances in grouping activities. 1040ez form printable The following factors have the greatest weight in determining whether activities form an appropriate economic unit. 1040ez form printable All of the factors do not have to apply to treat more than one activity as a single activity. 1040ez form printable The factors that you should consider are: The similarities and differences in the types of trades or businesses, The extent of common control, The extent of common ownership, The geographical location, and The interdependencies between or among activities, which may include the extent to which the activities: Buy or sell goods between or among themselves, Involve products or services that are generally provided together, Have the same customers, Have the same employees, or Use a single set of books and records to account for the activities. 1040ez form printable Example 1. 1040ez form printable John Jackson owns a bakery and a movie theater at a shopping mall in Baltimore and a bakery and movie theater in Philadelphia. 1040ez form printable Based on all the relevant facts and circumstances, there may be more than one reasonable method for grouping John's activities. 1040ez form printable For example, John may be able to group the movie theaters and the bakeries into: One activity, A movie theater activity and a bakery activity, A Baltimore activity and a Philadelphia activity, or Four separate activities. 1040ez form printable Example 2. 1040ez form printable Betty is a partner in ABC partnership, which sells nonfood items to grocery stores. 1040ez form printable Betty is also a partner in DEF (a trucking business). 1040ez form printable ABC and DEF are under common control. 1040ez form printable The main part of DEF's business is transporting goods for ABC. 1040ez form printable DEF is the only trucking business in which Betty is involved. 1040ez form printable Based on the rules of this section, Betty treats ABC's wholesale activity and DEF's trucking activity as a single activity. 1040ez form printable Consistency and disclosure requirement. 1040ez form printable   Generally, when you group activities into appropriate economic units, you may not regroup those activities in a later tax year. 1040ez form printable You must meet any disclosure requirements of the IRS when you first group your activities and when you add or dispose of any activities in your groupings. 1040ez form printable   However, if the original grouping is clearly inappropriate or there is a material change in the facts and circumstances that makes the original grouping clearly inappropriate, you must regroup the activities and comply with any disclosure requirements of the IRS. 1040ez form printable   See Disclosure Requirement , later. 1040ez form printable Regrouping by the IRS. 1040ez form printable   If any of the activities resulting from your grouping is not an appropriate economic unit and one of the primary purposes of your grouping (or failure to regroup) is to avoid the passive activity rules, the IRS may regroup your activities. 1040ez form printable Rental activities. 1040ez form printable   In general, you cannot group a rental activity with a trade or business activity. 1040ez form printable However, you can group them together if the activities form an appropriate economic unit and: The rental activity is insubstantial in relation to the trade or business activity, The trade or business activity is insubstantial in relation to the rental activity, or Each owner of the trade or business activity has the same ownership interest in the rental activity, in which case the part of the rental activity that involves the rental of items of property for use in the trade or business activity may be grouped with the trade or business activity. 1040ez form printable Example. 1040ez form printable Herbert and Wilma are married and file a joint return. 1040ez form printable Healthy Food, an S corporation, is a grocery store business. 1040ez form printable Herbert is Healthy Food's only shareholder. 1040ez form printable Plum Tower, an S corporation, owns and rents out the building. 1040ez form printable Wilma is Plum Tower's only shareholder. 1040ez form printable Plum Tower rents part of its building to Healthy Food. 1040ez form printable Plum Tower's grocery store rental business and Healthy Food's grocery business are not insubstantial in relation to each other. 1040ez form printable Herbert and Wilma file a joint return, so they are treated as one taxpayer for purposes of the passive activity rules. 1040ez form printable The same owner (Herbert and Wilma) owns both Healthy Food and Plum Tower with the same ownership interest (100% in each). 1040ez form printable If the grouping forms an appropriate economic unit, as discussed earlier, Herbert and Wilma can group Plum Tower's grocery store rental and Healthy Food's grocery business into a single trade or business activity. 1040ez form printable Grouping of real and personal property rentals. 1040ez form printable   In general, you cannot treat an activity involving the rental of real property and an activity involving the rental of personal property as a single activity. 1040ez form printable However, you can treat them as a single activity if you provide the personal property in connection with the real property or the real property in connection with the personal property. 1040ez form printable Certain activities may not be grouped. 1040ez form printable   In general, if you own an interest as a limited partner or a limited entrepreneur in one of the following activities, you may not group that activity with any other activity in another type of business. 1040ez form printable Holding, producing, or distributing motion picture films or video tapes. 1040ez form printable Farming. 1040ez form printable Leasing any section 1245 property (as defined in section 1245(a)(3) of the Internal Revenue Code). 1040ez form printable For a list of section 1245 property, see Section 1245 property under Activities Covered by the At-Risk Rules , later. 1040ez form printable Exploring for, or exploiting, oil and gas resources. 1040ez form printable Exploring for, or exploiting, geothermal deposits. 1040ez form printable   If you own an interest as a limited partner or a limited entrepreneur in an activity described in the list above, you may group that activity with another activity in the same type of business if the grouping forms an appropriate economic unit as discussed earlier. 1040ez form printable Limited entrepreneur. 1040ez form printable   A limited entrepreneur is a person who: Has an interest in an enterprise other than as a limited partner, and Does not actively participate in the management of the enterprise. 1040ez form printable Activities conducted through another entity. 1040ez form printable   A personal service corporation, closely held corporation, partnership, or S corporation must group its activities using the rules discussed in this section. 1040ez form printable Once the entity groups its activities, you, as the partner or shareholder of the entity, may group those activities (following the rules of this section): With each other, With activities conducted directly by you, or With activities conducted through other entities. 1040ez form printable    You may not treat activities grouped together by the entity as separate activities. 1040ez form printable Personal service and closely held corporations. 1040ez form printable   You may group an activity conducted through a personal service or closely held corporation with your other activities only to determine whether you materially or significantly participated in those other activities. 1040ez form printable See Material Participation , earlier, and Significant Participation Passive Activities , later. 1040ez form printable Publicly traded partnership (PTP). 1040ez form printable   You may not group activities conducted through a PTP with any other activity, including an activity conducted through another PTP. 1040ez form printable Partial dispositions. 1040ez form printable   If you dispose of substantially all of an activity during your tax year, you may treat the part disposed of as a separate activity. 1040ez form printable However, you can do this only if you can show with reasonable certainty: The amount of deductions and credits disallowed in prior years under the passive activity rules that is allocable to the part of the activity disposed of, and The amount of gross income and any other deductions and credits for the current tax year that is allocable to the part of the activity disposed of. 1040ez form printable Disclosure Requirement For tax years beginning after January 24, 2010, the following disclosure requirements for groupings apply. 1040ez form printable You are required to report certain changes to your groupings that occur during the tax year to the IRS. 1040ez form printable If you fail to report these changes, each trade or business activity or rental activity will be treated as a separate activity. 1040ez form printable You will be considered to have made a timely disclosure if you filed all affected income tax returns consistent with the claimed grouping and make the required disclosure on the income tax return for the year in which you first discovered the failure to disclose. 1040ez form printable If the IRS discovered the failure to disclose, you must have reasonable cause for not making the required disclosure. 1040ez form printable New grouping. 1040ez form printable   You must file a written statement with your original income tax return for the first tax year in which two or more activities are originally grouped into a single activity. 1040ez form printable The statement must provide the names, addresses, and employer identification numbers (EINs), if applicable, for the activities being grouped as a single activity. 1040ez form printable In addition, the statement must contain a declaration that the grouped activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. 1040ez form printable Addition to an existing grouping. 1040ez form printable   You must file a written statement with your original income tax return for the tax year in which you add a new activity to an existing group. 1040ez form printable The statement must provide the name, address, and EIN, if applicable, for the activity that is being added and for the activities in the existing group. 1040ez form printable In addition, the statement must contain a declaration that the activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. 1040ez form printable Regrouping. 1040ez form printable   You must file a written statement with your original income tax return for the tax year in which you regroup the activities. 1040ez form printable The statement must provide the names, addresses, and EINs, if applicable, for the activities that are being regrouped. 1040ez form printable If two or more activities are being regrouped into a single activity, the statement must contain a declaration that the regrouped activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. 1040ez form printable In addition, the statement must contain an explanation of the material change in the facts and circumstances that made the original grouping clearly inappropriate. 1040ez form printable Groupings by partnerships and S corporations. 1040ez form printable   Partnerships and S corporations are not subject to the rules for new grouping, addition to an existing grouping, or regrouping. 1040ez form printable Instead, they must comply with the disclosure instructions for grouping activities provided in their Form 1065, U. 1040ez form printable S. 1040ez form printable Return of Partnership Income, or Form 1120S, U. 1040ez form printable S. 1040ez form printable Income Tax Return for an S Corporation, whichever is applicable. 1040ez form printable   The partner or shareholder is not required to make a separate disclosure of the groupings disclosed by the entity unless the partner or shareholder: Groups together any of the activities that the entity does not group together, Groups the entity's activities with activities conducted directly by the partner or shareholder, or Groups an entity's activities with activities conducted through another entity. 1040ez form printable   A partner or shareholder may not treat activities grouped together by the entity as separate activities. 1040ez form printable Recharacterization of Passive Income Net income from the following passive activities may have to be recharacterized and excluded from passive activity income. 1040ez form printable Significant participation passive activities, Rental of property when less than 30% of the unadjusted basis of the property is subject to depreciation, Equity-financed lending activities, Rental of property incidental to development activities, Rental of property to nonpassive activities, and Licensing of intangible property by  pass-through entities. 1040ez form printable If you are engaged in or have an interest in one of these activities during the tax year (either directly or through a partnership or an S corporation), combine the income and losses from the activity to determine if you have a net loss or net income from that activity. 1040ez form printable If the result is a net loss, treat the income and losses the same as any other income or losses from that type of passive activity (trade or business activity or rental activity). 1040ez form printable If the result is net income, do not enter any of the income or losses from the activity or property on Form 8582 or its worksheets. 1040ez form printable Instead, enter income or losses on the form and schedules you normally use. 1040ez form printable However, see Significant Participation Passive Activities , later, if the activity is a significant participation passive activity and you also have a net loss from a different significant participation passive activity. 1040ez form printable Limit on recharacterized passive income. 1040ez form printable   The total amount that you treat as nonpassive income under the rules described later in this discussion for significant participation passive activities, rental of nondepreciable property, and equity-financed lending activities cannot exceed the greatest amount that you treat as nonpassive income under any one of these rules. 1040ez form printable Investment income and investment expense. 1040ez form printable   To figure your investment interest expense limitation on Form 4952, treat as investment income any net passive income recharacterized as nonpassive income from rental of nondepreciable property, equity-financed lending activity, or licensing of intangible property by a pass-through entity. 1040ez form printable Significant Participation Passive Activities A significant participation passive activity is any trade or business activity in which you participated for more than 100 hours during the tax year but did not materially participate. 1040ez form printable If your gross income from all significant participation passive activities is more than your deductions from those activities, a part of your net income from each significant participation passive activity is treated as nonpassive income. 1040ez form printable Corporations. 1040ez form printable   An activity of a personal service corporation or closely held corporation is a significant participation passive activity if both of the following statements are true. 1040ez form printable The corporation is not treated as materially participating in the activity for the year. 1040ez form printable One or more individuals, each of whom is treated as significantly participating in the activity, directly or indirectly hold (in total) more than 50% (by value) of the corporation's outstanding stock. 1040ez form printable Worksheet A. 1040ez form printable   Complete Worksheet A. 1040ez form printable Significant Participation Passive Activities , below, if you have income or losses from any significant participation activity. 1040ez form printable Begin by entering the name of each activity in the left column. 1040ez form printable Column (a). 1040ez form printable   Enter the number of hours you participated in each activity and total the column. 1040ez form printable   If the total is more than 500, do not complete Worksheet A or B. 1040ez form printable None of the activities are passive activities because you satisfy test 4 for material participation. 1040ez form printable (See Material participation tests , earlier. 1040ez form printable ) Report all the income and losses from these activities on the forms and schedules you normally use. 1040ez form printable Do not include the income and losses on Form 8582. 1040ez form printable Column (b). 1040ez form printable   Enter the net loss, if any, from the activity. 1040ez form printable Net loss from an activity means either: The activity's current year net loss (if any) plus prior year unallowed losses (if any), or The excess of prior year unallowed losses over the current year net income (if any). 1040ez form printable Enter -0- here if the prior year unallowed loss is the same as the current year net income. 1040ez form printable Column (c). 1040ez form printable   Enter net income (if any) from the activity. 1040ez form printable Net income means the excess of the current year's net income from the activity over any prior year unallowed losses from the activity. 1040ez form printable Column (d). 1040ez form printable   Combine amounts in the Totals row for columns (b) and (c) and enter the total net income or net loss in the Totals row of column (d). 1040ez form printable If column (d) is a net loss, skip Worksheet B, Significant Participation Activities With Net Income. 1040ez form printable Include the income and losses in Worksheet 3 of Form 8582 (or Worksheet 2 in the Form 88