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2010 Turbotax

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2010 Turbotax

2010 turbotax 7. 2010 turbotax   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. 2010 turbotax Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. 2010 turbotax Useful Items - You may want to see: Forms (and Instructions) 1040 U. 2010 turbotax S. 2010 turbotax Individual Income Tax Return 1040A U. 2010 turbotax S. 2010 turbotax Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. 2010 turbotax S. 2010 turbotax Nonresident Alien Income Tax Return 1040NR-EZ U. 2010 turbotax S. 2010 turbotax Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. 2010 turbotax What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. 2010 turbotax Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. 2010 turbotax The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). 2010 turbotax Under U. 2010 turbotax S. 2010 turbotax immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. 2010 turbotax Extensions of time to file. 2010 turbotax   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. 2010 turbotax You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). 2010 turbotax Use Form 4868 to get the extension to October 15. 2010 turbotax In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). 2010 turbotax To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. 2010 turbotax Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. 2010 turbotax   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. 2010 turbotax S. 2010 turbotax citizens and resident aliens abroad who expect to qualify for special tax treatment). 2010 turbotax    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. 2010 turbotax You may be able to file your return electronically. 2010 turbotax See IRS e-file in your form instructions. 2010 turbotax Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. 2010 turbotax If you are any of the following, you must file a return. 2010 turbotax A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. 2010 turbotax (But see Exceptions , later. 2010 turbotax ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. 2010 turbotax S. 2010 turbotax sources, or Your income is exempt from income tax. 2010 turbotax A nonresident alien individual not engaged in a trade or business in the United States with U. 2010 turbotax S. 2010 turbotax income on which the tax liability was not satisfied by the withholding of tax at the source. 2010 turbotax A representative or agent responsible for filing the return of an individual described in (1) or (2). 2010 turbotax A fiduciary for a nonresident alien estate or trust. 2010 turbotax You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. 2010 turbotax For example, if you have no U. 2010 turbotax S. 2010 turbotax business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. 2010 turbotax For information on what is timely, see When to file for deductions and credits under When To File, later. 2010 turbotax Exceptions. 2010 turbotax   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. 2010 turbotax Your only U. 2010 turbotax S. 2010 turbotax trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. 2010 turbotax You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. 2010 turbotax Even if you have left the United States and filed a Form 1040-C, U. 2010 turbotax S. 2010 turbotax Departing Alien Income Tax Return, on departure, you still must file an annual U. 2010 turbotax S. 2010 turbotax income tax return. 2010 turbotax If you are married and both you and your spouse are required to file, you must each file a separate return. 2010 turbotax Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. 2010 turbotax You do not claim any dependents. 2010 turbotax You cannot be claimed as a dependent on someone else's U. 2010 turbotax S. 2010 turbotax tax return. 2010 turbotax If you were married, you do not claim an exemption for your spouse. 2010 turbotax Your taxable income is less than $100,000. 2010 turbotax The only itemized deduction you can claim is for state and local income taxes. 2010 turbotax Note. 2010 turbotax Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. 2010 turbotax See chapter 5. 2010 turbotax Your only U. 2010 turbotax S. 2010 turbotax source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. 2010 turbotax (If you had taxable interest or dividend income, you cannot use this form. 2010 turbotax ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. 2010 turbotax You are not claiming any tax credits. 2010 turbotax This is not an “expatriation return. 2010 turbotax ” See Expatriation Tax in chapter 4. 2010 turbotax The only taxes you owe are: The income tax from the Tax Table. 2010 turbotax The social security and Medicare tax from Form 4137 or Form 8919. 2010 turbotax You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. 2010 turbotax You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. 2010 turbotax If you do not meet all of the above conditions, you must file Form 1040NR. 2010 turbotax When To File If you are an employee and you receive wages subject to U. 2010 turbotax S. 2010 turbotax income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. 2010 turbotax For the 2013 calendar year, file your return by April 15, 2014. 2010 turbotax If you are not an employee who receives wages subject to U. 2010 turbotax S. 2010 turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. 2010 turbotax For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. 2010 turbotax ) Extensions of time to file. 2010 turbotax   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. 2010 turbotax For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). 2010 turbotax You must file the extension by the regular due date of your return. 2010 turbotax   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). 2010 turbotax To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. 2010 turbotax Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. 2010 turbotax When to file for deductions and credits. 2010 turbotax   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. 2010 turbotax For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. 2010 turbotax However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. 2010 turbotax The allowance of the following credits is not affected by this time requirement. 2010 turbotax Credit for withheld taxes. 2010 turbotax Credit for excise tax on certain uses of gasoline and special fuels. 2010 turbotax Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. 2010 turbotax Protective return. 2010 turbotax   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. 2010 turbotax S. 2010 turbotax trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. 2010 turbotax By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. 2010 turbotax You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. 2010 turbotax   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. 2010 turbotax To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. 2010 turbotax   You can follow the same procedure if you believe you have no U. 2010 turbotax S. 2010 turbotax tax liability because of a U. 2010 turbotax S. 2010 turbotax tax treaty. 2010 turbotax Be sure to also complete item L on page 5 of Form 1040NR. 2010 turbotax Waiver of filing deadline. 2010 turbotax   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. 2010 turbotax S. 2010 turbotax income tax return (including a protective return) and you cooperate with the IRS in determining your U. 2010 turbotax S. 2010 turbotax income tax liability for the tax year for which you did not file a return. 2010 turbotax Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. 2010 turbotax  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. 2010 turbotax O. 2010 turbotax Box 1303 Charlotte, NC 28201-1303 Aliens from the U. 2010 turbotax S. 2010 turbotax Virgin Islands. 2010 turbotax    If you are a bona fide resident of the U. 2010 turbotax S. 2010 turbotax Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. 2010 turbotax S. 2010 turbotax Virgin Islands and file your income tax returns at the following address. 2010 turbotax Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. 2010 turbotax Thomas, VI 00802   Report all income from U. 2010 turbotax S. 2010 turbotax sources, as well as income from other sources, on your return. 2010 turbotax For information on filing U. 2010 turbotax S. 2010 turbotax Virgin Islands returns, contact the U. 2010 turbotax S. 2010 turbotax Virgin Islands Bureau of Internal Revenue. 2010 turbotax   Chapter 8 discusses withholding from U. 2010 turbotax S. 2010 turbotax wages of U. 2010 turbotax S. 2010 turbotax Virgin Islanders. 2010 turbotax Aliens from Guam or the Commonwealth of the Northern Mariana Islands. 2010 turbotax   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. 2010 turbotax Report all income, including income from U. 2010 turbotax S. 2010 turbotax sources, on your return. 2010 turbotax It is not necessary to file a separate U. 2010 turbotax S. 2010 turbotax income tax return. 2010 turbotax    Bona fide residents of Guam should file their Guam returns at the following address. 2010 turbotax   Department of Revenue and Taxation Government of Guam P. 2010 turbotax O. 2010 turbotax Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. 2010 turbotax   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. 2010 turbotax O. 2010 turbotax Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. 2010 turbotax 570, Tax Guide for Individuals With Income From U. 2010 turbotax S. 2010 turbotax Possessions, for information on where to file your return. 2010 turbotax Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. 2010 turbotax S. 2010 turbotax Individual Income Tax Return. 2010 turbotax Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. 2010 turbotax If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. 2010 turbotax ) to Form 1040X. 2010 turbotax Print “Amended” across the top. 2010 turbotax Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. 2010 turbotax A return filed before the final due date is considered to have been filed on the due date. 2010 turbotax Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. 2010 turbotax FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. 2010 turbotax The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. 2010 turbotax The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. 2010 turbotax However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. 2010 turbotax A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. 2010 turbotax Filing requirements. 2010 turbotax   FinCEN Form 105 filing requirements follow. 2010 turbotax Recipients. 2010 turbotax   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. 2010 turbotax Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. 2010 turbotax   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. 2010 turbotax Travelers. 2010 turbotax   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. 2010 turbotax Penalties. 2010 turbotax   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. 2010 turbotax Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. 2010 turbotax More information. 2010 turbotax   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. 2010 turbotax Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. 2010 turbotax A resident alien of the United States for any part of the tax year. 2010 turbotax A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. 2010 turbotax S. 2010 turbotax income tax treaty. 2010 turbotax See Effect of Tax Treaties in chapter 1. 2010 turbotax A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. 2010 turbotax See chapter 1 for information about this election. 2010 turbotax A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. 2010 turbotax See Publication 570, Tax Guide for Individuals With Income From U. 2010 turbotax S. 2010 turbotax Possessions, for a definition of bona fide resident. 2010 turbotax You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). 2010 turbotax The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. 2010 turbotax Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. 2010 turbotax S. 2010 turbotax person. 2010 turbotax You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. 2010 turbotax More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. 2010 turbotax Penalties The law provides penalties for failure to file returns or pay taxes as required. 2010 turbotax Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. 2010 turbotax You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. 2010 turbotax If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. 2010 turbotax Filing late. 2010 turbotax   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. 2010 turbotax The penalty is based on the tax not paid by the due date (without regard to extensions). 2010 turbotax The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. 2010 turbotax Fraud. 2010 turbotax   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. 2010 turbotax Return over 60 days late. 2010 turbotax   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. 2010 turbotax Exception. 2010 turbotax   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. 2010 turbotax Paying tax late. 2010 turbotax   You will have to pay a failure-to-pay penalty of ½ of 1% (. 2010 turbotax 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. 2010 turbotax This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. 2010 turbotax   The monthly rate of the failure-to-pay penalty is half the usual rate (. 2010 turbotax 25% instead of . 2010 turbotax 50%) if an installment agreement is in effect for that month. 2010 turbotax You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. 2010 turbotax   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. 2010 turbotax If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. 2010 turbotax   This penalty cannot be more than 25% of your unpaid tax. 2010 turbotax You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. 2010 turbotax Combined penalties. 2010 turbotax   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. 2010 turbotax However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. 2010 turbotax Accuracy-related penalty. 2010 turbotax   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. 2010 turbotax The penalty is equal to 20% of the underpayment. 2010 turbotax The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. 2010 turbotax The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. 2010 turbotax Negligence or disregard. 2010 turbotax   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. 2010 turbotax Negligence also includes failure to keep adequate books and records. 2010 turbotax You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. 2010 turbotax   The term “disregard” includes any careless, reckless, or intentional disregard. 2010 turbotax Adequate disclosure. 2010 turbotax   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. 2010 turbotax See Disclosure statement , later. 2010 turbotax   This exception will not apply to an item that is attributable to a tax shelter. 2010 turbotax In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. 2010 turbotax Substantial understatement of income tax. 2010 turbotax   You understate your tax if the tax shown on your return is less than the correct tax. 2010 turbotax The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. 2010 turbotax However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. 2010 turbotax   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. 2010 turbotax However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. 2010 turbotax Substantial authority. 2010 turbotax   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. 2010 turbotax Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. 2010 turbotax Disclosure statement. 2010 turbotax   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. 2010 turbotax You must also have a reasonable basis for treating the item the way you did. 2010 turbotax   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. 2010 turbotax   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. 2010 turbotax Transaction lacking economic substance. 2010 turbotax   For more information on economic substance, see section 7701(o). 2010 turbotax Foreign financial asset. 2010 turbotax   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. 2010 turbotax Reasonable cause. 2010 turbotax   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. 2010 turbotax You must also show that you acted in good faith. 2010 turbotax This does not apply to a transaction that lacks economic substance. 2010 turbotax Filing erroneous claim for refund or credit. 2010 turbotax   You may have to pay a penalty if you file an erroneous claim for refund or credit. 2010 turbotax The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. 2010 turbotax However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. 2010 turbotax The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged. 2010 turbotax Frivolous tax submission. 2010 turbotax   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. 2010 turbotax A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. 2010 turbotax For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 IRB 609 available at www. 2010 turbotax irs. 2010 turbotax gov/irb/2010-17_irb/ar13. 2010 turbotax html. 2010 turbotax   You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. 2010 turbotax This includes altering or striking out the preprinted language above the space provided for your signature. 2010 turbotax   This penalty is added to any other penalty provided by law. 2010 turbotax Fraud. 2010 turbotax   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax. 2010 turbotax Failure to supply taxpayer identification number. 2010 turbotax   If you do not include your social security number (SSN) or individual taxpayer identification number (ITIN) or the SSN or ITIN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. 2010 turbotax You will also be subject to a penalty of $50 if you do not give your SSN or ITIN to another person when it is required on a return, statement, or other document. 2010 turbotax   For example, if you have a bank account that earns interest, you must give your SSN or ITIN to the bank. 2010 turbotax The number must be shown on the Form 1099-INT or other statement the bank sends you. 2010 turbotax If you do not give the bank your SSN or ITIN, you will be subject to the $50 penalty. 2010 turbotax (You also may be subject to “backup” withholding of income tax. 2010 turbotax )   You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect. 2010 turbotax Criminal Penalties You may be subject to criminal prosecution (brought to trial) for actions such as: Tax evasion, Willful failure to file a return, supply information, or pay any tax due, Fraud and false statements, or Preparing and filing a fraudulent return. 2010 turbotax Prev  Up  Next   Home   More Online Publications
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The 2010 Turbotax

2010 turbotax Tax Changes for Businesses Table of Contents 2001 ChangesNew 5-Year Carryback Rule for Net Operating Losses (NOLs) Electronic Form 1099 Tax Incentives for New York Liberty Zone Other 2001 Changes 2002 ChangesNonaccrual-Experience Method Issuance of Qualified Zone Academy Bonds Depletion Work Opportunity Credit Expanded in New York Liberty Zone Credit For Pension Plan Startup Costs Welfare-to-Work Credit Extended Work Opportunity Credit Extended Electric and Clean-Fuel Vehicles Renewable Electricity Production Credit Later ChangesSpecial Depreciation Allowance Extension of Placed in Service Date Special Liberty Zone Depreciation Allowance for New and Used Property Depreciation of Property Used on Indian Reservations Indian Employment Credit Extended 2001 Changes New 5-Year Carryback Rule for Net Operating Losses (NOLs) If you have an NOL from a tax year ending during 2001 or 2002, you must generally carry back the entire amount of the NOL to the 5 tax years before the NOL year (the carryback period). 2010 turbotax However, you can still choose to use the previous carryback period. 2010 turbotax You also can choose not to carry back an NOL and only carry it forward. 2010 turbotax Individuals, estates, and trusts can file Form 1045, Application for Tentative Refund. 2010 turbotax Corporations can file Form 1139, Corporation Application for Tentative Refund. 2010 turbotax The instructions for these forms will be revised to reflect the new law. 2010 turbotax Electronic Form 1099 For tax years ending after March 9, 2002, most Forms 1099 can be furnished electronically if the recipient consents, according to IRS regulations, to receive it that way. 2010 turbotax Tax Incentives for New York Liberty Zone New tax benefits are provided for the parts of New York City damaged in the terrorist attacks on September 11, 2001. 2010 turbotax These benefits apply to the newly created New York Liberty Zone, which is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway), in the Borough of Manhattan. 2010 turbotax Tax benefits for the New York Liberty Zone include the following. 2010 turbotax A special depreciation allowance equal to 30% of the adjusted basis of qualified Liberty Zone property. 2010 turbotax It is allowed for the year the property is placed in service. 2010 turbotax No alternative minimum tax depreciation adjustment for qualified Liberty Zone property. 2010 turbotax Classification of Liberty Zone leasehold improvement property as 5-year property. 2010 turbotax Authorization of the issuance of tax-exempt New York Liberty bonds to finance the acquisition, construction, reconstruction, and renovation of nonresidential real property, residential rental property, and public utility property in the Liberty Zone. 2010 turbotax An increased section 179 deduction for certain Liberty Zone property. 2010 turbotax Extension of the replacement period from 2 years to 5 years for certain property involuntarily converted as a result of the terrorist attacks on September 11, 2001, but only if substantially all of the use of the replacement property is in New York City. 2010 turbotax For more information about involuntary conversions, see Postponement of Gain in Publication 547, Casualties, Disasters, and Thefts. 2010 turbotax In addition, for 2002 and 2003, the work opportunity credit is expanded by creating a new targeted group, consisting generally of employees who work in the Liberty Zone or, in certain cases, in New York City outside the Liberty Zone. 2010 turbotax For more information, see Work Opportunity Credit Expanded in New York Liberty Zone under 2002 Changes, later. 2010 turbotax For more information about the 30% special depreciation allowance, Liberty Zone leasehold improvement property, or increased section 179 deduction, see New York Liberty Zone Benefits, in chapter 5. 2010 turbotax In addition, the tax benefits for the Liberty Zone will be covered in a new edition of Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities, available later in 2002. 2010 turbotax Other 2001 Changes Other changes are discussed in the following chapters. 2010 turbotax Chapter 4 Car Expenses Chapter 5 Depreciation 2002 Changes Nonaccrual-Experience Method Under current law, if you perform services and use an accrual method of accounting, you do not accrue income which, based on experience, you expect to be uncollectible. 2010 turbotax Beginning in 2002, this rule only applies if you perform services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting, or your average annual gross receipts for the 3 prior tax years does not exceed $5,000,000. 2010 turbotax As under current law, the nonaccrual-experience method will not apply to amounts on which you charge interest or a late payment penalty. 2010 turbotax For more information, see Nonaccrual-Experience Method in chapter 11 of Publication 535, Business Expenses. 2010 turbotax Issuance of Qualified Zone Academy Bonds State and local governments issue qualified zone academy bonds to raise funds for the use of qualified zone academies. 2010 turbotax The amount of bonds that may be issued was limited to $400 million each year for 1998, 1999, 2000, and 2001. 2010 turbotax This provision has been extended to provide for an additional $400 million of bonds to be issued each year for 2002 and 2003. 2010 turbotax For more information about qualified zone academy bonds, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 turbotax Depletion The suspension of the taxable income limit on percentage depletion from the marginal production of oil and natural gas that was scheduled to expire for tax years beginning after 2001 has been extended to tax years beginning before 2004. 2010 turbotax For more information on marginal production, see section 613A(c) of the Internal Revenue Code. 2010 turbotax Work Opportunity Credit Expanded in New York Liberty Zone The work opportunity credit is expanded to include a new targeted group consisting generally of employees who perform substantially all their services: In the New York Liberty Zone (defined earlier under Tax Incentives for New York Liberty Zone, under 2001 Changes), or Elsewhere in New York City for a business that relocated from the Liberty Zone due to the destruction or damage of its place of business by the September 11, 2001, terrorist attack. 2010 turbotax The credit is available to employers for wages paid to new employees and existing employees for work performed during 2002 or 2003. 2010 turbotax Certain limits apply. 2010 turbotax For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 turbotax Credit For Pension Plan Startup Costs The credit for pension plan startup costs is now allowed for plans that become effective after December 31, 2001. 2010 turbotax Previously, the credit was only allowed for plans established after December 31, 2001. 2010 turbotax For more information on the credit, see Important Changes for 2002 in Publication 560, Retirement Plans for Small Business. 2010 turbotax Welfare-to-Work Credit Extended The welfare-to-work credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. 2010 turbotax For more information on the welfare-to-work credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 turbotax Work Opportunity Credit Extended The work opportunity credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. 2010 turbotax For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 turbotax Electric and Clean-Fuel Vehicles The maximum clean-fuel vehicle deduction and qualified electric vehicle credit were scheduled to be 25% lower for 2002 and both were scheduled to be phased out completely by 2005. 2010 turbotax The full deduction and credit are now allowed for qualified property placed in service in 2002 and 2003. 2010 turbotax The phaseout of the deduction and the credit will begin in 2004, and no deduction or credit will be allowed for property placed in service after 2006. 2010 turbotax For more information about electric and clean-fuel vehicles, see chapter 12 in Publication 535, Business Expenses. 2010 turbotax Renewable Electricity Production Credit The renewable electricity production credit is extended to include electricity produced by facilities placed in service after 2001 and before 2004. 2010 turbotax Later Changes Special Depreciation Allowance You can claim the special depreciation allowance (an additional 30% depreciation deduction) for new property that you acquire before September 11, 2004, and place in service for your business generally before January 1, 2005, if you meet the other requirements for qualified property covered in chapter 5. 2010 turbotax Accordingly, you will generally no longer be able to claim the special depreciation allowance for the qualified property if you acquire it after September 10, 2004, or place it in service for your business after December 31, 2004. 2010 turbotax However, you will be able to claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for most qualified property if you place it in service in the Liberty Zone after December 31, 2004, and generally before January 1, 2007, provided you meet the other requirements for qualified Liberty Zone property covered in chapter 5. 2010 turbotax Extension of Placed in Service Date To qualify for the special depreciation allowance, your property must meet certain tests, including the placed in service date test, as well as the other requirements covered in chapter 5 of this publication. 2010 turbotax To meet the placed in service date test, your property must generally be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. 2010 turbotax However, certain property placed in service before January 1, 2006, may meet this test. 2010 turbotax Transportation property and property with a recovery period of 10 years or longer meet the test if one of the following applies. 2010 turbotax The property has an estimated production period of more than 2 years. 2010 turbotax The property has an estimated production period of more than 1 year and it costs more than $1 million. 2010 turbotax Transportation property is any tangible personal property used in the trade or business of transporting persons or property. 2010 turbotax For property that qualifies for the special depreciation allowance solely because of the one-year extension of the placed in service date, only the part of the basis attributable to manufacture, construction, or production before September 11, 2004, is eligible for the special depreciation allowance. 2010 turbotax Special Liberty Zone Depreciation Allowance for New and Used Property You can claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for used property that you acquire after September 10, 2001, if the property meets the requirements listed under Qualified Liberty Zone Property in chapter 5 of this publication. 2010 turbotax You will be able to claim the allowance for both new and used property that you acquire after September 10, 2004, provided the property meets the other requirements for qualified Liberty Zone property. 2010 turbotax Depreciation of Property Used on Indian Reservations The special depreciation rules that apply to qualified property used on an Indian reservation were scheduled to expire for property placed in service after 2003. 2010 turbotax These special rules have been extended to include property placed in service in 2004. 2010 turbotax For more information about these rules, see Publication 946, How To Depreciate Property. 2010 turbotax Indian Employment Credit Extended The Indian employment credit that was scheduled to expire for tax years beginning after 2003 has been extended to include a tax year beginning in 2004. 2010 turbotax For more information about this credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 turbotax Prev  Up  Next   Home   More Online Publications