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2012 1040 Forms

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2012 1040 Forms

2012 1040 forms 10. 2012 1040 forms   Self-Employment (SE) Tax Table of Contents Who Must Pay SE Tax?Special Rules and Exceptions Figuring Earnings Subject to SE Tax Farm Optional Method Using Both Optional Methods Reporting Self-Employment Tax The SE tax rules apply no matter how old you are and even if you are already receiving social security and Medicare benefits. 2012 1040 forms Who Must Pay SE Tax? Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. 2012 1040 forms Use Schedule SE to figure net earnings from self-employment. 2012 1040 forms Sole proprietor or independent contractor. 2012 1040 forms   If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ (Form 1040) to figure your earnings subject to SE tax. 2012 1040 forms SE tax rate. 2012 1040 forms    For 2013, the SE tax rate on net earnings is 15. 2012 1040 forms 3% (12. 2012 1040 forms 4% social security tax plus 2. 2012 1040 forms 9% Medicare tax). 2012 1040 forms Maximum earnings subject to self-employment tax. 2012 1040 forms    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. 2012 1040 forms 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. 2012 1040 forms   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. 2012 1040 forms 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. 2012 1040 forms   If your wages and tips are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. 2012 1040 forms 4% social security part of the SE tax on any of your net earnings. 2012 1040 forms However, you must pay the 2. 2012 1040 forms 9% Medicare part of the SE tax on all your net earnings. 2012 1040 forms Special Rules and Exceptions Aliens. 2012 1040 forms   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. 2012 1040 forms S. 2012 1040 forms citizens. 2012 1040 forms Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. 2012 1040 forms S. 2012 1040 forms social security system. 2012 1040 forms However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. 2012 1040 forms S. 2012 1040 forms residents for self-employment tax purposes. 2012 1040 forms For more information on aliens, see Publication 519, U. 2012 1040 forms S. 2012 1040 forms Tax Guide for Aliens. 2012 1040 forms Child employed by parent. 2012 1040 forms   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. 2012 1040 forms Church employee. 2012 1040 forms    If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108. 2012 1040 forms 28 or more in wages from the church or organization. 2012 1040 forms For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 2012 1040 forms Fishing crew member. 2012 1040 forms   If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. 2012 1040 forms You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. 2012 1040 forms The pay is not more than $100 per trip. 2012 1040 forms The pay is received only if there is a minimum catch. 2012 1040 forms The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. 2012 1040 forms You get a share of the catch or a share of the proceeds from the sale of the catch. 2012 1040 forms Your share depends on the amount of the catch. 2012 1040 forms The boat's operating crew normally numbers fewer than 10 individuals. 2012 1040 forms (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10. 2012 1040 forms ) Notary public. 2012 1040 forms   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ but are not subject to self-employment tax (see the Instructions for Schedule SE (Form 1040)). 2012 1040 forms State or local government employee. 2012 1040 forms   You are subject to SE tax if you are an employee of a state or local government, are paid solely on a fee basis, and your services are not covered under a federal-state social security agreement. 2012 1040 forms Foreign government or international organization employee. 2012 1040 forms   You are subject to SE tax if both the following conditions are true. 2012 1040 forms You are a U. 2012 1040 forms S. 2012 1040 forms citizen employed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Virgin Islands by: A foreign government, A wholly-owned agency of a foreign government, or An international organization. 2012 1040 forms Your employer is not required to withhold social security and Medicare taxes from your wages. 2012 1040 forms U. 2012 1040 forms S. 2012 1040 forms citizen or resident alien residing abroad. 2012 1040 forms    If you are a self-employed U. 2012 1040 forms S. 2012 1040 forms citizen or resident alien living outside the United States, in most cases you must pay SE tax. 2012 1040 forms Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. 2012 1040 forms Exception. 2012 1040 forms    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. 2012 1040 forms Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. 2012 1040 forms The country to which you must pay the tax will issue a certificate which serves as proof of exemption from social security tax in the other country. 2012 1040 forms   For more information, see the Instructions for Schedule SE (Form 1040). 2012 1040 forms More Than One Business If you have earnings subject to SE tax from more than one trade, business, or profession, you must combine the net profit (or loss) from each to determine your total earnings subject to SE tax. 2012 1040 forms A loss from one business reduces your profit from another business. 2012 1040 forms Community Property Income If any of the income from a trade or business, other than a partnership, is community property income under state law, it is included in the earnings subject to SE tax of the spouse carrying on the trade or business. 2012 1040 forms Gain or Loss Do not include in earnings subject to SE tax a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. 2012 1040 forms It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. 2012 1040 forms Lost Income Payments If you are self-employed and reduce or stop your business activities, any payment you receive from insurance or other sources for the lost business income is included in earnings subject to SE tax. 2012 1040 forms If you are not working when you receive the payment, it still relates to your business and is included in earnings subject to SE tax, even though your business is temporarily inactive. 2012 1040 forms Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. 2012 1040 forms The regular method. 2012 1040 forms The nonfarm optional method. 2012 1040 forms The farm optional method. 2012 1040 forms You must use the regular method unless you are eligible to use one or both of the optional methods. 2012 1040 forms Why use an optional method?    You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. 2012 1040 forms You want to receive credit for social security benefit coverage. 2012 1040 forms You incurred child or dependent care expenses for which you could claim a credit. 2012 1040 forms (An optional method may increase your earned income, which could increase your credit. 2012 1040 forms ) You are entitled to the earned income credit. 2012 1040 forms (An optional method may increase your earned income, which could increase your credit. 2012 1040 forms ) You are entitled to the additional child tax credit. 2012 1040 forms (An optional method may increase your earned income, which could increase your credit. 2012 1040 forms ) Effects of using an optional method. 2012 1040 forms   Using an optional method could increase your SE tax. 2012 1040 forms Paying more SE tax could result in your getting higher benefits when you retire. 2012 1040 forms   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller tax or no tax using the regular method. 2012 1040 forms   The optional methods may be used only to figure your SE tax. 2012 1040 forms To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. 2012 1040 forms Regular Method Multiply your total earnings subject to SE tax by 92. 2012 1040 forms 35% (. 2012 1040 forms 9235) to get your net earnings under the regular method. 2012 1040 forms See Short Schedule SE, line 4, or Long Schedule SE, line 4a. 2012 1040 forms Net earnings figured using the regular method are also called actual net earnings. 2012 1040 forms Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. 2012 1040 forms You may use this method if you meet all the following tests. 2012 1040 forms You are self-employed on a regular basis. 2012 1040 forms This means that your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. 2012 1040 forms The net earnings can be from either farm or nonfarm earnings or both. 2012 1040 forms You have used this method less than 5 years. 2012 1040 forms (There is a 5-year lifetime limit. 2012 1040 forms ) The years do not have to be one after another. 2012 1040 forms Your net nonfarm profits were: Less than $5,024, and Less than 72. 2012 1040 forms 189% of your gross nonfarm income. 2012 1040 forms Net nonfarm profits. 2012 1040 forms   Net nonfarm profit generally is the total of the amounts from: Line 31, Schedule C (Form 1040), Line 3, Schedule C-EZ (Form 1040), Box 14, code A, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J1, Schedule K-1 (Form 1065-B). 2012 1040 forms   However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. 2012 1040 forms Gross nonfarm income. 2012 1040 forms   Your gross nonfarm income generally is the total of the amounts from: Line 7, Schedule C (Form 1040), Line 1, Schedule C-EZ (Form 1040), Box 14, code C, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J2, Schedule K-1 (Form 1065-B). 2012 1040 forms Figuring Nonfarm Net Earnings If you meet the three tests explained earlier, use the following table to figure your net earnings from self-employment under the nonfarm optional method. 2012 1040 forms Table 10-1. 2012 1040 forms Figuring Nonfarm Net Earnings IF your gross nonfarm income is. 2012 1040 forms . 2012 1040 forms . 2012 1040 forms THEN your net earnings are equal to. 2012 1040 forms . 2012 1040 forms . 2012 1040 forms $6,960 or less Two-thirds of your gross nonfarm income. 2012 1040 forms More than $6,960 $4,640 Actual net earnings. 2012 1040 forms   Your actual net earnings are 92. 2012 1040 forms 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. 2012 1040 forms 35% (. 2012 1040 forms 9235) to get actual net earnings). 2012 1040 forms Actual net earnings are equivalent to net earnings figured using the regular method. 2012 1040 forms Optional net earnings less than actual net earnings. 2012 1040 forms   You cannot use this method to report an amount less than your actual net earnings from self-employment. 2012 1040 forms Gross nonfarm income of $6,960 or less. 2012 1040 forms   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. 2012 1040 forms Example 1. 2012 1040 forms Net nonfarm profit less than $5,024 and less than 72. 2012 1040 forms 189% of gross nonfarm income. 2012 1040 forms Ann Green runs a craft business. 2012 1040 forms Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. 2012 1040 forms She meets the test for being self-employed on a regular basis. 2012 1040 forms She has used the nonfarm optional method less than 5 years. 2012 1040 forms Her gross income and net profit in 2013 are as follows: Gross nonfarm income $5,400 Net nonfarm profit $1,200 Ann's actual net earnings for 2013 are $1,108 ($1,200 × . 2012 1040 forms 9235). 2012 1040 forms Because her net profit is less than $5,024 and less than 72. 2012 1040 forms 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). 2012 1040 forms Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. 2012 1040 forms Example 2. 2012 1040 forms Net nonfarm profit less than $5,024 but not less than 72. 2012 1040 forms 189% of gross nonfarm income. 2012 1040 forms Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. 2012 1040 forms She must use the regular method to figure her net earnings. 2012 1040 forms She cannot use the nonfarm optional method because her net profit is not less than 72. 2012 1040 forms 189% of her gross income. 2012 1040 forms Example 3. 2012 1040 forms Net loss from a nonfarm business. 2012 1040 forms Assume that in Example 1 Ann has a net loss of $700. 2012 1040 forms She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. 2012 1040 forms Example 4. 2012 1040 forms Nonfarm net earnings less than $400. 2012 1040 forms Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. 2012 1040 forms In this situation, she would not pay any SE tax under either the regular method or the nonfarm optional method because her net earnings under both methods are less than $400. 2012 1040 forms Gross nonfarm income of more than $6,960. 2012 1040 forms   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. 2012 1040 forms Example 1. 2012 1040 forms Net nonfarm profit less than $5,024 and less than 72. 2012 1040 forms 189% of gross nonfarm income. 2012 1040 forms John White runs an appliance repair shop. 2012 1040 forms His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. 2012 1040 forms He meets the test for being self-employed on a regular basis. 2012 1040 forms He has used the nonfarm optional method less than 5 years. 2012 1040 forms His gross income and net profit in 2013 are as follows: Gross nonfarm income $12,000 Net nonfarm profit $1,200 John's actual net earnings for 2013 are $1,108 ($1,200 × . 2012 1040 forms 9235). 2012 1040 forms Because his net profit is less than $5,024 and less than 72. 2012 1040 forms 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. 2012 1040 forms Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. 2012 1040 forms Example 2. 2012 1040 forms Net nonfarm profit not less than $5,024. 2012 1040 forms Assume that in Example 1 John's net profit is $5,400. 2012 1040 forms He must use the regular method. 2012 1040 forms He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. 2012 1040 forms Example 3. 2012 1040 forms Net loss from a nonfarm business. 2012 1040 forms Assume that in Example 1 John has a net loss of $700. 2012 1040 forms He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. 2012 1040 forms Farm Optional Method Use the farm optional method only for earnings from a farming business. 2012 1040 forms See Publication 225 for information about this method. 2012 1040 forms Using Both Optional Methods If you have both farm and nonfarm earnings, you may be able to use both optional methods to determine your net earnings from self-employment. 2012 1040 forms To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. 2012 1040 forms Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. 2012 1040 forms Add the net earnings figured under each method to arrive at your total net earnings from self-employment. 2012 1040 forms You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. 2012 1040 forms If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. 2012 1040 forms Example. 2012 1040 forms You are a self-employed farmer. 2012 1040 forms You also operate a retail grocery store. 2012 1040 forms Your gross income, actual net earnings from self-employment, and optional farm and optional nonfarm net earnings from self-employment are shown in Table 10-2. 2012 1040 forms Table 10-2. 2012 1040 forms Example—Farm and Nonfarm Earnings Income and Earnings Farm Nonfarm Gross income $3,000 $6,000 Actual net earnings $900 $500 Optional net earnings (2/3 of gross income) $2,000 $4,000 Table 10-3 shows four methods or combinations of methods you can use to figure net earnings from self-employment using the farm and nonfarm gross income and actual net earnings shown in Table 10-2. 2012 1040 forms Method 1. 2012 1040 forms Using the regular method for both farm and nonfarm income. 2012 1040 forms Method 2. 2012 1040 forms Using the optional method for farm income and the regular method for nonfarm income. 2012 1040 forms Method 3. 2012 1040 forms Using the regular method for farm income and the optional method for nonfarm income. 2012 1040 forms Method 4. 2012 1040 forms Using the optional method for both farm and nonfarm income. 2012 1040 forms Note. 2012 1040 forms Actual net earnings is the same as net earnings figured using the regular method. 2012 1040 forms Table 10-3. 2012 1040 forms Example—Net Earnings Net Earnings 1 2 3 4 Actual  farm $ 900   $ 900   Optional  farm   $ 2,000   $ 2,000 Actual nonfarm $ 500 $ 500     Optional nonfarm     $4,000 $4,000 Amount you can report: $1,400 $2,500 $4,900 $4,640* *Limited to $4,640 because you used both optional methods. 2012 1040 forms Fiscal Year Filer If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. 2012 1040 forms Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. 2012 1040 forms Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. 2012 1040 forms Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. 2012 1040 forms Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. 2012 1040 forms However, certain taxpayers must use Section B—Long Schedule SE. 2012 1040 forms If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. 2012 1040 forms Joint return. 2012 1040 forms   Even if you file a joint return, you cannot file a joint Schedule SE. 2012 1040 forms This is true whether one spouse or both spouses have earnings subject to SE tax. 2012 1040 forms If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. 2012 1040 forms However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. 2012 1040 forms Attach both schedules to the joint return. 2012 1040 forms More than one business. 2012 1040 forms   If you have more than one trade or business, you must combine the net profit (or loss) from each business to figure your SE tax. 2012 1040 forms A loss from one business will reduce your profit from another business. 2012 1040 forms File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. 2012 1040 forms Example. 2012 1040 forms You are the sole proprietor of two separate businesses. 2012 1040 forms You operate a restaurant that made a net profit of $25,000. 2012 1040 forms You also have a cabinetmaking business that had a net loss of $500. 2012 1040 forms You must file a Schedule C for the restaurant showing your net profit of $25,000 and another Schedule C for the cabinetmaking business showing your net loss of $500. 2012 1040 forms You file Schedule SE showing total earnings subject to SE tax of $24,500. 2012 1040 forms Prev  Up  Next   Home   More Online Publications
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CP 298 - Final Notice Before Levy on Social Security Benefits

Details About This Notice:
Sample Content: Page 1, Page 2
Purpose:   We send CP 298 to notify the recipient of our intent to levy on their social security benefits.
Reason for Issuance:   There is a balance due on the recipient's account we've previously asked them to pay. We're sending the notice to inform them the account is still unpaid and to notify them of our intent to levy on their social security benefits.
Account Balance:   Balance due
     

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Page Last Reviewed or Updated: 31-Mar-2014

The 2012 1040 Forms

2012 1040 forms 3. 2012 1040 forms   Environmental Taxes Table of Contents Oil Spill Liability Tax ODCs Imported Taxable Products Floor Stocks Tax Environmental taxes are imposed on crude oil and petroleum products (oil spill liability), the sale or use of ozone-depleting chemicals (ODCs), and imported products containing or manufactured with ODCs. 2012 1040 forms In addition, a floor stocks tax is imposed on ODCs held on January 1 by any person (other than the manufacturer or importer of the ODCs) for sale or for use in further manufacture. 2012 1040 forms Figure the environmental tax on Form 6627. 2012 1040 forms Enter the tax on the appropriate lines of Form 720 and attach Form 6627 to Form 720. 2012 1040 forms For environmental tax purposes, United States includes the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, any possession of the United States, the Commonwealth of the Northern Mariana Islands, the Trust Territory of the Pacific Islands, the continental shelf areas (applying the principles of section 638), and foreign trade zones. 2012 1040 forms No one is exempt from the environmental taxes, including the federal government, state and local governments, Indian tribal governments, and nonprofit educational organizations. 2012 1040 forms Oil Spill Liability Tax The oil spill liability tax is reported on Form 6627, Environmental Taxes, and Form 720, Quarterly Federal Excise Tax Return (IRS Nos. 2012 1040 forms 18 and 21). 2012 1040 forms The oil spill liability tax rate is $. 2012 1040 forms 08 per barrel and generally applies to crude oil received at a U. 2012 1040 forms S. 2012 1040 forms refinery and to petroleum products entered into the United States for consumption, use, or warehousing. 2012 1040 forms The tax also applies to certain uses and the exportation of domestic crude oil. 2012 1040 forms Crude oil includes crude oil condensates and natural gasoline. 2012 1040 forms Petroleum products include crude oil, refined and residual oil, and other liquid hydrocarbon refinery products. 2012 1040 forms Crude oil. 2012 1040 forms   Tax is imposed on crude oil when it is received at a United Sates refinery. 2012 1040 forms The operator of the refinery is liable for the tax. 2012 1040 forms   Tax is imposed on domestic crude oil used or exported before it is received at a United States refinery. 2012 1040 forms However, the use of crude oil for extracting oil or natural gas on the premises where such crude oil was produced is not taxable. 2012 1040 forms The user or exporter is liable for the tax. 2012 1040 forms Imported petroleum products. 2012 1040 forms   Tax is imposed on petroleum products when they enter the United States for consumption, use, or warehousing. 2012 1040 forms The person entering the petroleum product into the country is liable for the tax, including the tax on imported crude oil, even if it is subsequently received at a U. 2012 1040 forms S. 2012 1040 forms refinery. 2012 1040 forms   Tax is imposed only once on any imported petroleum product. 2012 1040 forms Thus, the operator of a U. 2012 1040 forms S. 2012 1040 forms refinery that receives imported crude oil must establish that the petroleum tax has already been imposed on such crude oil in order not to be liable for the tax. 2012 1040 forms ODCs For a list of the taxable ODCs and tax rates, see the Form 6627 instructions. 2012 1040 forms Taxable event. 2012 1040 forms   Tax is imposed on an ODC when it is first used or sold by its manufacturer or importer. 2012 1040 forms The manufacturer or importer is liable for the tax. 2012 1040 forms Use of ODCs. 2012 1040 forms   You use an ODC if you put it into service in a trade or business or for the production of income. 2012 1040 forms Also, an ODC is used if you use it in the making of an article, including incorporation into the article, chemical transformation, or release into the air. 2012 1040 forms The loss, destruction, packaging, repackaging, or warehousing of ODCs is not a use of the ODC. 2012 1040 forms   The creation of a mixture containing an ODC is treated as a taxable use of the ODC contained in the mixture. 2012 1040 forms An ODC is contained in a mixture only if the chemical identity of the ODC is not changed. 2012 1040 forms Generally, tax is imposed when the mixture is created and not on its sale or use. 2012 1040 forms However, you can choose to have the tax imposed on its sale or use by checking the appropriate box on Form 6627. 2012 1040 forms You can revoke this choice only with IRS consent. 2012 1040 forms   The creation of a mixture for export or for use as a feedstock is not a taxable use of the ODCs contained in the mixture. 2012 1040 forms Exceptions. 2012 1040 forms   The following may be exempt from the tax on ODCs. 2012 1040 forms Metered-dose inhalers. 2012 1040 forms Recycled ODCs. 2012 1040 forms Exported ODCs. 2012 1040 forms ODCs used as feedstock. 2012 1040 forms Metered-dose inhalers. 2012 1040 forms   There is no tax on ODCs used or sold for use as propellants in metered-dose inhalers. 2012 1040 forms For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. 2012 1040 forms The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. 2012 1040 forms 4682-2(d)(5). 2012 1040 forms The certificate may be included as part of the sales documentation. 2012 1040 forms Keep the certificate with your records. 2012 1040 forms Recycled ODCs. 2012 1040 forms   There is no tax on any ODC diverted or recovered in the United States as part of a recycling process (and not as part of the original manufacturing or production process). 2012 1040 forms There is no tax on recycled Halon-1301 or recycled Halon-2402 imported from a country that has signed the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol). 2012 1040 forms   The Montreal Protocol is administered by the United Nations (U. 2012 1040 forms N. 2012 1040 forms ). 2012 1040 forms To determine if a country has signed the Montreal Protocol, contact the U. 2012 1040 forms N. 2012 1040 forms The website is untreaty. 2012 1040 forms un. 2012 1040 forms org. 2012 1040 forms Exported ODCs. 2012 1040 forms   Generally, there is no tax on ODCs sold for export if certain requirements are met. 2012 1040 forms For a sale to be nontaxable, you and the purchaser must be registered. 2012 1040 forms See Form 637, Application for Registration (for Certain Excise Tax Activities). 2012 1040 forms Also, you must obtain from the purchaser an exemption certificate that you rely on in good faith. 2012 1040 forms Keep the certificate with your records. 2012 1040 forms The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. 2012 1040 forms 4682-5(d)(3). 2012 1040 forms The tax benefit of this exemption is limited. 2012 1040 forms For more information, see Regulations section 52. 2012 1040 forms 4682-5. 2012 1040 forms ODCs used as feedstock. 2012 1040 forms   There is no tax on ODCs sold for use or used as a feedstock. 2012 1040 forms An ODC is used as a feedstock only if the ODC is entirely consumed in the manufacture of another chemical. 2012 1040 forms The transformation of an ODC into one or more new compounds qualifies as use as a feedstock, but use of an ODC in a mixture does not qualify. 2012 1040 forms   For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. 2012 1040 forms The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. 2012 1040 forms 4682-2(d)(2). 2012 1040 forms Keep the certificate with your records. 2012 1040 forms Credits or refunds. 2012 1040 forms   A credit or refund (without interest) of tax paid on ODCs may be claimed if a taxed ODC is: Used as a propellant in a metered-dose inhaler (the person who used the ODC as a propellant may file a claim), Exported (the manufacturer may file a claim), or Used as a feedstock (the person who used the ODC may file a claim). 2012 1040 forms For information on how to file for credits or refunds, see the Instructions for Form 720 or Schedule 6 (Form 8849). 2012 1040 forms Conditions to allowance for ODCs exported. 2012 1040 forms   To claim a credit or refund for ODCs that are exported, you must have repaid or agreed to repay the tax to the exporter, or obtained the exporter's written consent to allowance of the credit or refund. 2012 1040 forms You must also have the evidence required by the EPA as proof that the ODCs were exported. 2012 1040 forms Imported Taxable Products An imported product containing or manufactured with ODCs is subject to tax if it is entered into the United States for consumption, use, or warehousing and is listed in the Imported Products Table. 2012 1040 forms The Imported Products Table is listed in Regulations section 52. 2012 1040 forms 4682-3(f)(6). 2012 1040 forms The tax is based on the weight of the ODCs used in the manufacture of the product. 2012 1040 forms Use the following methods to figure the ODC weight. 2012 1040 forms The actual (exact) weight of each ODC used as a material in manufacturing the product. 2012 1040 forms If the actual weight cannot be determined, the ODC weight listed for the product in the Imported Products Table. 2012 1040 forms However, if you cannot determine the actual weight and the table does not list an ODC weight for the product, the rate of tax is 1% of the entry value of the product. 2012 1040 forms Taxable event. 2012 1040 forms   Tax is imposed on an imported taxable product when the product is first sold or used by its importer. 2012 1040 forms The importer is liable for the tax. 2012 1040 forms Use of imported products. 2012 1040 forms   You use an imported product if you put it into service in a trade or business or for the production of income or use it in the making of an article, including incorporation into the article. 2012 1040 forms The loss, destruction, packaging, repackaging, warehousing, or repair of an imported product is not a use of that product. 2012 1040 forms Entry as use. 2012 1040 forms   The importer may choose to treat the entry of a product into the United States as the use of the product. 2012 1040 forms Tax is imposed on the date of entry instead of when the product is sold or used. 2012 1040 forms The choice applies to all imported taxable products that you own and have not used when you make the choice and all later entries. 2012 1040 forms Make the choice by checking the box in Part II of Form 6627. 2012 1040 forms The choice is effective as of the beginning of the calendar quarter to which the Form 6627 applies. 2012 1040 forms You can revoke this choice only with IRS consent. 2012 1040 forms Sale of article incorporating imported product. 2012 1040 forms   The importer may treat the sale of an article manufactured or assembled in the United States as the first sale or use of an imported taxable product incorporated in that article if both the following apply. 2012 1040 forms The importer has consistently treated the sale of similar items as the first sale or use of similar taxable imported products. 2012 1040 forms The importer has not chosen to treat entry into the United States as use of the product. 2012 1040 forms Imported products table. 2012 1040 forms   The table lists all the products that are subject to the tax on imported taxable products and specifies the ODC weight (discussed later) of each product. 2012 1040 forms   Each listing in the table identifies a product by name and includes only products that are described by that name. 2012 1040 forms Most listings identify a product by both name and Harmonized Tariff Schedule (HTS) heading. 2012 1040 forms In those cases, a product is included in that listing only if the product is described by that name and the rate of duty on the product is determined by reference to that HTS heading. 2012 1040 forms A product is included in the listing even if it is manufactured with or contains a different ODC than the one specified in the table. 2012 1040 forms   Part II of the table lists electronic items that are not included within any other list in the table. 2012 1040 forms An imported product is included in this list only if the product meets one of the following tests. 2012 1040 forms It is an electronic component whose operation involves the use of nonmechanical amplification or switching devices such as tubes, transistors, and integrated circuits. 2012 1040 forms It contains components described in (1), which account for more than 15% of the cost of the product. 2012 1040 forms   These components do not include passive electrical devices, such as resistors and capacitors. 2012 1040 forms Items such as screws, nuts, bolts, plastic parts, and similar specially fabricated parts that may be used to construct an electronic item are not themselves included in the listing for electronic items. 2012 1040 forms Rules for listing products. 2012 1040 forms   Products are listed in the table according to the following rules. 2012 1040 forms A product is listed in Part I of the table if it is a mixture containing ODCs. 2012 1040 forms A product is listed in Part II of the table if the Commissioner has determined that the ODCs used as materials in the manufacture of the product under the predominant method are used for purposes of refrigeration or air conditioning, creating an aerosol or foam, or manufacturing electronic components. 2012 1040 forms A product is listed in Part III of the table if the Commissioner has determined that the product meets both the following tests. 2012 1040 forms It is not an imported taxable product. 2012 1040 forms It would otherwise be included within a list in Part II of the table. 2012 1040 forms   For example, floppy disk drive units are listed in Part III because they are not imported taxable products and would have been included in the Part II list for electronic items not specifically identified, but for their listing in Part III. 2012 1040 forms ODC weight. 2012 1040 forms   The Table ODC weight of a product is the weight, determined by the Commissioner, of the ODCs used as materials in the manufacture of the product under the predominant method of manufacturing. 2012 1040 forms The ODC weight is listed in Part II in pounds per single unit of product unless otherwise specified. 2012 1040 forms Modifying the table. 2012 1040 forms   A manufacturer or importer of a product may request the IRS add a product and its ODC weight to the table. 2012 1040 forms They also may request the IRS remove a product from the table, or change or specify the ODC weight of a product. 2012 1040 forms To request a modification, see Regulations section 52. 2012 1040 forms 4682-3(g) for the mailing address and information that must be included in the request. 2012 1040 forms Floor Stocks Tax Tax is imposed on any ODC held (other than by the manufacturer or importer of the ODC) on January 1 for sale or use in further manufacturing. 2012 1040 forms The person holding title (as determined under local law) to the ODC is liable for the tax, whether or not delivery has been made. 2012 1040 forms These chemicals are taxable without regard to the type or size of storage container in which the ODCs are held. 2012 1040 forms The tax may apply to an ODC whether it is in a 14-ounce can or a 30-pound tank. 2012 1040 forms You are liable for the floor stocks tax if you hold any of the following on January 1. 2012 1040 forms At least 400 pounds of ODCs other than halons or methyl chloroform, At least 50 pounds of halons, or At least 1,000 pounds of methyl chloroform. 2012 1040 forms If you are liable for the tax, prepare an inventory on January 1 of the taxable ODCs held on that date for sale or for use in further manufacturing. 2012 1040 forms You must pay this floor stocks tax by June 30 of each year. 2012 1040 forms Report the tax on Form 6627 and Part II of Form 720 for the second calendar quarter. 2012 1040 forms For the tax rates, see the Form 6627 instructions. 2012 1040 forms ODCs not subject to floor stocks tax. 2012 1040 forms   The floor stocks tax is not imposed on any of the following ODCs. 2012 1040 forms ODCs mixed with other ingredients that contribute to achieving the purpose for which the mixture will be used, unless the mixture contains only ODCs and one or more stabilizers. 2012 1040 forms ODCs contained in a manufactured article in which the ODCs will be used for their intended purpose without being released from the article. 2012 1040 forms ODCs that have been reclaimed or recycled. 2012 1040 forms ODCs sold in a qualifying sale for: Use as a feedstock, Export, or Use as a propellant in a metered-dose inhaler. 2012 1040 forms Prev  Up  Next   Home   More Online Publications