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2012 Ez Tax Forms

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2012 Ez Tax Forms

2012 ez tax forms 2. 2012 ez tax forms   Estimated Tax for 2014 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated TaxGeneral Rule Married Taxpayers Special Rules Aliens Estates and Trusts How To Figure Estimated Tax2014 Estimated Tax Worksheet When To Pay Estimated TaxWhen To Start Farmers and Fishermen How To Figure Each PaymentRegular Installment Method Annualized Income Installment Method Estimated Tax Payments Not Required How To Pay Estimated TaxCredit an Overpayment Pay Online Pay by Phone Pay by Check or Money Order Using the Estimated Tax Payment Voucher Introduction Estimated tax is the method used to pay tax on income that is not subject to withholding. 2012 ez tax forms This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. 2012 ez tax forms You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. 2012 ez tax forms Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. 2012 ez tax forms If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. 2012 ez tax forms If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. 2012 ez tax forms For information on when the penalty applies, see chapter 4. 2012 ez tax forms It would be helpful for you to have a copy of your 2013 tax return and an estimate of your 2014 income nearby while reading this chapter. 2012 ez tax forms Topics - This chapter discusses: Who must pay estimated tax, How to figure estimated tax (including illustrated examples), When to pay estimated tax, How to figure each payment, and How to pay estimated tax. 2012 ez tax forms Useful Items - You may want to see: Form (and Instructions) 1040-ES Estimated Tax for Individuals See chapter 5 for information about how to get this publication and form. 2012 ez tax forms Worksheets. 2012 ez tax forms   You may need to use several of the blank worksheets included in this chapter. 2012 ez tax forms See Worksheets for Chapter 2, later, to locate what you need. 2012 ez tax forms Who Does Not Have To Pay Estimated Tax If you receive salaries and wages, you may be able to avoid paying estimated tax by asking your employer to take more tax out of your earnings. 2012 ez tax forms To do this, file a new Form W-4 with your employer. 2012 ez tax forms See chapter 1. 2012 ez tax forms Estimated tax not required. 2012 ez tax forms   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. 2012 ez tax forms You had no tax liability for 2013. 2012 ez tax forms You were a U. 2012 ez tax forms S. 2012 ez tax forms citizen or resident alien for the whole year. 2012 ez tax forms Your 2013 tax year covered a 12-month period. 2012 ez tax forms   You had no tax liability for 2013 if your total tax (defined later under Total tax for 2013—line 14b ) was zero or you did not have to file an income tax return. 2012 ez tax forms Please click here for the text description of the image. 2012 ez tax forms Figure 2-A: Do You Have To Pay Estimated Tax? Who Must Pay Estimated Tax If you owed additional tax for 2013, you may have to pay estimated tax for 2014. 2012 ez tax forms You can use the following general rule as a guide during the year to see if you will have enough withholding, or should increase your withholding or make estimated tax payments. 2012 ez tax forms General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. 2012 ez tax forms You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. 2012 ez tax forms You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. 2012 ez tax forms Your 2013 tax return must cover all 12 months. 2012 ez tax forms Note. 2012 ez tax forms The percentages in (2a) or (2b) above may be different if you are a farmer, fisherman, or higher income taxpayer. 2012 ez tax forms See Special Rules , later. 2012 ez tax forms If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet for a more accurate calculation. 2012 ez tax forms Figure 2-A takes you through the general rule. 2012 ez tax forms You may find this helpful in determining if you must pay estimated tax. 2012 ez tax forms If all your income will be subject to income tax withholding, you probably do not need to pay estimated tax. 2012 ez tax forms Example 1. 2012 ez tax forms Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2014. 2012 ez tax forms She files as head of household claiming her dependent son, takes the standard deduction, and expects no refundable credits for 2014. 2012 ez tax forms Expected adjusted gross income (AGI) for 2014 $82,800 AGI for 2013 $73,700 Total tax on 2013 return (Form 1040,  line 61) $  8,746 Total 2014 estimated tax (line 13c of the 2014 Estimated Tax Worksheet) $11,015 Tax expected to be withheld in 2014 $10,000 Jane's answer to Figure 2-A, box 1, is YES; she expects to owe at least $1,000 for 2014 after subtracting her withholding from her expected total tax ($11,015 − $10,000 = $1,015). 2012 ez tax forms Her answer to box 2a is YES; she expects her income tax withholding ($10,000) to be at least 90% of the tax to be shown on her 2014 return ($11,015 × 90% = $9,913. 2012 ez tax forms 50). 2012 ez tax forms Jane does not need to pay estimated tax. 2012 ez tax forms Example 2. 2012 ez tax forms The facts are the same as in Example 1, except that Jane expects only $8,700 tax to be withheld in 2014. 2012 ez tax forms Because that is less than $9,913. 2012 ez tax forms 50, her answer to box 2a is NO. 2012 ez tax forms Jane's answer to box 2b is also NO; she does not expect her income tax withholding ($8,700) to be at least 100% of the total tax shown on her 2013 return ($8,746). 2012 ez tax forms Jane must increase her withholding or pay estimated tax for 2014. 2012 ez tax forms Example 3. 2012 ez tax forms The facts are the same as in Example 2, except that the total tax shown on Jane's 2013 return was $8,600. 2012 ez tax forms Because she expects to have more than $8,600 withheld in 2014 ($8,700), her answer to box 2b is YES. 2012 ez tax forms Jane does not need to pay estimated tax for 2014. 2012 ez tax forms Married Taxpayers If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. 2012 ez tax forms You and your spouse can make joint estimated tax payments even if you are not living together. 2012 ez tax forms However, you and your spouse cannot make joint estimated tax payments if: You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes). 2012 ez tax forms See Choosing Resident Alien Status in Publication 519, or Individuals of the same sex and opposite sex who are in registered domestic partnerships, civil unions, or other similar formal relationships that are not marriages under state law cannot make joint estimated tax payments. 2012 ez tax forms These individuals can take credit only for the estimated tax payments that he or she made. 2012 ez tax forms If you and your spouse cannot make joint estimated tax payments, apply these rules to your separate estimated income. 2012 ez tax forms Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. 2012 ez tax forms 2013 separate returns and 2014 joint return. 2012 ez tax forms   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. 2012 ez tax forms You filed a separate return if you filed as single, head of household, or married filing separately. 2012 ez tax forms 2013 joint return and 2014 separate returns. 2012 ez tax forms   If you plan to file a separate return for 2014, but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. 2012 ez tax forms You file a separate return if you file as single, head of household, or married filing separately. 2012 ez tax forms   To figure your share of the tax on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status for 2014. 2012 ez tax forms Then multiply the tax on the joint return by the following fraction. 2012 ez tax forms      The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. 2012 ez tax forms Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. 2012 ez tax forms Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. 2012 ez tax forms For 2014, they plan to file married filing separately. 2012 ez tax forms Joe figures his share of the tax on the 2013 joint return as follows: Tax on $40,100 based on separate return $5,960 Tax on $8,400 based on separate return 843 Total $6,803 Joe's percentage of total ($5,960 ÷ $6,803) 87. 2012 ez tax forms 6% Joe's share of tax on joint return  ($6,386 × 87. 2012 ez tax forms 6%) $5,594 Special Rules There are special rules for farmers, fishermen, and certain higher income taxpayers. 2012 ez tax forms Farmers and Fishermen If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under General Rule , earlier. 2012 ez tax forms Gross income. 2012 ez tax forms   Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. 2012 ez tax forms To determine whether two-thirds of your gross income for 2013 was from farming or fishing, use as your gross income the total of the income (not loss) amounts. 2012 ez tax forms Joint returns. 2012 ez tax forms   On a joint return, you must add your spouse's gross income to your gross income to determine if at least two-thirds of your total gross income is from farming or fishing. 2012 ez tax forms Gross income from farming. 2012 ez tax forms   This is income from cultivating the soil or raising agricultural commodities. 2012 ez tax forms It includes the following amounts. 2012 ez tax forms Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. 2012 ez tax forms Income from a plantation, ranch, nursery, range, orchard, or oyster bed. 2012 ez tax forms Crop shares for the use of your land. 2012 ez tax forms Gains from sales of draft, breeding, dairy, or sporting livestock. 2012 ez tax forms   For 2013, gross income from farming is the total of the following amounts. 2012 ez tax forms Schedule F (Form 1040), Profit or Loss From Farming, line 9. 2012 ez tax forms Form 4835, Farm Rental Income and Expenses, line 7. 2012 ez tax forms Your share of the gross farming income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041). 2012 ez tax forms Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property. 2012 ez tax forms   Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming. 2012 ez tax forms Gross income from fishing. 2012 ez tax forms   This is income from catching, taking, harvesting, cultivating, or farming any kind of fish, shellfish (for example, clams and mussels), crustaceans (for example, lobsters, crabs, and shrimp), sponges, seaweeds, or other aquatic forms of animal and vegetable life. 2012 ez tax forms   Gross income from fishing includes the following amounts. 2012 ez tax forms Schedule C (Form 1040), Profit or Loss From Business. 2012 ez tax forms Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing. 2012 ez tax forms Your share of the gross fishing income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041). 2012 ez tax forms Certain taxable interest and punitive damage awards received in connection with the Exxon Valdez litigation. 2012 ez tax forms Income for services normally performed in connection with fishing. 2012 ez tax forms Services normally performed in connection with fishing include: Shore service as an officer or crew member of a vessel engaged in fishing, and Services that are necessary for the immediate preservation of the catch, such as cleaning, icing, and packing the catch. 2012 ez tax forms Higher Income Taxpayers If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General Rule , earlier. 2012 ez tax forms For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. 2012 ez tax forms Note. 2012 ez tax forms This rule does not apply to farmers and fishermen. 2012 ez tax forms Aliens Resident and nonresident aliens also may have to pay estimated tax. 2012 ez tax forms Resident aliens should follow the rules in this publication, unless noted otherwise. 2012 ez tax forms Nonresident aliens should get Form 1040-ES (NR), U. 2012 ez tax forms S. 2012 ez tax forms Estimated Tax for Nonresident Alien Individuals. 2012 ez tax forms You are an alien if you are not a citizen or national of the United States. 2012 ez tax forms You are a resident alien if you either have a green card or meet the substantial presence test. 2012 ez tax forms For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Publication 519. 2012 ez tax forms Estates and Trusts Estates and trusts also must pay estimated tax. 2012 ez tax forms However, estates (and certain grantor trusts that receive the residue of the decedent's estate under the decedent's will) are exempt from paying estimated tax for the first 2 years after the decedent's death. 2012 ez tax forms Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax. 2012 ez tax forms How To Figure Estimated Tax To figure your estimated tax, you must figure your expected AGI, taxable income, taxes, deductions, and credits for the year. 2012 ez tax forms When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. 2012 ez tax forms Use your 2013 federal tax return as a guide. 2012 ez tax forms You can use Form 1040-ES to figure your estimated tax. 2012 ez tax forms Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. 2012 ez tax forms You must make adjustments both for changes in your own situation and for recent changes in the tax law. 2012 ez tax forms Some of these changes are discussed under What's New for 2014 , earlier. 2012 ez tax forms For information about these and other changes in the law, visit the IRS website at IRS. 2012 ez tax forms gov. 2012 ez tax forms The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. 2012 ez tax forms Keep the worksheet for your records. 2012 ez tax forms 2014 Estimated Tax Worksheet Use Worksheet 2-1 to help guide you through the information about completing the 2014 Estimated Tax Worksheet. 2012 ez tax forms You can also find a copy of the worksheet in the Instructions for Form 1040-ES. 2012 ez tax forms Expected AGI—Line 1 Your expected AGI for 2014 (line 1) is your expected total income minus your expected adjustments to income. 2012 ez tax forms Total income. 2012 ez tax forms   Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. 2012 ez tax forms However, do not include income that is tax exempt. 2012 ez tax forms   Total income includes all income and loss for 2014 that, if you had received it in 2013, would have been included on your 2013 tax return in the total on line 22 of Form 1040, line 15 of Form 1040A, or line 4 of Form 1040EZ. 2012 ez tax forms Social security and railroad retirement benefits. 2012 ez tax forms If you expect to receive social security or tier 1 railroad retirement benefits during 2014, use Worksheet 2-2 to figure the amount of expected taxable benefits you should include on line 1. 2012 ez tax forms Adjustments to income. 2012 ez tax forms   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2014 tax return. 2012 ez tax forms Self-employed. 2012 ez tax forms If you expect to have income from self-employment, use Worksheet 2-3 to figure your expected self-employment tax and your allowable deduction for self-employment tax. 2012 ez tax forms Include the amount from Worksheet 2-3 in your expected adjustments to income. 2012 ez tax forms If you file a joint return and both you and your spouse have net earnings from self-employment, each of you must complete a separate worksheet. 2012 ez tax forms Expected Taxable Income— Lines 2–5 Reduce your expected AGI for 2014 (line 1) by either your expected itemized deductions or your standard deduction and by your exemptions (lines 2 through 5). 2012 ez tax forms Itemized deductions—line 2. 2012 ez tax forms   If you expect to claim itemized deductions on your 2014 tax return, enter the estimated amount on line 2. 2012 ez tax forms   Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040). 2012 ez tax forms    For 2014, your total itemized deductions may be reduced if your AGI is more than the amount shown next for your filing status. 2012 ez tax forms Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than this amount, use Worksheet 2-5 to figure the amount to enter on line 2. 2012 ez tax forms Standard deduction—line 2. 2012 ez tax forms   If you expect to claim the standard deduction on your 2014 tax return, enter the amount on line 2. 2012 ez tax forms Use Worksheet 2-4 to figure your standard deduction. 2012 ez tax forms No standard deduction. 2012 ez tax forms   The standard deduction for some individuals is zero. 2012 ez tax forms Your standard deduction will be zero if you: File a separate return and your spouse itemizes deductions, Are a dual-status alien, or File a return for a period of less than 12 months because you change your accounting period. 2012 ez tax forms Exemptions—line 4. 2012 ez tax forms   After you have subtracted either your expected itemized deductions or your standard deduction from your expected AGI, reduce the amount remaining by $3,950 for each exemption you expect to take on your 2014 tax return. 2012 ez tax forms If another person (such as your parent) can claim an exemption for you on his or her tax return, you cannot claim your own personal exemption. 2012 ez tax forms This is true even if the other person will not claim your exemption or the exemption will be reduced or eliminated under the phaseout rule. 2012 ez tax forms    For 2014, your deduction for personal exemption is reduced if your AGI is more than the amount shown next for your filing status. 2012 ez tax forms Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than this amount, use Worksheet 2-6 to figure the amount to enter on line 4. 2012 ez tax forms Expected Taxes and Credits— Lines 6–13c After you have figured your expected taxable income (line 5), follow the steps next to figure your expected taxes, credits, and total tax for 2014. 2012 ez tax forms Most people will have entries for only a few of these steps. 2012 ez tax forms However, you should check every step to be sure you do not overlook anything. 2012 ez tax forms Step 1. 2012 ez tax forms   Figure your expected income tax (line 6). 2012 ez tax forms Generally, you will use the 2014 Tax Rate Schedules, later, to figure your expected income tax. 2012 ez tax forms   However, see below for situations where you must use a different method to compute your estimated tax. 2012 ez tax forms Tax on child's investment income. 2012 ez tax forms   You must use a special method to figure tax on the income of the following children who have more than $2,000 of investment income. 2012 ez tax forms Children under age 18 at the end of 2014. 2012 ez tax forms The following children if their earned income is not more than half their support. 2012 ez tax forms Children age 18 at the end of 2014. 2012 ez tax forms Children who are full-time students over age 18 and under age 24 at the end of 2014. 2012 ez tax forms See Publication 929, Tax Rules for Children and Dependents. 2012 ez tax forms Although the ages and dollar amounts in the publication may be different in the 2014 revision, this reference will give you basic information for figuring the tax. 2012 ez tax forms Tax on net capital gain. 2012 ez tax forms   The regular income tax rates for individuals do not apply to a net capital gain. 2012 ez tax forms Instead, your net capital gain is taxed at a lower maximum rate. 2012 ez tax forms   The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. 2012 ez tax forms Tax on capital gain and qualified dividends. 2012 ez tax forms If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure your tax. 2012 ez tax forms Note. 2012 ez tax forms For 2014, your capital gains and dividends rate will depend on your income. 2012 ez tax forms Tax if excluding foreign earned income or excluding or deducting foreign housing. 2012 ez tax forms If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555 or Form 2555-EZ, use Worksheet 2-8 to figure your estimated tax. 2012 ez tax forms Step 2. 2012 ez tax forms   Total your expected taxes (line 8). 2012 ez tax forms Include on line 8 the sum of the following. 2012 ez tax forms Your tax on line 6. 2012 ez tax forms Your expected alternative minimum tax (AMT) from Form 6251, or included on Form 1040A. 2012 ez tax forms Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions. 2012 ez tax forms Any recapture of education credits. 2012 ez tax forms Step 3. 2012 ez tax forms   Subtract your expected credits (line 9). 2012 ez tax forms If you are using your 2013 return as a guide and filed Form 1040, your total credits for 2013 were shown on line 54. 2012 ez tax forms If you filed Form 1040A, your total credits for 2013 were on line 34. 2012 ez tax forms   If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4. 2012 ez tax forms Step 4. 2012 ez tax forms   Add your expected self-employment tax (line 11). 2012 ez tax forms You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier). 2012 ez tax forms Step 5. 2012 ez tax forms   Add your expected other taxes (line 12). 2012 ez tax forms   Other taxes include the following. 2012 ez tax forms Additional tax on early distributions from: An IRA or other qualified retirement plan, A tax-sheltered annuity, or A modified endowment contract entered into after June 20, 1988. 2012 ez tax forms Household employment taxes if: You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax. 2012 ez tax forms Amounts written on Form 1040 on the line for “other taxes” (line 60 on the 2013 Form 1040). 2012 ez tax forms But, do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible. 2012 ez tax forms Repayment of the first-time homebuyer credit. 2012 ez tax forms See Form 5405. 2012 ez tax forms Additional Medicare Tax. 2012 ez tax forms A 0. 2012 ez tax forms 9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status. 2012 ez tax forms Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $200,000 Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. 2012 ez tax forms A self-employment loss should not be considered for purposes of this tax. 2012 ez tax forms RRTA compensation should be separately compared to the threshold. 2012 ez tax forms Your employer is responsible for withholding the 0. 2012 ez tax forms 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2014. 2012 ez tax forms You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. 2012 ez tax forms For more information on Additional Medicare Tax, go to IRS. 2012 ez tax forms gov and enter “Additional Medicare Tax” in the search box. 2012 ez tax forms Net Investment Income Tax (NIIT). 2012 ez tax forms The NIIT is 3. 2012 ez tax forms 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over the amount listed in the following chart, based on your filing status. 2012 ez tax forms Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $250,000 For more information on Net Investment Income Tax, go to IRS. 2012 ez tax forms gov and enter “Net Investment Income Tax” in the search box. 2012 ez tax forms Step 6. 2012 ez tax forms   Subtract your refundable credit (line 13b). 2012 ez tax forms   To figure your expected fuel tax credit, do not include fuel tax for the first three quarters of the year that you expect to have refunded to you. 2012 ez tax forms   The result of steps 1 through 6 is your total estimated tax for 2014 (line 13c). 2012 ez tax forms Required Annual Payment— Line 14c On lines 14a through 14c, figure the total amount you must pay for 2014, through withholding and estimated tax payments, to avoid paying a penalty. 2012 ez tax forms General rule. 2012 ez tax forms   The total amount you must pay is the smaller of: 90% of your total expected tax for 2014, or 100% of the total tax shown on your 2013 return. 2012 ez tax forms Your 2013 tax return must cover all 12 months. 2012 ez tax forms Special rules. 2012 ez tax forms   There are special rules for higher income taxpayers and for farmers and fishermen. 2012 ez tax forms Higher income taxpayers. 2012 ez tax forms   If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above. 2012 ez tax forms This rule does not apply to farmers and fishermen. 2012 ez tax forms For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. 2012 ez tax forms Example. 2012 ez tax forms   Jeremy Martin's total tax on his 2013 return was $42,581, and his expected tax for 2014 is $71,253. 2012 ez tax forms His 2013 AGI was $180,000. 2012 ez tax forms Because Jeremy had more than $150,000 of AGI in 2013, he figures his required annual payment as follows. 2012 ez tax forms He determines that 90% of his expected tax for 2014 is $64,128 (. 2012 ez tax forms 90 × $71,253). 2012 ez tax forms Next, he determines that 110% of the tax shown on his 2013 return is $46,839 (1. 2012 ez tax forms 10 x $42,581). 2012 ez tax forms Finally, he determines that his required annual payment is $46,839, the smaller of the two. 2012 ez tax forms Farmers and fishermen. 2012 ez tax forms   If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, your required annual payment is the smaller of: 662/3% (. 2012 ez tax forms 6667) of your total tax for 2014, or 100% of the total tax shown on your 2013 return. 2012 ez tax forms (Your 2013 tax return must cover all 12 months. 2012 ez tax forms )   For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen , under Special Rules discussed earlier. 2012 ez tax forms Total tax for 2013—line 14b. 2012 ez tax forms   Your 2013 total tax, if you filed Form 1040, is the amount on line 61 reduced by the following. 2012 ez tax forms Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). 2012 ez tax forms The following amounts from Form 5329 included on line 58. 2012 ez tax forms Any tax on excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts. 2012 ez tax forms Any tax on excess accumulations in qualified retirement plans. 2012 ez tax forms The following write-ins on line 60. 2012 ez tax forms Excise tax on excess golden parachute payments (identified as “EPP”). 2012 ez tax forms Excise tax on insider stock compensation from an expatriated corporation (identified as “ISC”). 2012 ez tax forms Look-back interest due under section 167(g) (identified as “From Form 8866”). 2012 ez tax forms Look-back interest due under section 460(b) (identified as “From Form 8697”). 2012 ez tax forms Recapture of federal mortgage subsidy (identified as “FMSR”). 2012 ez tax forms Additional tax on advance payments of health coverage tax credit when not eligible (identified as “HCTC”). 2012 ez tax forms Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance (identified as “UT”). 2012 ez tax forms Any refundable credit amounts. 2012 ez tax forms   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits. 2012 ez tax forms   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. 2012 ez tax forms Total Estimated Tax Payments Needed—Line 16a Use lines 15 and 16a to figure the total estimated tax you may be required to pay for 2014. 2012 ez tax forms Subtract your expected withholding from your required annual payment (line 14c). 2012 ez tax forms You usually must pay this difference in four equal installments. 2012 ez tax forms See When To Pay Estimated Tax and How To Figure Each Payment . 2012 ez tax forms You do not have to pay estimated tax if: Line 14c minus line 15 is zero or less, or Line 13c minus line 15 is less than $1,000. 2012 ez tax forms Withholding—line 15. 2012 ez tax forms   Your expected withholding for 2014 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc. 2012 ez tax forms ). 2012 ez tax forms It includes excess social security, and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. 2012 ez tax forms For this purpose, you will have excess social security or tier 1 railroad retirement tax withholding for 2014 only if your wages and compensation from two or more employers are more than $117,000. 2012 ez tax forms See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3. 2012 ez tax forms   It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. 2012 ez tax forms Your employer is responsible for withholding the 0. 2012 ez tax forms 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. 2012 ez tax forms When To Pay Estimated Tax For estimated tax purposes, the year is divided into four payment periods. 2012 ez tax forms Each period has a specific payment due date. 2012 ez tax forms If you do not pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return. 2012 ez tax forms If a payment is mailed, the date of the U. 2012 ez tax forms S. 2012 ez tax forms postmark is considered the date of payment. 2012 ez tax forms The payment periods and due dates for estimated tax payments are shown next. 2012 ez tax forms For exceptions to the dates listed, see Saturday, Sunday, holiday rule below. 2012 ez tax forms For the period: Due date: Jan. 2012 ez tax forms 11 – March 31 April 15 April 1 – May 31 June 16 June 1 – August 31 September 15 Sept. 2012 ez tax forms 1 – Dec. 2012 ez tax forms 31 January 15  next year2 1If your tax year does not begin on January 1,  see Fiscal year taxpayers . 2012 ez tax forms 2See January payment . 2012 ez tax forms Saturday, Sunday, holiday rule. 2012 ez tax forms   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or a holiday. 2012 ez tax forms January payment. 2012 ez tax forms   If you file your 2014 Form 1040 or Form 1040A by February 2, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. 2012 ez tax forms Example. 2012 ez tax forms Janet Adams does not pay any estimated tax for 2014. 2012 ez tax forms She files her 2014 income tax return and pays the balance due shown on her return on January 26, 2015. 2012 ez tax forms Janet's estimated tax for the fourth payment period is considered to have been paid on time. 2012 ez tax forms However, she may owe a penalty for not making the first three estimated tax payments, if required. 2012 ez tax forms Any penalty for not making those payments will be figured up to January 26, 2015. 2012 ez tax forms Fiscal year taxpayers. 2012 ez tax forms   If your tax year does not start on January 1, your payment due dates are: The 15th day of the 4th month of your fiscal year, The 15th day of the 6th month of your fiscal year, The 15th day of the 9th month of your fiscal year, and The 15th day of the 1st month after the end of your fiscal year. 2012 ez tax forms   You do not have to make the last payment listed above if you file your income tax return by the last day of the first month after the end of your fiscal year and pay all the tax you owe with your return. 2012 ez tax forms When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. 2012 ez tax forms If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. 2012 ez tax forms You have several options when paying estimated taxes. 2012 ez tax forms You can: apply an overpayment from the previous tax year, pay all your estimated tax by the due date of your first payment, or pay it in installments. 2012 ez tax forms If you choose to pay in installments, make your first payment by the due date for the first payment period. 2012 ez tax forms Make your remaining installment payments by the due dates for the later periods. 2012 ez tax forms To avoid any estimated tax penalties, all installments must be paid by their due date and for the required amount. 2012 ez tax forms No income subject to estimated tax during first period. 2012 ez tax forms   If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. 2012 ez tax forms You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. 2012 ez tax forms Table 2-1 shows the dates for making installment payments. 2012 ez tax forms    Table 2-1. 2012 ez tax forms Due Dates for Estimated Tax Installment Payments If you first have income on which you must pay estimated tax: Make a payment  by:* Make later  installments  by:* Before April 1 April 15 June 16     Sept. 2012 ez tax forms 15     Jan. 2012 ez tax forms 15 next year April 1–May 31 June 16 Sept. 2012 ez tax forms 15     Jan. 2012 ez tax forms 15 next year June 1–Aug. 2012 ez tax forms 31 Sept. 2012 ez tax forms 15 Jan. 2012 ez tax forms 15 next year After Aug. 2012 ez tax forms 31 Jan. 2012 ez tax forms 15 next year (None) *See January payment and Saturday, Sunday, holiday rule . 2012 ez tax forms How much to pay to avoid penalty. 2012 ez tax forms   To determine how much you should pay by each payment due date, see How To Figure Each Payment , later. 2012 ez tax forms Farmers and Fishermen If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, you have only one payment due date for your 2014 estimated tax, January 15, 2015. 2012 ez tax forms The due dates for the first three payment periods, discussed under When To Pay Estimated Tax , earlier, do not apply to you. 2012 ez tax forms If you file your 2014 Form 1040 by March 2, 2015, and pay all the tax you owe at that time, you do not need to make an estimated tax payment. 2012 ez tax forms Fiscal year farmers and fishermen. 2012 ez tax forms   If you are a farmer or fisherman, but your tax year does not start on January 1, you can either: Pay all your estimated tax by the 15th day after the end of your tax year, or File your return and pay all the tax you owe by the 1st day of the 3rd month after the end of your tax year. 2012 ez tax forms How To Figure Each Payment After you have figured your total estimated tax, figure how much you must pay by the due date of each payment period. 2012 ez tax forms You should pay enough by each due date to avoid a penalty for that period. 2012 ez tax forms If you do not pay enough during any payment period, you may be charged a penalty even if you are due a refund when you file your tax return. 2012 ez tax forms The penalty is discussed in chapter 4. 2012 ez tax forms Regular Installment Method If your first estimated tax payment is due April 15, 2014, you can figure your required payment for each period by dividing your annual estimated tax due (line 16a of the 2014 Estimated Tax Worksheet (Worksheet 2-1)) by 4. 2012 ez tax forms Enter this amount on line 17. 2012 ez tax forms However, use this method only if your income is basically the same throughout the year. 2012 ez tax forms Change in estimated tax. 2012 ez tax forms   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. 2012 ez tax forms Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. 2012 ez tax forms If you do not receive your income evenly throughout the year, your required estimated tax payments may not be the same for each period. 2012 ez tax forms See Annualized Income Installment Method . 2012 ez tax forms Amended estimated tax. 2012 ez tax forms If you refigure your estimated tax during the year, or if your first estimated tax payment is due after April 15, 2014, figure your required payment for each remaining payment period using Worksheet 2-14. 2012 ez tax forms Example. 2012 ez tax forms Early in 2014, Mira Roberts figures that her estimated tax due is $1,800. 2012 ez tax forms She makes estimated tax payments on April 15 and June 16 of $450 each ($1,800 ÷ 4). 2012 ez tax forms On July 10, she sells investment property at a gain. 2012 ez tax forms Her refigured estimated tax is $4,100. 2012 ez tax forms Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-14. 2012 ez tax forms If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025. 2012 ez tax forms Worksheet 2-14. 2012 ez tax forms Amended Estimated Tax Worksheet—Illustrated               1. 2012 ez tax forms Amended total estimated tax due 1. 2012 ez tax forms $4,100 2. 2012 ez tax forms Multiply line 1 by:           50% (. 2012 ez tax forms 50) if next payment is due June 16, 2014           75% (. 2012 ez tax forms 75) if next payment is due September 15,  2014           100% (1. 2012 ez tax forms 00) if next payment is due January 15,  2015 2. 2012 ez tax forms 3,075     3. 2012 ez tax forms Estimated tax payments for all previous periods 3. 2012 ez tax forms 900     4. 2012 ez tax forms Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment voucher for your next required payment 4. 2012 ez tax forms $2,175       Note. 2012 ez tax forms If the payment on line 4 is due January 15, 2015, stop here. 2012 ez tax forms Otherwise, go to line 5. 2012 ez tax forms         5. 2012 ez tax forms Add lines 3 and 4 5. 2012 ez tax forms 3,075 6. 2012 ez tax forms Subtract line 5 from line 1 and enter the result (but not less than zero) 6. 2012 ez tax forms 1,025 7. 2012 ez tax forms Each following required payment: If the payment on line 4 is due June 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. 2012 ez tax forms If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7. 2012 ez tax forms $1,025 Worksheet 2-14. 2012 ez tax forms Amended Estimated Tax Worksheet—Blank               1. 2012 ez tax forms Amended total estimated tax due 1. 2012 ez tax forms   2. 2012 ez tax forms Multiply line 1 by:           50% (. 2012 ez tax forms 50) if next payment is due June 16, 2014           75% (. 2012 ez tax forms 75) if next payment is due September 15,  2014           100% (1. 2012 ez tax forms 00) if next payment is due January 15,  2015 2. 2012 ez tax forms       3. 2012 ez tax forms Estimated tax payments for all previous periods 3. 2012 ez tax forms       4. 2012 ez tax forms Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment voucher for your next required payment 4. 2012 ez tax forms         Note. 2012 ez tax forms If the payment on line 4 is due January 15, 2015, stop here. 2012 ez tax forms Otherwise, go to line 5. 2012 ez tax forms         5. 2012 ez tax forms Add lines 3 and 4 5. 2012 ez tax forms   6. 2012 ez tax forms Subtract line 5 from line 1 and enter the result (but not less than zero) 6. 2012 ez tax forms   7. 2012 ez tax forms Each following required payment: If the payment on line 4 is due June 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. 2012 ez tax forms If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7. 2012 ez tax forms   Underpayment penalty. 2012 ez tax forms   The penalty is figured separately for each payment period. 2012 ez tax forms If you figure your payments using the regular installment method and later refigure your payments because of an increase in income, you may be charged a penalty for underpayment of estimated tax for the period(s) before you changed your payments. 2012 ez tax forms To see how you may be able to avoid or reduce this penalty, see Annualized Income Installment Method (Schedule AI) in chapter 4. 2012 ez tax forms Annualized Income Installment Method If you do not receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method. 2012 ez tax forms The annualized income installment method annualizes your tax at the end of each period based on a reasonable estimate of your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. 2012 ez tax forms To see whether you can pay less for any period, complete the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). 2012 ez tax forms You first must complete the 2014 Estimated Tax Worksheet (Worksheet 2-1) through line 16b. 2012 ez tax forms Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments and complete your payment vouchers. 2012 ez tax forms Note. 2012 ez tax forms If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2014 tax return. 2012 ez tax forms See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information. 2012 ez tax forms Instructions for the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9) Use Worksheet 2-9 to help you follow these instructions. 2012 ez tax forms The purpose of this worksheet is to determine your estimated tax liability as your income accumulates throughout the year, rather than dividing your entire year's estimated tax liability by four as if your income was earned equally throughout the year. 2012 ez tax forms The top of the worksheet shows the dates for each payment period. 2012 ez tax forms The periods build; that is, each period includes all previous periods. 2012 ez tax forms After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period. 2012 ez tax forms Line 1. 2012 ez tax forms   Enter your AGI for the period. 2012 ez tax forms This is your gross income for the period, including your share of partnership or S corporation income or loss, minus your adjustments to income for that period. 2012 ez tax forms See Expected AGI—Line 1 , earlier. 2012 ez tax forms Self-employment income. 2012 ez tax forms   If you had self-employment income, first complete Section B of this worksheet. 2012 ez tax forms Use the amounts on line 43 when figuring your expected AGI to enter in each column of Section A, line 1. 2012 ez tax forms Line 4. 2012 ez tax forms   Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 10% (7. 2012 ez tax forms 5% if either you or your spouse was born before January 2, 1950) or reducing certain miscellaneous deductions by 2% of your AGI. 2012 ez tax forms Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)). 2012 ez tax forms Line 6. 2012 ez tax forms   Multiply line 4 by line 5 and enter the result on line 6 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately. 2012 ez tax forms In that case, use Worksheet 2-10 to figure the amount to enter on line 6. 2012 ez tax forms Complete Worksheet 2–10 for each period, as necessary. 2012 ez tax forms Line 7. 2012 ez tax forms   If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction. 2012 ez tax forms Line 10. 2012 ez tax forms   Multiply $3,950 by your total expected exemptions and enter the result on line 10 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately. 2012 ez tax forms   In that case, use Worksheet 2-11 to figure the amount to enter on line 10. 2012 ez tax forms Line 12. 2012 ez tax forms   Generally, you will use the Tax Rate Schedules to figure the tax on your annualized income. 2012 ez tax forms However, see below for situations where you must use a different method to compute your estimated tax. 2012 ez tax forms Tax on child's investment income. 2012 ez tax forms   You must use a special method to figure tax on the income of the following children who have more than $2,000 of investment income. 2012 ez tax forms Children under age 18 at the end of 2014. 2012 ez tax forms The following children if their earned income is not more than half their support. 2012 ez tax forms Children age 18 at the end of 2014. 2012 ez tax forms Children who are full-time students over age 18 and under age 24 at the end of 2014. 2012 ez tax forms See Publication 929. 2012 ez tax forms Tax on net capital gain. 2012 ez tax forms   The regular income tax rates for individuals do not apply to a net capital gain. 2012 ez tax forms Instead, your net capital gain is taxed at a lower maximum rate. 2012 ez tax forms   The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. 2012 ez tax forms Tax on qualified dividends and capital gains. 2012 ez tax forms   For 2014, your capital gain and dividends rate will depend on your income. 2012 ez tax forms Tax on capital gain or qualified dividends. 2012 ez tax forms If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-12 to figure the amount to enter on line 12. 2012 ez tax forms Tax if excluding foreign earned income or excluding or deducting foreign housing. 2012 ez tax forms If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555 or Form 2555-EZ, use Worksheet 2-13 to figure the amount to enter on line 12. 2012 ez tax forms Line 13. 2012 ez tax forms   If you file Form 1040, add the tax from Forms 8814, 4972, and 6251 for the period. 2012 ez tax forms If you file Form 1040A, add the amount from the Alternative Minimum Tax Worksheet found in the instructions. 2012 ez tax forms Also include any recapture of an education credit for each period. 2012 ez tax forms You may owe this tax if you claimed an education credit in an earlier year and you received either tax-free educational assistance or a refund of qualifying expenses for the same student after filing your 2013 return. 2012 ez tax forms   Use the 2013 forms or worksheets to see if you will owe any of the taxes discussed above. 2012 ez tax forms Figure the tax based on your income and deductions during the period shown in the column headings. 2012 ez tax forms Multiply this amount by the annualization amounts shown for each column on line 2 of the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). 2012 ez tax forms Enter the result on line 13 of this worksheet. 2012 ez tax forms Line 15. 2012 ez tax forms   Include all the nonrefundable credits you expect to claim because of events that will occur during the period. 2012 ez tax forms Note. 2012 ez tax forms When figuring your credits for each period, annualize any item of income or deduction to figure each credit. 2012 ez tax forms For example, if you need to use your AGI to figure a credit, use line 3 of Worksheet 2-9 to figure the credit for each column. 2012 ez tax forms Line 18. 2012 ez tax forms   Add your expected other taxes. 2012 ez tax forms   Other taxes include the following. 2012 ez tax forms Additional tax on early distributions from: An IRA or other qualified retirement plan, A tax-sheltered annuity, or A modified endowment contract entered into after June 20, 1988. 2012 ez tax forms Household employment taxes if: You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax. 2012 ez tax forms Amounts on Form 1040 written on the line for “other taxes” (line 60 on the 2013 Form 1040). 2012 ez tax forms But do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security, Medicare, or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible. 2012 ez tax forms Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2014. 2012 ez tax forms See Form 5405 for exceptions. 2012 ez tax forms Additional Medicare Tax. 2012 ez tax forms A 0. 2012 ez tax forms 9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status. 2012 ez tax forms Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $200,000 Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. 2012 ez tax forms A self-employment loss should not be considered for purposes of this tax. 2012 ez tax forms RRTA compensation should be separately compared to the threshold. 2012 ez tax forms Your employer is responsible for withholding the 0. 2012 ez tax forms 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays you in excess of $200,000 in 2014. 2012 ez tax forms You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. 2012 ez tax forms For more information on Additional Medicare Tax, go to IRS. 2012 ez tax forms gov and enter “Additional Medicare Tax” in the search box. 2012 ez tax forms Net Investment Income Tax (NIIT). 2012 ez tax forms The NIIT is 3. 2012 ez tax forms 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over a specified threshold amount. 2012 ez tax forms Threshold amounts: Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $250,000 For more information on Net Investment Income Tax, go to IRS. 2012 ez tax forms gov and enter “Net Investment Income Tax” in the search box. 2012 ez tax forms Line 20. 2012 ez tax forms   Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. 2012 ez tax forms Note. 2012 ez tax forms When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit. 2012 ez tax forms Line 29. 2012 ez tax forms   If line 28 is smaller than line 25 and you are not certain of the estimate of your 2014 tax, you can avoid a penalty by entering the amount from line 25 on line 29. 2012 ez tax forms Line 31. 2012 ez tax forms   For each period, include estimated tax payments made and any excess social security and railroad retirement tax. 2012 ez tax forms   Also include estimated federal income tax withholding. 2012 ez tax forms One-fourth of your estimated withholding is considered withheld on the due date of each payment period. 2012 ez tax forms To figure the amount to include on line 31 for each period, multiply your total expected withholding for 2014 by: 25% (. 2012 ez tax forms 25) for the first period, 50% (. 2012 ez tax forms 50) for the second period, 75% (. 2012 ez tax forms 75) for the third period, and 100% (1. 2012 ez tax forms 00) for the fourth period. 2012 ez tax forms   However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. 2012 ez tax forms For each period, include withholding made from the beginning of the period up to and including the payment due date. 2012 ez tax forms You can make this choice separately for the taxes withheld from your wages and all other withholding. 2012 ez tax forms For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 16a , earlier. 2012 ez tax forms Nonresident aliens. 2012 ez tax forms   If you will file Form 1040NR and you do not receive wages as an employee subject to U. 2012 ez tax forms S. 2012 ez tax forms income tax withholding, the instructions for the worksheet are modified as follows. 2012 ez tax forms Skip column (a). 2012 ez tax forms On line 1, enter your income for the period that is effectively connected with a U. 2012 ez tax forms S. 2012 ez tax forms trade or business. 2012 ez tax forms On line 21, increase your entry by the amount determined by multiplying your income for the period that is not effectively connected with a U. 2012 ez tax forms S. 2012 ez tax forms trade or business by the following. 2012 ez tax forms 72% for column (b). 2012 ez tax forms 45% for column (c). 2012 ez tax forms 30% for column (d). 2012 ez tax forms However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2. 2012 ez tax forms 4, 1. 2012 ez tax forms 5, and 1, respectively. 2012 ez tax forms On line 26, enter one-half of the amount from line 16c of the Form 1040-ES (NR) 2014 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d) of Worksheet 2-9. 2012 ez tax forms On lines 24 and 27, skip column (b). 2012 ez tax forms On line 31, if you do not use the actual withholding method, include one-half of your total expected withholding in column (b) and one-fourth in columns (c) and (d). 2012 ez tax forms See Publication 519 for more information. 2012 ez tax forms Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. 2012 ez tax forms You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you will owe with your return under $1,000. 2012 ez tax forms How To Pay Estimated Tax There are several ways to pay estimated tax. 2012 ez tax forms Credit an overpayment on your 2013 return to your 2014 estimated tax. 2012 ez tax forms Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. 2012 ez tax forms Send in your payment (check or money order) with a payment voucher from Form 1040-ES. 2012 ez tax forms Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. 2012 ez tax forms On Form 1040, or Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. 2012 ez tax forms Take the amount you have credited into account when figuring your estimated tax payments. 2012 ez tax forms If you timely file your 2013 return, treat the credit as a payment made on April 15, 2014. 2012 ez tax forms If you are a beneficiary of an estate or trust, and the trustee elects to credit 2014 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2015. 2012 ez tax forms If you choose to have an overpayment of tax credited to your estimated tax, you cannot have any of that amount refunded to you until you file your tax return for the following year. 2012 ez tax forms You also cannot use that overpayment in any other way. 2012 ez tax forms Example. 2012 ez tax forms When Kathleen finished filling out her 2013 tax return, she saw that she had overpaid her taxes by $750. 2012 ez tax forms Kathleen knew she would owe additional tax in 2014. 2012 ez tax forms She credited $600 of the overpayment to her 2014 estimated tax and had the remaining $150 refunded to her. 2012 ez tax forms In September, she amended her 2013 return by filing Form 1040X, Amended U. 2012 ez tax forms S. 2012 ez tax forms Individual Income Tax Return. 2012 ez tax forms It turned out that she owed $250 more in tax than she had thought. 2012 ez tax forms This reduced her 2013 overpayment from $750 to $500. 2012 ez tax forms Because the $750 had already been applied to her 2014 estimated tax or refunded to her, the IRS billed her for the additional $250 she owed, plus penalties and interest. 2012 ez tax forms Kathleen could not use any of the $600 she had credited to her 2014 estimated tax to pay this bill. 2012 ez tax forms Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. 2012 ez tax forms You can make your estimated tax payments online when you e-file or at any time during the year. 2012 ez tax forms You can pay using either of the following electronic payment methods. 2012 ez tax forms Direct transfer from your bank account. 2012 ez tax forms Credit or debit card. 2012 ez tax forms To pay your taxes online or for more information, go to www. 2012 ez tax forms irs. 2012 ez tax forms gov/e-pay. 2012 ez tax forms Pay by Phone Paying by phone is another safe and secure method of paying electronically. 2012 ez tax forms Use one of the following methods. 2012 ez tax forms Direct transfer from your bank account. 2012 ez tax forms Credit or debit card. 2012 ez tax forms To pay by direct transfer from your bank account, call EFTPS Customer Service at 1-800-555-4477 (English), 1-800-244-4829 (Espanol), or TTY/TDD 1-800-733-4829. 2012 ez tax forms To pay using a credit or debit card, you can call one of the following service providers. 2012 ez tax forms There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. 2012 ez tax forms WorldPay 1-888-9-PAY-TAXTM (1-888-972-9829) www. 2012 ez tax forms payUSAtax. 2012 ez tax forms com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. 2012 ez tax forms officialpayments. 2012 ez tax forms com Link2GOV Corporation 1-888-PAY-1040TM (1-888-729-1040) www. 2012 ez tax forms PAY1040. 2012 ez tax forms com For the latest details on how to pay by phone, go to www. 2012 ez tax forms irs. 2012 ez tax forms gov/e-pay. 2012 ez tax forms Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. 2012 ez tax forms If you use your own envelopes (and not the window envelope that comes with the 1040-ES package), make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. 2012 ez tax forms Do not use the address shown in the Form 1040 or Form 1040A instructions. 2012 ez tax forms If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). 2012 ez tax forms Follow the instructions to make sure you use the vouchers correctly. 2012 ez tax forms Joint estimated tax payments. 2012 ez tax forms    If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. 2012 ez tax forms Change of address. 2012 ez tax forms    You must notify the IRS if you are making estimated tax payments and you changed your address during the year. 2012 ez tax forms Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. 2012 ez tax forms Worksheets for Chapter 2 Use the following worksheets and tables to figure your correct estimated tax. 2012 ez tax forms IF you need. 2012 ez tax forms . 2012 ez tax forms . 2012 ez tax forms THEN use. 2012 ez tax forms . 2012 ez tax forms . 2012 ez tax forms 2014 Tax Rate Schedules   the 2014 Estimated Tax Worksheet Worksheet 2-1 to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-2 to estimate your self-employment (SE) tax and your deduction for SE tax—lines 1 and 11 of ES Worksheet (lines 1 and 17 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-3 to estimate your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-4 to reduce your itemized deductions because your estimated AGI is more than $152,525—line 2 of ES Worksheet Worksheet 2-5 to reduce your exemption amount because your estimated AGI is more than $152,525—line 4 of ES Worksheet Worksheet 2-6 to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified dividends—line 6 of ES Worksheet Worksheet 2-7 to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 6 of ES Worksheet Worksheet 2-8 the 2014 Annualized Estimated Tax Worksheet (Annualized ES Worksheet) Worksheet 2-9 to reduce your itemized deductions because your estimated annualized AGI is more than $152,525—line 6 of Annualized ES Worksheet Worksheet 2-10 to reduce your exemption amount because your estimated annualized AGI is more than $152,525—line 10 of Annualized ES Worksheet Worksheet 2-11 to estimate your income tax if line 1 of your Annualized ES Worksheet includes a net capital gain or qualified dividends—line 12 of Annualized ES Worksheet Worksheet 2-12 to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 12 of Annualized ES Worksheet Worksheet 2-13 to refigure (amend) your estimated tax during the year Worksheet 2-14 2014 Tax Rate Schedules Do not use these Tax Rate Schedules to figure your 2013 taxes. 2012 ez tax forms Use them only to figure your 2014 estimated taxes. 2012 ez tax forms Schedule X—Use if your 2014 filing status is  Single Schedule Z—Use if your 2014 filing status is Head of household If line 5 is: The tax is:     If line 5 is: The tax is:     Over— But not  over—         of the  amount  over— Over— But not  over—         of the  amount  over— $0 $9,075     10. 2012 ez tax forms 0%   $0 $0 $12,950     10. 2012 ez tax forms 0%   $0 9,075 36,900 $907. 2012 ez tax forms 50 + 15. 2012 ez tax forms 0%   9,075 12,950 49,400 $1,295. 2012 ez tax forms 00 + 15. 2012 ez tax forms 0%   12,950 36,900 89,350 5,081. 2012 ez tax forms 25 + 25. 2012 ez tax forms 0%   36,900 49,400 127,550 6,762. 2012 ez tax forms 50 + 25. 2012 ez tax forms 0%   49,400 89,350 186,350 18,193. 2012 ez tax forms 75 + 28. 2012 ez tax forms 0%   89,350 127,550 206,600 26,300. 2012 ez tax forms 00 + 28. 2012 ez tax forms 0%   127,550 186,350 405,100 45,353. 2012 ez tax forms 75 + 33. 2012 ez tax forms 0%   186,350 206,600 405,100 48,434. 2012 ez tax forms 00 + 33. 2012 ez tax forms 0%   206,600 405,100 406,750 117,541. 2012 ez tax forms 25 + 35. 2012 ez tax forms 0%   405,100 405,100 432,200 113,939. 2012 ez tax forms 00 + 35. 2012 ez tax forms 0%   405,100 406,750 - - - - - - 118,118. 2012 ez tax forms 75 + 39. 2012 ez tax forms 6%   406,750 432,200 - - - - - - 123,424. 2012 ez tax forms 00 + 39. 2012 ez tax forms 6%   432,200 Schedule Y-1—Use if your 2014 filing status is Married filing jointly or Qualifying widow(er) Schedule Y-2—Use if your 2014 filing status is  Married filing separately If line 5 is: The tax is:     If line 5 is: The tax is:     Over— But not  over—         of the  amount  over— Over— But not  over—         of the  amount  over— $0 $18,150     10. 2012 ez tax forms 0%   $0 $0 $9,075     10. 2012 ez tax forms 0%   $0 18,150 73,800 $1,815. 2012 ez tax forms 00 + 15. 2012 ez tax forms 0%   18,150 9,075 36,900 $907. 2012 ez tax forms 50 + 15. 2012 ez tax forms 0%   9,075 73,800 148,850 10,162. 2012 ez tax forms 50 + 25. 2012 ez tax forms 0%   73,800 36,900 74,425 5,081. 2012 ez tax forms 25 + 25. 2012 ez tax forms 0%   36,900 148,850 226,850 28,925. 2012 ez tax forms 00 + 28. 2012 ez tax forms 0%   148,850 74,425 113,425 14,462. 2012 ez tax forms 50 + 28. 2012 ez tax forms 0%   74,425 226,850 405,100 50,765. 2012 ez tax forms 00 + 33. 2012 ez tax forms 0%   226,850 113,425 202,550 25,382. 2012 ez tax forms 50 + 33. 2012 ez tax forms 0%   113,425 405,100 457,600 109,587. 2012 ez tax forms 50 + 35. 2012 ez tax forms 0%   405,100 202,550 228,800 54,793. 2012 ez tax forms 75 + 35. 2012 ez tax forms 0%   202,550 457,600 - - - - - - 127,962. 2012 ez tax forms 50 + 39. 2012 ez tax forms 6%   457,600 228,800 - - - - - - 63,981. 2012 ez tax forms 25 + 39. 2012 ez tax forms 6%   228,800                             Worksheet 2-1. 2012 ez tax forms 2014 Estimated Tax Worksheet When this worksheet refers you to instructions, you can find those instructions in the Instructions for 2014 Form 1040-ES. 2012 ez tax forms 1 Adjusted gross income you expect in 2014 (see instructions) 1     2 If you plan to itemize deductions, enter the estimated total of your itemized deductions. 2012 ez tax forms  Caution: If line 1 is over $152,525, your deduction may be reduced. 2012 ez tax forms See Worksheet 2-5. 2012 ez tax forms If you do not plan to itemize deductions, enter your standard deduction. 2012 ez tax forms 2     3 Subtract line 2 from line 1 3     4 Exemptions. 2012 ez tax forms Multiply $3,950 by the number of personal exemptions. 2012 ez tax forms  Caution: If line 1 is over $152,525, the amount of your personal exemptions may be limited. 2012 ez tax forms See Worksheet 2-6. 2012 ez tax forms 4     5 Subtract line 4 from line 3 5     6 Tax. 2012 ez tax forms Figure your tax on the amount on line 5 by using the 2014 Tax Rate Schedules Caution: If you will have qualified dividends or a net capital gain, or expect to exclude or deduct foreign earned income or housing, see Worksheets 2-7 and 2-8 to figure the tax 6     7 Alternative minimum tax from Form 6251 or included on Form 1040A, line 28 7     8 Add lines 6 and 7. 2012 ez tax forms Add to this amount any other taxes you expect to include in the total on Form 1040, line 44 8     9 Credits (see instructions). 2012 ez tax forms Do not include any income tax withholding on this line 9     10 Subtract line 9 from line 8. 2012 ez tax forms If zero or less, enter -0- 10     11 Self-employment tax (see instructions) 11     12 Other taxes including, if applicable, Additional Medicare Tax and/or NIIT (see instructions) 12     13a Add lines 10 through 12 13a     b Earned income credit, additional child tax credit, fuel tax credit, and refundable American opportunity credit 13b     c Total 2014 estimated tax. 2012 ez tax forms Subtract line 13b from line 13a. 2012 ez tax forms If zero or less, enter -0- ▶ 13c     14a Multiply line 13c by 90% (662/3% for farmers and fishermen) 14a           b Required annual payment based on prior year's tax (see instructions) 14b           c Required annual payment to avoid a penalty. 2012 ez tax forms Enter the smaller of line 14a or 14b ▶ 14c        Caution: Generally, if you do not prepay (through income tax withholding and estimated tax payments) at least the amount on line 14c, you may owe a penalty for not paying enough estimated tax. 2012 ez tax forms To avoid a penalty, make sure your estimate on line 13c is as accurate as possible. 2012 ez tax forms Even if you pay the required annual payment, you may still owe tax when you file your return. 2012 ez tax forms If you prefer, you can pay the amount shown on line 13c. 2012 ez tax forms                         15 Income tax withheld and estimated to be withheld during 2014 (including income tax withholding on pensions, annuities, certain deferred income, etc. 2012 ez tax forms ) 15     16a Subtract line 15 from line 14c 16a             Is the result zero or less? □ Yes. 2012 ez tax forms Stop here. 2012 ez tax forms You are not required to make estimated tax payments. 2012 ez tax forms  □ No. 2012 ez tax forms Go to line 16b. 2012 ez tax forms             b Subtract line 15 from line 13c 16b             Is the result less than $1,000? □ Yes. 2012 ez tax forms Stop here. 2012 ez tax forms You are not required to make estimated tax payments. 2012 ez tax forms  □ No. 2012 ez tax forms Go to line 17 to figure your required payment. 2012 ez tax forms                         17 If the first payment you are required to make is due April 15, 2014, enter ¼ of line 16a (minus any 2013 overpayment that you are applying to this installment) here, and on your estimated tax payment voucher(s) if you are paying by check or money order 17     Worksheet 2-2. 2012 ez tax forms 2014 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits Note. 2012 ez tax forms If you are using this worksheet to estimate your taxable social security or railroad retirement benefits for Worksheet 2-9, 2014 Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount shown on Worksheet 2-9, line 2, for the same period before entering it on line 1 below. 2012 ez tax forms     1. 2012 ez tax forms Enter your expected social security and railroad retirement benefits 1. 2012 ez tax forms   2. 2012 ez tax forms Enter one-half of line 1 2. 2012 ez tax forms   3. 2012 ez tax forms Enter your expected total income. 2012 ez tax forms Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions 3. 2012 ez tax forms   4. 2012 ez tax forms Enter your expected nontaxable interest income 4. 2012 ez tax forms   5. 2012 ez tax forms Enter (as a positive amount) the total of any expected exclusions or deductions for: U. 2012 ez tax forms S. 2012 ez tax forms savings bond interest used for higher education expenses (Form 8815) Employer-provided adoption benefits (Form 8839) Foreign earned income or housing (Form 2555 or 2555-EZ) Income by bona fide residents of American Samoa (Form 4563) or Puerto Rico 5. 2012 ez tax forms   6. 2012 ez tax forms Add lines 2, 3, 4, and 5 6. 2012 ez tax forms   7. 2012 ez tax forms Enter your expected adjustments to income. 2012 ez tax forms Do not include any student loan interest deduction 7. 2012 ez tax forms   8. 2012 ez tax forms Subtract line 7 from line 6. 2012 ez tax forms If zero or less, stop here. 2012 ez tax forms  Note. 2012 ez tax forms Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 8. 2012 ez tax forms   9. 2012 ez tax forms Enter $25,000 ($32,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year) 9. 2012 ez tax forms   10. 2012 ez tax forms Subtract line 9 from line 8. 2012 ez tax forms If zero or less, stop here. 2012 ez tax forms  Note. 2012 ez tax forms Do not include any social security or railroad retirement benefits in the amount on line 1 of your Worksheet 2-1 (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 10. 2012 ez tax forms   11. 2012 ez tax forms Enter $9,000 ($12,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year) 11. 2012 ez tax forms   12. 2012 ez tax forms Subtract line 11 from line 10. 2012 ez tax forms If zero or less, enter -0- 12. 2012 ez tax forms   13. 2012 ez tax forms Enter the smaller of line 10 or line 11 13. 2012 ez tax forms   14. 2012 ez tax forms Enter one-half of line 13 14. 2012 ez tax forms   15
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File a Retirement Plan Return or Report

Form 5500 Corner for the annual reports of an employee benefit plan:

  • 5500, Annual Return/Report of an Employee Benefit Plan
  • 5500-EZ, Annual Return of One-Participant Retirement Plan
  • 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan
  • 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits
  • 5558, Application of Extension of Time to File Certain Employee Plan Returns

Form 5330 Corner for excise tax returns

Form 8955-SSA Resources for reports on deferred vested benefits

Form 8822-B to report a change in identity of a plan's responsible party

All retirement plan forms and publications

Notices to plan participants

DOL and PBGC requirements

Determinations

Additional resources

 

Page Last Reviewed or Updated: 20-Mar-2014

The 2012 Ez Tax Forms

2012 ez tax forms Publication 542 - Main Content Table of Contents Businesses Taxed as CorporationsPersonal services. 2012 ez tax forms Employee-owners. 2012 ez tax forms Other rules. 2012 ez tax forms Other rules. 2012 ez tax forms Property Exchanged for StockNonqualified preferred stock. 2012 ez tax forms Liabilities. 2012 ez tax forms Election to reduce basis. 2012 ez tax forms Capital Contributions Filing and Paying Income TaxesIncome Tax Return Penalties Estimated Tax U. 2012 ez tax forms S. 2012 ez tax forms Real Property Interest Accounting MethodsSection 481(a) adjustment. 2012 ez tax forms Accounting Periods Recordkeeping Income, Deductions, and Special ProvisionsCosts of Going Into Business Related Persons Income From Qualifying Shipping Activities Election to Expense Qualified Refinery Property Deduction to Comply With EPA Sulfur Regulations Energy-Efficient Commercial Building Property Deduction Corporate Preference Items Dividends-Received Deduction Extraordinary Dividends Below-Market Loans Charitable Contributions Capital Losses Net Operating Losses At-Risk Limits Passive Activity Limits Figuring TaxTax Rate Schedule Alternative Minimum Tax (AMT) Credits Recapture Taxes Accumulated Earnings Tax Distributions to ShareholdersMoney or Property Distributions Distributions of Stock or Stock Rights Constructive Distributions Reporting Dividends and Other Distributions How To Get Tax Help Businesses Taxed as Corporations The rules you must use to determine whether a business is taxed as a corporation changed for businesses formed after 1996. 2012 ez tax forms Business formed before 1997. 2012 ez tax forms   A business formed before 1997 and taxed as a corporation under the old rules will generally continue to be taxed as a corporation. 2012 ez tax forms Business formed after 1996. 2012 ez tax forms   The following businesses formed after 1996 are taxed as corporations. 2012 ez tax forms A business formed under a federal or state law that refers to it as a corporation, body corporate, or body politic. 2012 ez tax forms A business formed under a state law that refers to it as a joint-stock company or joint-stock association. 2012 ez tax forms An insurance company. 2012 ez tax forms Certain banks. 2012 ez tax forms A business wholly owned by a state or local government. 2012 ez tax forms A business specifically required to be taxed as a corporation by the Internal Revenue Code (for example, certain publicly traded partnerships). 2012 ez tax forms Certain foreign businesses. 2012 ez tax forms Any other business that elects to be taxed as a corporation. 2012 ez tax forms For example, a limited liability company (LLC) can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election. 2012 ez tax forms For more information about LLCs, see Publication 3402, Taxation of Limited Liability Companies. 2012 ez tax forms S corporations. 2012 ez tax forms   Some corporations may meet the qualifications for electing to be S corporations. 2012 ez tax forms For information on S corporations, see the instructions for Form 1120S, U. 2012 ez tax forms S. 2012 ez tax forms Income Tax Return for an S Corporation. 2012 ez tax forms Personal service corporations. 2012 ez tax forms   A corporation is a personal service corporation if it meets all of the following requirements. 2012 ez tax forms Its principal activity during the “testing period” is performing personal services (defined later). 2012 ez tax forms Generally, the testing period for any tax year is the prior tax year. 2012 ez tax forms If the corporation has just been formed, the testing period begins on the first day of its tax year and ends on the earlier of: The last day of its tax year, or The last day of the calendar year in which its tax year begins. 2012 ez tax forms Its employee-owners substantially perform the services in (1), above. 2012 ez tax forms This requirement is met if more than 20% of the corporation's compensation cost for its activities of performing personal services during the testing period is for personal services performed by employee-owners. 2012 ez tax forms Its employee-owners own more than 10% of the fair market value of its outstanding stock on the last day of the testing period. 2012 ez tax forms Personal services. 2012 ez tax forms   Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health (including veterinary services), law, and the performing arts. 2012 ez tax forms Employee-owners. 2012 ez tax forms   A person is an employee-owner of a personal service corporation if both of the following apply. 2012 ez tax forms He or she is an employee of the corporation or performs personal services for, or on behalf of, the corporation (even if he or she is an independent contractor for other purposes) on any day of the testing period. 2012 ez tax forms He or she owns any stock in the corporation at any time during the testing period. 2012 ez tax forms Other rules. 2012 ez tax forms   For other rules that apply to personal service corporations see Accounting Periods, later. 2012 ez tax forms Closely held corporations. 2012 ez tax forms   A corporation is closely held if all of the following apply. 2012 ez tax forms It is not a personal service corporation. 2012 ez tax forms At any time during the last half of the tax year, more than 50% of the value of its outstanding stock is, directly or indirectly, owned by or for five or fewer individuals. 2012 ez tax forms “Individual” includes certain trusts and private foundations. 2012 ez tax forms Other rules. 2012 ez tax forms   For the at-risk rules that apply to closely held corporations, seeAt-Risk Limits, later. 2012 ez tax forms Property Exchanged for Stock If you transfer property (or money and property) to a corporation in exchange for stock in that corporation (other than nonqualified preferred stock, described later), and immediately afterward you are in control of the corporation, the exchange is usually not taxable. 2012 ez tax forms This rule applies both to individuals and to groups who transfer property to a corporation. 2012 ez tax forms It also applies whether the corporation is being formed or is already operating. 2012 ez tax forms It does not apply in the following situations. 2012 ez tax forms The corporation is an investment company. 2012 ez tax forms You transfer the property in a bankruptcy or similar proceeding in exchange for stock used to pay creditors. 2012 ez tax forms The stock is received in exchange for the corporation's debt (other than a security) or for interest on the corporation's debt (including a security) that accrued while you held the debt. 2012 ez tax forms Both the corporation and any person involved in a nontaxable exchange of property for stock must attach to their income tax returns a complete statement of all facts pertinent to the exchange. 2012 ez tax forms For more information, see section 1. 2012 ez tax forms 351-3 of the Regulations. 2012 ez tax forms Control of a corporation. 2012 ez tax forms   To be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock. 2012 ez tax forms Example 1. 2012 ez tax forms You and Bill Jones buy property for $100,000. 2012 ez tax forms You both organize a corporation when the property has a fair market value of $300,000. 2012 ez tax forms You transfer the property to the corporation for all its authorized capital stock, which has a par value of $300,000. 2012 ez tax forms No gain is recognized by you, Bill, or the corporation. 2012 ez tax forms Example 2. 2012 ez tax forms You and Bill transfer the property with a basis of $100,000 to a corporation in exchange for stock with a fair market value of $300,000. 2012 ez tax forms This represents only 75% of each class of stock of the corporation. 2012 ez tax forms The other 25% was already issued to someone else. 2012 ez tax forms You and Bill recognize a taxable gain of $200,000 on the transaction. 2012 ez tax forms Services rendered. 2012 ez tax forms   The term property does not include services rendered or to be rendered to the issuing corporation. 2012 ez tax forms The value of stock received for services is income to the recipient. 2012 ez tax forms Example. 2012 ez tax forms You transfer property worth $35,000 and render services valued at $3,000 to a corporation in exchange for stock valued at $38,000. 2012 ez tax forms Right after the exchange, you own 85% of the outstanding stock. 2012 ez tax forms No gain is recognized on the exchange of property. 2012 ez tax forms However, you recognize ordinary income of $3,000 as payment for services you rendered to the corporation. 2012 ez tax forms Property of relatively small value. 2012 ez tax forms   The term property does not include property of a relatively small value when it is compared to the value of stock and securities already owned or to be received for services by the transferor if the main purpose of the transfer is to qualify for the nonrecognition of gain or loss by other transferors. 2012 ez tax forms   Property transferred will not be considered to be of relatively small value if its fair market value is at least 10% of the fair market value of the stock and securities already owned or to be received for services by the transferor. 2012 ez tax forms Stock received in disproportion to property transferred. 2012 ez tax forms   If a group of transferors exchange property for corporate stock, each transferor does not have to receive stock in proportion to his or her interest in the property transferred. 2012 ez tax forms If a disproportionate transfer takes place, it will be treated for tax purposes in accordance with its true nature. 2012 ez tax forms It may be treated as if the stock were first received in proportion and then some of it used to make gifts, pay compensation for services, or satisfy the transferor's obligations. 2012 ez tax forms Money or other property received. 2012 ez tax forms   If, in an otherwise nontaxable exchange of property for corporate stock, you also receive money or property other than stock, you may have to recognize gain. 2012 ez tax forms You must recognize gain only up to the amount of money plus the fair market value of the other property you receive. 2012 ez tax forms The rules for figuring the recognized gain in this situation generally follow those for a partially nontaxable exchange discussed in Publication 544 under Like-Kind Exchanges. 2012 ez tax forms If the property you give up includes depreciable property, the recognized gain may have to be reported as ordinary income from depreciation. 2012 ez tax forms See chapter 3 of Publication 544. 2012 ez tax forms No loss is recognized. 2012 ez tax forms Nonqualified preferred stock. 2012 ez tax forms   Nonqualified preferred stock is treated as property other than stock. 2012 ez tax forms Generally, it is preferred stock with any of the following features. 2012 ez tax forms The holder has the right to require the issuer or a related person to redeem or buy the stock. 2012 ez tax forms The issuer or a related person is required to redeem or buy the stock. 2012 ez tax forms The issuer or a related person has the right to redeem or buy the stock and, on the issue date, it is more likely than not that the right will be exercised. 2012 ez tax forms The dividend rate on the stock varies with reference to interest rates, commodity prices, or similar indices. 2012 ez tax forms For a detailed definition of nonqualified preferred stock, see section 351(g)(2) of the Internal Revenue Code. 2012 ez tax forms Liabilities. 2012 ez tax forms   If the corporation assumes your liabilities, the exchange generally is not treated as if you received money or other property. 2012 ez tax forms There are two exceptions to this treatment. 2012 ez tax forms If the liabilities the corporation assumes are more than your adjusted basis in the property you transfer, gain is recognized up to the difference. 2012 ez tax forms However, if the liabilities assumed give rise to a deduction when paid, such as a trade account payable or interest, no gain is recognized. 2012 ez tax forms If there is no good business reason for the corporation to assume your liabilities, or if your main purpose in the exchange is to avoid federal income tax, the assumption is treated as if you received money in the amount of the liabilities. 2012 ez tax forms For more information on the assumption of liabilities, see section 357(d) of the Internal Revenue Code. 2012 ez tax forms Example. 2012 ez tax forms You transfer property to a corporation for stock. 2012 ez tax forms Immediately after the transfer, you control the corporation. 2012 ez tax forms You also receive $10,000 in the exchange. 2012 ez tax forms Your adjusted basis in the transferred property is $20,000. 2012 ez tax forms The stock you receive has a fair market value (FMV) of $16,000. 2012 ez tax forms The corporation also assumes a $5,000 mortgage on the property for which you are personally liable. 2012 ez tax forms Gain is realized as follows. 2012 ez tax forms FMV of stock received $16,000 Cash received 10,000 Liability assumed by corporation 5,000 Total received $31,000 Minus: Adjusted basis of property transferred 20,000 Realized gain $11,000   The liability assumed is not treated as money or other property. 2012 ez tax forms The recognized gain is limited to $10,000, the cash received. 2012 ez tax forms Loss on exchange. 2012 ez tax forms   If you have a loss from an exchange and own, directly or indirectly, more than 50% of the corporation's stock, you cannot deduct the loss. 2012 ez tax forms For more information, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. 2012 ez tax forms Basis of stock or other property received. 2012 ez tax forms   The basis of the stock you receive is generally the adjusted basis of the property you transfer. 2012 ez tax forms Increase this amount by any amount treated as a dividend, plus any gain recognized on the exchange. 2012 ez tax forms Decrease this amount by any cash you received, the fair market value of any other property you received, and any loss recognized on the exchange. 2012 ez tax forms Also decrease this amount by the amount of any liability the corporation or another party to the exchange assumed from you, unless payment of the liability gives rise to a deduction when paid. 2012 ez tax forms    Further decreases may be required when the corporation or another party to the exchange assumes from you a liability that gives rise to a deduction when paid, if the basis of the stock would otherwise be higher than its fair market value on the date of the exchange. 2012 ez tax forms This rule does not apply if the entity assuming the liability acquired either substantially all of the assets or the trade or business with which the liability is associated. 2012 ez tax forms The basis of any other property you receive is its fair market value on the date of the trade. 2012 ez tax forms Basis of property transferred. 2012 ez tax forms   A corporation that receives property from you in exchange for its stock generally has the same basis you had in the property, increased by any gain you recognized on the exchange. 2012 ez tax forms However, the increase for the gain recognized may be limited. 2012 ez tax forms For more information, see section 362 of the Internal Revenue Code. 2012 ez tax forms Election to reduce basis. 2012 ez tax forms   In a section 351 transaction, if the adjusted basis of the property transferred exceeds the property's fair market value, the transferor and transferee may make an irrevocable election to treat the basis of the stock received by the transferor as having a basis equal to the fair market value of the property transferred. 2012 ez tax forms The transferor and transferee make this election by attaching a statement to their tax returns filed by the due date (including extensions) for the tax year in which the transaction occurred. 2012 ez tax forms However, if the transferor makes the election by including the certification provided in Notice 2005-70, 2005-41, I. 2012 ez tax forms R. 2012 ez tax forms B. 2012 ez tax forms 694, on or with its tax return filed by the due date (including extensions), then no election need be made by the transferee. 2012 ez tax forms    For more information on making this election, see section 362(e)(2)(C) of the Internal Revenue Code, and Notice 2005-70. 2012 ez tax forms Capital Contributions This section explains the tax treatment of contributions from shareholders and nonshareholders. 2012 ez tax forms Paid-in capital. 2012 ez tax forms   Contributions to the capital of a corporation, whether or not by shareholders, are paid-in capital. 2012 ez tax forms These contributions are not taxable to the corporation. 2012 ez tax forms Basis. 2012 ez tax forms   The corporation's basis of property contributed to capital by a shareholder is the same as the basis the shareholder had in the property, increased by any gain the shareholder recognized on the exchange. 2012 ez tax forms However, the increase for the gain recognized may be limited. 2012 ez tax forms For more information, see Basis of property transferred, above, and section 362 of the Internal Revenue Code. 2012 ez tax forms   The basis of property contributed to capital by a person other than a shareholder is zero. 2012 ez tax forms   If a corporation receives a cash contribution from a person other than a shareholder, the corporation must reduce the basis of any property acquired with the contribution during the 12-month period beginning on the day it received the contribution by the amount of the contribution. 2012 ez tax forms If the amount contributed is more than the cost of the property acquired, then reduce, but not below zero, the basis of the other properties held by the corporation on the last day of the 12-month period in the following order. 2012 ez tax forms Depreciable property. 2012 ez tax forms Amortizable property. 2012 ez tax forms Property subject to cost depletion but not to percentage depletion. 2012 ez tax forms All other remaining properties. 2012 ez tax forms   Reduce the basis of property in each category to zero before going on to the next category. 2012 ez tax forms   There may be more than one piece of property in each category. 2012 ez tax forms Base the reduction of the basis of each property on the following ratio:   Basis of each piece of property   Bases of all properties (within that category) If the corporation wishes to make this adjustment in some other way, it must get IRS approval. 2012 ez tax forms The corporation files a request for approval with its income tax return for the tax year in which it receives the contribution. 2012 ez tax forms Filing and Paying Income Taxes The federal income tax is a pay-as-you-go tax. 2012 ez tax forms A corporation generally must make estimated tax payments as it earns or receives income during its tax year. 2012 ez tax forms After the end of the year, the corporation must file an income tax return. 2012 ez tax forms This section will help you determine when and how to pay and file corporate income taxes. 2012 ez tax forms For certain corporations affected by Presidentially declared disasters such as hurricanes, the due dates for filing returns, paying taxes, and performing other time-sensitive acts may be extended. 2012 ez tax forms The IRS may also forgive the interest and penalties on any underpaid tax for the length of any extension. 2012 ez tax forms For more information, visit www. 2012 ez tax forms irs. 2012 ez tax forms gov/newsroom/article/0,,id=108362. 2012 ez tax forms 00. 2012 ez tax forms Income Tax Return This section will help you determine when and how to report a corporation's income tax. 2012 ez tax forms Who must file. 2012 ez tax forms   Unless exempt under section 501 of the Internal Revenue Code, all domestic corporations in existence for any part of a tax year (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. 2012 ez tax forms Which form to file. 2012 ez tax forms   A corporation generally must file Form 1120, U. 2012 ez tax forms S. 2012 ez tax forms Corporation Income Tax Return, to report its income, gains, losses, deductions, credits, and to figure its income tax liability. 2012 ez tax forms Certain organizations and entities must file special returns. 2012 ez tax forms For more information, see Special Returns for Certain Organizations, in the Instructions for Form 1120. 2012 ez tax forms Electronic filing. 2012 ez tax forms   Corporations can generally electronically file (e-file) Form 1120 and certain related forms, schedules, and attachments. 2012 ez tax forms Certain corporations with total assets of $10 million or more, that file at least 250 returns a year must e-file Form 1120. 2012 ez tax forms However, in certain instances, these corporations can request a waiver. 2012 ez tax forms For more information regarding electronic filing, visit www. 2012 ez tax forms irs. 2012 ez tax forms gov/efile. 2012 ez tax forms When to file. 2012 ez tax forms   Generally, a corporation must file its income tax return by the 15th day of the 3rd month after the end of its tax year. 2012 ez tax forms A new corporation filing a short-period return must generally file by the 15th day of the 3rd month after the short period ends. 2012 ez tax forms A corporation that has dissolved must generally file by the 15th day of the 3rd month after the date it dissolved. 2012 ez tax forms Example 1. 2012 ez tax forms A corporation's tax year ends December 31. 2012 ez tax forms It must file its income tax return by March 15th. 2012 ez tax forms Example 2. 2012 ez tax forms A corporation's tax year ends June 30. 2012 ez tax forms It must file its income tax return by September 15th. 2012 ez tax forms   If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day. 2012 ez tax forms Extension of time to file. 2012 ez tax forms   File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns, to request an extension of time to file a corporation income tax return. 2012 ez tax forms The IRS will grant the extension if you complete the form properly, file it, and pay any tax due by the original due date for the return. 2012 ez tax forms   Form 7004 does not extend the time for paying the tax due on the return. 2012 ez tax forms Interest, and possibly penalties, will be charged on any part of the final tax due not shown as a balance due on Form 7004. 2012 ez tax forms The interest is figured from the original due date of the return to the date of payment. 2012 ez tax forms   For more information, see the instructions for Form 7004. 2012 ez tax forms How to pay your taxes. 2012 ez tax forms   A corporation must pay its tax due in full no later than the 15th day of the 3rd month after the end of its tax year. 2012 ez tax forms Electronic Federal Tax Payment System (EFTPS). 2012 ez tax forms   Corporations generally must use EFTPS to make deposits of all tax liabilities (including social security, Medicare, withheld income, excise, and corporate income taxes). 2012 ez tax forms For more information on EFTPS and enrollment, visit www. 2012 ez tax forms eftps. 2012 ez tax forms gov or call 1-800-555-4477. 2012 ez tax forms Also see Publication 966, The Secure Way to Pay Your Federal Taxes. 2012 ez tax forms Note. 2012 ez tax forms Forms 8109 and 8109-B, Federal Tax Deposit Coupon, can no longer be used to make federal tax deposits. 2012 ez tax forms Penalties Generally, if the corporation receives a notice about interest and penalties after it files its return, send the IRS an explanation and we will determine if the corporation meets reasonable-cause criteria. 2012 ez tax forms Do not attach an explanation when the corporation's return is filed. 2012 ez tax forms See the instructions for your income tax return. 2012 ez tax forms Late filing of return. 2012 ez tax forms    A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. 2012 ez tax forms If the corporation is charged a penalty for late payment of tax (discussed next) for the same period of time, the penalty for late filing is reduced by the amount of the penalty for late payment. 2012 ez tax forms The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $100. 2012 ez tax forms The penalty will not be imposed if the corporation can show the failure to file on time was due to a reasonable cause. 2012 ez tax forms Late payment of tax. 2012 ez tax forms    A corporation that does not pay the tax when due may be penalized ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. 2012 ez tax forms The penalty will not be imposed if the corporation can show that the failure to pay on time was due to a reasonable cause. 2012 ez tax forms Trust fund recovery penalty. 2012 ez tax forms   If income, social security, and Medicare taxes that a corporation must withhold from employee wages are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. 2012 ez tax forms The penalty is the full amount of the unpaid trust fund tax. 2012 ez tax forms This penalty may apply to you if these unpaid taxes cannot be immediately collected from the business. 2012 ez tax forms   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying these taxes, and who acted willfully in not doing so. 2012 ez tax forms   A responsible person can be an officer or employee of a corporation, an accountant, or a volunteer director/trustee. 2012 ez tax forms A responsible person also may include one who signs checks for the corporation or otherwise has authority to cause the spending of business funds. 2012 ez tax forms   Willfully means voluntarily, consciously, and intentionally. 2012 ez tax forms A responsible person acts willfully if the person knows the required actions are not taking place. 2012 ez tax forms   For more information on withholding and paying these taxes, see Publication 15 (Circular E), Employer's Tax Guide, and Publication 51, (Circular A), Agricultural Employer's Tax Guide. 2012 ez tax forms Other penalties. 2012 ez tax forms   Other penalties can be imposed for negligence, substantial understatement of tax, reportable transaction understatements, and fraud. 2012 ez tax forms See sections 6662, 6662A, and 6663 of the Internal Revenue Code. 2012 ez tax forms Estimated Tax Generally, a corporation must make installment payments if it expects its estimated tax for the year to be $500 or more. 2012 ez tax forms If the corporation does not pay the installments when they are due, it could be subject to an underpayment penalty. 2012 ez tax forms This section will explain how to avoid this penalty. 2012 ez tax forms When to pay estimated tax. 2012 ez tax forms   Installment payments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year. 2012 ez tax forms Example 1. 2012 ez tax forms Your corporation's tax year ends December 31. 2012 ez tax forms Installment payments are due on April 15, June 15, September 15, and December 15. 2012 ez tax forms Example 2. 2012 ez tax forms Your corporation's tax year ends June 30. 2012 ez tax forms Installment payments are due on October 15, December 15, March 15, and June 15. 2012 ez tax forms   If any due date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next business day. 2012 ez tax forms How to figure each required installment. 2012 ez tax forms   Use Form 1120-W, Estimated Tax for Corporations, as a worksheet to figure each required installment of estimated tax. 2012 ez tax forms You will generally use one of the following two methods to figure each required installment. 2012 ez tax forms You should use the method that yields the smallest installment payments. 2012 ez tax forms Note. 2012 ez tax forms In these discussions, “return” generally refers to the corporation's original return. 2012 ez tax forms However, an amended return is considered the original return if it is filed by the due date (including extensions) of the original return. 2012 ez tax forms Method 1. 2012 ez tax forms   Each required installment is 25% of the income tax the corporation will show on its return for the current year. 2012 ez tax forms Method 2. 2012 ez tax forms   Each required installment is 25% of the income tax shown on the corporation's return for the previous year. 2012 ez tax forms   To use Method 2: The corporation must have filed a return for the previous year, The return must have been for a full 12 months, and The return must have shown a positive tax liability (not zero). 2012 ez tax forms Also, if the corporation is a large corporation, it can use Method 2 to figure the first installment only. 2012 ez tax forms   See the Instructions for Form 1120-W, for the definition of a large corporation and other special rules for large corporations. 2012 ez tax forms Other methods. 2012 ez tax forms   If a corporation's income is expected to vary during the year because, for example, its business is seasonal, it may be able to lower the amount of one or more required installments by using one or both of the following methods. 2012 ez tax forms The annualized income installment method. 2012 ez tax forms The adjusted seasonal installment method. 2012 ez tax forms Use Schedule A of Form 1120-W to determine if using one or both of these methods will lower the amount of any required installments. 2012 ez tax forms Refiguring required installments. 2012 ez tax forms   If after the corporation figures and deposits its estimated tax it finds that its tax liability for the year will be more or less than originally estimated, it may have to refigure its required installments to see if an underpayment penalty may apply. 2012 ez tax forms An immediate catchup payment should be made to reduce any penalty resulting from the underpayment of any earlier installments. 2012 ez tax forms Underpayment penalty. 2012 ez tax forms   If the corporation does not pay a required installment of estimated tax by its due date, it may be subject to a penalty. 2012 ez tax forms The penalty is figured separately for each installment due date. 2012 ez tax forms The corporation may owe a penalty for an earlier due date, even if it paid enough tax later to make up the underpayment. 2012 ez tax forms This is true even if the corporation is due a refund when its return is filed. 2012 ez tax forms Form 2220. 2012 ez tax forms   Use Form 2220, Underpayment of Estimated Tax by Corporations, to determine if a corporation is subject to the penalty for underpayment of estimated tax and to figure the amount of the penalty. 2012 ez tax forms   If the corporation is charged a penalty, the amount of the penalty depends on the following three factors. 2012 ez tax forms The amount of the underpayment. 2012 ez tax forms The period during which the underpayment was due and unpaid. 2012 ez tax forms The interest rate for underpayments published quarterly by the IRS in the Internal Revenue Bulletin. 2012 ez tax forms   A corporation generally does not have to file Form 2220 with its income tax return because the IRS will figure any penalty and bill the corporation. 2012 ez tax forms However, even if the corporation does not owe a penalty, complete and attach the form to the corporation's tax return if any of the following apply. 2012 ez tax forms The annualized income installment method was used to figure any required installment. 2012 ez tax forms The adjusted seasonal installment method was used to figure any required installment. 2012 ez tax forms The corporation is a large corporation figuring its first required installment based on the prior year's tax. 2012 ez tax forms How to pay estimated tax. 2012 ez tax forms   A corporation is generally required to use EFTPS to pay its taxes. 2012 ez tax forms See Electronic Federal Tax Payment System (EFTPS), earlier. 2012 ez tax forms Also see the Instructions for Form 1120-W. 2012 ez tax forms Quick refund of overpayments. 2012 ez tax forms   A corporation that has overpaid its estimated tax for the tax year may be able to apply for a quick refund. 2012 ez tax forms Use Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, to apply for a quick refund of an overpayment of estimated tax. 2012 ez tax forms A corporation can apply for a quick refund if the overpayment is: At least 10% of its expected tax liability, and At least $500. 2012 ez tax forms Use Form 4466 to figure the corporation's expected tax liability and the overpayment of estimated tax. 2012 ez tax forms File Form 4466 before the 16th day of the 3rd month after the end of the tax year, but before the corporation files its income tax return. 2012 ez tax forms Do not file Form 4466 before the end of the corporation's tax year. 2012 ez tax forms An extension of time to file the corporation's income tax return will not extend the time for filing Form 4466. 2012 ez tax forms The IRS will act on the form within 45 days from the date you file it. 2012 ez tax forms U. 2012 ez tax forms S. 2012 ez tax forms Real Property Interest If a domestic corporation acquires a U. 2012 ez tax forms S. 2012 ez tax forms real property interest from a foreign person or firm, the corporation may have to withhold tax on the amount it pays for the property. 2012 ez tax forms The amount paid includes cash, the fair market value of other property, and any assumed liability. 2012 ez tax forms If a domestic corporation distributes a U. 2012 ez tax forms S. 2012 ez tax forms real property interest to a foreign person or firm, it may have to withhold tax on the fair market value of the property. 2012 ez tax forms A corporation that fails to withhold may be liable for the tax, and any penalties and interest that apply. 2012 ez tax forms For more information, see section 1445 of the Internal Revenue Code; Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities; Form 8288, U. 2012 ez tax forms S. 2012 ez tax forms Withholding Tax Return for Dispositions by Foreign Persons of U. 2012 ez tax forms S. 2012 ez tax forms Real Property Interests; and Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. 2012 ez tax forms S. 2012 ez tax forms Real Property Interests. 2012 ez tax forms Accounting Methods An accounting method is a set of rules used to determine when and how income and expenses are reported. 2012 ez tax forms Taxable income should be determined using the method of accounting regularly used in keeping the corporation's books and records. 2012 ez tax forms In all cases, the method used must clearly show taxable income. 2012 ez tax forms Generally, permissible methods include: Cash, Accrual, or Any other method authorized by the Internal Revenue Code. 2012 ez tax forms Accrual method. 2012 ez tax forms   Generally, a corporation (other than a qualified personal service corporation) must use the accrual method of accounting if its average annual gross receipts exceed $5 million. 2012 ez tax forms A corporation engaged in farming operations also must use the accrual method. 2012 ez tax forms   If inventories are required, the accrual method generally must be used for sales and purchases of merchandise. 2012 ez tax forms However, qualifying taxpayers and eligible businesses of qualifying small business taxpayers are excepted from using the accrual method for eligible trades or businesses and may account for inventoriable items as materials and supplies that are not incidental. 2012 ez tax forms   Under the accrual method, an amount is includable in income when: All the events have occurred that fix the right to receive the income, which is the earliest of the date: The required performance takes place, Payment is due, or Payment is received; and The amount can be determined with reasonable accuracy. 2012 ez tax forms   Generally, an accrual basis taxpayer can deduct accrued expenses in the tax year when: All events that determine the liability have occurred, The amount of the liability can be figured with reasonable accuracy, and Economic performance takes place with respect to the expense. 2012 ez tax forms   There are exceptions to the economic performance rule for certain items, including recurring expenses. 2012 ez tax forms See section 461(h) of the Internal Revenue Code and the related regulations for the rules for determining when economic performance takes place. 2012 ez tax forms Nonaccrual experience method. 2012 ez tax forms   Accrual method corporations are not required to maintain accruals for certain amounts from the performance of services that, on the basis of their experience, will not be collected, if: The services are in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting; or The corporation's average annual gross receipts for the 3 prior tax years does not exceed $5 million. 2012 ez tax forms   This provision does not apply if interest is required to be paid on the amount or if there is any penalty for failure to pay the amount timely. 2012 ez tax forms Percentage of completion method. 2012 ez tax forms   Long-term contracts (except for certain real property construction contracts) must generally be accounted for using the percentage of completion method described in section 460 of the Internal Revenue Code. 2012 ez tax forms Mark-to-market accounting method. 2012 ez tax forms   Generally, dealers in securities must use the mark-to-market accounting method described in section 475 of the Internal Revenue Code. 2012 ez tax forms Under this method any security held by a dealer as inventory must be included in inventory at its FMV. 2012 ez tax forms Any security not held as inventory at the close of the tax year is treated as sold at its FMV on the last business day of the tax year. 2012 ez tax forms Any gain or loss must be taken into account in determining gross income. 2012 ez tax forms The gain or loss taken into account is treated as ordinary gain or loss. 2012 ez tax forms   Dealers in commodities and traders in securities and commodities can elect to use the mark-to-market accounting method. 2012 ez tax forms Change in accounting method. 2012 ez tax forms   A corporation can change its method of accounting used to report taxable income (for income as a whole or for the treatment of any material item). 2012 ez tax forms The corporation must file Form 3115, Application for Change in Accounting Method. 2012 ez tax forms For more information, see Form 3115 and Publication 538. 2012 ez tax forms Section 481(a) adjustment. 2012 ez tax forms   The corporation may have to make an adjustment under section 481(a) of the Internal Revenue Code to prevent amounts of income or expense from being duplicated or omitted. 2012 ez tax forms The section 481(a) adjustment period is generally 1 year for a net negative adjustment and 4 years for a net positive adjustment. 2012 ez tax forms However, a corporation can elect to use a 1-year adjustment period if the net section 481(a) adjustment for the change is less than $25,000. 2012 ez tax forms The corporation must complete the appropriate lines of Form 3115 to make the election. 2012 ez tax forms See the Instructions for Form 3115. 2012 ez tax forms Accounting Periods A corporation must figure its taxable income on the basis of a tax year. 2012 ez tax forms A tax year is the annual accounting period a corporation uses to keep its records and report its income and expenses. 2012 ez tax forms Generally, corporations can use either a calendar year or a fiscal year as its tax year. 2012 ez tax forms Unless special rules apply, a corporation generally adopts a tax year by filing its first federal income tax return using that tax year. 2012 ez tax forms For more information, see Publication 538. 2012 ez tax forms Personal service corporation. 2012 ez tax forms   A personal service corporation must use a calendar year as its tax year unless: It elects to use a 52–53 week tax year that ends with reference to the calendar year; It can establish a business purpose for a different tax year and obtains approval of the IRS. 2012 ez tax forms See Form 1128, Application To Adopt, Change, or Retain a Tax Year, and Publication 538; or It elects under section 444 of the Internal Revenue Code to have a tax year other than a calendar year. 2012 ez tax forms Use Form 8716, Election to Have a Tax Year Other Than a Required Tax Year, to make the election. 2012 ez tax forms   If a personal service corporation makes a section 444 election, its deduction for certain amounts paid to employee-owners may be limited. 2012 ez tax forms See Schedule H (Form 1120), Section 280H Limitations for a Personal Service Corporation (PSC), to figure the maximum deduction. 2012 ez tax forms Change of tax year. 2012 ez tax forms   Generally, a corporation must get the consent of the IRS before changing its tax year by filing Form 1128. 2012 ez tax forms However, under certain conditions, a corporation can change its tax year without getting the consent. 2012 ez tax forms For more information, see Form 1128 and Publication 538. 2012 ez tax forms Recordkeeping A corporation should keep its records for as long as they may be needed for the administration of any provision of the Internal Revenue Code. 2012 ez tax forms Usually records that support items of income, deductions, or credits on the return must be kept for 3 years from the date the return is due or filed, whichever is later. 2012 ez tax forms Keep records that verify the corporation's basis in property for as long as they are needed to figure the basis of the original or replacement property. 2012 ez tax forms The corporation should keep copies of all filed returns. 2012 ez tax forms They help in preparing future and amended returns and in the calculation of earnings and profits. 2012 ez tax forms Income, Deductions, and Special Provisions Rules on income and deductions that apply to individuals also apply, for the most part, to corporations. 2012 ez tax forms However, the following special provisions apply only to corporations. 2012 ez tax forms Costs of Going Into Business When you go into business, treat all costs you incur to get your business started as capital expenses. 2012 ez tax forms However, a corporation can elect to deduct a limited amount of start-up or organizational costs. 2012 ez tax forms Any costs not deducted can be amortized. 2012 ez tax forms Start-up costs are costs for creating an active trade or business or investigating the creation or acquisition of an active trade or business. 2012 ez tax forms Organizational costs are the direct costs of creating the corporation. 2012 ez tax forms For more information on deducting or amortizing start-up and organizational costs, see the instructions for your income tax return. 2012 ez tax forms Also see, Publication 535, chapter 7, Costs You Can Deduct or Capitalize, and chapter 8, Amortization. 2012 ez tax forms Related Persons A corporation that uses an accrual method of accounting cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until the corporation makes the payment and the corresponding amount is includible in the related person's gross income. 2012 ez tax forms Determine the relationship, for this rule, as of the end of the tax year for which the expense or interest would otherwise be deductible. 2012 ez tax forms If a deduction is denied, the rule will continue to apply even if the corporation's relationship with the person ends before the expense or interest is includible in the gross income of that person. 2012 ez tax forms These rules also deny the deduction of losses on the sale or exchange of property between related persons. 2012 ez tax forms Related persons. 2012 ez tax forms   For purposes of this rule, the following persons are related to a corporation. 2012 ez tax forms Another corporation, that is a member of the same controlled group (as defined in section 267(f) of the Internal Revenue Code). 2012 ez tax forms An individual who owns, directly or indirectly, more than 50% of the value of the outstanding stock of the corporation. 2012 ez tax forms A trust fiduciary, when the trust or the grantor of the trust owns, directly or indirectly, more than 50% in value of the outstanding stock of the corporation. 2012 ez tax forms An S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. 2012 ez tax forms A partnership, if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital or profits interest in the partnership. 2012 ez tax forms Any employee-owner, if the corporation is a personal service corporation (see Personal service corporation, earlier), regardless of the amount of stock owned by the employee-owner. 2012 ez tax forms Ownership of stock. 2012 ez tax forms   To determine whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following apply. 2012 ez tax forms Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, is treated as being owned proportionately by or for its shareholders, partners, or beneficiaries. 2012 ez tax forms An individual is treated as owning the stock owned, directly or indirectly, by or for the individual's family. 2012 ez tax forms Family includes only brothers and sisters (including half brothers and half sisters), a spouse, ancestors, and lineal descendants. 2012 ez tax forms Any individual owning (other than by applying (2), above) stock in a corporation, is treated as also owning the stock owned directly or indirectly by that individual's partner. 2012 ez tax forms To apply (1), (2), or (3), above, stock constructively owned by a person under (1) is treated as actually owned by that person. 2012 ez tax forms But stock constructively owned by an individual under (2) or (3) is not treated as actually owned by the individual for applying either (2) or (3) to make another person the constructive owner of that stock. 2012 ez tax forms Reallocation of income and deductions. 2012 ez tax forms   Where it is necessary to clearly show income or prevent tax evasion, the IRS can reallocate gross income, deductions, credits, or allowances between two or more organizations, trades, or businesses owned or controlled directly, or indirectly, by the same interests. 2012 ez tax forms Complete liquidations. 2012 ez tax forms   The disallowance of losses from the sale or exchange of property between related persons does not apply to liquidating distributions. 2012 ez tax forms More information. 2012 ez tax forms   For more information about the related person rules, see Publication 544. 2012 ez tax forms Income From Qualifying Shipping Activities A corporation may make an election to be taxed on its notional shipping income at the highest corporate tax rate. 2012 ez tax forms If a corporation makes this election it may exclude income from qualifying shipping activities from gross income. 2012 ez tax forms Also if the election is made, the corporation generally may not claim any loss, deduction, or credit with respect to qualifying shipping activities. 2012 ez tax forms A corporation making this election may also elect to defer gain on the disposition of a qualifying vessel. 2012 ez tax forms A corporation uses Form 8902, Alternative Tax on Qualifying Shipping Activities, to make the election and figure the alternative tax. 2012 ez tax forms For more information regarding the election, see Form 8902. 2012 ez tax forms Election to Expense Qualified Refinery Property A corporation can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct 50% of the cost of qualified refinery property (defined in section 179C(c) of the Internal Revenue Code), placed in service before January 1, 2014. 2012 ez tax forms The deduction is allowed for the year in which the property is placed in service. 2012 ez tax forms A subchapter T cooperative can make an irrevocable election on its return by the due date (including extensions) to allocate this deduction to its owners based on their ownership interest. 2012 ez tax forms For more information, see section 179C of the Internal Revenue Code and the related Regulations. 2012 ez tax forms Deduction to Comply With EPA Sulfur Regulations A small business refiner can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct up to 75% of qualified costs paid or incurred to comply with the Highway Diesel Fuel Sulfur Control Requirements of the Environmental Protection Agency (EPA). 2012 ez tax forms A subchapter T cooperative can make an irrevocable election on its return filed by the due date (including extensions) to allocate the deduction to its owners based on their ownership interest. 2012 ez tax forms For more information, see sections 45H and 179B of the Internal Revenue Code and the related Regulations. 2012 ez tax forms Energy-Efficient Commercial Building Property Deduction A corporation can claim a deduction for costs associated with energy-efficient commercial building property, placed in service before January 1, 2014. 2012 ez tax forms In order to qualify for the deduction: The costs must be associated with depreciable or amortizable property in a Standard 90. 2012 ez tax forms 1-2001 domestic building; The property must be either a part of the interior lighting system, the heating, cooling, ventilation and hot water system, or the building envelope (defined in section 179D(c)(1)(C) of the Internal Revenue Code); and The property must be installed as part of a plan to reduce the total annual energy and power costs of the building by 50% or more. 2012 ez tax forms The deduction is limited to $1. 2012 ez tax forms 80 per square foot of the building less the total amount of deductions taken for this property in prior tax years. 2012 ez tax forms Other rules and limitations apply. 2012 ez tax forms The corporation must reduce the basis of any property by any deduction taken. 2012 ez tax forms The deduction is subject to recapture if the corporation fails to fully implement an energy savings plan. 2012 ez tax forms For more information, see section 179D of the Internal Revenue Code. 2012 ez tax forms Also see Notice 2006-52, 2006-26 I. 2012 ez tax forms R. 2012 ez tax forms B. 2012 ez tax forms 1175, clarified and amplified by Notice 2008-40, 2008-14 I. 2012 ez tax forms R. 2012 ez tax forms B. 2012 ez tax forms 725, and any successor. 2012 ez tax forms Corporate Preference Items A corporation must make special adjustments to certain items before it takes them into account in determining its taxable income. 2012 ez tax forms These items are known as corporate preference items and they include the following. 2012 ez tax forms Gain on the disposition of section 1250 property. 2012 ez tax forms For more information, see section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. 2012 ez tax forms Percentage depletion for iron ore and coal (including lignite). 2012 ez tax forms For more information, see Mines and Geothermal Deposits under Mineral Property in chapter 9 of Publication 535. 2012 ez tax forms Amortization of pollution control facilities. 2012 ez tax forms For more information, see Pollution Control Facilities in chapter 8 of Publication 535 and section 291(a)(5) of the Internal Revenue Code. 2012 ez tax forms Mineral exploration and development costs. 2012 ez tax forms For more information, see Exploration Costs and Development Costs in chapter 7 of Publication 535. 2012 ez tax forms For more information on corporate preference items, see section 291 of the Internal Revenue Code. 2012 ez tax forms Dividends-Received Deduction A corporation can deduct a percentage of certain dividends received during its tax year. 2012 ez tax forms This section discusses the general rules that apply. 2012 ez tax forms The deduction is figured on Form 1120, Schedule C, or the applicable schedule of your income tax return. 2012 ez tax forms For more information, see the Instructions for Form 1120, or the instructions for your applicable income tax return. 2012 ez tax forms Dividends from domestic corporations. 2012 ez tax forms   A corporation can deduct, within certain limits, 70% of the dividends received if the corporation receiving the dividend owns less than 20% of the corporation distributing the dividend. 2012 ez tax forms If the corporation owns 20% or more of the distributing corporation's stock, it can, subject to certain limits, deduct 80% of the dividends received. 2012 ez tax forms Ownership. 2012 ez tax forms   Determine ownership, for these rules, by the amount of voting power and value of the paying corporation's stock (other than certain preferred stock) the receiving corporation owns. 2012 ez tax forms Small business investment companies. 2012 ez tax forms   Small business investment companies can deduct 100% of the dividends received from taxable domestic corporations. 2012 ez tax forms Dividends from regulated investment companies. 2012 ez tax forms   Regulated investment company dividends received are subject to certain limits. 2012 ez tax forms Capital gain dividends received from a regulated investment company do not qualify for the deduction. 2012 ez tax forms For more information, see section 854 of the Internal Revenue Code. 2012 ez tax forms No deduction allowed for certain dividends. 2012 ez tax forms   Corporations cannot take a deduction for dividends received from the following entities. 2012 ez tax forms A real estate investment trust (REIT). 2012 ez tax forms A corporation exempt from tax under section 501 or 521 of the Internal Revenue Code either for the tax year of the distribution or the preceding tax year. 2012 ez tax forms A corporation whose stock was held less than 46 days during the 91-day period beginning 45 days before the stock became ex-dividend with respect to the dividend. 2012 ez tax forms Ex-dividend means the holder has no rights to the dividend. 2012 ez tax forms A corporation whose preferred stock was held less than 91 days during the 181-day period beginning 90 days before the stock became ex-dividend with respect to the dividend if the dividends received are for a period or periods totaling more than 366 days. 2012 ez tax forms Any corporation, if your corporation is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. 2012 ez tax forms Dividends on deposits. 2012 ez tax forms   Dividends on deposits or withdrawable accounts in domestic building and loan associations, mutual savings banks, cooperative banks, and similar organizations are interest, not dividends. 2012 ez tax forms They do not qualify for this deduction. 2012 ez tax forms Limit on deduction for dividends. 2012 ez tax forms   The total deduction for dividends received or accrued is generally limited (in the following order) to: 80% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from 20%-owned corporations, then 70% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from less-than-20%-owned corporations (reducing taxable income by the total dividends received from 20%-owned corporations). 2012 ez tax forms Figuring the limit. 2012 ez tax forms   In figuring the limit, determine taxable income without the following items. 2012 ez tax forms The net operating loss deduction. 2012 ez tax forms The domestic production activities deduction. 2012 ez tax forms The deduction for dividends received. 2012 ez tax forms Any adjustment due to the nontaxable part of an extraordinary dividend (see Extraordinary Dividends, below). 2012 ez tax forms Any capital loss carryback to the tax year. 2012 ez tax forms Effect of net operating loss. 2012 ez tax forms   If a corporation has a net operating loss (NOL) for a tax year, the limit of 80% (or 70%) of taxable income does not apply. 2012 ez tax forms To determine whether a corporation has an NOL, figure the dividends-received deduction without the 80% (or 70%) of taxable income limit. 2012 ez tax forms Example 1. 2012 ez tax forms A corporation loses $25,000 from operations. 2012 ez tax forms It receives $100,000 in dividends from a 20%-owned corporation. 2012 ez tax forms Its taxable income is $75,000 ($100,000 – $25,000) before the deduction for dividends received. 2012 ez tax forms If it claims the full dividends-received deduction of $80,000 ($100,000 × 80%) and combines it with an operations loss of $25,000, it will have an NOL of ($5,000). 2012 ez tax forms Therefore, the 80% of taxable income limit does not apply. 2012 ez tax forms The corporation can deduct the full $80,000. 2012 ez tax forms Example 2. 2012 ez tax forms Assume the same facts as in Example 1, except that the corporation only loses $15,000 from operations. 2012 ez tax forms Its taxable income is $85,000 before the deduction for dividends received. 2012 ez tax forms After claiming the dividends-received deduction of $80,000 ($100,000 × 80%), its taxable income is $5,000. 2012 ez tax forms Because the corporation will not have an NOL after applying a full dividends-received deduction, its allowable dividends-received deduction is limited to 80% of its taxable income, or $68,000 ($85,000 × 80%). 2012 ez tax forms Extraordinary Dividends If a corporation receives an extraordinary dividend on stock held 2 years or less before the dividend announcement date, it generally must reduce its basis in the stock by the nontaxed part of the dividend. 2012 ez tax forms The nontaxed part is any dividends-received deduction allowable for the dividends. 2012 ez tax forms Extraordinary dividend. 2012 ez tax forms   An extraordinary dividend is any dividend on stock that equals or exceeds a certain percentage of the corporation's adjusted basis in the stock. 2012 ez tax forms The percentages are: 5% for stock preferred as to dividends, or 10% for other stock. 2012 ez tax forms Treat all dividends received that have ex-dividend dates within an 85-consecutive-day period as one dividend. 2012 ez tax forms Treat all dividends received that have ex-dividend dates within a 365-consecutive-day period as extraordinary dividends if the total of the dividends exceeds 20% of the corporation's adjusted basis in the stock. 2012 ez tax forms Disqualified preferred stock. 2012 ez tax forms   Any dividend on disqualified preferred stock is treated as an extraordinary dividend regardless of the period of time the corporation held the stock. 2012 ez tax forms   Disqualified preferred stock is any stock preferred as to dividends if any of the following apply. 2012 ez tax forms The stock when issued has a dividend rate that declines (or can reasonably be expected to decline) in the future. 2012 ez tax forms The issue price of the stock exceeds its liquidation rights or stated redemption price. 2012 ez tax forms The stock is otherwise structured to avoid the rules for extraordinary dividends and to enable corporate shareholders to reduce tax through a combination of dividends-received deductions and loss on the disposition of the stock. 2012 ez tax forms   These rules apply to stock issued after July 10, 1989, unless it was issued under a written binding contract in effect on that date, and thereafter, before the issuance of the stock. 2012 ez tax forms More information. 2012 ez tax forms   For more information on extraordinary dividends, see section 1059 of the Internal Revenue Code. 2012 ez tax forms Below-Market Loans If a corporation receives a below-market loan and uses the proceeds for its trade or business, it may be able to deduct the forgone interest. 2012 ez tax forms A below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. 2012 ez tax forms A below-market loan generally is treated as an arm's-length transaction in which the borrower is considered as having received both the following: A loan in exchange for a note that requires payment of interest at the applicable federal rate, and An additional payment in an amount equal to the forgone interest. 2012 ez tax forms Treat the additional payment as a gift, dividend, contribution to capital, payment of compensation, or other payment, depending on the substance of the transaction. 2012 ez tax forms Foregone interest. 2012 ez tax forms   For any period, forgone interest is equal to: The interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. 2012 ez tax forms See Below-market loans, in chapter 4 of Publication 535 for more information. 2012 ez tax forms Charitable Contributions A corporation can claim a limited deduction for charitable contributions made in cash or other property. 2012 ez tax forms The contribution is deductible if made to, or for the use of, a qualified organization. 2012 ez tax forms For more information on qualified organizations, see Publication 526, Charitable Contributions. 2012 ez tax forms Also see, Exempt Organizations Select Check (EO Select Check) at www. 2012 ez tax forms irs. 2012 ez tax forms gov/charities, the on-line search tool for finding information on organizations eligible to receive tax-deductible contributions. 2012 ez tax forms Note. 2012 ez tax forms You cannot take a deduction if any of the net earnings of an organization receiving contributions benefit any private shareholder or individual. 2012 ez tax forms Cash method corporation. 2012 ez tax forms   A corporation using the cash method of accounting deducts contributions in the tax year paid. 2012 ez tax forms Accrual method corporation. 2012 ez tax forms   A corporation using an accrual method of accounting can choose to deduct unpaid contributions for the tax year the board of directors authorizes them if it pays them by the 15th day of the 3rd month after the close of that tax year. 2012 ez tax forms Make the choice by reporting the contribution on the corporation's return for the tax year. 2012 ez tax forms A declaration stating that the board of directors adopted the resolution during the tax year must accompany the return. 2012 ez tax forms The declaration must include the date the resolution was adopted. 2012 ez tax forms Limitations on deduction. 2012 ez tax forms   A corporation cannot deduct charitable contributions that exceed 10% of its taxable income for the tax year. 2012 ez tax forms Figure taxable income for this purpose without the following. 2012 ez tax forms The deduction for charitable contributions. 2012 ez tax forms The dividends-received deduction. 2012 ez tax forms The deduction allowed under section 249 of the Internal Revenue Code. 2012 ez tax forms The domestic production activities deduction. 2012 ez tax forms Any net operating loss carryback to the tax year. 2012 ez tax forms Any capital loss carryback to the tax year. 2012 ez tax forms Farmers and ranchers. 2012 ez tax forms    Corporations that are farmers and ranchers should see section 170(b)(2) of the Internal Revenue Code for special rules that may affect the deduction limit. 2012 ez tax forms Carryover of excess contributions. 2012 ez tax forms   You can carry over, within certain limits, to each of the subsequent 5 years any charitable contributions made during the current year that exceed the 10% limit. 2012 ez tax forms You lose any excess not used within that period. 2012 ez tax forms For example, if a corporation has a carryover of excess contributions paid in 2010 and it does not use all the excess on its return for 2011, it can carry any excess over to 2012, 2013, 2014, and 2015, if applicable. 2012 ez tax forms Any excess not used in 2015 is lost. 2012 ez tax forms Do not deduct a carryover of excess contributions in the carryover year until after you deduct contributions made in that year (subject to the 10% limit). 2012 ez tax forms You cannot deduct a carryover of excess contributions to the extent it increases a net operating loss carryover. 2012 ez tax forms Cash contributions. 2012 ez tax forms   A corporation must maintain a record of any contribution of cash, check, or other monetary contribution, regardless of the amount. 2012 ez tax forms The record can be a bank record, receipt, letter, or other written communication from the donee indicating the name of the organization, the date of the contribution, and the amount of the contribution. 2012 ez tax forms Keep the record of the contribution with the other corporate records. 2012 ez tax forms Do not attach the records to the corporation's return. 2012 ez tax forms For more information on cash contributions, see Publication 526. 2012 ez tax forms Gifts of $250 or more. 2012 ez tax forms   Generally, no deduction is allowed for any contribution of $250 or more unless the corporation gets a written acknowledgement from the donee organization. 2012 ez tax forms The acknowledgement should show the amount of cash contributed, a description of the property contributed, and either gives a description and a good faith estimate of the value of any goods or services provided in return for the contribution or states that no goods or services were provided in return for the contribution. 2012 ez tax forms The acknowledgement should be received by the due date (including extensions) of the return, or, if earlier, the date the return was filed. 2012 ez tax forms Keep the acknowledgement with other corporate records. 2012 ez tax forms Do not attach the acknowledgement to the return. 2012 ez tax forms Contributions of property other than cash. 2012 ez tax forms   If a corporation (other than a closely-held or a personal service corporation) claims a deduction of more than $500 for contributions of property other than cash, a schedule describing the property and the method used to determine its fair market value must be attached to the corporation's return. 2012 ez tax forms In addition the corporation should keep a record of: The approximate date and manner of acquisition of the donated property and The cost or other basis of the donated property held by the donor for less than 12 months prior to contribution. 2012 ez tax forms   Closely held and personal service corporations must complete and attach Form 8283, Noncash Charitable Contributions, to their returns if they claim a deduction of more than $500 for non-cash contributions. 2012 ez tax forms For all other corporations, if the deduction claimed for donated property exceeds $5,000, complete Form 8283 and attach it to the corporation's return. 2012 ez tax forms   A corporation must obtain a qualified appraisal for all deductions of property claimed in excess of $5,000. 2012 ez tax forms A qualified appraisal is not required for the donation of cash, publicly traded securities, inventory, and any qualified vehicles sold by a donee organization without any significant intervening use or material improvement. 2012 ez tax forms The appraisal should be maintained with other corporate records and only attached to the corporation's return when the deduction claimed exceeds $500,000; $20,000 for donated art work. 2012 ez tax forms   See Form 8283 for more information. 2012 ez tax forms Qualified conservation contributions. 2012 ez tax forms   If a corporation makes a qualified conservation contribution, the corporation must provide information regarding the legal interest being donated, the fair market value of the underlying property before and after the donation, and a description of the conservation purpose for which the property will be used. 2012 ez tax forms For more information, see section 170(h) of the Internal Revenue Code. 2012 ez tax forms Contributions of used vehicles. 2012 ez tax forms   A corporation is allowed a deduction for the contribution of used motor vehicles, boats, and airplanes. 2012 ez tax forms The deduction is limited, and other special rules apply. 2012 ez tax forms For more information, see Publication 526. 2012 ez tax forms Reduction for contributions of certain property. 2012 ez tax forms   For a charitable contribution of property, the corporation must reduce the contribution by the sum of: The ordinary income and short-term capital gain that would have resulted if the property were sold at its FMV and For certain contributions, the long-term capital gain that would have resulted if the property were sold at its FMV. 2012 ez tax forms   The reduction for the long-term capital gain applies to: Contributions of tangible personal property for use by an exempt organization for a purpose or function unrelated to the basis for its exemption; Contributions of any property to or for the use of certain private foundations except for stock for which market quotations are readily available; and Contributions of any patent, certain copyrights, trademark, trade name, trade secret, know-how, software (that is a section 197 intangible), or similar property, or applications or registrations of such property. 2012 ez tax forms Larger deduction. 2012 ez tax forms   A corporation (other than an S corporation) may be able to claim a deduction equal to the lesser of (a) the basis of the donated inventory or property plus one-half of the inventory or property's appreciation (gain if the donated inventory or property was sold at fair market value on the date of the donation), or (b) two times basis of the donated inventory or property. 2012 ez tax forms This deduction may be allowed for certain contributions of: Certain inventory and other property made to a donee organization and used solely for the care of the ill, the needy, and infants. 2012 ez tax forms Scientific property constructed by the corporation (other than an S corporation, personal holding company, or personal service corporation) and donated no later than 2 years after substantial completion of the construction. 2012 ez tax forms The property must be donated to a qualified organization and its original use must be by the donee for research, experimentation, or research training within the United States in the area of physical or biological science. 2012 ez tax forms Computer technology and equipment acquired or constructed and donated no later than 3 years after either acquisition or substantial completion of construction to an educational organization for educational purposes within the United States. 2012 ez tax forms Contributions to organizations conducting lobbying activities. 2012 ez tax forms   Contributions made to an organization that conducts lobbying activities are not deductible if: The lobbying activities relate to matters of direct financial interest to the donor's trade or business and The principal purpose of the contribution was to avoid federal income tax by obtaining a deduction for activities that would have been nondeductible under the lobbying expense rules if conducted directly by the donor. 2012 ez tax forms More information. 2012 ez tax forms   For more information on charitable contributions, including substantiation and recordkeeping requirements, see section 170 of the Internal Revenue Code, the related regulations, and Publication 526. 2012 ez tax forms Capital Losses A corporation can deduct capital losses only up to the amount of its capital gains. 2012 ez tax forms In other words, if a corporation has an excess capital loss, it cannot deduct the loss in the current tax year. 2012 ez tax forms Instead, it carries the loss to other tax years and deducts it from any net capital gains that occur in those years. 2012 ez tax forms A capital loss is carried to other years in the following order. 2012 ez tax forms 3 years prior to the loss year. 2012 ez tax forms 2 years prior to the loss year. 2012 ez tax forms 1 year prior to the loss year. 2012 ez tax forms Any loss remaining is carried forward for 5 years. 2012 ez tax forms When you carry a net capital loss to another tax year, treat it as a short-term loss. 2012 ez tax forms It does not retain its original identity as long term or short term. 2012 ez tax forms Example. 2012 ez tax forms A calendar year corporation has a net short-term capital gain of $3,000 and a net long-term capital loss of $9,000. 2012 ez tax forms The short-term gain offsets some of the long-term loss, leaving a net capital loss of $6,000. 2012 ez tax forms The corporation treats this $6,000 as a short-term loss when carried back or forward. 2012 ez tax forms The corporation carries the $6,000 short-term loss back 3 years. 2012 ez tax forms In year 1, the corporation had a net short-term capital gain of $8,000 and a net long-term capital gain of $5,000. 2012 ez tax forms It subtracts the $6,000 short-term loss first from the net short-term gain. 2012 ez tax forms This results in a net capital gain for year 1 of $7,000. 2012 ez tax forms This consists of a net short-term capital gain of $2,000 ($8,000 − $6,000) and a net long-term capital gain of $5,000. 2012 ez tax forms S corporation status. 2012 ez tax forms   A corporation may not carry a capital loss from, or to, a year for which it is an S corporation. 2012 ez tax forms Rules for carryover and carryback. 2012 ez tax forms   When carrying a capital loss from one year to another, the following rules apply. 2012 ez tax forms When figuring the current year's net capital loss, you cannot combine it with a capital loss carried from another year. 2012 ez tax forms In other words, you can carry capital losses only to years that would otherwise have a total net capital gain. 2012 ez tax forms If you carry capital losses from 2 or more years to the same year, deduct the loss from the earliest year first. 2012 ez tax forms You cannot use a capital loss carried from another year to produce or increase a net operating loss in the year to which you carry it back. 2012 ez tax forms Refunds. 2012 ez tax forms   When you carry back a capital loss to an earlier tax year, refigure your tax for that year. 2012 ez tax forms If your corrected tax is less than the tax you originally owed, use either Form 1139, Corporate Application for Tentative Refund, or Form 1120X, Amended U. 2012 ez tax forms S. 2012 ez tax forms Corporation Income Tax Return, to apply for a refund. 2012 ez tax forms Form 1139. 2012 ez tax forms    A corporation can get a refund faster by using Form 1139. 2012 ez tax forms It cannot file Form 1139 before filing the return for the corporation's capital loss year, but it must file Form 1139 no later than 1 year after the year it sustains the capital loss. 2012 ez tax forms Form 1120X. 2012 ez tax forms   If the corporation does not file Form 1139, it must file Form 1120X to apply for a refund. 2012 ez tax forms The corporation must file the Form 1120X within 3 years of the due date, includin