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2012 Taxes Online

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2012 Taxes Online

2012 taxes online 8. 2012 taxes online   Distributions and Rollovers Table of Contents DistributionsMinimum Required Distributions No Special 10-Year Tax Option Transfer of Interest in 403(b) ContractAfter-tax contributions. 2012 taxes online Permissive service credit. 2012 taxes online Tax-Free RolloversHardship exception to rollover rules. 2012 taxes online Eligible retirement plans. 2012 taxes online Nonqualifying distributions. 2012 taxes online Second rollover. 2012 taxes online Gift Tax Distributions Permissible distributions. 2012 taxes online   Generally, a distribution cannot be made from a 403(b) account until the employee: Reaches age 59½, Has a severance from employment, Dies, Becomes disabled, In the case of elective deferrals, encounters financial hardship, or Has a qualified reservist distribution. 2012 taxes online In most cases, the payments you receive or that are made available to you under your 403(b) account are taxable in full as ordinary income. 2012 taxes online In general, the same tax rules apply to distributions from 403(b) plans that apply to distributions from other retirement plans. 2012 taxes online These rules are explained in Publication 575. 2012 taxes online Publication 575 also discusses the additional tax on early distributions from retirement plans. 2012 taxes online Retired public safety officers. 2012 taxes online   If you are an eligible retired public safety officer, distributions of up to $3,000, made directly from your 403(b) plan to pay accident, health, or long-term care insurance, are not included in your taxable income. 2012 taxes online The premiums can be for you, your spouse, or your dependents. 2012 taxes online   A public safety officer is a law enforcement officer, fire fighter, chaplain, or member of a rescue squad or ambulance crew. 2012 taxes online   For additional information, see Publication 575. 2012 taxes online Distribution for active reservist. 2012 taxes online   The 10% penalty for early withdrawals will not apply to a qualified reservist distribution attributable to elective deferrals from a 403(b) plan. 2012 taxes online A qualified reservist distribution is a distribution that is made: To an individual who is a reservist or national guardsman and who was ordered or called to active duty for a period in excess of 179 days or for an indefinite period; and During the period beginning on the date of the order or call to duty and ending at the close of the active duty period. 2012 taxes online Minimum Required Distributions You must receive all, or at least a certain minimum, of your interest accruing after 1986 in the 403(b) plan by April 1 of the calendar year following the later of the calendar year in which you become age 70½, or the calendar year in which you retire. 2012 taxes online Check with your employer, plan administrator, or provider to find out whether this rule also applies to pre-1987 accruals. 2012 taxes online If not, a minimum amount of these accruals must begin to be distributed by the later of the end of the calendar year in which you reach age 75 or April 1 of the calendar year following retirement. 2012 taxes online For each year thereafter, the minimum distribution must be made by the last day of the year. 2012 taxes online If you do not receive the required minimum distribution, you are subject to a nondeductible 50% excise tax on the difference between the required minimum distribution and the amount actually distributed. 2012 taxes online No Special 10-Year Tax Option A distribution from a 403(b) plan does not qualify as a lump-sum distribution. 2012 taxes online This means you cannot use the special 10-year tax option to calculate the taxable portion of a 403(b) distribution. 2012 taxes online For more information, see Publication 575. 2012 taxes online Transfer of Interest in 403(b) Contract Contract exchanges. 2012 taxes online   If you transfer all or part of your interest from a 403(b) contract to another 403(b) contract (held in the same plan), the transfer is tax free, and is referred to as a contract exchange. 2012 taxes online This was previously known as a 90-24 transfer. 2012 taxes online A contract exchange is similar to a 90-24 transfer with one major difference. 2012 taxes online Previously, you were able to accomplish the transfer without your employer’s involvement. 2012 taxes online After September 24, 2007, all such transfers are accomplished through a contract exchange requiring your employer’s involvement. 2012 taxes online In addition, the plan must provide for the exchange and the transferred interest must be subject to the same or stricter distribution restrictions. 2012 taxes online Finally, your accumulated benefit after the exchange must be equal to what it was before the exchange. 2012 taxes online   Transfers that do not satisfy this rule are plan distributions and are generally taxable as ordinary income. 2012 taxes online Plan-to-plan transfers. 2012 taxes online   You may also transfer part or all of your interest from a 403(b) plan to another 403(b) plan if you are an employee of (or were formerly employed by) the employer of the plan to which you would like to transfer. 2012 taxes online Both the initial plan and the receiving plan must provide for transfers. 2012 taxes online Your accumulated benefit after the transfer must be at least equal to what it was before the transfer. 2012 taxes online The new plan’s restrictions on distributions must be the same or stricter than those of the original plan. 2012 taxes online Tax-free transfers for certain cash distributions. 2012 taxes online   A tax-free transfer may also apply to a cash distribution of your 403(b) account from an insurance company that is subject to a rehabilitation, conservatorship, insolvency, or similar state proceeding. 2012 taxes online To receive tax-free treatment, you must do all of the following: Withdraw all the cash to which you are entitled in full settlement of your contract rights or, if less, the maximum permitted by the state. 2012 taxes online Reinvest the cash distribution in a single policy or contract issued by another insurance company or in a single custodial account subject to the same or stricter distribution restrictions as the original contract not later than 60 days after you receive the cash distribution. 2012 taxes online Assign all future distribution rights to the new contract or account for investment in that contract or account if you received an amount that is less than what you are entitled to because of state restrictions. 2012 taxes online   In addition to the preceding requirements, you must provide the new insurer with a written statement containing all of the following information: The gross amount of cash distributed under the old contract. 2012 taxes online The amount of cash reinvested in the new contract. 2012 taxes online Your investment in the old contract on the date you receive your first cash distribution. 2012 taxes online   Also, you must attach the following items to your timely filed income tax return in the year you receive the first distribution of cash. 2012 taxes online A copy of the statement you gave the new insurer. 2012 taxes online A statement that includes: The words ELECTION UNDER REV. 2012 taxes online PROC. 2012 taxes online 92-44, The name of the company that issued the new contract, and The new policy number. 2012 taxes online Direct trustee-to-trustee transfer. 2012 taxes online   If you make a direct trustee-to-trustee transfer, from your governmental 403(b) account to a defined benefit governmental plan, it may not be includible in gross income. 2012 taxes online   The transfer amount is not includible in gross income if it is made to: Purchase permissive service credits, or Repay contributions and earnings that were previously refunded under a forfeiture of service credit under the plan, or under another plan maintained by a state or local government employer within the same state. 2012 taxes online After-tax contributions. 2012 taxes online   For distributions beginning after December 31, 2006, after-tax contributions can be rolled over between a 403(b) plan and a defined benefit plan, IRA, or a defined contribution plan. 2012 taxes online If the rollover is to or from a 403(b) plan, it must occur through a direct trustee-to-trustee transfer. 2012 taxes online Permissive service credit. 2012 taxes online   A permissive service credit is credit for a period of service recognized by a defined benefit governmental plan only if you voluntarily contribute to the plan an amount that does not exceed the amount necessary to fund the benefit attributable to the period of service and the amount contributed is in addition to the regular employee contribution, if any, under the plan. 2012 taxes online   A permissive service credit may also include service credit for up to 5 years where there is no performance of service, or service credited to provide an increased benefit for service credit which a participant is receiving under the plan. 2012 taxes online   Check with your plan administrator as to the type and extent of service that may be purchased by this transfer. 2012 taxes online Tax-Free Rollovers You can generally roll over tax free all or any part of a distribution from a 403(b) plan to a traditional IRA or a non-Roth eligible retirement plan, except for any nonqualifying distributions, described later. 2012 taxes online You may also roll over any part of a distribution from a 403(b) plan by converting it through a direct rollover, described below, to a Roth IRA. 2012 taxes online Conversion amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. 2012 taxes online See Publication 590 for more information about conversion into a Roth IRA. 2012 taxes online Note. 2012 taxes online A participant is required to roll over distribution amounts received within 60 days in order for the amount to be treated as nontaxable. 2012 taxes online Distribution amounts that are rolled over within the 60 days are not subject to the 10% early distribution penalty. 2012 taxes online Rollovers to and from 403(b) plans. 2012 taxes online   You can generally roll over tax free all or any part of a distribution from an eligible retirement plan to a 403(b) plan. 2012 taxes online Beginning January 1, 2008, distributions from tax-qualified retirement plans and tax-sheltered annuities can be converted by making a direct rollover into a Roth IRA subject to the restrictions that currently apply to rollovers from a traditional IRA into a Roth IRA. 2012 taxes online Converted amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. 2012 taxes online See Publication 590 for more information on conversion into a Roth IRA. 2012 taxes online   If a distribution includes both pre-tax contributions and after-tax contributions, the portion of the distribution that is rolled over is treated as consisting first of pre-tax amounts (contributions and earnings that would be includible in income if no rollover occurred). 2012 taxes online This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you do not have to include any of the distribution in income. 2012 taxes online   For more information on rollovers and eligible retirement plans, see Publication 575. 2012 taxes online If you roll over money or other property from a 403(b) plan to an eligible retirement plan, see Publication 575 for information about possible effects on later distributions from the eligible retirement plan. 2012 taxes online Hardship exception to rollover rules. 2012 taxes online   The IRS may waive the 60-day rollover period if the failure to waive such requirement would be against equity or good conscience, including cases of casualty, disaster, or other events beyond the reasonable control of an individual. 2012 taxes online   To obtain a hardship exception, you must apply to the IRS for a waiver of the 60-day rollover requirement. 2012 taxes online You apply for the waiver by following the general instructions used in requesting a letter ruling. 2012 taxes online These instructions are stated in Revenue Procedure 2013-4, 2013-1 I. 2012 taxes online R. 2012 taxes online B. 2012 taxes online 126 available at www. 2012 taxes online irs. 2012 taxes online gov/irb/2013-01_IRB/ar09. 2012 taxes online html, or see the latest annual update. 2012 taxes online You must also pay a user fee with the application. 2012 taxes online The user fee for a rollover that is less than $50,000 is $500. 2012 taxes online For rollovers that are $50,000 or more, see Revenue Procedure 2013-8, 2013-1 I. 2012 taxes online R. 2012 taxes online B. 2012 taxes online 237 available at www. 2012 taxes online irs. 2012 taxes online gov/irb/2013-01_IRB/ar13. 2012 taxes online html, or see the latest annual update. 2012 taxes online   In determining whether to grant a waiver, the IRS will consider all relevant facts and circumstances, including: Whether errors were made by the financial institution; Whether you were unable to complete the rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country, or postal error; Whether you used the amount distributed (for example, in the case of payment by check, whether you cashed the check); and How much time has passed since the date of distribution. 2012 taxes online   For additional information on rollovers, see Publication 590. 2012 taxes online Eligible retirement plans. 2012 taxes online   The following are considered eligible retirement plans. 2012 taxes online Individual retirement arrangements. 2012 taxes online Roth IRA. 2012 taxes online 403(b) plans. 2012 taxes online Government eligible 457 plans. 2012 taxes online Qualified retirement plans. 2012 taxes online  If the distribution is from a designated Roth account, then the only eligible retirement plan is another designated Roth account or a Roth IRA. 2012 taxes online Nonqualifying distributions. 2012 taxes online   You cannot roll over tax free: Minimum required distributions (generally required to begin at age 70½), Substantially equal payments over your life or life expectancy, Substantially equal payments over the joint lives or life expectancies of your beneficiary and you, Substantially equal payments for a period of 10 years or more, Hardship distributions, or Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or excess annual additions and any allocable gains. 2012 taxes online Rollover of nontaxable amounts. 2012 taxes online    You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another eligible retirement plan, traditional IRA, or Roth IRA. 2012 taxes online The transfer must be made either through a direct rollover to an eligible plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional IRA or Roth IRA. 2012 taxes online   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. 2012 taxes online Direct rollovers of 403(b) plan distributions. 2012 taxes online   You have the option of having your 403(b) plan make the rollover directly to a traditional IRA, Roth IRA, or new plan. 2012 taxes online Before you receive a distribution, your plan will give you information on this. 2012 taxes online It is generally to your advantage to choose this option because your plan will not withhold tax on the distribution if you choose it. 2012 taxes online Distribution received by you. 2012 taxes online   If you receive a distribution that qualifies to be rolled over, you can roll over all or any part of the distribution. 2012 taxes online Generally, you will receive only 80% of the distribution because 20% must be withheld. 2012 taxes online If you roll over only the 80% you receive, you must pay tax on the 20% you did not roll over. 2012 taxes online You can replace the 20% that was withheld with other money within the 60-day period to make a 100% rollover. 2012 taxes online Voluntary deductible contributions. 2012 taxes online   For tax years 1982 through 1986, employees could make deductible contributions to a 403(b) plan under the individual retirement arrangement (IRA) rules instead of deducting contributions to a traditional IRA. 2012 taxes online   If you made voluntary deductible contributions to a 403(b) plan under these traditional IRA rules, the distribution of all or part of the accumulated deductible contributions may be rolled over if it otherwise qualifies as a distribution you can roll over. 2012 taxes online Accumulated deductible contributions are the deductible contributions: Plus Income allocable to the contributions, Gain allocable to the contributions, and Minus Expenses and losses allocable to the contributions, and Distributions from the contributions, income, or gain. 2012 taxes online Excess employer contributions. 2012 taxes online   The portion of a distribution from a 403(b) plan transferred to a traditional IRA that was previously included in income as excess employer contributions (discussed earlier) is not an eligible rollover distribution. 2012 taxes online   Its transfer does not affect the rollover treatment of the eligible portion of the transferred amounts. 2012 taxes online However, the ineligible portion is subject to the traditional IRA contribution limits and may create an excess IRA contribution subject to a 6% excise tax (see chapter 1 of Publication 590). 2012 taxes online Qualified domestic relations order. 2012 taxes online   You may be able to roll over tax free all or any part of an eligible rollover distribution from a 403(b) plan that you receive under a qualified domestic relations order (QDRO). 2012 taxes online If you receive the interest in the 403(b) plan as an employee's spouse or former spouse under a QDRO, all of the rollover rules apply to you as if you were the employee. 2012 taxes online You can roll over your interest in the plan to a traditional IRA or another 403(b) plan. 2012 taxes online For more information on the treatment of an interest received under a QDRO, see Publication 575. 2012 taxes online Spouses of deceased employees. 2012 taxes online   If you are the spouse of a deceased employee, you can roll over the qualifying distribution attributable to the employee. 2012 taxes online You can make the rollover to any eligible retirement plan. 2012 taxes online   After you roll money and other property over from a 403(b) plan to an eligible retirement plan, and you take a distribution from that plan, you will not be eligible to receive the capital gain treatment or the special averaging treatment for the distribution. 2012 taxes online Second rollover. 2012 taxes online   If you roll over a qualifying distribution to a traditional IRA, you can, if certain conditions are satisfied, later roll the distribution into another 403(b) plan. 2012 taxes online For more information, see IRA as a holding account (conduit IRA) for rollovers to other eligible plans in chapter 1 of Publication 590. 2012 taxes online Nonspouse beneficiary. 2012 taxes online   A nonspouse beneficiary may make a direct rollover of a distribution from a 403(b) plan of a deceased participant if the rollover is a direct transfer to an inherited IRA established to receive the distribution. 2012 taxes online If the rollover is a direct trustee-to-trustee transfer to an IRA established to receive the distribution: The transfer will be treated as an eligible rollover distribution. 2012 taxes online The IRA will be considered an inherited account. 2012 taxes online The required minimum distribution rules that apply in instances where the participant dies before the entire interest is distributed will apply to the transferred IRA. 2012 taxes online    For more information on IRAs, see Publication 590. 2012 taxes online Frozen deposits. 2012 taxes online   The 60-day period usually allowed for completing a rollover is extended for any time that the amount distributed is a frozen deposit in a financial institution. 2012 taxes online The 60-day period cannot end earlier than 10 days after the deposit ceases to be a frozen deposit. 2012 taxes online   A frozen deposit is any deposit that on any day during the 60-day period cannot be withdrawn because: The financial institution is bankrupt or insolvent, or The state where the institution is located has placed limits on withdrawals because one or more banks in the state are (or are about to be) bankrupt or insolvent. 2012 taxes online Gift Tax If, by choosing or not choosing an election, or option, you provide an annuity for your beneficiary at or after your death, you may have made a taxable gift equal to the value of the annuity. 2012 taxes online Joint and survivor annuity. 2012 taxes online   If the gift is an interest in a joint and survivor annuity where only you and your spouse have the right to receive payments, the gift will generally be treated as qualifying for the unlimited marital deduction. 2012 taxes online More information. 2012 taxes online   For information on the gift tax, see Publication 559, Survivors, Executors, and Administrators. 2012 taxes online Prev  Up  Next   Home   More Online Publications
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Tax Information For Businesses

Small Business and Self-Employed Tax Center
Access to tax information useful to small businesses with assets of $10 million or less.

Large Business and International Tax Center
This page provides links which are helpful for large to mid-size businesses with assets greater than $10 million

Work Opportunity Tax Credit Extended
Businesses, including tax-exempt employers, may qualify for the Work Opportunity Tax Credit for qualified veterans hired before January 1, 2014.

Self-Employed Individuals Tax Center
The basics on your tax responsibilities if you are self-employed or an independent contractor.

Qualifying Advanced Energy Project Credit (section 48C)
Notice 2013-12, issued February 7, 2013, announced the availability of $150,228,397 in section 48C tax credits in the Phase II allocation round in 2013. Application procedures are different than in the first allocation round.

IRS Video Portal
The IRS Video portal contains video and audio presentations on topics of interest to small businesses, individuals and tax professionals. You will find video clips of tax topics, and archived versions of live panel discussions and webinars.

Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations
The Balanced Budget and Emergency Deficit Reduction Act of 1985, as amended, requires certain spending cuts during Fiscal Year 2013 due to the sequester triggered earlier this year.

Alternative Motor Vehicle Credit
The Alternative Fuel Motor Vehicle Credit was enacted by the Energy Policy Act of 2005 and includes separate credits for four distinct categories of vehicles: Hybrid vehicles, Fuel Cell vehicles, Qualified Alternative Fuel Motor vehicles (QAFMV) and Advanced Lean Burn Technology vehicles. The amount of the potential credit varies by type of vehicle and which of the four credits applies.

Coordinated Issue Papers - LB&I
Effective January 21, 2014, all LB&I coordinated issue papers are decoordinated.  See 1/21/14 Directive from LB&I Commissioner Maloy for details.

HIRE Act: Questions and Answers for Employers
General information about the provisions of the Hiring Individuals to Restore Employment Act.

Employment Taxes
Federal income tax, Social Security and Medicare taxes, FUTA, self-employment tax and more.

Disaster Assistance and Emergency Relief for Individuals and Businesses
Special tax law provisions may help taxpayers and businesses recover financially from a disaster.

Small Business Forms and Publications
Download multiple small business and self-employed forms and publications.

e-file for Large Business and International (LB&I)
Certain large business and International (LB&I) corporations are required to electronically file their Forms 1120 and 1120S. Other corporations may do so voluntarily. This site provides e-file information for corporations that prepare and transmit their own electronic corporate income tax returns and those that use the services of third party tax professionals.

Employer ID Numbers (EINs)
Find out more on EINs or apply for one online.

Employee Tool & Equipment Plans
The Internal Revenue Service has established a compliance team to address the marketing and mistreatment of employee tool and equipment plans as tax-favored accountable plans.

Deducting Business Expenses
Find out what qualifies as a deductible business expense, including depreciation.

IRS Tax Calendar for Businesses and Self-Employed
The tax calendar is available for downloading and printing, or you can view it online.

U.S. Citizens and Resident Aliens Abroad
This section covers tax topics for U.S. citizens or resident aliens living overseas.

HCTC: Information for Health Plan Administrators (HPAs)
Health Plan Administrators are key to the success of the HCTC by providing health insurance to eligible individuals. Find information specific to health plan administrators here, including how to get involved and participate with the HCTC Program.

Excise Tax
Information about the various programs, databases, and activities within Excise Tax.

Industry Issue Resolution Program
The Industry Issue Resolution (IIR) Program resolves frequently disputed or burdensome tax issues. IRS solicits suggestions for issues for the program from taxpayers, representatives and associations.

Estate and Gift Taxes
General information on when these taxes apply and when they do not.

Filing Past Due Tax Returns
Understand how to file past due returns.

Information Returns Processing
The Information Reporting Program Website is designed to help you meet your Information Reporting Requirements. Included are help-line telephone numbers and direct links to aid you in reporting information returns. You will also find information about how to file returns electronically or magnetically.

LB&I Directives
LB&I Directives provide industry-related and administrative guidance to LB&I examiners to ensure consistent tax administration. The Directives do not establish Service position on legal issues and are not legal guidance.

Online Ordering for Information Returns and Employer Returns
Order information returns and employer returns online.

Manufacturers' Energy Efficient Appliance Credit
Act Section 305 - Modifications of Energy Efficient Appliance Credit for Appliances Produced After 2007

Audit Techniques Guides (ATGs)
These guides contain examination techniques to assist examiners in performing examinations.

1099-K Reporting Requirements for Payment Settlement Entities
Describes responsibilities of 1099-K filers and provides links to forms and publications.

Plug-In Electric Drive Vehicle Credit (IRC 30D)
Plug-In Electric Drive Vehicle Credit (IRC 30D) - Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks.

Your Guide to an IRS Small Business Audit
Video series shows small business owners steps of an audit and answers questions about the process

Income from Abroad is Taxable
There have been recent reports about the interest of the Internal Revenue Service (IRS) in taxpayers with bank accounts in Liechtenstein. The IRS' interest, however, extends beyond bank accounts in Liechtenstein to financial accounts anywhere in the world. The IRS reminds you to report your worldwide income on your U.S. tax return and lists the possible consequences of hiding income overseas.

Quality Examination Process
The Quality Examination Process (QEP) is a systematic approach for engaging and involving Large Business and International (LB&I) taxpayers in the tax examination process, from the earliest planning stages through resolution of all issues and completion of the case.

Market Segment Understandings (MSU)
The IRS and taxpayers in particular market segments, work together to improve tax compliance.

Railroad Retirement Tax Act (RRTA) Desk Guide (January 2009)
This Desk Reference Guide is intended as a resource tool to assist Revenue Agents who are assigned the examination of a railroad employer. The Guide was prepared presuming that the reader has already received employment tax training.

Federal Payment Levy Program
Certain federal payments (OPM, SSA, federal employee salaries, and federal employee travel) disbursed by the Department of the Treasury, Financial Management Service (FMS) may be subject to a 15 percent levy through the Federal Payment Levy Program (FPLP) to pay your delinquent tax debt. Find out your appeal rights and how to resolve any dispute.

Research Credit
Guidelines and audit technique guide are provided for field examiners on the examination of Research Credit cases.

The International Tax Gap
Find resources on this page pertaining to the international tax gap — the difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time. The tax gap can also be thought of as the sum of non-compliance with the tax law.

Uncertain Tax Positions - Schedule UTP
IRS finalized Schedule UTP & instructions for reporting uncertain tax positions by certain corporations.

IRS Non-Retaliation Policy
IRS has a zero-tolerance policy for retaliation and has had one in place since 1998.

Page Last Reviewed or Updated: 30-Mar-2014

The 2012 Taxes Online

2012 taxes online Internal Revenue Bulletin:  2009-17  April 27, 2009  Rev. 2012 taxes online Proc. 2012 taxes online 2009-24 Table of Contents SECTION 1. 2012 taxes online PURPOSE SECTION 2. 2012 taxes online BACKGROUND SECTION 3. 2012 taxes online SCOPE SECTION 4. 2012 taxes online APPLICATION. 2012 taxes online 01 In General. 2012 taxes online . 2012 taxes online 02 Limitations on Depreciation Deductions for Certain Automobiles. 2012 taxes online . 2012 taxes online 03 Inclusions in Income of Lessees of Passenger Automobiles. 2012 taxes online SECTION 5. 2012 taxes online EFFECTIVE DATE SECTION 6. 2012 taxes online DRAFTING INFORMATION SECTION 1. 2012 taxes online PURPOSE . 2012 taxes online 01 This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2009, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2009, including a separate table of inclusion amounts for lessees of trucks and vans. 2012 taxes online . 2012 taxes online 02 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. 2012 taxes online SECTION 2. 2012 taxes online BACKGROUND . 2012 taxes online 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year that the passenger automobile is placed in service by the taxpayer and each succeeding year. 2012 taxes online Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. 2012 taxes online The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. 2012 taxes online This change reflects the higher rate of price inflation that trucks and vans have been subject to since 1988. 2012 taxes online . 2012 taxes online 02 Section 168(k)(1)(A) provides a 50 percent additional first year depreciation deduction for certain new property acquired by a taxpayer after December 31, 2007, and before January 1, 2010, if no written binding contract for the acquisition of the property existed before January 1, 2008. 2012 taxes online Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A) by $8,000 for passenger automobiles to which the 50 percent additional first year depreciation deduction applies. 2012 taxes online . 2012 taxes online 03 Section 168(k)(2)(D)(i) provides that the 50 percent additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). 2012 taxes online Section 168(k)(2)(D)(iii) permits a taxpayer to elect to not claim the 50 percent additional first year depreciation deduction for any class of property. 2012 taxes online Section 168(k)(4) permits a corporation to elect to not claim the 50 percent additional first year depreciation deduction for all eligible qualified property (that is extension property or that is not extension property, as applicable) and instead to increase the business credit limitation under § 38(c) or the alternative minimum tax credit limitation under § 53(c). 2012 taxes online Accordingly, this revenue procedure provides tables for passenger automobiles for which the 50 percent additional depreciation deduction applies and tables for passenger automobiles for which the 50 percent additional first year depreciation deduction does not apply, including passenger automobiles in a class of property for which the taxpayer “elects out” of the 50 percent additional first year depreciation deduction or passenger automobiles that are eligible qualified property to which the § 168(k)(4) election applies. 2012 taxes online . 2012 taxes online 04 For leased passenger automobiles, § 280F(c) requires a reduction in the deduction allowed to the lessee of the passenger automobile. 2012 taxes online The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. 2012 taxes online Under § 1. 2012 taxes online 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. 2012 taxes online One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. 2012 taxes online Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. 2012 taxes online SECTION 3. 2012 taxes online SCOPE . 2012 taxes online 01 The limitations on depreciation deductions in section 4. 2012 taxes online 02(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2009, and continue to apply for each taxable year that the passenger automobile remains in service. 2012 taxes online . 2012 taxes online 02 The tables in section 4. 2012 taxes online 03 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2009. 2012 taxes online Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. 2012 taxes online See Rev. 2012 taxes online Proc. 2012 taxes online 2002-14, 2002-1 C. 2012 taxes online B. 2012 taxes online 450, for passenger automobiles first leased before January 1, 2003, Rev. 2012 taxes online Proc. 2012 taxes online 2003-75, 2003-2 C. 2012 taxes online B. 2012 taxes online 1018, for passenger automobiles first leased during calendar year 2003, Rev. 2012 taxes online Proc. 2012 taxes online 2004-20, 2004-1 C. 2012 taxes online B. 2012 taxes online 642, for passenger automobiles first leased during calendar year 2004, Rev. 2012 taxes online Proc. 2012 taxes online 2005-13, 2005-1 C. 2012 taxes online B. 2012 taxes online 759, for passenger automobiles first leased during calendar year 2005, Rev. 2012 taxes online Proc. 2012 taxes online 2006-18, 2006-1 C. 2012 taxes online B. 2012 taxes online 645, for passenger automobiles first leased during calendar year 2006, Rev. 2012 taxes online Proc. 2012 taxes online 2007-30, 2007-1 C. 2012 taxes online B. 2012 taxes online 1104, for passenger automobiles first leased during calendar year 2007, and Rev. 2012 taxes online Proc. 2012 taxes online 2008-22, 2008-12 I. 2012 taxes online R. 2012 taxes online B. 2012 taxes online 658, for passenger automobiles first leased during calendar year 2008. 2012 taxes online SECTION 4. 2012 taxes online APPLICATION . 2012 taxes online 01 In General. 2012 taxes online (1) Limitations on depreciation deductions for certain automobiles. 2012 taxes online The limitations on depreciation deductions for passenger automobiles placed in service by the taxpayer for the first time during calendar year 2009 are in Tables 1 through 4 in section 4. 2012 taxes online 02(2) of this revenue procedure. 2012 taxes online (2) Inclusions in income of lessees of passenger automobiles. 2012 taxes online A taxpayer first leasing a passenger automobile during calendar year 2009 must determine the inclusion amount that is added to gross income using Tables 5 and 6 in section 4. 2012 taxes online 03 of this revenue procedure. 2012 taxes online In addition, the taxpayer must follow the procedures of § 1. 2012 taxes online 280F-7(a). 2012 taxes online . 2012 taxes online 02 Limitations on Depreciation Deductions for Certain Automobiles. 2012 taxes online (1) Amount of the inflation adjustment. 2012 taxes online (a) Passenger automobiles (other than trucks or vans). 2012 taxes online Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. 2012 taxes online The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor. 2012 taxes online The new car component of the CPI was 115. 2012 taxes online 2 for October 1987 and 134. 2012 taxes online 837 for October 2008. 2012 taxes online The October 2008 index exceeded the October 1987 index by 19. 2012 taxes online 637. 2012 taxes online The Internal Revenue Service has, therefore, determined that the automobile price inflation adjustment for 2009 for passenger automobiles (other than trucks and vans) is 17. 2012 taxes online 05 percent (19. 2012 taxes online 637/115. 2012 taxes online 2 x 100%). 2012 taxes online This adjustment is applicable to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2009. 2012 taxes online The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0. 2012 taxes online 1705, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2009. 2012 taxes online (b) Trucks and vans. 2012 taxes online To determine the dollar limitations applicable to trucks and vans first placed in service during calendar year 2009, the new truck component of the CPI is used instead of the new car component. 2012 taxes online The new truck component of the CPI was 112. 2012 taxes online 4 for October 1987 and 133. 2012 taxes online 640 for October 2008. 2012 taxes online The October 2008 index exceeded the October 1987 index by 21. 2012 taxes online 24. 2012 taxes online The Service has, therefore, determined that the automobile price inflation adjustment for 2009 for trucks and vans is 18. 2012 taxes online 90 percent (21. 2012 taxes online 24/112. 2012 taxes online 4 x 100%). 2012 taxes online This adjustment is applicable to all trucks and vans that are first placed in service in calendar year 2009. 2012 taxes online The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0. 2012 taxes online 1890, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to trucks and vans. 2012 taxes online (2) Amount of the limitation. 2012 taxes online For passenger automobiles placed in service by the taxpayer in calendar year 2009, Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year. 2012 taxes online Use Table 1 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a passenger automobile (other than a truck or van) in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a passenger automobile that is eligible qualified property to which the § 168(k)(4) election applies. 2012 taxes online Use Table 2 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies. 2012 taxes online Use Table 3 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a truck or van in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a truck or van that is eligible qualified property to which the § 168(k)(4) election applies. 2012 taxes online Use Table 4 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies. 2012 taxes online REV. 2012 taxes online PROC. 2012 taxes online 2009-24 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $2,960 2nd Tax Year $4,800 3rd Tax Year $2,850 Each Succeeding Year $1,775 REV. 2012 taxes online PROC. 2012 taxes online 2009-24 TABLE 2 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $10,960 2nd Tax Year $4,800 3rd Tax Year $2,850 Each Succeeding Year $1,775 REV. 2012 taxes online PROC. 2012 taxes online 2009-24 TABLE 3 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. 2012 taxes online PROC. 2012 taxes online 2009-24 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 . 2012 taxes online 03 Inclusions in Income of Lessees of Passenger Automobiles. 2012 taxes online The inclusion amounts for passenger automobiles first leased in calendar year 2009 are calculated under the procedures described in § 1. 2012 taxes online 280F-7(a). 2012 taxes online Lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure in applying these procedures, while lessees of trucks and vans should use Table 6 of this revenue procedure. 2012 taxes online REV. 2012 taxes online PROC. 2012 taxes online 2009-24 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 9 19 28 34 38 19,000 19,500 10 21 32 38 43 19,500 20,000 11 24 36 42 48 20,000 20,500 12 27 39 46 54 20,500 21,000 13 29 43 51 58 21,000 21,500 15 31 47 55 64 21,500 22,000 16 34 50 60 68 22,000 23,000 17 38 56 66 76 23,000 24,000 20 42 64 75 86 24,000 25,000 22 47 71 84 96 25,000 26,000 24 52 78 93 107 26,000 27,000 26 58 85 101 117 27,000 28,000 29 62 93 110 127 28,000 29,000 31 67 100 119 138 29,000 30,000 33 72 108 128 147 30,000 31,000 35 77 115 137 157 31,000 32,000 38 82 122 146 167 32,000 33,000 40 87 129 155 178 33,000 34,000 42 92 137 163 188 34,000 35,000 44 97 144 172 199 35,000 36,000 47 102 151 181 208 36,000 37,000 49 107 159 189 219 37,000 38,000 51 112 166 199 228 38,000 39,000 53 117 173 208 239 39,000 40,000 56 122 180 216 250 40,000 41,000 58 127 188 225 259 41,000 42,000 60 132 195 234 269 42,000 43,000 62 137 203 242 280 43,000 44,000 65 141 210 252 290 44,000 45,000 67 146 218 260 300 45,000 46,000 69 151 225 269 311 46,000 47,000 71 157 232 278 320 47,000 48,000 74 161 240 286 331 48,000 49,000 76 166 247 296 340 49,000 50,000 78 171 255 304 351 50,000 51,000 80 176 262 313 361 51,000 52,000 83 181 269 322 371 52,000 53,000 85 186 276 331 381 53,000 54,000 87 191 284 339 392 54,000 55,000 89 196 291 349 401 55,000 56,000 92 201 298 357 412 56,000 57,000 94 206 306 365 423 57,000 58,000 96 211 313 375 432 58,000 59,000 98 216 320 384 442 59,000 60,000 101 221 327 393 452 60,000 62,000 104 228 339 406 467 62,000 64,000 109 238 353 424 488 64,000 66,000 113 248 368 441 509 66,000 68,000 118 258 382 459 529 68,000 70,000 122 268 397 476 550 70,000 72,000 127 277 413 493 570 72,000 74,000 131 288 427 511 590 74,000 76,000 136 297 442 529 610 76,000 78,000 140 307 457 546 631 78,000 80,000 145 317 471 564 651 80,000 85,000 152 335 497 595 686 85,000 90,000 164 359 534 639 737 90,000 95,000 175 384 570 683 789 95,000 100,000 186 409 607 727 839 100,000 110,000 203 446 662 793 916 110,000 120,000 226 495 736 881 1,018 120,000 130,000 248 545 809 970 1,119 130,000 140,000 271 594 883 1,058 1,220 140,000 150,000 293 644 956 1,146 1,322 150,000 160,000 316 693 1,030 1,234 1,424 160,000 170,000 338 743 1,103 1,322 1,526 170,000 180,000 361 792 1,177 1,410 1,628 180,000 190,000 383 842 1,250 1,498 1,730 190,000 200,000 406 891 1,324 1,586 1,831 200,000 210,000 428 941 1,397 1,675 1,932 210,000 220,000 451 990 1,471 1,762 2,035 220,000 230,000 473 1,040 1,544 1,851 2,136 230,000 240,000 496 1,089 1,618 1,939 2,238 240,000 And up 518 1,139 1,691 2,027 2,340 REV. 2012 taxes online PROC. 2012 taxes online 2009-24 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009 Fair Market Value of Electric Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th and Later $18,500 $19,000 8 17 25 30 35 19,000 19,500 9 19 29 35 40 19,500 20,000 10 22 33 38 45 20,000 20,500 11 25 36 43 50 20,500 21,000 12 27 40 48 55 21,000 21,500 13 30 43 52 60 21,500 22,000 15 32 47 56 66 22,000 23,000 16 36 52 64 72 23,000 24,000 18 41 60 72 83 24,000 25,000 21 45 68 81 93 25,000 26,000 23 50 75 90 103 26,000 27,000 25 56 82 98 114 27,000 28,000 27 61 89 107 124 28,000 29,000 30 65 97 116 134 29,000 30,000 32 70 104 125 144 30,000 31,000 34 75 112 134 154 31,000 32,000 36 80 119 143 164 32,000 33,000 39 85 126 151 175 33,000 34,000 41 90 134 160 184 34,000 35,000 43 95 141 169 195 35,000 36,000 45 100 148 178 205 36,000 37,000 48 105 155 187 215 37,000 38,000 50 110 163 195 226 38,000 39,000 52 115 170 204 236 39,000 40,000 55 120 177 213 246 40,000 41,000 57 125 185 221 256 41,000 42,000 59 130 192 231 266 42,000 43,000 61 135 199 240 276 43,000 44,000 64 139 207 249 286 44,000 45,000 66 144 215 257 296 45,000 46,000 68 149 222 266 307 46,000 47,000 70 155 229 274 317 47,000 48,000 73 159 237 283 327 48,000 49,000 75 164 244 292 338 49,000 50,000 77 169 251 301 348 50,000 51,000 79 174 259 310 357 51,000 52,000 82 179 266 318 368 52,000 53,000 84 184 273 328 378 53,000 54,000 86 189 281 336 388 54,000 55,000 88 194 288 345 399 55,000 56,000 91 199 295 354 408 56,000 57,000 93 204 302 363 419 57,000 58,000 95 209 310 371 429 58,000 59,000 97 214 317 381 439 59,000 60,000 100 219 324 389 450 60,000 62,000 103 226 336 402 465 62,000 64,000 107 236 351 420 485 64,000 66,000 112 246 365 438 505 66,000 68,000 116 256 380 455 526 68,000 70,000 121 266 394 473 546 70,000 72,000 125 276 409 491 566 72,000 74,000 130 286 423 509 586 74,000 76,000 134 296 438 526 607 76,000 78,000 139 305 454 543 627 78,000 80,000 143 316 467 561 648 80,000 85,000 151 333 493 592 684 85,000 90,000 163 357 531 635 735 90,000 95,000 174 382 567 680 785 95,000 100,000 185 407 604 724 836 100,000 110,000 202 444 659 790 912 110,000 120,000 225 493 733 878 1,014 120,000 130,000 247 543 806 966 1,116 130,000 140,000 270 592 880 1,054 1,218 140,000 150,000 292 642 953 1,143 1,319 150,000 160,000 315 691 1,027 1,230 1,421 160,000 170,000 337 741 1,100 1,319 1,522 170,000 180,000 360 790 1,174 1,407 1,624 180,000 190,000 382 840 1,247 1,495 1,726 190,000 200,000 405 889 1,321 1,583 1,828 200,000 210,000 427 939 1,394 1,671 1,930 210,000 220,000 450 988 1,468 1,759 2,031 220,000 230,000 472 1,038 1,541 1,847 2,134 230,000 240,000 495 1,087 1,615 1,935 2,235 240,000 and up 517 1,137 1,688 2,024 2,336 SECTION 5. 2012 taxes online EFFECTIVE DATE This revenue procedure applies to passenger automobiles (other than leased passenger automobiles) that are first placed in service by a taxpayer during calendar year 2009, and to leased passenger automobiles that are first leased by a taxpayer during calendar year 2009. 2012 taxes online SECTION 6. 2012 taxes online DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. 2012 taxes online Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). 2012 taxes online For further information regarding this revenue procedure, contact Mr. 2012 taxes online Harvey at (202) 622-4930 (not a toll-free call). 2012 taxes online Prev  Up  Next   Home   More Internal Revenue Bulletins