File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Amending My Tax Return

Forms 1040 EsEz 1040Www.1040xFree State Taxes1040ez Form For 20121040ez Instruction BookForm 1040x More:label_form_201040x More:taxesWww Freefilefillableforms Com Ffa Freefileforms HtmFree Site To File State TaxesFile My 2009 Taxes Online FreeDownload 1040ez Form2011 1040ezWhere Can I Get State Tax FormsPrior Year Tax Return1040nr Form 2012Free H&r Block Tax Software 20111040ez Fill In FormFiling Tax ReturnHow To File An Amended Tax ReturnFile An Amended Tax ReturnUnemployment Tax ReturnFree Efile Of State TaxesFile 2010 Taxes For FreeH&r Free Federal Tax FilingFiling Past TaxesAmended Form1040 EasyI Need To Efile My 2011 TaxesAmend A 2012 Tax Return2011 1040 Tax FormFree Tax Filing 20122012 Tax Forms 1040ezFree Tax Filing For Low Income Families1040 FormFree Federal Tax ReturnH And R Block Online Filing1040ez InstructionsHow To File An Amended Tax Return For 2013Tax Return For Students1040 Es Payment Voucher

Amending My Tax Return

Amending my tax return 11. Amending my tax return   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Amending my tax return Free help with your tax return. Amending my tax return   You can get free help preparing your return nationwide from IRS-certified volunteers. Amending my tax return The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Amending my tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Amending my tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Amending my tax return In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Amending my tax return To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Amending my tax return gov, download the IRS2Go app, or call 1-800-906-9887. Amending my tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. Amending my tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. Amending my tax return aarp. Amending my tax return org/money/taxaide or call 1-888-227-7669. Amending my tax return For more information on these programs, go to IRS. Amending my tax return gov and enter “VITA” in the search box. Amending my tax return Internet. Amending my tax return    IRS. Amending my tax return gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Amending my tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Amending my tax return Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Amending my tax return Check the status of your 2013 refund with the Where's My Refund? application on IRS. Amending my tax return gov or download the IRS2Go app and select the Refund Status option. Amending my tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Amending my tax return Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Amending my tax return You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Amending my tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Amending my tax return Use the Interactive Tax Assistant (ITA) to research your tax questions. Amending my tax return No need to wait on the phone or stand in line. Amending my tax return The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Amending my tax return When you reach the response screen, you can print the entire interview and the final response for your records. Amending my tax return New subject areas are added on a regular basis. Amending my tax return  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Amending my tax return gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Amending my tax return You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Amending my tax return The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Amending my tax return When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Amending my tax return Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Amending my tax return You can also ask the IRS to mail a return or an account transcript to you. Amending my tax return Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Amending my tax return gov or by calling 1-800-908-9946. Amending my tax return Tax return and tax account transcripts are generally available for the current year and the past three years. Amending my tax return Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Amending my tax return Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Amending my tax return If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Amending my tax return Check the status of your amended return using Where's My Amended Return? Go to IRS. Amending my tax return gov and enter Where's My Amended Return? in the search box. Amending my tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Amending my tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Amending my tax return Make a payment using one of several safe and convenient electronic payment options available on IRS. Amending my tax return gov. Amending my tax return Select the Payment tab on the front page of IRS. Amending my tax return gov for more information. Amending my tax return Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Amending my tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. Amending my tax return gov. Amending my tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Amending my tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Amending my tax return gov. Amending my tax return Request an Electronic Filing PIN by going to IRS. Amending my tax return gov and entering Electronic Filing PIN in the search box. Amending my tax return Download forms, instructions and publications, including accessible versions for people with disabilities. Amending my tax return Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Amending my tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Amending my tax return An employee can answer questions about your tax account or help you set up a payment plan. Amending my tax return Before you visit, check the Office Locator on IRS. Amending my tax return gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Amending my tax return If you have a special need, such as a disability, you can request an appointment. Amending my tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Amending my tax return Apply for an Employer Identification Number (EIN). Amending my tax return Go to IRS. Amending my tax return gov and enter Apply for an EIN in the search box. Amending my tax return Read the Internal Revenue Code, regulations, or other official guidance. Amending my tax return Read Internal Revenue Bulletins. Amending my tax return Sign up to receive local and national tax news and more by email. Amending my tax return Just click on “subscriptions” above the search box on IRS. Amending my tax return gov and choose from a variety of options. Amending my tax return Phone. Amending my tax return    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Amending my tax return Download the free IRS2Go app from the iTunes app store or from Google Play. Amending my tax return Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Amending my tax return gov, or download the IRS2Go app. Amending my tax return Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Amending my tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Amending my tax return Most VITA and TCE sites offer free electronic filing. Amending my tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Amending my tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Amending my tax return Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Amending my tax return If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Amending my tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. Amending my tax return Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Amending my tax return Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Amending my tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Amending my tax return Note, the above information is for our automated hotline. Amending my tax return Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Amending my tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Amending my tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Amending my tax return It can take up to 3 weeks from the date you mailed it to show up in our system. Amending my tax return Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Amending my tax return You should receive your order within 10 business days. Amending my tax return Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Amending my tax return If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Amending my tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Amending my tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Amending my tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service. Amending my tax return Walk-in. Amending my tax return   You can find a selection of forms, publications and services — in-person. Amending my tax return Products. Amending my tax return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Amending my tax return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Amending my tax return Services. Amending my tax return You can walk in to your local TAC for face-to-face tax help. Amending my tax return An employee can answer questions about your tax account or help you set up a payment plan. Amending my tax return Before visiting, use the Office Locator tool on IRS. Amending my tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Amending my tax return Mail. Amending my tax return   You can send your order for forms, instructions, and publications to the address below. Amending my tax return You should receive a response within 10 business days after your request is received. Amending my tax return Internal Revenue Service 1201 N. Amending my tax return Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Amending my tax return The Taxpayer Advocate Service (TAS) is your voice at the IRS. Amending my tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Amending my tax return   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Amending my tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Amending my tax return You face (or your business is facing) an immediate threat of adverse action. Amending my tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Amending my tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Amending my tax return Here's why we can help: TAS is an independent organization within the IRS. Amending my tax return Our advocates know how to work with the IRS. Amending my tax return Our services are free and tailored to meet your needs. Amending my tax return We have offices in every state, the District of Columbia, and Puerto Rico. Amending my tax return   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Amending my tax return   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Amending my tax return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Amending my tax return Low Income Taxpayer Clinics. Amending my tax return   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Amending my tax return Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Amending my tax return Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Amending my tax return Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

PTIN Information and the Freedom of Information Act

The Freedom of Information Act (FOIA), enacted in 1966, gives any person the right to access federal agency records, unless the information is protected from public disclosure by one of nine exemptions. FOIA authorizes government agencies to recover the cost of complying with a FOIA request.

Under FOIA, certain information submitted to the IRS by an individual applying for a preparer tax identification number (PTIN) must be disclosed by the IRS under FOIA, and the individual cannot opt out of the disclosure.

FOIA Awareness for PTIN Holders

The PTIN holder information subject to public disclosure includes:

  • Name
  • Business name
  • Business website address
  • Business phone number
  • Business mailing address – Either a physical address or a P.O. Box is acceptable as a business address.
  • Email address – Any valid email address that you check regularly for PTIN communications is acceptable.
  • Professional credentials

Updating your contact information

To maintain the privacy of your personal information, PTIN holders can update contact information.

Unwanted solicitations

Legitimate IRS emails regarding PTIN issues are sent from two email addresses: irs@service.govdelivery.com and TaxPro_PTIN@irs.gov. The IRS is aware of malicious emails attempting to spoof these email addresses. Pay careful attention to whether an email is actually from one of these addresses. If you feel that you have received a suspicious phishing email, follow the directions found here.

If you receive email solicitations from other organizations and they are unwanted, the Federal Trade Commission, Bureau of Consumer Protection provides guidance on whether an email or other contact violates the CAN-SPAM Act of 2003 and how to report violations.

Additionally, exercise caution on websites without a .gov domain. Only sites with the .gov domain are official government websites.

PTIN application changes

To clearly distinguish between public and private information, the IRS changed the “Permanent Mailing Address” box on the PTIN application to “Personal Mailing Address”. This change clarified that the information is personal and exempt from public disclosure under FOIA rules.

Also, the IRS removed the prohibition on entering a post office box in the “Business Mailing Address” box on the PTIN application. PTIN holders may now enter a P.O. Box as their business mailing address.

If you used your Personal Mailing Address as your Business Mailing Address or used a street address when you preferred to provide a P.O Box as your Business Mailing Address, you may update your contact information. But note that your Business Mailing Address is not exempt from disclosure under FOIA rules and it will be released even if it is the same as your Personal Mailing Address.

Page Last Reviewed or Updated: 11-Sep-2013

The Amending My Tax Return

Amending my tax return 2. Amending my tax return   Accounting Methods Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Accounting MethodsCash Method Accrual Method Farm Inventory Cash Versus Accrual Method Special Methods of Accounting Combination Method Changes in Methods of Accounting Introduction You must use an accounting method that clearly shows your income and expenses. Amending my tax return You must also figure your taxable income and file an income tax return for an annual accounting period called a tax year. Amending my tax return This chapter discusses accounting methods. Amending my tax return For information on accounting periods, see Publication 538, Accounting Periods and Methods, and the Instructions for Form 1128, Application To Adopt, Change, or Retain a Tax Year. Amending my tax return Topics - This chapter discusses: Cash method Accrual method Farm inventory Special methods of accounting Changes in methods of accounting Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 535 Business Expenses Form (and Instructions) 1128 Application To Adopt, Change, or Retain a Tax Year 3115 Application for Change in Accounting Method See chapter 16 for information about getting publications and forms. Amending my tax return Accounting Methods An accounting method is a set of rules used to determine when and how your income and expenses are reported on your tax return. Amending my tax return Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item. Amending my tax return A material item is one that affects the proper time for inclusion of income or allowance of a deduction. Amending my tax return An item considered material for financial statement purposes is generally also considered material for income tax purposes. Amending my tax return See Publication 538 for more information. Amending my tax return You generally choose an accounting method for your farm business when you file your first income tax return that includes a Schedule F (Form 1040), Profit or Loss From Farming. Amending my tax return If you later want to change your accounting method, you generally must get IRS approval. Amending my tax return How to obtain IRS approval is discussed later under Changes in Methods of Accounting . Amending my tax return Types of accounting methods. Amending my tax return   Generally, you can use any of the following accounting methods. Amending my tax return Each method is discussed in detail below. Amending my tax return Cash method. Amending my tax return Accrual method. Amending my tax return Special methods of accounting for certain items of income and expenses. Amending my tax return Combination (hybrid) method using elements of two or more of the above. Amending my tax return Business and other items. Amending my tax return   You can account for business and personal items using different accounting methods. Amending my tax return For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. Amending my tax return Two or more businesses. Amending my tax return   If you operate two or more separate and distinct businesses, you can use a different accounting method for each business. Amending my tax return Generally, no business is separate and distinct unless a complete and separate set of books and records is maintained for each business. Amending my tax return Cash Method Most farmers use the cash method because they find it easier to keep records using the cash method. Amending my tax return However, certain farm corporations and partnerships and all tax shelters must use an accrual method of accounting. Amending my tax return See Accrual Method Required , later. Amending my tax return Income Under the cash method, include in your gross income all items of income you actually or constructively received during the tax year. Amending my tax return Items of income include money received as well as property or services received. Amending my tax return If you receive property or services, you must include the fair market value (FMV) of the property or services in income. Amending my tax return See chapter 3 for information on how to report farm income on your income tax return. Amending my tax return Constructive receipt. Amending my tax return   Income is constructively received when an amount is credited to your account or made available to you without restriction. Amending my tax return You do not need to have possession of the income for it to be treated as income for the tax year. Amending my tax return If you authorize someone to be your agent and receive income for you, you are considered to have received the income when your agent receives it. Amending my tax return Income is not constructively received if your receipt of the income is subject to substantial restrictions or limitations. Amending my tax return Direct payments and counter-cyclical payments. Amending my tax return   If you received direct payments or counter-cyclical payments under Subtitle A or C of the Farm Security and Rural Investment Act of 2002, you will not be considered to have constructively received a payment merely because you had the option to receive it in the year before it is required to be paid. Amending my tax return Delaying receipt of income. Amending my tax return   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. Amending my tax return You must report the income in the year the money or property is received or made available to you without restriction. Amending my tax return Example. Amending my tax return Frances Jones, a farmer, was entitled to receive a $10,000 payment on a grain contract in December 2013. Amending my tax return She was told in December that her payment was available. Amending my tax return She requested not to be paid until January 2014. Amending my tax return However, she must still include this payment in her 2013 income because it was made available to her in 2013. Amending my tax return Debts paid by another person or canceled. Amending my tax return   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. Amending my tax return If you receive income in this way, you constructively receive the income when the debt is canceled or paid. Amending my tax return See Cancellation of Debt in chapter 3. Amending my tax return Deferred payment contract. Amending my tax return   If you sell an item under a deferred payment contract that calls for payment in a future year, there is no constructive receipt in the year of sale. Amending my tax return However, if the sales contract states that you have the right to the proceeds of the sale from the buyer at any time after delivery of the item, then you must include the sales price in income in the year of the sale, regardless of when you actually receive payment. Amending my tax return Example. Amending my tax return You are a farmer who uses the cash method and a calendar tax year. Amending my tax return You sell grain in December 2013 under a bona fide arm's-length contract that calls for payment in 2014. Amending my tax return You include the proceeds from the sale in your 2014 gross income since that is the year payment is received. Amending my tax return However, if the contract states that you have the right to the proceeds from the buyer at any time after the grain is delivered, you must include the sales price in your 2013 income, regardless of when you actually receive payment. Amending my tax return Repayment of income. Amending my tax return   If you include an amount in income and in a later year you have to repay all or part of it, then you can usually deduct the repayment in the year repaid. Amending my tax return If the repayment is more than $3,000, a special rule applies. Amending my tax return For details, see Repayments in chapter 11 of Publication 535, Business Expenses. Amending my tax return Expenses Under the cash method, generally you deduct expenses in the tax year you pay them. Amending my tax return This includes business expenses for which you contest liability. Amending my tax return However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained under Uniform Capitalization Rules in chapter 6. Amending my tax return See chapter 4 for information on how to deduct farm business expenses on your income tax return. Amending my tax return Prepayment. Amending my tax return   Generally, you cannot deduct expenses paid in advance. Amending my tax return This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Amending my tax return Example. Amending my tax return On November 1, 2013, you signed and paid $3,600 for a 3-year (36-month) insurance contract for equipment. Amending my tax return In 2013, you are allowed to deduct only $200 (2/36 x $3,600) of the cost of the policy that is attributable to 2013. Amending my tax return In 2014, you'll be able to deduct $1,200 (12/36 x $3,600); in 2015, you'll be able to deduct $1,200 (12/36 x $3,600); and in 2016 you'll be able to deduct the remaining balance of $1,000. Amending my tax return An exception applies if the expense qualifies for the 12-month rule. Amending my tax return See Publication 538 for more information and examples. Amending my tax return See chapter 4 for special rules for prepaid farm supplies and prepaid livestock feed. Amending my tax return Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. Amending my tax return The purpose of an accrual method of accounting is to correctly match income and expenses. Amending my tax return Certain businesses engaged in farming must use an accrual method of accounting for its farm business and for sales and purchases of inventory items. Amending my tax return See Accrual Method Required and Farm Inventory , later. Amending my tax return Income Generally, you include an amount in income for the tax year in which all events that fix your right to receive the income have occurred, and you can determine the amount with reasonable accuracy. Amending my tax return Under this rule, include an amount in income on the earliest of the following dates. Amending my tax return When you receive payment. Amending my tax return When the income amount is due to you. Amending my tax return When you earn the income. Amending my tax return When title passes. Amending my tax return If you use an accrual method of accounting, complete Part III of Schedule F (Form 1040) to report your income. Amending my tax return Inventory. Amending my tax return   If you keep an inventory, generally you must use an accrual method of accounting to determine your gross income. Amending my tax return An inventory is necessary to clearly show income when the production, purchase, or sale of merchandise is an income-producing factor. Amending my tax return See Publication 538 for more information. Amending my tax return Also see Farm Inventory , later, for more information on items that must be included in inventory by farmers and inventory valuation methods for farmers. Amending my tax return Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both of the following apply. Amending my tax return The all-events test has been met. Amending my tax return This test is met when: All events have occurred that fix the fact that you have a liability, and The amount of the liability can be determined with reasonable accuracy. Amending my tax return Economic performance has occurred. Amending my tax return Economic performance. Amending my tax return   Generally, you cannot deduct or capitalize a business expense until economic performance occurs. Amending my tax return If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. Amending my tax return If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. Amending my tax return Example. Amending my tax return Jane, who is a farmer, uses a calendar tax year and an accrual method of accounting. Amending my tax return She entered into a contract with ABC Farm Consulting in 2012. Amending my tax return The contract stated that Jane pay ABC Farm Consulting $2,000 in December 2012. Amending my tax return It further stipulates that ABC Farm Consulting will develop a plan for integrating her farm with a larger farm operation based in a neighboring state by March 1, 2013. Amending my tax return Jane paid ABC Farm Consulting $2,000 in December 2012. Amending my tax return Integration of operations according to the plan began in May 2013 and they completed the integration in December 2013. Amending my tax return Economic performance for Jane's liability in the contract occurs as the services are provided. Amending my tax return Jane incurs the $2,000 cost in 2013. Amending my tax return An exception to the economic performance rule allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. Amending my tax return For more information, see Economic Performance in Publication 538. Amending my tax return Special rule for related persons. Amending my tax return   Business expenses and interest owed to a related person who uses the cash method of accounting are not deductible until you make the payment and the corresponding amount is includible in the related person's gross income. Amending my tax return Determine the relationship for this rule as of the end of the tax year for which the expense or interest would otherwise be deductible. Amending my tax return For more information, see Internal Revenue Code section 267. Amending my tax return Accrual Method Required Generally, the following businesses, if engaged in farming, must use an accrual method of accounting. Amending my tax return A corporation (other than a family corporation) that had gross receipts of more than $1,000,000 for any tax year beginning after 1975. Amending my tax return A family corporation that had gross receipts of more than $25,000,000 for any tax year beginning after 1985. Amending my tax return A partnership with a corporation as a partner, if that corporation meets the requirements of (1) or (2) above. Amending my tax return A tax shelter. Amending my tax return Note. Amending my tax return Items (1), (2), and (3) above do not apply to an S corporation or a business operating a nursery or sod farm, or the raising or harvesting of trees (other than fruit and nut trees). Amending my tax return Family corporation. Amending my tax return   A family corporation is generally a corporation that meets one of the following ownership requirements. Amending my tax return Members of the same family own at least 50% of the total combined voting power of all classes of stock entitled to vote and at least 50% of the total shares of all other classes of stock of the corporation. Amending my tax return Members of two families have owned, directly or indirectly, since October 4, 1976, at least 65% of the total combined voting power of all classes of voting stock and at least 65% of the total shares of all other classes of the corporation's stock. Amending my tax return Members of three families have owned, directly or indirectly, since October 4, 1976, at least 50% of the total combined voting power of all classes of voting stock and at least 50% of the total shares of all other classes of the corporation's stock. Amending my tax return For more information on family corporations, see Internal Revenue Code section 447. Amending my tax return Tax shelter. Amending my tax return   A tax shelter is a partnership, noncorporate enterprise, or S corporation that meets either of the following tests. Amending my tax return Its principal purpose is the avoidance or evasion of federal income tax. Amending my tax return It is a farming syndicate. Amending my tax return A farming syndicate is an entity that meets either of the following tests. Amending my tax return Interests in the activity have been offered for sale in an offering required to be registered with a federal or state agency with the authority to regulate the offering of securities for sale. Amending my tax return More than 35% of the losses during the tax year are allocable to limited partners or limited entrepreneurs. Amending my tax return   A “limited partner” is one whose personal liability for partnership debts is limited to the money or other property the partner contributed or is required to contribute to the partnership. Amending my tax return   A “limited entrepreneur” is one who has an interest in an enterprise other than as a limited partner and does not actively participate in the management of the enterprise. Amending my tax return Farm Inventory If you are required to keep an inventory, you should keep a complete record of your inventory as part of your farm records. Amending my tax return This record should show the actual count or measurement of the inventory. Amending my tax return It should also show all factors that enter into its valuation, including quality and weight, if applicable. Amending my tax return Hatchery business. Amending my tax return   If you are in the hatchery business, and use an accrual method of accounting, you must include in inventory eggs in the process of incubation. Amending my tax return Products held for sale. Amending my tax return   All harvested and purchased farm products held for sale or for feed or seed, such as grain, hay, silage, concentrates, cotton, tobacco, etc. Amending my tax return , must be included in inventory. Amending my tax return Supplies. Amending my tax return   Supplies acquired for sale or that become a physical part of items held for sale must be included in inventory. Amending my tax return Deduct the cost of supplies in the year used or consumed in operations. Amending my tax return Do not include incidental supplies in inventory as these are deductible in the year of purchase. Amending my tax return Livestock. Amending my tax return   Livestock held primarily for sale must be included in inventory. Amending my tax return Livestock held for draft, breeding, or dairy purposes can either be depreciated or included in inventory. Amending my tax return See also Unit-livestock-price method , later. Amending my tax return If you are in the business of breeding and raising chinchillas, mink, foxes, or other fur-bearing animals, these animals are livestock for inventory purposes. Amending my tax return Growing crops. Amending my tax return   Generally, growing crops are not required to be included in inventory. Amending my tax return However, if the crop has a preproductive period of more than 2 years, you may have to capitalize (or include in inventory) costs associated with the crop. Amending my tax return See Uniform capitalization rules below. Amending my tax return Also see Uniform Capitalization Rules in  chapter 6. Amending my tax return Items to include in inventory. Amending my tax return   Your inventory should include all items held for sale, or for use as feed, seed, etc. Amending my tax return , whether raised or purchased, that are unsold at the end of the year. Amending my tax return Uniform capitalization rules. Amending my tax return   The following applies if you are required to use an accrual method of accounting. Amending my tax return The uniform capitalization rules apply to all costs of raising a plant, even if the preproductive period of raising a plant is 2 years or less. Amending my tax return The costs of animals are subject to the uniform capitalization rules. Amending my tax return Inventory valuation methods. Amending my tax return   The following methods, described below, are those generally available for valuing inventory. Amending my tax return The method you use must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. Amending my tax return Cost. Amending my tax return Lower of cost or market. Amending my tax return Farm-price method. Amending my tax return Unit-livestock-price method. Amending my tax return Cost and lower of cost or market methods. Amending my tax return   See Publication 538 for information on these valuation methods. Amending my tax return If you value your livestock inventory at cost or the lower of cost or market, you do not need IRS approval to change to the unit-livestock-price method. Amending my tax return However, if you value your livestock inventory using the farm-price method, then you must obtain permission from the IRS to change to the unit-livestock-price method. Amending my tax return Farm-price method. Amending my tax return   Under this method, each item, whether raised or purchased, is valued at its market price less the direct cost of disposition. Amending my tax return Market price is the current price at the nearest market in the quantities you usually sell. Amending my tax return Cost of disposition includes broker's commissions, freight, hauling to market, and other marketing costs. Amending my tax return If you use this method, you must use it for your entire inventory, except that livestock can be inventoried under the unit-livestock-price method. Amending my tax return Unit-livestock-price method. Amending my tax return   This method recognizes the difficulty of establishing the exact costs of producing and raising each animal. Amending my tax return You group or classify livestock according to type and age and use a standard unit price for each animal within a class or group. Amending my tax return The unit price you assign should reasonably approximate the normal costs incurred in producing the animals in such classes. Amending my tax return Unit prices and classifications are subject to approval by the IRS on examination of your return. Amending my tax return You must annually reevaluate your unit livestock prices and adjust the prices upward or downward to reflect increases or decreases in the costs of raising livestock. Amending my tax return IRS approval is not required for these adjustments. Amending my tax return Any other changes in unit prices or classifications do require IRS approval. Amending my tax return   If you use this method, include all raised livestock in inventory, regardless of whether they are held for sale or for draft, breeding, sport, or dairy purposes. Amending my tax return This method accounts only for the increase in cost of raising an animal to maturity. Amending my tax return It does not provide for any decrease in the animal's market value after it reaches maturity. Amending my tax return Also, if you raise cattle, you are not required to inventory hay you grow to feed your herd. Amending my tax return   Do not include sold or lost animals in the year-end inventory. Amending my tax return If your records do not show which animals were sold or lost, treat the first animals acquired as sold or lost. Amending my tax return The animals on hand at the end of the year are considered those most recently acquired. Amending my tax return   You must include in inventory all livestock purchased primarily for sale. Amending my tax return You can choose either to include in inventory or depreciate livestock purchased for draft, breeding, sport or dairy purposes. Amending my tax return However, you must be consistent from year to year, regardless of the method you have chosen. Amending my tax return You cannot change your method without obtaining approval from the IRS. Amending my tax return   You must include in inventory animals purchased after maturity or capitalize them at their purchase price. Amending my tax return If the animals are not mature at purchase, increase the cost at the end of each tax year according to the established unit price. Amending my tax return However, in the year of purchase, do not increase the cost of any animal purchased during the last 6 months of the year. Amending my tax return This “no increase” rule does not apply to tax shelters which must make an adjustment for any animal purchased during the year. Amending my tax return It also does not apply to taxpayers that must make an adjustment to reasonably reflect the particular period in the year in which animals are purchased, if necessary to avoid significant distortions in income. Amending my tax return Uniform capitalization rules. Amending my tax return   A farmer can determine costs required to be allocated under the uniform capitalization rules by using the farm-price or unit-livestock-price inventory method. Amending my tax return This applies to any plant or animal, even if the farmer does not hold or treat the plant or animal as inventory property. Amending my tax return Cash Versus Accrual Method The following examples compare the cash and accrual methods of accounting. Amending my tax return Example 1. Amending my tax return You are a farmer who uses an accrual method of accounting. Amending my tax return You keep your books on the calendar year basis. Amending my tax return You sell grain in December 2013 but you are not paid until January 2014. Amending my tax return Because the accrual method was used and 2013 was the tax year in which the grain was sold, you must both include the sales proceeds and deduct the costs incurred in producing the grain on your 2013 tax return. Amending my tax return Example 2. Amending my tax return Assume the same facts as in Example 1 except that you use the cash method and there was no constructive receipt of the sales proceeds in 2013. Amending my tax return Under this method, you include the sales proceeds in income for 2014, the year you receive payment. Amending my tax return Deduct the costs of producing the grain in the year you pay for them. Amending my tax return Special Methods of Accounting There are special methods of accounting for certain items of income and expense. Amending my tax return Crop method. Amending my tax return   If you do not harvest and dispose of your crop in the same tax year that you plant it, you can, with IRS approval, use the crop method of accounting. Amending my tax return You cannot use the crop method for any tax return, including your first tax return, unless you receive approval from the IRS. Amending my tax return Under this method, you deduct the entire cost of producing the crop, including the expense of seed or young plants, in the year you realize income from the crop. Amending my tax return    See chapter 4 for details on deducting the costs of operating a farm. Amending my tax return Also see Regulations section 1. Amending my tax return 162-12. Amending my tax return Other special methods. Amending my tax return   Other special methods of accounting apply to the following items. Amending my tax return Amortization, see chapter 7. Amending my tax return Casualties, see chapter 11. Amending my tax return Condemnations, see chapter 11. Amending my tax return Depletion, see chapter 7. Amending my tax return Depreciation, see chapter 7. Amending my tax return Farm business expenses, see chapter 4. Amending my tax return Farm income, see chapter 3. Amending my tax return Installment sales, see chapter 10. Amending my tax return Soil and water conservation expenses, see chapter 5. Amending my tax return Thefts, see chapter 11. Amending my tax return Combination Method Generally, you can use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. Amending my tax return However, the following restrictions apply. Amending my tax return If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. Amending my tax return If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. Amending my tax return Changes in Methods of Accounting A change in your method of accounting includes a change in: Your overall method, such as from the cash method to an accrual method, and Your treatment of any material item, such as a change in your method of valuing inventory (for example, a change from the farm-price method to the unit-livestock-price method, discussed earlier). Amending my tax return Generally, once you have set up your accounting method, you must receive approval from the IRS before you can change to another method of accounting. Amending my tax return You may also have to pay a fee. Amending my tax return To obtain approval, you must generally file Form 3115. Amending my tax return There are instances when you can obtain automatic consent to change certain methods of accounting. Amending my tax return See the List of Automatic Accounting Method Changes located in the Instructions for Form 3115. Amending my tax return For more information on changes in methods of accounting, see Form 3115 and the Instructions for Form 3115. Amending my tax return Also see Publication 538. Amending my tax return Prev  Up  Next   Home   More Online Publications