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

E File State Taxes Only Free

I Need To File My State Taxes OnlyFree Online Tax PreparationTaxes For College Students1040 Tax Forms 2011Irs 1040ez FormIrs E File ExtensionFree Irs Tax FilingMail 1040ezFree 1040 Ez1040ez Instructions 2012Print State Tax FormHr Block Free State ReturnWww Irs Amended ReturnsFile An Amended Tax Return OnlineFile Income Taxes OnlineIncome Tax Ez FormHow Do I Amend My 2010 TaxesHow Do You File An Amended Tax ReturnHow To File 2012 Tax Return1040x Amended Tax Form2012 1040aIrs Form 1040ezFederal Tax Form 1040ezFile 1040x OnlineHow To File Taxes From 2011When Amend Tax ReturnIncome Tax DeadlineFree Tax Forms 2012Amend Federal Tax Return FreeAmend My ReturnHow Do You File State Income Taxes2011 Ri 1040nrH&r Block Amended Tax ReturnTurbotax Free State Efile CouponH&r Block Free Tax FileFree Tax1040x Form For 2013Turbotax Amended Return 2013Filing Amended Tax Return 2013Free State Tax File Online

E File State Taxes Only Free

E file state taxes only free 5. E file state taxes only free   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. E file state taxes only free Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Reminder Foreign income. E file state taxes only free   If you are a U. E file state taxes only free S. E file state taxes only free citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. E file state taxes only free S. E file state taxes only free law. E file state taxes only free This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. E file state taxes only free This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). E file state taxes only free If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. E file state taxes only free For details, see Publication 54, Tax Guide for U. E file state taxes only free S. E file state taxes only free Citizens and Resident Aliens Abroad. E file state taxes only free Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. E file state taxes only free The following topics are included. E file state taxes only free Bonuses and awards. E file state taxes only free Special rules for certain employees. E file state taxes only free Sickness and injury benefits. E file state taxes only free The chapter explains what income is included in the employee's gross income and what is not included. E file state taxes only free Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income Employee Compensation This section discusses various types of employee compensation including fringe benefits, retirement plan contributions, stock options, and restricted property. E file state taxes only free Form W-2. E file state taxes only free    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. E file state taxes only free Include your pay on line 7 of Form 1040 or Form 1040A, or on line 1 of Form 1040EZ, even if you do not receive a Form W-2. E file state taxes only free   If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. E file state taxes only free These wages must be included on line 7 of Form 1040. E file state taxes only free See Form 8919 for more information. E file state taxes only free Childcare providers. E file state taxes only free    If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. E file state taxes only free If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. E file state taxes only free You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. E file state taxes only free Babysitting. E file state taxes only free   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. E file state taxes only free Miscellaneous Compensation This section discusses different types of employee compensation. E file state taxes only free Advance commissions and other earnings. E file state taxes only free   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. E file state taxes only free    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. E file state taxes only free If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), or you may be able to take a credit for that year. E file state taxes only free See Repayments in chapter 12. E file state taxes only free Allowances and reimbursements. E file state taxes only free    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. E file state taxes only free If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. E file state taxes only free Back pay awards. E file state taxes only free    Include in income amounts you are awarded in a settlement or judgment for back pay. E file state taxes only free These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. E file state taxes only free They should be reported to you by your employer on Form W-2. E file state taxes only free Bonuses and awards. E file state taxes only free   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. E file state taxes only free These include prizes such as vacation trips for meeting sales goals. E file state taxes only free If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. E file state taxes only free However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. E file state taxes only free Employee achievement award. E file state taxes only free   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. E file state taxes only free However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. E file state taxes only free Your employer can tell you whether your award is a qualified plan award. E file state taxes only free Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. E file state taxes only free   However, the exclusion does not apply to the following awards: A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. E file state taxes only free A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. E file state taxes only free Example. E file state taxes only free Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. E file state taxes only free Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. E file state taxes only free However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 – $1,600) in his income. E file state taxes only free Differential wage payments. E file state taxes only free   This is any payment made to you by an employer for any period during which you are, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages you would have received from the employer during that period. E file state taxes only free These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. E file state taxes only free The payments are reported as wages on Form W-2. E file state taxes only free Government cost-of-living allowances. E file state taxes only free   Most payments received by U. E file state taxes only free S. E file state taxes only free Government civilian employees for working abroad are taxable. E file state taxes only free However, certain cost-of-living allowances are tax free. E file state taxes only free Publication 516, U. E file state taxes only free S. E file state taxes only free Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. E file state taxes only free Nonqualified deferred compensation plans. E file state taxes only free   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. E file state taxes only free This amount is shown on Form W-2, box 12, using code Y. E file state taxes only free This amount is not included in your income. E file state taxes only free   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. E file state taxes only free This amount is included in your wages shown on Form W-2, box 1. E file state taxes only free It is also shown on Form W-2, box 12, using code Z. E file state taxes only free Note received for services. E file state taxes only free    If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. E file state taxes only free When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. E file state taxes only free Do not include that part again in your income. E file state taxes only free Include the rest of the payment in your income in the year of payment. E file state taxes only free   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. E file state taxes only free Severance pay. E file state taxes only free   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. E file state taxes only free Accrued leave payment. E file state taxes only free    If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. E file state taxes only free   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. E file state taxes only free You can reduce gross wages by the amount you repaid in the same tax year in which you received it. E file state taxes only free Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on the return and the wages on your Forms W-2. E file state taxes only free Outplacement services. E file state taxes only free   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. E file state taxes only free    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). E file state taxes only free Sick pay. E file state taxes only free   Pay you receive from your employer while you are sick or injured is part of your salary or wages. E file state taxes only free In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. E file state taxes only free A state sickness or disability fund. E file state taxes only free An association of employers or employees. E file state taxes only free An insurance company, if your employer paid for the plan. E file state taxes only free However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. E file state taxes only free For more information, see Publication 525. E file state taxes only free Social security and Medicare taxes paid by employer. E file state taxes only free   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. E file state taxes only free The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. E file state taxes only free However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. E file state taxes only free Stock appreciation rights. E file state taxes only free   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. E file state taxes only free When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. E file state taxes only free You include the cash payment in your income in the year you use the right. E file state taxes only free Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. E file state taxes only free Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. E file state taxes only free Accounting period. E file state taxes only free   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. E file state taxes only free Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. E file state taxes only free The general rule: benefits are reported for a full calendar year (January 1–December 31). E file state taxes only free The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. E file state taxes only free For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. E file state taxes only free  Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. E file state taxes only free   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). E file state taxes only free Form W-2. E file state taxes only free   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. E file state taxes only free Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). E file state taxes only free However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). E file state taxes only free Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. E file state taxes only free Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . E file state taxes only free For information on the items covered in this section, other than Long-term care coverage, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. E file state taxes only free Long-term care coverage. E file state taxes only free    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. E file state taxes only free However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. E file state taxes only free This amount will be reported as wages in box 1 of your Form W-2. E file state taxes only free   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. E file state taxes only free Archer MSA contributions. E file state taxes only free    Contributions by your employer to your Archer MSA generally are not included in your income. E file state taxes only free Their total will be reported in box 12 of Form W-2 with code R. E file state taxes only free You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. E file state taxes only free File the form with your return. E file state taxes only free Health flexible spending arrangement (health FSA). E file state taxes only free   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. E file state taxes only free Note. E file state taxes only free Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. E file state taxes only free The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. E file state taxes only free For more information, see Notice 2012-40, 2012-26 I. E file state taxes only free R. E file state taxes only free B. E file state taxes only free 1046, available at www. E file state taxes only free irs. E file state taxes only free gov/irb/2012-26 IRB/ar09. E file state taxes only free html. E file state taxes only free Health reimbursement arrangement (HRA). E file state taxes only free   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. E file state taxes only free Health savings accounts (HSA). E file state taxes only free   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. E file state taxes only free Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. E file state taxes only free Contributions made by your employer are not included in your income. E file state taxes only free Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. E file state taxes only free Distributions not used for qualified medical expenses are included in your income. E file state taxes only free See Publication 969 for the requirements of an HSA. E file state taxes only free   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. E file state taxes only free The contributions are treated as a distribution of money and are not included in the partner's gross income. E file state taxes only free Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. E file state taxes only free In both situations, the partner can deduct the contribution made to the partner's HSA. E file state taxes only free   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. E file state taxes only free The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. E file state taxes only free Qualified HSA funding distribution. E file state taxes only free   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. E file state taxes only free See Publication 590 for the requirements for these qualified HSA funding distributions. E file state taxes only free Failure to maintain eligibility. E file state taxes only free   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. E file state taxes only free If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. E file state taxes only free This income is also subject to an additional 10% tax. E file state taxes only free Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. E file state taxes only free See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. E file state taxes only free Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. E file state taxes only free They also are included as social security and Medicare wages in boxes 3 and 5. E file state taxes only free However, they are not included as wages in box 1. E file state taxes only free To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. E file state taxes only free File the form with your return. E file state taxes only free De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. E file state taxes only free In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. E file state taxes only free Holiday gifts. E file state taxes only free   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. E file state taxes only free However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. E file state taxes only free Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. E file state taxes only free For more information, see Publication 970, Tax Benefits for Education. E file state taxes only free Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. E file state taxes only free However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. E file state taxes only free For exceptions, see Entire cost excluded , and Entire cost taxed , later. E file state taxes only free If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. E file state taxes only free Also, it is shown separately in box 12 with code C. E file state taxes only free Group-term life insurance. E file state taxes only free   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. E file state taxes only free Permanent benefits. E file state taxes only free   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. E file state taxes only free Your employer should be able to tell you the amount to include in your income. E file state taxes only free Accidental death benefits. E file state taxes only free   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. E file state taxes only free Former employer. E file state taxes only free   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. E file state taxes only free Also, it is shown separately in box 12 with code C. E file state taxes only free Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. E file state taxes only free You must pay these taxes with your income tax return. E file state taxes only free Include them on line 60, Form 1040, and follow the instructions for line 60. E file state taxes only free For more information, see the Instructions for Form 1040. E file state taxes only free Two or more employers. E file state taxes only free   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. E file state taxes only free If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. E file state taxes only free You must figure how much to include in your income. E file state taxes only free Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. E file state taxes only free Figuring the taxable cost. E file state taxes only free   Use the following worksheet to figure the amount to include in your income. E file state taxes only free     Worksheet 5-1. E file state taxes only free Figuring the Cost of Group-Term Life Insurance To Include in Income 1. E file state taxes only free Enter the total amount of your insurance coverage from your employer(s) 1. E file state taxes only free   2. E file state taxes only free Limit on exclusion for employer-provided group-term life insurance coverage 2. E file state taxes only free 50,000 3. E file state taxes only free Subtract line 2 from line 1 3. E file state taxes only free   4. E file state taxes only free Divide line 3 by $1,000. E file state taxes only free Figure to the nearest tenth 4. E file state taxes only free   5. E file state taxes only free Go to Table 5-1. E file state taxes only free Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. E file state taxes only free   6. E file state taxes only free Multiply line 4 by line 5 6. E file state taxes only free   7. E file state taxes only free Enter the number of full months of coverage at this cost. E file state taxes only free 7. E file state taxes only free   8. E file state taxes only free Multiply line 6 by line 7 8. E file state taxes only free   9. E file state taxes only free Enter the premiums you paid per month 9. E file state taxes only free       10. E file state taxes only free Enter the number of months you paid the premiums 10. E file state taxes only free       11. E file state taxes only free Multiply line 9 by line 10. E file state taxes only free 11. E file state taxes only free   12. E file state taxes only free Subtract line 11 from line 8. E file state taxes only free Include this amount in your income as wages 12. E file state taxes only free      Table 5-1. E file state taxes only free Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. E file state taxes only free 05 25 through 29 . E file state taxes only free 06 30 through 34 . E file state taxes only free 08 35 through 39 . E file state taxes only free 09 40 through 44 . E file state taxes only free 10 45 through 49 . E file state taxes only free 15 50 through 54 . E file state taxes only free 23 55 through 59 . E file state taxes only free 43 60 through 64 . E file state taxes only free 66 65 through 69 1. E file state taxes only free 27 70 and older 2. E file state taxes only free 06 Example. E file state taxes only free You are 51 years old and work for employers A and B. E file state taxes only free Both employers provide group-term life insurance coverage for you for the entire year. E file state taxes only free Your coverage is $35,000 with employer A and $45,000 with employer B. E file state taxes only free You pay premiums of $4. E file state taxes only free 15 a month under the employer B group plan. E file state taxes only free You figure the amount to include in your income as shown in Worksheet 5-1. E file state taxes only free Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. E file state taxes only free Worksheet 5-1. E file state taxes only free Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. E file state taxes only free Enter the total amount of your insurance coverage from your employer(s) 1. E file state taxes only free 80,000 2. E file state taxes only free Limit on exclusion for employer-provided group-term life insurance coverage 2. E file state taxes only free 50,000 3. E file state taxes only free Subtract line 2 from line 1 3. E file state taxes only free 30,000 4. E file state taxes only free Divide line 3 by $1,000. E file state taxes only free Figure to the nearest tenth 4. E file state taxes only free 30. E file state taxes only free 0 5. E file state taxes only free Go to Table 5-1. E file state taxes only free Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. E file state taxes only free . E file state taxes only free 23 6. E file state taxes only free Multiply line 4 by line 5 6. E file state taxes only free 6. E file state taxes only free 90 7. E file state taxes only free Enter the number of full months of coverage at this cost. E file state taxes only free 7. E file state taxes only free 12 8. E file state taxes only free Multiply line 6 by line 7 8. E file state taxes only free 82. E file state taxes only free 80 9. E file state taxes only free Enter the premiums you paid per month 9. E file state taxes only free 4. E file state taxes only free 15     10. E file state taxes only free Enter the number of months you paid the premiums 10. E file state taxes only free 12     11. E file state taxes only free Multiply line 9 by line 10. E file state taxes only free 11. E file state taxes only free 49. E file state taxes only free 80 12. E file state taxes only free Subtract line 11 from line 8. E file state taxes only free Include this amount in your income as wages 12. E file state taxes only free 33. E file state taxes only free 00 Entire cost excluded. E file state taxes only free   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. E file state taxes only free You are permanently and totally disabled and have ended your employment. E file state taxes only free Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. E file state taxes only free A charitable organization (defined in chapter 24) to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. E file state taxes only free (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. E file state taxes only free ) The plan existed on January 1, 1984, and You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. E file state taxes only free Entire cost taxed. E file state taxes only free   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply: The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. E file state taxes only free You are a key employee and your employer's plan discriminates in favor of key employees. E file state taxes only free Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. E file state taxes only free Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. E file state taxes only free You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. E file state taxes only free Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. E file state taxes only free A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. E file state taxes only free Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. E file state taxes only free However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. E file state taxes only free Exclusion limit. E file state taxes only free   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. E file state taxes only free   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. E file state taxes only free   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. E file state taxes only free   If the benefits have a value that is more than these limits, the excess must be included in your income. E file state taxes only free You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. E file state taxes only free Commuter highway vehicle. E file state taxes only free   This is a highway vehicle that seats at least six adults (not including the driver). E file state taxes only free At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). E file state taxes only free Transit pass. E file state taxes only free   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. E file state taxes only free Qualified parking. E file state taxes only free   This is parking provided to an employee at or near the employer's place of business. E file state taxes only free It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. E file state taxes only free It does not include parking at or near the employee's home. E file state taxes only free Qualified bicycle commuting. E file state taxes only free   This is reimbursement based on the number of qualified bicycle commuting months for the year. E file state taxes only free A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. E file state taxes only free The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. E file state taxes only free Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. E file state taxes only free (Your employer can tell you whether your retirement plan is qualified. E file state taxes only free ) However, the cost of life insurance coverage included in the plan may have to be included. E file state taxes only free See Group-Term Life Insurance , earlier, under Fringe Benefits. E file state taxes only free If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. E file state taxes only free However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. E file state taxes only free For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. E file state taxes only free S. E file state taxes only free Civil Service Retirement Benefits, if you are a federal employee or retiree). E file state taxes only free Elective deferrals. E file state taxes only free   If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. E file state taxes only free The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. E file state taxes only free An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. E file state taxes only free However, it is included in wages subject to social security and Medicare taxes. E file state taxes only free   Elective deferrals include elective contributions to the following retirement plans. E file state taxes only free Cash or deferred arrangements (section 401(k) plans). E file state taxes only free The Thrift Savings Plan for federal employees. E file state taxes only free Salary reduction simplified employee pension plans (SARSEP). E file state taxes only free Savings incentive match plans for employees (SIMPLE plans). E file state taxes only free Tax-sheltered annuity plans (403(b) plans). E file state taxes only free Section 501(c)(18)(D) plans. E file state taxes only free Section 457 plans. E file state taxes only free Qualified automatic contribution arrangements. E file state taxes only free   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. E file state taxes only free You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. E file state taxes only free The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. E file state taxes only free   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. E file state taxes only free Overall limit on deferrals. E file state taxes only free   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3) and (5) above. E file state taxes only free The limit for SIMPLE plans is $12,000. E file state taxes only free The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. E file state taxes only free The limit for section 457 plans is the lesser of your includible compensation or $17,500. E file state taxes only free Amounts deferred under specific plan limits are part of the overall limit on deferrals. E file state taxes only free Designated Roth contributions. E file state taxes only free   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. E file state taxes only free Designated Roth contributions are treated as elective deferrals, except that they are included in income. E file state taxes only free Excess deferrals. E file state taxes only free   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. E file state taxes only free However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. E file state taxes only free   If you set aside more than the limit, the excess generally must be included in your income for that year, unless you have an excess deferral of a designated Roth contribution. E file state taxes only free See Publication 525 for a discussion of the tax treatment of excess deferrals. E file state taxes only free Catch-up contributions. E file state taxes only free   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. E file state taxes only free Stock Options If you receive a nonstatutory option to buy or sell stock or other property as payment for your services, you usually will have income when you receive the option, when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option. E file state taxes only free However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. E file state taxes only free Your employer can tell you which kind of option you hold. E file state taxes only free For more information, see Publication 525. E file state taxes only free Restricted Property In most cases, if you receive property for your services, you must include its fair market value in your income in the year you receive the property. E file state taxes only free However, if you receive stock or other property that has certain restrictions that affect its value, you do not include the value of the property in your income until it has substantially vested. E file state taxes only free (You can choose to include the value of the property in your income in the year it is transferred to you. E file state taxes only free ) For more information, see Restricted Property in Publication 525. E file state taxes only free Dividends received on restricted stock. E file state taxes only free   Dividends you receive on restricted stock are treated as compensation and not as dividend income. E file state taxes only free Your employer should include these payments on your Form W-2. E file state taxes only free Stock you chose to include in income. E file state taxes only free   Dividends you receive on restricted stock you chose to include in your income in the year transferred are treated the same as any other dividends. E file state taxes only free Report them on your return as dividends. E file state taxes only free For a discussion of dividends, see chapter 8. E file state taxes only free    For information on how to treat dividends reported on both your Form W-2 and Form 1099-DIV, see Dividends received on restricted stock in Publication 525. E file state taxes only free Special Rules for Certain Employees This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers. E file state taxes only free Clergy Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. E file state taxes only free , in addition to your salary. E file state taxes only free If the offering is made to the religious institution, it is not taxable to you. E file state taxes only free If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. E file state taxes only free However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. E file state taxes only free See chapter 24. E file state taxes only free Pension. E file state taxes only free    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. E file state taxes only free It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. E file state taxes only free Housing. E file state taxes only free    Special rules for housing apply to members of the clergy. E file state taxes only free Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. E file state taxes only free However, the exclusion cannot be more than the reasonable pay for your service. E file state taxes only free If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. E file state taxes only free The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. E file state taxes only free However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. E file state taxes only free For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. E file state taxes only free Members of Religious Orders If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order. E file state taxes only free Services performed for the order. E file state taxes only free   If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order. E file state taxes only free   If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. E file state taxes only free Any wages you earn as an agent of an order that you turn over to the order are not included in your income. E file state taxes only free Example. E file state taxes only free You are a member of a church order and have taken a vow of poverty. E file state taxes only free You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. E file state taxes only free You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. E file state taxes only free However, you remain under the general direction and control of the order. E file state taxes only free You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income. E file state taxes only free Services performed outside the order. E file state taxes only free   If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: They are the kind of services that are ordinarily the duties of members of the order. E file state taxes only free They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. E file state taxes only free If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. E file state taxes only free Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. E file state taxes only free Example. E file state taxes only free Mark Brown is a member of a religious order and has taken a vow of poverty. E file state taxes only free He renounces all claims to his earnings and turns over his earnings to the order. E file state taxes only free Mark is a schoolteacher. E file state taxes only free He was instructed by the superiors of the order to get a job with a private tax-exempt school. E file state taxes only free Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. E file state taxes only free Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. E file state taxes only free The wages Mark earns working for the school are included in his income. E file state taxes only free Foreign Employer Special rules apply if you work for a foreign employer. E file state taxes only free U. E file state taxes only free S. E file state taxes only free citizen. E file state taxes only free   If you are a U. E file state taxes only free S. E file state taxes only free citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income. E file state taxes only free Social security and Medicare taxes. E file state taxes only free   You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. E file state taxes only free However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. E file state taxes only free This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. E file state taxes only free Employees of international organizations or foreign governments. E file state taxes only free   Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). E file state taxes only free   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. E file state taxes only free You are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). E file state taxes only free Your work is like the work done by employees of the United States in foreign countries. E file state taxes only free The foreign government gives an equal exemption to employees of the United States in its country. E file state taxes only free Waiver of alien status. E file state taxes only free   If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. E file state taxes only free See Foreign Employer in Publication 525. E file state taxes only free Employment abroad. E file state taxes only free   For information on the tax treatment of income earned abroad, see Publication 54. E file state taxes only free Military Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. E file state taxes only free Allowances generally are not taxed. E file state taxes only free For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. E file state taxes only free Differential wage payments. E file state taxes only free   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. E file state taxes only free These wages are subject to income tax withholding and are reported on a Form W-2. E file state taxes only free See the discussion under Miscellaneous Compensation , earlier. E file state taxes only free Military retirement pay. E file state taxes only free   If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. E file state taxes only free Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan. E file state taxes only free   For more detailed discussion of survivor annuities, see chapter 10. E file state taxes only free Disability. E file state taxes only free   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. E file state taxes only free Veterans' benefits. E file state taxes only free   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). E file state taxes only free The following amounts paid to veterans or their families are not taxable. E file state taxes only free Education, training, and subsistence allowances. E file state taxes only free Disability compensation and pension payments for disabilities paid either to veterans or their families. E file state taxes only free Grants for homes designed for wheelchair living. E file state taxes only free Grants for motor vehicles for veterans who lost their sight or the use of their limbs. E file state taxes only free Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. E file state taxes only free Interest on insurance dividends you leave on deposit with the VA. E file state taxes only free Benefits under a dependent-care assistance program. E file state taxes only free The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. E file state taxes only free Payments made under the compensated work therapy program. E file state taxes only free Any bonus payment by a state or political subdivision because of service in a combat zone. E file state taxes only free Volunteers The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions. E file state taxes only free Peace Corps. E file state taxes only free   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. E file state taxes only free Taxable allowances. E file state taxes only free   The following allowances must be included in your income and reported as wages: Allowances paid to your spouse and minor children while you are a volunteer leader training in the United States. E file state taxes only free Living allowances designated by the Director of the Peace Corps as basic compensation. E file state taxes only free These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. E file state taxes only free Leave allowances. E file state taxes only free Readjustment allowances or termination payments. E file state taxes only free These are considered received by you when credited to your account. E file state taxes only free Example. E file state taxes only free Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. E file state taxes only free Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. E file state taxes only free Volunteers in Service to America (VISTA). E file state taxes only free   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. E file state taxes only free National Senior Services Corps programs. E file state taxes only free   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. E file state taxes only free Retired Senior Volunteer Program (RSVP). E file state taxes only free Foster Grandparent Program. E file state taxes only free Senior Companion Program. E file state taxes only free Service Corps of Retired Executives (SCORE). E file state taxes only free   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. E file state taxes only free Volunteer tax counseling. E file state taxes only free   Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE). E file state taxes only free   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. E file state taxes only free See chapter 24. E file state taxes only free Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. E file state taxes only free In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. E file state taxes only free If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. E file state taxes only free However, certain payments may not be taxable to you. E file state taxes only free Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. E file state taxes only free In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. E file state taxes only free Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. E file state taxes only free Cost paid by you. E file state taxes only free   If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. E file state taxes only free If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. E file state taxes only free See Reimbursement in a later year in chapter 21. E file state taxes only free Cafeteria plans. E file state taxes only free   In most cases, if you are covered by an accident or health insurance plan through a cafeteria plan, and the amount of the insurance premiums was not included in your income, you are not considered to have paid the premiums and you must include any benefits you receive in your income. E file state taxes only free If the amount of the premiums was included in your income, you are considered to have paid the premiums, and any benefits you receive are not taxable. E file state taxes only free Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. E file state taxes only free You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. E file state taxes only free Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. E file state taxes only free You may be entitled to a tax credit if you were permanently and totally disabled when you retired. E file state taxes only free For information on this credit and the definition of permanent and total disability, see chapter 33. E file state taxes only free Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. E file state taxes only free Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. E file state taxes only free The rules for reporting pensions are explained in How To Report in chapter 10. E file state taxes only free For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. E file state taxes only free Retirement and profit-sharing plans. E file state taxes only free   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. E file state taxes only free The payments must be reported as a pension or annuity. E file state taxes only free For more information on pensions, see chapter 10. E file state taxes only free Accrued leave payment. E file state taxes only free   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. E file state taxes only free The payment is not a disability payment. E file state taxes only free Include it in your income in the tax year you receive it. E file state taxes only free Military and Government Disability Pensions Certain military and government disability pensions are not taxable. E file state taxes only free Service-connected disability. E file state taxes only free   You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services. E file state taxes only free The armed forces of any country. E file state taxes only free The National Oceanic and Atmospheric Administration. E file state taxes only free The Public Health Service. E file state taxes only free The Foreign Service. E file state taxes only free Conditions for exclusion. E file state taxes only free   Do not include the disability payments in your income if any of the following conditions apply. E file state taxes only free You were entitled to receive a disability payment before September 25, 1975. E file state taxes only free You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975. E file state taxes only free You receive the disability payments for a combat-related injury. E file state taxes only free This is a personal injury or sickness that Results directly from armed conflict, Takes place while you are engaged in extra-hazardous service, Takes place under conditions simulating war, including training exercises such as maneuvers, or Is caused by an instrumentality of war. E file state taxes only free You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. E file state taxes only free Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. E file state taxes only free Pension based on years of service. E file state taxes only free   If you receive a disability pension based on years of service, in most cases you must include it in your income. E file state taxes only free However, if the pension qualifies for the exclusion for a service-connected disability (discussed earlier), do not include in income the part of your pension that you would have received if the pension had been based on a percentage of disability. E file state taxes only free You must include the rest of your pension in your income. E file state taxes only free Retroactive VA determination. E file state taxes only free   If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. E file state taxes only free You can claim a refund of any tax paid on the excludable amount (subject to the statute of limitations) by filing an amended return on Form 1040X for each previous year during the retroactive period. E file state taxes only free You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. E file state taxes only free The letter must show the amount withheld and the effective date of the benefit. E file state taxes only free   If you receive a lump-sum disability severance payment and are later awarded VA disability benefits, exclude 100% of the severance benefit from your income. E file state taxes only free However, you must include in your income any lump-sum readjustment or other nondisability severance payment you received on release from active duty, even if you are later given a retroactive disability rating by the VA. E file state taxes only free Special statute of limitations. E file state taxes only free   In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. E file state taxes only free However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended by a 1-year period beginning on the date of the determination. E file state taxes only free This 1-year extended period applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination. E file state taxes only free Example. E file state taxes only free You retired in 2007 and receive a pension based on your years of service. E file state taxes only free On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. E file state taxes only free Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. E file state taxes only free However, under the special limitation period, you can also file a claim for 2009 as long as you file the claim by August 1, 2014. E file state taxes only free You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. E file state taxes only free Terrorist attack or military action. E file state taxes only free   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. E file state taxes only free Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. E file state taxes only free Amounts you receive from them (other than policyholder dividends or premium refunds) in most cases are excludable from income as amounts received for personal injury or sickness. E file state taxes only free To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return. E file state taxes only free A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. E file state taxes only free The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits, and In most cases, not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. E file state taxes only free Qualified long-term care services. E file state taxes only free   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services, and Required by a chronically ill individual and provided pursuant to a plan of care as prescribed by a licensed health care practitioner. E file state taxes only free Chronically ill individual. E file state taxes only free   A chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as one of the following: An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. E file state taxes only free Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. E file state taxes only free An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. E file state taxes only free Limit on exclusion. E file state taxes only free   You generally can exclude from gross income up to $320 a day for 2013. E file state taxes only free See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. E file state taxes only free Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. E file state taxes only free The exemption also applies to your survivors. E file state taxes only free The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. E file state taxes only free If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. E file state taxes only free For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. E file state taxes only free Return to work. E file state taxes only free    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. E file state taxes only free Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. E file state taxes only free Railroad sick pay. E file state taxes only free    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. E file state taxes only free However, do not include them in your income if they are for an on-the-job injury. E file state taxes only free   If you received income because of a disability, see Disability Pensions , earlier. E file state taxes only free Federal Employees' Compensation Act (FECA). E file state taxes only free   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. E file state taxes only free However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. E file state taxes only free Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. E file state taxes only free Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. E file state taxes only free    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. E file state taxes only free For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. E file state taxes only free    You can deduct the amount you spend to buy back sick leave for an earlier year to be eligible for nontaxable FECA benefits for that period. E file state taxes only free It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). E file state taxes only free If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. E file state taxes only free Do not deduct it separately. E file state taxes only free Other compensation. E file state taxes only free   Many other amounts you receive as compensation for sickness or injury are not taxable. E file state taxes only free These include the following amounts. E file state taxes only free Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. E file state taxes only free Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. E file state taxes only free Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. E file state taxes only free Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. E file state taxes only free This compensation must be based only on the injury and not on the period of your absence from work. E file state taxes only free These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. E file state taxes only free Reimbursement for medical care. E file state taxes only free    A reimbursement for medical care is generally not taxable. E file state taxes only free However, it may reduce your medical expense deduction. E file state taxes only free For more information, see chapter 21. E file state taxes only free Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

The Tax Gap

The tax gap is defined as the amount of tax liability faced by taxpayers that is not paid on time. The Internal Revenue Service collects more than $2 trillion annually in taxes so producing an estimate of the tax gap is a major statistical effort that it undertakes every few years.

This month, the IRS released a new set of tax gap estimates for tax year 2006. The new tax gap estimate represents the first full update of the report in five years, and it shows the nation’s compliance rate is essentially unchanged at about 83 percent from the last review covering tax year 2001.

Tax Gap Estimates for Tax Year 2006

Related Item: Additional Materials on the Tax Gap

Page Last Reviewed or Updated: 03-Dec-2013

The E File State Taxes Only Free

E file state taxes only free 24. E file state taxes only free   Contributions Table of Contents Introduction Useful Items - You may want to see: Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions of PropertyException. E file state taxes only free Household items. E file state taxes only free Deduction more than $500. E file state taxes only free Form 1098-C. E file state taxes only free Filing deadline approaching and still no Form 1098-C. E file state taxes only free Exception 1—vehicle used or improved by organization. E file state taxes only free Exception 2—vehicle given or sold to needy individual. E file state taxes only free Deduction $500 or less. E file state taxes only free Right to use property. E file state taxes only free Tangible personal property. E file state taxes only free Future interest. E file state taxes only free Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value When To DeductChecks. E file state taxes only free Text message. E file state taxes only free Credit card. E file state taxes only free Pay-by-phone account. E file state taxes only free Stock certificate. E file state taxes only free Promissory note. E file state taxes only free Option. E file state taxes only free Borrowed funds. E file state taxes only free Limits on DeductionsCarryovers Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To Report Introduction This chapter explains how to claim a deduction for your charitable contributions. E file state taxes only free It discusses the following topics. E file state taxes only free The types of organizations to which you can make deductible charitable contributions. E file state taxes only free The types of contributions you can deduct. E file state taxes only free How much you can deduct. E file state taxes only free What records you must keep. E file state taxes only free How to report your charitable contributions. E file state taxes only free A charitable contribution is a donation or gift to, or for the use of, a qualified organization. E file state taxes only free It is voluntary and is made without getting, or expecting to get, anything of equal value. E file state taxes only free Form 1040 required. E file state taxes only free    To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. E file state taxes only free The amount of your deduction may be limited if certain rules and limits explained in this chapter apply to you. E file state taxes only free The limits are explained in detail in Publication 526. E file state taxes only free Useful Items - You may want to see: Publication 526 Charitable Contributions 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. E file state taxes only free Most organizations other than churches and governments must apply to the IRS to become a qualified organization. E file state taxes only free How to check whether an organization can receive deductible charitable contributions. E file state taxes only free   You can ask any organization whether it is a qualified organization, and most will be able to tell you. E file state taxes only free Or go to IRS. E file state taxes only free gov. E file state taxes only free Click on “Tools” and then on “Exempt Organizations Select Check” (www. E file state taxes only free irs. E file state taxes only free gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). E file state taxes only free This online tool will enable you to search for qualified organizations. E file state taxes only free You can also call the IRS to find out if an organization is qualified. E file state taxes only free Call 1-877-829-5500. E file state taxes only free People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. E file state taxes only free Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. E file state taxes only free gsa. E file state taxes only free gov/fedrelay. E file state taxes only free Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. E file state taxes only free A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). E file state taxes only free It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. E file state taxes only free Certain organizations that foster national or international amateur sports competition also qualify. E file state taxes only free War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). E file state taxes only free Domestic fraternal societies, orders, and associations operating under the lodge system. E file state taxes only free (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. E file state taxes only free ) Certain nonprofit cemetery companies or corporations. E file state taxes only free (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. E file state taxes only free ) The United States or any state, the District of Columbia, a U. E file state taxes only free S. E file state taxes only free possession (including Puerto Rico), a political subdivision of a state or U. E file state taxes only free S. E file state taxes only free possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. E file state taxes only free (Your contribution to this type of organization is only deductible if it is to be used solely for public purposes. E file state taxes only free ) Examples. E file state taxes only free    The following list gives some examples of qualified organizations. E file state taxes only free Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. E file state taxes only free Most nonprofit charitable organizations such as the American Red Cross and the United Way. E file state taxes only free Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. E file state taxes only free This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. E file state taxes only free However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . E file state taxes only free Nonprofit hospitals and medical research organizations. E file state taxes only free Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. E file state taxes only free Nonprofit volunteer fire companies. E file state taxes only free Nonprofit organizations that develop and maintain public parks and recreation facilities. E file state taxes only free Civil defense organizations. E file state taxes only free Certain foreign charitable organizations. E file state taxes only free   Under income tax treaties with Canada, Israel, and Mexico, you may be able to deduct contributions to certain Canadian, Israeli, or Mexican charitable organizations. E file state taxes only free Generally, you must have income from sources in that country. E file state taxes only free For additional information on the deduction of contributions to Canadian charities, see Publication 597, Information on the United States–Canada Income Tax Treaty. E file state taxes only free If you need more information on how to figure your contribution to Mexican and Israeli charities, see Publication 526. E file state taxes only free Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. E file state taxes only free A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. E file state taxes only free The contributions must be made to a qualified organization and not set aside for use by a specific person. E file state taxes only free If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. E file state taxes only free See Contributions of Property , later in this chapter. E file state taxes only free Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. E file state taxes only free See Limits on Deductions , later. E file state taxes only free In addition, the total of your charitable contribution deduction and certain other itemized deductions may be limited. E file state taxes only free See chapter 29. E file state taxes only free Table 24-1 gives examples of contributions you can and cannot deduct. E file state taxes only free Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. E file state taxes only free Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. E file state taxes only free If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. E file state taxes only free For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. E file state taxes only free Example 1. E file state taxes only free You pay $65 for a ticket to a dinner-dance at a church. E file state taxes only free Your entire $65 payment goes to the church. E file state taxes only free The ticket to the dinner-dance has a fair market value of $25. E file state taxes only free When you buy your ticket, you know that its value is less than your payment. E file state taxes only free To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). E file state taxes only free You can deduct $40 as a contribution to the church. E file state taxes only free Example 2. E file state taxes only free At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. E file state taxes only free The amount you pay is no more than the fair rental value. E file state taxes only free You have not made a deductible charitable contribution. E file state taxes only free Athletic events. E file state taxes only free   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. E file state taxes only free   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. E file state taxes only free Subtract the price of the tickets from your payment. E file state taxes only free You can deduct 80% of the remaining amount as a charitable contribution. E file state taxes only free Example 1. E file state taxes only free You pay $300 a year for membership in a university's athletic scholarship program. E file state taxes only free The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. E file state taxes only free You can deduct $240 (80% of $300) as a charitable contribution. E file state taxes only free Table 24-1. E file state taxes only free Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. E file state taxes only free See the rest of this chapter for more information and additional rules and limits that may apply. E file state taxes only free Deductible As  Charitable Contributions Not Deductible  As Charitable Contributions Money or property you give to:  Churches, synagogues, temples, mosques, and other religious organizations Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park) Nonprofit schools and hospitals The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. E file state taxes only free War veterans groups   Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Money or property you give to:  Civic leagues, social and sports clubs, labor unions, and chambers of commerce Foreign organizations (except certain Canadian, Israeli, and Mexican charities) Groups that are run for personal profit Groups whose purpose is to lobby for law changes Homeowners' associations Individuals Political groups or candidates for public office   Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank    Example 2. E file state taxes only free The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. E file state taxes only free You must subtract the usual price of a ticket ($120) from your $300 payment. E file state taxes only free The result is $180. E file state taxes only free Your deductible charitable contribution is $144 (80% of $180). E file state taxes only free Charity benefit events. E file state taxes only free   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. E file state taxes only free   If there is an established charge for the event, that charge is the value of your benefit. E file state taxes only free If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. E file state taxes only free Whether you use the tickets or other privileges has no effect on the amount you can deduct. E file state taxes only free However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. E file state taxes only free    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. E file state taxes only free If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. E file state taxes only free Example. E file state taxes only free You pay $40 to see a special showing of a movie for the benefit of a qualified organization. E file state taxes only free Printed on the ticket is “Contribution—$40. E file state taxes only free ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). E file state taxes only free Membership fees or dues. E file state taxes only free    You may be able to deduct membership fees or dues you pay to a qualified organization. E file state taxes only free However, you can deduct only the amount that is more than the value of the benefits you receive. E file state taxes only free    You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. E file state taxes only free They are not qualified organizations. E file state taxes only free Certain membership benefits can be disregarded. E file state taxes only free   Both you and the organization can disregard the following membership benefits if you receive them in return for an annual payment of $75 or less. E file state taxes only free Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. E file state taxes only free Admission, while you are a member, to events open only to members of the organization, if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. E file state taxes only free 20. E file state taxes only free Token items. E file state taxes only free   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. E file state taxes only free You receive only a small item or other benefit of token value. E file state taxes only free The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. E file state taxes only free Written statement. E file state taxes only free   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. E file state taxes only free The statement must say that you can deduct only the amount of your payment that is more than the value of the goods or services you received. E file state taxes only free It must also give you a good faith estimate of the value of those goods or services. E file state taxes only free   The organization can give you the statement either when it solicits or when it receives the payment from you. E file state taxes only free Exception. E file state taxes only free   An organization will not have to give you this statement if one of the following is true. E file state taxes only free The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. E file state taxes only free You receive only items whose value is not substantial as described under Token items , earlier. E file state taxes only free You receive only membership benefits that can be disregarded, as described earlier. E file state taxes only free Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. E file state taxes only free You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization as part of a program of the organization to provide educational opportunities for the student, Is not your relative or dependent, and Is a full-time student in the twelfth or any lower grade at a school in the United States. E file state taxes only free You can deduct up to $50 a month for each full calendar month the student lives with you. E file state taxes only free Any month when conditions (1) through (3) are met for 15 days or more counts as a full month. E file state taxes only free For additional information, see Expenses Paid for Student Living With You in Publication 526. E file state taxes only free Mutual exchange program. E file state taxes only free   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. E file state taxes only free Table 24-2. E file state taxes only free Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. E file state taxes only free All of the rules explained in this chapter also apply. E file state taxes only free See, in particular, Out-of-Pocket Expenses in Giving Services . E file state taxes only free Question Answer I volunteer 6 hours a week in the office of a qualified organization. E file state taxes only free The receptionist is paid $10 an hour for the same work. E file state taxes only free Can I deduct $60 a week for my time?    No, you cannot deduct the value of your time or services. E file state taxes only free The office is 30 miles from my home. E file state taxes only free Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. E file state taxes only free If you don't want to figure your actual costs, you can deduct 14 cents for each mile. E file state taxes only free I volunteer as a Red Cross nurse's aide at a hospital. E file state taxes only free Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. E file state taxes only free I pay a babysitter to watch my children while I volunteer for a qualified organization. E file state taxes only free Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. E file state taxes only free (If you have childcare expenses so you can work for pay, see chapter 32. E file state taxes only free ) Out-of-Pocket Expenses in Giving Services Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. E file state taxes only free The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. E file state taxes only free Table 24-2 contains questions and answers that apply to some individuals who volunteer their services. E file state taxes only free Conventions. E file state taxes only free   If a qualified organization selects you to attend a convention as its representative, you can deduct unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight in connection with the convention. E file state taxes only free However, see Travel , later. E file state taxes only free   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. E file state taxes only free You also cannot deduct transportation, meals and lodging, and other expenses for your spouse or children. E file state taxes only free    You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. E file state taxes only free You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. E file state taxes only free Uniforms. E file state taxes only free   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. E file state taxes only free Foster parents. E file state taxes only free   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. E file state taxes only free A qualified organization must select the individuals you take into your home for foster care. E file state taxes only free    You can deduct expenses that meet both of the following requirements. E file state taxes only free They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. E file state taxes only free They are incurred primarily to benefit the qualified organization. E file state taxes only free   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. E file state taxes only free For details, see chapter 3. E file state taxes only free Example. E file state taxes only free You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. E file state taxes only free Your unreimbursed expenses are not deductible as charitable contributions. E file state taxes only free Car expenses. E file state taxes only free   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, that are directly related to the use of your car in giving services to a charitable organization. E file state taxes only free You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. E file state taxes only free    If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. E file state taxes only free   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. E file state taxes only free   You must keep reliable written records of your car expenses. E file state taxes only free For more information, see Car expenses under Records To Keep, later. E file state taxes only free Travel. E file state taxes only free   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. E file state taxes only free This applies whether you pay the expenses directly or indirectly. E file state taxes only free You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. E file state taxes only free   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. E file state taxes only free Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. E file state taxes only free However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. E file state taxes only free Example 1. E file state taxes only free You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. E file state taxes only free You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. E file state taxes only free You participate in the activities of the group and enjoy your time with them. E file state taxes only free You oversee the breaking of camp and you transport the group home. E file state taxes only free You can deduct your travel expenses. E file state taxes only free Example 2. E file state taxes only free You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. E file state taxes only free The project is sponsored by a charitable organization. E file state taxes only free In most circumstances, you cannot deduct your expenses. E file state taxes only free Example 3. E file state taxes only free You work for several hours each morning on an archaeological dig sponsored by a charitable organization. E file state taxes only free The rest of the day is free for recreation and sightseeing. E file state taxes only free You cannot take a charitable contribution deduction even though you work very hard during those few hours. E file state taxes only free Example 4. E file state taxes only free You spend the entire day attending a charitable organization's regional meeting as a chosen representative. E file state taxes only free In the evening you go to the theater. E file state taxes only free You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. E file state taxes only free Daily allowance (per diem). E file state taxes only free   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. E file state taxes only free You may be able to deduct any necessary travel expenses that are more than the allowance. E file state taxes only free Deductible travel expenses. E file state taxes only free   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. E file state taxes only free Because these travel expenses are not business-related, they are not subject to the same limits as business-related expenses. E file state taxes only free For information on business travel expenses, see Travel Expenses in chapter 26. E file state taxes only free Contributions You Cannot Deduct There are some contributions you cannot deduct, such as those made to specific individuals and those made to nonqualified organizations. E file state taxes only free (See Contributions to Individuals and Contributions to Nonqualified Organizations , next. E file state taxes only free ) There are others you can deduct only part of, as discussed later under Contributions From Which You Benefit . E file state taxes only free Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. E file state taxes only free Contributions to fraternal societies made for the purpose of paying medical or burial expenses of deceased members. E file state taxes only free Contributions to individuals who are needy or worthy. E file state taxes only free You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. E file state taxes only free But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. E file state taxes only free Example. E file state taxes only free You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. E file state taxes only free However, you cannot deduct contributions earmarked for relief of a particular individual or family. E file state taxes only free Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. E file state taxes only free Expenses you paid for another person who provided services to a qualified organization. E file state taxes only free Example. E file state taxes only free Your son does missionary work. E file state taxes only free You pay his expenses. E file state taxes only free You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. E file state taxes only free Payments to a hospital that are for a specific patient's care or for services for a specific patient. E file state taxes only free You cannot deduct these payments even if the hospital is operated by a city, a state, or other qualified organization. E file state taxes only free Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. E file state taxes only free Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. E file state taxes only free Chambers of commerce and other business leagues or organizations (but see chapter 28). E file state taxes only free Civic leagues and associations. E file state taxes only free Communist organizations. E file state taxes only free Country clubs and other social clubs. E file state taxes only free Most foreign organizations (other than certain Canadian, Israeli, or Mexican charitable organizations). E file state taxes only free For details, see Publication 526. E file state taxes only free Homeowners' associations. E file state taxes only free Labor unions (but see chapter 28). E file state taxes only free Political organizations and candidates. E file state taxes only free Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. E file state taxes only free See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. E file state taxes only free These contributions include the following. E file state taxes only free Contributions for lobbying. E file state taxes only free This includes amounts that you earmark for use in, or in connection with, influencing specific legislation. E file state taxes only free Contributions to a retirement home for room, board, maintenance, or admittance. E file state taxes only free Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. E file state taxes only free Costs of raffles, bingo, lottery, etc. E file state taxes only free You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. E file state taxes only free For information on how to report gambling winnings and losses, see Gambling winnings in chapter 12 and Gambling Losses Up to the Amount of Gambling Winnings in chapter 28. E file state taxes only free Dues to fraternal orders and similar groups. E file state taxes only free However, see Membership fees or dues , earlier, under Contributions You Can Deduct. E file state taxes only free Tuition, or amounts you pay instead of tuition. E file state taxes only free You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. E file state taxes only free You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. E file state taxes only free ” Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. E file state taxes only free Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. E file state taxes only free The cost of meals you eat while you perform services for a qualified organization unless it is necessary for you to be away from home overnight while performing the services. E file state taxes only free Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final (but see Adoption Credit in chapter 37, and the instructions for Form 8839, Qualified Adoption Expenses). E file state taxes only free You also may be able to claim an exemption for the child. E file state taxes only free See Adopted child in chapter 3. E file state taxes only free Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property (but see chapter 28). E file state taxes only free Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. E file state taxes only free However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. E file state taxes only free See Giving Property That Has Increased in Value , later. E file state taxes only free For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. E file state taxes only free Clothing and household items. E file state taxes only free   You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. E file state taxes only free Exception. E file state taxes only free   You can take a deduction for a contribution of an item of clothing or household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. E file state taxes only free Household items. E file state taxes only free   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. E file state taxes only free   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. E file state taxes only free Cars, boats, and airplanes. E file state taxes only free    The following rules apply to any donation of a qualified vehicle. E file state taxes only free A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. E file state taxes only free Deduction more than $500. E file state taxes only free   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. E file state taxes only free If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. E file state taxes only free Form 1098-C. E file state taxes only free   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. E file state taxes only free The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. E file state taxes only free   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453 and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. E file state taxes only free   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. E file state taxes only free    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. E file state taxes only free But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. E file state taxes only free Filing deadline approaching and still no Form 1098-C. E file state taxes only free   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. E file state taxes only free Request an automatic 6-month extension of time to file your return. E file state taxes only free You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. E file state taxes only free S. E file state taxes only free Individual Income Tax Return. E file state taxes only free  For more information, see Automatic Extension in chapter 1. E file state taxes only free File the return on time without claiming the deduction for the qualified vehicle. E file state taxes only free After receiving the Form 1098-C, file an amended return, Form 1040X, claiming the deduction. E file state taxes only free Attach Copy B of Form 1098-C (or other statement) to the amended return. E file state taxes only free For more information about amended returns, see Amended Returns and Claims for Refund in chapter 1. E file state taxes only free Exceptions. E file state taxes only free   There are two exceptions to the rules just described for deductions of more than $500. E file state taxes only free Exception 1—vehicle used or improved by organization. E file state taxes only free   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. E file state taxes only free But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. E file state taxes only free The Form 1098-C (or other statement) will show whether this exception applies. E file state taxes only free Exception 2—vehicle given or sold to needy individual. E file state taxes only free   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. E file state taxes only free But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. E file state taxes only free The Form 1098-C (or other statement) will show whether this exception applies. E file state taxes only free   This exception does not apply if the organization sells the vehicle at auction. E file state taxes only free In that case, you cannot deduct the vehicle's fair market value. E file state taxes only free Example. E file state taxes only free Anita donates a used car to a qualified organization. E file state taxes only free She bought it 3 years ago for $9,000. E file state taxes only free A used car guide shows the fair market value for this type of car is $6,000. E file state taxes only free However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. E file state taxes only free Neither exception 1 nor exception 2 applies. E file state taxes only free If Anita itemizes her deductions, she can deduct $2,900 for her donation. E file state taxes only free She must attach Form 1098-C and Form 8283 to her return. E file state taxes only free Deduction $500 or less. E file state taxes only free   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. E file state taxes only free But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. E file state taxes only free   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. E file state taxes only free The statement must contain the information and meet the tests for an acknowledgment described under Deductions of At Least $250 But Not More Than $500 under Records To Keep, later. E file state taxes only free Partial interest in property. E file state taxes only free   Generally, you cannot deduct a charitable contribution of less than your entire interest in property. E file state taxes only free Right to use property. E file state taxes only free   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. E file state taxes only free For exceptions and more information, see Partial Interest in Property Not in Trust in Publication 561. E file state taxes only free Future interests in tangible personal property. E file state taxes only free   You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. E file state taxes only free Tangible personal property. E file state taxes only free   This is any property, other than land or buildings, that can be seen or touched. E file state taxes only free It includes furniture, books, jewelry, paintings, and cars. E file state taxes only free Future interest. E file state taxes only free   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. E file state taxes only free Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. E file state taxes only free Publication 561 contains a more complete discussion. E file state taxes only free Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. E file state taxes only free Used clothing and household items. E file state taxes only free   The fair market value of used clothing and household goods is usually far less than what you paid for them when they were new. E file state taxes only free   For used clothing, you should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. E file state taxes only free See Household Goods in Publication 561 for information on the valuation of household goods, such as furniture, appliances, and linens. E file state taxes only free Example. E file state taxes only free Dawn Greene donated a coat to a thrift store operated by her church. E file state taxes only free She paid $300 for the coat 3 years ago. E file state taxes only free Similar coats in the thrift store sell for $50. E file state taxes only free The fair market value of the coat is $50. E file state taxes only free Dawn's donation is limited to $50. E file state taxes only free Cars, boats, and airplanes. E file state taxes only free   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. E file state taxes only free Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. E file state taxes only free The guides may be published monthly or seasonally and for different regions of the country. E file state taxes only free These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. E file state taxes only free The prices are not “official” and these publications are not considered an appraisal of any specific donated property. E file state taxes only free But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. E file state taxes only free   You can also find used car pricing information on the Internet. E file state taxes only free Example. E file state taxes only free You donate a used car in poor condition to a local high school for use by students studying car repair. E file state taxes only free A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. E file state taxes only free However, the guide shows the price for a private party sale of the car is only $750. E file state taxes only free The fair market value of the car is considered to be $750. E file state taxes only free Large quantities. E file state taxes only free   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. E file state taxes only free Giving Property That Has Decreased in Value If you contribute property with a fair market value that is less than your basis in it, your deduction is limited to its fair market value. E file state taxes only free You cannot claim a deduction for the difference between the property's basis and its fair market value. E file state taxes only free Giving Property That Has Increased in Value If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. E file state taxes only free Your basis in property is generally what you paid for it. E file state taxes only free See chapter 13 if you need more information about basis. E file state taxes only free Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. E file state taxes only free Ordinary income property. E file state taxes only free   Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at fair market value on the date it was contributed. E file state taxes only free Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined in chapter 14) held 1 year or less. E file state taxes only free Amount of deduction. E file state taxes only free   The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. E file state taxes only free Generally, this rule limits the deduction to your basis in the property. E file state taxes only free Example. E file state taxes only free You donate stock you held for 5 months to your church. E file state taxes only free The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). E file state taxes only free Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation). E file state taxes only free Capital gain property. E file state taxes only free   Property is capital gain property if you would have recognized long-term capital gain had you sold it at fair market value on the date of the contribution. E file state taxes only free It includes capital assets held more than 1 year, as well as certain real property and depreciable property used in your trade or business and, generally, held more than 1 year. E file state taxes only free Amount of deduction — general rule. E file state taxes only free   When figuring your deduction for a contribution of capital gain property, you generally can use the fair market value of the property. E file state taxes only free Exceptions. E file state taxes only free   In certain situations, you must reduce the fair market value by any amount that would have been long-term capital gain if you had sold the property for its fair market value. E file state taxes only free Generally, this means reducing the fair market value to the property's cost or other basis. E file state taxes only free Bargain sales. E file state taxes only free   A bargain sale of property is a sale or exchange for less than the property's fair market value. E file state taxes only free A bargain sale to a qualified organization is partly a charitable contribution and partly a sale or exchange. E file state taxes only free A bargain sale may result in a taxable gain. E file state taxes only free More information. E file state taxes only free   For more information on donating appreciated property, see Giving Property That Has Increased in Value in Publication 526. E file state taxes only free When To Deduct You can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year, as explained later under Carryovers ). E file state taxes only free This applies whether you use the cash or an accrual method of accounting. E file state taxes only free Time of making contribution. E file state taxes only free   Usually, you make a contribution at the time of its unconditional delivery. E file state taxes only free Checks. E file state taxes only free   A check you mail to a charity is considered delivered on the date you mail it. E file state taxes only free Text message. E file state taxes only free   Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account. E file state taxes only free Credit card. E file state taxes only free    Contributions charged on your credit card are deductible in the year you make the charge. E file state taxes only free Pay-by-phone account. E file state taxes only free    Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. E file state taxes only free Stock certificate. E file state taxes only free   A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. E file state taxes only free However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution is not delivered until the date the stock is transferred on the books of the corporation. E file state taxes only free Promissory note. E file state taxes only free   If you issue and deliver a promissory note to a charity as a contribution, it is not a contribution until you make the note payments. E file state taxes only free Option. E file state taxes only free    If you grant a charity an option to buy real property at a bargain price, it is not a contribution until the organization exercises the option. E file state taxes only free Borrowed funds. E file state taxes only free   If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan. E file state taxes only free Limits on Deductions The amount you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income (AGI). E file state taxes only free Your deduction may be further limited to 30% or 20% of your AGI, depending on the type of property you give and the type of organization you give it to. E file state taxes only free If your total contributions for the year are 20% or less of your AGI, these limits do not apply to you. E file state taxes only free The limits are discussed in detail under Limits on Deductions in Publication 526. E file state taxes only free A higher limit applies to certain qualified conservation contributions. E file state taxes only free See Publication 526 for details. E file state taxes only free Carryovers You can carry over any contributions you cannot deduct in the current year because they exceed your adjusted-gross-income limits. E file state taxes only free You can deduct the excess in each of the next 5 years until it is used up, but not beyond that time. E file state taxes only free For more information, see Carryovers in Publication 526. E file state taxes only free Records To Keep You must keep records to prove the amount of the contributions you make during the year. E file state taxes only free The kind of records you must keep depends on the amount of your contributions and whether they are: Cash contributions, Noncash contributions, or Out-of-pocket expenses when donating your services. E file state taxes only free Note. E file state taxes only free An organization generally must give you a written statement if it receives a payment from you that is more than $75 and is partly a contribution and partly for goods or services. E file state taxes only free (See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. E file state taxes only free ) Keep the statement for your records. E file state taxes only free It may satisfy all or part of the recordkeeping requirements explained in the following discussions. E file state taxes only free Cash Contributions Cash contributions include those paid by cash, check, electronic funds transfer, debit card, credit card, or payroll deduction. E file state taxes only free You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following. E file state taxes only free A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. E file state taxes only free Bank records may include: A canceled check, A bank or credit union statement, or A credit card statement. E file state taxes only free A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution. E file state taxes only free The payroll deduction records described next. E file state taxes only free Payroll deductions. E file state taxes only free   If you make a contribution by payroll deduction, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the date and amount of the contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization. E file state taxes only free If your employer withheld $250 or more from a single paycheck, see Contributions of $250 or More , next. E file state taxes only free Contributions of $250 or More You can claim a deduction for a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization or certain payroll deduction records. E file state taxes only free If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions. E file state taxes only free Amount of contribution. E file state taxes only free   In figuring whether your contribution is $250 or more, do not combine separate contributions. E file state taxes only free For example, if you gave your church $25 each week, your weekly payments do not have to be combined. E file state taxes only free Each payment is a separate contribution. E file state taxes only free   If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution. E file state taxes only free   If you made a payment that is partly for goods and services, as described earlier under Contributions From Which You Benefit , your contribution is the amount of the payment that is more than the value of the goods and services. E file state taxes only free Acknowledgment. E file state taxes only free   The acknowledgment must meet these tests. E file state taxes only free It must be written. E file state taxes only free It must include: The amount of cash you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), A description and good faith estimate of the value of any goods or services described in (b) (other than intangible religious benefits), and A statement that the only benefit you received was an intangible religious benefit, if that was the case. E file state taxes only free The acknowledgment does not need to describe or estimate the value of an intangible religious benefit. E file state taxes only free An intangible religious benefit is a benefit that generally is not sold in commercial transactions outside a donative (gift) context. E file state taxes only free An example is admission to a religious ceremony. E file state taxes only free You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. E file state taxes only free   If the acknowledgment does not show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. E file state taxes only free If the acknowledgment shows the date of the contribution and meets the other tests just described, you do not need any other records. E file state taxes only free Payroll deductions. E file state taxes only free   If you make a contribution by payroll deduction and your employer withholds $250 or more from a single paycheck, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the amount withheld as a contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization and states the organization does not provide goods or services in return for any contribution made to it by payroll deduction. E file state taxes only free A single pledge card may be kept for all contributions made by payroll deduction regardless of amount as long as it contains all the required information. E file state taxes only free   If the pay stub, Form W-2, pledge card, or other document does not show the date of the contribution, you must have another document that does show the date of the contribution. E file state taxes only free If the pay stub, Form W-2, pledge card, or other document shows the date of the contribution, you do not need any other records except those just described in (1) and (2). E file state taxes only free Noncash Contributions For a contribution not made in cash, the records you must keep depend on whether your deduction for the contribution is: Less than $250, At least $250 but not more than $500, Over $500 but not more than $5,000, or Over $5,000. E file state taxes only free Amount of deduction. E file state taxes only free   In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any charitable organization during the year. E file state taxes only free   If you received goods or services in return, as described earlier in Contributions From Which You Benefit , reduce your contribution by the value of those goods or services. E file state taxes only free If you figure your deduction by reducing the fair market value of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value , your contribution is the reduced amount. E file state taxes only free Deductions of Less Than $250 If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing: The name of the charitable organization, The date and location of the charitable contribution, and A reasonably detailed description of the property. E file state taxes only free A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing the information in (1), (2), and (3) will serve as a receipt. E file state taxes only free You are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site). E file state taxes only free Additional records. E file state taxes only free   You must also keep reliable written records for each item of contributed property. E file state taxes only free Your written records must include the following information. E file state taxes only free The name and address of the organization to which you contributed. E file state taxes only free The date and location of the contribution. E file state taxes only free A description of the property in detail reasonable under the circumstances. E file state taxes only free For a security, keep the name of the issuer, the type of security, and whether it is regularly traded on a stock exchange or in an over-the-counter market. E file state taxes only free The fair market value of the property at the time of the contribution and how you figured the fair market value. E file state taxes only free If it was determined by appraisal, keep a signed copy of the appraisal. E file state taxes only free The cost or other basis of the property, if you must reduce its fair market value by appreciation. E file state taxes only free Your records should also include the amount of the reduction and how you figured it. E file state taxes only free The amount you claim as a deduction for the tax year as a result of the contribution, if you contribute less than your entire interest in the property during the tax year. E file state taxes only free Your records must include the amount you claimed as a deduction in any earlier years for contributions of other interests in this property. E file state taxes only free They must also include the name and address of each organization to which you contributed the other interests, the place where any such tangible property is located or kept, and the name of any person in possession of the property, other than the organization to which you contributed it. E file state taxes only free The terms of any conditions attached to the contribution of property. E file state taxes only free Deductions of At Least $250 But Not More Than $500 If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. E file state taxes only free If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions. E file state taxes only free The acknowledgment must contain the information in items (1) through (3) under Deductions of Less Than $250 , earlier, and your written records must include the information listed in that discussion under Additional records . E file state taxes only free The acknowledgment must also meet these tests. E file state taxes only free It must be written. E file state taxes only free It must include: A description (but not necessarily the value) of any property you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), and A description and good faith estimate of the value of any goods or services described in (b). E file state taxes only free If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in a commercial transaction outside the donative context, the acknowledgment must say so and does not need to describe or estimate the value of the benefit. E file state taxes only free You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. E file state taxes only free Deductions Over $500 You are required to give additional information if you claim a deduction over $500 for noncash charitable contributions. E file state taxes only free See Records To Keep in Publication 526 for more information. E file state taxes only free Out-of-Pocket Expenses If you give services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, the following two rules apply. E file state taxes only free You must have adequate records to prove the amount of the expenses. E file state taxes only free If any of your unreimbursed out-of-pocket expenses, considered separately, are $250 or more (for example, you pay $250 or more for an airline ticket to attend a convention of a qualified organization as a chosen representative), you must get an acknowledgment from the qualified organization that contains: A description of the services you provided, A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred, A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and A statement that the only benefit you received was an intangible religious benefit, if that was the case. E file state taxes only free The acknowledgment does not need to describe or estimate the value of an intangible religious benefit (defined earlier under Acknowledgment ). E file state taxes only free You must get the acknowledgment on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. E file state taxes only free Car expenses. E file state taxes only free   If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. E file state taxes only free Whether your records are considered reliable depends on all the facts and circumstances. E file state taxes only free Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses. E file state taxes only free   For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. E file state taxes only free If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. E file state taxes only free If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose. E file state taxes only free   See Car expenses under Out-of-Pocket Expenses in Giving Services, earlier, for the expenses you can deduct. E file state taxes only free How To Report Report your charitable contributions on Schedule A (Form 1040). E file state taxes only free If your total deduction for all noncash contributions for the year is over $500, you must also file Form 8283. E file state taxes only free See How To Report in Publication 526 for more information. E file state taxes only free Prev  Up  Next   Home   More Online Publications