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Efile Tax Calculator

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Efile Tax Calculator

Efile tax calculator 2. Efile tax calculator   Estimated Tax for 2014 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated TaxGeneral Rule Married Taxpayers Special Rules Aliens Estates and Trusts How To Figure Estimated Tax2014 Estimated Tax Worksheet When To Pay Estimated TaxWhen To Start Farmers and Fishermen How To Figure Each PaymentRegular Installment Method Annualized Income Installment Method Estimated Tax Payments Not Required How To Pay Estimated TaxCredit an Overpayment Pay Online Pay by Phone Pay by Check or Money Order Using the Estimated Tax Payment Voucher Introduction Estimated tax is the method used to pay tax on income that is not subject to withholding. Efile tax calculator This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Efile tax calculator You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Efile tax calculator Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Efile tax calculator If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Efile tax calculator If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Efile tax calculator For information on when the penalty applies, see chapter 4. Efile tax calculator It would be helpful for you to have a copy of your 2013 tax return and an estimate of your 2014 income nearby while reading this chapter. Efile tax calculator Topics - This chapter discusses: Who must pay estimated tax, How to figure estimated tax (including illustrated examples), When to pay estimated tax, How to figure each payment, and How to pay estimated tax. Efile tax calculator Useful Items - You may want to see: Form (and Instructions) 1040-ES Estimated Tax for Individuals See chapter 5 for information about how to get this publication and form. Efile tax calculator Worksheets. Efile tax calculator   You may need to use several of the blank worksheets included in this chapter. Efile tax calculator See Worksheets for Chapter 2, later, to locate what you need. Efile tax calculator Who Does Not Have To Pay Estimated Tax If you receive salaries and wages, you may be able to avoid paying estimated tax by asking your employer to take more tax out of your earnings. Efile tax calculator To do this, file a new Form W-4 with your employer. Efile tax calculator See chapter 1. Efile tax calculator Estimated tax not required. Efile tax calculator   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Efile tax calculator You had no tax liability for 2013. Efile tax calculator You were a U. Efile tax calculator S. Efile tax calculator citizen or resident alien for the whole year. Efile tax calculator Your 2013 tax year covered a 12-month period. Efile tax calculator   You had no tax liability for 2013 if your total tax (defined later under Total tax for 2013—line 14b ) was zero or you did not have to file an income tax return. Efile tax calculator Please click here for the text description of the image. Efile tax calculator Figure 2-A: Do You Have To Pay Estimated Tax? Who Must Pay Estimated Tax If you owed additional tax for 2013, you may have to pay estimated tax for 2014. Efile tax calculator You can use the following general rule as a guide during the year to see if you will have enough withholding, or should increase your withholding or make estimated tax payments. Efile tax calculator General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. Efile tax calculator You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Efile tax calculator You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Efile tax calculator Your 2013 tax return must cover all 12 months. Efile tax calculator Note. Efile tax calculator The percentages in (2a) or (2b) above may be different if you are a farmer, fisherman, or higher income taxpayer. Efile tax calculator See Special Rules , later. Efile tax calculator If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet for a more accurate calculation. Efile tax calculator Figure 2-A takes you through the general rule. Efile tax calculator You may find this helpful in determining if you must pay estimated tax. Efile tax calculator If all your income will be subject to income tax withholding, you probably do not need to pay estimated tax. Efile tax calculator Example 1. Efile tax calculator Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2014. Efile tax calculator She files as head of household claiming her dependent son, takes the standard deduction, and expects no refundable credits for 2014. Efile tax calculator Expected adjusted gross income (AGI) for 2014 $82,800 AGI for 2013 $73,700 Total tax on 2013 return (Form 1040,  line 61) $  8,746 Total 2014 estimated tax (line 13c of the 2014 Estimated Tax Worksheet) $11,015 Tax expected to be withheld in 2014 $10,000 Jane's answer to Figure 2-A, box 1, is YES; she expects to owe at least $1,000 for 2014 after subtracting her withholding from her expected total tax ($11,015 − $10,000 = $1,015). Efile tax calculator Her answer to box 2a is YES; she expects her income tax withholding ($10,000) to be at least 90% of the tax to be shown on her 2014 return ($11,015 × 90% = $9,913. Efile tax calculator 50). Efile tax calculator Jane does not need to pay estimated tax. Efile tax calculator Example 2. Efile tax calculator The facts are the same as in Example 1, except that Jane expects only $8,700 tax to be withheld in 2014. Efile tax calculator Because that is less than $9,913. Efile tax calculator 50, her answer to box 2a is NO. Efile tax calculator Jane's answer to box 2b is also NO; she does not expect her income tax withholding ($8,700) to be at least 100% of the total tax shown on her 2013 return ($8,746). Efile tax calculator Jane must increase her withholding or pay estimated tax for 2014. Efile tax calculator Example 3. Efile tax calculator The facts are the same as in Example 2, except that the total tax shown on Jane's 2013 return was $8,600. Efile tax calculator Because she expects to have more than $8,600 withheld in 2014 ($8,700), her answer to box 2b is YES. Efile tax calculator Jane does not need to pay estimated tax for 2014. Efile tax calculator Married Taxpayers If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Efile tax calculator You and your spouse can make joint estimated tax payments even if you are not living together. Efile tax calculator However, you and your spouse cannot make joint estimated tax payments if: You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes). Efile tax calculator See Choosing Resident Alien Status in Publication 519, or Individuals of the same sex and opposite sex who are in registered domestic partnerships, civil unions, or other similar formal relationships that are not marriages under state law cannot make joint estimated tax payments. Efile tax calculator These individuals can take credit only for the estimated tax payments that he or she made. Efile tax calculator If you and your spouse cannot make joint estimated tax payments, apply these rules to your separate estimated income. Efile tax calculator Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Efile tax calculator 2013 separate returns and 2014 joint return. Efile tax calculator   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Efile tax calculator You filed a separate return if you filed as single, head of household, or married filing separately. Efile tax calculator 2013 joint return and 2014 separate returns. Efile tax calculator   If you plan to file a separate return for 2014, but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Efile tax calculator You file a separate return if you file as single, head of household, or married filing separately. Efile tax calculator   To figure your share of the tax on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status for 2014. Efile tax calculator Then multiply the tax on the joint return by the following fraction. Efile tax calculator      The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Efile tax calculator Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Efile tax calculator Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Efile tax calculator For 2014, they plan to file married filing separately. Efile tax calculator Joe figures his share of the tax on the 2013 joint return as follows: Tax on $40,100 based on separate return $5,960 Tax on $8,400 based on separate return 843 Total $6,803 Joe's percentage of total ($5,960 ÷ $6,803) 87. Efile tax calculator 6% Joe's share of tax on joint return  ($6,386 × 87. Efile tax calculator 6%) $5,594 Special Rules There are special rules for farmers, fishermen, and certain higher income taxpayers. Efile tax calculator Farmers and Fishermen If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under General Rule , earlier. Efile tax calculator Gross income. Efile tax calculator   Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. Efile tax calculator To determine whether two-thirds of your gross income for 2013 was from farming or fishing, use as your gross income the total of the income (not loss) amounts. Efile tax calculator Joint returns. Efile tax calculator   On a joint return, you must add your spouse's gross income to your gross income to determine if at least two-thirds of your total gross income is from farming or fishing. Efile tax calculator Gross income from farming. Efile tax calculator   This is income from cultivating the soil or raising agricultural commodities. Efile tax calculator It includes the following amounts. Efile tax calculator Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. Efile tax calculator Income from a plantation, ranch, nursery, range, orchard, or oyster bed. Efile tax calculator Crop shares for the use of your land. Efile tax calculator Gains from sales of draft, breeding, dairy, or sporting livestock. Efile tax calculator   For 2013, gross income from farming is the total of the following amounts. Efile tax calculator Schedule F (Form 1040), Profit or Loss From Farming, line 9. Efile tax calculator Form 4835, Farm Rental Income and Expenses, line 7. Efile tax calculator Your share of the gross farming income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041). Efile tax calculator Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property. Efile tax calculator   Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming. Efile tax calculator Gross income from fishing. Efile tax calculator   This is income from catching, taking, harvesting, cultivating, or farming any kind of fish, shellfish (for example, clams and mussels), crustaceans (for example, lobsters, crabs, and shrimp), sponges, seaweeds, or other aquatic forms of animal and vegetable life. Efile tax calculator   Gross income from fishing includes the following amounts. Efile tax calculator Schedule C (Form 1040), Profit or Loss From Business. Efile tax calculator Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing. Efile tax calculator Your share of the gross fishing income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041). Efile tax calculator Certain taxable interest and punitive damage awards received in connection with the Exxon Valdez litigation. Efile tax calculator Income for services normally performed in connection with fishing. Efile tax calculator Services normally performed in connection with fishing include: Shore service as an officer or crew member of a vessel engaged in fishing, and Services that are necessary for the immediate preservation of the catch, such as cleaning, icing, and packing the catch. Efile tax calculator Higher Income Taxpayers If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General Rule , earlier. Efile tax calculator For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Efile tax calculator Note. Efile tax calculator This rule does not apply to farmers and fishermen. Efile tax calculator Aliens Resident and nonresident aliens also may have to pay estimated tax. Efile tax calculator Resident aliens should follow the rules in this publication, unless noted otherwise. Efile tax calculator Nonresident aliens should get Form 1040-ES (NR), U. Efile tax calculator S. Efile tax calculator Estimated Tax for Nonresident Alien Individuals. Efile tax calculator You are an alien if you are not a citizen or national of the United States. Efile tax calculator You are a resident alien if you either have a green card or meet the substantial presence test. Efile tax calculator For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Publication 519. Efile tax calculator Estates and Trusts Estates and trusts also must pay estimated tax. Efile tax calculator However, estates (and certain grantor trusts that receive the residue of the decedent's estate under the decedent's will) are exempt from paying estimated tax for the first 2 years after the decedent's death. Efile tax calculator Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax. Efile tax calculator How To Figure Estimated Tax To figure your estimated tax, you must figure your expected AGI, taxable income, taxes, deductions, and credits for the year. Efile tax calculator When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Efile tax calculator Use your 2013 federal tax return as a guide. Efile tax calculator You can use Form 1040-ES to figure your estimated tax. Efile tax calculator Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. Efile tax calculator You must make adjustments both for changes in your own situation and for recent changes in the tax law. Efile tax calculator Some of these changes are discussed under What's New for 2014 , earlier. Efile tax calculator For information about these and other changes in the law, visit the IRS website at IRS. Efile tax calculator gov. Efile tax calculator The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. Efile tax calculator Keep the worksheet for your records. Efile tax calculator 2014 Estimated Tax Worksheet Use Worksheet 2-1 to help guide you through the information about completing the 2014 Estimated Tax Worksheet. Efile tax calculator You can also find a copy of the worksheet in the Instructions for Form 1040-ES. Efile tax calculator Expected AGI—Line 1 Your expected AGI for 2014 (line 1) is your expected total income minus your expected adjustments to income. Efile tax calculator Total income. Efile tax calculator   Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. Efile tax calculator However, do not include income that is tax exempt. Efile tax calculator   Total income includes all income and loss for 2014 that, if you had received it in 2013, would have been included on your 2013 tax return in the total on line 22 of Form 1040, line 15 of Form 1040A, or line 4 of Form 1040EZ. Efile tax calculator Social security and railroad retirement benefits. Efile tax calculator If you expect to receive social security or tier 1 railroad retirement benefits during 2014, use Worksheet 2-2 to figure the amount of expected taxable benefits you should include on line 1. Efile tax calculator Adjustments to income. Efile tax calculator   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2014 tax return. Efile tax calculator Self-employed. Efile tax calculator If you expect to have income from self-employment, use Worksheet 2-3 to figure your expected self-employment tax and your allowable deduction for self-employment tax. Efile tax calculator Include the amount from Worksheet 2-3 in your expected adjustments to income. Efile tax calculator If you file a joint return and both you and your spouse have net earnings from self-employment, each of you must complete a separate worksheet. Efile tax calculator Expected Taxable Income— Lines 2–5 Reduce your expected AGI for 2014 (line 1) by either your expected itemized deductions or your standard deduction and by your exemptions (lines 2 through 5). Efile tax calculator Itemized deductions—line 2. Efile tax calculator   If you expect to claim itemized deductions on your 2014 tax return, enter the estimated amount on line 2. Efile tax calculator   Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040). Efile tax calculator    For 2014, your total itemized deductions may be reduced if your AGI is more than the amount shown next for your filing status. Efile tax calculator Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than this amount, use Worksheet 2-5 to figure the amount to enter on line 2. Efile tax calculator Standard deduction—line 2. Efile tax calculator   If you expect to claim the standard deduction on your 2014 tax return, enter the amount on line 2. Efile tax calculator Use Worksheet 2-4 to figure your standard deduction. Efile tax calculator No standard deduction. Efile tax calculator   The standard deduction for some individuals is zero. Efile tax calculator Your standard deduction will be zero if you: File a separate return and your spouse itemizes deductions, Are a dual-status alien, or File a return for a period of less than 12 months because you change your accounting period. Efile tax calculator Exemptions—line 4. Efile tax calculator   After you have subtracted either your expected itemized deductions or your standard deduction from your expected AGI, reduce the amount remaining by $3,950 for each exemption you expect to take on your 2014 tax return. Efile tax calculator If another person (such as your parent) can claim an exemption for you on his or her tax return, you cannot claim your own personal exemption. Efile tax calculator This is true even if the other person will not claim your exemption or the exemption will be reduced or eliminated under the phaseout rule. Efile tax calculator    For 2014, your deduction for personal exemption is reduced if your AGI is more than the amount shown next for your filing status. Efile tax calculator Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than this amount, use Worksheet 2-6 to figure the amount to enter on line 4. Efile tax calculator Expected Taxes and Credits— Lines 6–13c After you have figured your expected taxable income (line 5), follow the steps next to figure your expected taxes, credits, and total tax for 2014. Efile tax calculator Most people will have entries for only a few of these steps. Efile tax calculator However, you should check every step to be sure you do not overlook anything. Efile tax calculator Step 1. Efile tax calculator   Figure your expected income tax (line 6). Efile tax calculator Generally, you will use the 2014 Tax Rate Schedules, later, to figure your expected income tax. Efile tax calculator   However, see below for situations where you must use a different method to compute your estimated tax. Efile tax calculator Tax on child's investment income. Efile tax calculator   You must use a special method to figure tax on the income of the following children who have more than $2,000 of investment income. Efile tax calculator Children under age 18 at the end of 2014. Efile tax calculator The following children if their earned income is not more than half their support. Efile tax calculator Children age 18 at the end of 2014. Efile tax calculator Children who are full-time students over age 18 and under age 24 at the end of 2014. Efile tax calculator See Publication 929, Tax Rules for Children and Dependents. Efile tax calculator Although the ages and dollar amounts in the publication may be different in the 2014 revision, this reference will give you basic information for figuring the tax. Efile tax calculator Tax on net capital gain. Efile tax calculator   The regular income tax rates for individuals do not apply to a net capital gain. Efile tax calculator Instead, your net capital gain is taxed at a lower maximum rate. Efile tax calculator   The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Efile tax calculator Tax on capital gain and qualified dividends. Efile tax calculator If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure your tax. Efile tax calculator Note. Efile tax calculator For 2014, your capital gains and dividends rate will depend on your income. Efile tax calculator Tax if excluding foreign earned income or excluding or deducting foreign housing. Efile tax calculator If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555 or Form 2555-EZ, use Worksheet 2-8 to figure your estimated tax. Efile tax calculator Step 2. Efile tax calculator   Total your expected taxes (line 8). Efile tax calculator Include on line 8 the sum of the following. Efile tax calculator Your tax on line 6. Efile tax calculator Your expected alternative minimum tax (AMT) from Form 6251, or included on Form 1040A. Efile tax calculator Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions. Efile tax calculator Any recapture of education credits. Efile tax calculator Step 3. Efile tax calculator   Subtract your expected credits (line 9). Efile tax calculator If you are using your 2013 return as a guide and filed Form 1040, your total credits for 2013 were shown on line 54. Efile tax calculator If you filed Form 1040A, your total credits for 2013 were on line 34. Efile tax calculator   If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4. Efile tax calculator Step 4. Efile tax calculator   Add your expected self-employment tax (line 11). Efile tax calculator You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier). Efile tax calculator Step 5. Efile tax calculator   Add your expected other taxes (line 12). Efile tax calculator   Other taxes include the following. Efile tax calculator Additional tax on early distributions from: An IRA or other qualified retirement plan, A tax-sheltered annuity, or A modified endowment contract entered into after June 20, 1988. Efile tax calculator Household employment taxes if: You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax. Efile tax calculator Amounts written on Form 1040 on the line for “other taxes” (line 60 on the 2013 Form 1040). Efile tax calculator But, do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible. Efile tax calculator Repayment of the first-time homebuyer credit. Efile tax calculator See Form 5405. Efile tax calculator Additional Medicare Tax. Efile tax calculator A 0. Efile tax calculator 9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status. Efile tax calculator Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $200,000 Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. Efile tax calculator A self-employment loss should not be considered for purposes of this tax. Efile tax calculator RRTA compensation should be separately compared to the threshold. Efile tax calculator Your employer is responsible for withholding the 0. Efile tax calculator 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2014. Efile tax calculator You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. Efile tax calculator For more information on Additional Medicare Tax, go to IRS. Efile tax calculator gov and enter “Additional Medicare Tax” in the search box. Efile tax calculator Net Investment Income Tax (NIIT). Efile tax calculator The NIIT is 3. Efile tax calculator 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over the amount listed in the following chart, based on your filing status. Efile tax calculator Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $250,000 For more information on Net Investment Income Tax, go to IRS. Efile tax calculator gov and enter “Net Investment Income Tax” in the search box. Efile tax calculator Step 6. Efile tax calculator   Subtract your refundable credit (line 13b). Efile tax calculator   To figure your expected fuel tax credit, do not include fuel tax for the first three quarters of the year that you expect to have refunded to you. Efile tax calculator   The result of steps 1 through 6 is your total estimated tax for 2014 (line 13c). Efile tax calculator Required Annual Payment— Line 14c On lines 14a through 14c, figure the total amount you must pay for 2014, through withholding and estimated tax payments, to avoid paying a penalty. Efile tax calculator General rule. Efile tax calculator   The total amount you must pay is the smaller of: 90% of your total expected tax for 2014, or 100% of the total tax shown on your 2013 return. Efile tax calculator Your 2013 tax return must cover all 12 months. Efile tax calculator Special rules. Efile tax calculator   There are special rules for higher income taxpayers and for farmers and fishermen. Efile tax calculator Higher income taxpayers. Efile tax calculator   If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above. Efile tax calculator This rule does not apply to farmers and fishermen. Efile tax calculator For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Efile tax calculator Example. Efile tax calculator   Jeremy Martin's total tax on his 2013 return was $42,581, and his expected tax for 2014 is $71,253. Efile tax calculator His 2013 AGI was $180,000. Efile tax calculator Because Jeremy had more than $150,000 of AGI in 2013, he figures his required annual payment as follows. Efile tax calculator He determines that 90% of his expected tax for 2014 is $64,128 (. Efile tax calculator 90 × $71,253). Efile tax calculator Next, he determines that 110% of the tax shown on his 2013 return is $46,839 (1. Efile tax calculator 10 x $42,581). Efile tax calculator Finally, he determines that his required annual payment is $46,839, the smaller of the two. Efile tax calculator Farmers and fishermen. Efile tax calculator   If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, your required annual payment is the smaller of: 662/3% (. Efile tax calculator 6667) of your total tax for 2014, or 100% of the total tax shown on your 2013 return. Efile tax calculator (Your 2013 tax return must cover all 12 months. Efile tax calculator )   For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen , under Special Rules discussed earlier. Efile tax calculator Total tax for 2013—line 14b. Efile tax calculator   Your 2013 total tax, if you filed Form 1040, is the amount on line 61 reduced by the following. Efile tax calculator Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Efile tax calculator The following amounts from Form 5329 included on line 58. Efile tax calculator Any tax on excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts. Efile tax calculator Any tax on excess accumulations in qualified retirement plans. Efile tax calculator The following write-ins on line 60. Efile tax calculator Excise tax on excess golden parachute payments (identified as “EPP”). Efile tax calculator Excise tax on insider stock compensation from an expatriated corporation (identified as “ISC”). Efile tax calculator Look-back interest due under section 167(g) (identified as “From Form 8866”). Efile tax calculator Look-back interest due under section 460(b) (identified as “From Form 8697”). Efile tax calculator Recapture of federal mortgage subsidy (identified as “FMSR”). Efile tax calculator Additional tax on advance payments of health coverage tax credit when not eligible (identified as “HCTC”). Efile tax calculator Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance (identified as “UT”). Efile tax calculator Any refundable credit amounts. Efile tax calculator   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits. Efile tax calculator   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. Efile tax calculator Total Estimated Tax Payments Needed—Line 16a Use lines 15 and 16a to figure the total estimated tax you may be required to pay for 2014. Efile tax calculator Subtract your expected withholding from your required annual payment (line 14c). Efile tax calculator You usually must pay this difference in four equal installments. Efile tax calculator See When To Pay Estimated Tax and How To Figure Each Payment . Efile tax calculator You do not have to pay estimated tax if: Line 14c minus line 15 is zero or less, or Line 13c minus line 15 is less than $1,000. Efile tax calculator Withholding—line 15. Efile tax calculator   Your expected withholding for 2014 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc. Efile tax calculator ). Efile tax calculator It includes excess social security, and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. Efile tax calculator For this purpose, you will have excess social security or tier 1 railroad retirement tax withholding for 2014 only if your wages and compensation from two or more employers are more than $117,000. Efile tax calculator See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3. Efile tax calculator   It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. Efile tax calculator Your employer is responsible for withholding the 0. Efile tax calculator 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. Efile tax calculator When To Pay Estimated Tax For estimated tax purposes, the year is divided into four payment periods. Efile tax calculator Each period has a specific payment due date. Efile tax calculator If you do not pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return. Efile tax calculator If a payment is mailed, the date of the U. Efile tax calculator S. Efile tax calculator postmark is considered the date of payment. Efile tax calculator The payment periods and due dates for estimated tax payments are shown next. Efile tax calculator For exceptions to the dates listed, see Saturday, Sunday, holiday rule below. Efile tax calculator For the period: Due date: Jan. Efile tax calculator 11 – March 31 April 15 April 1 – May 31 June 16 June 1 – August 31 September 15 Sept. Efile tax calculator 1 – Dec. Efile tax calculator 31 January 15  next year2 1If your tax year does not begin on January 1,  see Fiscal year taxpayers . Efile tax calculator 2See January payment . Efile tax calculator Saturday, Sunday, holiday rule. Efile tax calculator   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or a holiday. Efile tax calculator January payment. Efile tax calculator   If you file your 2014 Form 1040 or Form 1040A by February 2, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Efile tax calculator Example. Efile tax calculator Janet Adams does not pay any estimated tax for 2014. Efile tax calculator She files her 2014 income tax return and pays the balance due shown on her return on January 26, 2015. Efile tax calculator Janet's estimated tax for the fourth payment period is considered to have been paid on time. Efile tax calculator However, she may owe a penalty for not making the first three estimated tax payments, if required. Efile tax calculator Any penalty for not making those payments will be figured up to January 26, 2015. Efile tax calculator Fiscal year taxpayers. Efile tax calculator   If your tax year does not start on January 1, your payment due dates are: The 15th day of the 4th month of your fiscal year, The 15th day of the 6th month of your fiscal year, The 15th day of the 9th month of your fiscal year, and The 15th day of the 1st month after the end of your fiscal year. Efile tax calculator   You do not have to make the last payment listed above if you file your income tax return by the last day of the first month after the end of your fiscal year and pay all the tax you owe with your return. Efile tax calculator When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Efile tax calculator If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Efile tax calculator You have several options when paying estimated taxes. Efile tax calculator You can: apply an overpayment from the previous tax year, pay all your estimated tax by the due date of your first payment, or pay it in installments. Efile tax calculator If you choose to pay in installments, make your first payment by the due date for the first payment period. Efile tax calculator Make your remaining installment payments by the due dates for the later periods. Efile tax calculator To avoid any estimated tax penalties, all installments must be paid by their due date and for the required amount. Efile tax calculator No income subject to estimated tax during first period. Efile tax calculator   If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Efile tax calculator You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Efile tax calculator Table 2-1 shows the dates for making installment payments. Efile tax calculator    Table 2-1. Efile tax calculator Due Dates for Estimated Tax Installment Payments If you first have income on which you must pay estimated tax: Make a payment  by:* Make later  installments  by:* Before April 1 April 15 June 16     Sept. Efile tax calculator 15     Jan. Efile tax calculator 15 next year April 1–May 31 June 16 Sept. Efile tax calculator 15     Jan. Efile tax calculator 15 next year June 1–Aug. Efile tax calculator 31 Sept. Efile tax calculator 15 Jan. Efile tax calculator 15 next year After Aug. Efile tax calculator 31 Jan. Efile tax calculator 15 next year (None) *See January payment and Saturday, Sunday, holiday rule . Efile tax calculator How much to pay to avoid penalty. Efile tax calculator   To determine how much you should pay by each payment due date, see How To Figure Each Payment , later. Efile tax calculator Farmers and Fishermen If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, you have only one payment due date for your 2014 estimated tax, January 15, 2015. Efile tax calculator The due dates for the first three payment periods, discussed under When To Pay Estimated Tax , earlier, do not apply to you. Efile tax calculator If you file your 2014 Form 1040 by March 2, 2015, and pay all the tax you owe at that time, you do not need to make an estimated tax payment. Efile tax calculator Fiscal year farmers and fishermen. Efile tax calculator   If you are a farmer or fisherman, but your tax year does not start on January 1, you can either: Pay all your estimated tax by the 15th day after the end of your tax year, or File your return and pay all the tax you owe by the 1st day of the 3rd month after the end of your tax year. Efile tax calculator How To Figure Each Payment After you have figured your total estimated tax, figure how much you must pay by the due date of each payment period. Efile tax calculator You should pay enough by each due date to avoid a penalty for that period. Efile tax calculator If you do not pay enough during any payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Efile tax calculator The penalty is discussed in chapter 4. Efile tax calculator Regular Installment Method If your first estimated tax payment is due April 15, 2014, you can figure your required payment for each period by dividing your annual estimated tax due (line 16a of the 2014 Estimated Tax Worksheet (Worksheet 2-1)) by 4. Efile tax calculator Enter this amount on line 17. Efile tax calculator However, use this method only if your income is basically the same throughout the year. Efile tax calculator Change in estimated tax. Efile tax calculator   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Efile tax calculator Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Efile tax calculator If you do not receive your income evenly throughout the year, your required estimated tax payments may not be the same for each period. Efile tax calculator See Annualized Income Installment Method . Efile tax calculator Amended estimated tax. Efile tax calculator If you refigure your estimated tax during the year, or if your first estimated tax payment is due after April 15, 2014, figure your required payment for each remaining payment period using Worksheet 2-14. Efile tax calculator Example. Efile tax calculator Early in 2014, Mira Roberts figures that her estimated tax due is $1,800. Efile tax calculator She makes estimated tax payments on April 15 and June 16 of $450 each ($1,800 ÷ 4). Efile tax calculator On July 10, she sells investment property at a gain. Efile tax calculator Her refigured estimated tax is $4,100. Efile tax calculator Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-14. Efile tax calculator If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025. Efile tax calculator Worksheet 2-14. Efile tax calculator Amended Estimated Tax Worksheet—Illustrated               1. Efile tax calculator Amended total estimated tax due 1. Efile tax calculator $4,100 2. Efile tax calculator Multiply line 1 by:           50% (. Efile tax calculator 50) if next payment is due June 16, 2014           75% (. Efile tax calculator 75) if next payment is due September 15,  2014           100% (1. Efile tax calculator 00) if next payment is due January 15,  2015 2. Efile tax calculator 3,075     3. Efile tax calculator Estimated tax payments for all previous periods 3. Efile tax calculator 900     4. Efile tax calculator Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment voucher for your next required payment 4. Efile tax calculator $2,175       Note. Efile tax calculator If the payment on line 4 is due January 15, 2015, stop here. Efile tax calculator Otherwise, go to line 5. Efile tax calculator         5. Efile tax calculator Add lines 3 and 4 5. Efile tax calculator 3,075 6. Efile tax calculator Subtract line 5 from line 1 and enter the result (but not less than zero) 6. Efile tax calculator 1,025 7. Efile tax calculator Each following required payment: If the payment on line 4 is due June 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. Efile tax calculator If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7. Efile tax calculator $1,025 Worksheet 2-14. Efile tax calculator Amended Estimated Tax Worksheet—Blank               1. Efile tax calculator Amended total estimated tax due 1. Efile tax calculator   2. Efile tax calculator Multiply line 1 by:           50% (. Efile tax calculator 50) if next payment is due June 16, 2014           75% (. Efile tax calculator 75) if next payment is due September 15,  2014           100% (1. Efile tax calculator 00) if next payment is due January 15,  2015 2. Efile tax calculator       3. Efile tax calculator Estimated tax payments for all previous periods 3. Efile tax calculator       4. Efile tax calculator Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment voucher for your next required payment 4. Efile tax calculator         Note. Efile tax calculator If the payment on line 4 is due January 15, 2015, stop here. Efile tax calculator Otherwise, go to line 5. Efile tax calculator         5. Efile tax calculator Add lines 3 and 4 5. Efile tax calculator   6. Efile tax calculator Subtract line 5 from line 1 and enter the result (but not less than zero) 6. Efile tax calculator   7. Efile tax calculator Each following required payment: If the payment on line 4 is due June 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. Efile tax calculator If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7. Efile tax calculator   Underpayment penalty. Efile tax calculator   The penalty is figured separately for each payment period. Efile tax calculator If you figure your payments using the regular installment method and later refigure your payments because of an increase in income, you may be charged a penalty for underpayment of estimated tax for the period(s) before you changed your payments. Efile tax calculator To see how you may be able to avoid or reduce this penalty, see Annualized Income Installment Method (Schedule AI) in chapter 4. Efile tax calculator Annualized Income Installment Method If you do not receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method. Efile tax calculator The annualized income installment method annualizes your tax at the end of each period based on a reasonable estimate of your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. Efile tax calculator To see whether you can pay less for any period, complete the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). Efile tax calculator You first must complete the 2014 Estimated Tax Worksheet (Worksheet 2-1) through line 16b. Efile tax calculator Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments and complete your payment vouchers. Efile tax calculator Note. Efile tax calculator If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2014 tax return. Efile tax calculator See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information. Efile tax calculator Instructions for the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9) Use Worksheet 2-9 to help you follow these instructions. Efile tax calculator The purpose of this worksheet is to determine your estimated tax liability as your income accumulates throughout the year, rather than dividing your entire year's estimated tax liability by four as if your income was earned equally throughout the year. Efile tax calculator The top of the worksheet shows the dates for each payment period. Efile tax calculator The periods build; that is, each period includes all previous periods. Efile tax calculator After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period. Efile tax calculator Line 1. Efile tax calculator   Enter your AGI for the period. Efile tax calculator This is your gross income for the period, including your share of partnership or S corporation income or loss, minus your adjustments to income for that period. Efile tax calculator See Expected AGI—Line 1 , earlier. Efile tax calculator Self-employment income. Efile tax calculator   If you had self-employment income, first complete Section B of this worksheet. Efile tax calculator Use the amounts on line 43 when figuring your expected AGI to enter in each column of Section A, line 1. Efile tax calculator Line 4. Efile tax calculator   Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 10% (7. Efile tax calculator 5% if either you or your spouse was born before January 2, 1950) or reducing certain miscellaneous deductions by 2% of your AGI. Efile tax calculator Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)). Efile tax calculator Line 6. Efile tax calculator   Multiply line 4 by line 5 and enter the result on line 6 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately. Efile tax calculator In that case, use Worksheet 2-10 to figure the amount to enter on line 6. Efile tax calculator Complete Worksheet 2–10 for each period, as necessary. Efile tax calculator Line 7. Efile tax calculator   If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction. Efile tax calculator Line 10. Efile tax calculator   Multiply $3,950 by your total expected exemptions and enter the result on line 10 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately. Efile tax calculator   In that case, use Worksheet 2-11 to figure the amount to enter on line 10. Efile tax calculator Line 12. Efile tax calculator   Generally, you will use the Tax Rate Schedules to figure the tax on your annualized income. Efile tax calculator However, see below for situations where you must use a different method to compute your estimated tax. Efile tax calculator Tax on child's investment income. Efile tax calculator   You must use a special method to figure tax on the income of the following children who have more than $2,000 of investment income. Efile tax calculator Children under age 18 at the end of 2014. Efile tax calculator The following children if their earned income is not more than half their support. Efile tax calculator Children age 18 at the end of 2014. Efile tax calculator Children who are full-time students over age 18 and under age 24 at the end of 2014. Efile tax calculator See Publication 929. Efile tax calculator Tax on net capital gain. Efile tax calculator   The regular income tax rates for individuals do not apply to a net capital gain. Efile tax calculator Instead, your net capital gain is taxed at a lower maximum rate. Efile tax calculator   The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Efile tax calculator Tax on qualified dividends and capital gains. Efile tax calculator   For 2014, your capital gain and dividends rate will depend on your income. Efile tax calculator Tax on capital gain or qualified dividends. Efile tax calculator If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-12 to figure the amount to enter on line 12. Efile tax calculator Tax if excluding foreign earned income or excluding or deducting foreign housing. Efile tax calculator If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555 or Form 2555-EZ, use Worksheet 2-13 to figure the amount to enter on line 12. Efile tax calculator Line 13. Efile tax calculator   If you file Form 1040, add the tax from Forms 8814, 4972, and 6251 for the period. Efile tax calculator If you file Form 1040A, add the amount from the Alternative Minimum Tax Worksheet found in the instructions. Efile tax calculator Also include any recapture of an education credit for each period. Efile tax calculator You may owe this tax if you claimed an education credit in an earlier year and you received either tax-free educational assistance or a refund of qualifying expenses for the same student after filing your 2013 return. Efile tax calculator   Use the 2013 forms or worksheets to see if you will owe any of the taxes discussed above. Efile tax calculator Figure the tax based on your income and deductions during the period shown in the column headings. Efile tax calculator Multiply this amount by the annualization amounts shown for each column on line 2 of the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). Efile tax calculator Enter the result on line 13 of this worksheet. Efile tax calculator Line 15. Efile tax calculator   Include all the nonrefundable credits you expect to claim because of events that will occur during the period. Efile tax calculator Note. Efile tax calculator When figuring your credits for each period, annualize any item of income or deduction to figure each credit. Efile tax calculator For example, if you need to use your AGI to figure a credit, use line 3 of Worksheet 2-9 to figure the credit for each column. Efile tax calculator Line 18. Efile tax calculator   Add your expected other taxes. Efile tax calculator   Other taxes include the following. Efile tax calculator Additional tax on early distributions from: An IRA or other qualified retirement plan, A tax-sheltered annuity, or A modified endowment contract entered into after June 20, 1988. Efile tax calculator Household employment taxes if: You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax. Efile tax calculator Amounts on Form 1040 written on the line for “other taxes” (line 60 on the 2013 Form 1040). Efile tax calculator But do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security, Medicare, or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible. Efile tax calculator Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2014. Efile tax calculator See Form 5405 for exceptions. Efile tax calculator Additional Medicare Tax. Efile tax calculator A 0. Efile tax calculator 9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status. Efile tax calculator Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $200,000 Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. Efile tax calculator A self-employment loss should not be considered for purposes of this tax. Efile tax calculator RRTA compensation should be separately compared to the threshold. Efile tax calculator Your employer is responsible for withholding the 0. Efile tax calculator 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays you in excess of $200,000 in 2014. Efile tax calculator You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. Efile tax calculator For more information on Additional Medicare Tax, go to IRS. Efile tax calculator gov and enter “Additional Medicare Tax” in the search box. Efile tax calculator Net Investment Income Tax (NIIT). Efile tax calculator The NIIT is 3. Efile tax calculator 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over a specified threshold amount. Efile tax calculator Threshold amounts: Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $250,000 For more information on Net Investment Income Tax, go to IRS. Efile tax calculator gov and enter “Net Investment Income Tax” in the search box. Efile tax calculator Line 20. Efile tax calculator   Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. Efile tax calculator Note. Efile tax calculator When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit. Efile tax calculator Line 29. Efile tax calculator   If line 28 is smaller than line 25 and you are not certain of the estimate of your 2014 tax, you can avoid a penalty by entering the amount from line 25 on line 29. Efile tax calculator Line 31. Efile tax calculator   For each period, include estimated tax payments made and any excess social security and railroad retirement tax. Efile tax calculator   Also include estimated federal income tax withholding. Efile tax calculator One-fourth of your estimated withholding is considered withheld on the due date of each payment period. Efile tax calculator To figure the amount to include on line 31 for each period, multiply your total expected withholding for 2014 by: 25% (. Efile tax calculator 25) for the first period, 50% (. Efile tax calculator 50) for the second period, 75% (. Efile tax calculator 75) for the third period, and 100% (1. Efile tax calculator 00) for the fourth period. Efile tax calculator   However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. Efile tax calculator For each period, include withholding made from the beginning of the period up to and including the payment due date. Efile tax calculator You can make this choice separately for the taxes withheld from your wages and all other withholding. Efile tax calculator For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 16a , earlier. Efile tax calculator Nonresident aliens. Efile tax calculator   If you will file Form 1040NR and you do not receive wages as an employee subject to U. Efile tax calculator S. Efile tax calculator income tax withholding, the instructions for the worksheet are modified as follows. Efile tax calculator Skip column (a). Efile tax calculator On line 1, enter your income for the period that is effectively connected with a U. Efile tax calculator S. Efile tax calculator trade or business. Efile tax calculator On line 21, increase your entry by the amount determined by multiplying your income for the period that is not effectively connected with a U. Efile tax calculator S. Efile tax calculator trade or business by the following. Efile tax calculator 72% for column (b). Efile tax calculator 45% for column (c). Efile tax calculator 30% for column (d). Efile tax calculator However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2. Efile tax calculator 4, 1. Efile tax calculator 5, and 1, respectively. Efile tax calculator On line 26, enter one-half of the amount from line 16c of the Form 1040-ES (NR) 2014 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d) of Worksheet 2-9. Efile tax calculator On lines 24 and 27, skip column (b). Efile tax calculator On line 31, if you do not use the actual withholding method, include one-half of your total expected withholding in column (b) and one-fourth in columns (c) and (d). Efile tax calculator See Publication 519 for more information. Efile tax calculator Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Efile tax calculator You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you will owe with your return under $1,000. Efile tax calculator How To Pay Estimated Tax There are several ways to pay estimated tax. Efile tax calculator Credit an overpayment on your 2013 return to your 2014 estimated tax. Efile tax calculator Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Efile tax calculator Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Efile tax calculator Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Efile tax calculator On Form 1040, or Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Efile tax calculator Take the amount you have credited into account when figuring your estimated tax payments. Efile tax calculator If you timely file your 2013 return, treat the credit as a payment made on April 15, 2014. Efile tax calculator If you are a beneficiary of an estate or trust, and the trustee elects to credit 2014 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2015. Efile tax calculator If you choose to have an overpayment of tax credited to your estimated tax, you cannot have any of that amount refunded to you until you file your tax return for the following year. Efile tax calculator You also cannot use that overpayment in any other way. Efile tax calculator Example. Efile tax calculator When Kathleen finished filling out her 2013 tax return, she saw that she had overpaid her taxes by $750. Efile tax calculator Kathleen knew she would owe additional tax in 2014. Efile tax calculator She credited $600 of the overpayment to her 2014 estimated tax and had the remaining $150 refunded to her. Efile tax calculator In September, she amended her 2013 return by filing Form 1040X, Amended U. Efile tax calculator S. Efile tax calculator Individual Income Tax Return. Efile tax calculator It turned out that she owed $250 more in tax than she had thought. Efile tax calculator This reduced her 2013 overpayment from $750 to $500. Efile tax calculator Because the $750 had already been applied to her 2014 estimated tax or refunded to her, the IRS billed her for the additional $250 she owed, plus penalties and interest. Efile tax calculator Kathleen could not use any of the $600 she had credited to her 2014 estimated tax to pay this bill. Efile tax calculator Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Efile tax calculator You can make your estimated tax payments online when you e-file or at any time during the year. Efile tax calculator You can pay using either of the following electronic payment methods. Efile tax calculator Direct transfer from your bank account. Efile tax calculator Credit or debit card. Efile tax calculator To pay your taxes online or for more information, go to www. Efile tax calculator irs. Efile tax calculator gov/e-pay. Efile tax calculator Pay by Phone Paying by phone is another safe and secure method of paying electronically. Efile tax calculator Use one of the following methods. Efile tax calculator Direct transfer from your bank account. Efile tax calculator Credit or debit card. Efile tax calculator To pay by direct transfer from your bank account, call EFTPS Customer Service at 1-800-555-4477 (English), 1-800-244-4829 (Espanol), or TTY/TDD 1-800-733-4829. Efile tax calculator To pay using a credit or debit card, you can call one of the following service providers. Efile tax calculator There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Efile tax calculator WorldPay 1-888-9-PAY-TAXTM (1-888-972-9829) www. Efile tax calculator payUSAtax. Efile tax calculator com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Efile tax calculator officialpayments. Efile tax calculator com Link2GOV Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Efile tax calculator PAY1040. Efile tax calculator com For the latest details on how to pay by phone, go to www. Efile tax calculator irs. Efile tax calculator gov/e-pay. Efile tax calculator Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Efile tax calculator If you use your own envelopes (and not the window envelope that comes with the 1040-ES package), make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Efile tax calculator Do not use the address shown in the Form 1040 or Form 1040A instructions. Efile tax calculator If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). Efile tax calculator Follow the instructions to make sure you use the vouchers correctly. Efile tax calculator Joint estimated tax payments. Efile tax calculator    If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Efile tax calculator Change of address. Efile tax calculator    You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Efile tax calculator Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Efile tax calculator Worksheets for Chapter 2 Use the following worksheets and tables to figure your correct estimated tax. Efile tax calculator IF you need. Efile tax calculator . Efile tax calculator . Efile tax calculator THEN use. Efile tax calculator . Efile tax calculator . Efile tax calculator 2014 Tax Rate Schedules   the 2014 Estimated Tax Worksheet Worksheet 2-1 to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-2 to estimate your self-employment (SE) tax and your deduction for SE tax—lines 1 and 11 of ES Worksheet (lines 1 and 17 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-3 to estimate your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-4 to reduce your itemized deductions because your estimated AGI is more than $152,525—line 2 of ES Worksheet Worksheet 2-5 to reduce your exemption amount because your estimated AGI is more than $152,525—line 4 of ES Worksheet Worksheet 2-6 to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified dividends—line 6 of ES Worksheet Worksheet 2-7 to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 6 of ES Worksheet Worksheet 2-8 the 2014 Annualized Estimated Tax Worksheet (Annualized ES Worksheet) Worksheet 2-9 to reduce your itemized deductions because your estimated annualized AGI is more than $152,525—line 6 of Annualized ES Worksheet Worksheet 2-10 to reduce your exemption amount because your estimated annualized AGI is more than $152,525—line 10 of Annualized ES Worksheet Worksheet 2-11 to estimate your income tax if line 1 of your Annualized ES Worksheet includes a net capital gain or qualified dividends—line 12 of Annualized ES Worksheet Worksheet 2-12 to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 12 of Annualized ES Worksheet Worksheet 2-13 to refigure (amend) your estimated tax during the year Worksheet 2-14 2014 Tax Rate Schedules Do not use these Tax Rate Schedules to figure your 2013 taxes. Efile tax calculator Use them only to figure your 2014 estimated taxes. Efile tax calculator Schedule X—Use if your 2014 filing status is  Single Schedule Z—Use if your 2014 filing status is Head of household If line 5 is: The tax is:     If line 5 is: The tax is:     Over— But not  over—         of the  amount  over— Over— But not  over—         of the  amount  over— $0 $9,075     10. Efile tax calculator 0%   $0 $0 $12,950     10. Efile tax calculator 0%   $0 9,075 36,900 $907. Efile tax calculator 50 + 15. Efile tax calculator 0%   9,075 12,950 49,400 $1,295. Efile tax calculator 00 + 15. Efile tax calculator 0%   12,950 36,900 89,350 5,081. Efile tax calculator 25 + 25. Efile tax calculator 0%   36,900 49,400 127,550 6,762. Efile tax calculator 50 + 25. Efile tax calculator 0%   49,400 89,350 186,350 18,193. Efile tax calculator 75 + 28. Efile tax calculator 0%   89,350 127,550 206,600 26,300. Efile tax calculator 00 + 28. Efile tax calculator 0%   127,550 186,350 405,100 45,353. Efile tax calculator 75 + 33. Efile tax calculator 0%   186,350 206,600 405,100 48,434. Efile tax calculator 00 + 33. Efile tax calculator 0%   206,600 405,100 406,750 117,541. Efile tax calculator 25 + 35. Efile tax calculator 0%   405,100 405,100 432,200 113,939. Efile tax calculator 00 + 35. Efile tax calculator 0%   405,100 406,750 - - - - - - 118,118. Efile tax calculator 75 + 39. Efile tax calculator 6%   406,750 432,200 - - - - - - 123,424. Efile tax calculator 00 + 39. Efile tax calculator 6%   432,200 Schedule Y-1—Use if your 2014 filing status is Married filing jointly or Qualifying widow(er) Schedule Y-2—Use if your 2014 filing status is  Married filing separately If line 5 is: The tax is:     If line 5 is: The tax is:     Over— But not  over—         of the  amount  over— Over— But not  over—         of the  amount  over— $0 $18,150     10. Efile tax calculator 0%   $0 $0 $9,075     10. Efile tax calculator 0%   $0 18,150 73,800 $1,815. Efile tax calculator 00 + 15. Efile tax calculator 0%   18,150 9,075 36,900 $907. Efile tax calculator 50 + 15. Efile tax calculator 0%   9,075 73,800 148,850 10,162. Efile tax calculator 50 + 25. Efile tax calculator 0%   73,800 36,900 74,425 5,081. Efile tax calculator 25 + 25. Efile tax calculator 0%   36,900 148,850 226,850 28,925. Efile tax calculator 00 + 28. Efile tax calculator 0%   148,850 74,425 113,425 14,462. Efile tax calculator 50 + 28. Efile tax calculator 0%   74,425 226,850 405,100 50,765. Efile tax calculator 00 + 33. Efile tax calculator 0%   226,850 113,425 202,550 25,382. Efile tax calculator 50 + 33. Efile tax calculator 0%   113,425 405,100 457,600 109,587. Efile tax calculator 50 + 35. Efile tax calculator 0%   405,100 202,550 228,800 54,793. Efile tax calculator 75 + 35. Efile tax calculator 0%   202,550 457,600 - - - - - - 127,962. Efile tax calculator 50 + 39. Efile tax calculator 6%   457,600 228,800 - - - - - - 63,981. Efile tax calculator 25 + 39. Efile tax calculator 6%   228,800                             Worksheet 2-1. Efile tax calculator 2014 Estimated Tax Worksheet When this worksheet refers you to instructions, you can find those instructions in the Instructions for 2014 Form 1040-ES. Efile tax calculator 1 Adjusted gross income you expect in 2014 (see instructions) 1     2 If you plan to itemize deductions, enter the estimated total of your itemized deductions. Efile tax calculator  Caution: If line 1 is over $152,525, your deduction may be reduced. Efile tax calculator See Worksheet 2-5. Efile tax calculator If you do not plan to itemize deductions, enter your standard deduction. Efile tax calculator 2     3 Subtract line 2 from line 1 3     4 Exemptions. Efile tax calculator Multiply $3,950 by the number of personal exemptions. Efile tax calculator  Caution: If line 1 is over $152,525, the amount of your personal exemptions may be limited. Efile tax calculator See Worksheet 2-6. Efile tax calculator 4     5 Subtract line 4 from line 3 5     6 Tax. Efile tax calculator Figure your tax on the amount on line 5 by using the 2014 Tax Rate Schedules Caution: If you will have qualified dividends or a net capital gain, or expect to exclude or deduct foreign earned income or housing, see Worksheets 2-7 and 2-8 to figure the tax 6     7 Alternative minimum tax from Form 6251 or included on Form 1040A, line 28 7     8 Add lines 6 and 7. Efile tax calculator Add to this amount any other taxes you expect to include in the total on Form 1040, line 44 8     9 Credits (see instructions). Efile tax calculator Do not include any income tax withholding on this line 9     10 Subtract line 9 from line 8. Efile tax calculator If zero or less, enter -0- 10     11 Self-employment tax (see instructions) 11     12 Other taxes including, if applicable, Additional Medicare Tax and/or NIIT (see instructions) 12     13a Add lines 10 through 12 13a     b Earned income credit, additional child tax credit, fuel tax credit, and refundable American opportunity credit 13b     c Total 2014 estimated tax. Efile tax calculator Subtract line 13b from line 13a. Efile tax calculator If zero or less, enter -0- ▶ 13c     14a Multiply line 13c by 90% (662/3% for farmers and fishermen) 14a           b Required annual payment based on prior year's tax (see instructions) 14b           c Required annual payment to avoid a penalty. Efile tax calculator Enter the smaller of line 14a or 14b ▶ 14c        Caution: Generally, if you do not prepay (through income tax withholding and estimated tax payments) at least the amount on line 14c, you may owe a penalty for not paying enough estimated tax. Efile tax calculator To avoid a penalty, make sure your estimate on line 13c is as accurate as possible. Efile tax calculator Even if you pay the required annual payment, you may still owe tax when you file your return. Efile tax calculator If you prefer, you can pay the amount shown on line 13c. Efile tax calculator                         15 Income tax withheld and estimated to be withheld during 2014 (including income tax withholding on pensions, annuities, certain deferred income, etc. Efile tax calculator ) 15     16a Subtract line 15 from line 14c 16a             Is the result zero or less? □ Yes. Efile tax calculator Stop here. Efile tax calculator You are not required to make estimated tax payments. Efile tax calculator  □ No. Efile tax calculator Go to line 16b. Efile tax calculator             b Subtract line 15 from line 13c 16b             Is the result less than $1,000? □ Yes. Efile tax calculator Stop here. Efile tax calculator You are not required to make estimated tax payments. Efile tax calculator  □ No. Efile tax calculator Go to line 17 to figure your required payment. Efile tax calculator                         17 If the first payment you are required to make is due April 15, 2014, enter ¼ of line 16a (minus any 2013 overpayment that you are applying to this installment) here, and on your estimated tax payment voucher(s) if you are paying by check or money order 17     Worksheet 2-2. Efile tax calculator 2014 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits Note. Efile tax calculator If you are using this worksheet to estimate your taxable social security or railroad retirement benefits for Worksheet 2-9, 2014 Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount shown on Worksheet 2-9, line 2, for the same period before entering it on line 1 below. Efile tax calculator     1. Efile tax calculator Enter your expected social security and railroad retirement benefits 1. Efile tax calculator   2. Efile tax calculator Enter one-half of line 1 2. Efile tax calculator   3. Efile tax calculator Enter your expected total income. Efile tax calculator Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions 3. Efile tax calculator   4. Efile tax calculator Enter your expected nontaxable interest income 4. Efile tax calculator   5. Efile tax calculator Enter (as a positive amount) the total of any expected exclusions or deductions for: U. Efile tax calculator S. Efile tax calculator savings bond interest used for higher education expenses (Form 8815) Employer-provided adoption benefits (Form 8839) Foreign earned income or housing (Form 2555 or 2555-EZ) Income by bona fide residents of American Samoa (Form 4563) or Puerto Rico 5. Efile tax calculator   6. Efile tax calculator Add lines 2, 3, 4, and 5 6. Efile tax calculator   7. Efile tax calculator Enter your expected adjustments to income. Efile tax calculator Do not include any student loan interest deduction 7. Efile tax calculator   8. Efile tax calculator Subtract line 7 from line 6. Efile tax calculator If zero or less, stop here. Efile tax calculator  Note. Efile tax calculator Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 8. Efile tax calculator   9. Efile tax calculator Enter $25,000 ($32,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year) 9. Efile tax calculator   10. Efile tax calculator Subtract line 9 from line 8. Efile tax calculator If zero or less, stop here. Efile tax calculator  Note. Efile tax calculator Do not include any social security or railroad retirement benefits in the amount on line 1 of your Worksheet 2-1 (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 10. Efile tax calculator   11. Efile tax calculator Enter $9,000 ($12,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year) 11. Efile tax calculator   12. Efile tax calculator Subtract line 11 from line 10. Efile tax calculator If zero or less, enter -0- 12. Efile tax calculator   13. Efile tax calculator Enter the smaller of line 10 or line 11 13. Efile tax calculator   14. Efile tax calculator Enter one-half of line 13 14. Efile tax calculator   15
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Efile tax calculator Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. Efile tax calculator Proc. Efile tax calculator 2009-37 Table of Contents SECTION 1. Efile tax calculator PURPOSE SECTION 2. Efile tax calculator BACKGROUND SECTION 3. Efile tax calculator SCOPE SECTION 4. Efile tax calculator ELECTION PROCEDURES SECTION 5. Efile tax calculator REQUIRED INFORMATION STATEMENT SECTION 6. Efile tax calculator EFFECTIVE DATE SECTION 7. Efile tax calculator TRANSITION RULE SECTION 8. Efile tax calculator PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. Efile tax calculator PURPOSE . Efile tax calculator 01 This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (“COD income”) under § 108(i) of the Internal Revenue Code. Efile tax calculator . Efile tax calculator 02 This revenue procedure also requires taxpayers making the § 108(i) election to provide additional information on returns beginning with the taxable year following the taxable year for which the taxpayer makes the election. Efile tax calculator This revenue procedure describes the time and manner of providing this additional information. Efile tax calculator . Efile tax calculator 03 The Internal Revenue Service and Treasury Department intend to issue additional guidance under § 108(i) that may include regulations addressing matters in this revenue procedure. Efile tax calculator Taxpayers should be aware that these regulations may be retroactive. Efile tax calculator See § 7805(b)(2). Efile tax calculator This revenue procedure may be modified to provide procedures consistent with additional guidance. Efile tax calculator SECTION 2. Efile tax calculator BACKGROUND . Efile tax calculator 01 Section 108(i), Generally. Efile tax calculator Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. Efile tax calculator L. Efile tax calculator No. Efile tax calculator 111-5, 123 Stat. Efile tax calculator 338. Efile tax calculator In general, § 108(i) provides that, at the election of a taxpayer, COD income realized in connection with a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument is includible in gross income ratably over a 5-taxable-year inclusion period, beginning with the taxpayer’s fourth or fifth taxable year following the taxable year of the reacquisition. Efile tax calculator Generally, if a taxpayer makes a § 108(i) election and reacquires (or is treated as reacquiring) the applicable debt instrument generating the COD income for a new debt instrument with original issue discount (“OID”), then interest deductions for this OID also are deferred, as provided in § 108(i)(2). Efile tax calculator The OID deferral rule, however, does not apply if the amount of OID is less than a de minimis amount, as determined under § 1273(a)(3) and § 1. Efile tax calculator 1273-1(d) of the Income Tax Regulations. Efile tax calculator The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. Efile tax calculator For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). Efile tax calculator A taxpayer must take into account any item of income or deduction deferred under § 108(i), and not previously taken into account, in the taxable year in which certain events occur (such as the liquidation of the taxpayer and upon other events specified in administrative guidance). Efile tax calculator See § 108(i)(5)(D). Efile tax calculator The rule regarding acceleration of deferred COD income and OID deductions also applies in the case of certain dispositions by persons holding ownership interests in pass-through entities. Efile tax calculator Section 108(i)(5)(D)(ii). Efile tax calculator For purposes of § 108(i), regulated investment companies (as defined in § 851(a)) and real estate investment trusts (as defined in § 856(a)) are not pass-through entities. Efile tax calculator . Efile tax calculator 02 Applicable Debt Instrument. Efile tax calculator Section 108(i)(3)(A) defines the term “applicable debt instrument” to mean any debt instrument issued by a C corporation or by any other person in connection with the conduct of a trade or business by that person. Efile tax calculator The term “debt instrument” means any bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness within the meaning of § 1275(a)(1). Efile tax calculator Section 108(i)(3)(B). Efile tax calculator For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. Efile tax calculator 1502-13(g)(2)(ii)), an applicable debt instrument includes only an instrument for which COD income is realized upon the instrument’s deemed satisfaction under § 1. Efile tax calculator 1502-13(g)(5). Efile tax calculator . Efile tax calculator 03 Reacquisition. Efile tax calculator Section 108(i)(4)(A) defines the term “reacquisition” to mean, with respect to any applicable debt instrument, any acquisition of the debt instrument by the debtor that issued (or is otherwise the obligor under) the debt instrument, or a person related to the debtor under § 108(e)(4). Efile tax calculator The term “acquisition” includes an acquisition of the debt instrument for cash or other property, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, the contribution of the debt instrument to capital, and the complete forgiveness of the indebtedness by the holder of the debt instrument. Efile tax calculator See § 108(i)(4)(B). Efile tax calculator The term “acquisition” also includes an indirect acquisition within the meaning of § 1. Efile tax calculator 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). Efile tax calculator For example, if a corporation acquires debt of a partnership that the partnership issued in connection with its trade or business, and the partnership and corporation become related within six months of the corporation’s acquisition of the debt, the indirect acquisition is an acquisition for which an election under § 108(i) may be made. Efile tax calculator . Efile tax calculator 04 General Requirements for the Section 108(i) Election. Efile tax calculator Section 108(i)(5)(B) provides, in general, that a taxpayer makes the § 108(i) election by including a statement that clearly identifies the applicable debt instrument with the return of tax imposed for the taxable year in which the reacquisition of the instrument occurs. Efile tax calculator (For purposes of this revenue procedure, a return of tax or income tax return includes an information return, and a taxpayer includes a person that files an information return. Efile tax calculator ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. Efile tax calculator Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. Efile tax calculator . Efile tax calculator 05 Section 108(i) Elections Made by Pass-through Entities. Efile tax calculator In the case of COD income realized by a pass-through entity from the reacquisition of an applicable debt instrument, the pass-through entity makes the § 108(i) election. Efile tax calculator Section 108(i)(5)(B)(iii). Efile tax calculator . Efile tax calculator 06 Additional Information on Subsequent Years’ Returns. Efile tax calculator Section 108(i)(7) authorizes the Service to issue guidance necessary or appropriate for applying § 108(i), including requiring reporting the election and other information on returns of tax for subsequent taxable years. Efile tax calculator . Efile tax calculator 07 Exclusivity. Efile tax calculator Section 108(i)(5)(C) provides that if a taxpayer elects to apply § 108(i) to an applicable debt instrument, § 108(a)(1)(A), (B), (C), and (D) do not apply to COD income deferred under § 108(i). Efile tax calculator . Efile tax calculator 08 Allocation of Deferred COD Income on Partnership Indebtedness. Efile tax calculator Section 4. Efile tax calculator 04(3) of this revenue procedure describes how a partnership may elect under § 108(i) to defer a portion of the COD income realized from the reacquisition of an applicable debt instrument. Efile tax calculator If a partnership elects to defer all or any portion of COD income realized from the reacquisition of an applicable debt instrument, all of the COD income with respect to that debt instrument, without regard to § 108(i), is allocated to the partners in the partnership immediately before the reacquisition in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Efile tax calculator 704-1(b)(2)(iii). Efile tax calculator Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). Efile tax calculator The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). Efile tax calculator The partner’s COD income amount that is not deferred and is included in the partner’s distributive share of partnership income for the taxable year of the partnership in which the reacquisition occurs is the partner’s included amount (“included amount”). Efile tax calculator . Efile tax calculator 09 Partner’s Deferred § 752 Amount. Efile tax calculator A decrease in a partner’s share of a partnership liability resulting from the reacquisition of an applicable debt instrument that is not treated as a current distribution of money to the partner under § 752 by reason of § 108(i)(6) is the partner’s deferred § 752 amount (“deferred § 752 amount”). Efile tax calculator A partner’s deferred § 752 amount may not exceed the lesser of (i) the partner’s deferred amount or (ii) gain that the partner would recognize in the year of reacquisition under § 731 as a result of the reacquisition absent § 108(i)(6). Efile tax calculator To determine the amount of gain the partner would recognize under clause (ii) of the preceding sentence, the amount of any deemed distribution of money under § 752(b) resulting from the decrease in the partner’s share of a reacquired applicable debt instrument that is treated as an advance or draw of money under § 1. Efile tax calculator 731-1(a)(1)(ii) is determined as if no COD income resulting from the reacquisition of the applicable debt instrument is deferred under § 108(i). Efile tax calculator See Rev. Efile tax calculator Rul. Efile tax calculator 92-97, 1992-2 C. Efile tax calculator B. Efile tax calculator 124, and Rev. Efile tax calculator Rul. Efile tax calculator 94-4, 1994-1 C. Efile tax calculator B. Efile tax calculator 195. Efile tax calculator A partner’s deferred § 752 amount is treated as a distribution of money to the partner under § 752 at the same time, and to the extent remaining in the same amount, as the partner recognizes the COD income deferred under § 108(i). Efile tax calculator . Efile tax calculator 10 Allocation of Deferred COD Income on S Corporation Indebtedness. Efile tax calculator For purposes of § 108(i), an S corporation’s COD income deferred under § 108(i) is shared pro rata only among those shareholders that are shareholders of the S corporation immediately before the reacquisition transaction. Efile tax calculator . Efile tax calculator 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. Efile tax calculator (1) In general. Efile tax calculator The Service and Treasury Department intend to issue regulations regarding the computation of a corporation’s earnings and profits with respect to COD income and OID deductions that are deferred under § 108(i). Efile tax calculator These regulations generally will provide that deferred COD income increases earnings and profits in the taxable year that it is realized and not in the taxable year or years that the deferred COD income is includible in gross income. Efile tax calculator OID deductions deferred under § 108(i) generally will decrease earnings and profits in the taxable year or years in which the deduction would be allowed without regard to § 108(i). Efile tax calculator COD income and OID deductions that are deferred increase or decrease adjusted current earnings under § 56(g)(4) in the taxable year or years that the income or deduction is includible or deductible in determining taxable income. Efile tax calculator See § 1. Efile tax calculator 56(g)-1(c)(1). Efile tax calculator (2) Exceptions for certain special status corporations. Efile tax calculator The Service and Treasury Department intend to issue regulations providing that in the case of regulated investment companies and real estate investment trusts, COD income deferred under § 108(i) generally increases earnings and profits in the taxable year or years in which the deferred COD income is includible in gross income and not in the year that the deferred COD income is realized. Efile tax calculator OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. Efile tax calculator . Efile tax calculator 12 Extension of Time to Make Election. Efile tax calculator Under § 301. Efile tax calculator 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. Efile tax calculator An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. Efile tax calculator Section 301. Efile tax calculator 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. Efile tax calculator SECTION 3. Efile tax calculator SCOPE This revenue procedure applies to taxpayers that realize COD income from a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in § 108(i). Efile tax calculator SECTION 4. Efile tax calculator ELECTION PROCEDURES . Efile tax calculator 01 In General. Efile tax calculator (1) A taxpayer within the scope of this revenue procedure makes the § 108(i) election by— (a) Attaching a statement meeting the requirements of section 4. Efile tax calculator 05 of this revenue procedure to the taxpayer’s timely filed (including extensions) original federal income tax return for the taxable year in which the reacquisition of the applicable debt instrument occurs, and (b) If applicable, satisfying the additional requirements of section 4. Efile tax calculator 07, 4. Efile tax calculator 08, 4. Efile tax calculator 09, or 4. Efile tax calculator 10 of this revenue procedure. Efile tax calculator (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. Efile tax calculator 01(1)(a) of this revenue procedure for making the § 108(i) election. Efile tax calculator The rules that apply to an automatic extension under § 301. Efile tax calculator 9100-2(a) apply to this automatic extension. Efile tax calculator . Efile tax calculator 02 Section 108(i) Elections Made by Members of Consolidated Groups. Efile tax calculator The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. Efile tax calculator See § 1. Efile tax calculator 1502-77(a). Efile tax calculator . Efile tax calculator 03 Aggregation Rule. Efile tax calculator A taxpayer within the scope of this revenue procedure may treat two or more applicable debt instruments that are part of the same issue and that are reacquired during the same taxable year as one applicable debt instrument for purposes of this revenue procedure. Efile tax calculator A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. Efile tax calculator 03 if the owners and their ownership interests in the pass-through entity immediately prior to the reacquisition of each applicable debt instrument are not identical. Efile tax calculator . Efile tax calculator 04 Partial Elections. Efile tax calculator (1) A taxpayer within the scope of this revenue procedure may make an election for any portion of COD income realized from the reacquisition of any applicable debt instrument. Efile tax calculator Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument, the taxpayer may elect under § 108(i)(1) to defer only $40 of the $100 of COD income. Efile tax calculator The taxpayer may exclude from income the portion of COD income that the taxpayer does not elect to defer under § 108(i) ($60 in this example) under § 108(a)(1)(A), (B), (C), or (D), if applicable. Efile tax calculator (2) A taxpayer is not required to make an election for the same portion of COD income arising from each applicable debt instrument that it reacquires, but may make an election for different portions of COD income arising from different applicable debt instruments (whether or not part of the same issue). Efile tax calculator Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument (Instrument A) and $100 of COD income from the reacquisition of a different applicable debt instrument (Instrument B), the taxpayer may elect to defer all or a portion of the COD income associated with Instrument A and none or a different portion of the COD income associated with Instrument B. Efile tax calculator (3) A partnership that elects to defer less than all of the COD income realized from the reacquisition of an applicable debt instrument may determine, in any manner, the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Efile tax calculator Thus, for example, one partner’s deferred amount may be zero while another partner’s deferred amount may equal that partner’s COD income amount (or any portion thereof). Efile tax calculator A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. Efile tax calculator The provisions of this section 4. Efile tax calculator 04(3) apply for purposes of § 108(i) only and are not intended as an interpretation of or a change to existing law under § 704. Efile tax calculator . Efile tax calculator 05 Contents of Election Statement. Efile tax calculator A statement meets the requirements of this section 4. Efile tax calculator 05 if the statement— (1) Label. Efile tax calculator States “Section 108(i) Election” across the top. Efile tax calculator (2) Required information. Efile tax calculator Provides, for each applicable debt instrument the reacquisition of which generates COD income that the taxpayer is electing to defer under § 108(i)— (a) The name and taxpayer identification numbers, if any, of the issuer or issuers of the applicable debt instrument; (b) A general description of the applicable debt instrument (including the issue and maturity dates) and, in the case of any person other than a C corporation, a general description of the person’s trade or business to which the applicable debt instrument is connected; (c) A general description of the reacquisition transaction or transactions generating the COD income (including the date(s) of the transaction(s)); (d) The total amount of COD income for the applicable debt instrument that results from the reacquisition (in the case of a partnership, the aggregate of the partners’ COD income amounts) and a general description of the manner in which this amount is calculated; (e) The amount of COD income for the applicable debt instrument that the taxpayer is electing to defer under § 108(i); (f) In the case of a partnership, a list of partners that have a deferred amount, their identifying information and each partner’s deferred amount; and in the case of an S corporation, a list of shareholders with COD income deferred under § 108(i), their identifying information and each shareholder’s share of the S corporation’s deferred COD income; and (g) In cases in which a new debt instrument is issued or deemed issued in exchange for the applicable debt instrument (including exchanges under § 108(e)(4), § 108(i)(2)(B), and § 1. Efile tax calculator 1001-3), the issuer’s name, the issuer’s taxpayer identification number, if any, a general description of the new debt instrument and whether the new debt instrument has OID, and if the new debt instrument has OID, a schedule of the OID that the issuer expects to accrue each taxable year on the instrument and the amount of OID that the issuer expects to defer under § 108(i)(2) each taxable year. Efile tax calculator . Efile tax calculator 06 Supplemental information. Efile tax calculator The statement described in section 4. Efile tax calculator 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. Efile tax calculator 05(2)(e) of this revenue procedure that the taxpayer elects to defer under § 108(i) in the event the Service subsequently concludes that the taxpayer understated the amount of COD income described in section 4. Efile tax calculator 05(2)(d) of this revenue procedure. Efile tax calculator This additional amount of COD income the taxpayer elects to defer may be described as the entire additional COD income, or as a percentage of any additional COD income. Efile tax calculator If the taxpayer is a partnership, the partnership must specify each partner’s share of the partnership’s additional COD income that would be deferred (the partner’s additional deferred amount), which the partnership may describe for each partner as the partner’s entire share of the partnership’s additional COD income or as a percentage of the partner’s share of the partnership’s additional COD income. Efile tax calculator If the taxpayer is an S corporation, the S corporation must specify each shareholder’s share of the S corporation’s additional COD income that would be deferred, which the S corporation may describe for each shareholder as the shareholder’s entire share of the S corporation’s additional COD income or as a percentage of the shareholder’s share of the S corporation’s additional COD income. Efile tax calculator In the case of partnerships and S corporations, the additional COD income and the portion of additional COD income that would be deferred are allocated or determined as provided in sections 2. Efile tax calculator 08, 2. Efile tax calculator 10 and, if applicable, 4. Efile tax calculator 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. Efile tax calculator . Efile tax calculator 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. Efile tax calculator The rules of this section 4. Efile tax calculator 07 apply to partnerships other than partnerships described in section 4. Efile tax calculator 10 of this revenue procedure. Efile tax calculator (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). Efile tax calculator For the taxable year in which the § 108(i) election is made, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B), Partner’s Share of Income, Deductions, Credits, etc. Efile tax calculator , in the manner specified in the instructions to the forms, for each partner § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Efile tax calculator Partnerships reporting § 108(i) information on the 2008 Schedule K-1 (Form 1065 or Form 1065-B) must report for each partner on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made: (a) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 11 (“other income”) using code F for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (b) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii) or § 108(i)(5)(D)(i) or (ii), in box 13 (“other deductions”) using code W for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (c) The partner’s deferred amount that has not been included in income in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (d) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (e) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); and (f) The partner’s deferred § 752 amount remaining as of the end of the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B). Efile tax calculator (2) Election information statement provided to partners. Efile tax calculator The partnership must attach to the Schedule K-1 (Form 1065 or Form 1065-B) provided to each partner for the taxable year in which the § 108(i) election is made a statement satisfying the requirements of this section 4. Efile tax calculator 07(2). Efile tax calculator The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Efile tax calculator A statement meets the requirements of this section 4. Efile tax calculator 07(2) if the statement— (a) Label. Efile tax calculator States “Section 108(i) Election Information Statement for Partners” across the top. Efile tax calculator (b) Required information. Efile tax calculator Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (i) The partner’s COD income amount, the partner’s deferred amount, and the partner’s included amount; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (v) The partner’s share of each liability of the partnership described in section 4. Efile tax calculator 05(2)(g) of this revenue procedure; (vi) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument; (vii) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument that is treated as a distribution of money to the partner under § 752 in the current taxable year; (viii) The partner’s deferred § 752 amount as described in section 2. Efile tax calculator 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. Efile tax calculator 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. Efile tax calculator (c) If a partner fails to provide the written statement required by section 4. Efile tax calculator 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. Efile tax calculator 07(2)(b)(vii) and (viii) of this revenue procedure cannot be calculated because the partner did not provide the information necessary to report these amounts. Efile tax calculator (3) Partner reporting requirements. Efile tax calculator The partnership must make reasonable efforts prior to making a § 108(i) election to secure from each partner with a deferred amount for which it does not have the information necessary to compute the partner’s basis in its partnership interest (and its deferred § 752 amount as described in section 2. Efile tax calculator 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. Efile tax calculator Each partner with a deferred amount must provide this written statement to the partnership within 30 days of the date of request by the partnership. Efile tax calculator A partner’s failure to comply with this reporting requirement does not invalidate the partnership’s election under § 108(i) for an applicable debt instrument only if the partnership makes reasonable efforts before making the § 108(i) election to obtain the written statement from the partner and otherwise complies with the requirements of section 4 of this revenue procedure. Efile tax calculator If a partner provides its written statement under this section 4. Efile tax calculator 07(3) after the partnership has provided to the partner the Section 108(i) Election Information Statement for Partners, the partnership must provide to the partner a revised Section 108(i) Election Information Statement for Partners reporting the information required under section 4. Efile tax calculator 07(2)(b)(vii) and (viii) of this revenue procedure and report the partner’s deferred § 752 amount on the partner’s Schedule K-1 (Form 1065 or Form 1065-B) in subsequent taxable years. Efile tax calculator . Efile tax calculator 08 Additional Requirements for an S Corporation Making a § 108(i) Election. Efile tax calculator (1) Information filing on Schedule K-1 (Form 1120S). Efile tax calculator For the taxable year in which the § 108(i) election is made, the S corporation must report on the Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. Efile tax calculator , in the manner specified in the instructions to the forms, for each shareholder § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Efile tax calculator S corporations reporting § 108(i) information on the 2008 Schedule K-1 (Form 1120S) must report for each shareholder, on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made, the shareholder’s share of the S corporation’s: (a) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 10 (“other income”) using code E; (b) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii), or § 108(i)(5)(D)(i) or (ii), in box 12 (“other deductions”) using code S; (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years, in box 17 (“other information”) using code T; and (d) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 17 (“other information”) using code T. Efile tax calculator (2) Election information statement provided to shareholders. Efile tax calculator The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for the taxable year in which the § 108(i) election is made, a statement satisfying the requirements of this section 4. Efile tax calculator 08(2). Efile tax calculator The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Efile tax calculator A statement meets the requirements of this section 4. Efile tax calculator 08(2) if the statement— (a) Label. Efile tax calculator States “Section 108(i) Election Information Statement for Shareholders” across the top. Efile tax calculator (b) Required information. Efile tax calculator Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income that the S corporation elects to defer under § 108(i); (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (v) Additional COD income that would be deferred as described in section 4. Efile tax calculator 06 of this revenue procedure. Efile tax calculator . Efile tax calculator 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. Efile tax calculator The controlling domestic shareholder(s) (or common parent of the controlling domestic shareholder(s), if applicable) of a controlled foreign corporation or a noncontrolled § 902 corporation not otherwise required to file a return of tax may make the § 108(i) election on behalf of the foreign corporation by satisfying the requirements of § 1. Efile tax calculator 964-1(c)(3). Efile tax calculator Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. Efile tax calculator 05 of this revenue procedure and, if applicable, section 4. Efile tax calculator 06 of this revenue procedure, to its federal income tax return for the taxable year ending within or with the taxable year of the foreign corporation for which the § 108(i) election is made. Efile tax calculator . Efile tax calculator 10 Section 108(i) Elections Made By Certain Foreign Partnerships. Efile tax calculator The rules of this section 4. Efile tax calculator 10 apply to a foreign partnership making a § 108(i) election that is not otherwise required to file a federal partnership return (“nonfiling foreign partnership”). Efile tax calculator See § 1. Efile tax calculator 6031(a)-1(b). Efile tax calculator (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. Efile tax calculator 05 of this revenue procedure and, if applicable, section 4. Efile tax calculator 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. Efile tax calculator 6031(a)-1(b)(5) it files with the Service. Efile tax calculator In addition, a nonfiling foreign partnership must include in the information required in section 4. Efile tax calculator 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. Efile tax calculator S. Efile tax calculator persons (as defined in § 7701(a)(30)) and controlled foreign corporation(s) that are partners with deferred amounts in the nonfiling foreign partnership (“affected partners”). Efile tax calculator (2) The nonfiling foreign partnership must make the election, in accordance with § 1. Efile tax calculator 6031(a)-1(b)(5), by the date provided in section 4. Efile tax calculator 01(1)(a) of this revenue procedure, as if it had a filing obligation for the taxable year in which the reacquisition of the applicable debt instrument occurs. Efile tax calculator (3) For each affected partner, the partnership must file with the Service a Schedule K-1 (Form 1065) and report on the Schedule K-1 (Form 1065) for the affected partner as provided in section 4. Efile tax calculator 07(1) of this revenue procedure. Efile tax calculator Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Efile tax calculator The partnership must provide a copy of the respective Schedule K-1 (Form 1065) to each affected partner and must also attach to the Schedule K-1 (Form 1065) provided to each affected partner a statement satisfying the requirements of section 4. Efile tax calculator 07(2) of this revenue procedure by the date provided in section 4. Efile tax calculator 01(1)(a) of this revenue procedure. Efile tax calculator The partnership should not attach any statement described in section 4. Efile tax calculator 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. Efile tax calculator However, the partnership must retain the statements provided to the affected partners, and each affected partner must retain that partner’s statement, in their respective books and records. Efile tax calculator (4) The partnership and each affected partner must satisfy the requirements of section 4. Efile tax calculator 07(3) of this revenue procedure. Efile tax calculator . Efile tax calculator 11 Protective § 108(i) Election. Efile tax calculator (1) In general. Efile tax calculator A taxpayer may make a protective election under § 108(i) for an applicable debt instrument if the taxpayer concludes that a particular transaction does not result in the realization of COD income, reports the transaction on its federal income tax return in a manner consistent with the taxpayer’s conclusion, and would be within the scope of this revenue procedure if the taxpayer’s conclusion were incorrect. Efile tax calculator If the Service at any time determines the taxpayer’s conclusion that the particular transaction does not result in the realization of COD income is incorrect, the taxpayer’s protective election is treated as a valid, irrevocable election under § 108(i). Efile tax calculator Thus, if a taxpayer makes a protective election, the Service subsequently may require the taxpayer to report COD income deferred pursuant to the valid and irrevocable protective election even if the statute of limitations has expired for the year in which the COD income was realized and the protective election was made. Efile tax calculator A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. Efile tax calculator 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. Efile tax calculator 01(1)(a) of this revenue procedure. Efile tax calculator The taxpayer also must attach the election to its federal income tax return in each of the 8 or 9 taxable years, as applicable, following the taxable year of the election. Efile tax calculator A statement meets the requirements of this section 4. Efile tax calculator 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. Efile tax calculator 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. Efile tax calculator 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. Efile tax calculator 06 of this revenue procedure. Efile tax calculator (2) Statements provided to shareholders and partners. Efile tax calculator (a) For each applicable debt instrument, a partnership or S corporation that makes a protective election must attach to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) it provides each of its partners or shareholders, as the case may be, for the taxable year in which the protective election is made a statement containing the information described in section 4. Efile tax calculator 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the partner’s or shareholder’s share of the additional COD income that would be deferred as described in section 4. Efile tax calculator 11(1)(d) of this revenue procedure. Efile tax calculator (b) The partnership or S corporation should not attach the statements described in this section 4. Efile tax calculator 11(2) to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Efile tax calculator . Efile tax calculator 12 Election-Year Reporting by Tiered Pass-Through Entities. Efile tax calculator (1) A partnership required to file a U. Efile tax calculator S. Efile tax calculator partnership return other than under § 1. Efile tax calculator 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting its share of any items listed in section 4. Efile tax calculator 07(1) of this revenue procedure, must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Efile tax calculator 07(1)(a) through (d) of this revenue procedure). Efile tax calculator (2) If a partnership described in section 4. Efile tax calculator 12(1) of this revenue procedure receives a statement described in sections 4. Efile tax calculator 07(2) or 4. Efile tax calculator 10(3) of this revenue procedure or this section 4. Efile tax calculator 12(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership, including the information described in section 4. Efile tax calculator 07(2)(b)(x) of this revenue procedure. Efile tax calculator If an S corporation receives a statement described in sections 4. Efile tax calculator 07(2) or 4. Efile tax calculator 10(3) of this revenue procedure or this section 4. Efile tax calculator 12(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 4. Efile tax calculator 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. Efile tax calculator The partnership or S corporation must attach this statement or statements to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) that it provides to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Efile tax calculator The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Efile tax calculator (3) A partnership that receives a statement described in this section 4 identifying its COD income amount with respect to an applicable debt instrument must allocate its COD income amount, without regard to § 108(i), to the partners in the partnership immediately before the reacquisition transaction in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Efile tax calculator 704-1(b)(2)(iii). Efile tax calculator The partnership may determine in any manner the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Efile tax calculator No partner’s deferred amount with respect to an applicable debt instrument may exceed its COD income amount with respect to the applicable debt instrument, and the aggregate of deferred amounts of its partners with respect to an applicable debt instrument must equal the partnership’s deferred amount with respect to the applicable debt instrument. Efile tax calculator The partnership allocates amounts described in section 4. Efile tax calculator 06 of this revenue procedure under this section 4. Efile tax calculator 12(3) as if the additional COD income was realized. Efile tax calculator (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. Efile tax calculator No further adjustment to the deferred § 752 amount is made to reflect the basis or other attributes of partners that are indirect partners in the partnership. Efile tax calculator (5) If an S corporation receives a statement described in this section 4 identifying its COD income amount, deferred amount, included amount or additional COD income that would be deferred with respect to an applicable debt instrument, these amounts are shared pro rata only among those shareholders that are shareholders in the S corporation immediately before the reacquisition transaction. Efile tax calculator (6) This paragraph 4. Efile tax calculator 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. Efile tax calculator S. Efile tax calculator Persons With Respect to Certain Foreign Partnerships, as defined in the instructions for Form 8865, if the foreign partnership, for which the Category 1 or Category 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items listed in section 4. Efile tax calculator 07(1) of this revenue procedure, or a statement described in sections 4. Efile tax calculator 07(2) or 4. Efile tax calculator 10(3) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Efile tax calculator (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Efile tax calculator 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 4. Efile tax calculator 12(6)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Efile tax calculator (b) A Category 2 filer must include its share of the information described in section 4. Efile tax calculator 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Efile tax calculator Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Efile tax calculator (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. Efile tax calculator 12(6)(a)(ii) and 4. Efile tax calculator 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Efile tax calculator However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Efile tax calculator (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. Efile tax calculator 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. Efile tax calculator 12(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 4. Efile tax calculator 12(1) and (2) of this revenue procedure. Efile tax calculator Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Efile tax calculator 12(6) of this revenue procedure. Efile tax calculator (8) The provisions of section 4. Efile tax calculator 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. Efile tax calculator 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. Efile tax calculator 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the share of the partner or shareholder in the amounts described in section 4. Efile tax calculator 11(1)(d) of this revenue procedure. Efile tax calculator SECTION 5. Efile tax calculator REQUIRED INFORMATION STATEMENT . Efile tax calculator 01 Annual Information Statements. Efile tax calculator Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. Efile tax calculator 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. Efile tax calculator 02 of this revenue procedure to its federal income tax return for each taxable year beginning with the taxable year following the taxable year for which the taxpayer makes the election and ending with the first taxable year in which all items deferred under § 108(i) have been recognized. Efile tax calculator . Efile tax calculator 02 Contents of Statement. Efile tax calculator A statement meets the requirements of this section 5. Efile tax calculator 02 if the statement— (1) Label. Efile tax calculator States “Section 108(i) Information Statement” across the top; (2) Required information. Efile tax calculator Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (a) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(1); (b) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(5)(D), including a description and date of the acceleration event described in § 108(i)(5)(D); (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years (in the case of a partnership, the aggregate of the partners’ deferred amounts that have not been included in income in the current or prior taxable years, and in the case of an S corporation, the S corporation’s COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years); (d) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (e) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D); and (f) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Efile tax calculator (3) Election attached. Efile tax calculator Includes a copy of the election statement described in section 4. Efile tax calculator 05 of this revenue procedure. Efile tax calculator . Efile tax calculator 03 Additional Annual Reporting Requirements for Certain Partnerships. Efile tax calculator The rules of this section 5. Efile tax calculator 03 apply to partnerships other than partnerships described in section 5. Efile tax calculator 05 of this revenue procedure. Efile tax calculator (1) In general. Efile tax calculator A partnership that makes an election under § 108(i) (except for a protective election under section 4. Efile tax calculator 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Efile tax calculator 01 of this revenue procedure. Efile tax calculator In addition, for each taxable year in which a statement is required under section 5. Efile tax calculator 01 of this revenue procedure, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B) for each partner § 108(i) information in the manner described in section 4. Efile tax calculator 07(1) of this revenue procedure. Efile tax calculator (2) Annual information statements provided to partners. Efile tax calculator The partnership must attach to the Schedule K-1 (Form 1065) provided to each partner for each taxable year in which a statement is required under section 5. Efile tax calculator 01 of this revenue procedure, a statement meeting the requirements of this section 5. Efile tax calculator 03(2). Efile tax calculator The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Efile tax calculator A statement meets the requirements of this section 5. Efile tax calculator 03(2) if the statement— (a) Label. Efile tax calculator States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. Efile tax calculator (b) Required information. Efile tax calculator Clearly identifies for each applicable debt instrument to which a § 108(i) election applies— (i) The partner’s deferred amount that has not been included in income as of the end of the prior taxable year; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1); (iii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) The partner’s deferred amount that has not been included in income in the current or prior taxable years; (v) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (viii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years; and (ix) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year and any remaining deferred § 752 amount. Efile tax calculator If a partner fails to provide the written statement required by section 4. Efile tax calculator 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. Efile tax calculator 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. Efile tax calculator . Efile tax calculator 04 Additional Annual Reporting Requirements for an S Corporation. Efile tax calculator (1) In general. Efile tax calculator An S corporation that makes an election under § 108(i) (except for a protective election under section 4. Efile tax calculator 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Efile tax calculator 01 of this revenue procedure. Efile tax calculator In addition, for each taxable year in which a statement is required under section 5. Efile tax calculator 01 of this revenue procedure, the S corporation must report on the Schedule K-1 (Form 1120S) for each shareholder § 108(i) information in the manner described in section 4. Efile tax calculator 08(1) of this revenue procedure. Efile tax calculator (2) Annual information statements provided to shareholders. Efile tax calculator The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for each taxable year in which a statement is required under section 5. Efile tax calculator 01 of this revenue procedure a statement meeting the requirements of this section 5. Efile tax calculator 04(2). Efile tax calculator The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Efile tax calculator A statement meets the requirements of this section 5. Efile tax calculator 04(2) if the statement— (a) Label. Efile tax calculator States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. Efile tax calculator Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income deferred under § 108(i) that has not been included in income as of the end of the prior taxable year; (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1); (iii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years; (v) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (viii) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Efile tax calculator . Efile tax calculator 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. Efile tax calculator (1) The rules of this section 5. Efile tax calculator 05 apply to nonfiling foreign partnerships. Efile tax calculator (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. Efile tax calculator 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. Efile tax calculator 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. Efile tax calculator 01 of this revenue procedure. Efile tax calculator (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. Efile tax calculator 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. Efile tax calculator (4) For each taxable year in which a statement is required under section 5. Efile tax calculator 01 of this revenue procedure, the nonfiling foreign partnership must provide each affected partner a Schedule K-1 (Form 1065) reporting § 108(i) information in the manner described in section 4. Efile tax calculator 07(1) of this revenue procedure. Efile tax calculator Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Efile tax calculator The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. Efile tax calculator 6031(b)-1T(b). Efile tax calculator The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. Efile tax calculator 05(2) of this revenue procedure. Efile tax calculator (5) For each taxable year for which a statement is required under section 5. Efile tax calculator 01 of this revenue procedure, the nonfiling foreign partnership must attach to each affected partner’s Schedule K-1 (Form 1065) a statement meeting the requirements of section 5. Efile tax calculator 03(2) of this revenue procedure. Efile tax calculator The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain the statements, and each partner must retain that partner’s statement, in their respective books and records. Efile tax calculator . Efile tax calculator 06 Information Statements Made on Behalf of Certain Foreign Corporations. Efile tax calculator Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. Efile tax calculator 02 of this revenue procedure to the shareholder’s federal income tax return for each taxable year for which a statement is required under section 5. Efile tax calculator 01 of this revenue procedure. Efile tax calculator . Efile tax calculator 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. Efile tax calculator (1) A partnership required to file a U. Efile tax calculator S. Efile tax calculator partnership return other than under § 1. Efile tax calculator 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) described in the second sentence of section 5. Efile tax calculator 03(1) of this revenue procedure reflecting its share of any § 108(i) information must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Efile tax calculator 07(1)(a) through (d) of this revenue procedure). Efile tax calculator (2) If a partnership described in section 5. Efile tax calculator 07(1) of this revenue procedure receives a statement described in sections 5. Efile tax calculator 03(2) or 5. Efile tax calculator 05(5) of this revenue procedure or this section 5. Efile tax calculator 07(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership. Efile tax calculator If an S corporation receives a statement described in sections 5. Efile tax calculator 03(2) or 5. Efile tax calculator 05(5) of this revenue procedure or this section 5. Efile tax calculator 07(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 5. Efile tax calculator 03(2)(b)(i) through (viii) of this revenue procedure. Efile tax calculator The partnership or S corporation must attach the statement or statements to the Schedule K-1 (Form 1065 or Form 1065-B) or Schedule K-1 (Form 1120S) that is provided to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Efile tax calculator The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Efile tax calculator (3) This paragraph 5. Efile tax calculator 07(3) provides the rules for persons described in section 4. Efile tax calculator 12(6) of this revenue procedure if the foreign partnership, for which the Category 1 or 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items described in the second sentence of section 5. Efile tax calculator 03(1) of this revenue procedure, or a statement described in sections 5. Efile tax calculator 03(2) or 5. Efile tax calculator 05(5) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Efile tax calculator (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Efile tax calculator 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 5. Efile tax calculator 07(3)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Efile tax calculator (b) A Category 2 filer must include its share of the information described in section 4. Efile tax calculator 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Efile tax calculator Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Efile tax calculator (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. Efile tax calculator 07(3)(a)(ii) and 5. Efile tax calculator 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Efile tax calculator However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Efile tax calculator (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. Efile tax calculator 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. Efile tax calculator 07(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 5. Efile tax calculator 07(1) and (2) of this revenue procedure. Efile tax calculator Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Efile tax calculator 12(6) of this revenue procedure. Efile tax calculator SECTION 6. Efile tax calculator EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. Efile tax calculator SECTION 7. Efile tax calculator TRANSITION RULE . Efile tax calculator 01 Noncomplying Election. Efile tax calculator Except as otherwise provided in this section 7. Efile tax calculator 01, the Service will treat a § 108(i) election as effective if a taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009, using any reasonable procedure to make the election. Efile tax calculator However, an election that does not comply with section 4 of this revenue procedure will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election and complies with the requirements of section 4 of this revenue procedure. Efile tax calculator . Efile tax calculator 02 Modification of Election. Efile tax calculator A taxpayer that files a § 108(i) election on or before September 16, 2009, may modify that election by filing an amended return on or before November 16, 2009 (for example, to modify the amount of COD income the taxpayer elects to defer). Efile tax calculator To be effective, a modification of an election described in the preceding sentence must satisfy the requirements for an election described in section 4 of this revenue procedure. Efile tax calculator . Efile tax calculator 03 Notations. Efile tax calculator A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. Efile tax calculator A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. Efile tax calculator See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. Efile tax calculator SECTION 8. Efile tax calculator PAPERWORK REDUCTION ACT The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U. Efile tax calculator S. Efile tax calculator C. Efile tax calculator 3507) under control number 1545-2147. Efile tax calculator An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Efile tax calculator The collection of information in this revenue procedure is in sections 4, 5 and 7. Efile tax calculator This information is required to determine the amount of income and deductions a taxpayer elects to defer and to track those amounts until the taxpayer has reported all deferred income and deductions on the taxpayer’s tax return. Efile tax calculator This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. Efile tax calculator The collection of information is required to obtain a benefit. Efile tax calculator The likely respondents are C corporations, shareholders of S corporations, partners of partnerships, and other individuals engaged in a trade or business, that reacquire applicable debt instruments in 2009 or 2010. Efile tax calculator The estimated total annual reporting burden is 300,000 hours. Efile tax calculator The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. Efile tax calculator The estimated number of respondents is 50,000. Efile tax calculator Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Efile tax calculator Generally, tax returns and return information are confidential, as required by § 6103. Efile tax calculator DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. Efile tax calculator Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). Efile tax calculator For further information regarding this revenue procedure, contact Megan A. Efile tax calculator Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. Efile tax calculator Blanchard at (202) 622-3950 for questions involving OID, Ronald M. Efile tax calculator Gootzeit at (202) 622-3860 for questions involving foreign entities, Robert Rhyne at (202) 622-7790 for questions involving earnings and profits and consolidated groups, and Craig Wojay at (202) 622-4920 for questions on § 108(i) generally (not toll-free calls). Efile tax calculator Prev  Up  Next   Home   More Internal Revenue Bulletins