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Ez 1040 Form

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Ez 1040 Form

Ez 1040 form Publication 971 - Main Content Table of Contents How To Request ReliefException for agreements relating to TEFRA partnership proceedings. Ez 1040 form The IRS Must Contact Your Spouse or Former Spouse Tax Court Review of Request Community Property LawsRelief for Married Persons Who Did Not File Joint Returns Innocent Spouse ReliefUnderstated Tax Erroneous Items Actual Knowledge or Reason To Know Indications of Unfairness for Innocent Spouse Relief Separation of Liability ReliefLimitations on Relief Equitable ReliefConditions for Getting Equitable Relief Factors for Determining Whether To Grant Equitable Relief RefundsProof Required Refunds Under Equitable Relief Limit on Amount of Refund Filled-in Form 8857 Flowcharts How To Request Relief File Form 8857 to ask the IRS for the types of relief discussed in this publication. Ez 1040 form If you are requesting relief for more than three tax years, you must file an additional Form 8857. Ez 1040 form The IRS will review your Form 8857 and let you know if you qualify. Ez 1040 form A completed Form 8857 is shown later. Ez 1040 form When to file Form 8857. Ez 1040 form   You should file Form 8857 as soon as you become aware of a tax liability for which you believe only your spouse or former spouse should be held responsible. Ez 1040 form The following are some of the ways you may become aware of such a liability. Ez 1040 form The IRS is examining your tax return and proposing to increase your tax liability. Ez 1040 form The IRS sends you a notice. Ez 1040 form   You must file Form 8857 no later than two years after the date on which the IRS first attempted to collect the tax from you that occurs after July 22, 1998. Ez 1040 form (But see the exceptions below for different filing deadlines that apply. Ez 1040 form ) For this reason, do not delay filing because you do not have all the documentation. Ez 1040 form   Collection activities that may start the 2-year period are: The IRS offset your income tax refund against an amount you owed on a joint return for another year and the IRS informed you about your right to file Form 8857. Ez 1040 form The filing of a claim by the IRS in a court proceeding in which you were a party or the filing of a claim in a proceeding that involves your property. Ez 1040 form This includes the filing of a proof of claim in a bankruptcy proceeding. Ez 1040 form The filing of a suit by the United States against you to collect the joint liability. Ez 1040 form The issuance of a section 6330 notice, which notifies you of the IRS' intent to levy and your right to a collection due process (CDP) hearing. Ez 1040 form The collection-related notices include, but are not limited to, Letter 11 and Letter 1058. Ez 1040 form Exception for equitable relief. Ez 1040 form   On July 25, 2011, the IRS issued Notice 2011-70 (available at www. Ez 1040 form irs. Ez 1040 form gov/irb/2011-32_IRB/ar11. Ez 1040 form html) expanding the amount of time to request equitable relief. Ez 1040 form The amount of time to request equitable relief depends on whether you are seeking relief from a balance due, seeking a credit or refund, or both: Balance Due – Generally, you must file your request within the time period the IRS has to collect the tax. Ez 1040 form Generally, the IRS has 10 years from the date the tax liability was assessed to collect the tax. Ez 1040 form In certain cases, the 10-year period is suspended. Ez 1040 form The amount of time the suspension is in effect will extend the time the IRS has to collect the tax. Ez 1040 form See Pub. Ez 1040 form 594, The IRS Collection Process, for details. Ez 1040 form Credit or Refund – Generally, you must file your request within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. Ez 1040 form But you may have more time to file if you live in a federally declared disaster area or you are physically or mentally unable to manage your financial affairs. Ez 1040 form See Pub. Ez 1040 form 556, Examination of Returns, Appeal Rights, and Claims for Refund, for details. Ez 1040 form Both a Balance Due and a Credit or Refund – If you are seeking a refund of amounts you paid and relief from a balance due over and above what you have paid, the time period for credit or refund will apply to any payments you have made, and the time period for collection of a balance due amount will apply to any unpaid liability. Ez 1040 form Exception for relief based on community property laws. Ez 1040 form   If you are requesting relief based on community property laws, a different filing deadline applies. Ez 1040 form See Relief from liability arising from community property law discussed later under Community Property Laws . Ez 1040 form Form 8857 filed by or on behalf of a decedent. Ez 1040 form   An executor (including any other duly appointed representative) may pursue a Form 8857 filed during the decedent's lifetime. Ez 1040 form An executor (including any other duly appointed representative) may also file Form 8857 as long as the decedent satisfied the eligibility requirements while alive. Ez 1040 form For purposes of separation of liability relief (discussed later), the decedent's marital status is determined on the earlier of the date relief was requested or the date of death. Ez 1040 form Situations in which you are not entitled to relief. Ez 1040 form   You are not entitled to innocent spouse relief for any tax year to which the following situations apply. Ez 1040 form In a final decision dated after July 22, 1998, a court considered whether to grant you relief from joint liability and decided not to do so. Ez 1040 form In a final decision dated after July 22, 1998, a court did not consider whether to grant you relief from joint liability, but you meaningfully participated in the proceeding and could have asked for relief. Ez 1040 form You entered into an offer in compromise with the IRS. Ez 1040 form You entered into a closing agreement with the IRS that disposed of the same liability for which you want to seek relief. Ez 1040 form Exception for agreements relating to TEFRA partnership proceedings. Ez 1040 form   You may be entitled to relief, discussed in (4) earlier, if you entered into a closing agreement for both partnership items and nonpartnership items, while you were a party to a pending TEFRA partnership proceeding. Ez 1040 form (TEFRA is an acronym that refers to the “Tax Equity and Fiscal Responsibility Act of 1982” that prescribed the tax treatment of partnership items. Ez 1040 form ) You are not entitled to relief for the nonpartnership items, but you will be entitled to relief for the partnership items (if you otherwise qualify). Ez 1040 form Transferee liability not affected by innocent spouse relief provisions. Ez 1040 form   The innocent spouse relief provisions do not affect tax liabilities that arise under federal or state transferee liability or property laws. Ez 1040 form Therefore, even if you are relieved of the tax liability under the innocent spouse relief provisions, you may remain liable for the unpaid tax, interest, and penalties to the extent provided by these laws. Ez 1040 form Example. Ez 1040 form Herb and Wanda timely filed their 2008 joint income tax return on April 15, 2009. Ez 1040 form Herb died in March 2010, and the executor of Herb's will transferred all of the estate's assets to Wanda. Ez 1040 form In August 2010, the IRS assessed a deficiency for the 2008 return. Ez 1040 form The items causing the deficiency belong to Herb. Ez 1040 form Wanda is relieved of the deficiency under the innocent spouse relief provisions, and Herb's estate remains solely liable for it. Ez 1040 form However, the IRS may collect the deficiency from Wanda to the extent permitted under federal or state transferee liability or property laws. Ez 1040 form The IRS Must Contact Your Spouse or Former Spouse By law, the IRS must contact your spouse or former spouse. Ez 1040 form There are no exceptions, even for victims of spousal abuse or domestic violence. Ez 1040 form We will inform your spouse or former spouse that you filed Form 8857 and will allow him or her to participate in the process. Ez 1040 form If you are requesting relief from joint and several liability on a joint return, the IRS must also inform him or her of its preliminary and final determinations regarding your request for relief. Ez 1040 form However, to protect your privacy, the IRS will not disclose your personal information (for example, your current name, address, phone number(s), information about your employer, your income or assets) or any other information that does not relate to making a determination about your request for relief from liability. Ez 1040 form If you petition the Tax Court (explained below), your spouse or former spouse may see your personal information. Ez 1040 form Tax Court Review of Request After you file Form 8857, you may be able to petition (ask) the United States Tax Court to review your request for relief in the following two situations. Ez 1040 form The IRS sends you a final determination letter regarding your request for relief. Ez 1040 form You do not receive a final determination letter from the IRS within six months from the date you filed Form 8857. Ez 1040 form If you seek equitable relief for an underpaid tax, you will be able to get a Tax Court review of your request only if the tax arose or remained unpaid on or after December 20, 2006. Ez 1040 form The United States Tax Court is an independent judicial body and is not part of the IRS. Ez 1040 form You must file a petition with the United States Tax Court in order for it to review your request for relief. Ez 1040 form You must file the petition no later than the 90th day after the date the IRS mails its final determination notice to you. Ez 1040 form If you do not file a petition, or you file it late, the Tax Court cannot review your request for relief. Ez 1040 form You can get a copy of the rules for filing a petition by writing to the Tax Court at the following address:    United States Tax Court 400 Second Street, NW Washington, DC 20217 Or you can visit the Tax Court's website at www. Ez 1040 form ustaxcourt. Ez 1040 form gov Community Property Laws You must generally follow community property laws when filing a tax return if you are married and live in a community property state. Ez 1040 form Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Ez 1040 form Generally, community property laws require you to allocate community income and expenses equally between both spouses. Ez 1040 form However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Ez 1040 form Relief for Married Persons Who Did Not File Joint Returns Married persons who live in community property states, but who did not file joint returns, have two ways to get relief. Ez 1040 form Relief From Liability Arising From Community Property Law You are not responsible for the tax relating to an item of community income if all the following conditions exist. Ez 1040 form You did not file a joint return for the tax year. Ez 1040 form You did not include the item of community income in gross income. Ez 1040 form The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. Ez 1040 form Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. Ez 1040 form Your spouse's (or former spouse's) distributive share of partnership income. Ez 1040 form Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). Ez 1040 form Use the appropriate community property law to determine what is separate property. Ez 1040 form Any other income that belongs to your spouse (or former spouse) under community property law. Ez 1040 form You establish that you did not know of, and had no reason to know of, that community income. Ez 1040 form See  Actual Knowledge or Reason To Know , below. Ez 1040 form Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. Ez 1040 form See Indications of unfairness for liability arising from community property law, later. Ez 1040 form Actual knowledge or reason to know. Ez 1040 form   You knew or had reason to know of an item of community income if: You actually knew of the item of community income, or A reasonable person in similar circumstances would have known of the item of community income. Ez 1040 form Amount of community income unknown. Ez 1040 form   If you are aware of the source of the item of community income or the income-producing activity, but are unaware of the specific amount, you are considered to know or have reason to know of the item of community income. Ez 1040 form Not knowing the specific amount is not a basis for relief. Ez 1040 form Reason to know. Ez 1040 form   The IRS will consider all facts and circumstances in determining whether you had reason to know of an item of community income. Ez 1040 form The facts and circumstances include: The nature of the item of community income and the amount of the item relative to other income items. Ez 1040 form The financial situation of you and your spouse (or former spouse). Ez 1040 form Your educational background and business experience. Ez 1040 form Whether the item of community income represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Ez 1040 form Indications of unfairness for liability arising from community property law. Ez 1040 form   The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax due to the item of community income. Ez 1040 form   The following are examples of factors the IRS will consider. Ez 1040 form Whether you received a benefit, either directly or indirectly, from the omitted item of community income (defined below). Ez 1040 form Whether your spouse (or former spouse) deserted you. Ez 1040 form Whether you and your spouse have been divorced or separated. Ez 1040 form  For other factors see Factors for Determining Whether To Grant Equitable Relief later. Ez 1040 form Benefit from omitted item of community income. Ez 1040 form   A benefit includes normal support, but does not include de minimis (small) amounts. Ez 1040 form Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers received several years after the filing of the return. Ez 1040 form   For example, if you receive property, including life insurance proceeds, from your spouse (or former spouse) and the property is traceable to omitted items of community income attributable to your spouse (or former spouse), you are considered to have benefitted from those omitted items of community income. Ez 1040 form Equitable Relief If you do not qualify for the relief described above and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief (discussed later). Ez 1040 form How and When To Request Relief You request relief by filing Form 8857, as discussed earlier. Ez 1040 form Fill in Form 8857 according to the instructions. Ez 1040 form For relief from liability arising from community property law, you must file Form 8857 no later than 6 months before the expiration of the period of limitations on assessment (including extensions) against your spouse for the tax year for which you are requesting relief. Ez 1040 form However, if the IRS begins an examination of your return during that 6-month period, the latest time for requesting relief is 30 days after the date the IRS' initial contact letter to you. Ez 1040 form The period of limitation on assessment is the amount of time, generally three years, that the IRS has from the date you filed the return to assess taxes that you owe. Ez 1040 form Innocent Spouse Relief By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Ez 1040 form Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). Ez 1040 form However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. Ez 1040 form The IRS can collect these amounts from either you or your spouse (or former spouse). Ez 1040 form You must meet all of the following conditions to qualify for innocent spouse relief. Ez 1040 form You filed a joint return. Ez 1040 form There is an understated tax on the return that is due to erroneous items (defined later) of your spouse (or former spouse). Ez 1040 form You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed). Ez 1040 form See Actual Knowledge or Reason To Know, later. Ez 1040 form Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax. Ez 1040 form See Indications of Unfairness for Innocent Spouse Relief , later. Ez 1040 form Innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. Ez 1040 form A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Ez 1040 form Understated Tax You have an understated tax if the IRS determined that your total tax should be more than the amount that was actually shown on your return. Ez 1040 form Erroneous Items Erroneous items are either of the following. Ez 1040 form Unreported income. Ez 1040 form This is any gross income item received by your spouse (or former spouse) that is not reported. Ez 1040 form Incorrect deduction, credit, or basis. Ez 1040 form This is any improper deduction, credit, or property basis claimed by your spouse (or former spouse). Ez 1040 form The following are examples of erroneous items. Ez 1040 form The expense for which the deduction is taken was never paid or incurred. Ez 1040 form For example, your spouse, a cash-basis taxpayer, deducted $10,000 of advertising expenses on Schedule C of your joint Form 1040, but never paid for any advertising. Ez 1040 form The expense does not qualify as a deductible expense. Ez 1040 form For example, your spouse claimed a business fee deduction of $10,000 that was for the payment of state fines. Ez 1040 form Fines are not deductible. Ez 1040 form No factual argument can be made to support the deductibility of the expense. Ez 1040 form For example, your spouse claimed $4,000 for security costs related to a home office, which were actually veterinary and food costs for your family's two dogs. Ez 1040 form Actual Knowledge or Reason To Know You knew or had reason to know of an understated tax if: You actually knew of the understated tax, or A reasonable person in similar circumstances would have known of the understated tax. Ez 1040 form Actual knowledge. Ez 1040 form   If you actually knew about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Ez 1040 form You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Ez 1040 form For information about the criteria for determining whether you actually knew about an erroneous item, see Actual Knowledge later under Separation of Liability Relief. Ez 1040 form Reason to know. Ez 1040 form   If you had reason to know about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Ez 1040 form You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Ez 1040 form   The IRS will consider all facts and circumstances in determining whether you had reason to know of an understated tax due to an erroneous item. Ez 1040 form The facts and circumstances include: The nature of the erroneous item and the amount of the erroneous item relative to other items. Ez 1040 form The financial situation of you and your spouse (or former spouse). Ez 1040 form Your educational background and business experience. Ez 1040 form The extent of your participation in the activity that resulted in the erroneous item. Ez 1040 form Whether you failed to ask, at or before the time the return was signed, about items on the return or omitted from the return that a reasonable person would question. Ez 1040 form Whether the erroneous item represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Ez 1040 form Partial relief when a portion of erroneous item is unknown. Ez 1040 form   You may qualify for partial relief if, at the time you filed your return, you had no knowledge or reason to know of only a portion of an erroneous item. Ez 1040 form You will be relieved of the understated tax due to that portion of the item if all other requirements are met for that portion. Ez 1040 form Example. Ez 1040 form At the time you signed your joint return, you knew that your spouse did not report $5,000 of gambling winnings. Ez 1040 form The IRS examined your tax return several months after you filed it and determined that your spouse's unreported gambling winnings were actually $25,000. Ez 1040 form You established that you did not know about, and had no reason to know about, the additional $20,000 because of the way your spouse handled gambling winnings. Ez 1040 form The understated tax due to the $20,000 will qualify for innocent spouse relief if you meet the other requirements. Ez 1040 form The understated tax due to the $5,000 of gambling winnings you knew about will not qualify for relief. Ez 1040 form Indications of Unfairness for Innocent Spouse Relief The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax. Ez 1040 form The following are examples of factors the IRS will consider. Ez 1040 form Whether you received a significant benefit (defined below), either directly or indirectly, from the understated tax. Ez 1040 form Whether your spouse (or former spouse) deserted you. Ez 1040 form Whether you and your spouse have been divorced or separated. Ez 1040 form Whether you received a benefit on the return from the understated tax. Ez 1040 form For other factors, see Factors for Determining Whether To Grant Equitable Relief later under Equitable Relief. Ez 1040 form Significant benefit. Ez 1040 form   A significant benefit is any benefit in excess of normal support. Ez 1040 form Normal support depends on your particular circumstances. Ez 1040 form Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers that may be received several years after the year of the understated tax. Ez 1040 form Example. Ez 1040 form You receive money from your spouse that is beyond normal support. Ez 1040 form The money can be traced to your spouse's lottery winnings that were not reported on your joint return. Ez 1040 form You will be considered to have received a significant benefit from that income. Ez 1040 form This is true even if your spouse gives you the money several years after he or she received it. Ez 1040 form Separation of Liability Relief Under this type of relief, the understated tax (plus interest and penalties) on your joint return is allocated between you and your spouse (or former spouse). Ez 1040 form The understated tax allocated to you is generally the amount you are responsible for. Ez 1040 form This type of relief is available only for unpaid liabilities resulting from the understated tax. Ez 1040 form Refunds are not allowed. Ez 1040 form To request separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Ez 1040 form You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Ez 1040 form (Under this rule, you are no longer married if you are widowed. Ez 1040 form ) You were not a member of the same household (explained below) as the spouse with whom you filed the joint return at any time during the 12-month per- iod ending on the date you file Form 8857. Ez 1040 form Members of the same household. Ez 1040 form   You and your spouse are not members of the same household if you are living apart and are estranged. Ez 1040 form However, you and your spouse are considered members of the same household if any of the following conditions are met. Ez 1040 form You and your spouse reside in the same dwelling. Ez 1040 form You and your spouse reside in separate dwellings but are not estranged, and one of you is temporarily absent from the other's household as explained in (3) below. Ez 1040 form Either spouse is temporarily absent from the household and it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Ez 1040 form Examples of temporary absences include absence due to imprisonment, illness, business, vacation, military service, or education. Ez 1040 form Burden of proof. Ez 1040 form   You must be able to prove that you meet all of the requirements for separation of liability relief (except actual knowledge) and that you did not transfer property to avoid tax (discussed later). Ez 1040 form You must also establish the basis for allocating the erroneous items. Ez 1040 form Limitations on Relief Even if you meet the requirements discussed previously, separation of liability relief will not be granted in the following situations. Ez 1040 form The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Ez 1040 form A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Ez 1040 form The IRS proves that at the time you signed your joint return, you had actual knowledge (explained below) of any erroneous items giving rise to the deficiency that were allocable to your spouse (or former spouse). Ez 1040 form For the definition of erroneous items, see Erroneous Items earlier under Innocent Spouse Relief. Ez 1040 form Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Ez 1040 form See Transfers of Property To Avoid Tax , later. Ez 1040 form Actual Knowledge The relief discussed here does not apply to any part of the understated tax due to your spouse's (or former spouse's) erroneous items of which you had actual knowledge. Ez 1040 form You and your spouse (or former spouse) remain jointly and severally liable for this part of the understated tax. Ez 1040 form If you had actual knowledge of only a portion of an erroneous item, the IRS will not grant relief for that portion of the item. Ez 1040 form You had actual knowledge of an erroneous item if: You knew that an item of unreported income was received. Ez 1040 form (This rule applies whether or not there was a receipt of cash. Ez 1040 form ) You knew of the facts that made an incorrect deduction or credit unallowable. Ez 1040 form For a false or inflated deduction, you knew that the expense was not incurred, or not incurred to the extent shown on the tax return. Ez 1040 form Knowledge of the source of an erroneous item is not sufficient to establish actual knowledge. Ez 1040 form Also, your actual knowledge may not be inferred when you merely had a reason to know of the erroneous item. Ez 1040 form Similarly, the IRS does not have to establish that you knew of the source of an erroneous item in order to establish that you had actual knowledge of the item itself. Ez 1040 form Your actual knowledge of the proper tax treatment of an erroneous item is not relevant for purposes of demonstrating that you had actual knowledge of that item. Ez 1040 form Neither is your actual knowledge of how the erroneous item was treated on the tax return. Ez 1040 form For example, if you knew that your spouse received dividend income, relief is not available for that income even if you did not know it was taxable. Ez 1040 form Example. Ez 1040 form Bill and Karen Green filed a joint return showing Karen's wages of $50,000 and Bill's self-employment income of $10,000. Ez 1040 form The IRS audited their return and found that Bill did not report $20,000 of self-employment income. Ez 1040 form The additional income resulted in a $6,000 understated tax, plus interest and penalties. Ez 1040 form After obtaining a legal separation from Bill, Karen filed Form 8857 to request separation of liability relief. Ez 1040 form The IRS proved that Karen actually knew about the $20,000 of additional income at the time she signed the joint return. Ez 1040 form Bill is liable for all of the understated tax, interest, and penalties because all of it was due to his unreported income. Ez 1040 form Karen is also liable for the understated tax, interest, and penalties due to the $20,000 of unreported income because she actually knew of the item. Ez 1040 form The IRS can collect the entire $6,000 plus interest and penalties from either Karen or Bill because they are jointly and individually liable for it. Ez 1040 form Factors supporting actual knowledge. Ez 1040 form   The IRS may rely on all facts and circumstances in determining whether you actually knew of an erroneous item at the time you signed the return. Ez 1040 form The following are examples of factors the IRS may use. Ez 1040 form Whether you made a deliberate effort to avoid learning about the item in order to be shielded from liability. Ez 1040 form Whether you and your spouse (or former spouse) jointly owned the property that resulted in the erroneous item. Ez 1040 form Exception for spousal abuse or domestic violence. Ez 1040 form   Even if you had actual knowledge, you may still qualify for relief if you establish that: You were the victim of spousal abuse or domestic violence before signing the return, and Because of that abuse, you did not challenge the treatment of any items on the return because you were afraid your spouse (or former spouse) would retaliate against you. Ez 1040 form   If you establish that you signed your joint return under duress (threat of harm or other form of coercion), then it is not a joint return, and you are not liable for any tax shown on that return or any tax deficiency for that return. Ez 1040 form However, you may be required to file a separate return for that tax year. Ez 1040 form For more information about duress, see the instructions for Form 8857. Ez 1040 form Transfers of Property To Avoid Tax If your spouse (or former spouse) transfers property (or the right to property) to you for the main purpose of avoiding tax or payment of tax, the tax liability allocated to you will be increased by the fair market value of the property on the date of the transfer. Ez 1040 form The increase may not be more than the entire amount of the liability. Ez 1040 form A transfer will be presumed to have as its main purpose the avoidance of tax or payment of tax if the transfer is made after the date that is 1 year before the date on which the IRS sent its first letter of proposed deficiency. Ez 1040 form This presumption will not apply if: The transfer was made under a divorce decree, separate maintenance agreement, or a written instrument incident to such an agreement, or You establish that the transfer did not have as its main purpose the avoidance of tax or payment of tax. Ez 1040 form If the presumption does not apply, but the IRS can establish that the purpose of the transfer was the avoidance of tax or payment of tax, the tax liability allocated to you will be increased as explained above. Ez 1040 form Equitable Relief If you do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law, you may still be relieved of responsibility for tax, interest, and penalties through equitable relief. Ez 1040 form Unlike innocent spouse relief or separation of liability relief, you can get equitable relief from an understated tax (defined earlier under Innocent Spouse Relief ) or an underpaid tax. Ez 1040 form An underpaid tax is an amount of tax you properly reported on your return but you have not paid. Ez 1040 form For example, your joint 2009 return shows that you and your spouse owed $5,000. Ez 1040 form You paid $2,000 with the return. Ez 1040 form You have an underpaid tax of $3,000. Ez 1040 form Conditions for Getting Equitable Relief You may qualify for equitable relief if you meet all of the following conditions. Ez 1040 form You are not eligible for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Ez 1040 form You have an understated tax or an underpaid tax. Ez 1040 form You did not pay the tax. Ez 1040 form However, see Refunds , later, for situations in which you are entitled to a refund of payments you made. Ez 1040 form You establish that, taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated or underpaid tax. Ez 1040 form See Factors for Determining Whether To Grant Equitable Relief, later. Ez 1040 form You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Ez 1040 form A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Ez 1040 form Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Ez 1040 form See Transfers of Property To Avoid Tax, earlier, under Separation of Liability Relief. Ez 1040 form You did not file or fail to file your return with the intent to commit fraud. Ez 1040 form The income tax liability from which you seek relief must be attributable to an item of the spouse (or former spouse) with whom you filed the joint return, unless one of the following exceptions applies: The item is attributable or partially attributable to you solely due to the operation of community property law. Ez 1040 form If you meet this exception, that item will be considered attributable to your spouse (or former spouse) for purposes of equitable relief. Ez 1040 form If the item is titled in your name, the item is presumed to be attributable to you. Ez 1040 form However, you can rebut this presumption based on the facts and circumstances. Ez 1040 form You did not know, and had no reason to know, that funds intended for the payment of tax were misappropriated by your spouse (or former spouse) for his or her benefit. Ez 1040 form If you meet this exception, the IRS will consider granting equitable relief although the underpaid tax may be attributable in part or in full to your item, and only to the extent the funds intended for payment were taken by your spouse (or former spouse). Ez 1040 form You establish that you were the victim of spousal abuse or domestic violence before signing the return, and that, as a result of the prior abuse, you did not challenge the treatment of any items on the return for fear of your spouse's (or former spouse's) retaliation. Ez 1040 form If you meet this exception, relief will be considered although the understated tax or underpaid tax may be attributable in part or in full to your item. Ez 1040 form Factors for Determining Whether To Grant Equitable Relief The IRS will consider all of the facts and circumstances in order to determine whether it is unfair to hold you responsible for the understated or underpaid tax. Ez 1040 form The following are examples of factors that the IRS will consider to determine whether to grant equitable relief. Ez 1040 form The IRS will consider all factors and weigh them appropriately. Ez 1040 form Relevant Factors The following are examples of factors that may be relevant to whether the IRS will grant equitable relief. Ez 1040 form Whether you are separated (whether legally or not) or divorced from your spouse. Ez 1040 form A temporary absence, such as an absence due to imprisonment, illness, business, vacation, military service, or education, is not considered separation for this purpose. Ez 1040 form A temporary absence is one where it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Ez 1040 form Whether you would suffer a significant economic hardship if relief is not granted. Ez 1040 form (In other words, you would not be able to pay your reasonable basic living expenses. Ez 1040 form ) Whether you have a legal obligation under a divorce decree or agreement to pay the tax. Ez 1040 form This factor will not weigh in favor of relief if you knew or had reason to know, when entering into the divorce decree or agreement, that your former spouse would not pay the income tax liability. Ez 1040 form Whether you received a significant benefit (beyond normal support) from the underpaid tax or item causing the understated tax. Ez 1040 form (For a definition of significant benefit, see Indications of Unfairness for Innocent Spouse Relief earlier. Ez 1040 form ) Whether you have made a good faith effort to comply with federal income tax laws for the tax year for which you are requesting relief or the following years. Ez 1040 form Whether you knew or had reason to know about the items causing the understated tax or that the tax would not be paid, as explained next. Ez 1040 form Knowledge or reason to know. Ez 1040 form   In the case of an underpaid tax, the IRS will consider whether you did not know and had no reason to know that your spouse (or former spouse) would not pay the income tax liability. Ez 1040 form   In the case of an income tax liability that arose from an understated tax, the IRS will consider whether you did not know and had no reason to know of the item causing the understated tax. Ez 1040 form Reason to know of the item giving rise to the understated tax will not be weighed more heavily than other factors. Ez 1040 form Actual knowledge of the item giving rise to the understated tax, however, is a strong factor weighing against relief. Ez 1040 form This strong factor may be overcome if the factors in favor of equitable relief are particularly compelling. Ez 1040 form Reason to know. Ez 1040 form   In determining whether you had reason to know, the IRS will consider your level of education, any deceit or evasiveness of your spouse (or former spouse), your degree of involvement in the activity generating the income tax liability, your involvement in business and household financial matters, your business or financial expertise, and any lavish or unusual expenditures compared with past spending levels. Ez 1040 form Example. Ez 1040 form You and your spouse filed a joint 2009 return. Ez 1040 form That return showed you owed $10,000. Ez 1040 form You had $5,000 of your own money and you took out a loan to pay the other $5,000. Ez 1040 form You gave 2 checks for $5,000 each to your spouse to pay the $10,000 liability. Ez 1040 form Without telling you, your spouse took the $5,000 loan and spent it on himself. Ez 1040 form You and your spouse were divorced in 2010. Ez 1040 form In addition, you had no knowledge or reason to know at the time you signed the return that the tax would not be paid. Ez 1040 form These facts indicate to the IRS that it may be unfair to hold you liable for the $5,000 underpaid tax. Ez 1040 form The IRS will consider these facts, together with all of the other facts and circumstances, to determine whether to grant you equitable relief from the $5,000 underpaid tax. Ez 1040 form Factors Weighing in Favor of Equitable Relief The following are examples of factors that will weigh in favor of equitable relief, but will not weigh against equitable relief. Ez 1040 form Whether your spouse (or former spouse) abused you. Ez 1040 form Whether you were in poor mental or physical health on the date you signed the return or at the time you requested relief. Ez 1040 form Refunds If you are granted relief, refunds are: Permitted under innocent spouse relief as explained later under Limit on Amount of Refund . Ez 1040 form Not permitted under separation of liability relief. Ez 1040 form Permitted in limited circumstances under equitable relief, as explained under Refunds Under Equitable Relief. Ez 1040 form Proof Required The IRS will only refund payments you made with your own money. Ez 1040 form However, you must provide proof that you made the payments with your own money. Ez 1040 form Examples of proof are a copy of your bank statement or a canceled check. Ez 1040 form No proof is required if your individual refund was used by the IRS to pay a tax you owed on a joint tax return for another year. Ez 1040 form Refunds Under Equitable Relief In the following situations, you are eligible to receive a refund of certain payments you made. Ez 1040 form Underpaid tax. Ez 1040 form   If you are granted relief for an underpaid tax, you are eligible for a refund of separate payments that you made after July 22, 1998. Ez 1040 form However, you are not eligible for refunds of payments made with the joint return, joint payments, or payments that your spouse (or former spouse) made. Ez 1040 form For example, withholding tax and estimated tax payments cannot be refunded because they are considered made with the joint return. Ez 1040 form   The amount of the refund is subject to the limit discussed later under Limit on Amount of Refund. Ez 1040 form Understated tax. Ez 1040 form   If you are granted relief for an understated tax, you are eligible for a refund of certain payments made under an installment agreement that you entered into with the IRS, if you have not defaulted on the installment agreement. Ez 1040 form You are not in default if the IRS did not issue you a notice of default or take any action to end the installment agreement. Ez 1040 form Only installment payments made after the date you filed Form 8857 are eligible for a refund. Ez 1040 form   The amount of the refund is subject to the limit discussed next. Ez 1040 form Limit on Amount of Refund The amount of your refund is limited. Ez 1040 form Read the following chart to find out the limit. Ez 1040 form IF you file Form 8857. Ez 1040 form . Ez 1040 form . Ez 1040 form THEN the refund cannot be more than. Ez 1040 form . Ez 1040 form . Ez 1040 form Within 3 years after filing your return The part of the tax paid within 3 years (plus any extension of time for filing your return) before you filed Form 8857. Ez 1040 form After the 3-year period, but within 2 years from the time you paid the tax The tax you paid within 2 years immediately before you filed Form 8857. Ez 1040 form Filled-in Form 8857 This part explains how Janie Boulder fills out Form 8857 to request innocent spouse relief. Ez 1040 form Janie and Joe Boulder filed a joint tax return for 2007. Ez 1040 form They claimed one dependency exemption for their son Michael. Ez 1040 form Their return was adjusted by the IRS because Joe did not report a $5,000 award he won that year. Ez 1040 form Janie did not know about the award when the return was filed. Ez 1040 form They agreed to the adjustment but could not pay the additional amount due of $815 ($650 tax + $165 penalty and interest). Ez 1040 form Janie and Joe were divorced on May 13, 2009. Ez 1040 form In February 2010, Janie filed her 2009 federal income tax return as head of household. Ez 1040 form She expected a refund of $1,203. Ez 1040 form In May 2010, she received a notice informing her that the IRS had offset her refund against the $815 owed on her joint 2007 income tax return and that she had a right to file Form 8857. Ez 1040 form Janie applies the conditions listed earlier under Innocent Spouse Relief to see if she qualifies for relief. Ez 1040 form Janie meets the first and second conditions because the joint tax return they filed has an understated tax due to Joe's erroneous item. Ez 1040 form Janie believes she meets the third condition. Ez 1040 form She did not know about the award and had no reason to know about it because of the secretive way Joe conducted his financial affairs. Ez 1040 form Janie believes she meets the fourth condition. Ez 1040 form She believes it would be unfair to be held liable for the tax because she did not benefit from the award. Ez 1040 form Joe spent it on personal items for his use only. Ez 1040 form Because Janie believes she qualifies for innocent spouse relief, she first completes Part I of Form 8857 to determine if she should file the form. Ez 1040 form In Part I, she makes all entries under the Tax Year 1 column because she is requesting relief for only one year. Ez 1040 form Part I Line 1. Ez 1040 form   She enters “2007” on line 1 because this is the tax year for which she is requesting relief. Ez 1040 form Line 2. Ez 1040 form   She checks the box because she wants a refund. Ez 1040 form Note. Ez 1040 form Because the IRS used her individual refund to pay the tax owed on the joint tax return, she does not need to provide proof of payment. Ez 1040 form Line 3. Ez 1040 form   She checks the “No” box because the IRS did not use her share of a joint refund to pay Joe's past-due debts. Ez 1040 form Line 4. Ez 1040 form   She checks the “Yes” box because she filed a joint tax return for tax year 2007. Ez 1040 form Line 5. Ez 1040 form   She skips this line because she checked the “Yes” box on line 4. Ez 1040 form Part II Line 6. Ez 1040 form   She enters her name, address, social security number, county, and best daytime phone number. Ez 1040 form Part III Line 7. Ez 1040 form   She enters Joe's name, address, social security number, and best daytime phone number. Ez 1040 form Line 8. Ez 1040 form   She checks the “divorced since” box and enters the date she was divorced as “05/13/2009. Ez 1040 form ” She attaches a copy of her entire divorce decree (not Illustrated) to the form. Ez 1040 form Line 9. Ez 1040 form   She checks the box for “High school diploma, equivalent, or less,” because she had completed high school when her 2007 joint tax return was filed. Ez 1040 form Line 10. Ez 1040 form   She checks the “No” box because she was not a victim of spousal abuse or domestic violence. Ez 1040 form Line 11. Ez 1040 form   She checks the “No” box because neither she nor Joe incurred any large expenses during the year for which she wants relief. Ez 1040 form Line 12. Ez 1040 form   She checks the “Yes” box because she signed the 2007 joint tax return. Ez 1040 form Line 13. Ez 1040 form   She checks the “No” box because she did not have a mental or physical condition when the return was filed and does not have one now. Ez 1040 form Part IV Line 14. Ez 1040 form   Because she was not involved in preparing the return, she checks the box, “You were not involved in preparing the returns. Ez 1040 form ” Line 15. Ez 1040 form   She checks the box, “You did not know anything was incorrect or missing” because she did not know that Joe had received a $5,000 award. Ez 1040 form She explains this in the space provided. Ez 1040 form Line 16. Ez 1040 form   She checks the box, “You knew that person had income” because she knew Joe had income from wages. Ez 1040 form She also lists Joe's income. Ez 1040 form Under “Type of Income” she enters “wages. Ez 1040 form ” Under “Who paid it to that person,” she enters the name of Joe's employer, “Allied. Ez 1040 form ” Under “Tax Year 1” she enters the amount of Joe's wages, “$40,000. Ez 1040 form ” Because she is only requesting relief for one tax year, she leaves the entry spaces for “Tax Year 2” and “Tax Year 3” blank. Ez 1040 form Line 17. Ez 1040 form   She checks the “No” box because she did not know any amount was owed to the IRS when the 2007 return was signed. Ez 1040 form Line 18. Ez 1040 form   She checks the “No” box because, when the return was signed, she was not having financial problems. Ez 1040 form Line 19. Ez 1040 form   She checks the box, “You were not involved in handling money for the household” because Joe handled all the money for the household. Ez 1040 form She provides additional information in the space provided. Ez 1040 form Line 20. Ez 1040 form   She checks the “No” box because Joe has never transferred money or property to her. Ez 1040 form Part V Line 21. Ez 1040 form   She enters the number “1” on both the line for “Adults” and the line for “Children” because her current household consists of herself and her son. Ez 1040 form Line 22. Ez 1040 form   She enters her average monthly income for her entire household. Ez 1040 form Line 23. Ez 1040 form   She lists her assets, which are $500 for the fair market value of a car, $450 in her checking account, and $100 in her savings account. Ez 1040 form Signing and mailing Form 8857. Ez 1040 form    Janie signs and dates the form. Ez 1040 form She attaches the copy of her divorce decree (not illustrated) required by line 8. Ez 1040 form Finally, she sends the form to the IRS address or fax number shown in the instructions for Form 8857. Ez 1040 form This image is too large to be displayed in the current screen. Ez 1040 form Please click the link to view the image. Ez 1040 form Boulder's filled-in Form 8857 page 1 This image is too large to be displayed in the current screen. Ez 1040 form Please click the link to view the image. Ez 1040 form Boulder's filled-in Form 8857 page 2 This image is too large to be displayed in the current screen. Ez 1040 form Please click the link to view the image. Ez 1040 form Boulder's filled-in Form 8857 page 3 This image is too large to be displayed in the current screen. Ez 1040 form Please click the link to view the image. Ez 1040 form Boulder's filled-in Form 8857 page 4 Flowcharts The following flowcharts provide a quick way for determining whether you may qualify for relief. Ez 1040 form But do not rely on these flowcharts alone. Ez 1040 form Also read the earlier discussions. Ez 1040 form Figure A. Ez 1040 form Do You Qualify for Innocent Spouse Relief? Please click here for the text description of the image. Ez 1040 form "Do You Qualify for Innocent Spouse Relief?" Figure B. Ez 1040 form Do You Qualify for Separation of Liability Relief? Please click here for the text description of the image. Ez 1040 form "Do You Qualify for Separation of Liability Relief?" Figure C. Ez 1040 form Do You Qualify for Equitable Relief? This image is too large to be displayed in the current screen. Ez 1040 form Please click the link to view the image. Ez 1040 form "Do You Qualify for Equitable Relief?" Prev  Up  Next   Home   More Online Publications
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Updated: Common Input Issues

Many common issues are easy to resolve by following the instructions below. The most frequent issue involves data entry errors.  Please review your return closely before e-filing.  Because Free File Fillable Forms is basic, you must follow the instructions exactly and enter data only on the lines indicated.

Below you will find a few more general tips for successful e-filing and then some more specific issues currently trending for Free File Fillable Forms:

General Tips

  • Many issues can be resolved by simply using the “tab” key which ensures you will see all the data boxes. For example, when you use the tab key, you will see the MI box for your middle initial on the top of the Form 1040.
  • Use the state drop down box in the address field and enter zip code in appropriate box.
  • Check all your data entries before attempting to e-file.
  • Check your social security numbers for accuracy.  Is your dependent’s SSN correct? Is your SSN correct on the Form W2, Box A, Employee’s SSN?
  • Do not use zero “0” in any field unless instructed to do so.
  • If you’re getting a refund by direct deposit, double check your financial account and routing numbers; the routing number must be nine digits.  Be sure to select checking or savings. 
  • Check your withholdings; make sure your W-2 statement withholdings match the amount on your 1040.
  • Check the withholding amount entered Step 2, Section 1 and make sure it equals the amount in Step 2, Section 2, Box A.
  • Verify your identity. Do not guess at your prior year Adjusted Gross Income. This is the most common error we see. If you don’t remember your AGI, you must get an electronic filing PIN at IRS.gov or call 1-866-704-7388.
  • If your filing status is Married Filing Jointly, make sure to include all information for your spouse, especially Step 2 requirements for identify verification and signing the return electronically.
  •  Whenever you’re entering your information on a form or schedule in Free File Fillable Forms and you have a question, just select the button, "Instructions For This Form," at the bottom of the screen.

Specific Issues

I didn’t get the email confirming that my Free File Fillable Forms return was accepted or rejected

  • First, check your email spam/junk folder. 
  • If it’s not there, take the following steps: Return to your Free File Fillable Forms account. (Either through IRS.gov/freefile or freefilefillableforms.com.) 
  • Select “Get E-File Status” from upper left column. If there is no status update, log-on to your account and review your return for accuracy  
  • CAUTION: Make sure to place the current date ("Today's Date") in Step 2, Section 4, Signing This Year's Return
  • Next, select  “E-File Now” button to resubmit.  
  • If your return was successfully e-filed, you will receive 2 emails: one from freefilefillableforms.com saying it was received and a second one from freefilefillableform.com saying it was accepted or rejected by the IRS. If you do not receive these two emails, you have not successfully transmitted your return.

I got this message: Business Rule X0000-005 - The XML data has failed schema validation

This currently is the second most common error we see, and it’s not as scary as it sounds. You will receive this message when there is a data entry error. This is a simple correction.

  • First, your message will identify the form and line number where the error occurred on your return.
  • Look for one of two key phrases in the error message.
  • If you see the phrase “is expected” that means you left blank a required field.
  • If you see the phrase “not facet-valid with” that means you made an entry in the wrong format, i.e. you used a number where it should be blank, or used a description not allowed in the field.
  • For more information, see our Rejected return help page.

“Do the Math” won’t work

Most often, your form is missing data that the program considers necessary to perform the calculation. Use the “tab” key and double check your entries.

Here's a list of some common problems taxpayers have encountered and possible solutions. 

  • 1040 (Form) Line 44 Tax - You must look up your tax in the tax tables and follow the IRS instructions to manually enter an amount on this line.  Don’t forget this step.
  • Schedule 8812 Additional Child Tax Credit, Lines 9, 11, 12 and 13 - You must complete all the prior required lines, including the buttons on line 6, before these lines will calculate.   Check your entries before you e-file.
  • Form 8863, Education Credits (Hope and Lifetime Learning Credits, Line 15 - You are required to complete Part 1. If instructed to put a zero on a line, you must put a zero on that line.
  • Schedule A, Itemized Deductions
    • Line 23 - The amount for this line is populated from the amount(s) you enter in the grey areas under the words, ‘list type and amount’. There are two lines under these words and two fields on each line. The first field is for a description of the ‘Other Expense’ deduction and the second field is for the amount. Enter the description and corresponding amount and ‘Do the math’ will calculate an amount for line 23.
    • Line 29 - Don't forget to manually enter the total amount for your Itemized Deductions on line 29 of the Schedule A.  Line 29 is not a Do the Math calculated field.  Select the “Yes” or “No” button for line 29 and follow the Schedule A instructions for entering an amount on the line 29.  If your answer is No,  Is Form 1040 line 38 over $150,000, then add up all the column amounts, lines 4 through 28, on the Sch A and enter the total amount on line 29.  Check your math.  If  your answer is Yes, line 38 of the Form 1040 is over $150,000 refer to the Itemized Deductions Worksheet for line 29 (page A-13) and then enter the amount you figured on line 29.  After you enter your amount on line 29, then select “Do the Math.”  The amount on line 29 will then transfer and update Line 40 of Form 1040.
  • Schedule C, Profit or Loss from Business Lines 3, 4, 5, and 7 - You must enter the business entity information (A-J) before the lines will calculate.
  • Schedule C-EZ Net Profit or Loss from Business Line 3 - You must enter the business entity information (A-G) before “Do the Math” will calculate.
  • Schedule E, Supplemental Income and Loss, Line 23a, b, etc. - Many lines will not calculate until Part 1 of the form is complete. 

I Can’t Find the Form I need

First, review the list of available Forms You Can Use. You can learn how to add some forms to your return by following the instructions below.

  • Form 4562, Depreciation and Amortization (Including Information on Listed Property -  You must Add the Form 4562 from the “add” button on your Schedule C and/or Schedule E.  You can NOT add the Form 4562 from the “add/view" button.  
  • Form 6198 At-Risk Limitations- Add this form from the “add” button on your Schedule C.
  • Form 8829 Expenses for Business Use of Your Home- Add this form from the “add” button on your line 30 of the Schedule C, Profit or Loss from Business
  • Form 8863, Education Credits (Hope and Lifetime Learning Credits) -
    1. Part III on page 2 for each student for whom you are claiming either credit must be completed before you complete Parts I and II on Page 1.  Some taxpayers can’t find the add button for page 2.  Just go to the top of page 1 of the Form 8863 and click on the add button next to the statement click to enter student information on page 2. 
    2. Make sure you use"Do the Math" for computing line 15 of page 1 of the Form 8863.
    3. Make sure you use the tab key for entering the student’s first name and the last name on line 20. Entered the first name in the first grey field and then use the tab key to enter the last name in the grey field to the right. 
  • Form 8949, Sales and other Dispositions of Capital Assets- Don’t forget to add Page 2 to complete this form.  Complete the Form 8949 before you complete your Schedule D. On the Schedule D, complete lines 1b, 2, 3, 8b, 9, and 10. You may add multiple copies of the Form 8949 if you need additional space to report sales and exchanges of your capital assets.
  • Add Forms W2, W2G and 1099-R in Step 2, Section 1.
  • All other Form 1099’s, including SSA 1099, 1099 INT, 1099 MISC etc. are not available as individual forms in Free File Fillable Forms because you do not have to e-file these statements to IRS.
  • BUT make sure to include all other income from Form 1099 including SSA 1099, 1099 INT, 1099 MISC etc. on your Form 1040. Don’t forget to include your federal withholding amounts from these other Form 1099s in Step 2 Section 2 Box B.

I Can’t Print My Return?

  • If you are having trouble printing and you are using Internet Explorer 8.0 you must upgrade your Internet browser or switch to another computer to print your information.  
  • If you can't print, search for 'print' in General FAQs (PDF) for additional information. Remember, always print your return for your records after you successfully e-file.

I am having problems with my 16a and 16b entries for pensions and annuities on the Form 1040

  • Find your total pension or annuity amount on your Form 1099-R and enter it on line 16a of your Form 1040.
  • Then, enter the taxable portion in 16b to the far right under the column of the Form 1040 where you are entering all of your amounts.
  • Do not enter your taxable amount after “b Taxable amount”.   This “b Taxable amount” field is only reserved for the text: “ROLLOVER”, “PSO”, and “ROLLOVER AND PSO” - Refer to the 1040 instructions to see if either of these 3 descriptions apply to you.
  • When your total pensions and annuities equal your taxable amount, “Do the Math” will automatically remove your amount on line 16a.
  • When your total pensions and annuities is greater than your taxable amount, “Do the Math” will display the total on line 16a and taxable amount you entered to the right of 16b.     

I am getting an error on Line 21, "Other income" on the Form 1040 - List type and amount

  • In certain situations, the form instructions may prompt you to enter information next to a line.   There are 2 parts for you to enter: 1) the description type in the first grey box and then 2) a corresponding amount in the second grey box.  Don’t enter descriptions or $ amounts in the grey fields unless the instructions tell you too.  Generally, leave these fields blank and don't enter a zero or '0" amount unless the instructions tell you too.
  •  Use line 21 of the Form 1040 to report any other taxable income not reported elsewhere on your return or on other schedules.  Make sure you enter the type and then the amount for the Other income to the left of the amount on line 21.  Enter the type of income in the first grey field and then enter the amount in the second grey field.   After you enter the amount in the second grey field, select "Do the Math" and the amount you entered to the left in the grey field will transfer to line 21.   Don't forget to enter the type of other income such as gambling winnings or jury duty pay in the first grey field to the left of the amount.  And if one of your other income description types is net operating loss (NOL), make sure you enter a negative sign "-" before the amount.  To view a list of description types for other income examples on line 21, refer to page 28 of the Form 1040 instructions.  Free File Fillable Forms will automatically display the description type in all upper case letters after selecting Do the Math.

Refer to the tutorial for basic tips before your start Free File Fillable Forms. These tips will improve your chances to successfully e-file without getting errors.

Page Last Reviewed or Updated: 26-Feb-2014

The Ez 1040 Form

Ez 1040 form 5. Ez 1040 form   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. Ez 1040 form Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. Ez 1040 form When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. Ez 1040 form Otherwise, these are capital expenses that must be added to the basis of the land. Ez 1040 form (See chapter 6 for information on determining basis. Ez 1040 form ) Conservation expenses for land in a foreign country do not qualify for this special treatment. Ez 1040 form The deduction for conservation expenses cannot be more than 25% of your gross income from farming. Ez 1040 form See 25% Limit on Deduction , later. Ez 1040 form Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. Ez 1040 form These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. Ez 1040 form You must include in income most government payments for approved conservation practices. Ez 1040 form However, you can exclude some payments you receive under certain cost-sharing conservation programs. Ez 1040 form For more information, see Agricultural Program Payments in chapter 3. Ez 1040 form To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. Ez 1040 form Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. Ez 1040 form You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. Ez 1040 form You are not farming if you are engaged only in forestry or the growing of timber. Ez 1040 form Farm defined. Ez 1040 form   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. Ez 1040 form It also includes plantations, ranches, ranges, and orchards. Ez 1040 form A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. Ez 1040 form It does not include an area where they are merely caught or harvested. Ez 1040 form A plant nursery is a farm for purposes of deducting soil and water conservation expenses. Ez 1040 form Farm rental. Ez 1040 form   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. Ez 1040 form If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. Ez 1040 form   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. Ez 1040 form Example. Ez 1040 form You own a farm in Iowa and live in California. Ez 1040 form You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. Ez 1040 form You cannot deduct your soil conservation expenses for this farm. Ez 1040 form You must capitalize the expenses and add them to the basis of the land. Ez 1040 form     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. Ez 1040 form Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. Ez 1040 form If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. Ez 1040 form Keep a copy of the plan with your books and records to support your deductions. Ez 1040 form Conservation plan. Ez 1040 form   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. Ez 1040 form There are three types of approved plans. Ez 1040 form NRCS individual site plans. Ez 1040 form These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. Ez 1040 form NRCS county plans. Ez 1040 form These plans include a listing of farm conservation practices approved for the county where the farmland is located. Ez 1040 form You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. Ez 1040 form Comparable state agency plans. Ez 1040 form These plans are approved by state agencies and can be approved individual site plans or county plans. Ez 1040 form   A list of NRCS conservation programs is available at www. Ez 1040 form nrcs. Ez 1040 form usda. Ez 1040 form gov/programs. Ez 1040 form Individual site plans can be obtained from NRCS offices and the comparable state agencies. Ez 1040 form Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. Ez 1040 form These expenses include, but are not limited to, the following. Ez 1040 form The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. Ez 1040 form The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. Ez 1040 form The eradication of brush. Ez 1040 form The planting of windbreaks. Ez 1040 form You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. Ez 1040 form These expenses are added to the basis of the land. Ez 1040 form If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. Ez 1040 form See chapter 3 for information about payments eligible for the cost-sharing exclusion. Ez 1040 form New farm or farmland. Ez 1040 form   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. Ez 1040 form You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. Ez 1040 form The new farming activity does not have to be the same as the old farming activity. Ez 1040 form For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. Ez 1040 form Land not used for farming. Ez 1040 form   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. Ez 1040 form For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. Ez 1040 form You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. Ez 1040 form Depreciable conservation assets. Ez 1040 form   You generally cannot deduct your expenses for depreciable conservation assets. Ez 1040 form However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. Ez 1040 form See Assessment for Depreciable Property , later. Ez 1040 form   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. Ez 1040 form These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. Ez 1040 form You recover your capital investment through annual allowances for depreciation. Ez 1040 form   You can deduct soil and water conservation expenses for nondepreciable earthen items. Ez 1040 form Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. Ez 1040 form Water well. Ez 1040 form   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. Ez 1040 form It is a capital expense. Ez 1040 form You recover your cost through depreciation. Ez 1040 form You also must capitalize your cost for drilling a test hole. Ez 1040 form If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. Ez 1040 form You can recover the total cost through depreciation deductions. Ez 1040 form   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. Ez 1040 form Abandonment means that all economic benefits from the well are terminated. Ez 1040 form For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. Ez 1040 form Endangered species recovery expenses. Ez 1040 form   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. Ez 1040 form Otherwise, these are capital expenses that must be added to the basis of the land. Ez 1040 form   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. Ez 1040 form See Internal Revenue Code section 175 for more information. Ez 1040 form Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. Ez 1040 form You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. Ez 1040 form Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. Ez 1040 form This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. Ez 1040 form The depreciable property must be used in the district's soil and water conservation activities. Ez 1040 form However, the following limits apply to these assessments. Ez 1040 form The total assessment limit. Ez 1040 form The yearly assessment limit. Ez 1040 form After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. Ez 1040 form The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. Ez 1040 form See Table 5-1 for a brief summary of these limits. Ez 1040 form Table 5-1. Ez 1040 form Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. Ez 1040 form Your deductible share of the cost to the district for the property. Ez 1040 form Your gross income from farming. Ez 1040 form No one taxpayer can deduct more than 10% of the total assessment. Ez 1040 form Any amount over 10% is a capital expense and is added to the basis of your land. Ez 1040 form If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Ez 1040 form If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. Ez 1040 form You can deduct the remainder in equal amounts over the next 9 tax years. Ez 1040 form Limit for all conservation expenses, including assessments for depreciable property. Ez 1040 form Amounts greater than 25% can be carried to the following year and added to that year's expenses. Ez 1040 form The total is then subject to the 25% of gross income from farming limit in that year. Ez 1040 form To ensure your deduction is within the deduction limits, keep records to show the following. Ez 1040 form The total assessment against all members of the district for the depreciable property. Ez 1040 form Your deductible share of the cost to the district for the depreciable property. Ez 1040 form Your gross income from farming. Ez 1040 form Total assessment limit. Ez 1040 form   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. Ez 1040 form This applies whether you pay the assessment in one payment or in installments. Ez 1040 form If your assessment is more than 10% of the total amount assessed, both the following rules apply. Ez 1040 form The amount over 10% is a capital expense and is added to the basis of your land. Ez 1040 form If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Ez 1040 form Yearly assessment limit. Ez 1040 form   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. Ez 1040 form If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. Ez 1040 form If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. Ez 1040 form You can deduct the remainder in equal amounts over the next 9 tax years. Ez 1040 form Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. Ez 1040 form Example 1. Ez 1040 form This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. Ez 1040 form Of the assessment, $1,500 is for digging drainage ditches. Ez 1040 form You can deduct this part as a soil or conservation expense as if you had paid it directly. Ez 1040 form The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. Ez 1040 form The total amount assessed by the district against all its members for the depreciable equipment is $7,000. Ez 1040 form The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. Ez 1040 form The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. Ez 1040 form To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. Ez 1040 form Add $500 to the result for a total of $570. Ez 1040 form Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). Ez 1040 form You can deduct the balance at the rate of $70 a year over the next 9 years. Ez 1040 form You add $70 to the $1,500 portion of the assessment for drainage ditches. Ez 1040 form You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. Ez 1040 form Example 2. Ez 1040 form Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. Ez 1040 form The total amount assessed by the district against all its members for depreciable equipment is $5,500. Ez 1040 form The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. Ez 1040 form The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). Ez 1040 form Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. Ez 1040 form You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. Ez 1040 form Sale or other disposal of land during 9-year period. Ez 1040 form   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. Ez 1040 form Death of farmer during 9-year period. Ez 1040 form   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. Ez 1040 form 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. Ez 1040 form Gross income from farming. Ez 1040 form   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. Ez 1040 form Gains from sales of draft, breeding, or dairy livestock are included. Ez 1040 form Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. Ez 1040 form Carryover of deduction. Ez 1040 form   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. Ez 1040 form However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. Ez 1040 form Example. Ez 1040 form In 2012, you have gross income of $32,000 from two farms. Ez 1040 form During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. Ez 1040 form However, your deduction is limited to 25% of $32,000, or $8,000. Ez 1040 form The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. Ez 1040 form The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. Ez 1040 form Any expenses over the limit in that year are carried to 2014 and later years. Ez 1040 form Net operating loss. Ez 1040 form   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. Ez 1040 form If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. Ez 1040 form When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. Ez 1040 form If you do not choose to deduct the expenses, you must capitalize them. Ez 1040 form Change of method. Ez 1040 form   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. Ez 1040 form To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. Ez 1040 form You or your authorized representative must sign the request. Ez 1040 form   The request must include the following information. Ez 1040 form Your name and address. Ez 1040 form The first tax year the method or change of method is to apply. Ez 1040 form Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. Ez 1040 form If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. Ez 1040 form The total expenses you paid or incurred in the first tax year the method or change of method is to apply. Ez 1040 form A statement that you will account separately in your books for the expenses to which this method or change of method relates. Ez 1040 form Send your request to the following  address. Ez 1040 form  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. Ez 1040 form Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). Ez 1040 form However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. Ez 1040 form Gain on sale of farmland. Ez 1040 form   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. Ez 1040 form If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. Ez 1040 form See Section 1252 property under Other Gains in chapter 9. Ez 1040 form Prev  Up  Next   Home   More Online Publications