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The Ez1040

Ez1040 Publication 3920 - Main Contents Table of Contents Tax ForgivenessYears Eligible for Tax Forgiveness Amount of Tax Forgiven Refund of Taxes Paid How To Claim Tax Forgiveness Payments to SurvivorsSeptember 11th Victim Compensation Fund of 2001 Qualified Disaster Relief Payments Disability Payments Death Benefits Canceled Debt Payments to Survivors of Public Safety Officers Postponed Tax DeadlinesCovered area. Ez1040 Disaster Area Losses Estate Tax Reduction Structured Settlement Factoring Transactions Illustrated Worksheets B and C Additional Worksheets How To Get Tax Help Tax Forgiveness The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. Ez1040 Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. Ez1040 Any forgiven tax liability owed to the IRS will not have to be paid. Ez1040 Any forgiven tax liability that has already been paid will be refunded. Ez1040 (See Refund of Taxes Paid, later. Ez1040 ) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. Ez1040 Then read Amount of Tax Forgiven. Ez1040 Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. Ez1040 Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. Ez1040 See Minimum Amount of Relief later under Amount of Tax Forgiven. Ez1040 Years Eligible for Tax Forgiveness The following paragraphs explain which years are eligible for tax forgiveness. Ez1040 Oklahoma City attack. Ez1040   For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death. Ez1040 Example 1. Ez1040 A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. Ez1040 His income tax is forgiven for 1994 and 1995. Ez1040 Example 2. Ez1040 A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. Ez1040 She subsequently died of her wounds in 1996. Ez1040 Her income tax is forgiven for 1994, 1995, and 1996. Ez1040 September 11 attacks and anthrax attacks. Ez1040   For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death. Ez1040 Example 1. Ez1040 A Pentagon employee died in the September 11 attack. Ez1040 Her income tax is forgiven for 2000 and 2001. Ez1040 Example 2. Ez1040 A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. Ez1040 His income tax liability is forgiven for 2000, 2001, and 2002. Ez1040 Amount of Tax Forgiven The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. Ez1040 On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness. Ez1040 To figure the tax to be forgiven, use the following worksheets. Ez1040 Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er). Ez1040 Use Worksheet B for any eligible year the decedent filed a joint return. Ez1040 See the illustrated Worksheet B near the end of this publication. Ez1040 Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. Ez1040 Instead, complete Worksheet C and file a return for the decedent's last tax year. Ez1040 See Minimum Amount of Relief, later. Ez1040 If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times. Ez1040 In English–7 a. Ez1040 m. Ez1040 to 10 p. Ez1040 m. Ez1040 local time. Ez1040 In Spanish–8 a. Ez1040 m. Ez1040 to 9:30 p. Ez1040 m. Ez1040 local time. Ez1040 Both spouses died. Ez1040   If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. Ez1040 Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). Ez1040 If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. Ez1040 However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. Ez1040 The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B. Ez1040 Residents of community property states. Ez1040   If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. Ez1040 Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative. Ez1040 Worksheet B. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Ez1040 1       2 Enter the decedent's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 2       3 Enter the decedent's total tax. Ez1040 See the instructions. Ez1040 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Ez1040 See the instructions. Ez1040 4       5 Subtract line 4 from line 3. Ez1040 5       6 Enter the surviving spouse's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 6       7 Enter the surviving spouse's total tax. Ez1040 See the instructions. Ez1040 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Ez1040 8       9 Subtract line 8 from line 7. Ez1040 9       10 Add lines 5 and 9. Ez1040 10       11 Enter the total tax from the joint return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 11       12 Add lines 4 and 8. Ez1040 12       13 Subtract line 12 from line 11. Ez1040 13       14 Divide line 5 by line 10. Ez1040 Enter the result as a decimal. Ez1040 14       15 Tax to be forgiven. Ez1040 Multiply line 13 by line 14 and enter the result. Ez1040 15       Note. Ez1040 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Worksheet B. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Ez1040 1       2 Enter the decedent's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 2       3 Enter the decedent's total tax. Ez1040 See the instructions. Ez1040 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Ez1040 See the instructions. Ez1040 4       5 Subtract line 4 from line 3. Ez1040 5       6 Enter the surviving spouse's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 6       7 Enter the surviving spouse's total tax. Ez1040 See the instructions. Ez1040 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Ez1040 8       9 Subtract line 8 from line 7. Ez1040 9       10 Add lines 5 and 9. Ez1040 10       11 Enter the total tax from the joint return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 11       12 Add lines 4 and 8. Ez1040 12       13 Subtract line 12 from line 11. Ez1040 13       14 Divide line 5 by line 10. Ez1040 Enter the result as a decimal. Ez1040 14       15 Tax to be forgiven. Ez1040 Multiply line 13 by line 14 and enter the result. Ez1040 15       Note. Ez1040 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Instructions for Worksheet B Table 1. Ez1040 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Ez1040 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Ez1040 ** File Form 4506 to get a transcript of the decedent's account. Ez1040 Table 1. Ez1040 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Ez1040 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Ez1040 ** File Form 4506 to get a transcript of the decedent's account. Ez1040 Lines 2 and 6. Ez1040   Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns. Ez1040   Allocate wages and salaries to the spouse who performed the services and received the Form W-2. Ez1040 Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. Ez1040 Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate. Ez1040   Allocate business deductions to the owner of the business. Ez1040 Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate. Ez1040 Lines 3 and 7. Ez1040   Figure the total tax as if a separate return had been filed. Ez1040 The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. Ez1040 When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2. Ez1040   When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. Ez1040 If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. Ez1040 Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit. Ez1040 Line 4. Ez1040   Enter the total, if any, of the following taxes. Ez1040 Self-employment tax. Ez1040 Social security and Medicare tax on tip income not reported to employer. Ez1040 Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Ez1040 Tax on excess accumulation in qualified retirement plans. Ez1040 Household employment taxes. Ez1040 Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Ez1040 Tax on golden parachute payments. Ez1040 Minimum Amount of Relief The minimum amount of relief is $10,000. Ez1040 If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. Ez1040 The IRS will refund the difference as explained under Refund of Taxes Paid. Ez1040 Use Worksheet C to figure the additional tax payment. Ez1040 But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years. Ez1040 Example 1. Ez1040 An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. Ez1040 The $6,400 is eligible for forgiveness. Ez1040 The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001. Ez1040 Example 2. Ez1040 A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. Ez1040 The IRS will treat $10,000 as a tax payment for 2001. Ez1040 Income received after date of death. Ez1040   Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. Ez1040 Examples are the final paycheck or dividends on stock owned by the decedent. Ez1040 However, this income is exempt from income tax and is not included on Form 1041 if it is received: After the date of the decedent's death, and Before the end of the decedent's tax year (determined without regard to death). Ez1040 Nonqualifying income. Ez1040   The following income is not exempt from tax. Ez1040 The tax on it is not eligible for forgiveness. Ez1040 Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks. Ez1040 Amounts that would not have been payable but for an action taken after September 11, 2001. Ez1040 The following are examples of nonqualifying income. Ez1040 Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent. Ez1040 Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason. Ez1040 Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack. Ez1040 Interest on savings bonds cashed by the beneficiary of the decedent. Ez1040 If you are responsible for the estate of a decedent, see Publication 559. Ez1040 Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due. Ez1040 Instructions for lines 2–9 of Worksheet C. Ez1040   The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. Ez1040 To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. Ez1040 Or, if special requirements are met, you can use the alternative computation instead. Ez1040 See Alternative computation, later. Ez1040   You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. Ez1040 Use Form 1041 to figure what the taxable income would be without including the exempt income. Ez1040 Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)). Ez1040 Alternative computation. Ez1040   Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. Ez1040 You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met. Ez1040 The estate claimed an income distribution deduction on line 18 (Form 1041). Ez1040 Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate. Ez1040 If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if: Form 1041 was not required because exempt income was received, and The estate would have claimed an income distribution deduction if the exempt income were taxable. Ez1040 If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. Ez1040 Complete the rest of Worksheet C to determine the additional payment allowed. Ez1040 Worksheet C. Ez1040 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Ez1040 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Ez1040 1 Minimum relief amount. Ez1040 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Ez1040 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Ez1040 3       4 Add lines 2 and 3. Ez1040 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 5       6 Add lines 4 and 5. Ez1040 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Ez1040 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Ez1040 8       9 Tax on exempt income. Ez1040 Subtract line 8 from line 7. Ez1040 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Ez1040 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Ez1040 10       11 Add lines 9 and 10. Ez1040 11   12 Additional payment allowed. Ez1040 If line 11 is $10,000 or more, enter -0- and stop here. Ez1040 No additional amount is allowed as a tax payment. Ez1040 Otherwise, subtract line 11 from line 1 and enter the result. Ez1040 12   Note. Ez1040 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Ez1040 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Ez1040 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Ez1040 Write "Sec. Ez1040 692(d)(2) Payment" and the amount to the right of the entry space. Ez1040 Also indicate whether a Form 1041 is being filed for the decedent's estate. Ez1040 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Ez1040 Write “Sec. Ez1040 692(d)(2) Payment” on the dotted line to the left of the entry space. Ez1040 Worksheet C. Ez1040 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Ez1040 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Ez1040 1 Minimum relief amount. Ez1040 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Ez1040 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Ez1040 3       4 Add lines 2 and 3. Ez1040 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 5       6 Add lines 4 and 5. Ez1040 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Ez1040 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Ez1040 8       9 Tax on exempt income. Ez1040 Subtract line 8 from line 7. Ez1040 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Ez1040 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Ez1040 10       11 Add lines 9 and 10. Ez1040 11   12 Additional payment allowed. Ez1040 If line 11 is $10,000 or more, enter -0- and stop here. Ez1040 No additional amount is allowed as a tax payment. Ez1040 Otherwise, subtract line 11 from line 1 and enter the result. Ez1040 12   Note. Ez1040 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Ez1040 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Ez1040 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Ez1040 Write "Sec. Ez1040 692(d)(2) Payment" and the amount to the right of the entry space. Ez1040 Also indicate whether a Form 1041 is being filed for the decedent's estate. Ez1040 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Ez1040 Write “Sec. Ez1040 692(d)(2) Payment” on the dotted line to the left of the entry space. Ez1040 Worksheet D. Ez1040 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Ez1040 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Ez1040 5   6 Estate's tax on exempt income. Ez1040 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Ez1040 Figure the total tax that would have been payable by all beneficiaries. Ez1040 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Ez1040 Add the amounts by which each beneficiary's income tax is increased. Ez1040 7   8 Add lines 6 and 7. Ez1040 Enter this amount on line 9 of Worksheet C. Ez1040 8   Worksheet D. Ez1040 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Ez1040 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Ez1040 5   6 Estate's tax on exempt income. Ez1040 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Ez1040 Figure the total tax that would have been payable by all beneficiaries. Ez1040 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Ez1040 Add the amounts by which each beneficiary's income tax is increased. Ez1040 7   8 Add lines 6 and 7. Ez1040 Enter this amount on line 9 of Worksheet C. Ez1040 8   Refund of Taxes Paid The IRS will refund the following forgiven income tax liabilities. Ez1040 Income tax liabilities that have been paid. Ez1040 Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. Ez1040 See Minimum Amount of Relief, earlier. Ez1040 Example 1. Ez1040 A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. Ez1040 The total, $14,000, is eligible for tax forgiveness. Ez1040 However, he paid only $13,000 of that amount. Ez1040 The IRS will refund the $13,000 paid. Ez1040 Example 2. Ez1040 A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. Ez1040 The child qualifies for the minimum relief of $10,000. Ez1040 The $10,000 is treated as a tax payment for 2001 and will be refunded. Ez1040 Period for filing a claim for credit or refund. Ez1040   To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Ez1040 For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. Ez1040 To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return. Ez1040 Extension of time for victims of Oklahoma City attack. Ez1040   The period described above has been extended for victims of the Oklahoma City attack. Ez1040 Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return. Ez1040 How To Claim Tax Forgiveness Use the following procedures to claim income tax forgiveness. Ez1040 Which Form To Use The form you use depends on whether an income tax return for the eligible year was already filed for the decedent. Ez1040 Return required but not yet filed. Ez1040   File Form 1040 if the decedent was a U. Ez1040 S. Ez1040 citizen or resident. Ez1040 File Form 1040NR if the decedent was a nonresident alien. Ez1040 A nonresident alien is someone who is not a U. Ez1040 S. Ez1040 citizen or resident. Ez1040 Return required and already filed. Ez1040   File a separate Form 1040X for each year you are claiming tax relief. Ez1040 Return not required and not filed. Ez1040   File Form 1040 only for the year of death if the decedent was a U. Ez1040 S. Ez1040 citizen or resident. Ez1040 File Form 1040NR if the decedent was a nonresident alien. Ez1040 Return not required but already filed. Ez1040   File Form 1040X only for the year of death. Ez1040 How to complete the returns. Ez1040   Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. Ez1040 Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. Ez1040 If filing Form 1040 or Form 1040NR, also attach any Forms W–2. Ez1040 If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C. Ez1040 Also, please write one of the following across the top of page 1 of each return. Ez1040 KITA—Oklahoma City KITA—9/11 KITA—Anthrax “KITA” means “killed in terrorist attack. Ez1040 ” Need a copy of a previously filed return?   You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. Ez1040 If you need a copy, use Form 4506. Ez1040 The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. Ez1040 Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. Ez1040 Send Form 4506 to the address shown in the form instructions. Ez1040 Taxpayer identification number. Ez1040   A taxpayer identification number must be furnished on the decedent's returns. Ez1040 This is usually the decedent's social security number (SSN). Ez1040 However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). Ez1040 If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U. Ez1040 S. Ez1040 income tax return for any tax year, do not apply for an ITIN. Ez1040 You may claim a refund by filing Form 1040NR without an SSN or ITIN. Ez1040 Necessary Documents Please attach the following documents to the return or amended return. Ez1040 Proof of death. Ez1040   Attach a copy of the death certificate. Ez1040 If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate. Ez1040 Form 1310. Ez1040   You must send Form 1310 with all returns and claims for refund, unless either of the following applies. Ez1040 You are a surviving spouse filing an original or amended joint return with the decedent. Ez1040 You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return. Ez1040 A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. Ez1040 A copy of the decedent's will cannot be accepted as evidence that you are the personal representative. Ez1040      If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. Ez1040 Include a statement saying an amended return will be filed as soon as the necessary tax information is available. Ez1040 Where To File The IRS has set up a special office for processing returns and claims for tax forgiveness. Ez1040 Use one of the addresses shown below. Ez1040 Where you file the returns or claims depends on whether you use the U. Ez1040 S. Ez1040 Postal Service or a private delivery service. Ez1040 Please do not send these returns or claims to any of the addresses shown in the tax form instructions. Ez1040 U. Ez1040 S. Ez1040 Postal Service. Ez1040   If you use the U. Ez1040 S. Ez1040 Postal Service, file these returns and claims at the following address. Ez1040 Internal Revenue Service P. Ez1040 O. Ez1040 Box 4053 Woburn, MA 01888 Private delivery service. Ez1040   Private delivery services cannot deliver items to P. Ez1040 O. Ez1040 boxes. Ez1040 If you use a private delivery service, file these returns and claims at the following address. Ez1040 Internal Revenue Service Stop 661 310 Lowell St. Ez1040 Andover, MA 01810 Designated private delivery services. Ez1040   You can use the following private delivery services to file these returns and claims. Ez1040 Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service. Ez1040 DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight. Ez1040 Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day. Ez1040 United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Ez1040 M. Ez1040 , UPS Worldwide Express Plus, and UPS Worldwide Express. Ez1040 The private delivery service can tell you how to get written proof of the mailing date. Ez1040 Payments to Survivors The following section discusses the tax treatment of certain amounts received by survivors. Ez1040 September 11th Victim Compensation Fund of 2001 Payments from the September 11th Victim Compensation Fund of 2001 are not included in income. Ez1040 Qualified Disaster Relief Payments Qualified disaster relief payments are not included in income. Ez1040 These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). Ez1040 No withholding applies to these payments. Ez1040 Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses. Ez1040 Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack. Ez1040 Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. Ez1040 (A personal residence can be a rented residence or one you own. Ez1040 ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack. Ez1040 Qualified disaster relief payments also include the following. Ez1040 Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack. Ez1040 Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack. Ez1040 Qualified disaster relief payments do not include: Insurance or other reimbursements for expenses, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Ez1040 Disability Payments For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income. Ez1040 Death Benefits Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. Ez1040 Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. Ez1040 However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack. Ez1040 If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. Ez1040 For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. Ez1040 If that period has expired, you are granted an extension. Ez1040 You have until January 22, 2003, to file Form 1040X to exclude the death benefits. Ez1040 On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. Ez1040 102(b)(2). Ez1040 ” Canceled Debt Canceled debt is not included in your income (or the income of the estate) if: You (or the estate) were liable, or became liable, for the debt of a decedent, and The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks. Ez1040 The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt. Ez1040 Payments to Survivors of Public Safety Officers If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income. Ez1040 Bureau of Justice Assistance payments. Ez1040   If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance. Ez1040 Government plan annuity. Ez1040   If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. Ez1040 This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer. Ez1040 For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews. Ez1040 More information. Ez1040   For more information, see Publication 559. Ez1040 Postponed Tax Deadlines The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. Ez1040 The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Ez1040 If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Ez1040 Affected taxpayers. Ez1040   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Ez1040 Any individual whose main home is located in a covered area (defined later). Ez1040 Any business entity or sole proprietor whose principal place of business is located in a covered area. Ez1040 Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. Ez1040 The main home or principal place of business does not have to be located in the covered area. Ez1040 Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area. Ez1040 Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area. Ez1040 The spouse on a joint return with a taxpayer who is eligible for postponements. Ez1040 Any other person determined by the IRS to be affected by a terrorist attack. Ez1040 Covered area. Ez1040   This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year. Ez1040 Abatement of interest. Ez1040   The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement. Ez1040 Disaster Area Losses If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return. Ez1040 You must make this choice to deduct your loss on your 2000 return by the later of the following dates. Ez1040 The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer). Ez1040 The due date (with extensions) for the 2000 return. Ez1040 For more information about disaster area losses, see Publication 547. Ez1040 Estate Tax Reduction The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. Ez1040 The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. Ez1040 The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. Ez1040 These credits may reduce or eliminate the estate tax due. Ez1040 A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid. Ez1040 Recovery from the September 11th Victim Compensation Fund. Ez1040   The value of claims for a decedent's pain and suffering is normally included in the gross estate. Ez1040 However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. Ez1040 Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund. Ez1040 Which estates must file a return. Ez1040   For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U. Ez1040 S. Ez1040 citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. Ez1040 Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. Ez1040 Use Form 4768, Application for Extension of Time To File a Return and/or Pay U. Ez1040 S. Ez1040 Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension. Ez1040 Where to file. Ez1040   Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print. Ez1040 Internal Revenue Service E & G Department/Stop 824T 201 W. Ez1040 Rivercenter Blvd. Ez1040 Covington, KY 41011 More information. Ez1040   For more information on the federal estate tax, see the instructions for Form 706. Ez1040 Structured Settlement Factoring Transactions A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. Ez1040 The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. Ez1040 However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. Ez1040 For information about these requirements, see Internal Revenue Code section 5891. Ez1040 Worksheet B Illustrated. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Ez1040 1 2000 2001   2 Enter the decedent's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 2 $17,259 $14,295   3 Enter the decedent's total tax. Ez1040 See the instructions. Ez1040 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Ez1040 See the instructions. Ez1040 4 3,532 3,109   5 Subtract line 4 from line 3. Ez1040 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions for line 2. Ez1040 6 29,025 29,850   7 Enter the surviving spouse's total tax. Ez1040 See the instructions. Ez1040 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Ez1040 8 0 0   9 Subtract line 8 from line 7. Ez1040 9 5,277 5,391   10 Add lines 5 and 9. Ez1040 10 7,868 7,532   11 Enter the total tax from the joint return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 11 10,789 9,728   12 Add lines 4 and 8. Ez1040 12 3,532 3,109   13 Subtract line 12 from line 11. Ez1040 13 7,257 6,619   14 Divide line 5 by line 10. Ez1040 Enter the result as a decimal. Ez1040 14 . Ez1040 329 . Ez1040 284   15 Tax to be forgiven. Ez1040 Multiply line 13 by line 14 and enter the result. Ez1040 15 $2,388 $1,880   Note. Ez1040 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Worksheet B Illustrated. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Ez1040 1 2000 2001   2 Enter the decedent's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 2 $17,259 $14,295   3 Enter the decedent's total tax. Ez1040 See the instructions. Ez1040 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Ez1040 See the instructions. Ez1040 4 3,532 3,109   5 Subtract line 4 from line 3. Ez1040 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions for line 2. Ez1040 6 29,025 29,850   7 Enter the surviving spouse's total tax. Ez1040 See the instructions. Ez1040 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Ez1040 8 0 0   9 Subtract line 8 from line 7. Ez1040 9 5,277 5,391   10 Add lines 5 and 9. Ez1040 10 7,868 7,532   11 Enter the total tax from the joint return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 11 10,789 9,728   12 Add lines 4 and 8. Ez1040 12 3,532 3,109   13 Subtract line 12 from line 11. Ez1040 13 7,257 6,619   14 Divide line 5 by line 10. Ez1040 Enter the result as a decimal. Ez1040 14 . Ez1040 329 . Ez1040 284   15 Tax to be forgiven. Ez1040 Multiply line 13 by line 14 and enter the result. Ez1040 15 $2,388 $1,880   Note. Ez1040 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Illustrated Worksheets B and C A wife lost her husband in the September 11 attack on the World Trade Center. Ez1040 They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. Ez1040 The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities. Ez1040 After the husband died, his estate received income of $4,000. Ez1040 Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. Ez1040 This net profit is exempt from income tax as explained earlier under Income received after date of death. Ez1040 The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more. Ez1040 To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. Ez1040 She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000. Ez1040 To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. Ez1040 To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C. Ez1040   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728 Worksheet C Illustrated. Ez1040 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Ez1040 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Ez1040 1 Minimum relief amount. Ez1040 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Ez1040 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Ez1040 3 0     4 Add lines 2 and 3. Ez1040 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 5 1,000     6 Add lines 4 and 5. Ez1040 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Ez1040 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Ez1040 8 435     9 Tax on exempt income. Ez1040 Subtract line 8 from line 7. Ez1040 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Ez1040 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Ez1040 10 4,268     11 Add lines 9 and 10. Ez1040 11 $4,543 12 Additional payment allowed. Ez1040 If line 11 is $10,000 or more, enter -0- and stop here. Ez1040 No additional amount is allowed as a tax payment. Ez1040 Otherwise, subtract line 11 from line 1 and enter the result. Ez1040 12 $5,457 Note. Ez1040 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Ez1040 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Ez1040 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Ez1040 Write "Sec. Ez1040 692(d)(2) Payment" and the amount to the right of the entry space. Ez1040 Also indicate whether a Form 1041 is being filed for the decedent's estate. Ez1040 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Ez1040 Write “Sec. Ez1040 692(d)(2) Payment” on the dotted line to the left of the entry space. Ez1040 Worksheet C Illustrated. Ez1040 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Ez1040 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Ez1040 1 Minimum relief amount. Ez1040 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Ez1040 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Ez1040 3 0     4 Add lines 2 and 3. Ez1040 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 5 1,000     6 Add lines 4 and 5. Ez1040 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Ez1040 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Ez1040 8 435     9 Tax on exempt income. Ez1040 Subtract line 8 from line 7. Ez1040 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Ez1040 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Ez1040 10 4,268     11 Add lines 9 and 10. Ez1040 11 $4,543 12 Additional payment allowed. Ez1040 If line 11 is $10,000 or more, enter -0- and stop here. Ez1040 No additional amount is allowed as a tax payment. Ez1040 Otherwise, subtract line 11 from line 1 and enter the result. Ez1040 12 $5,457 Note. Ez1040 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Ez1040 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Ez1040 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Ez1040 Write "Sec. Ez1040 692(d)(2) Payment" and the amount to the right of the entry space. Ez1040 Also indicate whether a Form 1041 is being filed for the decedent's estate. Ez1040 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Ez1040 Write “Sec. Ez1040 692(d)(2) Payment” on the dotted line to the left of the entry space. Ez1040 Additional Worksheets The following additional worksheets are provided for your convenience. Ez1040 Worksheet A. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Ez1040 1       2 Enter the total tax from the decedent's income tax return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Ez1040 (These taxes are not eligible for forgiveness. Ez1040 )           a Self-employment tax. Ez1040 3a         b Social security and Medicare tax on tip income not reported to employer. Ez1040 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Ez1040 3c         d Tax on excess accumulation in qualified retirement plans. Ez1040 3d         e Household employment taxes. Ez1040 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Ez1040 3f         g Tax on golden parachute payments. Ez1040 3g       4 Add lines 3a through 3g. Ez1040 4       5 Tax to be forgiven. Ez1040 Subtract line 4 from line 2. Ez1040 5       Note. Ez1040 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Worksheet A. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Ez1040 1       2 Enter the total tax from the decedent's income tax return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Ez1040 (These taxes are not eligible for forgiveness. Ez1040 )           a Self-employment tax. Ez1040 3a         b Social security and Medicare tax on tip income not reported to employer. Ez1040 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Ez1040 3c         d Tax on excess accumulation in qualified retirement plans. Ez1040 3d         e Household employment taxes. Ez1040 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Ez1040 3f         g Tax on golden parachute payments. Ez1040 3g       4 Add lines 3a through 3g. Ez1040 4       5 Tax to be forgiven. Ez1040 Subtract line 4 from line 2. Ez1040 5       Note. Ez1040 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Worksheet B. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Ez1040 1       2 Enter the decedent's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 2       3 Enter the decedent's total tax. Ez1040 See the instructions. Ez1040 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Ez1040 See the instructions. Ez1040 4       5 Subtract line 4 from line 3. Ez1040 5       6 Enter the surviving spouse's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 6       7 Enter the surviving spouse's total tax. Ez1040 See the instructions. Ez1040 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Ez1040 8       9 Subtract line 8 from line 7. Ez1040 9       10 Add lines 5 and 9. Ez1040 10       11 Enter the total tax from the joint return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 11       12 Add lines 4 and 8. Ez1040 12       13 Subtract line 12 from line 11. Ez1040 13       14 Divide line 5 by line 10. Ez1040 Enter the result as a decimal. Ez1040 14       15 Tax to be forgiven. Ez1040 Multiply line 13 by line 14 and enter the result. Ez1040 15       Note. Ez1040 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Worksheet B. Ez1040 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Ez1040 1       2 Enter the decedent's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 2       3 Enter the decedent's total tax. Ez1040 See the instructions. Ez1040 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Ez1040 See the instructions. Ez1040 4       5 Subtract line 4 from line 3. Ez1040 5       6 Enter the surviving spouse's taxable income. Ez1040 Figure taxable income as if a separate return had been filed. Ez1040 See the instructions. Ez1040 6       7 Enter the surviving spouse's total tax. Ez1040 See the instructions. Ez1040 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Ez1040 8       9 Subtract line 8 from line 7. Ez1040 9       10 Add lines 5 and 9. Ez1040 10       11 Enter the total tax from the joint return. Ez1040 See Table 1 on page 5 for the line number for years before 2002. Ez1040 11       12 Add lines 4 and 8. Ez1040 12       13 Subtract line 12 from line 11. Ez1040 13       14 Divide line 5 by line 10. Ez1040 Enter the result as a decimal. Ez1040 14       15 Tax to be forgiven. Ez1040 Multiply line 13 by line 14 and enter the result. Ez1040 15       Note. Ez1040 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Ez1040 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Ez1040 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Ez1040 The IRS will determine the amount to be refunded. Ez1040 Worksheet C. Ez1040 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Ez1040 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Ez1040 1 Minimum tax forgiveness. Ez1040 Note. Ez1040 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Ez1040 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Ez1040 3       4 Add lines 2 and 3. Ez1040 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 5       6 Add lines 4 and 5. Ez1040 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Ez1040 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Ez1040 8       9 Tax on exempt income. Ez1040 Subtract line 8 from line 7. Ez1040 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Ez1040 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Ez1040 10       11 Add lines 9 and 10. Ez1040 11   12 Additional payment allowed. Ez1040 If line 11 is $10,000 or more, enter -0- and stop here. Ez1040 No additional amount is allowed as a tax payment. Ez1040 Otherwise, subtract line 11 from line 1 and enter the result. Ez1040 12   Note. Ez1040 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Ez1040 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Ez1040 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Ez1040 Write "Sec. Ez1040 692(d)(2) Payment" and the amount to the right of the entry space. Ez1040 Also indicate whether a Form 1041 is being filed for the decedent's estate. Ez1040 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Ez1040 Write “Sec. Ez1040 692(d)(2) Payment” on the dotted line to the left of the entry space. Ez1040 Worksheet C. Ez1040 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Ez1040 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Ez1040 1 Minimum tax forgiveness. Ez1040 Note. Ez1040 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Ez1040 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Ez1040 3       4 Add lines 2 and 3. Ez1040 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Ez1040 (See Income received after date of death on page 5. Ez1040 ) 5       6 Add lines 4 and 5. Ez1040 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Ez1040 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Ez1040 8       9 Tax on exempt income. Ez1040 Subtract line 8 from line 7. Ez1040 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Ez1040 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Ez1040 10       11 Add lines 9 and 10. Ez1040 11   12 Additional payment allowed. Ez1040 If line 11 is $10,000 or more, enter -0- and stop here. Ez1040 No additional amount is allowed as a tax payment. Ez1040 Otherwise, subtract line 11 from line 1 and enter the result. Ez1040 12   Note. Ez1040 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Ez1040 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Ez1040 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Ez1040 Write "Sec. Ez1040 692(d)(2) Payment" and the amount to the right of the entry space. Ez1040 Also indicate whether a Form 1041 is being filed for the decedent's estate. Ez1040 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Ez1040 Write “Sec. Ez1040 692(d)(2) Payment” on the dotted line to the left of the entry space. Ez1040 How To Get Tax Help Special IRS assistance. Ez1040   The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. Ez1040 We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks. Ez1040 Call 1–866–562–5227 Monday through Friday In English–7 a. Ez1040 m. Ez1040 to 10 p. Ez1040 m. Ez1040 local time In Spanish–8 a. Ez1040 m. Ez1040 to 9:30 p. Ez1040 m. Ez1040 local time   The IRS web site at www. Ez1040 irs. Ez1040 gov has notices and other tax relief information. Ez1040 Check it periodically for any new guidance or to see if Congress has enacted new legislation. Ez1040   Business taxpayers affected by the attacks can e-mail their questions to corp. Ez1040 disaster. Ez1040 relief@irs. Ez1040 gov. Ez1040   For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www. Ez1040 fema. Ez1040 gov. Ez1040 Other help from the IRS. Ez1040   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Ez1040 By selecting the method that is best for you, you will have quick and easy access to tax help. Ez1040 Contacting your Taxpayer Advocate. Ez1040   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. Ez1040   The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. Ez1040 While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. Ez1040   To contact your Taxpayer Advocate: Call the Taxpayer Advocate at 1–877–777–4778. Ez1040 Call the IRS at 1–800–829–1040. Ez1040 Call, write, or fax the Taxpayer Advocate office in your area. Ez1040 Call 1–800–829–4059 if you are a TTY/TDD user. Ez1040   For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS. Ez1040 Free tax services. Ez1040   To find out what services are available, get Publication 910, Guide to Free Tax Services. Ez1040 It contains a list of free tax publications and an index of tax topics. Ez1040 It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Ez1040 Personal computer. Ez1040 With your personal computer and modem, you can access the IRS on the Internet at www. Ez1040 irs. Ez1040 gov. Ez1040 While visiting our web site, you can: Find answers to questions you may have. Ez1040 Download forms and publications or search for forms and pub