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File 2011 Tax Return Online

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File 2011 Tax Return Online

File 2011 tax return online 26. File 2011 tax return online   Car Expenses and Other Employee Business Expenses Table of Contents What's New Introduction Useful Items - You may want to see: Travel ExpensesTraveling Away From Home Tax Home Temporary Assignment or Job What Travel Expenses Are Deductible? Travel in the United States Travel Outside the United States Conventions Entertainment Expenses50% Limit What Entertainment Expenses Are Deductible? What Entertainment Expenses Are Not Deductible? Gift Expenses Transportation ExpensesArmed Forces reservists. File 2011 tax return online Parking fees. File 2011 tax return online Advertising display on car. File 2011 tax return online Car pools. File 2011 tax return online Hauling tools or instruments. File 2011 tax return online Union members' trips from a union hall. File 2011 tax return online Car Expenses RecordkeepingHow To Prove Expenses How Long To Keep Records and Receipts How To ReportGifts. File 2011 tax return online Statutory employees. File 2011 tax return online Reimbursements Completing Forms 2106 and 2106-EZ Special Rules What's New Standard mileage rate. File 2011 tax return online  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. File 2011 tax return online Car expenses and use of the standard mileage rate are explained under Transportation Expenses , later. File 2011 tax return online Depreciation limits on cars, trucks, and vans. File 2011 tax return online  For 2013, the first-year limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). File 2011 tax return online For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). File 2011 tax return online For more information, see Depreciation limits in Publication 463. File 2011 tax return online Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. File 2011 tax return online An ordinary expense is one that is common and accepted in your trade or business. File 2011 tax return online A necessary expense is one that is helpful and appropriate for your business. File 2011 tax return online An expense does not have to be required to be considered necessary. File 2011 tax return online This chapter explains the following. File 2011 tax return online What expenses are deductible. File 2011 tax return online How to report your expenses on your return. File 2011 tax return online What records you need to prove your expenses. File 2011 tax return online How to treat any expense reimbursements you may receive. File 2011 tax return online Who does not need to use this chapter. File 2011 tax return online   If you are an employee, you will not need to read this chapter if all of the following are true. File 2011 tax return online You fully accounted to your employer for your work-related expenses. File 2011 tax return online You received full reimbursement for your expenses. File 2011 tax return online Your employer required you to return any excess reimbursement and you did so. File 2011 tax return online There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. File 2011 tax return online If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. File 2011 tax return online See Reimbursements , later, if you would like more information on reimbursements and accounting to your employer. File 2011 tax return online    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. File 2011 tax return online Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming Form 2106 Employee Business Expenses Form 2106-EZ Unreimbursed Employee Business Expenses Travel Expenses If you temporarily travel away from your tax home, you can use this section to determine if you have deductible travel expenses. File 2011 tax return online This section discusses: Traveling away from home, Tax home, Temporary assignment or job, and What travel expenses are deductible. File 2011 tax return online It also discusses the standard meal allowance, rules for travel inside and outside the United States, and deductible convention expenses. File 2011 tax return online Travel expenses defined. File 2011 tax return online   For tax purposes, travel expenses are the ordinary and necessary expenses (defined earlier) of traveling away from home for your business, profession, or job. File 2011 tax return online   You will find examples of deductible travel expenses in Table 26-1 . File 2011 tax return online Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. File 2011 tax return online This rest requirement is not satisfied by merely napping in your car. File 2011 tax return online You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. File 2011 tax return online Example 1. File 2011 tax return online You are a railroad conductor. File 2011 tax return online You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. File 2011 tax return online During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. File 2011 tax return online You are considered to be away from home. File 2011 tax return online Example 2. File 2011 tax return online You are a truck driver. File 2011 tax return online You leave your terminal and return to it later the same day. File 2011 tax return online You get an hour off at your turnaround point to eat. File 2011 tax return online Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. File 2011 tax return online Members of the Armed Forces. File 2011 tax return online   If you are a member of the U. File 2011 tax return online S. File 2011 tax return online Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. File 2011 tax return online You cannot deduct your expenses for meals and lodging. File 2011 tax return online You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. File 2011 tax return online If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. File 2011 tax return online    A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home aboard ship for travel expense purposes. File 2011 tax return online Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. File 2011 tax return online Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. File 2011 tax return online It includes the entire city or general area in which your business or work is located. File 2011 tax return online If you have more than one regular place of business, your tax home is your main place of business. File 2011 tax return online See Main place of business or work , later. File 2011 tax return online If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. File 2011 tax return online See No main place of business or work , later. File 2011 tax return online If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. File 2011 tax return online As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. File 2011 tax return online Main place of business or work. File 2011 tax return online   If you have more than one place of business or work, consider the following when determining which one is your main place of business or work. File 2011 tax return online The total time you ordinarily spend in each place. File 2011 tax return online The level of your business activity in each place. File 2011 tax return online Whether your income from each place is significant or insignificant. File 2011 tax return online Example. File 2011 tax return online You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. File 2011 tax return online You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. File 2011 tax return online Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. File 2011 tax return online No main place of business or work. File 2011 tax return online   You may have a tax home even if you do not have a regular or main place of business or work. File 2011 tax return online Your tax home may be the home where you regularly live. File 2011 tax return online Factors used to determine tax home. File 2011 tax return online   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. File 2011 tax return online You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. File 2011 tax return online You have living expenses at your main home that you duplicate because your business requires you to be away from that home. File 2011 tax return online You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. File 2011 tax return online   If you satisfy all three factors, your tax home is the home where you regularly live. File 2011 tax return online If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. File 2011 tax return online If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. File 2011 tax return online Example. File 2011 tax return online You are single and live in Boston in an apartment you rent. File 2011 tax return online You have worked for your employer in Boston for a number of years. File 2011 tax return online Your employer enrolls you in a 12-month executive training program. File 2011 tax return online You do not expect to return to work in Boston after you complete your training. File 2011 tax return online During your training, you do not do any work in Boston. File 2011 tax return online Instead, you receive classroom and on-the-job training throughout the United States. File 2011 tax return online You keep your apartment in Boston and return to it frequently. File 2011 tax return online You use your apartment to conduct your personal business. File 2011 tax return online You also keep up your community contacts in Boston. File 2011 tax return online When you complete your training, you are transferred to Los Angeles. File 2011 tax return online You do not satisfy factor (1) because you did not work in Boston. File 2011 tax return online You satisfy factor (2) because you had duplicate living expenses. File 2011 tax return online You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. File 2011 tax return online Therefore, you have a tax home in Boston. File 2011 tax return online Tax home different from family home. File 2011 tax return online   If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. File 2011 tax return online You also cannot deduct the cost of meals and lodging while at your tax home. File 2011 tax return online See Example 1 . File 2011 tax return online   If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. File 2011 tax return online See Example 2 . File 2011 tax return online Example 1. File 2011 tax return online You are a truck driver and you and your family live in Tucson. File 2011 tax return online You are employed by a trucking firm that has its terminal in Phoenix. File 2011 tax return online At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. File 2011 tax return online You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. File 2011 tax return online This is because Phoenix is your tax home. File 2011 tax return online Example 2. File 2011 tax return online Your family home is in Pittsburgh, where you work 12 weeks a year. File 2011 tax return online The rest of the year you work for the same employer in Baltimore. File 2011 tax return online In Baltimore, you eat in restaurants and sleep in a rooming house. File 2011 tax return online Your salary is the same whether you are in Pittsburgh or Baltimore. File 2011 tax return online Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. File 2011 tax return online You cannot deduct any expenses you have for meals and lodging there. File 2011 tax return online However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. File 2011 tax return online You can deduct the cost of your round trip between Baltimore and Pittsburgh. File 2011 tax return online You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. File 2011 tax return online Temporary Assignment or Job You may regularly work at your tax home and also work at another location. File 2011 tax return online It may not be practical to return to your tax home from this other location at the end of each work day. File 2011 tax return online Temporary assignment vs. File 2011 tax return online indefinite assignment. File 2011 tax return online   If your assignment or job away from your main place of work is temporary, your tax home does not change. File 2011 tax return online You are considered to be away from home for the whole period you are away from your main place of work. File 2011 tax return online You can deduct your travel expenses if they otherwise qualify for deduction. File 2011 tax return online Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. File 2011 tax return online   However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. File 2011 tax return online An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. File 2011 tax return online   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. File 2011 tax return online You may be able to deduct the cost of relocating to your new tax home as a moving expense. File 2011 tax return online See Publication 521 for more information. File 2011 tax return online Exception for federal crime investigations or prosecutions. File 2011 tax return online   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. File 2011 tax return online This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year, provided you meet the other requirements for deductibility. File 2011 tax return online   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate or prosecute, or provide support services for the investigation or prosecution of a federal crime. File 2011 tax return online Determining temporary or indefinite. File 2011 tax return online   You must determine whether your assignment is temporary or indefinite when you start work. File 2011 tax return online If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. File 2011 tax return online An assignment or job that is initially temporary may become indefinite due to changed circumstances. File 2011 tax return online A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. File 2011 tax return online Going home on days off. File 2011 tax return online   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. File 2011 tax return online You cannot deduct the cost of your meals and lodging there. File 2011 tax return online However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. File 2011 tax return online You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. File 2011 tax return online   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. File 2011 tax return online In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. File 2011 tax return online Probationary work period. File 2011 tax return online   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. File 2011 tax return online You cannot deduct any of your expenses for meals and lodging during the probationary period. File 2011 tax return online What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. File 2011 tax return online You can deduct ordinary and necessary expenses you have when you travel away from home on business. File 2011 tax return online The type of expense you can deduct depends on the facts and your circumstances. File 2011 tax return online Table 26-1 summarizes travel expenses you may be able to deduct. File 2011 tax return online You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. File 2011 tax return online When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. File 2011 tax return online You can use a log, diary, notebook, or any other written record to keep track of your expenses. File 2011 tax return online The types of expenses you need to record, along with supporting documentation, are described in Table 26-2 , later. File 2011 tax return online Separating costs. File 2011 tax return online   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. File 2011 tax return online You must have a reasonable basis for making this allocation. File 2011 tax return online For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. File 2011 tax return online Travel expenses for another individual. File 2011 tax return online   If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. File 2011 tax return online Employee. File 2011 tax return online   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. File 2011 tax return online Business associate. File 2011 tax return online   If a business associate travels with you and meets the conditions in (2) and (3) above, you can deduct the travel expenses you have for that person. File 2011 tax return online A business associate is someone with whom you could reasonably expect to engage or deal in the active conduct of your business. File 2011 tax return online A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. File 2011 tax return online Bona fide business purpose. File 2011 tax return online   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. File 2011 tax return online Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. File 2011 tax return online Example. File 2011 tax return online Jerry drives to Chicago on business and takes his wife, Linda, with him. File 2011 tax return online Linda is not Jerry's employee. File 2011 tax return online Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. File 2011 tax return online The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. File 2011 tax return online Her expenses are not deductible. File 2011 tax return online Jerry pays $199 a day for a double room. File 2011 tax return online A single room costs $149 a day. File 2011 tax return online He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. File 2011 tax return online If he uses public transportation, he can deduct only his fare. File 2011 tax return online Table 26-1. File 2011 tax return online Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. File 2011 tax return online IF you have expenses for. File 2011 tax return online . File 2011 tax return online . File 2011 tax return online THEN you can deduct the cost of. File 2011 tax return online . File 2011 tax return online . File 2011 tax return online transportation travel by airplane, train, bus, or car between your home and your business destination. File 2011 tax return online If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. File 2011 tax return online If you travel by ship, see Luxury Water Travel and Cruise ships (under Conventions) in Publication 463 for additional rules and limits. File 2011 tax return online taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. File 2011 tax return online baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. File 2011 tax return online car operating and maintaining your car when traveling away from home on business. File 2011 tax return online You can deduct actual expenses or the standard mileage rate as well as business-related tolls and parking. File 2011 tax return online If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. File 2011 tax return online lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. File 2011 tax return online Meals include amounts spent for food, beverages, taxes, and related tips. File 2011 tax return online See Meals and Incidental Expenses for additional rules and limits. File 2011 tax return online cleaning dry cleaning and laundry. File 2011 tax return online telephone business calls while on your business trip. File 2011 tax return online This includes business communication by fax machine or other communication devices. File 2011 tax return online tips tips you pay for any expenses in this chart. File 2011 tax return online other other similar ordinary and necessary expenses related to your business travel. File 2011 tax return online These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. File 2011 tax return online Meals and Incidental Expenses You can deduct the cost of meals in either of the following situations. File 2011 tax return online It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. File 2011 tax return online The meal is business-related entertainment. File 2011 tax return online Business-related entertainment is discussed under Entertainment Expenses , later. File 2011 tax return online The following discussion deals only with meals (and incidental expenses) that are not business-related entertainment. File 2011 tax return online Lavish or extravagant. File 2011 tax return online   You cannot deduct expenses for meals that are lavish or extravagant. File 2011 tax return online An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. File 2011 tax return online Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. File 2011 tax return online 50% limit on meals. File 2011 tax return online   You can figure your meal expenses using either of the following methods. File 2011 tax return online Actual cost. File 2011 tax return online The standard meal allowance. File 2011 tax return online Both of these methods are explained below. File 2011 tax return online But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. File 2011 tax return online   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. File 2011 tax return online If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. File 2011 tax return online The 50% limit is explained later under Entertainment Expenses . File 2011 tax return online Accountable and nonaccountable plans are discussed later under Reimbursements . File 2011 tax return online Actual cost. File 2011 tax return online   You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. File 2011 tax return online If you use this method, you must keep records of your actual cost. File 2011 tax return online Standard meal allowance. File 2011 tax return online   Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. File 2011 tax return online It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. File 2011 tax return online The set amount varies depending on where and when you travel. File 2011 tax return online In this chapter, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . File 2011 tax return online If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. File 2011 tax return online See Recordkeeping , later. File 2011 tax return online Incidental expenses. File 2011 tax return online   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. File 2011 tax return online Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. File 2011 tax return online Incidental expenses only method. File 2011 tax return online   You can use an optional method (instead of actual cost) for deducting incidental expenses only. File 2011 tax return online The amount of the deduction is $5 a day. File 2011 tax return online You can use this method only if you did not pay or incur any meal expenses. File 2011 tax return online You cannot use this method on any day that you use the standard meal allowance. File 2011 tax return online    Federal employees should refer to the Federal Travel Regulations at  www. File 2011 tax return online gsa. File 2011 tax return online gov. File 2011 tax return online Find “What GSA Offers” and click on “Regulations: FMR, FTR, & FAR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. File 2011 tax return online 50% limit may apply. File 2011 tax return online   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. File 2011 tax return online If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. File 2011 tax return online The 50% limit is explained later under Entertainment Expenses . File 2011 tax return online Accountable and nonaccountable plans are discussed later under Reimbursements . File 2011 tax return online There is no optional standard lodging amount similar to the standard meal allowance. File 2011 tax return online Your allowable lodging expense deduction is your actual cost. File 2011 tax return online Who can use the standard meal allowance. File 2011 tax return online   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. File 2011 tax return online   Use of the standard meal allowance for other travel. File 2011 tax return online    You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. File 2011 tax return online You can also use it to figure your meal expenses when you travel for qualifying educational purposes. File 2011 tax return online You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. File 2011 tax return online Amount of standard meal allowance. File 2011 tax return online   The standard meal allowance is the federal M&IE rate. File 2011 tax return online For travel in 2013, the daily rate for most small localities in the United States is $46. File 2011 tax return online   Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. File 2011 tax return online You can find this information (organized by state) on the Internet at www. File 2011 tax return online gsa. File 2011 tax return online gov. File 2011 tax return online Click on “Per Diem Rates,” then select “2013” for the period January 1, 2013 – September 30, 2013, and select “2014” for the period October 1, 2013 – December 31, 2013. File 2011 tax return online However, you can apply the rates in effect before October 1, 2013, for expenses of all travel within the United States for 2013 instead of the updated rates. File 2011 tax return online You must consistently use either the rates for the first 9 months for all of 2013 or the updated rates for the period of October 1, 2013, through December 31, 2013. File 2011 tax return online   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. File 2011 tax return online If you work in the transportation industry, however, see Special rate for transportation workers , later. File 2011 tax return online Standard meal allowance for areas outside the continental United States. File 2011 tax return online    The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. File 2011 tax return online The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. File 2011 tax return online S. File 2011 tax return online Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. File 2011 tax return online The Department of State establishes per diem rates for all other foreign areas. File 2011 tax return online    You can access per diem rates for non-foreign areas outside the continental United States at: www. File 2011 tax return online defensetravel. File 2011 tax return online dod. File 2011 tax return online mil/site/perdiemCalc. File 2011 tax return online cfm. File 2011 tax return online You can access all other foreign per diem rates at www. File 2011 tax return online state. File 2011 tax return online gov/travel/. File 2011 tax return online Click on “Travel Per Diem Allowances for Foreign Areas” under “Foreign Per Diem Rates,” to obtain the latest foreign per diem rates. File 2011 tax return online Special rate for transportation workers. File 2011 tax return online   You can use a special standard meal allowance if you work in the transportation industry. File 2011 tax return online You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. File 2011 tax return online If this applies to you, you can claim a standard daily meal allowance of $59 ($65 for travel outside the continental United States). File 2011 tax return online   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. File 2011 tax return online If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. File 2011 tax return online Travel for days you depart and return. File 2011 tax return online   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). File 2011 tax return online You can do so by one of two methods. File 2011 tax return online Method 1: You can claim 3/4 of the standard meal allowance. File 2011 tax return online Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. File 2011 tax return online Example. File 2011 tax return online Jen is employed in New Orleans as a convention planner. File 2011 tax return online In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. File 2011 tax return online She left her home in New Orleans at 10 a. File 2011 tax return online m. File 2011 tax return online on Wednesday and arrived in Washington, DC, at 5:30 p. File 2011 tax return online m. File 2011 tax return online After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. File 2011 tax return online m. File 2011 tax return online Jen's employer gave her a flat amount to cover her expenses and included it with her wages. File 2011 tax return online Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. File 2011 tax return online Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. File 2011 tax return online For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. File 2011 tax return online Travel in the United States The following discussion applies to travel in the United States. File 2011 tax return online For this purpose, the United States includes only the 50 states and the District of Columbia. File 2011 tax return online The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. File 2011 tax return online See Part of Trip Outside the United States , later. File 2011 tax return online Trip Primarily for Business You can deduct all your travel expenses if your trip was entirely business related. File 2011 tax return online If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. File 2011 tax return online These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. File 2011 tax return online Example. File 2011 tax return online You work in Atlanta and take a business trip to New Orleans in May. File 2011 tax return online On your way home, you stop in Mobile to visit your parents. File 2011 tax return online You spend $1,996 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. File 2011 tax return online If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,696. File 2011 tax return online You can deduct $1,696 for your trip, including the cost of round-trip transportation to and from New Orleans. File 2011 tax return online The deduction for your meals is subject to the 50% limit on meals mentioned earlier. File 2011 tax return online Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. File 2011 tax return online However, you can deduct any expenses you have while at your destination that are directly related to your business. File 2011 tax return online A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. File 2011 tax return online The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. File 2011 tax return online Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later under Travel Outside the United States for that part of the trip. File 2011 tax return online For the part of your trip that is inside the United States, use the rules for travel in the United States. File 2011 tax return online Travel outside the United States does not include travel from one point in the United States to another point in the United States. File 2011 tax return online The following discussion can help you determine whether your trip was entirely within the United States. File 2011 tax return online Public transportation. File 2011 tax return online   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. File 2011 tax return online Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . File 2011 tax return online Example. File 2011 tax return online You fly from New York to Puerto Rico with a scheduled stop in Miami. File 2011 tax return online You return to New York nonstop. File 2011 tax return online The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. File 2011 tax return online Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. File 2011 tax return online Private car. File 2011 tax return online   Travel by private car in the United States is travel between points in the United States, even when you are on your way to a destination outside the United States. File 2011 tax return online Example. File 2011 tax return online You travel by car from Denver to Mexico City and return. File 2011 tax return online Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. File 2011 tax return online The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. File 2011 tax return online Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. File 2011 tax return online For this purpose, the United States includes only the 50 states and the District of Columbia. File 2011 tax return online How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. File 2011 tax return online See chapter 1 of Publication 463 for information on luxury water travel. File 2011 tax return online Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. File 2011 tax return online Travel entirely for business. File 2011 tax return online   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. File 2011 tax return online Travel considered entirely for business. File 2011 tax return online   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. File 2011 tax return online Exception 1 - No substantial control. File 2011 tax return online   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. File 2011 tax return online The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. File 2011 tax return online   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, Are not related to your employer, and Are not a managing executive. File 2011 tax return online    “Related to your employer” is defined later in this chapter under Per Diem and Car Allowances . File 2011 tax return online   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. File 2011 tax return online    A self-employed person generally has substantial control over arranging business trips. File 2011 tax return online Exception 2 - Outside United States no more than a week. File 2011 tax return online   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. File 2011 tax return online One week means 7 consecutive days. File 2011 tax return online In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. File 2011 tax return online Exception 3 - Less than 25% of time on personal activities. File 2011 tax return online   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. File 2011 tax return online For this purpose, count both the day your trip began and the day it ended. File 2011 tax return online Exception 4 - Vacation not a major consideration. File 2011 tax return online   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. File 2011 tax return online Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on nonbusiness activities, you generally cannot deduct all of your travel expenses. File 2011 tax return online You can only deduct the business portion of your cost of getting to and from your destination. File 2011 tax return online You must allocate the costs between your business and nonbusiness activities to determine your deductible amount. File 2011 tax return online These travel allocation rules are discussed in chapter 1 of Publication 463. File 2011 tax return online You do not have to allocate your travel expense deduction if you meet one of the four exceptions listed earlier under Travel considered entirely for business. File 2011 tax return online In those cases, you can deduct the total cost of getting to and from your destination. File 2011 tax return online Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. File 2011 tax return online If you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. File 2011 tax return online Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. File 2011 tax return online You cannot deduct the travel expenses for your family. File 2011 tax return online If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. File 2011 tax return online Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. File 2011 tax return online You can deduct your travel expenses only if your attendance is connected to your own trade or business. File 2011 tax return online Convention agenda. File 2011 tax return online   The convention agenda or program generally shows the purpose of the convention. File 2011 tax return online You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. File 2011 tax return online The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. File 2011 tax return online Conventions held outside the North American area. File 2011 tax return online    See chapter 1 of Publication 463 for information on conventions held outside the North American area. File 2011 tax return online Entertainment Expenses You may be able to deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. File 2011 tax return online You can deduct entertainment expenses only if they are both ordinary and necessary (defined earlier in the Introduction ) and meet one of the following tests. File 2011 tax return online Directly-related test. File 2011 tax return online Associated test. File 2011 tax return online Both of these tests are explained in chapter 2 of Publication 463. File 2011 tax return online The amount you can deduct for entertainment expenses may be limited. File 2011 tax return online Generally, you can deduct only 50% of your unreimbursed entertainment expenses. File 2011 tax return online This limit is discussed next. File 2011 tax return online 50% Limit In general, you can deduct only 50% of your business-related meal and entertainment expenses. File 2011 tax return online (If you are subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal and entertainment expenses. File 2011 tax return online See Individuals subject to “hours of service” limits , later. File 2011 tax return online ) The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed. File 2011 tax return online Figure 26-A summarizes the general rules explained in this section. File 2011 tax return online The 50% limit applies to business meals or entertainment expenses you have while: Traveling away from home (whether eating alone or with others) on business, Entertaining customers at your place of business, a restaurant, or other location, or Attending a business convention or reception, business meeting, or business luncheon at a club. File 2011 tax return online Included expenses. File 2011 tax return online   Expenses subject to the 50% limit include: Taxes and tips relating to a business meal or entertainment activity, Cover charges for admission to a nightclub, Rent paid for a room in which you hold a dinner or cocktail party, and Amounts paid for parking at a sports arena. File 2011 tax return online However, the cost of transportation to and from a business meal or a business-related entertainment activity is not subject to the 50% limit. File 2011 tax return online Application of 50% limit. File 2011 tax return online   The 50% limit on meal and entertainment expenses applies if the expense is otherwise deductible and is not covered by one of the exceptions discussed later in this section. File 2011 tax return online   The 50% limit also applies to certain meal and entertainment expenses that are not business related. File 2011 tax return online It applies to meal and entertainment expenses incurred for the production of income, including rental or royalty income. File 2011 tax return online It also applies to the cost of meals included in deductible educational expenses. File 2011 tax return online When to apply the 50% limit. File 2011 tax return online   You apply the 50% limit after determining the amount that would otherwise qualify for a deduction. File 2011 tax return online You first have to determine the amount of meal and entertainment expenses that would be deductible under the other rules discussed in this chapter. File 2011 tax return online Example 1. File 2011 tax return online You spend $200 for a business-related meal. File 2011 tax return online If $110 of that amount is not allowable because it is lavish and extravagant, the remaining $90 is subject to the 50% limit. File 2011 tax return online Your deduction cannot be more than $45 (. File 2011 tax return online 50 × $90). File 2011 tax return online Example 2. File 2011 tax return online You purchase two tickets to a concert and give them to a client. File 2011 tax return online You purchased the tickets through a ticket agent. File 2011 tax return online You paid $200 for the two tickets, which had a face value of $80 each ($160 total). File 2011 tax return online Your deduction cannot be more than $80 (. File 2011 tax return online 50 × $160). File 2011 tax return online Exceptions to the 50% Limit Generally, business-related meal and entertainment expenses are subject to the 50% limit. File 2011 tax return online Figure 26-A can help you determine if the 50% limit applies to you. File 2011 tax return online Your meal or entertainment expense is not subject to the 50% limit if the expense meets one of the following exceptions. File 2011 tax return online Employee's reimbursed expenses. File 2011 tax return online   If you are an employee, you are not subject to the 50% limit on expenses for which your employer reimburses you under an accountable plan. File 2011 tax return online Accountable plans are discussed later under Reimbursements . File 2011 tax return online Individuals subject to “hours of service” limits. File 2011 tax return online   You can deduct a higher percentage of your meal expenses while traveling away from your tax home if the meals take place during or incident to any period subject to the Department of Transportation's “hours of service” limits. File 2011 tax return online The percentage is 80%. File 2011 tax return online   Individuals subject to the Department of Transportation's “hours of service” limits include the following persons. File 2011 tax return online Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. File 2011 tax return online Interstate truck operators and bus drivers who are under Department of Transportation regulations. File 2011 tax return online Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. File 2011 tax return online Certain merchant mariners who are under Coast Guard regulations. File 2011 tax return online Other exceptions. File 2011 tax return online   There are also exceptions for the self-employed, advertising expenses, selling meals or entertainment, and charitable sports events. File 2011 tax return online These are discussed in Publication 463. File 2011 tax return online Figure 26-A. File 2011 tax return online Does the 50% Limit Apply to Your Expenses? There are exceptions to these rules. File 2011 tax return online See Exceptions to the 50% Limit . File 2011 tax return online Please click here for the text description of the image. File 2011 tax return online Entertainment expenses: 50% limit What Entertainment Expenses Are Deductible? This section explains different types of entertainment expenses you may be able to deduct. File 2011 tax return online Entertainment. File 2011 tax return online    Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. File 2011 tax return online Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; or on hunting, fishing, vacation, and similar trips. File 2011 tax return online A meal as a form of entertainment. File 2011 tax return online   Entertainment includes the cost of a meal you provide to a customer or client, whether the meal is a part of other entertainment or by itself. File 2011 tax return online A meal expense includes the cost of food, beverages, taxes, and tips for the meal. File 2011 tax return online To deduct an entertainment-related meal, you or your employee must be present when the food or beverages are provided. File 2011 tax return online You cannot claim the cost of your meal both as an entertainment expense and as a travel expense. File 2011 tax return online Separating costs. File 2011 tax return online   If you have one expense that includes the costs of entertainment and other services (such as lodging or transportation), you must allocate that expense between the cost of entertainment and the cost of other services. File 2011 tax return online You must have a reasonable basis for making this allocation. File 2011 tax return online For example, you must allocate your expenses if a hotel includes entertainment in its lounge on the same bill with your room charge. File 2011 tax return online Taking turns paying for meals or entertainment. File 2011 tax return online   If a group of business acquaintances take turns picking up each others' meal or entertainment checks without regard to whether any business purposes are served, no member of the group can deduct any part of the expense. File 2011 tax return online Lavish or extravagant expenses. File 2011 tax return online   You cannot deduct expenses for entertainment that are lavish or extravagant. File 2011 tax return online An expense is not considered lavish or extravagant if it is reasonable considering the facts and circumstances. File 2011 tax return online Expenses will not be disallowed just because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. File 2011 tax return online Trade association meetings. File 2011 tax return online    You can deduct entertainment expenses that are directly related to, and necessary for, attending business meetings or conventions of certain exempt organizations if the expenses of your attendance are related to your active trade or business. File 2011 tax return online These organizations include business leagues, chambers of commerce, real estate boards, trade associations, and professional associations. File 2011 tax return online Entertainment tickets. File 2011 tax return online   Generally, you cannot deduct more than the face value of an entertainment ticket, even if you paid a higher price. File 2011 tax return online For example, you cannot deduct service fees you pay to ticket agencies or brokers or any amount over the face value of the tickets you pay to scalpers. File 2011 tax return online What Entertainment Expenses Are Not Deductible? This section explains different types of entertainment expenses you generally may not be able to deduct. File 2011 tax return online Club dues and membership fees. File 2011 tax return online   You cannot deduct dues (including initiation fees) for membership in any club organized for: Business, Pleasure, Recreation, or Other social purpose. File 2011 tax return online This rule applies to any membership organization if one of its principal purposes is either: To conduct entertainment activities for members or their guests, or To provide members or their guests with access to entertainment facilities. File 2011 tax return online   The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. File 2011 tax return online You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. File 2011 tax return online Entertainment facilities. File 2011 tax return online   Generally, you cannot deduct any expense for the use of an entertainment facility. File 2011 tax return online This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection. File 2011 tax return online   An entertainment facility is any property you own, rent, or use for entertainment. File 2011 tax return online Examples include a yacht, hunting lodge, fishing camp, swimming pool, tennis court, bowling alley, car, airplane, apartment, hotel suite, or home in a vacation resort. File 2011 tax return online Out-of-pocket expenses. File 2011 tax return online   You can deduct out-of-pocket expenses, such as for food and beverages, catering, gas, and fishing bait, that you provided during entertainment at a facility. File 2011 tax return online These are not expenses for the use of an entertainment facility. File 2011 tax return online However, these expenses are subject to the directly-related and associated tests and to the 50% Limit discussed earlier. File 2011 tax return online Additional information. File 2011 tax return online   For more information on entertainment expenses, including discussions of the directly-related and associated tests, see chapter 2 of Publication 463. File 2011 tax return online Gift Expenses If you give gifts in the course of your trade or business, you can deduct all or part of the cost. File 2011 tax return online This section explains the limits and rules for deducting the costs of gifts. File 2011 tax return online $25 limit. File 2011 tax return online   You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year. File 2011 tax return online A gift to a company that is intended for the eventual personal use or benefit of a particular person or a limited class of people will be considered an indirect gift to that particular person or to the individuals within that class of people who receive the gift. File 2011 tax return online   If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. File 2011 tax return online This rule does not apply if you have a bona fide, independent business connection with that family member and the gift is not intended for the customer's eventual use or benefit. File 2011 tax return online   If you and your spouse both give gifts, both of you are treated as one taxpayer. File 2011 tax return online It does not matter whether you have separate businesses, are separately employed, or whether each of you has an independent connection with the recipient. File 2011 tax return online If a partnership gives gifts, the partnership and the partners are treated as one taxpayer. File 2011 tax return online Incidental costs. File 2011 tax return online   Incidental costs, such as engraving on jewelry, or packaging, insuring, and mailing, are generally not included in determining the cost of a gift for purposes of the $25 limit. File 2011 tax return online   A cost is incidental only if it does not add substantial value to the gift. File 2011 tax return online For example, the cost of customary gift wrapping is an incidental cost. File 2011 tax return online However, the purchase of an ornamental basket for packaging fruit is not an incidental cost if the value of the basket is substantial compared to the value of the fruit. File 2011 tax return online Exceptions. File 2011 tax return online   The following items are not considered gifts for purposes of the $25 limit. File 2011 tax return online An item that costs $4 or less and: Has your name clearly and permanently imprinted on the gift, and Is one of a number of identical items you widely distribute. File 2011 tax return online Examples include pens, desk sets, and plastic bags and cases. File 2011 tax return online Signs, display racks, or other promotional material to be used on the business premises of the recipient. File 2011 tax return online Gift or entertainment. File 2011 tax return online   Any item that might be considered either a gift or entertainment generally will be considered entertainment. File 2011 tax return online However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. File 2011 tax return online    If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. File 2011 tax return online You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. File 2011 tax return online    If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. File 2011 tax return online You cannot choose, in this case, to treat the cost of the tickets as a gift expense. File 2011 tax return online Transportation Expenses This section discusses expenses you can deduct for business transportation when you are not traveling away from home as defined earlier under Travel Expenses . File 2011 tax return online These expenses include the cost of transportation by air, rail, bus, taxi, etc. File 2011 tax return online , and the cost of driving and maintaining your car. File 2011 tax return online Transportation expenses include the ordinary and necessary costs of all of the following. File 2011 tax return online Getting from one workplace to another in the course of your business or profession when you are traveling within the area of your tax home. File 2011 tax return online (Tax home is defined earlier under Travel Expenses . File 2011 tax return online ) Visiting clients or customers. File 2011 tax return online Going to a business meeting away from your regular workplace. File 2011 tax return online Getting from your home to a temporary workplace when you have one or more regular places of work. File 2011 tax return online These temporary workplaces can be either within the area of your tax home or outside that area. File 2011 tax return online Transportation expenses do not include expenses you have while traveling away from home overnight. File 2011 tax return online Those expenses are travel expenses, discussed earlier. File 2011 tax return online However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. File 2011 tax return online See Car Expenses , later. File 2011 tax return online Illustration of transportation expenses. File 2011 tax return online    Figure 26-B illustrates the rules for when you can deduct transportation expenses when you have a regular or main job away from your home. File 2011 tax return online You may want to refer to it when deciding whether you can deduct your transportation expenses. File 2011 tax return online Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. File 2011 tax return online However, there are many exceptions for deducting transportation expenses, like whether your work location is temporary (inside or outside the metropolitan area), traveling for same trade or business, or if you have a home office. File 2011 tax return online Temporary work location. File 2011 tax return online   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. File 2011 tax return online   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. File 2011 tax return online   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. File 2011 tax return online   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. File 2011 tax return online It will not be treated as temporary after the date you determine it will last more than 1 year. File 2011 tax return online   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. File 2011 tax return online You may have deductible travel expenses as discussed earlier in this chapter. File 2011 tax return online No regular place of work. File 2011 tax return online   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. File 2011 tax return online   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. File 2011 tax return online   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. File 2011 tax return online These are nondeductible commuting expenses. File 2011 tax return online Two places of work. File 2011 tax return online   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. File 2011 tax return online However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. File 2011 tax return online   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. File 2011 tax return online You cannot deduct them. File 2011 tax return online Armed Forces reservists. File 2011 tax return online   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. File 2011 tax return online You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work , earlier. File 2011 tax return online   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. File 2011 tax return online In this case, your transportation generally is a nondeductible commuting expense. File 2011 tax return online However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. File 2011 tax return online   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. File 2011 tax return online   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. File 2011 tax return online These expenses are discussed earlier under Travel Expenses . File 2011 tax return online   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to income rather than as an itemized deduction. File 2011 tax return online See Armed Forces reservists traveling more than 100 miles from home under Special Rules, later. File 2011 tax return online Commuting expenses. File 2011 tax return online   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. File 2011 tax return online These costs are personal commuting expenses. File 2011 tax return online You cannot deduct commuting expenses no matter how far your home is from your regular place of work. File 2011 tax return online You cannot deduct commuting expenses even if you work during the commuting trip. File 2011 tax return online Example. File 2011 tax return online You sometimes use your cell phone to make business calls while commuting to and from work. File 2011 tax return online Sometimes business associates ride with you to and from work, and you have a business discussion in the car. File 2011 tax return online These activities do not change the trip from personal to business. File 2011 tax return online You cannot deduct your commuting expenses. File 2011 tax return online Parking fees. File 2011 tax return online   Fees you pay to park your car at your place of business are nondeductible commuting expenses. File 2011 tax return online You can, however, deduct business-related parking fees when visiting a customer or client. File 2011 tax return online Advertising display on car. File 2011 tax return online   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. File 2011 tax return online If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. File 2011 tax return online Car pools. File 2011 tax return online   You cannot deduct the cost of using your car in a nonprofit car pool. File 2011 tax return online Do not include payments you receive from the passengers in your income. File 2011 tax return online These payments are considered reimbursements of your expenses. File 2011 tax return online However, if you operate a car pool for a profit, you must include payments from passengers in your income. File 2011 tax return online You can then deduct your car expenses (using the rules in this chapter). File 2011 tax return online Hauling tools or instruments. File 2011 tax return online   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. File 2011 tax return online However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). File 2011 tax return online Union members' trips from a union hall. File 2011 tax return online   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. File 2011 tax return online Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. File 2011 tax return online Office in the home. File 2011 tax return online   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. File 2011 tax return online (See chapter 28 for information on determining if your home office qualifies as a principal place of business. File 2011 tax return online ) Figure 26-B. File 2011 tax return online When Are Transportation Expenses Deductible? Most employees and self-employed persons can use this chart. File 2011 tax return online (Do not use this chart if your home is your principal place of business. File 2011 tax return online See Office in the home . File 2011 tax return online ) Please click here for the text description of the image. File 2011 tax return online Figure 26-B. File 2011 tax return online Local Transportation Examples of deductible transportation. File 2011 tax return online   The following examples show when you can deduct transportation expenses based on the location of your work and your home. File 2011 tax return online Example 1. File 2011 tax return online You regularly work in an office in the city where you live. File 2011 tax return online Your employer sends you to a 1-week training session at a different office in the same city. File 2011 tax return online You travel directly from your home to the training location and return each day. File 2011 tax return online You can deduct the cost of your daily round-trip transportation between your home and the training location. File 2011 tax return online Example 2. File 2011 tax return online Your principal place of business is in your home. File 2011 tax return online You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. File 2011 tax return online Example 3. File 2011 tax return online You have no regular office, and you do not have an office in your home. File 2011 tax return online In this case, the location of your first business contact inside the metropolitan area is considered your office. File 2011 tax return online Transportation expenses between your home and this first contact are nondeductible commuting expenses. File 2011 tax return online Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. File 2011 tax return online While you cannot deduct the costs of these first and last trips, you can deduct the costs of going from one client or customer to another. File 2011 tax return online With no regular or home office, the costs of travel between two or more business contacts in a metropolitan area are deductible while the costs of travel between the home to (and from) business contacts are not deductible. File 2011 tax return online Car Expenses If you use your car for business purposes, you may be able to deduct car expenses. File 2011 tax return online You generally can use one of the two following methods to figure your deductible expenses. File 2011 tax return online Standard mileage rate. File 2011 tax return online Actual car expenses. File 2011 tax return online If you use actual car expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. File 2011 tax return online See Leasing a car under Actual Car Expenses, later. File 2011 tax return online In this chapter, “car” includes a van, pickup, or panel truck. File 2011 tax return online Rural mail carriers. File 2011 tax return online   If you are a rural mail carrier, you may be able to treat the amount of qualified reimbursement you received as the amount of your allowable expense. File 2011 tax return online Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the amount of reimbursement in your income. File 2011 tax return online   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). File 2011 tax return online You must complete Form 2106 and attach it to your Form 1040. File 2011 tax return online   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. File 2011 tax return online It is given as an equipment maintenance allowance (EMA) to employees of the U. File 2011 tax return online S. File 2011 tax return online Postal Service. File 2011 tax return online It is at the rate contained in the 1991 collective bargaining agreement. File 2011 tax return online Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. File 2011 tax return online See your employer for information on your reimbursement. File 2011 tax return online If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. File 2011 tax return online Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. File 2011 tax return online For 2013, the standard mileage rate for business use is 56½ cents per mile. File 2011 tax return online If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year, but see Parking fees and tolls, later. File 2011 tax return online You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. File 2011 tax return online See Reimbursements under How To Report, later. File 2011 tax return online Choosing the standard mileage rate. File 2011 tax return online   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. File 2011 tax return online Then in later years, you can choose to use either the standard mileage rate or actual expenses. File 2011 tax return online   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. File 2011 tax return online   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. File 2011 tax return online You cannot revoke the choice. File 2011 tax return online However, in a later year, you can switch from the standard mileage rate to the actual expenses method. File 2011 tax return online If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. File 2011 tax return online Example. File 2011 tax return online Larry is an employee who occasionally uses his own car for business purposes. File 2011 tax return online He purchased the car in 2011, but he did not claim any unreimburse
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Answers to Frequently Asked Questions for Individuals of the Same Sex Who Are Married Under State Law

The following questions and answers provide information to individuals of the same sex who are lawfully married (same-sex spouses). These questions and answers reflect the holdings in Revenue Ruling 2013-17 in 2013-38 IRB 201.

Q1. When are individuals of the same sex lawfully married for federal tax purposes?

A1. For federal tax purposes, the IRS looks to state or foreign law to determine whether individuals are married. The IRS has a general rule recognizing a marriage of same-sex spouses that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages.

Q2. Can same-sex spouses file federal tax returns using a married filing jointly or married filing separately status?

A2. Yes. For tax year 2013 and going forward, same-sex spouses generally must file using a married filing separately or jointly filing status. For tax year 2012 and all prior years, same-sex spouses who file an original tax return on or after Sept. 16, 2013 (the effective date of Rev. Rul. 2013-17), generally must file using a married filing separately or jointly filing status. For tax year 2012, same-sex spouses who filed their tax return before Sept. 16, 2013, may choose (but are not required) to amend their federal tax returns to file using married filing separately or jointly filing status. For tax years 2011 and earlier, same-sex spouses who filed their tax returns timely may choose (but are not required) to amend their federal tax returns to file using married filing separately or jointly filing status provided the period of limitations for amending the return has not expired. A taxpayer generally may file a claim for refund for three years from the date the return was filed or two years from the date the tax was paid, whichever is later. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html

Q3. Can a taxpayer and his or her same-sex spouse file a joint return if they were married in a state that recognizes same-sex marriages but they live in a state that does not recognize their marriage?

A3. Yes. For federal tax purposes, the IRS has a general rule recognizing a marriage of same-sex individuals that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages. The rules for using a married filing jointly or married filing separately status described in Q&A #2 apply to these married individuals. 

Q4. Can a taxpayer’s same-sex spouse be a dependent of the taxpayer?

A4. No. A taxpayer’s spouse cannot be a dependent of the taxpayer.

Q5. Can a same-sex spouse file using head of household filing status?

A5. A taxpayer who is married cannot file using head of household filing status. However, a married taxpayer may be considered unmarried and may use the head-of-household filing status if the taxpayer lives apart from his or her spouse for the last 6 months of the taxable year and provides more than half the cost of maintaining a household that is the principal place of abode of the taxpayer’s dependent child for more than half of the year. See Publication 501 for more details.

Q6. If same-sex spouses (who file using the married filing separately status) have a child, which parent may claim the child as a dependent?

A6. If a child is a qualifying child under section 152(c) of both parents who are spouses (who file using the married filing separate status), either parent, but not both, may claim a dependency deduction for the qualifying child. If both parents claim a dependency deduction for the child on their income tax returns, the IRS will treat the child as the qualifying child of the parent with whom the child resides for the longer period of time during the taxable year. If the child resides with each parent for the same amount of time during the taxable year, the IRS will treat the child as the qualifying child of the parent with the higher adjusted gross income.   

Q7. Can a taxpayer who is married to a person of the same sex claim the standard deduction if the taxpayer’s spouse itemized deductions?

A7. No. If a taxpayer’s spouse itemized his or her deductions, the taxpayer cannot claim the standard deduction (section 63(c)(6)(A)).

Q8. If a taxpayer adopts the child of his or her same-sex spouse as a second parent or co-parent, may the taxpayer (“adopting parent”) claim the adoption credit for the qualifying adoption expenses he or she pays or incurs to adopt the child?

A8. No. The adopting parent may not claim an adoption credit. A taxpayer may not claim an adoption credit for expenses incurred in adopting the child of the taxpayer’s spouse (section 23). 

Q9. Do provisions of the federal tax law such as section 66 (treatment of community income) and section 469(i)(5) ($25,000 offset for passive activity losses for rental real estate activities) apply to same-sex spouses?

A9. Yes. Like other provisions of the federal tax law that apply to married taxpayers, section 66 and section 469(i)(5) apply to same-sex spouses because same-sex spouses are married for all federal tax purposes.

Q10. If an employer provided health coverage for an employee’s same-sex spouse and included the value of that coverage in the employee’s gross income, can the employee file an amended Form 1040 reflecting the employee’s status as a married individual to recover federal income tax paid on the value of the health coverage of the employee’s spouse?

A10. Yes, for all years for which the period of limitations for filing a claim for refund is open. Generally, a taxpayer may file a claim for refund for three years from the date the return was filed or two years from the date the tax was paid, whichever is later. If an employer provided health coverage for an employee’s same-sex spouse, the employee may claim a refund of income taxes paid on the value of coverage that would have been excluded from income had the employee’s spouse been recognized as the employee’s legal spouse for tax purposes. This claim for a refund generally would be made through the filing of an amended Form 1040. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html. For a discussion regarding refunds of Social Security and Medicare taxes, see Q&A #12 and Q&A #13.

Example. Employer sponsors a group health plan covering eligible employees and their dependents and spouses (including same-sex spouses). Fifty percent of the cost of health coverage elected by employees is paid by Employer. Employee A was married to same-sex Spouse B at all times during 2012. Employee A elected coverage for Spouse B through Employer’s group health plan beginning Jan. 1, 2012. The value of the employer-funded portion of Spouse B’s health coverage was $250 per month.

The amount in Box 1, “Wages, tips, other compensation,” of the 2012 Form W-2 provided by Employer to Employee A included $3,000 ($250 per month x 12 months) of income reflecting the value of employer-funded health coverage provided to Spouse B.  Employee A filed Form 1040 for the 2012 taxable year reflecting the Box 1 amount reported on Form W-2.

Employee A may file an amended Form 1040 for the 2012 taxable year excluding the value of Spouse B’s employer-funded health coverage ($3,000) from gross income.

Q11. If an employer sponsored a cafeteria plan that allowed employees to pay premiums for health coverage on a pre-tax basis, can a participating employee file an amended return to recover income taxes paid on premiums that the employee paid on an after-tax basis for the health coverage of the employee’s same-sex spouse?

A11. Yes, for all years for which the period of limitations for filing a claim for refund is open. Generally, a taxpayer may file a claim for refund for three years from the date the return was filed or two years from the date the tax was paid, whichever is later. If an employer sponsored a cafeteria plan under which an employee elected to pay for health coverage for the employee on a pre-tax basis, and if the employee purchased coverage on an after-tax basis for the employee’s same-sex spouse under the employer’s health plan, the employee may claim a refund of income taxes paid on the premiums for the coverage of the employee’s spouse. This claim for a refund generally would be made through the filing of an amended Form 1040. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html. For a discussion regarding refunds of Social Security and Medicare taxes, see Q&A #12 and Q&A #13.

Example. Employer sponsors a group health plan as part of a cafeteria plan with a calendar year plan year. The full cost of spousal and dependent coverage is paid by the employees. In the open enrollment period for the 2012 plan year, Employee C elected to purchase self-only health coverage through salary reduction under Employer’s cafeteria plan. On March 1, 2012, Employee C was married to same-sex spouse D. Employee C purchased health coverage for Spouse D through Employer’s group health plan beginning March 1, 2012. The premium paid by Employee C for Spouse D’s health coverage was $500 per month.

The amount in Box 1, “Wages, tips, other compensation,” of the 2012 Form W-2 provided by Employer to Employee C included the $5,000 ($500 per month x 10 months) of premiums paid by Employee C for Spouse D’s health coverage. Employee C filed Form 1040 for the 2012 taxable year reflecting the Box 1 amount reported on Form W-2.

Employee C’s salary reduction election is treated as including the value of the same-sex spousal coverage purchased for Spouse D. Employee C may file an amended Form 1040 for the 2012 taxable year excluding the premiums paid for Spouse D’s health coverage ($5,000) from gross income.

Q12. In the situations described in Q&A #10 and Q&A #11, may the employer claim a refund for the Social Security taxes and Medicare taxes paid on the benefits? 

A12. Yes. If the period of limitations for filing a claim for refund is open, the employer may claim a refund of, or make an adjustment for, any overpayment of Social Security taxes and Medicare taxes. The requirements for filing a claim for refund or for making an adjustment for an overpayment of the employer and employee portions of Social Security and Medicare taxes can be found in the Instructions for Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund. Notice 2013-61 provides special administrative procedures for employers to file claims for refunds or make adjustments for overpayments of Social Security taxes and Medicare taxes paid on same-sex spouse benefits. 

Q13. In the situations described in Q&A #10 and Q&A #11, may the employer claim a refund or make an adjustment of income tax withholding that was withheld from the employee with respect to the benefits in prior years? 

A13. No. Claims for refund of overwithheld income tax for prior years cannot be made by employers. The employee may file for any refund of income tax due for prior years on Form 1040X, provided the period of limitations for claiming a refund has not expired. See Q&A #10 and Q&A #11.

Employers may make adjustments for income tax withholding that was overwithheld from an employee in the current year provided the employer has repaid or reimbursed the employee for the overwithheld income tax before the end of the calendar year.

Q14. If an employer cannot locate a former employee with a same-sex spouse who received the benefits described in Q&A #10 and Q&A #11, may the employer still claim a refund of the employer portion of the Social Security and Medicare taxes on the benefits?

A14. Yes, if the employer makes reasonable attempts to locate an employee who received the benefits described in Q&A #10 and Q&A #11 that were treated as wages but the employer is unable to locate the employee, the employer can claim a refund of the employer portion of Social Security and Medicare taxes, but not the employee portion. Also, if an employee is notified and given the opportunity to participate in the claim for refund of Social Security and Medicare taxes but declines in writing, the employer can claim a refund of the employer portion of the taxes, but not the employee portion. Employers can use the special administrative procedure set forth in Notice 2013-61 to file these claims.

Q15. If a sole proprietor employs his or her same-sex spouse in his or her business, can the sole proprietor get a refund of Social Security, Medicare and FUTA taxes on the wages that the sole proprietor paid to the same-sex spouse as an employee in the business?

A15. Services performed by an employee in the employ of his or her spouse are excluded from the definition of employment for purposes of the Federal Unemployment Tax Act (FUTA). Therefore, for all years for which the period of limitations is open, the sole proprietor can claim a refund of the FUTA tax paid on the compensation that the sole proprietor paid his or her same-sex spouse as an employee in the business. Services of a spouse are excluded from Social Security and Medicare taxes only if the services are not in the course of the employer's trade or business, or if it is domestic service in a private home of the employer.

Q16. What rules apply to qualified retirement plans pursuant to Rev. Rul. 2013-17?

A16. Qualified retirement plans are required to comply with the following rules pursuant to Rev. Rul. 2013-17:

  1. A qualified retirement plan must treat a same-sex spouse as a spouse for purposes of satisfying the federal tax laws relating to qualified retirement plans.
  2. For purposes of satisfying the federal tax laws relating to qualified retirement plans, a qualified retirement plan must recognize a same-sex marriage that was validly entered into in a jurisdiction whose laws authorize the marriage, even if the married couple lives in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages.
  3. A person who is in a registered domestic partnership or civil union is not  considered to be a spouse for purposes of applying the federal tax law requirements relating to qualified retirement plans, regardless of whether that person’s partner is of the opposite or same sex.

Q17. What are some examples of the consequences of these rules for qualified retirement plans?

A17. The following are some examples of the consequences of these rules:

  1. Plan A, a qualified defined benefit plan, is maintained by Employer X, which operates only in a state that does not recognize same-sex marriages. Nonetheless, Plan A must treat a participant who is married to a spouse of the same sex under the laws of a different jurisdiction as married for purposes of applying the qualification requirements that relate to spouses.
  2. Plan B is a qualified defined contribution plan and provides that the participant’s account must be paid to the participant’s spouse upon the participant’s death unless the spouse consents to a different beneficiary. Plan B does not provide for any annuity forms of distribution. Plan B must pay this death benefit to the same-sex surviving spouse of any deceased participant. Plan B is not required to provide this death benefit to a surviving registered domestic partner of a deceased participant. However, Plan B is allowed to make a participant’s registered domestic partner the default beneficiary who will receive the death benefit unless the participant chooses a different beneficiary.

Q18. As of when do the rules of Rev. Rul. 2013-17 apply to qualified retirement plans?

A18. Qualified retirement plans must comply with these rules as of Sept. 16, 2013. Although Rev. Rul. 2013-17 allows taxpayers to file amended returns that relate to prior periods in reliance on the rules in Rev. Rul. 2013-17 with respect to many matters, this rule does not extend to matters relating to qualified retirement plans. The IRS has not yet provided guidance regarding the application of Windsor and these rules to qualified retirement plans with respect to periods before Sept. 16, 2013.

Q19. Will the IRS issue further guidance on how qualified retirement plans and other tax-favored retirement arrangements must comply with Windsor and Rev. Rul. 2013-17?

A19. The IRS intends to issue further guidance on how qualified retirement plans and other tax-favored retirement arrangements must comply with Windsor and Rev. Rul. 2013-17.  It is expected that future guidance will address the following, among other issues:

  1. Plan amendment requirements (including the timing of any required amendments).
  2. Any necessary corrections relating to plan operations for periods before future guidance is issued.

Q20. Can a same-sex married couple elect to treat a jointly owned and operated unincorporated business as a Qualified Joint Venture?

A20. Yes. Spouses that wholly own and operate an unincorporated business and that meet certain other requirements may avoid Federal partnership tax treatment by electing to be a Qualified Joint Venture. For more information on Qualified Joint Ventures, see the tax topic “Husband and Wife Business” at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Husband-and-Wife-Business.

Q21. In the situations described in FAQ #10 and FAQ #11, may the employee claim a refund for the social security and Medicare taxes paid on the benefits if the employer will not?

A21. Yes. If the period of limitations for filing a claim for refund is open and the employee has not been reimbursed by the employer for the Social Security and Medicare taxes and has not authorized the employer to file a claim for refund of those taxes on his or her behalf, the employee may claim a refund. The employee should seek a refund of Social Security and Medicare taxes from his or her employer first. However, if the employer indicates an intention not to file a claim or adjust the overpaid Social Security and Medicare taxes, the employee may claim a refund of any overpayment of employee Social Security and Medicare taxes by filing Form 843, Claim for Refund and Request for Abatement. The requirements for an employee filing a claim for refund of the employee portions of Social Security and Medicare taxes can be found in the Instructions for Form 843. Employees should write “Windsor Claim” in dark, bold letters across the top margin of Form 843.

Q22. Is an employer that repays or reimburses an employee on or before Dec. 31, 2013, for an overpayment of Social Security and Medicare taxes and income tax withholding with respect to same-sex spouse benefits provided in 2013 required to obtain a written statement from the employee confirming the employee did not make a claim for refund of the overcollected taxes (or the claim was rejected) and will not make any future claim for refund or credit of the overcollected taxes?

A22. No. An employer using the first special administrative procedure under Notice 2013-61 (i.e., employer repays or reimburses an employee for 2013 overpayments of taxes on or before Dec. 31, 2013, and corrects the overpayment on the fourth quarter 2013 Form 941) does not need to obtain the written statement from its employee with respect to the 2013 overpayments. However, an employer using the second special administrative procedure under Notice 2013-61 (i.e., employer does not repay or reimburse an employee for an overpayment of taxes on or before Dec. 31, 2013, and corrects the overpayment on a Form 941-X) is required to obtain such written statement from each affected employee.

Q23. If an individual employed his or her same-sex spouse to perform domestic (household) services in the individual’s private home, can the individual get a refund of Social Security, Medicare and FUTA taxes on wages that the individual paid to the spouse for such service? If so, which forms should the individual use to claim refunds?

A23. Yes, if the period of limitations for filing a claim for refund is open, the individual can get a refund of Social Security, Medicare and FUTA taxes paid on remuneration for domestic services in the individual’s private home that were performed by his or her same sex spouse as the individual’s employee. If the taxes for these services were reported on Schedule H (Form 1040), Household Employment Taxes, and taxes were paid in connection with the Form 1040, the individual should file an amended Form 1040 to claim refund of those taxes together with an amended Schedule H. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html. If the Social Security and Medicare taxes for the domestic service were reported on Form 941, Employer’s QUARTERLY Federal Tax Return, the individual employer can use Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund, to claim a refund of these taxes. The requirements for filing a claim for refund or making an adjustment of the employer and employee portions of Social Security and Medicare taxes can be found in the Instructions for Form 941-X. Notice 2013-61 provides special administrative procedures for employers to file claims for refunds or make adjustments for an overpayment of social security taxes and Medicare taxes on same-sex spouse benefits. If the FUTA taxes for the domestic service were reported on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, the individual employer can file an amended Form 940 for the prior year to obtain a refund. The previous year’s Form 940 should be used to claim a refund of FUTA taxes for that prior year. (Forms 940 for prior years may also be found at IRS.gov.)

Related Items:

 

Page Last Reviewed or Updated: 07-Mar-2014

The File 2011 Tax Return Online

File 2011 tax return online Publication 504 - Main Content Table of Contents Filing StatusUnmarried persons. File 2011 tax return online Married persons. File 2011 tax return online Same-sex marriage. File 2011 tax return online Exception. File 2011 tax return online Married Filing Jointly Married Filing Separately Head of Household ExemptionsPersonal Exemptions Exemptions for Dependents Phaseout of Exemptions AlimonyInvalid decree. File 2011 tax return online Amended instrument. File 2011 tax return online General Rules Instruments Executed After 1984 Instruments Executed Before 1985 Qualified Domestic Relations OrderRollovers. File 2011 tax return online Individual Retirement Arrangements Property SettlementsTransfer Between Spouses Gift Tax on Property Settlements Sale of Jointly-Owned Property Costs of Getting a Divorce Tax Withholding and Estimated Tax Community PropertyCommunity Income Alimony (Community Income) How To Get Tax Help Filing Status Your filing status is used in determining whether you must file a return, your standard deduction, and the correct tax. File 2011 tax return online It may also be used in determining whether you can claim certain other deductions and credits. File 2011 tax return online The filing status you can choose depends partly on your marital status on the last day of your tax year. File 2011 tax return online Marital status. File 2011 tax return online   If you are unmarried, your filing status is single or, if you meet certain requirements, head of household or qualifying widow(er). File 2011 tax return online If you are married, your filing status is either married filing a joint return or married filing a separate return. File 2011 tax return online For information about the single and qualifying widow(er) filing statuses, see Publication 501. File 2011 tax return online Unmarried persons. File 2011 tax return online   You are unmarried for the whole year if either of the following applies. File 2011 tax return online You have obtained a final decree of divorce or separate maintenance by the last day of your tax year. File 2011 tax return online You must follow your state law to determine if you are divorced or legally separated. File 2011 tax return online Exception. File 2011 tax return online If you and your spouse obtain a divorce in one year for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to remarry each other and do so in the next tax year, you and your spouse must file as married individuals. File 2011 tax return online You have obtained a decree of annulment, which holds that no valid marriage ever existed. File 2011 tax return online You must file amended returns (Form 1040X, Amended U. File 2011 tax return online S. File 2011 tax return online Individual Income Tax Return) for all tax years affected by the annulment that are not closed by the statute of limitations. File 2011 tax return online The statute of limitations generally does not end until 3 years (including extensions) after the date you file your original return or within 2 years after the date you pay the tax. File 2011 tax return online On the amended return you will change your filing status to single or, if you meet certain requirements, head of household. File 2011 tax return online Married persons. File 2011 tax return online   You are married for the whole year if you are separated but you have not obtained a final decree of divorce or separate maintenance by the last day of your tax year. File 2011 tax return online An interlocutory decree is not a final decree. File 2011 tax return online Same-sex marriage. File 2011 tax return online   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. File 2011 tax return online The term "spouse" includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. File 2011 tax return online However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. File 2011 tax return online For more details, see Publication 501. File 2011 tax return online Exception. File 2011 tax return online   If you live apart from your spouse, under certain circumstances, you may be considered unmarried and can file as head of household. File 2011 tax return online See Head of Household , later. File 2011 tax return online Married Filing Jointly If you are married, you and your spouse can choose to file a joint return. File 2011 tax return online If you file jointly, you both must include all your income, exemptions, deductions, and credits on that return. File 2011 tax return online You can file a joint return even if one of you had no income or deductions. File 2011 tax return online If both you and your spouse have income, you should usually figure your tax on both a joint return and separate returns (using the filing status of married filing separately) to see which gives the two of you the lower combined tax. File 2011 tax return online Nonresident alien. File 2011 tax return online   To file a joint return, at least one of you must be a U. File 2011 tax return online S. File 2011 tax return online citizen or resident alien at the end of the tax year. File 2011 tax return online If either of you was a nonresident alien at any time during the tax year, you can file a joint return only if you agree to treat the nonresident spouse as a resident of the United States. File 2011 tax return online This means that your combined worldwide incomes are subject to U. File 2011 tax return online S. File 2011 tax return online income tax. File 2011 tax return online These rules are explained in Publication 519, U. File 2011 tax return online S. File 2011 tax return online Tax Guide for Aliens. File 2011 tax return online Signing a joint return. File 2011 tax return online   Both you and your spouse generally must sign the return, or it will not be considered a joint return. File 2011 tax return online Joint and individual liability. File 2011 tax return online   Both you and your spouse may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. File 2011 tax return online This means that one spouse may be held liable for all the tax due even if all the income was earned by the other spouse. File 2011 tax return online Divorced taxpayers. File 2011 tax return online   If you are divorced, you are jointly and individually responsible for any tax, interest, and penalties due on a joint return for a tax year ending before your divorce. File 2011 tax return online This responsibility applies even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. File 2011 tax return online Relief from joint liability. File 2011 tax return online   In some cases, a spouse may be relieved of the tax, interest, and penalties on a joint return. File 2011 tax return online You can ask for relief no matter how small the liability. File 2011 tax return online   There are three types of relief available. File 2011 tax return online Innocent spouse relief. File 2011 tax return online Separation of liability, which applies to joint filers who are divorced, widowed, legally separated, or who have not lived together for the 12 months ending on the date election of this relief is filed. File 2011 tax return online Equitable relief. File 2011 tax return online   Married persons who live in community property states, but who did not file joint returns, may also qualify for relief from liability arising from community property law or for equitable relief. File 2011 tax return online See Relief from liability arising from community property law , later, under Community Property. File 2011 tax return online    Each kind of relief has different requirements. File 2011 tax return online You must file Form 8857 to request relief under any of these categories. File 2011 tax return online Publication 971 explains these kinds of relief and who may qualify for them. File 2011 tax return online You can also find information on our website at IRS. File 2011 tax return online gov. File 2011 tax return online Tax refund applied to spouse's debts. File 2011 tax return online   The overpayment shown on your joint return may be used to pay the past-due amount of your spouse's debts. File 2011 tax return online This includes your spouse's federal tax, state income tax, child or spousal support payments, or a federal nontax debt, such as a student loan. File 2011 tax return online You can get a refund of your share of the overpayment if you qualify as an injured spouse. File 2011 tax return online Injured spouse. File 2011 tax return online   You are an injured spouse if you file a joint return and all or part of your share of the overpayment was, or is expected to be, applied against your spouse's past-due debts. File 2011 tax return online An injured spouse can get a refund for his or her share of the overpayment that would otherwise be used to pay the past-due amount. File 2011 tax return online   To be considered an injured spouse, you must: Have made and reported tax payments (such as federal income tax withheld from wages or estimated tax payments), or claimed a refundable tax credit, such as the earned income credit or additional child tax credit on the joint return, and Not be legally obligated to pay the past-due amount. File 2011 tax return online Note. File 2011 tax return online If the injured spouse's permanent home is in a community property state, then the injured spouse must only meet (2). File 2011 tax return online For more information, see Publication 555. File 2011 tax return online    Refunds that involve community property states must be divided according to local law. File 2011 tax return online If you live in a community property state in which all community property is subject to the debts of either spouse, your entire refund is generally used to pay those debts. File 2011 tax return online   If you are an injured spouse, you must file Form 8379 to have your portion of the overpayment refunded to you. File 2011 tax return online Follow the instructions for the form. File 2011 tax return online   If you have not filed your joint return and you know that your joint refund will be offset, file Form 8379 with your return. File 2011 tax return online You should receive your refund within 14 weeks from the date the paper return is filed or within 11 weeks from the date the return is filed electronically. File 2011 tax return online   If you filed your joint return and your joint refund was offset, file Form 8379 by itself. File 2011 tax return online When filed after offset, it can take up to 8 weeks to receive your refund. File 2011 tax return online Do not attach the previously filed tax return, but do include copies of all Forms W-2, Wage and Tax Statement, and W-2G, Certain Gambling Winnings, for both spouses and any Forms 1099 that show income tax withheld. File 2011 tax return online    An injured spouse claim is different from an innocent spouse relief request. File 2011 tax return online An injured spouse uses Form 8379 to request an allocation of the tax overpayment attributed to each spouse. File 2011 tax return online An innocent spouse uses Form 8857 to request relief from joint liability for tax, interest, and penalties on a joint return for items of the other spouse (or former spouse) that were incorrectly reported on or omitted from the joint return. File 2011 tax return online For information on innocent spouses, see Relief from joint liability, earlier. File 2011 tax return online Married Filing Separately If you and your spouse file separate returns, you should each report only your own income, exemptions, deductions, and credits on your individual return. File 2011 tax return online You can file a separate return even if only one of you had income. File 2011 tax return online For information on exemptions you can claim on your separate return, see Exemptions , later. File 2011 tax return online Community or separate income. File 2011 tax return online   If you live in a community property state and file a separate return, your income may be separate income or community income for income tax purposes. File 2011 tax return online For more information, see Community Income under Community Property, later. File 2011 tax return online Separate liability. File 2011 tax return online   If you and your spouse file separately, you each are responsible only for the tax due on your own return. File 2011 tax return online Itemized deductions. File 2011 tax return online   If you and your spouse file separate returns and one of you itemizes deductions, the other spouse cannot use the standard deduction and should also itemize deductions. File 2011 tax return online Table 1. File 2011 tax return online Itemized Deductions on Separate Returns This table shows itemized deductions you can claim on your married filing separate return whether you paid the expenses separately with your own funds or jointly with your spouse. File 2011 tax return online  Caution: If you live in a community property state, these rules do not apply. File 2011 tax return online See Community Property. File 2011 tax return online IF you paid . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online AND you . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online THEN you can deduct on your separate federal return. File 2011 tax return online . File 2011 tax return online . File 2011 tax return online   medical expenses   paid with funds deposited in a joint checking account in which you and your spouse have an equal interest     half of the total medical expenses, subject to certain limits, unless you can show that you alone paid the expenses. File 2011 tax return online     state income tax   file a separate state income tax return     the state income tax you alone paid during the year. File 2011 tax return online         file a joint state income tax return and you and your spouse are jointly and individually liable for the full amount of the state income tax     the state income tax you alone paid during the year. File 2011 tax return online         file a joint state income tax return and you  are liable for only your own share of state  income tax     the smaller of: the state income tax you alone paid during the year, or the total state income tax you and your spouse paid during the year multiplied by the following fraction. File 2011 tax return online The numerator is your gross income and the denominator  is your combined gross income. File 2011 tax return online     property tax   paid the tax on property held as tenants by the entirety     the property tax you alone paid. File 2011 tax return online     mortgage interest   paid the interest on a qualified home1 held  as tenants by the entirety     the mortgage interest you alone paid. File 2011 tax return online     casualty loss   have a casualty loss on a home you own  as tenants by the entirety     half of the loss, subject to the deduction limits. File 2011 tax return online Neither spouse may report the total casualty loss. File 2011 tax return online 1 For more information on a qualified home and deductible mortgage interest, see Publication 936, Home Mortgage Interest Deduction. File 2011 tax return online Dividing itemized deductions. File 2011 tax return online   You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse. File 2011 tax return online See Table 1, later. File 2011 tax return online Separate returns may give you a higher tax. File 2011 tax return online   Some married couples file separate returns because each wants to be responsible only for his or her own tax. File 2011 tax return online There is no joint liability. File 2011 tax return online But in almost all instances, if you file separate returns, you will pay more combined federal tax than you would with a joint return. File 2011 tax return online This is because the following special rules apply if you file a separate return. File 2011 tax return online Your tax rate generally will be higher than it would be on a joint return. File 2011 tax return online Your exemption amount for figuring the alternative minimum tax will be half of that allowed a joint return filer. File 2011 tax return online You cannot take the credit for child and dependent care expenses in most cases. File 2011 tax return online You cannot take the earned income credit. File 2011 tax return online You cannot take the exclusion or credit for adoption expenses in most cases. File 2011 tax return online You cannot take the credit for higher education expenses (American opportunity and lifetime learning credits), the deduction for student loan interest, or the tuition and fees deduction. File 2011 tax return online You cannot exclude the interest from qualified savings bonds that you used for higher education expenses. File 2011 tax return online If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You will have to include in income more (up to 85%) of any social security or equivalent railroad retirement benefits you received. File 2011 tax return online Your income limits that reduce the child tax credit, the retirement savings contributions credit, itemized deductions, and the deduction for personal exemptions are half of the limits for a joint return filer. File 2011 tax return online Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). File 2011 tax return online Your basic standard deduction, if allowable, is half of that allowed a joint return filer. File 2011 tax return online See Itemized deductions , earlier. File 2011 tax return online Joint return after separate returns. File 2011 tax return online   If either you or your spouse (or both of you) file a separate return, you generally can change to a joint return within 3 years from the due date (not including extensions) of the separate return or returns. File 2011 tax return online This applies to a return either of you filed claiming married filing separately, single, or head of household filing status. File 2011 tax return online Use Form 1040X to change your filing status. File 2011 tax return online Separate returns after joint return. File 2011 tax return online   After the due date of your return, you and your spouse cannot file separate returns if you previously filed a joint return. File 2011 tax return online Exception. File 2011 tax return online   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. File 2011 tax return online The personal representative has 1 year from the due date (including extensions) of the joint return to make the change. File 2011 tax return online Head of Household Filing as head of household has the following advantages. File 2011 tax return online You can claim the standard deduction even if your spouse files a separate return and itemizes deductions. File 2011 tax return online Your standard deduction is higher than is allowed if you claim a filing status of single or married filing separately. File 2011 tax return online Your tax rate usually will be lower than it is if you claim a filing status of single or married filing separately. File 2011 tax return online You may be able to claim certain credits (such as the dependent care credit and the earned income credit) you cannot claim if your filing status is married filing separately. File 2011 tax return online Income limits that reduce your child tax credit, retirement savings contributions credit, itemized deductions, and the deduction for personal exemptions are higher than the income limits if you claim a filing status of married filing separately. File 2011 tax return online Requirements. File 2011 tax return online   You may be able to file as head of household if you meet all the following requirements. File 2011 tax return online You are unmarried or “considered unmarried” on the last day of the year. File 2011 tax return online You paid more than half the cost of keeping up a home for the year. File 2011 tax return online A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). File 2011 tax return online However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. File 2011 tax return online See Special rule for parent , later, under Qualifying person. File 2011 tax return online Considered unmarried. File 2011 tax return online   You are considered unmarried on the last day of the tax year if you meet all the following tests. File 2011 tax return online You file a separate return. File 2011 tax return online A separate return includes a return claiming married filing separately, single, or head of household filing status. File 2011 tax return online You paid more than half the cost of keeping up your home for the tax year. File 2011 tax return online Your spouse did not live in your home during the last 6 months of the tax year. File 2011 tax return online Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. File 2011 tax return online See Temporary absences , later. File 2011 tax return online Your home was the main home of your child, stepchild, or foster child for more than half the year. File 2011 tax return online (See Qualifying person , later, for rules applying to a child's birth, death, or temporary absence during the year. File 2011 tax return online ) You must be able to claim an exemption for the child. File 2011 tax return online However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rule described later in Special rule for divorced or separated parents (or parents who live apart) under Exemptions for Dependents. File 2011 tax return online The general rules for claiming an exemption for a dependent are shown later in Table 3. File 2011 tax return online    If you were considered married for part of the year and lived in a community property state (one of the states listed later under Community Property), special rules may apply in determining your income and expenses. File 2011 tax return online See Publication 555 for more information. File 2011 tax return online Nonresident alien spouse. File 2011 tax return online   If your spouse was a nonresident alien at any time during the tax year, and you have not chosen to treat your spouse as a resident alien, you are considered unmarried for head of household purposes. File 2011 tax return online However, your spouse is not a qualifying person for head of household purposes. File 2011 tax return online You must have another qualifying person and meet the other requirements to file as head of household. File 2011 tax return online Keeping up a home. File 2011 tax return online   You are keeping up a home only if you pay more than half the cost of its upkeep for the year. File 2011 tax return online This includes rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. File 2011 tax return online This does not include the cost of clothing, education, medical treatment, vacations, life insurance, or transportation for any member of the household. File 2011 tax return online Qualifying person. File 2011 tax return online    Table 2, later, shows who can be a qualifying person. File 2011 tax return online Any person not described in Table 2 is not a qualifying person. File 2011 tax return online   Generally, the qualifying person must live with you for more than half of the year. File 2011 tax return online Table 2. File 2011 tax return online Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. File 2011 tax return online See the text of this publication for the other requirements you must meet to claim head of household filing status. File 2011 tax return online IF the person is your . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online AND . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online THEN that person is . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online   qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2 he or she is single a qualifying person, whether or not you can claim an exemption for the person. File 2011 tax return online     he or she is married and you can claim an exemption for him or her a qualifying person. File 2011 tax return online     he or she is married and you cannot claim an exemption for him or her not a qualifying person. File 2011 tax return online 3     qualifying relative4 who is your father or mother you can claim an exemption for him or her5 a qualifying person. File 2011 tax return online 6     you cannot claim an exemption for him or her not a qualifying person. File 2011 tax return online     qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests) he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 and you can claim an exemption for him or her5 a qualifying person. File 2011 tax return online     he or she did not live with you more than half the year not a qualifying person. File 2011 tax return online     he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 and is your qualifying relative only because he or she lived with you all year as a member of your household not a qualifying person. File 2011 tax return online     you cannot claim an exemption for him or her not a qualifying person. File 2011 tax return online   1 A person cannot qualify more than one taxpayer to use the head of household filing status for the year. File 2011 tax return online 2 See Table 3, later, for the tests that must be met to be a qualifying child. File 2011 tax return online Note. File 2011 tax return online If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of Divorced or Separated Parents (or Parents Who Live Apart) under Exemptions for Dependents, later. File 2011 tax return online If you are the custodial parent and those rules apply, the child is generally your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. File 2011 tax return online 3 This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. File 2011 tax return online 4 See Table 3, later, for the tests that must be met to be a qualifying relative. File 2011 tax return online 5 If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. File 2011 tax return online See Multiple Support Agreement in Publication 501. File 2011 tax return online 6 See Special rule for parent . File 2011 tax return online Special rule for parent. File 2011 tax return online   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. File 2011 tax return online However, you must be able to claim an exemption for your father or mother. File 2011 tax return online Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. File 2011 tax return online You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. File 2011 tax return online Death or birth. File 2011 tax return online   If the person for whom you kept up a home was born or died in 2013, you still may be able to file as head of household. File 2011 tax return online If the person is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. File 2011 tax return online If the person is anyone else, see Publication 501. File 2011 tax return online Temporary absences. File 2011 tax return online   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. File 2011 tax return online It must be reasonable to assume that the absent person will return to the home after the temporary absence. File 2011 tax return online You must continue to keep up the home during the absence. File 2011 tax return online Kidnapped child. File 2011 tax return online   You may be eligible to file as head of household even if the child who is your qualifying person has been kidnapped. File 2011 tax return online You can claim head of household filing status if all the following statements are true. File 2011 tax return online The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. File 2011 tax return online In the year of the kidnapping, the child lived with you for more than half the part of the year before the kidnapping. File 2011 tax return online You would have qualified for head of household filing status if the child had not been kidnapped. File 2011 tax return online   This treatment applies for all years until the earlier of: The year the child is returned, The year there is a determination that the child is dead, or The year the child would have reached age 18. File 2011 tax return online More information. File 2011 tax return online   For more information on filing as head of household, see Publication 501. File 2011 tax return online Exemptions You can deduct $3,900 for each exemption you claim in 2013. File 2011 tax return online However, if your adjusted gross income is more than $150,000, see Phaseout of Exemptions , later. File 2011 tax return online There are two types of exemptions: personal exemptions and exemptions for dependents. File 2011 tax return online If you are entitled to claim an exemption for a dependent (such as your child), that dependent cannot claim his or her personal exemption on his or her own tax return. File 2011 tax return online Personal Exemptions You can claim your own exemption unless someone else can claim it. File 2011 tax return online If you are married, you may be able to take an exemption for your spouse. File 2011 tax return online These are called personal exemptions. File 2011 tax return online Exemption for Your Spouse Your spouse is never considered your dependent. File 2011 tax return online Joint return. File 2011 tax return online   On a joint return, you can claim one exemption for yourself and one for your spouse. File 2011 tax return online   If your spouse had any gross income, you can claim his or her exemption only if you file a joint return. File 2011 tax return online Separate return. File 2011 tax return online   If you file a separate return, you can take an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. File 2011 tax return online If your spouse is the dependent of another taxpayer, you cannot claim an exemption for your spouse even if the other taxpayer does not actually claim your spouse's exemption. File 2011 tax return online Alimony paid. File 2011 tax return online   If you paid alimony to your spouse, you cannot take an exemption for your spouse. File 2011 tax return online This is because alimony is gross income to the spouse who received it. File 2011 tax return online Divorced or separated spouse. File 2011 tax return online   If you obtained a final decree of divorce or separate maintenance during the year, you cannot take your former spouse's exemption. File 2011 tax return online This rule applies even if you provided all of your former spouse's support. File 2011 tax return online Exemptions for Dependents You are allowed one exemption for each person you can claim as a dependent. File 2011 tax return online You can claim an exemption for a dependent even if your dependent files a return. File 2011 tax return online The term “dependent” means: A qualifying child, or A qualifying relative. File 2011 tax return online Table 3 shows the tests that must be met to be either a qualifying child or qualifying relative, plus the additional requirements for claiming an exemption for a dependent. File 2011 tax return online For detailed information, see Publication 501. File 2011 tax return online   Dependent not allowed a personal exemption. File 2011 tax return online If you can claim an exemption for your dependent, the dependent cannot claim his or her own exemption on his or her own tax return. File 2011 tax return online This is true even if you do not claim the dependent's exemption on your return. File 2011 tax return online It is also true if the decedent's exemption on your return is reduced or eliminated under the phaseout rule described under Phaseout of Exemptions, later. File 2011 tax return online Table 3. File 2011 tax return online Overview of the Rules for Claiming an Exemption for a Dependent Caution. File 2011 tax return online This table is only an overview of the rules. File 2011 tax return online For details, see Publication 501. File 2011 tax return online • You cannot claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer. File 2011 tax return online • You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns. File 2011 tax return online • You cannot claim a person as a dependent unless that person is a U. File 2011 tax return online S. File 2011 tax return online citizen, U. File 2011 tax return online S. File 2011 tax return online resident alien, U. File 2011 tax return online S. File 2011 tax return online national, or a resident of Canada or Mexico. File 2011 tax return online 1 • You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative. File 2011 tax return online   Tests To Be a Qualifying Child   Tests To Be a Qualifying Relative 1. File 2011 tax return online     2. File 2011 tax return online       3. File 2011 tax return online    4. File 2011 tax return online    5. File 2011 tax return online    The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. File 2011 tax return online   The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled. File 2011 tax return online   The child must have lived with you for more than half of the year. File 2011 tax return online 2   The child must not have provided more than half of his or her own support for the year. File 2011 tax return online   The child is not filing a joint return for the year (unless that joint return is filed only as a claim for refund of withheld income tax or estimated tax paid). File 2011 tax return online   1. File 2011 tax return online    2. File 2011 tax return online       3. File 2011 tax return online    4. File 2011 tax return online The person cannot be your qualifying child or the qualifying child of anyone else. File 2011 tax return online   The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 or (b) must live with you all year as a member of your household 2 (and your relationship must not violate local law). File 2011 tax return online   The person's gross income for the year must be less than $3,900. File 2011 tax return online 3   You must provide more than half of the person's total support for the year. File 2011 tax return online 4 If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. File 2011 tax return online See Special Rule for Qualifying Child of More Than One Person , later, to find out which person is the person entitled to claim the child as a qualifying child. File 2011 tax return online     1 Exception exists for certain adopted children. File 2011 tax return online 2 Exceptions exist for temporary absences, children who were born or died during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children. File 2011 tax return online 3 Exception exists for persons who are disabled and have income from a sheltered workshop. File 2011 tax return online 4 Exceptions exist for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children. File 2011 tax return online See Publication 501. File 2011 tax return online You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year if you claimed an exemption for that child. File 2011 tax return online For more information, see the instructions for your tax return if you file Form 1040A or 1040. File 2011 tax return online Children of Divorced or Separated Parents (or Parents Who Live Apart) In most cases, because of the residency test (see item 3 under Tests To Be a Qualifying Child in Table 3), a child of divorced or separated parents is the qualifying child of the custodial parent. File 2011 tax return online However, the child will be treated as the qualifying child of the noncustodial parent if the special rule (discussed next) applies. File 2011 tax return online Special rule for divorced or separated parents (or parents who live apart). File 2011 tax return online   A child will be treated as the qualifying child of his or her noncustodial parent if all four of the following statements are true. File 2011 tax return online The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of the year, whether or not they are or were married. File 2011 tax return online The child received over half of his or her support for the year from the parents. File 2011 tax return online The child is in the custody of one or both parents for more than half of the year. File 2011 tax return online Either of the following applies. File 2011 tax return online The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. File 2011 tax return online (If the decree or agreement went into effect after 1984, see Divorce decree or separation agreement that went into effect after 1984 and before 2009 , later. File 2011 tax return online A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during 2013. File 2011 tax return online See Child support under pre-1985 agreement , later. File 2011 tax return online Custodial parent and noncustodial parent. File 2011 tax return online   The custodial parent is the parent with whom the child lived for the greater number of nights during the year. File 2011 tax return online The other parent is the noncustodial parent. File 2011 tax return online   If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year. File 2011 tax return online   A child is treated as living with a parent for a night if the child sleeps: At that parent's home, whether or not the parent is present, or In the company of the parent, when the child does not sleep at a parent's home (for example, the parent and child are on vacation together). File 2011 tax return online Equal number of nights. File 2011 tax return online   If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income. File 2011 tax return online December 31. File 2011 tax return online   The night of December 31 is treated as part of the year in which it begins. File 2011 tax return online For example, December 31, 2013, is treated as part of 2013. File 2011 tax return online Emancipated child. File 2011 tax return online   If a child is emancipated under state law, the child is treated as not living with either parent. File 2011 tax return online See Examples 5 and 6 . File 2011 tax return online Absences. File 2011 tax return online    If a child was not with either parent on a particular night (because, for example, the child was staying at a friend's house), the child is treated as living with the parent with whom the child normally would have lived for that night, except for the absence. File 2011 tax return online But if it cannot be determined with which parent the child normally would have lived or if the child would not have lived with either parent that night, the child is treated as not living with either parent that night. File 2011 tax return online Parent works at night. File 2011 tax return online   If, due to a parent's nighttime work schedule, a child lives for a greater number of days but not nights with the parent who works at night, that parent is treated as the custodial parent. File 2011 tax return online On a school day, the child is treated as living at the primary residence registered with the school. File 2011 tax return online Example 1 – child lived with one parent greater number of nights. File 2011 tax return online You and your child’s other parent are divorced. File 2011 tax return online In 2013, your child lived with you 210 nights and with the other parent 156 nights. File 2011 tax return online You are the custodial parent. File 2011 tax return online Example 2 – child is away at camp. File 2011 tax return online In 2013, your daughter lives with each parent for alternate weeks. File 2011 tax return online In the summer, she spends 6 weeks at summer camp. File 2011 tax return online During the time she is at camp, she is treated as living with you for 3 weeks and with her other parent, your ex-spouse, for 3 weeks because this is how long she would have lived with each parent if she had not attended summer camp. File 2011 tax return online Example 3 – child lived same number of days with each parent. File 2011 tax return online Your son lived with you 180 nights during the year and lived the same number of nights with his other parent, your ex-spouse. File 2011 tax return online Your adjusted gross income is $40,000. File 2011 tax return online Your ex-spouse's adjusted gross income is $25,000. File 2011 tax return online You are treated as your son's custodial parent because you have the higher adjusted gross income. File 2011 tax return online Example 4 – child is at parent’s home but with other parent. File 2011 tax return online Your son normally lives with you during the week and with his other parent, your ex-spouse, every other weekend. File 2011 tax return online You become ill and are hospitalized. File 2011 tax return online The other parent lives in your home with your son for 10 consecutive days while you are in the hospital. File 2011 tax return online Your son is treated as living with you during this 10-day period because he was living in your home. File 2011 tax return online Example 5 – child emancipated in May. File 2011 tax return online When your son turned age 18 in May 2013, he became emancipated under the law of the state where he lives. File 2011 tax return online As a result, he is not considered in the custody of his parents for more than half of the year. File 2011 tax return online The special rule for children of divorced or separated parents (or parents who live apart) does not apply. File 2011 tax return online Example 6 – child emancipated in August. File 2011 tax return online Your daughter lives with you from January 1, 2013, until May 31, 2013, and lives with her other parent, your ex-spouse, from June 1, 2013, through the end of the year. File 2011 tax return online She turns 18 and is emancipated under state law on August 1, 2013. File 2011 tax return online Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2013. File 2011 tax return online You are the custodial parent. File 2011 tax return online Written declaration. File 2011 tax return online    The custodial parent must use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. File 2011 tax return online The noncustodial parent must attach a copy of the form or statement to his or her tax return. File 2011 tax return online   The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all future years, as specified in the declaration. File 2011 tax return online Divorce decree or separation agreement that went into effect after 1984 and before 2009. File 2011 tax return online   If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. File 2011 tax return online To be able to do this, the decree or agreement must state all three of the following. File 2011 tax return online The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support. File 2011 tax return online The custodial parent will not claim the child as a dependent for the year. File 2011 tax return online The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent. File 2011 tax return online   The noncustodial parent must attach all of the following pages of the decree or agreement to his or her return. File 2011 tax return online The cover page (write the other parent's social security number on this page). File 2011 tax return online The pages that include all of the information identified in items (1) through (3) above. File 2011 tax return online The signature page with the other parent's signature and the date of the agreement. File 2011 tax return online Post-2008 divorce decree or separation agreement. File 2011 tax return online   If the decree or agreement went into effect after 2008, a noncustodial parent claiming an exemption for a child cannot attach pages from a divorce decree or separation agreement instead of Form 8332. File 2011 tax return online The custodial parent must sign either a Form 8332 or a similar statement. File 2011 tax return online The only purpose of this statement must be to release the custodial parent's claim to the child's exemption. File 2011 tax return online The noncustodial parent must attach a copy to his or her return. File 2011 tax return online The form or statement must release the custodial parent's claim to the child without any conditions. File 2011 tax return online For example, the release must not depend on the noncustodial parent paying support. File 2011 tax return online    The noncustodial parent must attach the required information even if it was filed with a return in an earlier year. File 2011 tax return online Revocation of release of claim to an exemption. File 2011 tax return online   The custodial parent can revoke a release of claim to exemption that he or she previously released to the noncustodial parent on Form 8332 or a similar statement. File 2011 tax return online In order for the revocation to be effective for 2013, the custodial parent must have given (or made reasonable efforts to give) written notice of the revocation to the noncustodial parent in 2012 or earlier. File 2011 tax return online The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation. File 2011 tax return online Remarried parent. File 2011 tax return online   If you remarry, the support provided by your new spouse is treated as provided by you. File 2011 tax return online Child support under pre-1985 agreement. File 2011 tax return online   All child support payments actually received from the noncustodial parent under a pre-1985 agreement are considered used for the support of the child, even if such amounts are not actually spent for child support. File 2011 tax return online Example. File 2011 tax return online Under a pre-1985 agreement, the noncustodial parent provides $1,200 for the child's support. File 2011 tax return online This amount is considered support provided by the noncustodial parent even if the $1,200 was actually spent on things other than support. File 2011 tax return online Parents who never married. File 2011 tax return online   The special rule for divorced or separated parents also applies to parents who never married and lived apart at all times during the last 6 months of the year. File 2011 tax return online Alimony. File 2011 tax return online   Payments to your spouse that are includible in his or her gross income as either alimony, separate maintenance payments, or similar payments from an estate or trust, are not treated as a payment for the support of a dependent. File 2011 tax return online Special Rule for Qualifying Child of More Than One Person If your qualifying child is not a qualifying child of anyone else, this special rule does not apply to you and you do not need to read about it. File 2011 tax return online This is also true if your qualifying child is not a qualifying child of anyone else except your spouse with whom you file a joint return. File 2011 tax return online If a child is treated as the qualifying child of the noncustodial parent under the Special rule for divorced or separated parents (or parents who live apart), earlier, see Applying this special rule to divorced or separated parents (or parents who live apart), later. File 2011 tax return online Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. File 2011 tax return online (For a description of these tests, see list items 1 through 5 under Tests To Be a Qualifying Child in Table 3). File 2011 tax return online Although the child meets the conditions to be a qualifying child of each of these persons, only one person can actually use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). File 2011 tax return online The exemption for the child. File 2011 tax return online The child tax credit. File 2011 tax return online Head of household filing status. File 2011 tax return online The credit for child and dependent care expenses. File 2011 tax return online The exclusion from income for dependent care benefits. File 2011 tax return online The earned income credit. File 2011 tax return online The other person cannot take any of these benefits based on this qualifying child. File 2011 tax return online In other words, you and the other person cannot agree to divide these tax benefits between you. File 2011 tax return online The other person cannot take any of these tax benefits unless he or she has a different qualifying child. File 2011 tax return online Tiebreaker rules. File 2011 tax return online   To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply. File 2011 tax return online If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. File 2011 tax return online If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. File 2011 tax return online If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. File 2011 tax return online If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. File 2011 tax return online If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. File 2011 tax return online If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' total AGI evenly between them; see Publication 501 for details. File 2011 tax return online   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. File 2011 tax return online Example 1—separated parents. File 2011 tax return online You, your husband, and your 10-year-old son lived together until August 1, 2013, when your husband moved out of the household. File 2011 tax return online In August and September, your son lived with you. File 2011 tax return online For the rest of the year, your son lived with your husband, the boy's father. File 2011 tax return online Your son is a qualifying child of both you and your husband because your son lived with each of you for more than half the year and because he met the relationship, age, support, and joint return tests for both of you. File 2011 tax return online At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. File 2011 tax return online You and your husband will file separate returns. File 2011 tax return online Your husband agrees to let you treat your son as a qualifying child. File 2011 tax return online This means, if your husband does not claim your son as a qualifying child, you can claim your son as a dependent and treat him as a qualifying child for the child tax credit and exclusion for dependent care benefits, if you qualify for each of those tax benefits. File 2011 tax return online However, you cannot claim head of household filing status because you and your husband did not live apart the last 6 months of the year. File 2011 tax return online And, as a result of your filing status being married filing separately, you cannot claim the earned income credit or the credit for child and dependent care expenses. File 2011 tax return online Example 2—separated parents claim same child. File 2011 tax return online The facts are the same as in Example 1 except that you and your husband both claim your son as a qualifying child. File 2011 tax return online In this case, only your husband will be allowed to treat your son as a qualifying child. File 2011 tax return online This is because, during 2013, the boy lived with him longer than with you. File 2011 tax return online If you claimed an exemption, the child tax credit, or the exclusion for dependent care benefits for your son, the IRS will disallow your claim to all these tax benefits, unless you have another qualifying child. File 2011 tax return online In addition, because you and your husband did not live apart the last 6 months of the year, your husband cannot claim head of household filing status. File 2011 tax return online And, as a result of his filing status being married filing separately, he cannot claim the earned income credit or the credit for child and dependent care expenses. File 2011 tax return online Applying this special rule to divorced or separated parents (or parents who live apart). File 2011 tax return online   If a child is treated as the qualifying child of the noncustodial parent under the special rule for divorced or separated parents (or parents who live apart) described earlier, only the noncustodial parent can claim an exemption and the child tax credit for the child. File 2011 tax return online However, the noncustodial parent cannot claim the child as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. File 2011 tax return online Only the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for those four tax benefits. File 2011 tax return online If the child is the qualifying child of more than one person for those tax benefits, the tiebreaker rules determine which person can treat the child as a qualifying child. File 2011 tax return online Example 1. File 2011 tax return online You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. File 2011 tax return online Your AGI is $10,000. File 2011 tax return online Your mother's AGI is $25,000. File 2011 tax return online Your son's father does not live with you or your son. File 2011 tax return online Under the rules for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child if he meets all the requirements to do so. File 2011 tax return online Because of this, you cannot claim an exemption or the child tax credit for your son. File 2011 tax return online However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. File 2011 tax return online You and your mother did not have any child care expenses or dependent care benefits, but the boy is a qualifying child of both you and your mother for head of household filing status and the earned income credit because he meets the relationship, age, residency, support, and joint return tests for both you and your mother. File 2011 tax return online (Note: The support test does not apply for the earned income credit. File 2011 tax return online ) However, you agree to let your mother claim your son. File 2011 tax return online This means she can claim him for head of household filing status and the earned income credit if she qualifies for each and if you do not claim him as a qualifying child for the earned income credit. File 2011 tax return online (You cannot claim head of household filing status because your mother paid the entire cost of keeping up the home. File 2011 tax return online ) Example 2. File 2011 tax return online The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. File 2011 tax return online Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. File 2011 tax return online Example 3. File 2011 tax return online The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the earned income credit. File 2011 tax return online Your mother also claims him as a qualifying child for head of household filing status. File 2011 tax return online You, as the child's parent, will be the only one allowed to claim your son as a qualifying child for the earned income credit. File 2011 tax return online The IRS will disallow your mother's claim to the earned income credit and head of household filing status unless she has another qualifying child. File 2011 tax return online Phaseout of Exemptions The amount you can claim as a deduction for exemptions is reduced once your adjusted gross income (AGI) goes above a certain level for your filing status. File 2011 tax return online These levels are as follows:    Filing Status AGI Level That Reduces Exemption Amount Married filing separately $150,000 Single 250,000 Head of household 275,000 Married filing jointly 300,000 Qualifying widow(er) 300,000 You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown above for your filing status. File 2011 tax return online If your AGI exceeds the amount shown above by more than $122,500 ($61,250 if married filing separately), the amount of your deduction for exemptions is reduced to zero. File 2011 tax return online If your AGI exceeds the level for your filing status, use the Deduction for Exemptions Worksheet found in the instructions for Form 1040 or Form 1040NR to figure the amount of your deduction for exemptions. File 2011 tax return online Alimony Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. File 2011 tax return online It does not include voluntary payments that are not made under a divorce or separation instrument. File 2011 tax return online Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. File 2011 tax return online Although this discussion is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. File 2011 tax return online To be alimony, a payment must meet certain requirements. File 2011 tax return online There are some differences between the requirements that apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. File 2011 tax return online The general requirements that apply to payments regardless of when the divorce or separation instrument was executed and the specific requirements that apply to post-1984 instruments (and, in certain cases, some pre-1985 instruments) are discussed in this publication. File 2011 tax return online See, Instruments Executed Before 1985 , later, if you are looking for information on where to find the specific requirements that apply to pre-1985 instruments. File 2011 tax return online Spouse or former spouse. File 2011 tax return online   Unless otherwise stated, the term “spouse” includes former spouse. File 2011 tax return online Divorce or separation instrument. File 2011 tax return online   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. File 2011 tax return online This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). File 2011 tax return online Invalid decree. File 2011 tax return online   Payments under a divorce decree can be alimony even if the decree's validity is in question. File 2011 tax return online A divorce decree is valid for tax purposes until a court having proper jurisdiction holds it invalid. File 2011 tax return online Amended instrument. File 2011 tax return online   An amendment to a divorce decree may change the nature of your payments. File 2011 tax return online Amendments are not ordinarily retroactive for federal tax purposes. File 2011 tax return online However, a retroactive amendment to a divorce decree correcting a clerical error to reflect the original intent of the court will generally be effective retroactively for federal tax purposes. File 2011 tax return online Example 1. File 2011 tax return online A court order retroactively corrected a mathematical error under your divorce decree to express the original intent to spread the payments over more than 10 years. File 2011 tax return online This change also is effective retroactively for federal tax purposes. File 2011 tax return online Example 2. File 2011 tax return online Your original divorce decree did not fix any part of the payment as child support. File 2011 tax return online To reflect the true intention of the court, a court order retroactively corrected the error by designating a part of the payment as child support. File 2011 tax return online The amended order is effective retroactively for federal tax purposes. File 2011 tax return online Deducting alimony paid. File 2011 tax return online   You can deduct alimony you paid, whether or not you itemize deductions on your return. File 2011 tax return online You must file Form 1040. File 2011 tax return online You cannot use Form 1040A, 1040EZ, or 1040NR. File 2011 tax return online Enter the amount of alimony you paid on Form 1040, line 31a. File 2011 tax return online In the space provided on line 31b, enter your spouse's social security number (SSN) or IRS individual taxpayer identification number (ITIN). File 2011 tax return online If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. File 2011 tax return online Show the SSN or ITIN and amount paid to each other recipient on an attached statement. File 2011 tax return online Enter your total payments on line 31a. File 2011 tax return online If you do not provide your spouse's SSN or ITIN, you may have to pay a $50 penalty and your deduction may be disallowed. File 2011 tax return online Reporting alimony received. File 2011 tax return online   Report alimony you received as income on Form 1040, line 11, or on Schedule NEC (Form 1040NR), line 12. File 2011 tax return online You cannot use Form 1040A, 1040EZ, or 1040NR-EZ. File 2011 tax return online    You must give the person who paid the alimony your SSN or ITIN. File 2011 tax return online If you do not, you may have to pay a $50 penalty. File 2011 tax return online Withholding on nonresident aliens. File 2011 tax return online   If you are a U. File 2011 tax return online S. File 2011 tax return online citizen or resident alien and you pay alimony to a nonresident alien spouse, you may have to withhold income tax at a rate of 30% on each payment. File 2011 tax return online However, many tax treaties provide for an exemption from withholding for alimony payments. File 2011 tax return online For more information, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. File 2011 tax return online General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. File 2011 tax return online Payments not alimony. File 2011 tax return online   Not all payments under a divorce or separation instrument are alimony. File 2011 tax return online Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained later under Community Property , Payments to keep up the payer's property, or Use of the payer's property. File 2011 tax return online Example. File 2011 tax return online Under your written separation agreement, your spouse lives rent-free in a home you own and you must pay the mortgage, real estate taxes, insurance, repairs, and utilities for the home. File 2011 tax return online Because you own the home and the debts are yours, your payments for the mortgage, real estate taxes, insurance, and repairs are not alimony. File 2011 tax return online Neither is the value of your spouse's use of the home. File 2011 tax return online If they otherwise qualify, you can deduct the payments for utilities as alimony. File 2011 tax return online Your spouse must report them as income. File 2011 tax return online If you itemize deductions, you can deduct the real estate taxes and, if the home is a qualified home, you can also include the interest on the mortgage in figuring your deductible interest. File 2011 tax return online However, if your spouse owned the home, see Example 2 under Payments to a third party, later. File 2011 tax return online If you owned the home jointly with your spouse, see Table 4. File 2011 tax return online For more information on a qualified home and deductible mortgage interest, see Publication 936, Home Mortgage Interest Deduction. File 2011 tax return online Child support. File 2011 tax return online   To determine whether a payment is child support, see the discussion under Instruments Executed After 1984 , later. File 2011 tax return online If your divorce or separation agreement was executed before 1985, see the 2004 revision of Publication 504 available at www. File 2011 tax return online irs. File 2011 tax return online gov/formspubs. File 2011 tax return online Underpayment. File 2011 tax return online   If both alimony and child support payments are called for by your divorce or separation instrument, and you pay less than the total required, the payments apply first to child support and then to alimony. File 2011 tax return online Example. File 2011 tax return online Your divorce decree calls for you to pay your former spouse $200 a month ($2,400 ($200 x 12) a year) as child support and $150 a month ($1,800 ($150 x 12) a year) as alimony. File 2011 tax return online If you pay the full amount of $4,200 ($2,400 + $1,800) during the year, you can deduct $1,800 as alimony and your former spouse must report $1,800 as alimony received. File 2011 tax return online If you pay only $3,600 during the year, $2,400 is child support. File 2011 tax return online You can deduct only $1,200 ($3,600 – $2,400) as alimony and your former spouse must report $1,200 as alimony received. File 2011 tax return online Payments to a third party. File 2011 tax return online   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. File 2011 tax return online These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. File 2011 tax return online ), taxes, tuition, etc. File 2011 tax return online The payments are treated as received by your spouse and then paid to the third party. File 2011 tax return online Example 1. File 2011 tax return online Under your divorce decree, you must pay your former spouse's medical and dental expenses. File 2011 tax return online If the payments otherwise qualify, you can deduct them as alimony on your return. File 2011 tax return online Your former spouse must report them as alimony received and can include them in figuring deductible medical expenses. File 2011 tax return online Example 2. File 2011 tax return online Under your separation agreement, you must pay the real estate taxes, mortgage payments, and insurance premiums on a home owned by your spouse. File 2011 tax return online If they otherwise qualify, you can deduct the payments as alimony on your return, and your spouse must report them as alimony received. File 2011 tax return online If itemizing deductions, your spouse can deduct the real estate taxes and, if the home is a qualified home, also include the interest on the mortgage in figuring deductible interest. File 2011 tax return online However, if you owned the home, see the example under Payments not alimony , earlier. File 2011 tax return online If you owned the home jointly with your spouse, see Table 4. File 2011 tax return online Life insurance premiums. File 2011 tax return online   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. File 2011 tax return online Payments for jointly-owned home. File 2011 tax return online   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse or former spouse, some of your payments may be alimony. File 2011 tax return online See Table 4. File 2011 tax return online   However, if your spouse owned the home, see Example 2 under Payments to a third party, earlier. File 2011 tax return online If you owned the home, see the example under Payments not alimony , earlier. File 2011 tax return online Table 4. File 2011 tax return online Expenses for a Jointly-Owned Home Use the table below to find how much of your payment is alimony and how much you can claim as an itemized deduction. File 2011 tax return online IF you must pay all of the . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online AND your home is . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online THEN you can deduct and your spouse (or former spouse) must include as alimony . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online AND you can claim as an itemized deduction . File 2011 tax return online . File 2011 tax return online . File 2011 tax return online   mortgage payments (principal and interest) jointly owned half of the total payments half of the interest as interest expense (if the home is a qualified home). File 2011 tax return online 1   real estate taxes and home insurance held as tenants in common half of the total payments half of the real estate taxes2 and none of the home insurance. File 2011 tax return online     held as tenants by the entirety or in joint tenancy none of the payments all of the real estate taxes and none of the home insurance. File 2011 tax return online 1 Your spouse (or former spouse) can deduct the other half of the interest if the home is a qualified home. File 2011 tax return online  2 Your spouse (or former spouse) can deduct the other half of the real estate taxes. File 2011 tax return online Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. File 2011 tax return online Exception for instruments executed before 1985. File 2011 tax return online   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. File 2011 tax return online A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. File 2011 tax return online A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. File 2011 tax return online   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, see the 2004 revision of Publication 504 available at www. File 2011 tax return online irs. File 2011 tax return online gov/formspubs. File 2011 tax return online Example 1. File 2011 tax return online In November 1984, you and your former spouse executed a written separation agreement. File 2011 tax return online In February 1985, a decree of divorce was substituted for the written separation agreement. File 2011 tax return online The decree of divorce did not change the terms for the alimony you pay your former spouse. File 2011 tax return online The decree of divorce is treated as executed before 1985. File 2011 tax return online Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. File 2011 tax return online Example 2. File 2011 tax return online The facts are the same as in Example 1 except that the decree of divorce changed the amount of the alimony. File 2011 tax return online In this example, the decree of divorce is not treated as executed before 1985. File 2011 tax return online The alimony payments are subject to the rules for payments under instruments executed after 1984. File 2011 tax return online Alimony Requirements A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. File 2011 tax return online The payment is in cash. File 2011 tax return online The instrument does not designate the payment as not alimony. File 2011 tax return online The spouses are not members of the same household at the time the payments are made. File 2011 tax return online This requirement applies only if the spouses are legally separated under a decree of divorce or separate maintenance. File 2011 tax return online There is no liability to make any payment (in cash or property) after the death of the recipient spouse. File 2011 tax return online The payment is not treated as child support. File 2011 tax return online Each of these requirements is discussed next. File 2011 tax return online Cash payment requirement. File 2011 tax return online   Only cash payments, including checks and money orders, qualify as alimony. File 2011 tax return online The following do not qualify as alimony. File 2011 tax return online Transfers of services or property (including a debt instrument of a third party or an annuity contract). File 2011 tax return online Execution of a debt instrument by the payer. File 2011 tax return online The use of the payer's property. File 2011 tax return online Payments to a third party. File 2011 tax return online   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. File 2011 tax return online See Payments to a third party under General Rules, earlier. File 2011 tax return online   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. File 2011 tax return online The payments are in lieu of payments of alimony directly to your spouse. File 2011 tax return online The written request states that both spouses intend the payments to be treated as alimony. File 2011 tax return online You receive the written request from your spouse before you file your return for the year you made the payments. File 2011 tax return online Payments designated as not alimony. File 2011 tax return online   You and your spouse can designate that otherwise qualifying payments are not alimony. File 2011 tax return online You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. File 2011 tax return online For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). File 2011 tax return online If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. File 2011 tax return online   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. File 2011 tax return online The copy must be attached each year the designation applies. File 2011 tax return online Spouses cannot be members of the same household. File 2011 tax return online   Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. File 2011 tax return online A home you formerly shared is considered one household, even if you physically separate yourselves in the home. File 2011 tax return online   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. File 2011 tax return online Exception. File 2011 tax return online   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. File 2011 tax return online Liability for payments after death of recipient spouse. File 2011 tax return online   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony whether made before or after the death. File 2011 tax return online If all of the payments would continue, then none of the payments made before or after the death are alimony. File 2011 tax return online   The divorce or separation instrument does not have to expressly state that the payments cease upon the