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Filing Amended Tax Return

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Filing Amended Tax Return

Filing amended tax return Publication 531 - Introductory Material Table of Contents Future Developments What's New Reminder IntroductionOrdering forms and publications. Filing amended tax return Tax questions. Filing amended tax return Future Developments For the latest information about developments related to Publication 531, such as legislation enacted after this publication was published, go to www. Filing amended tax return irs. Filing amended tax return gov/pub531. Filing amended tax return What's New Additional Medicare Tax. Filing amended tax return  Beginning in 2013, a 0. Filing amended tax return 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. Filing amended tax return An employer is required to withhold Additional Medicare Tax on any Medicare wages or RRTA compensation it pays to an employee in excess of $200,000 in a calendar year without regard to the employee's filing status. Filing amended tax return An employer is required to begin withholding Additional Medicare Tax in the pay period in which it pays wages or compensation in excess of $200,000 to an employee and continue to withhold it until the end of the calendar year. Filing amended tax return Additional Medicare Tax is only imposed on the employee. Filing amended tax return There is no employer share of Additional Medicare Tax. Filing amended tax return All wages and compensation that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Filing amended tax return Tips are subject to Additional Medicare Tax withholding, if, in combination with other wages paid by the employer, they exceed the $200,000 withholding threshold. Filing amended tax return Similarly, tips are subject to Additional Medicare Tax withholding, if, in combination with other RRTA compensation paid by the employer, they exceed the $200,000 withholding threshold. Filing amended tax return For more information on Additional Medicare Tax, go to www. Filing amended tax return irs. Filing amended tax return gov and enter “Additional Medicare Tax” in the search box. Filing amended tax return Reminder Photographs of missing children. Filing amended tax return  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Filing amended tax return Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Filing amended tax return You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Filing amended tax return Introduction This publication is for employees who receive tips. Filing amended tax return All tips you receive are income and are subject to federal income tax. Filing amended tax return You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. Filing amended tax return The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. Filing amended tax return Reporting your tip income correctly is not difficult. Filing amended tax return You must do three things. Filing amended tax return Keep a daily tip record. Filing amended tax return Report tips to your employer. Filing amended tax return Report all your tips on your income tax return. Filing amended tax return  This publication will explain these three things and show you what to do on your tax return if you have not done the first two. Filing amended tax return This publication will also show you how to treat allocated tips. Filing amended tax return Comments and suggestions. Filing amended tax return   We welcome your comments about this publication and your suggestions for future editions. Filing amended tax return   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Filing amended tax return NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Filing amended tax return Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Filing amended tax return   You can send your comments from www. Filing amended tax return irs. Filing amended tax return gov/formspubs/. Filing amended tax return Click on “More Information” and then on “Comment on Tax Forms and Publications”. Filing amended tax return   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Filing amended tax return Ordering forms and publications. Filing amended tax return   Visit www. Filing amended tax return irs. Filing amended tax return gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Filing amended tax return Internal Revenue Service 1201 N. Filing amended tax return Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Filing amended tax return   If you have a tax question, check the information available on IRS. Filing amended tax return gov or call 1-800-829-1040. Filing amended tax return We cannot answer tax questions sent to either of the above addresses. Filing amended tax return Prev  Up  Next   Home   More Online Publications
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Abusive Tax Schemes - Criminal Investigation (CI)

Overview - Abusive Tax Schemes
Since the mid-1990s, the IRS has witnessed a proliferation of abusive tax schemes, particularly those with offshore components. 

What are some of the Most Common Abusive Tax Schemes?
The most common abusive tax schemes involve numerous domestic and foreign trusts, partnerships, or nominees.

How Does the Taxpayer Access the Funds in Offshore Accounts? - Abusive Tax Schemes
There are two methods commonly used to get funds back to the taxpayers. They are through credit/debit cards and fraudulent loans. 

In Partnership - IRS Criminal and Civil Enforcement and Department of Justice - Abusive Tax Schemes
Parallel civil and criminal investigations are an effective and aggressive approach that halts these schemes quickly and permanently.

Civil and Criminal Penalties - Abusive Tax Schemes
Investors of abusive tax schemes that improperly evade tax are still liable for taxes, interest, and civil penalties.

Statistical Data - Abusive Tax Schemes
Enforcement statistics on investigations initiated, prosecutions recommended, indictments, sentenced, and months to serve in prison.

Examples of Abusive Tax Scheme
Examples have been written from public record documents filed in the district courts where the case was prosecuted.

 


Criminal Enforcement Home Page

How to Report Suspected Tax Fraud Activities

Page Last Reviewed or Updated: 30-Oct-2013

The Filing Amended Tax Return

Filing amended tax return 6. Filing amended tax return   How To Figure Cost of Goods Sold Table of Contents Introduction Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42Line 35 Inventory at Beginning of Year Line 36 Purchases Less Cost of Items Withdrawn for Personal Use Line 37 Cost of Labor Line 38 Materials and Supplies Line 39 Other Costs Line 40 Add Lines 35 through 39 Line 41 Inventory at End of Year Line 42 Cost of Goods Sold Introduction If you make or buy goods to sell, you can deduct the cost of goods sold from your gross receipts on Schedule C. Filing amended tax return However, to determine these costs, you must value your inventory at the beginning and end of each tax year. Filing amended tax return This chapter applies to you if you are a manufacturer, wholesaler, or retailer or if you are engaged in any business that makes, buys, or sells goods to produce income. Filing amended tax return This chapter does not apply to a personal service business, such as the business of a doctor, lawyer, carpenter, or painter. Filing amended tax return However, if you work in a personal service business and also sell or charge for the materials and supplies normally used in your business, this chapter applies to you. Filing amended tax return If you must account for an inventory in your business, you must generally use an accrual method of accounting for your purchases and sales. Filing amended tax return For more information, see chapter 2. Filing amended tax return Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42 Figure your cost of goods sold by filling out lines 35 through 42 of Schedule C. Filing amended tax return These lines are reproduced below and are explained in the discussion that follows. Filing amended tax return 35 Inventory at beginning of year. Filing amended tax return If different from last year's closing inventory, attach explanation   36 Purchases less cost of items withdrawn for personal use   37 Cost of labor. Filing amended tax return Do not include any amounts paid to yourself   38 Materials and supplies   39 Other costs   40 Add lines 35 through 39   41 Inventory at end of year   42 Cost of goods sold. Filing amended tax return Subtract line 41 from line 40. Filing amended tax return  Enter the result here and on line 4   Line 35 Inventory at Beginning of Year If you are a merchant, beginning inventory is the cost of merchandise on hand at the beginning of the year that you will sell to customers. Filing amended tax return If you are a manufacturer or producer, it includes the total cost of raw materials, work in process, finished goods, and materials and supplies used in manufacturing the goods (see Inventories in chapter 2). Filing amended tax return Opening inventory usually will be identical to the closing inventory of the year before. Filing amended tax return You must explain any difference in a schedule attached to your return. Filing amended tax return Donation of inventory. Filing amended tax return   If you contribute inventory (property that you sell in the course of your business), the amount you can claim as a contribution deduction is the smaller of its fair market value on the day you contributed it or its basis. Filing amended tax return The basis of donated inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. Filing amended tax return You must remove the amount of your contribution deduction from your opening inventory. Filing amended tax return It is not part of the cost of goods sold. Filing amended tax return   If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. Filing amended tax return Treat the inventory's cost as you would ordinarily treat it under your method of accounting. Filing amended tax return For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. Filing amended tax return   A special rule may apply to certain donations of food inventory. Filing amended tax return See Publication 526, Charitable Contributions. Filing amended tax return Example 1. Filing amended tax return You are a calendar year taxpayer who uses an accrual method of accounting. Filing amended tax return In 2013, you contributed property from inventory to a church. Filing amended tax return It had a fair market value of $600. Filing amended tax return The closing inventory at the end of 2012 properly included $400 of costs due to the acquisition of the property, and in 2012, you properly deducted $50 of administrative and other expenses attributable to the property as business expenses. Filing amended tax return The charitable contribution allowed for 2013 is $400 ($600 − $200). Filing amended tax return The $200 is the amount that would be ordinary income if you had sold the contributed inventory at fair market value on the date of the gift. Filing amended tax return The cost of goods sold you use in determining gross income for 2013 must not include the $400. Filing amended tax return You remove that amount from opening inventory for 2013. Filing amended tax return Example 2. Filing amended tax return If, in Example 1, you acquired the contributed property in 2013 at a cost of $400, you would include the $400 cost of the property in figuring the cost of goods sold for 2013 and deduct the $50 of administrative and other expenses attributable to the property for that year. Filing amended tax return You would not be allowed any charitable contribution deduction for the contributed property. Filing amended tax return Line 36 Purchases Less Cost of Items Withdrawn for Personal Use If you are a merchant, use the cost of all merchandise you bought for sale. Filing amended tax return If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into a finished product. Filing amended tax return Trade discounts. Filing amended tax return   The differences between the stated prices of articles and the actual prices you pay for them are called trade discounts. Filing amended tax return You must use the prices you pay (not the stated prices) in figuring your cost of purchases. Filing amended tax return Do not show the discount amount separately as an item in gross income. Filing amended tax return   An automobile dealer must record the cost of a car in inventory reduced by any manufacturer's rebate that represents a trade discount. Filing amended tax return Cash discounts. Filing amended tax return   Cash discounts are amounts your suppliers let you deduct from your purchase invoices for prompt payments. Filing amended tax return There are two methods of accounting for cash discounts. Filing amended tax return You can either credit them to a separate discount account or deduct them from total purchases for the year. Filing amended tax return Whichever method you use, you must be consistent. Filing amended tax return If you want to change your method of figuring inventory cost, you must file Form 3115, Application for Change in Accounting Method. Filing amended tax return For more information, see Change in Accounting Method in chapter 2. Filing amended tax return   If you credit cash discounts to a separate account, you must include this credit balance in your business income at the end of the tax year. Filing amended tax return If you use this method, do not reduce your cost of goods sold by the cash discounts. Filing amended tax return Purchase returns and allowances. Filing amended tax return   You must deduct all returns and allowances from your total purchases during the year. Filing amended tax return Merchandise withdrawn from sale. Filing amended tax return   If you withdraw merchandise for your personal or family use, you must exclude this cost from the total amount of merchandise you bought for sale. Filing amended tax return Do this by crediting the purchases or sales account with the cost of merchandise you withdraw for personal use. Filing amended tax return You must also charge the amount to your drawing account. Filing amended tax return   A drawing account is a separate account you should keep to record the business income you withdraw to pay for personal and family expenses. Filing amended tax return As stated above, you also use it to record withdrawals of merchandise for personal or family use. Filing amended tax return This account is also known as a “withdrawals account” or “personal account. Filing amended tax return ” Line 37 Cost of Labor Labor costs are usually an element of cost of goods sold only in a manufacturing or mining business. Filing amended tax return Small merchandisers (wholesalers, retailers, etc. Filing amended tax return ) usually do not have labor costs that can properly be charged to cost of goods sold. Filing amended tax return In a manufacturing business, labor costs properly allocable to the cost of goods sold include both the direct and indirect labor used in fabricating the raw material into a finished, saleable product. Filing amended tax return Direct labor. Filing amended tax return   Direct labor costs are the wages you pay to those employees who spend all their time working directly on the product being manufactured. Filing amended tax return They also include a part of the wages you pay to employees who work directly on the product part time if you can determine that part of their wages. Filing amended tax return Indirect labor. Filing amended tax return   Indirect labor costs are the wages you pay to employees who perform a general factory function that does not have any immediate or direct connection with making the saleable product, but that is a necessary part of the manufacturing process. Filing amended tax return Other labor. Filing amended tax return   Other labor costs not properly chargeable to the cost of goods sold can be deducted as selling or administrative expenses. Filing amended tax return Generally, the only kinds of labor costs properly chargeable to your cost of goods sold are the direct or indirect labor costs and certain other costs treated as overhead expenses properly charged to the manufacturing process, as discussed later under Line 39 Other Costs. Filing amended tax return Line 38 Materials and Supplies Materials and supplies, such as hardware and chemicals, used in manufacturing goods are charged to cost of goods sold. Filing amended tax return Those that are not used in the manufacturing process are treated as deferred charges. Filing amended tax return You deduct them as a business expense when you use them. Filing amended tax return Business expenses are discussed in chapter 8. Filing amended tax return Line 39 Other Costs Examples of other costs incurred in a manufacturing or mining process that you charge to your cost of goods sold are as follows. Filing amended tax return Containers. Filing amended tax return   Containers and packages that are an integral part of the product manufactured are a part of your cost of goods sold. Filing amended tax return If they are not an integral part of the manufactured product, their costs are shipping or selling expenses. Filing amended tax return Freight-in. Filing amended tax return   Freight-in, express-in, and cartage-in on raw materials, supplies you use in production, and merchandise you purchase for sale are all part of cost of goods sold. Filing amended tax return Overhead expenses. Filing amended tax return   Overhead expenses include expenses such as rent, heat, light, power, insurance, depreciation, taxes, maintenance, labor, and supervision. Filing amended tax return The overhead expenses you have as direct and necessary expenses of the manufacturing operation are included in your cost of goods sold. Filing amended tax return Line 40 Add Lines 35 through 39 The total of lines 35 through 39 equals the cost of the goods available for sale during the year. Filing amended tax return Line 41 Inventory at End of Year Subtract the value of your closing inventory (including, as appropriate, the allocable parts of the cost of raw materials and supplies, direct labor, and overhead expenses) from line 40. Filing amended tax return Inventory at the end of the year is also known as closing or ending inventory. Filing amended tax return Your ending inventory will usually become the beginning inventory of your next tax year. Filing amended tax return Line 42 Cost of Goods Sold When you subtract your closing inventory (inventory at the end of the year) from the cost of goods available for sale, the remainder is your cost of goods sold during the tax year. Filing amended tax return Prev  Up  Next   Home   More Online Publications