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Fillable 1040ez Form 2012

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Fillable 1040ez Form 2012

Fillable 1040ez form 2012 Publication 17 - Introductory Material Table of Contents What's New Reminders IntroductionIcons. Fillable 1040ez form 2012 Ordering forms and publications. Fillable 1040ez form 2012 Tax questions. Fillable 1040ez form 2012 All material in this publication may be reprinted freely. Fillable 1040ez form 2012 A citation to Your Federal Income Tax (2013) would be appropriate. Fillable 1040ez form 2012 The explanations and examples in this publication reflect the interpretation by the Internal Revenue Service (IRS) of: Tax laws enacted by Congress, Treasury regulations, and Court decisions. Fillable 1040ez form 2012 However, the information given does not cover every situation and is not intended to replace the law or change its meaning. Fillable 1040ez form 2012 This publication covers some subjects on which a court may have made a decision more favorable to taxpayers than the interpretation by the IRS. Fillable 1040ez form 2012 Until these differing interpretations are resolved by higher court decisions or in some other way, this publication will continue to present the interpretations by the IRS. Fillable 1040ez form 2012 All taxpayers have important rights when working with the IRS. Fillable 1040ez form 2012 These rights are described in Your Rights as a Taxpayer in the back of this publication. Fillable 1040ez form 2012 What's New This section summarizes important tax changes that took effect in 2013. Fillable 1040ez form 2012 Most of these changes are discussed in more detail throughout this publication. Fillable 1040ez form 2012 Future developments. Fillable 1040ez form 2012  For the latest information about the tax law topics covered in this publication, including information about any tax legislation, go to www. Fillable 1040ez form 2012 irs. Fillable 1040ez form 2012 gov/pub17. Fillable 1040ez form 2012 Additional Medicare Tax. Fillable 1040ez form 2012  Beginning in 2013, a 0. Fillable 1040ez form 2012 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (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. Fillable 1040ez form 2012 See Form 8959 and its instructions. Fillable 1040ez form 2012 Net Investment Income Tax. Fillable 1040ez form 2012  Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). Fillable 1040ez form 2012 The NIIT is 3. Fillable 1040ez form 2012 8% of the smaller of (a) your net investment income or (b) the excess of your modified adjusted gross income over: $125,000 if married filing separately, $250,000 if married filing jointly or qualifying widow(er), or $200,000 if any other filing status. Fillable 1040ez form 2012 See Form 8960 and its instructions. Fillable 1040ez form 2012 Change in tax rates. Fillable 1040ez form 2012  The highest tax rate is 39. Fillable 1040ez form 2012 6%. Fillable 1040ez form 2012 For more information, see the 2013 Tax Computation Worksheet or the 2013 Tax Rate Schedules near the end of this publication. Fillable 1040ez form 2012 Tax rate on net capital gain and qualified dividends. Fillable 1040ez form 2012  The maximum tax rate of 15% on net capital gain and qualified dividends has increased to 20% for some taxpayers. Fillable 1040ez form 2012 See chapter 16. Fillable 1040ez form 2012 Medical and dental expenses. Fillable 1040ez form 2012  You can deduct only the part of your medical and dental expenses that is more than 10% of your adjusted gross income (7. Fillable 1040ez form 2012 5% if either you or your spouse is age 65 or older). Fillable 1040ez form 2012 See chapter 21. Fillable 1040ez form 2012 Personal exemption amount increased for certain taxpayers. Fillable 1040ez form 2012  Your personal exemption is increased to $3,900. Fillable 1040ez form 2012 But the amount is reduced if your adjusted gross income is more than: $150,000 if married filing separately, $250,000 if single, $275,000 if head of household, or $300,000 if any other filing status. Fillable 1040ez form 2012 See chapter 3. Fillable 1040ez form 2012 Limit on itemized deductions. Fillable 1040ez form 2012  You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than: $150,000 if married filing separately, $250,000 if single, $275,000 if head of household, or $300,000 if any other filing status. Fillable 1040ez form 2012 See chapter 29. Fillable 1040ez form 2012 Same-sex marriages. Fillable 1040ez form 2012  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. Fillable 1040ez form 2012 See chapter 2. Fillable 1040ez form 2012 If you meet certain requirements, you may be able to file amended returns to change your filing status for some earlier years. Fillable 1040ez form 2012 For details on filing amended returns, see chapter 1. Fillable 1040ez form 2012 Health flexible spending arrangements (FSAs). Fillable 1040ez form 2012  You cannot have more than $2,500 in salary reduction contributions made to a health FSA for plan years beginning after 2012. Fillable 1040ez form 2012 See chapter 5. Fillable 1040ez form 2012 Expiring credits. Fillable 1040ez form 2012  The plug-in electric vehicle credit and the refundable part of the credit for prior year minimum tax have expired. Fillable 1040ez form 2012 You cannot claim either one on your 2013 return. Fillable 1040ez form 2012 See chapter 37. Fillable 1040ez form 2012 Ponzi-type investment schemes. Fillable 1040ez form 2012  There are new rules for how to claim a theft loss deduction on Form 4684 due to a Ponzi-type investment scheme. Fillable 1040ez form 2012 See chapter 25. Fillable 1040ez form 2012 Home office deduction simplified method. Fillable 1040ez form 2012  If you can take a home office deduction, you may be able to use a simplified method to figure it. Fillable 1040ez form 2012 See Publication 587. Fillable 1040ez form 2012 Standard mileage rates. Fillable 1040ez form 2012  The 2013 rate for business use of your car is increased to 56½ cents a mile. Fillable 1040ez form 2012 See chapter 26. Fillable 1040ez form 2012 The 2013 rate for use of your car to get medical care is increased to 24 cents a mile. Fillable 1040ez form 2012 See chapter 21. Fillable 1040ez form 2012 The 2013 rate for use of your car to move is increased to 24 cents a mile. Fillable 1040ez form 2012 See Publication 521, Moving Expenses. Fillable 1040ez form 2012 Reminders Listed below are important reminders and other items that may help you file your 2013 tax return. Fillable 1040ez form 2012 Many of these items are explained in more detail later in this publication. Fillable 1040ez form 2012 Enter your social security number (SSN). Fillable 1040ez form 2012  Enter your SSN in the space provided on your tax form. Fillable 1040ez form 2012 If you filed a joint return for 2012 and are filing a joint return for 2013 with the same spouse, enter your names and SSNs in the same order as on your 2012 return. Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Secure your tax records from identity theft. Fillable 1040ez form 2012  Identity theft occurs when someone uses your personal information, such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. Fillable 1040ez form 2012 An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund. Fillable 1040ez form 2012 For more information about identity theft and how to reduce your risk from it, see chapter 1. Fillable 1040ez form 2012 Taxpayer identification numbers. Fillable 1040ez form 2012  You must provide the taxpayer identification number for each person for whom you claim certain tax benefits. Fillable 1040ez form 2012 This applies even if the person was born in 2013. Fillable 1040ez form 2012 Generally, this number is the person's social security number (SSN). Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Foreign source income. Fillable 1040ez form 2012  If you are a U. Fillable 1040ez form 2012 S. Fillable 1040ez form 2012 citizen with income from sources outside the United States (foreign income), you must report all such income on your tax return unless it is exempt by U. Fillable 1040ez form 2012 S. Fillable 1040ez form 2012 law. Fillable 1040ez form 2012 This is true whether you live inside or outside the United States and whether or not you receive a Form W-2 or Form 1099 from the foreign payer. Fillable 1040ez form 2012 This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents and royalties). Fillable 1040ez form 2012 If you live outside the United States, you may be able to exclude part or all of your foreign source earned income. Fillable 1040ez form 2012 For details, see Publication 54, Tax Guide for U. Fillable 1040ez form 2012 S. Fillable 1040ez form 2012 Citizens and Resident Aliens Abroad. Fillable 1040ez form 2012 Foreign financial assets. Fillable 1040ez form 2012  If you had foreign financial assets in 2013, you may have to file Form 8938 with your return. Fillable 1040ez form 2012 Check www. Fillable 1040ez form 2012 IRS. Fillable 1040ez form 2012 gov/form8938 for details. Fillable 1040ez form 2012 Automatic 6-month extension to file tax return. Fillable 1040ez form 2012  You can use Form 4868, Application for Automatic Extension of Time To File U. Fillable 1040ez form 2012 S. Fillable 1040ez form 2012 Individual Income Tax Return, to obtain an automatic 6-month extension of time to file your tax return. Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Include your phone number on your return. Fillable 1040ez form 2012  To promptly resolve any questions we have in processing your tax return, we would like to be able to call you. Fillable 1040ez form 2012 Please enter your daytime telephone number on your tax form next to your signature and occupation. Fillable 1040ez form 2012 If you are filing a joint return, you can enter either your or your spouse's daytime phone number. Fillable 1040ez form 2012 Payment of taxes. Fillable 1040ez form 2012   You can pay your taxes online, by phone, or by check or money order. Fillable 1040ez form 2012 You can make a direct transfer from your bank account or use a credit or debit card. Fillable 1040ez form 2012 If you e-file, you can schedule an electronic payment. Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Faster ways to file your return. Fillable 1040ez form 2012  The IRS offers fast, accurate ways to file your tax return information without filing a paper tax return. Fillable 1040ez form 2012 You can use IRS e-file (electronic filing). Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Free electronic filing. Fillable 1040ez form 2012  You may be able to file your 2013 taxes online for free. Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Change of address. Fillable 1040ez form 2012  If you change your address, you should notify the IRS. Fillable 1040ez form 2012 See Change of Address in chapter 1. Fillable 1040ez form 2012 Refund on a late filed return. Fillable 1040ez form 2012  If you were due a refund but you did not file a return, you generally must file your return within 3 years from the date the return was due (including extensions) to get that refund. Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Frivolous tax returns. Fillable 1040ez form 2012  The IRS has published a list of positions that are identified as frivolous. Fillable 1040ez form 2012 The penalty for filing a frivolous tax return is $5,000. Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Filing erroneous claim for refund or credit. Fillable 1040ez form 2012  You may have to pay a penalty if you file an erroneous claim for refund or credit. Fillable 1040ez form 2012 See chapter 1. Fillable 1040ez form 2012 Privacy Act and paperwork reduction information. Fillable 1040ez form 2012   The IRS Restructuring and Reform Act of 1998, the Privacy Act of 1974, and the Paperwork Reduction Act of 1980 require that when we ask you for information we must first tell you what our legal right is to ask for the information, why we are asking for it, how it will be used, what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory under the law. Fillable 1040ez form 2012 A complete statement on this subject can be found in your tax form instructions. Fillable 1040ez form 2012 Customer service for taxpayers. Fillable 1040ez form 2012  You can set up a personal appointment at the most convenient Taxpayer Assistance Center, on the most convenient business day. Fillable 1040ez form 2012 See How To Get Tax Help in the back of this publication. Fillable 1040ez form 2012 Preparer e-file mandate. Fillable 1040ez form 2012  Most paid preparers must e-file returns they prepare and file. Fillable 1040ez form 2012 Your preparer may make you aware of this requirement and the options available to you. Fillable 1040ez form 2012 Treasury Inspector General for Tax Administration. Fillable 1040ez form 2012   If you want to confidentially report misconduct, waste, fraud, or abuse by an IRS employee, you can call 1-800-366-4484 (call 1-800-877-8339 if you are deaf, hard of hearing, or have a speech disability, and are using TTY/TDD equipment). Fillable 1040ez form 2012 You can remain anonymous. Fillable 1040ez form 2012 Photographs of missing children. Fillable 1040ez form 2012  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Fillable 1040ez form 2012 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Fillable 1040ez form 2012 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. Fillable 1040ez form 2012 Introduction This publication covers the general rules for filing a federal income tax return. Fillable 1040ez form 2012 It supplements the information contained in your tax form instructions. Fillable 1040ez form 2012 It explains the tax law to make sure you pay only the tax you owe and no more. Fillable 1040ez form 2012 How this publication is arranged. Fillable 1040ez form 2012   This publication closely follows Form 1040, U. Fillable 1040ez form 2012 S. Fillable 1040ez form 2012 Individual Income Tax Return. Fillable 1040ez form 2012 It is divided into six parts which cover different sections of Form 1040. Fillable 1040ez form 2012 Each part is further divided into chapters which generally discuss one line of the form. Fillable 1040ez form 2012 Do not worry if you file Form 1040A or Form 1040EZ. Fillable 1040ez form 2012 Anything included on a line of either of these forms is also included on Form 1040. Fillable 1040ez form 2012   The table of contents inside the front cover and the index in the back of the publication are useful tools to help you find the information you need. Fillable 1040ez form 2012 What is in this publication. Fillable 1040ez form 2012   The publication begins with the rules for filing a tax return. Fillable 1040ez form 2012 It explains: Who must file a return, Which tax form to use, When the return is due, How to e-file your return, and Other general information. Fillable 1040ez form 2012 It will help you identify which filing status you qualify for, whether you can claim any dependents, and whether the income you receive is taxable. Fillable 1040ez form 2012 The publication goes on to explain the standard deduction, the kinds of expenses you may be able to deduct, and the various kinds of credits you may be able to take to reduce your tax. Fillable 1040ez form 2012   Throughout the publication are examples showing how the tax law applies in typical situations. Fillable 1040ez form 2012 Also throughout the publication are flowcharts and tables that present tax information in an easy-to-understand manner. Fillable 1040ez form 2012   Many of the subjects discussed in this publication are discussed in greater detail in other IRS publications. Fillable 1040ez form 2012 References to those other publications are provided for your information. Fillable 1040ez form 2012 Icons. Fillable 1040ez form 2012   Small graphic symbols, or icons, are used to draw your attention to special information. Fillable 1040ez form 2012 See Table 1 later for an explanation of each icon used in this publication. Fillable 1040ez form 2012 What is not covered in this publication. Fillable 1040ez form 2012   Some material that you may find helpful is not included in this publication but can be found in your tax form instruction booklet. Fillable 1040ez form 2012 This includes lists of: Where to report certain items shown on information documents, and Recorded tax information topics (TeleTax). Fillable 1040ez form 2012   If you operate your own business or have other self-employment income, such as from babysitting or selling crafts, see the following publications for more information. Fillable 1040ez form 2012 Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ). Fillable 1040ez form 2012 Publication 535, Business Expenses. Fillable 1040ez form 2012 Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Fillable 1040ez form 2012 Help from the IRS. Fillable 1040ez form 2012   There are many ways you can get help from the IRS. Fillable 1040ez form 2012 These are explained under How To Get Tax Help in the back of this publication. Fillable 1040ez form 2012 Comments and suggestions. Fillable 1040ez form 2012   We welcome your comments about this publication and your suggestions for future editions. Fillable 1040ez form 2012   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Fillable 1040ez form 2012 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Fillable 1040ez form 2012 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Fillable 1040ez form 2012   You can send your comments from www. Fillable 1040ez form 2012 irs. Fillable 1040ez form 2012 gov/formspubs/. Fillable 1040ez form 2012 Click on “More Information” and then on “Comment on Tax Forms and Publications”. Fillable 1040ez form 2012   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. Fillable 1040ez form 2012 Ordering forms and publications. Fillable 1040ez form 2012   Visit www. Fillable 1040ez form 2012 irs. Fillable 1040ez form 2012 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. Fillable 1040ez form 2012 Internal Revenue Service 1201 N. Fillable 1040ez form 2012 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Fillable 1040ez form 2012   If you have a tax question, check the information available on IRS. Fillable 1040ez form 2012 gov or call 1-800-829-1040. Fillable 1040ez form 2012 We cannot answer tax questions sent to either of the above addresses. Fillable 1040ez form 2012 IRS mission. Fillable 1040ez form 2012   Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. Fillable 1040ez form 2012 Table 1. Fillable 1040ez form 2012 Legend of Icons Icon Explanation Items that may cause you particular problems, or an alert about pending legislation that may be enacted after this publication goes to print. Fillable 1040ez form 2012 An Internet site or an email address. Fillable 1040ez form 2012 An address you may need. Fillable 1040ez form 2012 Items you should keep in your personal records. Fillable 1040ez form 2012 Items you may need to figure or a worksheet you may need to complete and keep for your records. Fillable 1040ez form 2012 An important phone number. Fillable 1040ez form 2012 Helpful information you may need. Fillable 1040ez form 2012 Prev  Up  Next   Home   More Online Publications
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Tax Information for Charitable Organizations

Life Cycle of a Public Charity/Private Foundation
Links to helpful information about points of intersection between charitable organizations and the IRS, including access to explanatory information and forms that an organization may need to file with the IRS.

Exemption Requirements - 501(c)(3) Organizations
A brief description of the requirements for exemption under IRC Section 501(c)(3).

Application for Recognition of Exemption
Procedures for applying for exemption under Internal Revenue Section 501(c)(3).

Exempt Organizations - Required Filings
Federal annual tax filings for tax-exempt organizations.

Publication 4573, Group Exemptions
A publication describing, in question and answer format, the federal tax rules that apply to group rulings of exemption under Internal Revenue Code section 501.

The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations
Political Campaign Activity by section 501(c)(3) tax-exempt organizations

Unrelated Business Income Tax
Unrelated business income tax requirements for tax-exempt organizations.

Employment Taxes for Exempt Organizations
Links to information about employment taxes for tax-exempt organizations.

Tax Information for Churches and Religious Organizations
Tax Information for Churches and Religious Orgs

Tax Information for Contributors
Tax Information for Contributors

State Links
A collection of links to State government web sites with useful information for exempt organizations.

Web-Based Mini-Course - Deducting Charitable Contributions
A short course to help charities and contributors understand what is a deductible charitable contribution and what is not. Also covers amount and types of deductible contributions, what records to keep and how to report contributions.

Charitable Contributions - YouTube video
YouTube video on Charitable Contributions.

Page Last Reviewed or Updated: 20-Mar-2014

The Fillable 1040ez Form 2012

Fillable 1040ez form 2012 2. Fillable 1040ez form 2012   Accounting Periods and Methods Table of Contents Introduction Useful Items - You may want to see: Accounting Periods Accounting MethodsCash Method Accrual Method Combination Method Inventories Uniform Capitalization Rules Special Methods Change in Accounting Method Introduction You must figure your taxable income and file an income tax return for an annual accounting period called a tax year. Fillable 1040ez form 2012 Also, you must consistently use an accounting method that clearly shows your income and expenses for the tax year. Fillable 1040ez form 2012 Useful Items - You may want to see: Publication 538 Accounting Periods and Methods See chapter 12 for information about getting publications and forms. Fillable 1040ez form 2012 Accounting Periods When preparing a statement of income and expenses (generally your income tax return), you must use your books and records for a specific interval of time called an accounting period. Fillable 1040ez form 2012 The annual accounting period for your income tax return is called a tax year. Fillable 1040ez form 2012 You can use one of the following tax years. Fillable 1040ez form 2012 A calendar tax year. Fillable 1040ez form 2012 A fiscal tax year. Fillable 1040ez form 2012 Unless you have a required tax year, you adopt a tax year by filing your first income tax return using that tax year. Fillable 1040ez form 2012 A required tax year is a tax year required under the Internal Revenue Code or the Income Tax Regulations. Fillable 1040ez form 2012 Calendar tax year. Fillable 1040ez form 2012   A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. Fillable 1040ez form 2012   You must adopt the calendar tax year if any of the following apply. Fillable 1040ez form 2012 You do not keep books. Fillable 1040ez form 2012 You have no annual accounting period. Fillable 1040ez form 2012 Your present tax year does not qualify as a fiscal year. Fillable 1040ez form 2012 Your use of the calendar tax year is required under the Internal Revenue Code or the Income Tax Regulations. Fillable 1040ez form 2012   If you filed your first income tax return using the calendar tax year and you later begin business as a sole proprietor, you must continue to use the calendar tax year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. Fillable 1040ez form 2012 For more information, see Change in tax year, later. Fillable 1040ez form 2012   If you adopt the calendar tax year, you must maintain your books and records and report your income and expenses for the period from January 1 through December 31 of each year. Fillable 1040ez form 2012 Fiscal tax year. Fillable 1040ez form 2012   A fiscal tax year is 12 consecutive months ending on the last day of any month except December. Fillable 1040ez form 2012 A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Fillable 1040ez form 2012   If you adopt a fiscal tax year, you must maintain your books and records and report your income and expenses using the same tax year. Fillable 1040ez form 2012   For more information on a fiscal tax year, including a 52-53-week tax year, see Publication 538. Fillable 1040ez form 2012 Change in tax year. Fillable 1040ez form 2012   Generally, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year, to request IRS approval to change your tax year. Fillable 1040ez form 2012 See the Instructions for Form 1128 for exceptions. Fillable 1040ez form 2012 If you qualify for an automatic approval request, a user fee is not required. Fillable 1040ez form 2012 If you do not qualify for automatic approval, a ruling must be requested. Fillable 1040ez form 2012 See the instructions for Form 1128 for information about user fees if you are requesting a ruling. Fillable 1040ez form 2012 Accounting Methods An accounting method is a set of rules used to determine when and how income and expenses are reported. Fillable 1040ez form 2012 Your accounting method includes not only the overall method of accounting you use, but also the accounting treatment you use for any material item. Fillable 1040ez form 2012 You choose an accounting method for your business when you file your first income tax return that includes a Schedule C for the business. Fillable 1040ez form 2012 After that, if you want to change your accounting method, you must generally get IRS approval. Fillable 1040ez form 2012 See Change in Accounting Method, later. Fillable 1040ez form 2012 Kinds of methods. Fillable 1040ez form 2012   Generally, you can use any of the following accounting methods. Fillable 1040ez form 2012 Cash method. Fillable 1040ez form 2012 An accrual method. Fillable 1040ez form 2012 Special methods of accounting for certain items of income and expenses. Fillable 1040ez form 2012 Combination method using elements of two or more of the above. Fillable 1040ez form 2012 You must use the same accounting method to figure your taxable income and to keep your books. Fillable 1040ez form 2012 Also, you must use an accounting method that clearly shows your income. Fillable 1040ez form 2012 Business and personal items. Fillable 1040ez form 2012   You can account for business and personal items under different accounting methods. Fillable 1040ez form 2012 For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. Fillable 1040ez form 2012 Two or more businesses. Fillable 1040ez form 2012   If you have two or more separate and distinct businesses, you can use a different accounting method for each if the method clearly reflects the income of each business. Fillable 1040ez form 2012 They are separate and distinct only if you maintain complete and separate books and records for each business. Fillable 1040ez form 2012 Cash Method Most individuals and many sole proprietors with no inventory use the cash method because they find it easier to keep cash method records. Fillable 1040ez form 2012 However, if an inventory is necessary to account for your income, you must generally use an accrual method of accounting for sales and purchases. Fillable 1040ez form 2012 For more information, see Inventories, later. Fillable 1040ez form 2012 Income Under the cash method, include in your gross income all items of income you actually or constructively receive during your tax year. Fillable 1040ez form 2012 If you receive property or services, you must include their fair market value in income. Fillable 1040ez form 2012 Example. Fillable 1040ez form 2012 On December 30, 2012, Mrs. Fillable 1040ez form 2012 Sycamore sent you a check for interior decorating services you provided to her. Fillable 1040ez form 2012 You received the check on January 2, 2013. Fillable 1040ez form 2012 You must include the amount of the check in income for 2013. Fillable 1040ez form 2012 Constructive receipt. Fillable 1040ez form 2012   You have constructive receipt of income when an amount is credited to your account or made available to you without restriction. Fillable 1040ez form 2012 You do not need to have possession of it. Fillable 1040ez form 2012 If you authorize someone to be your agent and receive income for you, you are treated as having received it when your agent received it. Fillable 1040ez form 2012 Example. Fillable 1040ez form 2012 Interest is credited to your bank account in December 2013. Fillable 1040ez form 2012 You do not withdraw it or enter it into your passbook until 2014. Fillable 1040ez form 2012 You must include it in your gross income for 2013. Fillable 1040ez form 2012 Delaying receipt of income. Fillable 1040ez form 2012   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. Fillable 1040ez form 2012 You must report the income in the year the property is received or made available to you without restriction. Fillable 1040ez form 2012 Example. Fillable 1040ez form 2012 Frances Jones, a service contractor, was entitled to receive a $10,000 payment on a contract in December 2013. Fillable 1040ez form 2012 She was told in December that her payment was available. Fillable 1040ez form 2012 At her request, she was not paid until January 2014. Fillable 1040ez form 2012 She must include this payment in her 2013 income because it was constructively received in 2013. Fillable 1040ez form 2012 Checks. Fillable 1040ez form 2012   Receipt of a valid check by the end of the tax year is constructive receipt of income in that year, even if you cannot cash or deposit the check until the following year. Fillable 1040ez form 2012 Example. Fillable 1040ez form 2012 Dr. Fillable 1040ez form 2012 Redd received a check for $500 on December 31, 2013, from a patient. Fillable 1040ez form 2012 She could not deposit the check in her business account until January 2, 2014. Fillable 1040ez form 2012 She must include this fee in her income for 2013. Fillable 1040ez form 2012 Debts paid by another person or canceled. Fillable 1040ez form 2012   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. Fillable 1040ez form 2012 If you receive income in this way, you constructively receive the income when the debt is canceled or paid. Fillable 1040ez form 2012 For more information, see Canceled Debt under Kinds of Income in chapter 5. Fillable 1040ez form 2012 Repayment of income. Fillable 1040ez form 2012   If you include an amount in income and in a later year you have to repay all or part of it, you can usually deduct the repayment in the year in which you make it. Fillable 1040ez form 2012 If the amount you repay is over $3,000, a special rule applies. Fillable 1040ez form 2012 For details about the special rule, see Repayments in chapter 11 of Publication 535, Business Expenses. Fillable 1040ez form 2012 Expenses Under the cash method, you generally deduct expenses in the tax year in which you actually pay them. Fillable 1040ez form 2012 This includes business expenses for which you contest liability. Fillable 1040ez form 2012 However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained later under Uniform Capitalization Rules. Fillable 1040ez form 2012 Expenses paid in advance. Fillable 1040ez form 2012   You can deduct an expense you pay in advance only in the year to which it applies. Fillable 1040ez form 2012 Example. Fillable 1040ez form 2012 You are a calendar year taxpayer and you pay $1,000 in 2013 for a business insurance policy effective for one year, beginning July 1. Fillable 1040ez form 2012 You can deduct $500 in 2013 and $500 in 2014. Fillable 1040ez form 2012 Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. Fillable 1040ez form 2012 The purpose of an accrual method of accounting is to match income and expenses in the correct year. Fillable 1040ez form 2012 Income—General Rule Under an accrual method, you generally include an amount in your gross income for the tax year in which all events that fix your right to receive the income have occurred and you can determine the amount with reasonable accuracy. Fillable 1040ez form 2012 Example. Fillable 1040ez form 2012 You are a calendar year accrual method taxpayer. Fillable 1040ez form 2012 You sold a computer on December 28, 2013. Fillable 1040ez form 2012 You billed the customer in the first week of January 2014, but you did not receive payment until February 2014. Fillable 1040ez form 2012 You must include the amount received for the computer in your 2013 income. Fillable 1040ez form 2012 Income—Special Rules The following are special rules that apply to advance payments, estimating income, and changing a payment schedule for services. Fillable 1040ez form 2012 Estimated income. Fillable 1040ez form 2012   If you include a reasonably estimated amount in gross income, and later determine the exact amount is different, take the difference into account in the tax year in which you make the determination. Fillable 1040ez form 2012 Change in payment schedule for services. Fillable 1040ez form 2012   If you perform services for a basic rate specified in a contract, you must accrue the income at the basic rate, even if you agree to receive payments at a lower rate until you complete the services and then receive the difference. Fillable 1040ez form 2012 Advance payments for services. Fillable 1040ez form 2012   Generally, you report an advance payment for services to be performed in a later tax year as income in the year you receive the payment. Fillable 1040ez form 2012 However, if you receive an advance payment for services you agree to perform by the end of the next tax year, you can elect to postpone including the advance payment in income until the next tax year. Fillable 1040ez form 2012 However, you cannot postpone including any payment beyond that tax year. Fillable 1040ez form 2012   For more information, see Advance Payment for Services under Accrual Method in Publication 538. Fillable 1040ez form 2012 That publication also explains special rules for reporting the following types of income. Fillable 1040ez form 2012 Advance payments for service agreements. Fillable 1040ez form 2012 Prepaid rent. Fillable 1040ez form 2012 Advance payments for sales. Fillable 1040ez form 2012   Special rules apply to including income from advance payments on agreements for future sales or other dispositions of goods you hold primarily for sale to your customers in the ordinary course of your business. Fillable 1040ez form 2012 If the advance payments are for contracts involving both the sale and service of goods, it may be necessary to treat them as two agreements. Fillable 1040ez form 2012 An agreement includes a gift certificate that can be redeemed for goods. Fillable 1040ez form 2012 Treat amounts that are due and payable as amounts you received. Fillable 1040ez form 2012   You generally include an advance payment in income for the tax year in which you receive it. Fillable 1040ez form 2012 However, you can use an alternative method. Fillable 1040ez form 2012 For information about the alternative method, see Publication 538. Fillable 1040ez form 2012 Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both the following apply. Fillable 1040ez form 2012 The all-events test has been met. Fillable 1040ez form 2012 The test has been met when: All events have occurred that fix the fact of liability, and The liability can be determined with reasonable accuracy. Fillable 1040ez form 2012 Economic performance has occurred. Fillable 1040ez form 2012 Economic performance. Fillable 1040ez form 2012   You generally cannot deduct or capitalize a business expense until economic performance occurs. Fillable 1040ez form 2012 If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. Fillable 1040ez form 2012 If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. Fillable 1040ez form 2012 An exception allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. Fillable 1040ez form 2012 For more information on economic performance, see Economic Performance under Accrual Method in Publication 538. Fillable 1040ez form 2012 Example. Fillable 1040ez form 2012 You are a calendar year taxpayer and use an accrual method of accounting. Fillable 1040ez form 2012 You buy office supplies in December 2013. Fillable 1040ez form 2012 You receive the supplies and the bill in December, but you pay the bill in January 2014. Fillable 1040ez form 2012 You can deduct the expense in 2013 because all events that fix the fact of liability have occurred, the amount of the liability could be reasonably determined, and economic performance occurred in that year. Fillable 1040ez form 2012 Your office supplies may qualify as a recurring expense. Fillable 1040ez form 2012 In that case, you can deduct them in 2013 even if the supplies are not delivered until 2014 (when economic performance occurs). Fillable 1040ez form 2012 Keeping inventories. Fillable 1040ez form 2012   When the production, purchase, or sale of merchandise is an income-producing factor in your business, you must generally take inventories into account at the beginning and the end of your tax year. Fillable 1040ez form 2012 If you must account for an inventory, you must generally use an accrual method of accounting for your purchases and sales. Fillable 1040ez form 2012 For more information, see Inventories , later. Fillable 1040ez form 2012 Special rule for related persons. Fillable 1040ez form 2012   You cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until you make the payment and the corresponding amount is includible in the related person's gross income. Fillable 1040ez form 2012 Determine the relationship, for this rule, as of the end of the tax year for which the expense or interest would otherwise be deductible. Fillable 1040ez form 2012 If a deduction is not allowed under this rule, the rule will continue to apply even if your relationship with the person ends before the expense or interest is includible in the gross income of that person. Fillable 1040ez form 2012   Related persons include members of your immediate family, including only brothers and sisters (either whole or half), your spouse, ancestors, and lineal descendants. Fillable 1040ez form 2012 For a list of other related persons, see section 267 of the Internal Revenue Code. Fillable 1040ez form 2012 Combination Method You can generally use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. Fillable 1040ez form 2012 However, the following restrictions apply. Fillable 1040ez form 2012 If an inventory is necessary to account for your income, you must generally use an accrual method for purchases and sales. Fillable 1040ez form 2012 (See, however, Inventories, later. Fillable 1040ez form 2012 ) You can use the cash method for all other items of income and expenses. Fillable 1040ez form 2012 If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. Fillable 1040ez form 2012 If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. Fillable 1040ez form 2012 If you use a combination method that includes the cash method, treat that combination method as the cash method. Fillable 1040ez form 2012 Inventories Generally, if you produce, purchase, or sell merchandise in your business, you must keep an inventory and use the accrual method for purchases and sales of merchandise. Fillable 1040ez form 2012 However, the following taxpayers can use the cash method of accounting even if they produce, purchase, or sell merchandise. Fillable 1040ez form 2012 These taxpayers can also account for inventoriable items as materials and supplies that are not incidental (discussed later). Fillable 1040ez form 2012 A qualifying taxpayer under Revenue Procedure 2001-10 in Internal Revenue Bulletin 2001-2. Fillable 1040ez form 2012 A qualifying small business taxpayer under Revenue Procedure 2002-28 in Internal Revenue Bulletin 2002-18. Fillable 1040ez form 2012 Qualifying taxpayer. Fillable 1040ez form 2012   You are a qualifying taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 17, 1998, is $1 million or less. Fillable 1040ez form 2012 (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing by 3. Fillable 1040ez form 2012 ) Your business is not a tax shelter, as defined under section 448(d)(3) of the Internal Revenue Code. Fillable 1040ez form 2012 Qualifying small business taxpayer. Fillable 1040ez form 2012   You are a qualifying small business taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 31, 2000, is more than $1 million but not more than $10 million. Fillable 1040ez form 2012 (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing the total by 3. Fillable 1040ez form 2012 ) You are not prohibited from using the cash method under section 448 of the Internal Revenue Code. Fillable 1040ez form 2012 Your principal business activity is an eligible business (described in Publication 538 and Revenue Procedure 2002-28). Fillable 1040ez form 2012 Business not owned or not in existence for 3 years. Fillable 1040ez form 2012   If you did not own your business for all of the 3-tax-year period used in figuring your average annual gross receipts, include the period of any predecessor. Fillable 1040ez form 2012 If your business has not been in existence for the 3-tax-year period, base your average on the period it has existed including any short tax years, annualizing the short tax year's gross receipts. Fillable 1040ez form 2012 Materials and supplies that are not incidental. Fillable 1040ez form 2012   If you account for inventoriable items as materials and supplies that are not incidental, you will deduct the cost of the items you would otherwise include in inventory in the year you sell the items, or the year you pay for them, whichever is later. Fillable 1040ez form 2012 If you are a producer, you can use any reasonable method to estimate the raw material in your work in process and finished goods on hand at the end of the year to determine the raw material used to produce finished goods that were sold during the year. Fillable 1040ez form 2012 Changing accounting method. Fillable 1040ez form 2012   If you are a qualifying taxpayer or qualifying small business taxpayer and want to change to the cash method or to account for inventoriable items as non-incidental materials and supplies, you must file Form 3115, Application for Change in Accounting Method. Fillable 1040ez form 2012 See Change in Accounting Method, later. Fillable 1040ez form 2012 More information. Fillable 1040ez form 2012    For more information about the qualifying taxpayer exception, see Revenue Procedure 2001-10 in Internal Revenue Bulletin 2001-2. Fillable 1040ez form 2012 For more information about the qualifying small business taxpayer exception, see Revenue Procedure 2002-28 in Internal Revenue Bulletin 2002-18. Fillable 1040ez form 2012 Items included in inventory. Fillable 1040ez form 2012   If you are required to account for inventories, include the following items when accounting for your inventory. Fillable 1040ez form 2012 Merchandise or stock in trade. Fillable 1040ez form 2012 Raw materials. Fillable 1040ez form 2012 Work in process. Fillable 1040ez form 2012 Finished products. Fillable 1040ez form 2012 Supplies that physically become a part of the item intended for sale. Fillable 1040ez form 2012 Valuing inventory. Fillable 1040ez form 2012   You must value your inventory at the beginning and end of each tax year to determine your cost of goods sold (Schedule C, line 42). Fillable 1040ez form 2012 To determine the value of your inventory, you need a method for identifying the items in your inventory and a method for valuing these items. Fillable 1040ez form 2012   Inventory valuation rules cannot be the same for all kinds of businesses. Fillable 1040ez form 2012 The method you use to value your inventory must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. Fillable 1040ez form 2012 Your inventory practices must be consistent from year to year. Fillable 1040ez form 2012 More information. Fillable 1040ez form 2012   For more information about inventories, see Publication 538. Fillable 1040ez form 2012 Uniform Capitalization Rules Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for production or resale activities. Fillable 1040ez form 2012 Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. Fillable 1040ez form 2012 You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Fillable 1040ez form 2012 Activities subject to the uniform capitalization rules. Fillable 1040ez form 2012   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. Fillable 1040ez form 2012 Produce real or tangible personal property. Fillable 1040ez form 2012 For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. Fillable 1040ez form 2012 Acquire property for resale. Fillable 1040ez form 2012 Exceptions. Fillable 1040ez form 2012   These rules do not apply to the following property. Fillable 1040ez form 2012 Personal property you acquire for resale if your average annual gross receipts are $10 million or less. Fillable 1040ez form 2012 Property you produce if you meet either of the following conditions. Fillable 1040ez form 2012 Your indirect costs of producing the property are $200,000 or less. Fillable 1040ez form 2012 You use the cash method of accounting and do not account for inventories. Fillable 1040ez form 2012 For more information, see Inventories, earlier. Fillable 1040ez form 2012 Special Methods There are special methods of accounting for certain items of income or expense. Fillable 1040ez form 2012 These include the following. Fillable 1040ez form 2012 Amortization, discussed in chapter 8 of Publication 535, Business Expenses. Fillable 1040ez form 2012 Bad debts, discussed in chapter 10 of Publication 535. Fillable 1040ez form 2012 Depletion, discussed in chapter 9 of Publication 535. Fillable 1040ez form 2012 Depreciation, discussed in Publication 946, How To Depreciate Property. Fillable 1040ez form 2012 Installment sales, discussed in Publication 537, Installment Sales. Fillable 1040ez form 2012 Change in Accounting Method Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. Fillable 1040ez form 2012 A change in your accounting method includes a change in: Your overall method, such as from cash to an accrual method, and Your treatment of any material item. Fillable 1040ez form 2012 To get approval, you must file Form 3115, Application for Change in Accounting Method. Fillable 1040ez form 2012 You can get IRS approval to change an accounting method under either the automatic change procedures or the advance consent request procedures. Fillable 1040ez form 2012 You may have to pay a user fee. Fillable 1040ez form 2012 For more information, see the form instructions. Fillable 1040ez form 2012 Automatic change procedures. Fillable 1040ez form 2012   Certain taxpayers can presume to have IRS approval to change their method of accounting. Fillable 1040ez form 2012 The approval is granted for the tax year for which the taxpayer requests a change (year of change), if the taxpayer complies with the provisions of the automatic change procedures. Fillable 1040ez form 2012 No user fee is required for an application filed under an automatic change procedure generally covered in Revenue Procedure 2002-9. Fillable 1040ez form 2012   Generally, you must use Form 3115 to request an automatic change. Fillable 1040ez form 2012 For more information, see the Instructions for Form 3115. Fillable 1040ez form 2012 Prev  Up  Next   Home   More Online Publications