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Free E Filing For State Taxes

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Free E Filing For State Taxes

Free e filing for state taxes 4. Free e filing for state taxes   Special Situations Table of Contents Condominiums CooperativesDepreciation Property Changed to Rental UseBasis of Property Changed to Rental Use Figuring the Depreciation Deduction Renting Part of Property Not Rented for ProfitPostponing decision. Free e filing for state taxes Example—Property Changed to Rental Use This chapter discusses some rental real estate activities that are subject to additional rules. Free e filing for state taxes Condominiums A condominium is most often a dwelling unit in a multi-unit building, but can also take other forms, such as a townhouse or garden apartment. Free e filing for state taxes If you own a condominium, you also own a share of the common elements, such as land, lobbies, elevators, and service areas. Free e filing for state taxes You and the other condominium owners may pay dues or assessments to a special corporation that is organized to take care of the common elements. Free e filing for state taxes Special rules apply if you rent your condominium to others. Free e filing for state taxes You can deduct as rental expenses all the expenses discussed in chapters 1 and 2. Free e filing for state taxes In addition, you can deduct any dues or assessments paid for maintenance of the common elements. Free e filing for state taxes You cannot deduct special assessments you pay to a condominium management corporation for improvements. Free e filing for state taxes However, you may be able to recover your share of the cost of any improvement by taking depreciation. Free e filing for state taxes Cooperatives If you live in a cooperative, you do not own your apartment. Free e filing for state taxes Instead, a corporation owns the apartments and you are a tenant-stockholder in the cooperative housing corporation. Free e filing for state taxes If you rent your apartment to others, you usually can deduct, as a rental expense, all the maintenance fees you pay to the cooperative housing corporation. Free e filing for state taxes In addition to the maintenance fees paid to the cooperative housing corporation, you can deduct your direct payments for repairs, upkeep, and other rental expenses, including interest paid on a loan used to buy your stock in the corporation. Free e filing for state taxes Depreciation You will be depreciating your stock in the corporation rather than the apartment itself. Free e filing for state taxes Figure your depreciation deduction as follows. Free e filing for state taxes Figure the depreciation for all the depreciable real property owned by the corporation. Free e filing for state taxes (Depreciation methods are discussed in chapter 2 of this publication and Publication 946. Free e filing for state taxes ) If you bought your cooperative stock after its first offering, figure the depreciable basis of this property as follows. Free e filing for state taxes Multiply your cost per share by the total number of outstanding shares. Free e filing for state taxes Add to the amount figured in (a) any mortgage debt on the property on the date you bought the stock. Free e filing for state taxes Subtract from the amount figured in (b) any mortgage debt that is not for the depreciable real property, such as the part for the land. Free e filing for state taxes Subtract from the amount figured in (1) any depreciation for space owned by the corporation that can be rented but cannot be lived in by tenant-stockholders. Free e filing for state taxes Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. Free e filing for state taxes Multiply the result of (2) by the percentage you figured in (3). Free e filing for state taxes This is your depreciation on the stock. Free e filing for state taxes Your depreciation deduction for the year cannot be more than the part of your adjusted basis (defined in chapter 2) in the stock of the corporation that is allocable to your rental property. Free e filing for state taxes Payments added to capital account. Free e filing for state taxes   Payments earmarked for a capital asset or improvement, or otherwise charged to the corporation's capital account are added to the basis of your stock in the corporation. Free e filing for state taxes For example, you cannot deduct a payment used to pave a community parking lot, install a new roof, or pay the principal of the corporation's mortgage. Free e filing for state taxes   Treat as a capital cost the amount you were assessed for capital items. Free e filing for state taxes This cannot be more than the amount by which your payments to the corporation exceeded your share of the corporation's mortgage interest and real estate taxes. Free e filing for state taxes   Your share of interest and taxes is the amount the corporation elected to allocate to you, if it reasonably reflects those expenses for your apartment. Free e filing for state taxes Otherwise, figure your share in the following manner. Free e filing for state taxes Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. Free e filing for state taxes Multiply the corporation's deductible interest by the number you figured in (1). Free e filing for state taxes This is your share of the interest. Free e filing for state taxes Multiply the corporation's deductible taxes by the number you figured in (1). Free e filing for state taxes This is your share of the taxes. Free e filing for state taxes Property Changed to Rental Use If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use. Free e filing for state taxes You can deduct as rental expenses only the part of the expense that is for the part of the year the property was used or held for rental purposes. Free e filing for state taxes You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. Free e filing for state taxes However, you can include the home mortgage interest, qualified mortgage insurance premiums, and real estate tax expenses for the part of the year the property was held for personal use as an itemized deduction on Schedule A (Form 1040). Free e filing for state taxes Example. Free e filing for state taxes Your tax year is the calendar year. Free e filing for state taxes You moved from your home in May and started renting it out on June 1. Free e filing for state taxes You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. Free e filing for state taxes Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. Free e filing for state taxes When figuring depreciation, treat the property as placed in service on June 1. Free e filing for state taxes Basis of Property Changed to Rental Use When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of fair market value or adjusted basis on the date of conversion. Free e filing for state taxes Fair market value. Free e filing for state taxes   This is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. Free e filing for state taxes Sales of similar property, on or about the same date, may be helpful in figuring the fair market value of the property. Free e filing for state taxes Figuring the basis. Free e filing for state taxes   The basis for depreciation is the lesser of: The fair market value of the property on the date you changed it to rental use, or Your adjusted basis on the date of the change—that is, your original cost or other basis of the property, plus the cost of permanent additions or improvements since you acquired it, minus deductions for any casualty or theft losses claimed on earlier years' income tax returns and other decreases to basis. Free e filing for state taxes For other increases and decreases to basis, see Adjusted Basis in chapter 2. Free e filing for state taxes Example. Free e filing for state taxes Several years ago you built your home for $140,000 on a lot that cost you $14,000. Free e filing for state taxes Before changing the property to rental use this year, you added $28,000 of permanent improvements to the house and claimed a $3,500 casualty loss deduction for damage to the house. Free e filing for state taxes Part of the improvements qualified for a $500 residential energy credit, which you claimed on your 2010 tax return. Free e filing for state taxes Because land is not depreciable, you can only include the cost of the house when figuring the basis for depreciation. Free e filing for state taxes The adjusted basis of the house at the time of the change in its use was $164,000 ($140,000 + $28,000 − $3,500 − $500). Free e filing for state taxes On the date of the change in use, your property had a fair market value of $168,000, of which $21,000 was for the land and $147,000 was for the house. Free e filing for state taxes The basis for depreciation on the house is the fair market value on the date of the change ($147,000), because it is less than your adjusted basis ($164,000). Free e filing for state taxes Cooperatives If you change your cooperative apartment to rental use, figure your allowable depreciation as explained earlier. Free e filing for state taxes (Depreciation methods are discussed in chapter 2 of this publication and Publication 946. Free e filing for state taxes ) The basis of all the depreciable real property owned by the cooperative housing corporation is the smaller of the following amounts. Free e filing for state taxes The fair market value of the property on the date you change your apartment to rental use. Free e filing for state taxes This is considered to be the same as the corporation's adjusted basis minus straight line depreciation, unless this value is unrealistic. Free e filing for state taxes The corporation's adjusted basis in the property on that date. Free e filing for state taxes Do not subtract depreciation when figuring the corporation's adjusted basis. Free e filing for state taxes If you bought the stock after its first offering, the corporation's adjusted basis in the property is the amount figured in (1) under Depreciation (under Cooperatives, near the beginning of this chapter). Free e filing for state taxes The fair market value of the property is considered to be the same as the corporation's adjusted basis figured in this way minus straight line depreciation, unless the value is unrealistic. Free e filing for state taxes Figuring the Depreciation Deduction To figure the deduction, use the depreciation system in effect when you convert your residence to rental use. Free e filing for state taxes Generally, that will be MACRS for any conversion after 1986. Free e filing for state taxes Treat the property as placed in service on the conversion date. Free e filing for state taxes Example. Free e filing for state taxes Your converted residence (see previous example under Figuring the basis) was available for rent on August 1. Free e filing for state taxes Using Table 2-2d (see chapter 2), the percentage for Year 1 beginning in August is 1. Free e filing for state taxes 364% and the depreciation deduction for Year 1 is $2,005 ($147,000 × . Free e filing for state taxes 01364). Free e filing for state taxes Renting Part of Property If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. Free e filing for state taxes You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). Free e filing for state taxes You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity, or painting the outside of the house. Free e filing for state taxes There is no change in the types of expenses deductible for the personal-use part of your property. Free e filing for state taxes Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). Free e filing for state taxes You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. Free e filing for state taxes You do not have to divide the expenses that belong only to the rental part of your property. Free e filing for state taxes For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense. Free e filing for state taxes If you install a second phone line strictly for your tenant's use, all of the cost of the second line is deductible as a rental expense. Free e filing for state taxes You can deduct depreciation on the part of the house used for rental purposes as well as on the furniture and equipment you use for rental purposes. Free e filing for state taxes How to divide expenses. Free e filing for state taxes   If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between rental use and personal use. Free e filing for state taxes You can use any reasonable method for dividing the expense. Free e filing for state taxes It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. Free e filing for state taxes The two most common methods for dividing an expense are (1) the number of rooms in your home, and (2) the square footage of your home. Free e filing for state taxes Example. Free e filing for state taxes You rent a room in your house. Free e filing for state taxes The room is 12 × 15 feet, or 180 square feet. Free e filing for state taxes Your entire house has 1,800 square feet of floor space. Free e filing for state taxes You can deduct as a rental expense 10% of any expense that must be divided between rental use and personal use. Free e filing for state taxes If your heating bill for the year for the entire house was $600, $60 ($600 × . Free e filing for state taxes 10) is a rental expense. Free e filing for state taxes The balance, $540, is a personal expense that you cannot deduct. Free e filing for state taxes Duplex. Free e filing for state taxes   A common situation is the duplex where you live in one unit and rent out the other. Free e filing for state taxes Certain expenses apply to the entire property, such as mortgage interest and real estate taxes, and must be split to determine rental and personal expenses. Free e filing for state taxes Example. Free e filing for state taxes You own a duplex and live in one half, renting the other half. Free e filing for state taxes Both units are approximately the same size. Free e filing for state taxes Last year, you paid a total of $10,000 mortgage interest and $2,000 real estate taxes for the entire property. Free e filing for state taxes You can deduct $5,000 mortgage interest and $1,000 real estate taxes on Schedule E (Form 1040), and if you itemize your deductions, you can deduct the other $5,000 mortgage interest and $1,000 real estate taxes on Schedule A (Form 1040). Free e filing for state taxes Not Rented for Profit If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. Free e filing for state taxes You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. Free e filing for state taxes Where to report. Free e filing for state taxes   Report your not-for-profit rental income on Form 1040 or 1040NR, line 21. Free e filing for state taxes For example, if you are filing Form 1040, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A (Form 1040) if you itemize your deductions. Free e filing for state taxes   If you itemize your deductions, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. Free e filing for state taxes You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. Free e filing for state taxes Presumption of profit. Free e filing for state taxes   If your rental income is more than your rental expenses for at least 3 years out of a period of 5 consecutive years, you are presumed to be renting your property to make a profit. Free e filing for state taxes Postponing decision. Free e filing for state taxes   If you are starting your rental activity and do not have 3 years showing a profit, you can elect to have the presumption made after you have the 5 years of experience required by the test. Free e filing for state taxes You may choose to postpone the decision of whether the rental is for profit by filing Form 5213. Free e filing for state taxes You must file Form 5213 within 3 years after the due date of your return (determined without extensions) for the year in which you first carried on the activity or, if earlier, within 60 days after receiving written notice from the Internal Revenue Service proposing to disallow deductions attributable to the activity. Free e filing for state taxes More information. Free e filing for state taxes   For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535. Free e filing for state taxes Example—Property Changed to Rental Use In January, Eileen Johnson bought a condominium apartment to live in. Free e filing for state taxes Instead of selling the house she had been living in, she decided to change it to rental property. Free e filing for state taxes Eileen selected a tenant and started renting the house on February 1. Free e filing for state taxes Eileen charges $750 a month for rent and collects it herself. Free e filing for state taxes Eileen also received a $750 security deposit from her tenant. Free e filing for state taxes Because she plans to return it to her tenant at the end of the lease, she does not include it in her income. Free e filing for state taxes Her rental expenses for the year are as follows. Free e filing for state taxes   Mortgage interest $1,800     Fire insurance (1-year policy) 100     Miscellaneous repairs (after renting) 297     Real estate taxes imposed and paid 1,200   Eileen must divide the real estate taxes, mortgage interest, and fire insurance between the personal use of the property and the rental use of the property. Free e filing for state taxes She can deduct eleven-twelfths of these expenses as rental expenses. Free e filing for state taxes She can include the balance of the allowable taxes and mortgage interest on Schedule A (Form 1040) if she itemizes. Free e filing for state taxes She cannot deduct the balance of the fire insurance because it is a personal expense. Free e filing for state taxes Eileen bought this house in 1984 for $35,000. Free e filing for state taxes Her property tax was based on assessed values of $10,000 for the land and $25,000 for the house. Free e filing for state taxes Before changing it to rental property, Eileen added several improvements to the house. Free e filing for state taxes She figures her adjusted basis as follows:   Improvements Cost     House $25,000     Remodeled kitchen 4,200     Recreation room 5,800     New roof 1,600     Patio and deck 2,400     Adjusted basis $39,000   On February 1, when Eileen changed her house to rental property, the property had a fair market value of $152,000. Free e filing for state taxes Of this amount, $35,000 was for the land and $117,000 was for the house. Free e filing for state taxes Because Eileen's adjusted basis is less than the fair market value on the date of the change, Eileen uses $39,000 as her basis for depreciation. Free e filing for state taxes As specified for residential rental property, Eileen must use the straight line method of depreciation over the GDS or ADS recovery period. Free e filing for state taxes She chooses the GDS recovery period of 27. Free e filing for state taxes 5 years. Free e filing for state taxes She uses Table 2-2d to find her depreciation percentage. Free e filing for state taxes Since she placed the property in service in February, the percentage is 3. Free e filing for state taxes 182%. Free e filing for state taxes On April 1, Eileen bought a new dishwasher for the rental property at a cost of $425. Free e filing for state taxes The dishwasher is personal property used in a rental real estate activity, which has a 5-year recovery period. Free e filing for state taxes She uses Table 2-2a to find the percentage for Year 1 under “Half-year convention” (20%) to figure her depreciation deduction. Free e filing for state taxes On May 1, Eileen paid $4,000 to have a furnace installed in the house. Free e filing for state taxes The furnace is residential rental property. Free e filing for state taxes Because she placed the property in service in May, the percentage from Table 2-2d is 2. Free e filing for state taxes 273%. Free e filing for state taxes Eileen figures her net rental income or loss for the house as follows: Total rental income received  ($750 × 11) $8,250 Minus: Expenses     Mortgage interest ($1,800 × 11/12) $1,650   Fire insurance ($100 × 11/12) 92   Miscellaneous repairs 297   Real estate taxes ($1,200 × 11/12) 1,100   Total expenses 3,139 Balance $5,111 Minus: Depreciation     House ($39,000 × . Free e filing for state taxes 03182) $1,241   Dishwasher ($425 × . Free e filing for state taxes 20) 85   Furnace ($4,000 × . Free e filing for state taxes 02273) 91   Total depreciation 1,417 Net rental income for house   $3,694       Eileen uses Schedule E, Part I, to report her rental income and expenses. Free e filing for state taxes She enters her income, expenses, and depreciation for the house in the column for Property A. Free e filing for state taxes Since all property was placed in service this year, Eileen must use Form 4562 to figure the depreciation. Free e filing for state taxes See the Instructions for Form 4562 for more information on preparing the form. Free e filing for state taxes Prev  Up  Next   Home   More Online Publications
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The Free E Filing For State Taxes

Free e filing for state taxes 33. Free e filing for state taxes   Credit for the Elderly or the Disabled Table of Contents Introduction Useful Items - You may want to see: Are You Eligible for the Credit?Qualified Individual Income Limits How to Claim the CreditCredit Figured for You Credit Figured by You Introduction If you qualify, you may be able to reduce the tax you owe by taking the credit for the elderly or the disabled which is figured on Schedule R (Form 1040A or 1040). Free e filing for state taxes This chapter explains the following. Free e filing for state taxes Who qualifies for the credit for the elderly or the disabled. Free e filing for state taxes How to claim the credit. Free e filing for state taxes You may be able to take the credit for the elderly or the disabled if: You are age 65 or older at the end of 2013, or You retired on permanent and total disability and have taxable disability income. Free e filing for state taxes Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 554 Tax Guide for Seniors Form (and Instruction) Schedule R (Form 1040A or 1040) Credit for the Elderly or the Disabled Are You Eligible for the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. Free e filing for state taxes You are a qualified individual. Free e filing for state taxes Your income is not more than certain limits. Free e filing for state taxes You can use Figure 33-A and Table 33-1 as guides to see if you are eligible for the credit. Free e filing for state taxes Use Figure 33-A first to see if you are a qualified individual. Free e filing for state taxes If you are, go to Table 33-1 to make sure your income is not too high to take the credit. Free e filing for state taxes You can take the credit only if you file Form 1040 or Form 1040A. Free e filing for state taxes You cannot take the credit if you file Form 1040EZ. Free e filing for state taxes Qualified Individual You are a qualified individual for this credit if you are a U. Free e filing for state taxes S. Free e filing for state taxes citizen or resident alien, and either of the following applies. Free e filing for state taxes You were age 65 or older at the end of 2013. Free e filing for state taxes You were under age 65 at the end of 2013 and all three of the following statements are true. Free e filing for state taxes You retired on permanent and total disability (explained later). Free e filing for state taxes You received taxable disability income for 2013. Free e filing for state taxes On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). Free e filing for state taxes Age 65. Free e filing for state taxes   You are considered to be age 65 on the day before your 65th birthday. Free e filing for state taxes Therefore, if you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Free e filing for state taxes U. Free e filing for state taxes S. Free e filing for state taxes Citizen or Resident Alien You must be a U. Free e filing for state taxes S. Free e filing for state taxes citizen or resident alien (or be treated as a resident alien) to take the credit. Free e filing for state taxes Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. Free e filing for state taxes Exceptions. Free e filing for state taxes   You may be able to take the credit if you are a nonresident alien who is married to a U. Free e filing for state taxes S. Free e filing for state taxes citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. Free e filing for state taxes S. Free e filing for state taxes resident alien. Free e filing for state taxes If you make that choice, both you and your spouse are taxed on your worldwide incomes. Free e filing for state taxes If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. Free e filing for state taxes S. Free e filing for state taxes citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. Free e filing for state taxes S. Free e filing for state taxes resident alien for the entire year. Free e filing for state taxes In that case, you may be allowed to take the credit. Free e filing for state taxes For information on these choices, see chapter 1 of Publication 519, U. Free e filing for state taxes S. Free e filing for state taxes Tax Guide for Aliens. Free e filing for state taxes Married Persons Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. Free e filing for state taxes However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. Free e filing for state taxes Head of household. Free e filing for state taxes   You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet certain tests. Free e filing for state taxes See Head of Household in chapter 2 for the tests you must meet. Free e filing for state taxes Under Age 65 If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). Free e filing for state taxes You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the close of the tax year. Free e filing for state taxes Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. Free e filing for state taxes If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. Free e filing for state taxes Permanent and total disability. Free e filing for state taxes    You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. Free e filing for state taxes A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Free e filing for state taxes See Physician's statement , later. Free e filing for state taxes Substantial gainful activity. Free e filing for state taxes   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Free e filing for state taxes Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. Free e filing for state taxes   Substantial gainful activity is not work you do to take care of yourself or your home. Free e filing for state taxes It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. Free e filing for state taxes However, doing this kind of work may show that you are able to engage in substantial gainful activity. Free e filing for state taxes    The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. Free e filing for state taxes Sheltered employment. Free e filing for state taxes   Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. Free e filing for state taxes These qualified locations are in sheltered workshops, hospitals, and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes. Free e filing for state taxes   Compared to commercial employment, pay is lower for sheltered employment. Free e filing for state taxes Therefore, one usually does not look for sheltered employment if he or she can get other employment. Free e filing for state taxes The fact that one has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity. Free e filing for state taxes Physician's statement. Free e filing for state taxes   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. Free e filing for state taxes You can use the statement in the Instructions for Schedule R. Free e filing for state taxes    Figure 33-A. Free e filing for state taxes Are You a Qualified Individual? This image is too large to be displayed in the current screen. Free e filing for state taxes Please click the link to view the image. Free e filing for state taxes Figure 33-A Are You a Qualified Individual?   You do not have to file this statement with your Form 1040 or Form 1040A, but you must keep it for your records. Free e filing for state taxes Veterans. Free e filing for state taxes   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. Free e filing for state taxes VA Form 21-0172 must be signed by a person authorized by the VA to do so. Free e filing for state taxes You can get this form from your local VA regional office. Free e filing for state taxes Physician's statement obtained in earlier year. Free e filing for state taxes   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. Free e filing for state taxes For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. Free e filing for state taxes If you meet the required conditions, check the box on your Schedule R, Part II, line 2. Free e filing for state taxes   If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked. Free e filing for state taxes Table 33-1. Free e filing for state taxes Income Limits IF your filing status is . Free e filing for state taxes . Free e filing for state taxes . Free e filing for state taxes THEN, even if you qualify (see Figure 33-A ), you CANNOT take the credit if. Free e filing for state taxes . Free e filing for state taxes . Free e filing for state taxes   Your adjusted gross income (AGI)* is equal to or more than. Free e filing for state taxes . Free e filing for state taxes . Free e filing for state taxes     OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. Free e filing for state taxes . Free e filing for state taxes . Free e filing for state taxes   single, head of household, or qualifying widow(er) with dependent child   $17,500     $5,000   married filing jointly and only one spouse qualifies in Figure 33-A   $20,000     $5,000   married filing jointly and both spouses qualify in Figure 33-A   $25,000     $7,500   married filing separately and you lived apart from your spouse for all of 2013   $12,500     $3,750   * AGI is the amount on Form 1040A, line 22, or Form 1040, line 38. Free e filing for state taxes Disability income. Free e filing for state taxes   If you are under age 65, you must also have taxable disability income to qualify for the credit. Free e filing for state taxes Disability income must meet both of the following requirements. Free e filing for state taxes It must be paid under your employer's accident or health plan or pension plan. Free e filing for state taxes It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability. Free e filing for state taxes Payments that are not disability income. Free e filing for state taxes   Any payment you receive from a plan that does not provide for disability retirement is not disability income. Free e filing for state taxes Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. Free e filing for state taxes   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. Free e filing for state taxes Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled. Free e filing for state taxes Income Limits To determine if you can claim the credit, you must consider two income limits. Free e filing for state taxes The first limit is the amount of your adjusted gross income (AGI). Free e filing for state taxes The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. Free e filing for state taxes The limits are shown in Table 33-1. Free e filing for state taxes If your AGI and nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. Free e filing for state taxes See How to Claim the Credit , later. Free e filing for state taxes If either your AGI or your nontaxable pensions, annuities, or disability income are equal to or more than the income limits, you cannot take the credit. Free e filing for state taxes How to Claim the Credit You can figure the credit yourself or the Internal Revenue Service will figure it for you. Free e filing for state taxes Credit Figured for You If you choose to have the IRS figure the credit for you, read the following discussion for the form you will file (Form 1040 or 1040A). Free e filing for state taxes If you want the IRS to figure your tax, see chapter 30. Free e filing for state taxes Form 1040. Free e filing for state taxes   If you want the IRS to figure your credit, see Form 1040 Line Entries under Tax Figured by IRS in chapter 30. Free e filing for state taxes Form 1040A. Free e filing for state taxes   If you want the IRS to figure your credit, see Form 1040A Line Entries under Tax Figured by IRS in chapter 30. Free e filing for state taxes Credit Figured by You If you choose to figure the credit yourself, fill out the front of Schedule R. Free e filing for state taxes Next, fill out Schedule R, Part III. Free e filing for state taxes If you file Form 1040A, enter the amount from Schedule R, line 22, on Form 1040A, line 30. Free e filing for state taxes If you file Form 1040, include the amount from Schedule R, line 22, on line 53; check box c, and enter “Sch R” on the line next to that box. Free e filing for state taxes For a step-by-step discussion about filling out Part III of Schedule R, see Figuring the Credit Yourself in Publication 524. Free e filing for state taxes Limit on credit. Free e filing for state taxes   The amount of the credit you can claim is generally limited to the amount of your tax. Free e filing for state taxes Use the Credit Limit Worksheet in the Instructions for Schedule R to determine if your credit is limited. Free e filing for state taxes Prev  Up  Next   Home   More Online Publications