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Free H&r Block Efile

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Free h&r block efile 16. Free h&r block efile   Reporting Gains and Losses Table of Contents What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. Free h&r block efile Exception 2. Free h&r block efile File Form 1099-B or Form 1099-S with the IRS. Free h&r block efile Capital Losses Capital Gain Tax Rates What's New Maximum capital gain rates. Free h&r block efile . Free h&r block efile  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Free h&r block efile Introduction This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Form 8949 and Schedule D (Form 1040). Free h&r block efile The discussion includes the following topics. Free h&r block efile How to report short-term gains and losses. Free h&r block efile How to report long-term gains and losses. Free h&r block efile How to figure capital loss carryovers. Free h&r block efile How to figure your tax on a net capital gain. Free h&r block efile If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D (Form 1040). Free h&r block efile Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income 8582 Passive Activity Loss Limitations 8949 Sales and Other Dispositions of Capital Assets Schedule D (Form 1040) Capital Gains and Losses Reporting Capital Gains and Losses Generally, report capital gains and losses on Form 8949. Free h&r block efile Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D (Form 1040). Free h&r block efile Use Form 8949 to report: The sale or exchange of a capital asset not reported on another form or schedule; Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit; and Nonbusiness bad debts. Free h&r block efile Use Schedule D (Form 1040): To figure the overall gain or loss from transactions reported on Form 8949; To report a gain from Form 6252 or Part I of Form 4797; To report a gain or loss from Form 4684, 6781, or 8824; To report capital gain distributions not reported directly on Form 1040 or Form 1040A; To report a capital loss carryover from the previous tax year to the current tax year; To report your share of a gain or (loss) from a partnership, S corporation, estate, or trust; To report transactions reported to you on a Form 1099-B (or substitute statement) showing basis was reported to the IRS and to which none of the Form 8949 adjustments or codes apply; and To report undistributed long-term capital gains from Form 2439. Free h&r block efile On Form 8949, enter all sales and exchanges of capital assets, including stocks, bonds, etc. Free h&r block efile , and real estate (if not reported on Form 4684, 4797, 6252, 6781, 8824, or line 1a or 8a of Schedule D). Free h&r block efile Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. Free h&r block efile Report short-term gains or losses in Part I. Free h&r block efile Report long-term gains or losses in Part II. Free h&r block efile Use as many Forms 8949 as you need. Free h&r block efile Exceptions to filing Form 8949 and Schedule D (Form 1040). Free h&r block efile   There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040). Free h&r block efile Exception 1. Free h&r block efile   You do not have to file Form 8949 or Schedule D (Form 1040) if you have no capital losses and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements). Free h&r block efile (If any Form(s) 1099-DIV (or substitute statements) you receive have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain), you do not qualify for this exception. Free h&r block efile ) If you qualify for this exception, report your capital gain distributions directly on line 13 of Form 1040 (and check the box on line 13). Free h&r block efile Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax. Free h&r block efile You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if none of the Forms 1099-DIV (or substitute statements) you received have an amount in box 2b, 2c, or 2d, and you do not have to file Form 1040. Free h&r block efile Exception 2. Free h&r block efile   You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are: Capital gain distributions; A capital loss carryover; A gain from Form 2439 or 6252 or Part I of Form 4797; A gain or loss from Form 4684, 6781, or 8824; A gain or loss from a partnership, S corporation, estate, or trust; or Gains and losses from transactions for which you received a Form 1099-B (or substitute statement) that shows the basis was reported to the IRS and for which you do not need to make any adjustments in column (g) of Form 8949 or enter any codes in column (f) of Form 8949. Free h&r block efile Installment sales. Free h&r block efile   You cannot use the installment method to report a gain from the sale of stock or securities traded on an established securities market. Free h&r block efile You must report the entire gain in the year of sale (the year in which the trade date occurs). Free h&r block efile Passive activity gains and losses. Free h&r block efile    If you have gains or losses from a passive activity, you may also have to report them on Form 8582. Free h&r block efile In some cases, the loss may be limited under the passive activity rules. Free h&r block efile Refer to Form 8582 and its instructions for more information about reporting capital gains and losses from a passive activity. Free h&r block efile Form 1099-B transactions. Free h&r block efile   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B or substitute statement from the broker. Free h&r block efile Use the Form 1099-B or the substitute statement to complete Form 8949. Free h&r block efile If you sold a covered security in 2013, your broker should send you a Form 1099-B (or substitute statement) that shows your basis. Free h&r block efile This will help you complete Form 8949. Free h&r block efile Generally, a covered security is a security you acquired after 2010. Free h&r block efile   Report the gross proceeds shown in box 2a of Form 1099-B as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Free h&r block efile However, if the broker advises you, in box 2a of Form 1099-B, that gross proceeds (sales price) less commissions and option premiums were reported to the IRS, enter that net sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Free h&r block efile    Include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Free h&r block efile If you include an expense of sale in column (g), enter “E” in column (f). Free h&r block efile Form 1099-CAP transactions. Free h&r block efile   If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP or a substitute statement from the corporation. Free h&r block efile Use the Form 1099-CAP or substitute statement to fill in Form 8949. Free h&r block efile If your computations show that you would have a loss because of the change, do not enter any amounts on Form 8949 or Schedule D (Form 1040). Free h&r block efile You cannot claim a loss on Schedule D (Form 1040) as a result of this transaction. Free h&r block efile   Report the aggregate amount received shown in box 2 of Form 1099-CAP as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Free h&r block efile Form 1099-S transactions. Free h&r block efile   If you sold or traded reportable real estate, you generally should receive from the real estate reporting person a Form 1099-S showing the gross proceeds. Free h&r block efile    “Reportable real estate” is defined as any present or future ownership interest in any of the following: Improved or unimproved land, including air space; Inherently permanent structures, including any residential, commercial, or industrial building; A condominium unit and its accessory fixtures and common elements, including land; and Stock in a cooperative housing corporation (as defined in section 216 of the Internal Revenue Code). Free h&r block efile   A “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. Free h&r block efile   Your Form 1099-S will show the gross proceeds from the sale or exchange in box 2. Free h&r block efile See the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040) for how to report these transactions and include them in Part I or Part II of Form 8949 as appropriate. Free h&r block efile However, report like-kind exchanges on Form 8824 instead. Free h&r block efile   It is unlawful for any real estate reporting person to separately charge you for complying with the requirement to file Form 1099-S. Free h&r block efile Nominees. Free h&r block efile   If you receive gross proceeds as a nominee (that is, the gross proceeds are in your name but actually belong to someone else), see the Instructions for Form 8949 for how to report these amounts on Form 8949. Free h&r block efile File Form 1099-B or Form 1099-S with the IRS. Free h&r block efile   If you received gross proceeds as a nominee in 2013, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. Free h&r block efile Send the Form 1099-B or Form 1099-S with a Form 1096, Annual Summary and Transmittal of U. Free h&r block efile S. Free h&r block efile Information Returns, to your Internal Revenue Service Center by February 28, 2014 (March 31, 2014, if you file Form 1099-B or Form 1099-S electronically). Free h&r block efile Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 18, 2014. Free h&r block efile On Form 1099-B, you should be listed as the “Payer. Free h&r block efile ” The other owner should be listed as the “Recipient. Free h&r block efile ” On Form 1099-S, you should be listed as the “Filer. Free h&r block efile ” The other owner should be listed as the “Transferor. Free h&r block efile ” You do not have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. Free h&r block efile For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns. Free h&r block efile If you are filing electronically see Publication 1220. Free h&r block efile Sale of property bought at various times. Free h&r block efile   If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on one row in Part I of Form 8949, and the long-term gain or loss on one row in Part II of Form 8949. Free h&r block efile Write “Various” in column (b) for the “Date acquired. Free h&r block efile ” Sale expenses. Free h&r block efile    On Form 8949, include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Free h&r block efile If you include an expense of sale in column (g), enter “E” in column (f). Free h&r block efile   For more information about adjustments to basis, see chapter 13. Free h&r block efile Short-term gains and losses. Free h&r block efile   Capital gain or loss on the sale or trade of investment property held 1 year or less is a short-term capital gain or loss. Free h&r block efile You report it in Part I of Form 8949. Free h&r block efile   You combine your share of short-term capital gain or loss from partnerships, S corporations, estates, and trusts, and any short-term capital loss carryover, with your other short-term capital gains and losses to figure your net short-term capital gain or loss on line 7 of Schedule D (Form 1040). Free h&r block efile Long-term gains and losses. Free h&r block efile    A capital gain or loss on the sale or trade of investment property held more than 1 year is a long-term capital gain or loss. Free h&r block efile You report it in Part II of Form 8949. Free h&r block efile   You report the following in Part II of Schedule D (Form 1040): Undistributed long-term capital gains from a mutual fund (or other regulated investment company) or real estate investment trust (REIT); Your share of long-term capital gains or losses from partnerships, S corporations, estates, and trusts; All capital gain distributions from mutual funds and REITs not reported directly on line 10 of Form 1040A or line 13 of Form 1040; and Long-term capital loss carryovers. Free h&r block efile    The result after combining these items with your other long-term capital gains and losses is your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Free h&r block efile Total net gain or loss. Free h&r block efile   To figure your total net gain or loss, combine your net short-term capital gain or loss (Schedule D (Form 1040), line 7) with your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Free h&r block efile Enter the result on Schedule D (Form 1040), Part III, line 16. Free h&r block efile If your losses are more than your gains, see Capital Losses , next. Free h&r block efile If both lines 15 and 16 of your Schedule D (Form 1040) are gains and your taxable income on your Form 1040 is more than zero, see Capital Gain Tax Rates , later. Free h&r block efile Capital Losses If your capital losses are more than your capital gains, you can claim a capital loss deduction. Free h&r block efile Report the amount of the deduction on line 13 of Form 1040, in parentheses. Free h&r block efile Limit on deduction. Free h&r block efile   Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of: $3,000 ($1,500 if you are married and file a separate return); or Your total net loss as shown on line 16 of Schedule D (Form 1040). Free h&r block efile   You can use your total net loss to reduce your income dollar for dollar, up to the $3,000 limit. Free h&r block efile Capital loss carryover. Free h&r block efile   If you have a total net loss on line 16 of Schedule D (Form 1040) that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. Free h&r block efile If part of the loss is still unused, you can carry it over to later years until it is completely used up. Free h&r block efile   When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. Free h&r block efile   When you carry over a loss, it remains long term or short term. Free h&r block efile A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains. Free h&r block efile Figuring your carryover. Free h&r block efile   The amount of your capital loss carryover is the amount of your total net loss that is more than the lesser of: Your allowable capital loss deduction for the year; or Your taxable income increased by your allowable capital loss deduction for the year and your deduction for personal exemptions. Free h&r block efile   If your deductions are more than your gross income for the tax year, use your negative taxable income in computing the amount in item (2). Free h&r block efile    Complete the Capital Loss Carryover Worksheet in the Instructions for Schedule D or Publication 550 to determine the part of your capital loss that you can carry over. Free h&r block efile Example. Free h&r block efile Bob and Gloria sold securities in 2013. Free h&r block efile The sales resulted in a capital loss of $7,000. Free h&r block efile They had no other capital transactions. Free h&r block efile Their taxable income was $26,000. Free h&r block efile On their joint 2013 return, they can deduct $3,000. Free h&r block efile The unused part of the loss, $4,000 ($7,000 − $3,000), can be carried over to 2014. Free h&r block efile If their capital loss had been $2,000, their capital loss deduction would have been $2,000. Free h&r block efile They would have no carryover. Free h&r block efile Use short-term losses first. Free h&r block efile   When you figure your capital loss carryover, use your short-term capital losses first, even if you incurred them after a long-term capital loss. Free h&r block efile If you have not reached the limit on the capital loss deduction after using the short-term capital losses, use the long-term capital losses until you reach the limit. Free h&r block efile Decedent's capital loss. Free h&r block efile    A capital loss sustained by a decedent during his or her last tax year (or carried over to that year from an earlier year) can be deducted only on the final income tax return filed for the decedent. Free h&r block efile The capital loss limits discussed earlier still apply in this situation. Free h&r block efile The decedent's estate cannot deduct any of the loss or carry it over to following years. Free h&r block efile Joint and separate returns. Free h&r block efile   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. Free h&r block efile However, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. Free h&r block efile Capital Gain Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Free h&r block efile These lower rates are called the maximum capital gain rates. Free h&r block efile The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Free h&r block efile For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Free h&r block efile See Table 16-1 for details. Free h&r block efile If you figure your tax using the maximum capital gain rate and the regular tax computation results in a lower tax, the regular tax computation applies. Free h&r block efile Example. Free h&r block efile All of your net capital gain is from selling collectibles, so the capital gain rate would be 28%. Free h&r block efile If you are otherwise subject to a rate lower than 28%, the 28% rate does not apply. Free h&r block efile Investment interest deducted. Free h&r block efile   If you claim a deduction for investment interest, you may have to reduce the amount of your net capital gain that is eligible for the capital gain tax rates. Free h&r block efile Reduce it by the amount of the net capital gain you choose to include in investment income when figuring the limit on your investment interest deduction. Free h&r block efile This is done on the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet. Free h&r block efile For more information about the limit on investment interest, see Interest Expenses in chapter 3 of Publication 550. Free h&r block efile Table 16-1. Free h&r block efile What Is Your Maximum Capital Gain Rate? IF your net capital gain is from . Free h&r block efile . Free h&r block efile . Free h&r block efile THEN your  maximum capital gain rate is . Free h&r block efile . Free h&r block efile . Free h&r block efile a collectibles gain 28% an eligible gain on qualified small business stock minus the section 1202 exclusion 28% an unrecaptured section 1250 gain 25% other gain1 and the regular tax rate that would apply is 39. Free h&r block efile 6% 20% other gain1 and the regular tax rate that would apply is 25%, 28%, 33%, or 35% 15% other gain1 and the regular tax rate that would apply is 10% or 15% 0% 1 Other gain means any gain that is not collectibles gain, gain on qualified small business stock, or unrecaptured section 1250 gain. Free h&r block efile     Collectibles gain or loss. Free h&r block efile   This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year. Free h&r block efile   Collectibles gain includes gain from sale of an interest in a partnership, S corporation, or trust due to unrealized appreciation of collectibles. Free h&r block efile Gain on qualified small business stock. Free h&r block efile    If you realized a gain from qualified small business stock that you held more than 5 years, you generally can exclude some or all of your gain under section 1202. Free h&r block efile The eligible gain minus your section 1202 exclusion is a 28% rate gain. Free h&r block efile See Gains on Qualified Small Business Stock in chapter 4 of Publication 550. Free h&r block efile Unrecaptured section 1250 gain. Free h&r block efile    Generally, this is any part of your capital gain from selling section 1250 property (real property) that is due to depreciation (but not more than your net section 1231 gain), reduced by any net loss in the 28% group. Free h&r block efile Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D (Form 1040) instructions to figure your unrecaptured section 1250 gain. Free h&r block efile For more information about section 1250 property and section 1231 gain, see chapter 3 of Publication 544. Free h&r block efile Tax computation using maximum capital gain rates. Free h&r block efile   Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet (whichever applies) to figure your tax if you have qualified dividends or net capital gain. Free h&r block efile You have net capital gain if Schedule D (Form 1040), lines 15 and 16, are both gains. Free h&r block efile Schedule D Tax Worksheet. Free h&r block efile   Use the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions to figure your tax if: You have to file Schedule D (Form 1040); and Schedule D (Form 1040), line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain), is more than zero. Free h&r block efile Qualified Dividends and Capital Gain Tax Worksheet. Free h&r block efile   If you do not have to use the Schedule D Tax Worksheet (as explained above) and any of the following apply, use the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040 or Form 1040A (whichever you file) to figure your tax. Free h&r block efile You received qualified dividends. Free h&r block efile (See Qualified Dividends in chapter 8. Free h&r block efile ) You do not have to file Schedule D (Form 1040) and you received capital gain distributions. Free h&r block efile (See Exceptions to filing Form 8949 and Schedule D (Form 1040) , earlier. Free h&r block efile ) Schedule D (Form 1040), lines 15 and 16, are both more than zero. Free h&r block efile Alternative minimum tax. Free h&r block efile   These capital gain rates are also used in figuring alternative minimum tax. Free h&r block efile Prev  Up  Next   Home   More Online Publications
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The Free H&r Block Efile

Free h&r block efile Publication 4492 - Main Contents Table of Contents DefinitionsHurricane Katrina Disaster Area Katrina Covered Disaster Area Gulf Opportunity (GO) Zone (Core Disaster Area) Hurricane Rita Disaster Area (Rita Covered Disaster Area) Rita GO Zone Hurricane Wilma Disaster Area Wilma Covered Disaster Area Wilma GO Zone Extended Tax Deadlines Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Charitable Deduction for Contributions of Food Inventory Charitable Deduction for Contributions of Book Inventories to Public Schools Casualty and Theft LossesTime limit for making election. Free h&r block efile Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Hurricane Distributions Repayment of Qualified Hurricane Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by Hurricane Katrina Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Work Opportunity Credit Employee Retention Credit Hurricane Katrina Housing Credit Reforestation Costs Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax Help Definitions The following definitions are used throughout this publication. Free h&r block efile Hurricane Katrina Disaster Area The Hurricane Katrina disaster area covers the area for which the President declared a major disaster before September 14, 2005, because of Hurricane Katrina. Free h&r block efile The Hurricane Katrina disaster area covers the entire states of Alabama, Florida, Louisiana, and Mississippi. Free h&r block efile Katrina Covered Disaster Area A portion of the Hurricane Katrina disaster area has been designated by the IRS as a covered disaster area. Free h&r block efile The Katrina covered disaster area covers the following areas in four states. Free h&r block efile Alabama. Free h&r block efile   The counties of Baldwin, Bibb, Choctaw, Clarke, Colbert, Cullman, Greene, Hale, Jefferson, Lamar, Lauderdale, Marengo, Marion, Mobile, Monroe, Perry, Pickens, Sumter, Tuscaloosa, Washington, Wilcox, and Winston. Free h&r block efile Florida. Free h&r block efile   The counties of Bay, Broward, Collier, Escambia, Franklin, Gulf, Miami-Dade, Monroe, Okaloosa, Santa Rosa, and Walton. Free h&r block efile Louisiana. Free h&r block efile   All parishes. Free h&r block efile Mississippi. Free h&r block efile   All counties. Free h&r block efile Gulf Opportunity (GO) Zone (Core Disaster Area) The GO Zone (also called the core disaster area) covers the portion of the Hurricane Katrina disaster area determined by the Federal Emergency Management Agency (FEMA) to be eligible for either individual only or both individual and public assistance from the Federal Government. Free h&r block efile The GO Zone covers the following areas in three states. Free h&r block efile Alabama. Free h&r block efile   The counties of Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa, and Washington. Free h&r block efile Louisiana. Free h&r block efile   The parishes of Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Free h&r block efile Bernard, St. Free h&r block efile Charles, St. Free h&r block efile Helena, St. Free h&r block efile James, St. Free h&r block efile John the Baptist, St. Free h&r block efile Martin, St. Free h&r block efile Mary, St. Free h&r block efile Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge, and West Feliciana. Free h&r block efile Mississippi. Free h&r block efile   The counties of Adams, Amite, Attala, Choctaw, Claiborne, Clarke, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston, and Yazoo. Free h&r block efile Hurricane Rita Disaster Area (Rita Covered Disaster Area) The Hurricane Rita disaster area (also designated by the IRS as the Rita covered disaster area) covers the area for which the President declared a major disaster before October 6, 2005, because of Hurricane Rita. Free h&r block efile This area covers the entire states of Louisiana and Texas. Free h&r block efile Rita GO Zone The Rita GO Zone covers the portion of the Hurricane Rita disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. Free h&r block efile The Rita GO Zone covers the following areas in two states. Free h&r block efile Louisiana. Free h&r block efile   The parishes of Acadia, Allen, Ascension, Beauregard, Calcasieu, Cameron, Evangeline, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Plaquemines, Sabine, St. Free h&r block efile Landry, St. Free h&r block efile Martin, St. Free h&r block efile Mary, St. Free h&r block efile Tammany, Terrebonne, Vermilion, Vernon, and West Baton Rouge. Free h&r block efile Texas. Free h&r block efile   The counties of Angelina, Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity, Tyler, and Walker. Free h&r block efile Hurricane Wilma Disaster Area The Hurricane Wilma disaster area covers the area for which the President declared a major disaster before November 14, 2005, because of Hurricane Wilma. Free h&r block efile The Hurricane Wilma disaster area covers the entire state of Florida. Free h&r block efile Wilma Covered Disaster Area A portion of the Hurricane Wilma disaster area has been designated by the IRS as a covered disaster area. Free h&r block efile The Wilma covered disaster area covers the following counties. Free h&r block efile Florida. Free h&r block efile   Brevard, Broward, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Osceola, Palm Beach, Polk, St. Free h&r block efile Lucie, and Sarasota. Free h&r block efile Wilma GO Zone The Wilma GO Zone covers the portion of the Hurricane Wilma disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. Free h&r block efile The Wilma GO Zone covers the following counties. Free h&r block efile Florida. Free h&r block efile   Brevard, Broward, Collier, Glades, Hendry, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, and St. Free h&r block efile Lucie. Free h&r block efile Extended Tax Deadlines The IRS has extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Katrina, Rita, or Wilma, until February 28, 2006. Free h&r block efile The extension applies to deadlines (either an original or extended due date) that occur during the following periods. Free h&r block efile After August 28, 2005 (August 23, 2005, for Florida affected taxpayers), and before February 28, 2006, for taxpayers affected by Hurricane Katrina. Free h&r block efile After September 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Rita. Free h&r block efile After October 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Wilma. Free h&r block efile Affected taxpayer. Free h&r block efile   The following taxpayers are eligible for the extension. Free h&r block efile Any individual whose main home is located in a covered disaster area. Free h&r block efile Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Free h&r block efile Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained or whose tax professional's office is in a covered disaster area. Free h&r block efile The main home or principal place of business does not have to be located in the covered area. Free h&r block efile Any individual visiting a county or parish in the Hurricane Katrina or Hurricane Rita covered disaster area that was injured or killed (and the estate of an individual killed) as a result of the hurricane or its aftermath. Free h&r block efile Any estate or trust whose tax records needed to meet a filing or payment deadline are maintained in a covered disaster area. Free h&r block efile Generally, any individual who is a worker assisting in the relief activities in a covered disaster area. Free h&r block efile However, a relief worker assisting in the Wilma covered disaster area is not an affected taxpayer unless the worker is affiliated with a recognized government or philanthropic organization assisting in the relief activities. Free h&r block efile The spouse of an affected taxpayer, solely with regard to a joint income tax return with that taxpayer. Free h&r block efile   To ensure correct processing, affected taxpayers should write the assigned disaster designation (for example, “Hurricane Katrina”) in red ink at the top of any forms or documents filed with the IRS. Free h&r block efile Affected taxpayers can also identify themselves to the IRS or ask hurricane-related questions by calling the special IRS disaster hotline at 1-866-562-5227. Free h&r block efile Acts extended. Free h&r block efile   Deadlines for performing the following acts are extended. Free h&r block efile Filing any return of income, estate, gift, generation-skipping transfer, excise, or employment tax. Free h&r block efile Paying any income, estate, gift, generation-skipping transfer, excise, or employment tax. Free h&r block efile This includes making estimated tax payments. Free h&r block efile Making certain contributions, distributions, recharacterizing contributions, or making a rollover to or from a qualified retirement plan. Free h&r block efile Filing certain petitions with the Tax Court. Free h&r block efile Filing a claim for credit or refund of any tax. Free h&r block efile Bringing suit upon a claim for credit or refund. Free h&r block efile Certain other acts described in Revenue Procedure 2005-27. Free h&r block efile You can find Revenue Procedure 2005-27 on page 1050 of Internal Revenue Bulletin 2005-20 at www. Free h&r block efile irs. Free h&r block efile gov/pub/irs-irbs/irb05-20. Free h&r block efile pdf. Free h&r block efile Forgiveness of interest and penalties. Free h&r block efile   The IRS may forgive the interest and penalties on any underpaid income, estate, gift, employment, or excise tax for the length of any extension. Free h&r block efile Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions Individuals. Free h&r block efile   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% adjusted gross income (AGI) limit. Free h&r block efile A qualified contribution is a charitable contribution paid in cash or by check after August 27, 2005, and before January 1, 2006, to a 50% limit organization (other than certain private foundations described in section 509(a)(3)) if you make an election to have the 50% limit not apply to these contributions. Free h&r block efile   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. Free h&r block efile You can carry over any contributions you are not able to deduct for 2005 because of this limit. Free h&r block efile In 2006, treat the carryover of your unused qualified contributions as a carryover of contributions subject to the 50% limit. Free h&r block efile Exception. Free h&r block efile   Qualified contributions do not include a contribution to a segregated fund or account for which you (or any person you appoint or designate) have or expect to have advisory privileges with respect to distributions or investments based on your contribution. Free h&r block efile Corporations. Free h&r block efile   A corporation may elect to deduct qualified cash contributions without regard to the 10% taxable income limit if the contributions were made after August 27, 2005, and before January 1, 2006, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3)), for Hurricane Katrina, Rita, or Wilma relief efforts. Free h&r block efile The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. Free h&r block efile Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% limit. Free h&r block efile Partners and shareholders. Free h&r block efile   Each partner in a partnership and each shareholder in an S corporation makes a separate election to have the appropriate limit not apply. Free h&r block efile More information. Free h&r block efile   For more information, see Publication 526 or Publication 542, Corporations. Free h&r block efile Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. Free h&r block efile Standard Mileage Rate for Charitable Use of Vehicles The following are special standard mileage rates in effect in 2005 and 2006 for the cost of operating your automobile for providing charitable services solely related to Hurricane Katrina. Free h&r block efile 29 cents per mile for the period August 25 through August 31, 2005. Free h&r block efile 34 cents per mile for the period September 1 through December 31, 2005. Free h&r block efile 32 cents per mile for the period January 1 through December 31, 2006. Free h&r block efile Mileage Reimbursements to Charitable Volunteers You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger automobile for the benefit of a qualified charitable organization in providing relief related to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. Free h&r block efile You cannot claim a deduction or credit for amounts you receive as a mileage reimbursement. Free h&r block efile You must keep records of miles driven, time, place (or use), and purpose of the mileage. Free h&r block efile The amount you can exclude from income cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. Free h&r block efile 40. Free h&r block efile 5 cents per mile for the period August 25 through August 31, 2005. Free h&r block efile 48. Free h&r block efile 5 cents per mile for the period September 1 through December 31, 2005. Free h&r block efile 44. Free h&r block efile 5 cents per mile for the period January 1 through December 31, 2006. Free h&r block efile Charitable Deduction for Contributions of Food Inventory Any taxpayer engaged in a trade or business is eligible to claim a deduction for a contribution of “apparently wholesome food” inventory to a qualified charitable organization described in section 501(c)(3) (except for private nonoperating foundations) after August 27, 2005, and before January 1, 2006. Free h&r block efile “Apparently wholesome food” is food that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions. Free h&r block efile The deduction is equal to the lesser of: The basis of the donated food plus one-half of the gain that would have been realized if the donated food had been sold at fair market value on the date of the donation, or Two times the basis of the donated food. Free h&r block efile The taxpayer must receive written certification from the donee stating: The donated food is related to the purpose or function of the donee's basis for exemption under section 501(c)(3) and is to be used solely for the care of the ill, the needy, or infants; and The food was not given in exchange for money, other property, or services. Free h&r block efile For a taxpayer other than a C corporation, the deduction is limited to 10% of the taxpayer's total net income from all trades or businesses from which the food contributions were made (figured without regard to the deduction for charitable contributions). Free h&r block efile For example, if a taxpayer is a sole proprietor, a shareholder in an S corporation, and a partner in a partnership, and each made a contribution of apparently wholesome food inventory, the taxpayer's deduction is limited to 10% of the taxpayer's total net income from the sole proprietorship, S corporation, and partnership (figured without regard to the deduction for charitable contributions). Free h&r block efile Charitable Deduction for Contributions of Book Inventories to Public Schools A corporation (other than an S corporation) may be allowed a charitable deduction for a qualified book contribution made after August 27, 2005, and before January 1, 2006, to a public school that: Provides elementary or secondary education (kindergarten through grade 12), and Normally maintains a regular faculty and curriculum and has a regular enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Free h&r block efile . Free h&r block efile The deduction is equal to the lesser of: The basis of the donated books plus one-half of the gain that would have been realized if the donated books had been sold at fair market value on the date of the donation, or Two times the basis of the donated books. Free h&r block efile The corporation must receive written certification from the school stating that the donated books are suitable for the organization's educational programs and will be used for such programs. Free h&r block efile Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that were caused by Hurricane Katrina, Rita, or Wilma. Free h&r block efile For more information, see Publication 547. Free h&r block efile Limits on personal casualty or theft losses caused by Hurricane Katrina, Rita, or Wilma. Free h&r block efile   The following losses to personal use property are not subject to the $100 or 10% of adjusted gross income limits. Free h&r block efile Losses that arose in the Hurricane Katrina disaster area after August 24, 2005, and that were caused by Hurricane Katrina. Free h&r block efile Losses that arose in the Hurricane Rita disaster area after September 22, 2005, and that were caused by Hurricane Rita. Free h&r block efile Losses that arose in the Hurricane Wilma disaster area after October 22, 2005, and that were caused by Hurricane Wilma. Free h&r block efile Qualifying losses include losses from flooding or other casualty, and from theft, that arose in the hurricane disaster area and that were caused by the hurricane. Free h&r block efile Special instructions for individuals who elect to claim a Hurricane Katrina, Rita, or Wilma casualty or theft loss for 2004. Free h&r block efile   Casualty and theft losses are generally deductible only in the year the casualty occurred or theft was discovered. Free h&r block efile However, Hurricane Katrina, Rita, and Wilma are Presidentially declared disasters. Free h&r block efile Therefore, you can elect to deduct losses from these hurricanes on your tax return for the previous year. Free h&r block efile If you make this election, use the following additional instructions to complete your forms. Free h&r block efile   Individuals filing or amending their 2004 tax return whose only casualty or theft losses to personal use property claimed on that return were caused by Hurricane Katrina, Rita, or Wilma should write “Hurricane Katrina,” “Hurricane Rita,” or “Hurricane Wilma” at the top of Form 1040 or 1040X. Free h&r block efile They must also complete and attach the 2004 Form 4684 and write “Hurricane Katrina,”“Hurricane Rita,” or “Hurricane Wilma” on the dotted line next to line 11 and enter -0- on lines 11 and 17. Free h&r block efile   Individuals filing or amending their 2004 tax return who also have casualty or theft losses to personal use property not related to Hurricane Katrina, Rita, or Wilma should disregard the caution directing taxpayers to use only one Form 4684, located above line 13, and complete lines 13 through 18 on two Forms 4684. Free h&r block efile The Form 1040 or 1040X and the first Form 4684 should be prepared as explained above for Hurricane Katrina, Rita, or Wilma losses only. Free h&r block efile The second Form 4684 should be prepared in the normal manner for all gains and non-Hurricane Katrina, Rita or Wilma losses. Free h&r block efile If both Forms 4684 have a loss on line 18, they should carry the combined losses from that line to Schedule A (Form 1040), line 19. Free h&r block efile If there is a gain on line 15 of the second Form 4684, disregard the instruction to enter it on Schedule D (Form 1040), and instead enter on Schedule A (Form 1040), line 19, the excess of the loss from the first Form 4684 over the gain on line 15 of the second Form 4684. Free h&r block efile , Time limit for making election. Free h&r block efile   You must make this election to claim your casualty or theft loss in 2004 by the later of the following dates. Free h&r block efile The due date (without extensions) for filing your 2005 income tax return. Free h&r block efile The due date (with extensions) for filing your 2004 income tax return. Free h&r block efile Example. Free h&r block efile If you are a calendar year individual taxpayer, you have until April 17, 2006, to amend your 2004 tax return to claim a casualty or theft loss that occurred during 2005. Free h&r block efile Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Free h&r block efile Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). Free h&r block efile However, for property that was involuntarily converted after August 24, 2005, as a result of Hurricane Katrina, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. Free h&r block efile For more information, see the Instructions for Form 4684. Free h&r block efile Net Operating Losses Qualified GO Zone loss. Free h&r block efile   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Free h&r block efile However, the portion of an NOL that is a qualified GO Zone loss can be carried back to the 5 tax years before the NOL year. Free h&r block efile In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Free h&r block efile   A qualified GO Zone loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified GO Zone casualty loss (as defined below), Moving expenses paid or incurred after August 27, 2005, and before January 1, 2008, for the employment of an individual whose main home was in the GO Zone before August 28, 2005, who was unable to remain in that home because of Hurricane Katrina, and whose main job location (after the move) is in the GO Zone, Temporary housing expenses paid or incurred after August 27, 2005, and before January 1, 2008, to house employees of the taxpayer whose main job location is in the GO Zone, Depreciation or amortization allowable for any qualified GO Zone property (even if you elected not to claim the special GO Zone depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after August 27, 2005, and before January 1, 2008, for any damage from Hurricane Katrina to property located in the GO Zone. Free h&r block efile Qualified GO Zone casualty loss. Free h&r block efile   A qualified GO Zone casualty loss is any deductible section 1231 loss of property located in the GO Zone if the loss was caused by Hurricane Katrina. Free h&r block efile For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by Hurricane Katrina of property located in the GO Zone. Free h&r block efile Any such loss taken into account in figuring your qualified GO Zone loss is not eligible for the election to be treated as having occurred in the previous tax year. Free h&r block efile 5-year NOL carryback of certain timber losses. Free h&r block efile   Generally, you can carry the portion of an NOL due to income and deductions attributable to a farming business back to the 5 tax years before the NOL year. Free h&r block efile You can treat income and deductions attributable to qualified timber property as attributable to a farming business if any portion of the property is located in the GO Zone, Rita GO Zone, or Wilma GO Zone, and the income and deductions are allocable to the part of your tax year which is after the applicable date below. Free h&r block efile August 27, 2005, if any portion of the property is located in the GO Zone. Free h&r block efile September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). Free h&r block efile October 22, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the RITA GO Zone). Free h&r block efile   These rules will not apply after 2006. Free h&r block efile   However, these rules apply only to a timber producer who: Held qualified timber property (defined in Publication 535, Business Expenses) on the applicable date below: August 28, 2005, if any portion of the property is located in the GO Zone, September 23, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone), or October 23, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the Rita GO Zone); Is not a corporation with stock publicly traded on an established securities market; Is not a real estate investment trust; and Did not hold more than 500 acres of qualified timber property on the applicable date above. Free h&r block efile More information. Free h&r block efile   For more information on NOLs, see Publication 536 or Publication 542, Corporations. Free h&r block efile IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of Hurricane Katrina, Rita, or Wilma. Free h&r block efile Definitions Qualified hurricane distribution. Free h&r block efile   A qualified hurricane distribution is any distribution you received from an eligible retirement plan if all of the following apply. Free h&r block efile The distribution was made: After August 24, 2005, and before January 1, 2007, for Hurricane Katrina; After September 22, 2005, and before January 1, 2007, for Hurricane Rita; or After October 22, 2005, and before January 1, 2007, for Hurricane Wilma. Free h&r block efile Your main home was located in a hurricane disaster area listed below on the date shown for that area. Free h&r block efile August 28, 2005, for the Hurricane Katrina disaster area. Free h&r block efile September 23, 2005, for the Hurricane Rita disaster area. Free h&r block efile October 23, 2005, for the Hurricane Wilma disaster area. Free h&r block efile You sustained an economic loss because of Hurricane Katrina, Rita, or Wilma and your main home was in that hurricane disaster area on the date shown in (2) above for that hurricane. Free h&r block efile Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Free h&r block efile   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified hurricane distribution, regardless of whether the distribution was made on account of Hurricane Katrina, Rita, or Wilma. Free h&r block efile Qualified hurricane distributions are permitted without regard to your need or the actual amount of your economic loss. Free h&r block efile   The total of your qualified hurricane distributions from all plans is limited to $100,000. Free h&r block efile If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. Free h&r block efile   A reduction or offset (after August 24, 2005, for Katrina; after September 22, 2005, for Rita; or after October 22, 2005, for Wilma) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified hurricane distribution. Free h&r block efile Eligible retirement plan. Free h&r block efile   An eligible retirement plan can be any of the following. Free h&r block efile A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Free h&r block efile A qualified annuity plan. Free h&r block efile A tax-sheltered annuity contract. Free h&r block efile A governmental section 457 deferred compensation plan. Free h&r block efile A traditional, SEP, SIMPLE, or Roth IRA. Free h&r block efile Main home. Free h&r block efile   Generally, your main home is the home where you live most of the time. Free h&r block efile A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Free h&r block efile Taxation of Qualified Hurricane Distributions Qualified hurricane distributions are included in income in equal amounts over three years. Free h&r block efile However, if you elect, you can include the entire distribution in your income in the year it was received. Free h&r block efile Qualified hurricane distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Free h&r block efile However, any distributions you receive in excess of the $100,000 qualified hurricane distribution limit may be subject to the additional tax on early distributions. Free h&r block efile For more information, see Form 8915. Free h&r block efile Repayment of Qualified Hurricane Distributions If you choose, you generally can repay any portion of a qualified hurricane distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Free h&r block efile Also, you can repay a qualified hurricane distribution made on account of a hardship from a retirement plan. Free h&r block efile However, see Exceptions below for qualified hurricane distributions you cannot repay. Free h&r block efile You have three years from the day after the date you received the distribution to make a repayment. Free h&r block efile Amounts that are repaid are treated as a qualified rollover and are not included in income. Free h&r block efile Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Free h&r block efile See Form 8915 for more information on how to report repayments. Free h&r block efile Exceptions. Free h&r block efile   You cannot repay the following types of distributions. Free h&r block efile Qualified hurricane distributions received as a beneficiary (other than a surviving spouse). Free h&r block efile Required minimum distributions. Free h&r block efile Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. Free h&r block efile Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area, you can repay that distribution before March 1, 2006, to an eligible retirement plan after August 24, 2005 (Katrina); after September 22, 2005 (Rita); or after October 22, 2005 (Wilma). Free h&r block efile For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Free h&r block efile To be a qualified distribution, the distribution must meet all of the following requirements. Free h&r block efile The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. Free h&r block efile The distribution was received in 2005 after February 28 and before: August 29 for Hurricane Katrina; September 24 for Hurricane Rita; or October 24 for Hurricane Wilma. Free h&r block efile The distribution was to be used to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area that was not purchased or constructed because of Hurricane Katrina, Rita, or Wilma. Free h&r block efile Amounts that are repaid before March 1, 2006, are treated as a qualified rollover and are not included in income. Free h&r block efile Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Free h&r block efile A qualified distribution not repaid before March 1, 2006, may be taxable for 2005 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Free h&r block efile You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before March 1, 2006. Free h&r block efile Loans From Qualified Plans The following benefits are available to qualified individuals. Free h&r block efile Increases to the limits for distributions treated as loans from employer plans. Free h&r block efile A 1-year suspension for payments due on plan loans. Free h&r block efile Qualified individual. Free h&r block efile   You are a qualified individual if any of the following apply. Free h&r block efile Your main home on August 28, 2005, was located in the Hurricane Katrina disaster area and you had an economic loss because of Hurricane Katrina. Free h&r block efile Your main home on September 23, 2005, was located in the Hurricane Rita disaster area and you had an economic loss because of Hurricane Rita. Free h&r block efile Your main home on October 23, 2005, was located in the Hurricane Wilma disaster area and you had an economic loss because of Hurricane Wilma. Free h&r block efile Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Free h&r block efile Limits on plan loans. Free h&r block efile   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Free h&r block efile In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Free h&r block efile The higher limits apply only to loans received during the following period. Free h&r block efile If your main home was located in the Hurricane Katrina disaster area, the period began on September 24, 2005, and ends on December 31, 2006. Free h&r block efile If your main home was located in the Hurricane Rita or Wilma disaster area, the period began on December 21, 2005, and ends on December 31, 2006. Free h&r block efile If you are a qualified individual based on Hurricane Katrina and another hurricane, use the period based on Hurricane Katrina. Free h&r block efile One-year suspension of loan payments. Free h&r block efile   Payments on plan loans due before 2007 may be suspended for 1 year by the plan administrator. Free h&r block efile To qualify for the suspension, the due date for any loan payment must occur during the period beginning on: August 28, 2005, if your main home was located in the Hurricane Katrina disaster area. Free h&r block efile September 23, 2005, if your main home was located in the Hurricane Rita disaster area. Free h&r block efile October 23, 2005, if your main home was located in the Hurricane Wilma disaster area. Free h&r block efile If you are a qualified individual based on more than one hurricane, use the period with the earliest beginning date. Free h&r block efile Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit You can elect to use your 2004 earned income to figure your earned income credit (EIC) and additional child tax credit for 2005 if: Your 2005 earned income is less than your 2004 earned income, and At least one of the following statements is true. Free h&r block efile Your main home on August 25, 2005, was in the Gulf Opportunity (GO) Zone. Free h&r block efile Your main home on August 25, 2005, was in the Hurricane Katrina disaster area and you were displaced from that home because of Hurricane Katrina. Free h&r block efile Your main home on September 23, 2005, was in the Rita GO Zone. Free h&r block efile Your main home on September 23, 2005, was in the Hurricane Rita disaster area and you were displaced from that home because of Hurricane Rita. Free h&r block efile Your main home on October 23, 2005, was in the Wilma GO Zone. Free h&r block efile Your main home on October 23, 2005, was in the Hurricane Wilma disaster area and you were displaced from that home because of Hurricane Wilma. Free h&r block efile Earned income. Free h&r block efile    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. Free h&r block efile If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. Free h&r block efile Joint returns. Free h&r block efile   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. Free h&r block efile If you make the election, your 2004 earned income is the sum of your 2004 earned income and your spouse's 2004 earned income. Free h&r block efile Making the election. Free h&r block efile   If you make the election to use your 2004 earned income, the election applies for figuring both the EIC and the additional child tax credit. Free h&r block efile However, you can make the election for the additional child tax credit even if you do not take the EIC. Free h&r block efile   Electing to use your 2004 earned income may increase or decrease your EIC. Free h&r block efile Take the following steps to decide whether to make the election. Free h&r block efile Figure your 2005 EIC using your 2004 earned income. Free h&r block efile Figure your 2005 additional child tax credit using your 2004 earned income for EIC purposes. Free h&r block efile Add the results of (1) and (2). Free h&r block efile Figure your 2005 EIC using your 2005 earned income. Free h&r block efile Figure your 2005 additional child tax credit using your 2005 earned income for additional child tax credit purposes. Free h&r block efile Add the results of (4) and (5). Free h&r block efile Compare the results of (3) and (6). Free h&r block efile If (3) is larger than (6), it is to your benefit to make the election. Free h&r block efile If (3) is equal to or smaller than (6), making the election will not help you. Free h&r block efile   If you elect to use your 2004 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2004 earned income on the dotted line next to line 66a of Form 1040, on the line next to line 41a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. Free h&r block efile   If you elect to use your 2004 earned income and you are claiming the additional child tax credit, enter your 2004 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. Free h&r block efile   Because Form 8812 was released before the GO Zone legislation was enacted, the instructions refer only to individuals whose main home was in the Hurricane Katrina disaster area. Free h&r block efile When completing Form 8812, line 4a, use the above rules to determine your eligibility to make the election (instead of the Form 8812 instructions). Free h&r block efile Getting your 2004 tax return information. Free h&r block efile   If you do not have your 2004 tax records, you can get the amount of earned income used to figure your 2004 EIC by calling 1-866-562-5227. Free h&r block efile You can also get this information by visiting the IRS website at www. Free h&r block efile irs. Free h&r block efile gov. Free h&r block efile   If you prefer to figure your 2004 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. Free h&r block efile See Request for Copy or Transcript of Tax Return on page 16. Free h&r block efile Additional Exemption for Housing Individuals Displaced by Hurricane Katrina You may be able to claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by Hurricane Katrina. Free h&r block efile The additional exemption amount is claimed on new Form 8914. Free h&r block efile The additional exemption amount is allowable once per taxpayer for a specific individual in 2005 or 2006, but not in both years. Free h&r block efile The maximum additional exemption amount you can claim for all displaced individuals is $2,000 ($1,000 if married filing separately). Free h&r block efile The additional exemption amount you claim for displaced individuals in 2005 will reduce the $2,000 maximum for 2006. Free h&r block efile If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. Free h&r block efile If married filing separately, only one spouse may claim the additional exemption amount for a specific displaced individual. Free h&r block efile In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). Free h&r block efile To qualify as a displaced individual, the individual: Must have had his or her main home in the Hurricane Katrina disaster area on August 28, 2005, and he or she must have been displaced from that home. Free h&r block efile If the individual's main home was located outside the core disaster area, that home must have been damaged by Hurricane Katrina or the individual must have been evacuated from that home because of Hurricane Katrina, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. Free h&r block efile You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. Free h&r block efile You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. Free h&r block efile Food, clothing, or personal items consumed or used by the displaced individual. Free h&r block efile Reimbursement for the cost of any long distance telephone calls made by the displaced individual. Free h&r block efile Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. Free h&r block efile However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. Free h&r block efile Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. Free h&r block efile For more information, see Form 8914. Free h&r block efile Education Credits The education credits have been expanded for students attending an eligible educational institution located in the Gulf Opportunity Zone (GOZ students) for any tax year beginning in 2005 or 2006. Free h&r block efile The Hope credit for a GOZ student is increased to 100% of the first $2,000 in qualified education expenses and 50% of the next $2,000 of qualified education expenses for a maximum credit of $3,000 per student. Free h&r block efile The lifetime learning credit rate for a GOZ student is increased from 20% to 40%. Free h&r block efile The definition of qualified education expenses for a GOZ student also has been expanded. Free h&r block efile In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a GOZ student include the following. Free h&r block efile Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Free h&r block efile For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. Free h&r block efile For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. Free h&r block efile The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. Free h&r block efile The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Free h&r block efile You will need to contact the eligible educational institution for qualified room and board costs. Free h&r block efile For more information, see Form 8863. Free h&r block efile Recapture of Federal Mortgage Subsidy Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. Free h&r block efile However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. Free h&r block efile This amount is increased to $150,000 if the loan was provided before 2011 and was used to: Repair damage caused by Hurricane Katrina to a residence in the Hurricane Katrina disaster area, or Alter, repair, or improve an existing owner-occupied residence in the GO Zone, Rita GO Zone, or Wilma GO Zone. Free h&r block efile Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Generally, discharges of nonbusiness debts (such as mortgages) made after August 24, 2005, and before January 1, 2007, are excluded from income for individuals whose main home was in the Hurricane Katrina disaster area on August 25, 2005. Free h&r block efile If the individual's main home was located outside the core disaster area, the individual also must have had an economic loss because of Hurricane Katrina. Free h&r block efile Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Free h&r block efile This relief does not apply to any debt secured by real property located outside the Hurricane Katrina disaster area. Free h&r block efile You may also have to reduce certain tax attributes by the amount excluded. Free h&r block efile For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Free h&r block efile Tax Relief for Temporary Relocation Under the Gulf Opportunity Zone Act of 2005, the IRS may adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2005 or 2006 as a result of a temporary relocation caused by Hurricane Katrina, Rita, or Wilma. Free h&r block efile However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. Free h&r block efile The IRS has exercised this authority as follows. Free h&r block efile In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. Free h&r block efile In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. Free h&r block efile You can treat as a student an individual who enrolled in school before August 25, 2005, and who is unable to attend classes because of Hurricane Katrina, for each month of the enrollment period that individual is prevented by Hurricane Katrina from attending school as planned. Free h&r block efile You can treat as a student an individual who enrolled in school before September 23, 2005, and who is unable to attend classes because of Hurricane Rita, for each month of the enrollment period that individual is prevented by Hurricane Rita from attending school as planned. Free h&r block efile You can treat as a student an individual who enrolled in school before October 23, 2005, and who is unable to attend classes because of Hurricane Wilma, for each month of the enrollment period that individual is prevented by Hurricane Wilma from attending school as planned. Free h&r block efile Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified Gulf Opportunity (GO) Zone property (as defined below) you place in service after August 27, 2005. Free h&r block efile The allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). Free h&r block efile The special allowance applies only for the first year the property is placed in service. Free h&r block efile The allowance is deductible for both the regular tax and the alternative minimum tax (AMT). Free h&r block efile There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Free h&r block efile You can elect not to deduct the special GO Zone depreciation allowance for qualified property. Free h&r block efile If you make this election for any property, it applies to all property in the same class placed in service during the year. Free h&r block efile Qualified GO Zone property. Free h&r block efile   Property that qualifies for the special GO Zone depreciation allowance includes the following. Free h&r block efile Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. Free h&r block efile Water utility property. Free h&r block efile Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. Free h&r block efile (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Free h&r block efile ) Qualified leasehold improvement property. Free h&r block efile Nonresidential real property and residential rental property. Free h&r block efile   For more information on this property, see Publication 946. Free h&r block efile Other tests to be met. Free h&r block efile   To be qualified GO Zone property, the property must also meet all of the following tests. Free h&r block efile You must have acquired the property, by purchase, after August 27, 2005, but only if no binding written contract for the acquisition was in effect before August 28, 2005. Free h&r block efile The property must be placed in service before 2008 (2009 in the case of nonresidential real property and residential rental property). Free h&r block efile Substantially all of the use of the property must be in the GO Zone and in the active conduct of your trade or business in the GO Zone. Free h&r block efile The original use of the property in the GO Zone must begin with you after August 27, 2005. Free h&r block efile Used property can be qualified GO Zone property if it has not previously been used within the GO Zone. Free h&r block efile Also, additional capital expenditures you incurred after August 27, 2005, to recondition or rebuild your property meet the original use test if the original use of the property in the GO Zone began with you. Free h&r block efile Excepted property. Free h&r block efile   Qualified GO Zone property does not include any of the following. Free h&r block efile Property required to be depreciated using the Alternative Depreciation System (ADS). Free h&r block efile Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. Free h&r block efile Property for which you are claiming a commercial revitalization deduction. Free h&r block efile Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. Free h&r block efile Any gambling or animal racing property (as defined below). Free h&r block efile Property in the same class as that for which you elected not to claim the special GO Zone depreciation allowance. Free h&r block efile   Gambling or animal racing property is: Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and The portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. Free h&r block efile Recapture of special allowance. Free h&r block efile   If, in any year after the year you claim the special allowance, the property ceases to be qualified GO Zone property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. Free h&r block efile Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 Gulf Opportunity (GO) Zone property (as defined later) placed in service in the GO Zone. Free h&r block efile Increased dollar limit. Free h&r block efile   The limit on the section 179 deduction ($105,000 for 2005, $108,000 for 2006) for qualified section 179 GO Zone property acquired after August 27, 2005, is increased by the smaller of: $100,000, or The cost of qualified section 179 GO Zone property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). Free h&r block efile   The amount for which you can make the election is reduced if the cost of all qualified section 179 GO Zone property you placed in service during the year exceeds $420,000 for 2005 ($430,000 for 2006) increased by the smaller of: $600,000, or The cost of qualified section 179 GO Zone property placed in service during the year. Free h&r block efile Qualified section 179 GO Zone property. Free h&r block efile   Qualified section 179 GO Zone property is section 179 property that is qualified GO Zone property (explained earlier under Special Depreciation Allowance). Free h&r block efile Section 179 property does not include nonresidential real property or residential rental property. Free h&r block efile For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. Free h&r block efile Work Opportunity Credit For the work opportunity credit, the definition of “targeted group employee” has been expanded to include a Hurricane Katrina employee. Free h&r block efile Hurricane Katrina employee. Free h&r block efile   A Hurricane Katrina employee is: A person who, on August 28, 2005, had a main home in the core disaster area and, within a two-year period beginning on that date, is hired to perform services principally in the core disaster area; or A person who, on August 28, 2005, had a main home in the core disaster area, was displaced from that main home as a result of Hurricane Katrina, and was hired during the period beginning on August 28, 2005, and ending on December 31, 2005. Free h&r block efile Qualified wages. Free h&r block efile   Generally, qualified wages do not include wages you paid to a targeted group employee who worked for you previously. Free h&r block efile However, wages will qualify if: You paid them to an employee who is a Hurricane Katrina employee, The employee was not in your employment on August 28, 2005, and This is your first hire of the employee as a Hurricane Katrina employee after August 28, 2005. Free h&r block efile   For more information, see Form 5884. Free h&r block efile Certification requirements. Free h&r block efile   An employee must provide to the employer reasonable evidence that he or she is a Hurricane Katrina employee. Free h&r block efile An employer may accept a completed Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, as such evidence. Free h&r block efile The certification requirements described in Form 8850 do not apply to a Hurricane Katrina employee. Free h&r block efile Do not send any Forms 8850 that have only box 1 checked to the state employment security agency. Free h&r block efile Instead, the employer should keep these Forms 8850 with the employer's other records. Free h&r block efile For more information, see Form 8850 and its instructions. Free h&r block efile Employee Retention Credit An eligible employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone, the Rita GO Zone, or the Wilma GO Zone can claim the employee retention credit. Free h&r block efile The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Free h&r block efile Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Free h&r block efile Use Form 5884-A to claim the credit. Free h&r block efile See the following rules and definitions for each hurricane. Free h&r block efile Employers affected by Hurricane Katrina. Free h&r block efile   The following definitions apply to employers affected by Hurricane Katrina. Free h&r block efile Eligible employer. Free h&r block efile   For this purpose, an eligible employer is any employer who conducted an active trade or business on August 28, 2005, in the GO Zone and whose trade or business was inoperable on any day after August 28, 2005, and before January 1, 2006, because of damage caused by Hurricane Katrina. Free h&r block efile Eligible employee. Free h&r block efile   For this purpose, an eligible employee is an employee whose principal place of employment on August 28, 2005, with such eligible employer was in the GO Zone. Free h&r block efile An employee is not an eligible employee for purposes of Hurricane Katrina if the employee is treated as an eligible employee for the work opportunity credit. Free h&r block efile Employers affected by Hurricane Rita. Free h&r block efile   The following definitions apply to employers affected by Hurricane Rita. Free h&r block efile Eligible employer. Free h&r block efile   For this purpose, an eligible employer is any employer who conducted an active trade or business on September 23, 2005, in the Rita GO Zone and whose trade or business was inoperable on any day after September 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Rita. Free h&r block efile Eligible employee. Free h&r block efile   For this purpose, an eligible employee is an employee whose principal place of employment on September 23, 2005, with such eligible employer was in the Rita GO Zone. Free h&r block efile An employee is not an eligible employee for purposes of Hurricane Rita if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina employee retention credit. Free h&r block efile Employers affected by Hurricane Wilma. Free h&r block efile   The following definitions apply to employers affected by Hurricane Wilma. Free h&r block efile Eligible employer. Free h&r block efile   For this purpose, an eligible employer is any employer who conducted an active trade or business on October 23, 2005, in the Wilma GO Zone and whose trade or business was inoperable on any day after October 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Wilma. Free h&r block efile Eligible employee. Free h&r block efile   For this purpose, an eligible employee is an employee whose principal place of employment on October 23, 2005, with such eligible employer was in the Wilma GO Zone. Free h&r block efile An employee is not an eligible employee for purposes of Hurricane Wilma if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina or Rita employee retention credit. Free h&r block efile Qualified wages. Free h&r block efile   Qualified wages are wages you paid or incurred before January 1, 2006, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable hurricane, and ending on the date your trade or business resumed significant operations at that place. Free h&r block efile In addition, the wages must have been paid or incurred after the following date. Free h&r block efile August 28, 2005, for Hurricane Katrina. Free h&r block efile September 23, 2005, for Hurricane Rita. Free h&r block efile October 23, 2005, for Hurricane Wilma. Free h&r block efile    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. Free h&r block efile    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Free h&r block efile Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Free h&r block efile Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Free h&r block efile   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. Free h&r block efile For a special rule that applies to railroad employees, see section 51(h)(1)(B). Free h&r block efile   Qualified wages do not include the following. Free h&r block efile Wages paid to your dependent or a related individual. Free h&r block efile See section 51(i)(1). Free h&r block efile Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. Free h&r block efile Wages for services of replacement workers during a strike or lockout. Free h&r block efile   For more information, see Form 5884-A. Free h&r block efile Hurricane Katrina Housing Credit An employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone can claim the Hurricane Katrina housing credit. Free h&r block efile The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from January 1, 2006, through July 1, 2006. Free h&r block efile The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). Free h&r block efile Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Free h&r block efile The employer must use Form 5884-A to claim the credit. Free h&r block efile A qualified employee is an individual who had a main home in the GO Zone on August 28, 2005, and who performs substantially all employment services in the GO Zone for the employer furnishing the lodging. Free h&r block efile The employee cannot be your dependent or a related individual. Free h&r block efile See section 51(i)(1). Free h&r block efile For more information, see Form 5884-A. Free h&r block efile Reforestation Costs You may be able to elect to deduct a limited amount of reforestation costs for each qualified timber property. Free h&r block efile The deduction for any tax year generally is limited to $10,000 ($5,000 if married filing separately, $0 for a trust). Free h&r block efile However, this limit is increased if you paid or incurred reforestation costs after the applicable date below and any portion of the qualified timber property is located in one of the following areas. Free h&r block efile August 27, 2005, if any portion of the property is located in the GO Zone. Free h&r block efile September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). Free h&r block efile October 22, 2005, if any portion of the property is located in the Wilma GO Zone. Free h&r block efile The limit for each qualified timber property is increased by the smaller of: $10,000 ($5,000 if married filing separately, $0 for a trust), or The amount of reforestation costs you paid or incurred after the applicable date for the qualified timber property, any portion of which is located in the zone described above. Free h&r block efile The increase in the limit applies only to costs paid or incurred before 2008. Free h&r block efile However, these rules do not apply to any timber producer who: Held more than 500 acres of qualified timber property at any time during the tax year, Is a corporation with stock publicly traded on an established securities market, or Is a real estate investment trust. Free h&r block efile For more information about the election to deduct reforestation costs, see chapter 8 in Publication 535, Business Expenses. Free h&r block efile Demolition and Clean-up Costs You can elect to deduct 50% of any qualified GO Zone clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Free h&r block efile Qualified GO Zone clean-up costs are any amounts paid or incurred after August 27, 2005, and before January 1, 2008, for the removal of debris from, or the demolition of structures on, real property located in the GO Zone that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. Free h&r block efile Increase in Rehabilitation Tax Credit The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred after August 27, 2005, and before January 1, 2009, on buildings located in the GO Zone as follows. Free h&r block efile For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. Free h&r block efile For certified historic structures, the credit percentage is increased from 20% to 26%. Free h&r block efile For more information, see Form 3468, Investment Credit. Free h&r block efile Request for Copy or Transcript of Tax Return Request for copy of tax return. Free h&r block efile   You can use Form 4506 to order a copy of your tax return. Free h&r block efile Generally, there is a $39. Free h&r block efile 00 fee for requesting each copy of a tax return. Free h&r block efile If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Hurricane Katrina”) is written in red across the top of the form when filed. Free h&r block efile Request for transcript of tax return. Free h&r block efile   You can use Form 4506-T to order a free transcript of your tax return. Free h&r block efile A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Free h&r block efile You can also call 1-800-829-1040 to order a transcript. Free h&r block efile How To Get Tax Help Special IRS assistance. Free h&r block efile   The IRS is providing special help for those affected by Hurricane Katrina, Rita, or Wilma, as well as survivors and personal representatives of the victims. Free h&r block efile We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by Hurricane Katrina, Rita, or Wilma, or who have other tax issues related to the hurricanes. Free h&r block efile Call 1-866-562-5227 Monday through Friday In English-7 a. Free h&r block efile m. Free h&r block efile to 10 p. Free h&r block efile m. Free h&r block efile local time In Spanish-8 a. Free h&r block efile m. Free h&r block efile to 9:30 p. Free h&r block efile m. Free h&r block efile local time   The IRS website at www. Free h&r block efile irs. Free h&r block efile gov has notices and other tax relief information. Free h&r block efile Check it periodically for any new guidance. Free h&r block efile Other help from the IRS. Free h&r block efile   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Free h&r block efile By selecting the method that is best for you, you will have quick and easy access to tax help. Free h&r block efile Contacting your Taxpayer Advocate. Free h&r block efile   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. 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