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Free income tax help Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. Free income tax help Stock. Free income tax help Options. Free income tax help Determining Fair Market Value Problems in Determining Fair Market Value Valuation of Various Kinds of PropertyHousehold Goods Used Clothing Jewelry and Gems Paintings, Antiques, and Other Objects of Art Collections Cars, Boats, and Aircraft Inventory Patents Stocks and Bonds Real Estate Interest in a Business Annuities, Interests for Life or Terms of Years, Remainders, and Reversions Certain Life Insurance and Annuity Contracts Partial Interest in Property Not in Trust AppraisalsDeductions of More Than $5,000 Deductions of More Than $500,000 Qualified Appraisal Form 8283 Internal Revenue Service Review of Appraisals Penalty How To Get Tax HelpLow income tax clinics (LITCs). Free income tax help What Is Fair Market Value (FMV)? To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution. Free income tax help Fair market value. Free income tax help   Fair market value (FMV) is the price that property would sell for on the open market. Free income tax help It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. Free income tax help If you put a restriction on the use of property you donate, the FMV must reflect that restriction. Free income tax help Example 1. Free income tax help If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. Free income tax help Usually, such items are worth far less than what you paid for them. Free income tax help Example 2. Free income tax help If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted. Free income tax help Factors. Free income tax help   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. Free income tax help These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. Free income tax help   These factors are discussed later. Free income tax help Also, see Table 1 for a summary of questions to ask as you consider each factor. Free income tax help Date of contribution. Free income tax help   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. Free income tax help Stock. Free income tax help   If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. Free income tax help If the certificate is mailed and received through the regular mail, it is the date of mailing. Free income tax help If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation. Free income tax help Options. Free income tax help   If you grant an option to a qualified organization to buy real property, you have not made a charitable contribution until the organization exercises the option. Free income tax help The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. Free income tax help Example. Free income tax help You grant an option to a local university, which is a qualified organization, to buy real property. Free income tax help Under the option, the university could buy the property at any time during a 2-year period for $40,000. Free income tax help The FMV of the property on the date the option is granted is $50,000. Free income tax help In the following tax year, the university exercises the option. Free income tax help The FMV of the property on the date the option is exercised is $55,000. Free income tax help Therefore, you have made a charitable contribution of $15,000 ($55,000, the FMV, minus $40,000, the exercise price) in the tax year the option is exercised. Free income tax help Determining Fair Market Value Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. Free income tax help Usually it is not that simple. Free income tax help Using such formulas, etc. Free income tax help , seldom results in an acceptable determination of FMV. Free income tax help There is no single formula that always applies when determining the value of property. Free income tax help This is not to say that a valuation is only guesswork. Free income tax help You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. Free income tax help For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. Free income tax help When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. Free income tax help On the other hand, it may be an antique, the value of which could not be determined by using any formula. Free income tax help Cost or Selling Price of the Donated Property The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. Free income tax help However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution. Free income tax help The cost or selling price is a good indication of the property's value if: The purchase or sale took place close to the valuation date in an open market, The purchase or sale was at “arm's-length,” The buyer and seller knew all relevant facts, The buyer and seller did not have to act, and The market did not change between the date of purchase or sale and the valuation date. Free income tax help Example. Free income tax help Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. Free income tax help The promoter claimed that the price was “wholesale” even though he and other dealers made similar sales at similar prices to other persons who were not dealers. Free income tax help The promoter said that if Tom kept the gems for more than 1 year and then gave them to charity, Tom could claim a charitable deduction of $15,000, which, according to the promoter, would be the value of the gems at the time of contribution. Free income tax help Tom gave the gems to a qualified charity 13 months after buying them. Free income tax help The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. Free income tax help The best evidence of FMV depends on actual transactions and not on some artificial estimate. Free income tax help The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. Free income tax help Terms of the purchase or sale. Free income tax help   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. Free income tax help These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. Free income tax help Rate of increase or decrease in value. Free income tax help   Unless you can show that there were unusual circumstances, it is assumed that the increase or decrease in the value of your donated property from your cost has been at a reasonable rate. Free income tax help For time adjustments, an appraiser may consider published price indexes for information on general price trends, building costs, commodity costs, securities, and works of art sold at auction in arm's-length sales. Free income tax help Example. Free income tax help Bill Brown bought a painting for $10,000. Free income tax help Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. Free income tax help The appraisal of the painting should include information showing that there were unusual circumstances that justify a 50% increase in value for the 13 months Bill held the property. Free income tax help Arm's-length offer. Free income tax help   An arm's-length offer to buy the property close to the valuation date may help to prove its value if the person making the offer was willing and able to complete the transaction. Free income tax help To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. Free income tax help Offers to buy property other than the donated item will help to determine value if the other property is reasonably similar to the donated property. Free income tax help Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. Free income tax help The weight to be given to each sale depends on the following. Free income tax help The degree of similarity between the property sold and the donated property. Free income tax help The time of the sale—whether it was close to the valuation date. Free income tax help The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. Free income tax help The conditions of the market in which the sale was made—whether unusually inflated or deflated. Free income tax help The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. Free income tax help Example 1. Free income tax help Mary Black, who is not a book dealer, paid a promoter $10,000 for 500 copies of a single edition of a modern translation of the Bible. Free income tax help The promoter had claimed that the price was considerably less than the “retail” price, and gave her a statement that the books had a total retail value of $30,000. Free income tax help The promoter advised her that if she kept the Bibles for more than 1 year and then gave them to a qualified organization, she could claim a charitable deduction for the “retail” price of $30,000. Free income tax help Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. Free income tax help At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. Free income tax help The FMV of the Bibles is $10,000, the price at which similar quantities of Bibles were being sold to others at the time of the contribution. Free income tax help Example 2. Free income tax help The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. Free income tax help The promoter said that if Mary wanted a charitable deduction within 1 year of the purchase, she could buy the 500 Bibles at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000. Free income tax help The principal and interest on the note would not be due for 12 years. Free income tax help According to the promoter, Mary could then, within 1 year of the purchase, give the Bibles to a qualified organization and claim the full $30,000 retail price as a charitable contribution. Free income tax help She purchased the Bibles under the second option and, 3 months later, gave them to a church, which will use the books for church purposes. Free income tax help At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. Free income tax help The difference between the two prices was solely at the discretion of the buyer. Free income tax help The promoter was a willing seller for $10,000. Free income tax help Therefore, the value of Mary's contribution of the Bibles is $10,000, the amount at which similar lots of Bibles could be purchased from the promoter by members of the general public. Free income tax help Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. Free income tax help However, there must be a reasonable relationship between the replacement cost and the FMV. Free income tax help The replacement cost is the amount it would cost to replace the donated item on the valuation date. Free income tax help Often there is no relationship between the replacement cost and the FMV. Free income tax help If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. Free income tax help To determine the replacement cost of the donated property, find the “estimated replacement cost new. Free income tax help ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. Free income tax help You should be able to show the relationship between the depreciated replacement cost and the FMV, as well as how you arrived at the “estimated replacement cost new. Free income tax help ” Opinions of Experts Generally, the weight given to an expert's opinion on matters such as the authenticity of a coin or a work of art, or the most profitable and best use of a piece of real estate, depends on the knowledge and competence of the expert and the thoroughness with which the opinion is supported by experience and facts. Free income tax help For an expert's opinion to deserve much weight, the facts must support the opinion. Free income tax help For additional information, see Appraisals, later. Free income tax help Table 1. Free income tax help Factors That Affect FMV IF the factor you are considering is. Free income tax help . Free income tax help . Free income tax help THEN you should ask these questions. Free income tax help . Free income tax help . Free income tax help     cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? Was any increase or decrease in value, as compared to your cost, at a reasonable rate? Do the terms of purchase or sale limit what can be done with the property? Was there an arm's-length offer to buy the property close to the valuation date?     sales of comparable properties How similar is the property sold to the property donated? How close is the date of sale to the valuation date? Was the sale at arm's-length? What was the condition of the market at the time of sale?     replacement cost What would it cost to replace the donated property? Is there a reasonable relationship between replacement cost and FMV? Is the supply of the donated property more or less than the demand for it?     opinions of experts Is the expert knowledgeable and competent? Is the opinion thorough and supported by facts and experience? Problems in Determining Fair Market Value There are a number of problems in determining the FMV of donated property. Free income tax help Unusual Market Conditions The sale price of the property itself in an arm's-length transaction in an open market is often the best evidence of its value. Free income tax help When you rely on sales of comparable property, the sales must have been made in an open market. Free income tax help If those sales were made in a market that was artificially supported or stimulated so as not to be truly representative, the prices at which the sales were made will not indicate the FMV. Free income tax help For example, liquidation sale prices usually do not indicate the FMV. Free income tax help Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV. Free income tax help Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. Free income tax help However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. Free income tax help The degree of similarity must be close enough so that this selling price would have been given consideration by reasonably well-informed buyers or sellers of the property. Free income tax help Example. Free income tax help You give a rare, old book to your former college. Free income tax help The book is a third edition and is in poor condition because of a missing back cover. Free income tax help You discover that there was a sale for $300, near the valuation date, of a first edition of the book that was in good condition. Free income tax help Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. Free income tax help Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. Free income tax help Future Events You may not consider unexpected events happening after your donation of property in making the valuation. Free income tax help You may consider only the facts known at the time of the gift, and those that could be reasonably expected at the time of the gift. Free income tax help Example. Free income tax help You give farmland to a qualified charity. Free income tax help The transfer provides that your mother will have the right to all income and full use of the property for her life. Free income tax help Even though your mother dies 1 week after the transfer, the value of the property on the date it is given is its present value, subject to the life interest as estimated from actuarial tables. Free income tax help You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. Free income tax help Using Past Events to Predict the Future A common error is to rely too much on past events that do not fairly reflect the probable future earnings and FMV. Free income tax help Example. Free income tax help You give all your rights in a successful patent to your favorite charity. Free income tax help Your records show that before the valuation date there were three stages in the patent's history of earnings. Free income tax help First, there was rapid growth in earnings when the invention was introduced. Free income tax help Then, there was a period of high earnings when the invention was being exploited. Free income tax help Finally, there was a decline in earnings when competing inventions were introduced. Free income tax help The entire history of earnings may be relevant in estimating the future earnings. Free income tax help However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. Free income tax help The market conditions at those times do not represent the condition of the market at the valuation date. Free income tax help What is most significant is the trend of decline in earnings up to the valuation date. Free income tax help For more information about donations of patents, see Patents, later. Free income tax help Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. Free income tax help For information on appraisals, see Appraisals, later. Free income tax help Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. Free income tax help Such used property may have little or no market value because of its worn condition. Free income tax help It may be out of style or no longer useful. Free income tax help You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. Free income tax help A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. Free income tax help See Deduction over $500 for certain clothing or household items, later. Free income tax help If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. Free income tax help Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. Free income tax help Valuation of items of clothing does not lend itself to fixed formulas or methods. Free income tax help The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value. Free income tax help You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. Free income tax help An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. Free income tax help See Deduction over $500 for certain clothing or household items, later. Free income tax help For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. Free income tax help Jewelry and Gems Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. Free income tax help The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion. Free income tax help If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. Free income tax help The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. Free income tax help Sentimental personal value has no effect on FMV. Free income tax help But if the jewelry was owned by a famous person, its value might increase. Free income tax help Paintings, Antiques, and Other Objects of Art Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less. Free income tax help Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. Free income tax help Art valued at $20,000 or more. Free income tax help   If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. Free income tax help For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request. Free income tax help Art valued at $50,000 or more. Free income tax help   If you donate an item of art that has been appraised at $50,000 or more, you can request a Statement of Value for that item from the IRS. Free income tax help You must request the statement before filing the tax return that reports the donation. Free income tax help Your request must include the following. Free income tax help A copy of a qualified appraisal of the item. Free income tax help See Qualified Appraisal, later. Free income tax help A $2,500 check or money order payable to the Internal Revenue Service for the user fee that applies to your request regarding one, two, or three items of art. Free income tax help Add $250 for each item in excess of three. Free income tax help A completed Form 8283, Section B. Free income tax help The location of the IRS territory that has examination responsibility for your return. Free income tax help If your request lacks essential information, you will be notified and given 30 days to provide the missing information. Free income tax help   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. Free income tax help O. Free income tax help Box 27720 McPherson Station Washington, DC 20038 Refunds. Free income tax help   You can withdraw your request for a Statement of Value at any time before it is issued. Free income tax help However, the IRS will not refund the user fee if you do. Free income tax help   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. Free income tax help Authenticity. Free income tax help   The authenticity of the donated art must be determined by the appraiser. Free income tax help Physical condition. Free income tax help   Important items in the valuation of antiques and art are physical condition and extent of restoration. Free income tax help These have a significant effect on the value and must be fully reported in an appraisal. Free income tax help An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. Free income tax help Art appraisers. Free income tax help   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. Free income tax help Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. Free income tax help Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. Free income tax help They can report more recent comparable sales to support their opinion. Free income tax help   To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. Free income tax help It lists museums both by state and by category. Free income tax help   To help you locate a qualified appraiser for your donation, you may wish to ask an art historian at a nearby college or the director or curator of a local museum. Free income tax help The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. Free income tax help You may be able to find a qualified appraiser on the Internet. Free income tax help You may also contact associations of dealers for guidance. Free income tax help Collections Since many kinds of hobby collections may be the subject of a charitable donation, it is not possible to discuss all of the possible collectibles in this publication. Free income tax help Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. Free income tax help Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. Free income tax help Reference material. Free income tax help   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. Free income tax help When using one of these price guides, you must use the current edition at the date of contribution. Free income tax help However, these sources are not always reliable indicators of FMV and should be supported by other evidence. Free income tax help   For example, a dealer may sell an item for much less than is shown on a price list, particularly after the item has remained unsold for a long time. Free income tax help The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. Free income tax help The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. Free income tax help If you are donating a valuable collection, you should get an appraisal. Free income tax help If your donation appears to be of little value, you may be able to make a satisfactory valuation using reference materials available at a state, city, college, or museum library. Free income tax help Stamp collections. Free income tax help   Most libraries have catalogs or other books that report the publisher's estimate of values. Free income tax help Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. Free income tax help Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. Free income tax help Coin collections. Free income tax help   Many catalogs and other reference materials show the writer's or publisher's opinion of the value of coins on or near the date of the publication. Free income tax help Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. Free income tax help Another important factor is the coin's condition. Free income tax help For example, there is a great difference in the value of a coin that is in mint condition and a similar coin that is only in good condition. Free income tax help   Catalogs usually establish a category for coins, based on their physical condition—mint or uncirculated, extremely fine, very fine, fine, very good, good, fair, or poor—with a different valuation for each category. Free income tax help Books. Free income tax help   The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences between the comparable sales and the item being evaluated. Free income tax help This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. Free income tax help Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. Free income tax help Modest value of collection. Free income tax help   If the collection you are donating is of modest value, not requiring a written appraisal, the following information may help you in determining the FMV. Free income tax help   A book that is very old, or very rare, is not necessarily valuable. Free income tax help There are many books that are very old or rare, but that have little or no market value. Free income tax help Condition of book. Free income tax help   The condition of a book may have a great influence on its value. Free income tax help Collectors are interested in items that are in fine, or at least good, condition. Free income tax help When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. Free income tax help Other factors. Free income tax help   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). Free income tax help Collectors usually want first editions of books. Free income tax help However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. Free income tax help Manuscripts, autographs, diaries, and similar items. Free income tax help   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. Free income tax help The writings of unknowns also may be of value if they are of unusual historical or literary importance. Free income tax help Determining the value of such material is difficult. Free income tax help For example, there may be a great difference in value between two diaries that were kept by a famous person—one kept during childhood and the other during a later period in his or her life. Free income tax help The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. Free income tax help Signatures. Free income tax help   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. Free income tax help But complete sets of the signatures of U. Free income tax help S. Free income tax help presidents are in demand. Free income tax help Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. Free income tax help Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. Free income tax help Prices are reported for each make, model, and year. Free income tax help These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Free income tax help The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. Free income tax help But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. Free income tax help These publications are sometimes available from public libraries or at a bank, credit union, or finance company. Free income tax help You can also find pricing information about used cars on the Internet. Free income tax help An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. Free income tax help However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. Free income tax help The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. Free income tax help Example. Free income tax help You donate a used car in poor condition to a local high school for use by students studying car repair. Free income tax help A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Free income tax help However, the guide shows the price for a private party sale of the car is only $750. Free income tax help The FMV of the car is considered to be no more than $750. Free income tax help Boats. Free income tax help   Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value. Free income tax help More information. Free income tax help   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. Free income tax help This rule applies if the claimed value of the donated vehicle is more than $500. Free income tax help In certain cases, you can deduct the vehicle's FMV. Free income tax help For details, see Publication 526. Free income tax help Inventory If you donate any inventory item to a charitable organization, the amount of your deductible contribution generally is the FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift. Free income tax help For more information, see Publication 526. Free income tax help Patents To determine the FMV of a patent, you must take into account, among other factors: Whether the patented technology has been made obsolete by other technology; Any restrictions on the donee's use of, or ability to transfer, the patented technology; and The length of time remaining before the patent expires. Free income tax help However, your deduction for a donation of a patent or other intellectual property is its FMV, minus any gain you would have realized if you had sold the property at its FMV on the date of the gift. Free income tax help Generally, this means your deduction is the lesser of the property's FMV or its basis. Free income tax help For details, see Publication 526. Free income tax help Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. Free income tax help See Date of contribution, earlier, under What Is Fair Market Value (FMV). Free income tax help Selling prices on valuation date. Free income tax help   If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. Free income tax help For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. Free income tax help You get the average price by adding $11 and $9 and dividing the sum by 2. Free income tax help No sales on valuation date. Free income tax help   If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. Free income tax help Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. Free income tax help Example. Free income tax help   On the day you gave stock to a qualified organization, there were no sales of the stock. Free income tax help Sales of the stock nearest the valuation date took place two trading days before the valuation date at an average selling price of $10 and three trading days after the valuation date at an average selling price of $15. Free income tax help The FMV on the valuation date was $12, figured as follows: [(3 x $10) + (2 x $15)] ÷ 5 = $12 Listings on more than one stock exchange. Free income tax help   Stocks or bonds listed on more than one stock exchange are valued based on the prices of the exchange on which they are principally dealt. Free income tax help This applies if these prices are published in a generally available listing or publication of general circulation. Free income tax help If this is not applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a publication of general circulation, use the composite list. Free income tax help See also Unavailable prices or closely held corporation, later. Free income tax help Bid and asked prices on valuation date. Free income tax help   If there were no sales within a reasonable period before and after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the valuation date. Free income tax help Example. Free income tax help Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked prices were available on that date of $14 and $16, respectively. Free income tax help The FMV is $15, the average price between the bid and asked prices. Free income tax help No prices on valuation date. Free income tax help   If there were no prices available on the valuation date, you determine FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date before and after the valuation date. Free income tax help Both dates must be within a reasonable period. Free income tax help Then you weight these averages in inverse order by the respective number of trading days between the bid and asked dates and the valuation date. Free income tax help Example. Free income tax help On the day you gave stock to a qualified organization, no prices were available. Free income tax help Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. Free income tax help The FMV on the valuation date is $13, figured as follows: [(2 x $10) + (3 x $15)] ÷ 5 = $13 Prices only before or after valuation date, but not both. Free income tax help   If no selling prices or bona fide bid and asked prices are available on a date within a reasonable period before the valuation date, but are available on a date within a reasonable period after the valuation date, or vice versa, then the average price between the highest and lowest of such available prices may be treated as the value. Free income tax help Large blocks of stock. Free income tax help   When a large block of stock is put on the market, it may lower the selling price of the stock if the supply is greater than the demand. Free income tax help On the other hand, market forces may exist that will afford higher prices for large blocks of stock. Free income tax help Because of the many factors to be considered, determining the value of large blocks of stock usually requires the help of experts specializing in underwriting large quantities of securities, or in trading in the securities of the industry of which the particular company is a part. Free income tax help Unavailable prices or closely held corporation. Free income tax help   If selling prices or bid and asked prices are not available, or if securities of a closely held corporation are involved, determine the FMV by considering the following factors. Free income tax help For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. Free income tax help For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. Free income tax help Other factors. Free income tax help   Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business. Free income tax help For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. Free income tax help   You should keep complete financial and other information on which the valuation is based. Free income tax help This includes copies of reports of examinations of the company made by accountants, engineers, or any technical experts on or close to the valuation date. Free income tax help Restricted securities. Free income tax help   Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and Exchange Commission, or by the corporate charter or a trust agreement. Free income tax help These restricted securities usually trade at a discount in relation to freely traded securities. Free income tax help   To arrive at the FMV of restricted securities, factors that you must consider include the resale provisions found in the restriction agreements, the relative negotiating strengths of the buyer and seller, and the market experience of freely traded securities of the same class as the restricted securities. Free income tax help Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. Free income tax help The appraiser must be thoroughly trained in the application of appraisal principles and theory. Free income tax help In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions. Free income tax help The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. Free income tax help The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant. Free income tax help In general, there are three main approaches to the valuation of real estate. Free income tax help An appraisal may require the combined use of two or three methods rather than one method only. Free income tax help 1. Free income tax help Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. Free income tax help The selling prices, after adjustments for differences in date of sale, size, condition, and location, would then indicate the estimated FMV of the donated property. Free income tax help If the comparable sales method is used to determine the value of unimproved real property (land without significant buildings, structures, or any other improvements that add to its value), the appraiser should consider the following factors when comparing the potential comparable property and the donated property: Location, size, and zoning or use restrictions, Accessibility and road frontage, and available utilities and water rights, Riparian rights (right of access to and use of the water by owners of land on the bank of a river) and existing easements, rights-of-way, leases, etc. Free income tax help , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. Free income tax help For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor's appraised FMV. Free income tax help The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. Free income tax help Because differences of opinion may arise between appraisers as to the degree of comparability and the amount of the adjustment considered necessary for comparison purposes, an appraiser should document each item of adjustment. Free income tax help Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property. Free income tax help 2. Free income tax help Capitalization of Income This method capitalizes the net income from the property at a rate that represents a fair return on the particular investment at the particular time, considering the risks involved. Free income tax help The key elements are the determination of the income to be capitalized and the rate of capitalization. Free income tax help 3. Free income tax help Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. Free income tax help Instead, it generally tends to set the upper limit of value, particularly in periods of rising costs, because it is reasonable to assume that an informed buyer will not pay more for the real estate than it would cost to reproduce a similar property. Free income tax help Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. Free income tax help Generally, this method serves to support the value determined from other methods. Free income tax help When the replacement cost method is applied to improved realty, the land and improvements are valued separately. Free income tax help The replacement cost of a building is figured by considering the materials, the quality of workmanship, and the number of square feet or cubic feet in the building. Free income tax help This cost represents the total cost of labor and material, overhead, and profit. Free income tax help After the replacement cost has been figured, consideration must be given to the following factors: Physical deterioration—the wear and tear on the building itself, Functional obsolescence—usually in older buildings with, for example, inadequate lighting, plumbing, or heating, small rooms, or a poor floor plan, and Economic obsolescence—outside forces causing the whole area to become less desirable. Free income tax help Interest in a Business The FMV of any interest in a business, whether a sole proprietorship or a partnership, is the amount that a willing buyer would pay for the interest to a willing seller after consideration of all relevant factors. Free income tax help The relevant factors to be considered in valuing the business are: The FMV of the assets of the business, The demonstrated earnings capacity of the business, based on a review of past and current earnings, and The other factors used in evaluating corporate stock, if they apply. Free income tax help The value of the goodwill of the business should also be taken into consideration. Free income tax help You should keep complete financial and other information on which you base the valuation. Free income tax help This includes copies of reports of examinations of the business made by accountants, engineers, or any technical experts on or close to the valuation date. Free income tax help Annuities, Interests for Life or Terms of Years, Remainders, and Reversions The value of these kinds of property is their present value, except in the case of annuities under contracts issued by companies regularly engaged in their sale. Free income tax help The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. Free income tax help To determine present value, you must know the applicable interest rate and use actuarial tables. Free income tax help Interest rate. Free income tax help   The applicable interest rate varies. Free income tax help It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. Free income tax help The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. Free income tax help You can call the IRS office at 1-800-829-1040 to obtain this rate. Free income tax help Actuarial tables. Free income tax help   You need to refer to actuarial tables to determine a qualified interest in the form of an annuity, any interest for life or a term of years, or any remainder interest to a charitable organization. Free income tax help   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). Free income tax help Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest. Free income tax help For qualified charitable transfers, you can use the factor for the month in which you made the contribution or for either of the 2 months preceding that month. Free income tax help   Publication 1457 also contains actuarial factors for computing the value of a remainder interest in a charitable remainder annuity trust and a pooled income fund. Free income tax help Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. Free income tax help You can download Publications 1457 and 1458 from www. Free income tax help irs. Free income tax help gov. Free income tax help In addition, they are available for purchase via the website of the U. Free income tax help S. Free income tax help Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. Free income tax help O. Free income tax help Box 371954 Pittsburgh, PA 15250-7954 Tables containing actuarial factors for transfers to pooled income funds may also be found in Income Tax Regulation 1. Free income tax help 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. Free income tax help 664-4(e), and other transfers in Regulation 20. Free income tax help 2031-7(d)(6). Free income tax help Special factors. Free income tax help   If you need a special factor for an actual transaction, you can request a letter ruling. Free income tax help Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. Free income tax help Also include copies of the relevant instruments. Free income tax help IRS charges a user fee for providing special factors. Free income tax help   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. Free income tax help R. Free income tax help B. Free income tax help 1. Free income tax help Revenue Procedure 2006-1 is available at www. Free income tax help irs. Free income tax help gov/irb/2006-01_IRB/ar06. Free income tax help html. Free income tax help   For information on the circumstances under which a charitable deduction may be allowed for the donation of a partial interest in property not in trust, see Partial Interest in Property Not in Trust, later. Free income tax help Certain Life Insurance and Annuity Contracts The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is the amount that company would charge for a comparable contract. Free income tax help But if the donee of a life insurance policy may reasonably be expected to cash the policy rather than hold it as an investment, then the FMV is the cash surrender value rather than the replacement cost. Free income tax help If an annuity is payable under a combination annuity contract and life insurance policy (for example, a retirement income policy with a death benefit) and there was no insurance element when it was transferred to the charity, the policy is treated as an annuity contract. Free income tax help Partial Interest in Property Not in Trust Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than your entire interest in property. Free income tax help However, this does not apply to a transfer of less than your entire interest if it is a transfer of: A remainder interest in your personal residence or farm, An undivided part of your entire interest in property, or A qualified conservation contribution. Free income tax help Remainder Interest in Real Property The amount of the deduction for a donation of a remainder interest in real property is the FMV of the remainder interest at the time of the contribution. Free income tax help To determine this value, you must know the FMV of the property on the date of the contribution. Free income tax help Multiply this value by the appropriate factor. Free income tax help Publications 1457 and 1458 contain these factors. Free income tax help You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). Free income tax help You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. Free income tax help See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. Free income tax help You can download Publication 1459 from www. Free income tax help irs. Free income tax help gov. Free income tax help For this purpose, the term “depreciable property” means any property subject to wear and tear or obsolescence, even if not used in a trade or business or for the production of income. Free income tax help If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be allocated between each kind of property at the time of the contribution. Free income tax help This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. Free income tax help Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. Free income tax help For more information, see section 1. Free income tax help 170A-12 of the Income Tax Regulations. Free income tax help Undivided Part of Your Entire Interest A contribution of an undivided part of your entire interest in property must consist of a part of each and every substantial interest or right you own in the property. Free income tax help It must extend over the entire term of your interest in the property. Free income tax help For example, you are entitled to the income from certain property for your life (life estate) and you contribute 20% of that life estate to a qualified organization. Free income tax help You can claim a deduction for the contribution if you do not have any other interest in the property. Free income tax help To figure the value of a contribution involving a partial interest, see Publication 1457. Free income tax help If the only interest you own in real property is a remainder interest and you transfer part of that interest to a qualified organization, see the previous discussion on valuation of a remainder interest in real property. Free income tax help Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. Free income tax help Qualified organization. Free income tax help   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. Free income tax help , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. Free income tax help The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. Free income tax help Conservation purposes. Free income tax help   Your contribution must be made only for one of the following conservation purposes. Free income tax help Preserving land areas for outdoor recreation by, or for the education of, the general public. Free income tax help Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. Free income tax help Preserving open space, including farmland and forest land, if it yields a significant public benefit. Free income tax help It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. Free income tax help Preserving a historically important land area or a certified historic structure. Free income tax help There must be some visual public access to the property. Free income tax help Factors used in determining the type and amount of public access required include the historical significance of the property, the remoteness or accessibility of the site, and the extent to which intrusions on the privacy of individuals living on the property would be unreasonable. Free income tax help Building in registered historic district. Free income tax help   A contribution after July 25, 2006, of a qualified real property interest that is an easement or other restriction on the exterior of a building in a registered historic district is deductible only if it meets all of the following three conditions. Free income tax help The restriction must preserve the entire exterior of the building and must prohibit any change to the exterior of the building that is inconsistent with its historical character. Free income tax help You and the organization receiving the contribution must enter into a written agreement certifying, that the organization is a qualified organization and that it has the resources and commitment to maintain the property as donated. Free income tax help If you make the contribution in a tax year beginning after August 17, 2006, you must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. Free income tax help   If you make this type of contribution after February 12, 2007, and claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. Free income tax help See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. Free income tax help Qualified real property interest. Free income tax help   This is any of the following interests in real property. Free income tax help Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). Free income tax help A remainder interest. Free income tax help A restriction (granted in perpetuity) on the use that may be made of the real property. Free income tax help Valuation. Free income tax help   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. Free income tax help If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. Free income tax help If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. Free income tax help   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. Free income tax help If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. Free income tax help   In determining the value of restrictions, you should take into account the selling price in arm's-length transactions of other properties that have comparable restrictions. Free income tax help If there are no comparable sales, the restrictions are valued indirectly as the difference between the FMVs of the property involved before and after the grant of the restriction. Free income tax help   The FMV of the property before contribution of the restriction should take into account not only current use but the likelihood that the property, without the restriction, would be developed. Free income tax help You should also consider any zoning, conservation, or historical preservation laws that would restrict development. Free income tax help Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. Free income tax help Example. Free income tax help   You own 10 acres of farmland. Free income tax help Similar land in the area has an FMV of $2,000 an acre. Free income tax help However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. Free income tax help Your county wants to preserve open space and prevent further development in your area. Free income tax help   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. Free income tax help The value of this easement is $4,000, determined as follows: FMV of the property before granting easement:   $2,000 × 10 acres $20,000 FMV of the property after granting easement:   $1,500 × 8 acres $12,000   $2,000 × 2 acres 4,000 16,000 Value of easement   $4,000   If you later transfer in fee your remaining interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the FMV of the 8 acres reduced by the FMV of the easement granted to the first organization. Free income tax help More information. Free income tax help   For more information about qualified conservation contributions, see Publication 526. Free income tax help Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. Free income tax help (There is one exception, described next, for certain clothing and household items. Free income tax help ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. Free income tax help There are exceptions. Free income tax help See Deductions of More Than $5,000, later. Free income tax help The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser's demonstrated knowledge of the donated property. Free income tax help An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. Free income tax help The appraisal will not be given much weight if: All the factors that apply are not considered, The opinion is not supported with facts, such as purchase price and comparable sales, or The opinion is not consistent with known facts. Free income tax help The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. Free income tax help The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. Free income tax help All facts associated with the donation must be considered. Free income tax help Deduction over $500 for certain clothing or household items. Free income tax help   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. Free income tax help See Household Goods and Used Clothing, earlier. Free income tax help Cost of appraisals. Free income tax help   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. Free income tax help However, these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A (Form 1040) if paid to determine the amount allowable as a charitable contribution. Free income tax help Deductions of More Than $5,000 Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you must attach Section B of Form 8283 to your tax return. Free income tax help There are exceptions, discussed later. Free income tax help You should keep the appraiser's report with your written records. Free income tax help Records are discussed in Publication 526. Free income tax help The phrase “similar items” means property of the same generic category or type (whether or not donated to the same donee), such as stamp collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances, toys, everyday kitchenware, china, crystal, or silver. Free income tax help For example, if you give books to three schools and you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for these books. Free income tax help You must get a qualified appraisal of the books and for each school you must attach a fully completed Form 8283, Section B, to your tax return. Free income tax help Exceptions. Free income tax help   You do not need an appraisal if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal Revenue Code, or Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. Free income tax help   Although an appraisal is not required for the types of property just listed, you must provide certain information about a donation of any of these types of property on Form 8283. Free income tax help Publicly traded securities. Free income tax help   Even if your claimed deduction is more than $5,000, neither a qualified appraisal nor Section B of Form 8283 is required for publicly traded securities that are: Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States. Free income tax help Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. Free income tax help   A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not meet the requirements just listed but does meet these requirements: The issue is regularly traded during the computation period (defined later) in a market for which there is an “interdealer quotation system” (defined later), The issuer or agent computes the “average trading price” (defined later) for the same issue for the computation period, The average trading price and total volume of the issue during the computation period are published in a newspaper of general circulation throughout the United States, not later than the last day of the month following the end of the calendar quarter in which the computation period ends, The issuer or agent keeps books and records that list for each transaction during the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the market in which the transaction occurred, and the trading price and volume, and The issuer or agent permits the Internal Revenue Service to review the books and records described in item (4) with respect to transactions during the computation period upon receiving reasonable notice. Free income tax help   An interdealer quotation system is any system of general circulation to brokers and dealers that regularly disseminates quotations of obligations by two or more identified brokers or dealers who are not related to either the issuer or agent who computes the average trading price of the security. Free income tax help A quotation sheet prepared and distributed by a broker or dealer in the regular course of business and containing only quotations of that broker or dealer is not an interdealer quotation system. Free income tax help   The average trading price is the average price of all transactions (weighted by volume), other than original issue or redemption transactions, conducted through a United States office of a broker or dealer who maintains a market in the issue of the security during the computation period. Free income tax help Bid and asked quotations are not taken into account. Free income tax help   The computation period is weekly during October through December and monthly during January through September. Free income tax help The weekly computation periods during October through December begin with the first Monday in October and end with the first Sunday following the last Monday in December. Free income tax help Nonpublicly traded stock. Free income tax help   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. Free income tax help However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. Free income tax help Deductions of More Than $500,000 If you claim a deduction of more than $500,000 for a donation of property, you must attach a qualified appraisal of the property to your return. Free income tax help This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. Free income tax help If you do not attach the appraisal, you cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable cause and not to willful neglect. Free income tax help Qualified Appraisal Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. Free income tax help You must also complete Form 8283, Section B, and attach it to your tax return. Free income tax help See Deductions of More Than $5,000, earlier. Free income tax help A qualified appraisal is an appraisal document that: Is made, signed, and dated by a qualified appraiser (defined later) in accordance with generally accepted appraisal standards, Meets the relevant requirements of Regulations section 1. Free income tax help 170A-13(c)(3) and Notice 2006-96, 2006-46 I. Free income tax help R. Free income tax help B. Free income tax help 902 (available at www. Free income tax help irs. Free income tax help gov/irb/2006-46_IRB/ar13. Free income tax help html), Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property, Does not involve a prohibited appraisal fee, and Includes certain information (covered later). Free income tax help You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. Free income tax help If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. Free income tax help Form 8283, Section B, must be attached to your tax return. Free income tax help Generally, you do not need to attach the qualified appraisal itself, but you should keep a copy as long as it may be relevant under the tax law. Free income tax help There are four exceptions. Free income tax help If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. Free income tax help See Paintings, Antiques, and Other Objects of Art, earlier. Free income tax help If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. Free income tax help See Deductions of More Than $500,000, earlier. Free income tax help If you claim a deduction of more than $500 for an article of clothing, or a household item, that is not in good used condition or better, that you donated after August 17, 2006, you must attach the appraisal. Free income tax help See Deduction over $500 for certain clothing or household items, earlier. Free income tax help If you claim a deduction in a tax year beginning after August 17, 2006, for an easement or other restriction on the exterior of a building in a historic district, you must attach the appraisal. Free income tax help See Building in registered historic district, earlier. Free income tax help Prohibited appraisal fee. Free income tax help   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. Free income tax help If a fee arrangement is based on what is allowed as a deduction, after Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. Free income tax help However, appraisals are not disqualified when an otherwise prohi
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Understanding your CP22A Notice

We made the change(s) you requested to your tax return for the tax year specified on the notice. You owe money on your taxes as a result of the change(s).

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the toll free number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully ― it will explain why you owe money on your taxes.
  • Pay the amount owed by the date on the notice's payment coupon.
  • Make payment arrangements if you can't pay the full amount you owe.
  • Contact us if you disagree with the change(s) we made.
  • Correct the copy of your tax return that you kept for your records.

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Answers to Common Questions

The notice says "Based on the information you provided, we changed your 200X Form 1040 to correct your:..." but I don't remember sending any change to IRS. How can I find out what IRS received to initiate this change?
Please contact us at the number listed on the top right corner of your notice for specific information about your tax return.

What do I say when I call the IRS?
Mention that you got a CP22A notice with a balance due and you need to review your account with a customer service representative. Be sure to have a copy of your notice and your tax return before you call.

What should I do if I disagree with the changes you made?
If you disagree, contact us at the toll-free number listed on the top right corner of your notice.

What happens if I can't pay the full amount I owe?
You can arrange to make a payment plan with us if you can't pay the full amount you owe.

Am I charged interest on the money I owe?
If you don't full pay the amount you owe by the date on the payment coupon, interest will accrue on the unpaid balance after that date.

Will I receive a penalty if I can't pay the full amount?
Yes, you'll receive a late payment penalty. You can contact us at the number listed on your notice if you’re unable to pay the full amount shown in your specific notice because of circumstances beyond your control. Contact us by the due date of your payment and, depending on your situation, we may be able to remove the penalty.

Can I set up a payment plan?
Yes. Call the toll-free number listed on the top right corner of your notice to discuss payment options or check out more information on payment options and how to make a payment arrangement.

There are other options, such as paying by credit card. Note: There may be a fee to pay by credit card.

What if I need to make another correction to my account?
You'll need to file Form 1040X, Amended U.S. Individual Income Tax Return.

What if I have tried to get answers and after contacting IRS several times have not been successful?
Call Taxpayer Advocate at 1-877-777-4778 or for TTY/TDD 1-800-829-4059.

What if I think I’m a victim of identity theft?
Please contact us at the number listed on the top right corner of your notice. Refer to the IRS Identity Theft resource page for more information.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 03-Mar-2014

The Free Income Tax Help

Free income tax help Publication 4492-B - Main Content Table of Contents DefinitionsMidwestern Disaster Areas Applicable Disaster Date Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Casualty and Theft LossesTime limit for making election. Free income tax help Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Disaster Recovery Assistance 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 the Severe Storms, Tornadoes, or Flooding Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesEmployee Retention Credit Employer Housing Credit and Exclusion Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Free income tax help Definitions The following definitions are used throughout this publication. Free income tax help Midwestern Disaster Areas A Midwestern disaster area is an area for which a major disaster was declared by the President during the period beginning on May 20, 2008, and ending on July 31, 2008, in the state of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, or Wisconsin, as a result of severe storms, tornadoes, or flooding that occurred on the applicable disaster date. Free income tax help See Tables 1 and 2 for a list of the counties included in the Midwestern disaster areas. Free income tax help Applicable Disaster Date The term “applicable disaster date” as used in this publication, refers to the date on which the severe storms, tornadoes, or flooding occurred in the Midwestern disaster areas. Free income tax help You will need to know this date when using this publication for the various tax provisions. Free income tax help Table 1 The counties listed in Table 1 below are eligible for all tax provisions shown in this publication. Free income tax help Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 05/02/2008through05/12/2008 Arkansas Arkansas, Benton, Cleburne, Conway, Crittenden, Grant, Lonoke, Mississippi, Phillips, Pulaski, Saline, and Van Buren. Free income tax help 06/01/2008through07/22/2008 Illinois Adams, Calhoun, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper, Jersey, Lake, Lawrence, Mercer, Rock Island, Whiteside, and Winnebago. Free income tax help 05/30/2008through06/27/2008 Indiana Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Madison, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Tippecanoe, Vermillion, Vigo, Washington, and Wayne. Free income tax help 05/25/2008through08/13/2008 Iowa Adair, Adams, Allamakee, Appanoose, Audubon, Benton, Black Hawk, Boone, Bremer, Buchanan, Butler, Cass, Cedar, Cerro Gordo, Chickasaw, Clarke, Clayton, Clinton, Crawford, Dallas, Davis, Decatur, Delaware, Des Moines, Dubuque, Fayette, Floyd, Franklin, Fremont, Greene, Grundy, Guthrie, Hamilton, Hancock, Hardin, Harrison, Henry, Howard, Humboldt, Iowa, Jackson, Jasper, Johnson, Jones, Keokuk, Kossuth, Lee, Linn, Louisa, Lucas, Madison, Mahaska, Marion, Marshall, Mills, Mitchell, Monona, Monroe, Montgomery, Muscatine, Page, Polk, Pottawattamie, Poweshiek, Ringgold, Scott, Story, Tama, Union, Van Buren, Wapello, Warren, Washington, Webster, Winnebago, Winneshiek, Worth, and Wright. Free income tax help 05/10/2008through05/11/2008 Missouri Barry, Jasper, and Newton. Free income tax help 06/01/2008through08/13/2008 Missouri Adair, Andrew, Callaway, Cass, Chariton, Clark, Gentry, Greene, Harrison, Holt, Johnson, Lewis, Lincoln, Linn, Livingston, Macon, Marion, Monroe, Nodaway, Pike, Putnam, Ralls, St. Free income tax help Charles, Stone, Taney, Vernon, and Webster. Free income tax help 05/22/2008through06/24/2008 Nebraska Buffalo, Butler, Colfax, Custer, Dawson, Douglas, Gage, Hamilton, Holt, Jefferson, Kearney, Lancaster, Platte, Richardson, Sarpy, and Saunders. Free income tax help 06/05/2008through07/25/2008 Wisconsin Adams, Calumet, Crawford, Columbia, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Monroe, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha, and Winnebago. Free income tax help *For more details, go to www. Free income tax help fema. Free income tax help gov Table 2 The counties listed in Table 2 below are eligible for all of the special tax provisions shown in this publication except the following. Free income tax help Charitable Giving Incentives. Free income tax help Net Operating Losses. Free income tax help Education Credits. Free income tax help Recapture of Federal Mortgage Subsidy. Free income tax help Tax Relief for Temporary Relocation. Free income tax help Employee Retention Credit. Free income tax help Employer Housing Credit and Exclusion. Free income tax help Demolition and Clean-up Costs. Free income tax help Increase in Rehabilitation Credit. Free income tax help Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 06/01/2008through07/22/2008 Illinois Greene, Madison, Monroe, Pike, Randolph, St. Free income tax help Clair, and Scott. Free income tax help 05/30/2008through06/27/2008 Indiana Benton, Boone, Fountain, Franklin, Jay, Montgomery, Ohio, Switzerland, Union, and Wabash. Free income tax help 05/25/2008through08/13/2008 Iowa Carroll, Cherokee, Lyon, Palo Alto, Pocahontas, Taylor, and Wayne. Free income tax help 05/22/2008through06/16/2008 Kansas Barber, Barton, Bourbon, Brown, Butler, Chautauqua, Cherokee, Clark, Clay, Comanche, Cowley, Crawford, Decatur, Dickinson, Edwards, Elk, Ellis, Ellsworth, Franklin, Gove, Graham, Harper, Haskell, Hodgeman, Jackson, Jewell, Kingman, Kiowa, Lane, Linn, Logan, Mitchell, Montgomery, Ness, Norton, Osborne, Pawnee, Phillips, Pratt, Reno, Republic, Riley, Rooks, Rush, Saline, Seward, Sheridan, Smith, Stafford, Sumner, Thomas, Trego, Wallace, and Wilson. Free income tax help 06/06/2008through06/13/2008 Michigan Allegan, Barry, Eaton, Ingham, Lake, Manistee, Mason, Missaukee, Osceola, Ottawa, Saginaw, and Wexford. Free income tax help 06/06/2008through06/12/2008 Minnesota Cook, Fillmore, Freeborn, Houston, Mower, and Nobles. Free income tax help 06/01/2008through08/13/2008 Missouri Atchison, Audrain, Bates, Buchanan, Cape Girardeau, Carroll, Christian, Daviess, Grundy, Howard, Jefferson, Knox, Mercer, Miller, Mississippi, Morgan, New Madrid, Pemiscot, Perry, Pettis, Platte, Polk, Randolph, Ray, Saline, Schuyler, Scotland, Shelby, St. Free income tax help Genevieve, St. Free income tax help Louis, the Independent City of St. Free income tax help Louis, Scott, Sullivan, and Worth. Free income tax help 04/23/2008through04/26/2008 Nebraska Gage, Johnson, Morrill, Nemaha, and Pawnee. Free income tax help 05/22/2008through06/24/2008 Nebraska Adams, Blaine, Boone, Boyd, Brown, Burt, Cass, Chase, Cherry, Cuming, Dundy, Fillmore, Frontier, Furnas, Garfield, Gosper, Greeley, Hall, Hayes, Howard, Johnson, Keya Paha, Lincoln, Logan, Loup, Merrick, McPherson, Morrill, Nance, Nemaha, Otoe, Phelps, Polk, Red Willow, Rock, Saline, Seward, Sherman, Stanton, Thayer, Thomas, Thurston, Valley, Webster, Wheeler, and York. Free income tax help 06/27/2008 Nebraska Dodge, Douglas, Sarpy, and Saunders. Free income tax help 06/05/2008through07/25/2008 Wisconsin Lafayette. Free income tax help * For more details, go to www. Free income tax help fema. Free income tax help gov Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions This benefit applies only to the counties in Table 1. Free income tax help Individuals. Free income tax help   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% of adjusted gross income (AGI) limit. Free income tax help A qualified contribution is a charitable contribution paid in cash or by check to a 50% limit organization if you make an election to have the 50% limit not apply to these contributions. Free income tax help   A qualified contribution must also meet all of the following requirements. Free income tax help Be paid after May 1, 2008, and before January 1, 2009. Free income tax help The contribution must be for relief efforts in one or more Midwestern disaster areas. Free income tax help Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. Free income tax help   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. Free income tax help You can carry over any contributions you are not able to deduct for 2008 because of this limit. Free income tax help In 2009, the carryover of your unused qualified contributions is subject to the 50% of AGI limit. Free income tax help Exception. Free income tax help   Qualified contributions do not include contributions to certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund. Free income tax help Corporations. Free income tax help   A corporation can elect to deduct qualified cash contributions without regard to the 10% of taxable income limit if the contributions were paid after May 1, 2008, and before January 1, 2009, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund), for relief efforts in one or more Midwestern disaster areas. Free income tax help Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. Free income tax help 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 income tax help Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% of taxable income limit. Free income tax help Partners and shareholders. Free income tax help   Each partner in a partnership and each shareholder in an S corporation must make a separate election to have the appropriate limit not apply. Free income tax help More information. Free income tax help   For more information, see Publication 526 or Publication 542, Corporations. Free income tax help Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. Free income tax help Standard Mileage Rate for Charitable Use of Vehicles This benefit applies only to the counties in Table 1. Free income tax help The following are special standard mileage rates in effect for 2008 for the cost of operating your vehicle for providing charitable services related only to the severe storms, tornadoes, or flooding. Free income tax help 36 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. Free income tax help 41 cents per mile for the period July 1 through December 31, 2008. Free income tax help Mileage Reimbursements to Charitable Volunteers This benefit applies only to the counties in Table 1. Free income tax help You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger vehicle for the benefit of a qualified charitable organization in providing relief related to the severe storms, tornadoes, or flooding during the period beginning on the applicable disaster date, and ending on December 31, 2008. Free income tax help You cannot claim a deduction or credit for amounts you exclude. Free income tax help You must keep records of miles driven, time, place (or use), and purpose of the mileage. Free income tax help The amount you can exclude cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. Free income tax help 50. Free income tax help 5 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. Free income tax help 58. Free income tax help 5 cents per mile for the period July 1 through December 31, 2008. Free income tax help Casualty and Theft Losses This benefit applies to the counties in both Tables 1 and 2. Free income tax help The following paragraphs explain changes to casualty and theft losses that were caused by the severe storms, tornadoes, or flooding in the Midwestern disaster areas. Free income tax help For more information, see Publication 547. Free income tax help Limits on personal casualty or theft losses. Free income tax help   Losses of personal use property that arose in a Midwestern disaster area on or after the applicable disaster date are not subject to the $100 or 10% of AGI limits. Free income tax help Qualifying losses include losses from casualties and thefts that arose in a Midwestern disaster area that were attributable to the severe storms, tornadoes, or flooding. Free income tax help When completing Form 4684, do not include on line 17 any losses that arose in a Midwestern disaster area. Free income tax help A loss arising in a Midwestern disaster area is not considered a loss attributable to a federally declared disaster for purposes of that line and cannot be added to your standard deduction. Free income tax help When to deduct the loss. Free income tax help   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. Free income tax help However, you can elect to deduct losses caused by the severe storms, tornadoes, or flooding on your return for the prior year. Free income tax help Special instructions for individuals who elect to claim a Midwestern disaster area casualty or theft loss for 2007. Free income tax help   Individuals filing or amending their 2007 tax return for casualty or theft losses that were attributable to the severe storms, tornadoes, or flooding should: Enter “Midwestern Disaster Area” at the top of Form 1040 or Form 1040X, and Complete the 2008 version of Form 4684. Free income tax help Cross out “2008” and enter “2007” at the top of Form 4684. Free income tax help Time limit for making election. Free income tax help   You must make this election to claim your casualty or theft loss in 2007 by the later of the following dates. Free income tax help The due date (without extensions) for filing your 2008 income tax return. Free income tax help The due date (with extensions) for filing your 2007 income tax return. Free income tax help Example. Free income tax help If you are a calendar year individual taxpayer, you have until April 15, 2009, to amend your 2007 tax return to claim a casualty or theft loss that occurred during 2008. Free income tax help Replacement Period for Nonrecognition of Gain This benefit applies to the counties in both Tables 1 and 2. Free income tax help 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 income tax help 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 federally declared disaster area). Free income tax help However, for property that was involuntarily converted on or after the applicable disaster date, as a result of the severe storms, tornadoes, or flooding, a 5-year replacement period applies if substantially all of the use of the replacement property is in a Midwestern disaster area. Free income tax help For more information, see the Instructions for Form 4684. Free income tax help Net Operating Losses This benefit applies only to the counties in Table 1. Free income tax help Qualified disaster recovery assistance loss. Free income tax help   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Free income tax help However, the portion of an NOL that is a qualified disaster recovery assistance loss can be carried back to the 5 tax years before the NOL year. Free income tax help In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Free income tax help   A qualified disaster recovery assistance 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 disaster recovery assistance casualty loss (as defined below), Moving expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the employment of an individual whose main home was in a Midwestern disaster area before the applicable disaster date, who was unable to remain in that home because of the severe storms, tornadoes, or flooding, and whose main job location (after the move) is in a Midwestern disaster area, Temporary housing expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, to house employees of the taxpayer whose main job location is in a Midwestern disaster area, Depreciation or amortization allowable for any qualified disaster recovery assistance property (even if you elected not to claim the special disaster recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred on or after the applicable disaster date, and before January 1, 2011, for any damage from the severe storms, tornadoes, or flooding to property located in a Midwestern disaster area. Free income tax help Qualified disaster recovery assistance casualty loss. Free income tax help   A qualified disaster recovery assistance casualty loss is any deductible section 1231 loss of property located in a Midwestern disaster area if the loss was caused by the severe storms, tornadoes, or flooding. Free income tax help For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the severe storms, tornadoes, or flooding of property located in a Midwestern disaster area. Free income tax help Any such loss taken into account in figuring your qualified disaster recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. Free income tax help More information. Free income tax help   For more information on NOLs, see Publication 536 or Publication 542, Corporations. Free income tax help 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 the severe storms, tornadoes, or flooding. Free income tax help Definitions Qualified disaster recovery assistance distribution. Free income tax help   A qualified disaster recovery assistance distribution is any distribution you received from an eligible retirement plan if all of the following apply. Free income tax help The distribution was made on or after the applicable disaster date and before January 1, 2010. Free income tax help Your main home was located in a Midwestern disaster area on the applicable disaster date. Free income tax help You sustained an economic loss because of the severe storms, tornadoes, or flooding and your main home was in a Midwestern disaster area on the applicable disaster date. Free income tax help 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 income tax help   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 disaster recovery assistance distribution, regardless of whether the distribution was made on account of the severe storms, tornadoes, or flooding. Free income tax help Qualified disaster recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. Free income tax help   The total of your qualified disaster recovery assistance distributions from all plans is limited to $100,000. Free income tax help 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 can allocate the $100,000 limit among the plans any way you choose. Free income tax help   A reduction or offset (on or after the applicable disaster date) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified disaster recovery assistance distribution. Free income tax help Eligible retirement plan. Free income tax help   An eligible retirement plan can be any of the following. Free income tax help A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Free income tax help A qualified annuity plan. Free income tax help A tax-sheltered annuity contract. Free income tax help A governmental section 457 deferred compensation plan. Free income tax help A traditional, SEP, SIMPLE, or Roth IRA. Free income tax help Main home. Free income tax help   Generally, your main home is the home where you live most of the time. Free income tax help A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Free income tax help Taxation of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. Free income tax help Qualified disaster recovery assistance distributions are included in income in equal amounts over three years. Free income tax help However, if you elect, you can include the entire distribution in your income in the year it was received. Free income tax help Qualified disaster recovery assistance 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 income tax help However, any distributions you receive in excess of the $100,000 qualified disaster recovery assistance distribution limit may be subject to the additional tax on early distributions. Free income tax help For more information, see Form 8930. Free income tax help Repayment of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. Free income tax help If you choose, you generally can repay any portion of a qualified disaster recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Free income tax help Also, you can repay a qualified disaster recovery assistance distribution made on account of a hardship from a retirement plan. Free income tax help However, see Exceptions later for qualified disaster recovery assistance distributions you cannot repay. Free income tax help You have three years from the day after the date you received the distribution to make a repayment. Free income tax help Amounts that are repaid are treated as a qualified rollover and are not included in income. Free income tax help Also, a repayment of a qualified disaster recovery assistance distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. Free income tax help See Form 8930 for more information on how to report repayments. Free income tax help Exceptions. Free income tax help   You cannot repay the following types of distributions. Free income tax help Qualified disaster recovery assistance distributions received as a beneficiary (other than a surviving spouse). Free income tax help Required minimum distributions. Free income tax help 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 income tax help Repayment of Qualified Distributions for the Purchase or Construction of a Main Home This benefit applies to the counties in both Tables 1 and 2. Free income tax help If you received a qualified distribution to purchase or construct a main home in a Midwestern disaster area, you can repay part or all of that distribution on or after the applicable disaster date, but no later than March 3, 2009, to an eligible retirement plan. Free income tax help For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Free income tax help To be a qualified distribution, the distribution must meet all of the following requirements. Free income tax help 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 income tax help The distribution was received after the date that was 6 months before the day after the applicable disaster date. Free income tax help The distribution was to be used to purchase or construct a main home in a Midwestern disaster area that was not purchased or constructed because of the severe storms, tornadoes, or flooding. Free income tax help Amounts that are repaid before March 4, 2009, are treated as a qualified rollover and are not included in income. Free income tax help Also, a repayment of a qualified distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. Free income tax help A qualified distribution not repaid before March 4, 2009, may be taxable for 2007 or 2008 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Free income tax help You must file Form 8930 if you received a qualified distribution that you repaid, in whole or in part, before March 4, 2009. Free income tax help Loans From Qualified Plans This benefit applies to the counties in both Tables 1 and 2. Free income tax help The following benefits are available to qualified individuals. Free income tax help Increases to the limits for distributions treated as loans from employer plans. Free income tax help A 1-year suspension for payments due on plan loans. Free income tax help Qualified individual. Free income tax help   You are a qualified individual if your main home was located in a Midwestern disaster area on the applicable disaster date and you had an economic loss because of the severe storms, tornadoes, or flooding. Free income tax help 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 income tax help Limits on plan loans. Free income tax help   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Free income tax help In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Free income tax help If your main home was located in a Midwestern disaster area, the higher limits apply only to loans received during the period beginning on October 3, 2008, and ending on December 31, 2009. Free income tax help One-year suspension of loan payments. Free income tax help   Payments on plan loans outstanding on or after the applicable disaster date, may be suspended for 1 year by the plan administrator. Free income tax help To qualify for the suspension, the due date for any loan payment must occur during the period beginning on the applicable disaster date and ending on December 31, 2009. Free income tax help Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit This benefit applies to the counties in both Tables 1 and 2. Free income tax help You can elect to use your 2007 earned income to figure your earned income credit (EIC) and additional child tax credit for 2008 if: Your 2008 earned income is less than your 2007 earned income, and At least one of the following statements is true. Free income tax help Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 1. Free income tax help Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 2, and you were displaced from that home because of the severe storms, tornadoes, or flooding. Free income tax help Earned income. Free income tax help    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 income tax help 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 income tax help Joint returns. Free income tax help   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. Free income tax help If you make the election, your 2007 earned income is the sum of your 2007 earned income and your spouse's 2007 earned income. Free income tax help Making the election. Free income tax help   If you make the election to use your 2007 earned income, the election applies for figuring both the EIC and the additional child tax credit. Free income tax help However, you can make the election for the additional child tax credit even if you do not take the EIC. Free income tax help   Electing to use your 2007 earned income can increase or decrease your EIC. Free income tax help Take the following steps to decide whether to make the election. Free income tax help Figure your 2008 EIC using your 2007 earned income. Free income tax help Figure your 2008 additional child tax credit using your 2007 earned income for EIC purposes. Free income tax help Add the results of (1) and (2). Free income tax help Figure your 2008 EIC using your 2008 earned income. Free income tax help Figure your 2008 additional child tax credit using your 2008 earned income for additional child tax credit purposes. Free income tax help Add the results of (4) and (5). Free income tax help Compare the results of (3) and (6). Free income tax help If (3) is larger than (6), it is to your benefit to make the election. Free income tax help If (3) is equal to or smaller than (6), making the election will not help you. Free income tax help   If you elect to use your 2007 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2007 earned income on the dotted line next to line 64a of Form 1040, on the line next to line 40a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. Free income tax help   If you elect to use your 2007 earned income and you are claiming the additional child tax credit, enter your 2007 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 income tax help Getting your 2007 tax return information. Free income tax help   If you do not have your 2007 tax records, you can get the amount of earned income used to figure your 2007 EIC by calling 1-866-562-5227. Free income tax help You can also get this information by visiting the IRS website at www. Free income tax help irs. Free income tax help gov. Free income tax help   If you prefer to figure your 2007 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. Free income tax help See Request for Copy or Transcript of Tax Return on page 11. Free income tax help Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. Free income tax help You can claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by the severe storms, tornadoes, or flooding. Free income tax help The additional exemption amount is claimed on Form 8914. Free income tax help You can claim an additional exemption amount only one time for a specific individual. Free income tax help If you claimed an additional exemption amount for an individual in 2008, you cannot claim that amount again for the same individual in 2009. Free income tax help The maximum additional exemption amount you can claim for all displaced individuals is $2,000. Free income tax help Any additional exemption amount you claimed for displaced individuals in 2008 will reduce the $2,000 maximum for 2009. Free income tax help The $2,000 limit applies to a husband and wife, whether the husband and wife file joint returns or separate returns. Free income tax help If married filing separately, the $2,000 can be divided in $500 increments between the spouses. Free income tax help For example, if one spouse claims an additional exemption amount for one displaced individual, the other spouse, if otherwise eligible, can claim additional exemption amounts for three different displaced individuals. Free income tax help 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 income tax help 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 income tax help To qualify as a displaced individual, the individual: Must have had his or her main home in a Midwestern disaster area on the applicable disaster date, and he or she must have been displaced from that home. Free income tax help If the individual's main home was located in a Midwestern disaster area as shown in Table 2, that home must have been damaged by the severe storms, tornadoes, or flooding or the individual must have been evacuated from that home because of the severe storms, tornadoes, or flooding, 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 income tax help You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. Free income tax help You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. Free income tax help Food, clothing, or personal items consumed or used by the displaced individual. Free income tax help Reimbursement for the cost of any long distance telephone calls made by the displaced individual. Free income tax help Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. Free income tax help 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 income tax help 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 income tax help For more information, see Form 8914. Free income tax help Education Credits This benefit applies only to the counties in Table 1. Free income tax help The education credits have been expanded for students attending an eligible educational institution located in a Midwestern disaster area (Midwestern disaster area students) for any tax year beginning in 2008 or 2009. Free income tax help The Hope credit for a Midwestern disaster area student is increased to 100% of the first $2,400 in qualified education expenses and 50% of the next $2,400 of qualified education expenses for a maximum credit of $3,600 per student. Free income tax help The lifetime learning credit rate for a Midwestern disaster area student is increased from 20% to 40%. Free income tax help The definition of qualified education expenses for a Midwestern disaster area student also has been expanded. Free income tax help This expanded definition also applies to the tuition and fees deduction claimed on Form 8917. Free income tax help In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a Midwestern disaster area student include the following. Free income tax help Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Free income tax help For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. Free income tax help 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 income tax help 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 income tax help The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Free income tax help You will need to contact the eligible educational institution for qualified room and board costs. Free income tax help For more information, see Form 8863. Free income tax help See Form 8917 for the tuition and fees deduction. Free income tax help Recapture of Federal Mortgage Subsidy This benefit applies only to the counties in Table 1. Free income tax help 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 income tax help 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 income tax help This amount is increased to $150,000 if the loan was provided before 2011 and was used to alter, repair, or improve an existing owner-occupied residence in a Midwestern disaster area as shown in Table 1. Free income tax help Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. Free income tax help Generally, discharges of nonbusiness debts (such as mortgages) made on or after the applicable disaster date and before January 1, 2010, are excluded from income for individuals whose main home was in a Midwestern disaster area on the applicable disaster date. Free income tax help If the individual's main home was located in a Midwestern disaster area as shown in Table 2, the individual also must have had an economic loss because of the severe storms, tornadoes, or flooding. Free income tax help 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 income tax help This relief does not apply to any debt secured by real property located outside a Midwestern disaster area. Free income tax help You may also have to reduce certain tax attributes by the amount excluded. Free income tax help For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Free income tax help Tax Relief for Temporary Relocation This benefit applies only to the counties in Table 1. Free income tax help The IRS can adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2008 or 2009 as a result of a temporary relocation caused by the severe storms, tornadoes, or flooding. Free income tax help 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 income tax help The IRS has exercised this authority as follows. Free income tax help 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 the severe storms, tornadoes, or flooding. Free income tax help 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 the severe storms, tornadoes, or flooding. Free income tax help You can treat as a student an individual who enrolled in school before the applicable disaster date, and who is unable to attend classes because of the severe storms, tornadoes, or flooding, for each month of the enrollment period that individual is prevented by the severe storms, tornadoes, or flooding from attending school as planned. Free income tax help Additional Tax Relief for Businesses Employee Retention Credit This benefit applies only to the counties in Table 1. Free income tax help An eligible employer who conducted an active trade or business in a Midwestern disaster area can claim the employee retention credit. Free income tax help The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Free income tax help Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Free income tax help Use Form 5884-A to claim the credit. Free income tax help Employers affected by the severe storms, tornadoes, or flooding. Free income tax help   The following definitions apply to employers affected by the severe storms, tornadoes, or flooding. Free income tax help Eligible employer. Free income tax help   For this purpose, an eligible employer is any employer who meets all of the following. Free income tax help Employed an average of not more than 200 employees on business days during the tax year before the applicable disaster date. Free income tax help Conducted an active trade or business on the applicable disaster date in a Midwestern disaster area. Free income tax help Whose trade or business was inoperable on any day after the applicable disaster date and before January 1, 2009, because of the damage caused by the severe storms, tornadoes, or flooding. Free income tax help Eligible employee. Free income tax help   For this purpose, an eligible employee is an employee whose principal place of employment on the applicable disaster date with such eligible employer was in a Midwestern disaster area. Free income tax help An employee is not an eligible employee for purposes of the severe storms, tornadoes, or flooding if the employee is treated as an eligible employee for the work opportunity credit. Free income tax help Qualified wages. Free income tax help   Qualified wages are wages (up to $6,000 per employee) you paid or incurred before January 1, 2009, 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 disaster, and ending on the date your trade or business resumed significant operations at that place. Free income tax help In addition, the wages must have been paid or incurred after the applicable disaster date. Free income tax help    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 income tax help    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Free income tax help Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Free income tax help Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Free income tax help   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 income tax help For a special rule that applies to railroad employees, see section 51(h)(1)(B). Free income tax help   Qualified wages do not include the following. Free income tax help Wages paid to your dependent or a related individual. Free income tax help See section 51(i)(1). Free income tax help 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 income tax help Wages for services of replacement workers during a strike or lockout. Free income tax help   For more information, see Form 5884-A. Free income tax help Employer Housing Credit and Exclusion This benefit applies only to the counties in Table 1. Free income tax help An employer who conducted an active trade or business in a Midwestern disaster area can claim the employer housing credit. Free income tax help 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 November 1, 2008, through May 1, 2009. Free income tax help 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 income tax help Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Free income tax help The employer must use Form 5884-A to claim the credit. Free income tax help A qualified employee is an individual who had a main home in a Midwestern disaster area on the applicable disaster date, and who performs substantially all employment services in a Midwestern disaster area for the employer furnishing the lodging. Free income tax help The employee cannot be your dependent or a related individual. Free income tax help See section 51(i)(1). Free income tax help For more information, see Form 5884-A. Free income tax help Demolition and Clean-up Costs This benefit applies only to the counties in Table 1. Free income tax help You can elect to deduct 50% of any qualified disaster recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Free income tax help Qualified disaster recovery assistance clean-up costs are any amounts paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the removal of debris from, or the demolition of structures on, real property located in a Midwestern disaster area 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 income tax help Qualified disaster recovery assistance clean-up costs are limited to amounts necessary due to damage attributable to the severe storms, tornadoes, or flooding in the Midwestern disaster areas. Free income tax help Increase in Rehabilitation Tax Credit This benefit applies only to the counties in Table 1. Free income tax help The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred on or after the applicable disaster date, and before January 1, 2012, on buildings located in a Midwestern disaster area as follows. Free income tax help For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. Free income tax help For certified historic structures, the credit percentage is increased from 20% to 26%. Free income tax help For more information, see Form 3468, Investment Credit. Free income tax help Request for Copy or Transcript of Tax Return Request for copy of tax return. Free income tax help   You can use Form 4506 to order a copy of your tax return. Free income tax help Generally, there is a $57 fee for requesting each copy of a tax return. Free income tax help If your main home, principal place of business, or tax records are located in a Midwestern disaster area, the fee will be waived if “Midwestern Disaster Area” is written in red across the top of the form when filed. Free income tax help Request for transcript of tax return. Free income tax help   You can use Form 4506-T to order a free transcript of your tax return. Free income tax help A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Free income tax help You can also call 1-800-829-1040 to order a transcript. Free income tax help How To Get Tax Help Special IRS assistance. Free income tax help   The IRS is providing special help for those affected by the severe storms, tornadoes, or flooding, as well as survivors and personal representatives of the victims. Free income tax help 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 recent federally declared disasters, or who have other tax issues related to the severe storms, tornadoes, or flooding. Free income tax help Call 1-866-562-5227 Monday through FridayIn English–7 a. Free income tax help m. Free income tax help to 10 p. Free income tax help m. Free income tax help local timeIn Spanish–8 a. Free income tax help m. Free income tax help to 9:30 p. Free income tax help m. Free income tax help local time   The IRS website at www. Free income tax help irs. Free income tax help gov has notices and other tax relief information. Free income tax help Check it periodically for any new guidance. Free income tax help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Free income tax help By selecting the method that is best for you, you will have quick and easy access to tax help. Free income tax help Contacting your Taxpayer Advocate. Free income tax help   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Free income tax help Here are seven things every taxpayer should know about TAS: TAS is your voice at the IRS. Free income tax help Our service is free, confidential, and tailored to meet your needs. Free income tax help You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. Free income tax help TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. Free income tax help This includes businesses as well as individuals. Free income tax help TAS employees know the IRS and how to navigate it. Free income tax help We will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. Free income tax help TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. Free income tax help You can call your local advocate, whose number is in your phone book, in Pub. Free income tax help 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. Free income tax help irs. Free income tax help gov/advocate. Free income tax help You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Free income tax help You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. Free income tax help taxtoolkit. Free income tax help irs. Free income tax help gov. Free income tax help Low Income Taxpayer Clinics (LITCs). Free income tax help   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. Free income tax help LITCs are independent from the IRS. Free income tax help Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. Free income tax help If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. Free income tax help For more information, see Publication 4134, Low Income Taxpayer Clinic List. Free income tax help This publication is available at www. Free income tax help irs. Free income tax help gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. Free income tax help Free tax services. Free income tax help   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Free income tax help It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. Free income tax help It also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on your telephone. Free income tax help   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Free income tax help Free help with your return. Free income tax help   Free help in preparing your return is available nationwide from IRS-trained volunteers. Free income tax help The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Free income tax help Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free income tax help To find the nearest VITA or TCE site, call 1-800-829-1040. Free income tax help   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free income tax help To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website atwww. Free income tax help aarp. Free income tax help org/money/taxaide. Free income tax help   For more information on these programs, go to www. Free income tax help irs. Free income tax help gov and enter keyword “VITA” in the upper right-hand corner. Free income tax help Internet. Free income tax help You can access the IRS website at www. Free income tax help irs. Free income tax help gov 24 hours a day, 7 days a week to: E-file your return. Free income tax help Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Free income tax help Check the status of your 2009 refund. Free income tax help Go to www. Free income tax help irs. Free income tax help gov and click on Where's My Refund. Free income tax help Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Free income tax help If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Free income tax help Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Free income tax help Download forms, instructions, and publications. Free income tax help Order IRS products online. Free income tax help Research your tax questions online. Free income tax help Search publications online by topic or keyword. Free income tax help Use the online Internal Revenue Code, Regulations, or other official guidance. Free income tax help View Internal Revenue Bulletins (IRBs) published in the last few years. Free income tax help Figure your withholding allowances using the withholding calculator online at www. Free income tax help irs. Free income tax help gov/individuals. Free income tax help Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant. Free income tax help Sign up to receive local and national tax news by email. Free income tax help Get information on starting and operating a small business. Free income tax help Phone. Free income tax help Many services are available by phone. Free income tax help Ordering forms, instructions, and publications. Free income tax help Call 1-800-TAX FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. Free income tax help You should receive your order within 10 days. Free income tax help Asking tax questions. Free income tax help Call the IRS with your tax questions at 1-800-829-1040. Free income tax help Solving problems. Free income tax help You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Free income tax help An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Free income tax help Call your local Taxpayer Assistance Center for an appointment. Free income tax help To find the number, go to www. Free income tax help irs. Free income tax help gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Free income tax help TTY/TDD equipment. Free income tax help If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Free income tax help TeleTax topics. Free income tax help Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Free income tax help Refund information. Free income tax help To check the status of your 2009 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Free income tax help Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Free income tax help If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Free income tax help Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Free income tax help Refunds are sent out weekly on Fridays. Free income tax help If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. Free income tax help Other refund information. Free income tax help To check the status of a prior year refund or amended return refund, call 1-800-829-1954. Free income tax help Evaluating the quality of our telephone services. Free income tax help To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Free income tax help One method is for a second IRS representative to listen in on or record random telephone calls. Free income tax help Another is to ask some callers to complete a short survey at the end of the call. Free income tax help Walk-in. Free income tax help Many products and services are available on a walk-in basis. Free income tax help Products. Free income tax help You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free income tax help Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Free income tax help Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Free income tax help Services. Free income tax help You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Free income tax help An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Free income tax help If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Free income tax help No appointment is necessary—just walk in. Free income tax help If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Free income tax help A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Free income tax help If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. Free income tax help All other issues will be handled without an appointment. Free income tax help To find the number of your local office, go to www. Free income tax help irs. Free income tax help gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Free income tax help Mail. Free income tax help You can send your order for forms, instructions, and publications to the address below. Free income tax help You should receive a response within 10 days after your request is received. Free income tax help Internal Revenue Service1201 N. Free income tax help Mitsubishi MotorwayBloomington, IL 61705-6613 DVD for tax products. Free income tax help You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Free income tax help Prior-year forms, instructions, and publications. Free income tax help Tax Map: an electronic research tool and finding aid. Free income tax help Tax law frequently asked questions. Free income tax help Tax Topics from the IRS telephone response system. Free income tax help Internal Revenue Code—Title 26 of the U. Free income tax help S. Free income tax help Code. Free income tax help Fill-in, print, and save features for most tax forms. Free income tax help Internal Revenue Bulletins. Free income tax help Toll-free and email technical support. Free income tax help Two releases during the year. Free income tax help – The first release will ship the beginning of January 2010. Free income tax help – The final release will ship the beginning of March 2010. Free income tax help Purchase the DVD from National Technical Information Service (NTIS) at www. Free income tax help irs. Free income tax help gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). Free income tax help Prev  Up  Next   Home   More Online Publications