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Free Prior Tax Years Filing

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Free prior tax years filing 5. Free prior tax years filing   Additional Rules for Listed Property Table of Contents Introduction Useful Items - You may want to see: What Is Listed Property?Passenger Automobiles Other Property Used for Transportation Computers and Related Peripheral Equipment Can Employees Claim a Deduction? What Is the Business-Use Requirement?How To Allocate Use Qualified Business Use Recapture of Excess Depreciation Lessee's Inclusion Amount Do the Passenger Automobile Limits Apply?Maximum Depreciation Deduction Deductions After the Recovery Period Deductions For Passenger Automobiles Acquired in a Trade-in What Records Must Be Kept?Adequate Records How Is Listed Property Information Reported? Introduction This chapter discusses the deduction limits and other special rules that apply to certain listed property. Free prior tax years filing Listed property includes cars and other property used for transportation, property used for entertainment, and certain computers. Free prior tax years filing Deductions for listed property (other than certain leased property) are subject to the following special rules and limits. Free prior tax years filing Deduction for employees. Free prior tax years filing If your use of the property is not for your employer's convenience or is not required as a condition of your employment, you cannot deduct depreciation or rent expenses for your use of the property as an employee. Free prior tax years filing Business-use requirement. Free prior tax years filing If the property is not used predominantly (more than 50%) for qualified business use, you cannot claim the section 179 deduction or a special depreciation allowance. Free prior tax years filing In addition, you must figure any depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS) using the straight line method over the ADS recovery period. Free prior tax years filing You may also have to recapture (include in income) any excess depreciation claimed in previous years. Free prior tax years filing A similar inclusion amount applies to certain leased property. Free prior tax years filing Passenger automobile limits and rules. Free prior tax years filing Annual limits apply to depreciation deductions (including section 179 deductions and any special depreciation allowance) for certain passenger automobiles. Free prior tax years filing You can continue to deduct depreciation for the unrecovered basis resulting from these limits after the end of the recovery period. Free prior tax years filing This chapter defines listed property and explains the special rules and depreciation deduction limits that apply, including the special inclusion amount rule for leased property. Free prior tax years filing It also discusses the recordkeeping rules for listed property and explains how to report information about the property on your tax return. Free prior tax years filing Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 6 for information about getting publications and forms. Free prior tax years filing What Is Listed Property? Listed property is any of the following. Free prior tax years filing Passenger automobiles (as defined later). Free prior tax years filing Any other property used for transportation, unless it is an excepted vehicle. Free prior tax years filing Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video-recording equipment). Free prior tax years filing Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the establishment. Free prior tax years filing A regular business establishment includes a portion of a dwelling unit that is used both regularly and exclusively for business as discussed in Publication 587. Free prior tax years filing Improvements to listed property. Free prior tax years filing   An improvement made to listed property that must be capitalized is treated as a new item of depreciable property. Free prior tax years filing The recovery period and method of depreciation that apply to the listed property as a whole also apply to the improvement. Free prior tax years filing For example, if you must depreciate the listed property using the straight line method, you also must depreciate the improvement using the straight line method. Free prior tax years filing Passenger Automobiles A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (6,000 pounds or less of gross vehicle weight for trucks and vans). Free prior tax years filing It includes any part, component, or other item physically attached to the automobile at the time of purchase or usually included in the purchase price of an automobile. Free prior tax years filing The following vehicles are not considered passenger automobiles for these purposes. Free prior tax years filing An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business. Free prior tax years filing A vehicle used directly in the trade or business of transporting persons or property for pay or hire. Free prior tax years filing A truck or van that is a qualified nonpersonal use vehicle. Free prior tax years filing Qualified nonpersonal use vehicles. Free prior tax years filing   Qualified nonpersonal use vehicles are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. Free prior tax years filing They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation , next. Free prior tax years filing They also include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name. Free prior tax years filing For a detailed discussion of passenger automobiles, including leased passenger automobiles, see  Publication 463. Free prior tax years filing Other Property Used for Transportation Although vehicles used to transport persons or property for pay or hire and vehicles rated at more than the 6,000-pound threshold are not passenger automobiles, they are still “other property used for transportation” and are subject to the special rules for listed property. Free prior tax years filing Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods. Free prior tax years filing Excepted vehicles. Free prior tax years filing   Other property used for transportation does not include the following qualified nonpersonal use vehicles (defined earlier under Passenger Automobiles ). Free prior tax years filing Clearly marked police and fire vehicles. Free prior tax years filing Unmarked vehicles used by law enforcement officers if the use is officially authorized. Free prior tax years filing Ambulances used as such and hearses used as such. Free prior tax years filing Any vehicle with a loaded gross vehicle weight of over 14,000 pounds that is designed to carry cargo. Free prior tax years filing Bucket trucks (cherry pickers), cement mixers, dump trucks (including garbage trucks), flatbed trucks, and refrigerated trucks. Free prior tax years filing Combines, cranes and derricks, and forklifts. Free prior tax years filing Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat. Free prior tax years filing Qualified moving vans. Free prior tax years filing Qualified specialized utility repair trucks. Free prior tax years filing School buses used in transporting students and employees of schools. Free prior tax years filing Other buses with a capacity of at least 20 passengers that are used as passenger buses. Free prior tax years filing Tractors and other special purpose farm vehicles. Free prior tax years filing Clearly marked police and fire vehicle. Free prior tax years filing   A clearly marked police or fire vehicle is a vehicle that meets all the following requirements. Free prior tax years filing It is owned or leased by a governmental unit or an agency or instrumentality of a governmental unit. Free prior tax years filing It is required to be used for commuting by a police officer or fire fighter who, when not on a regular shift, is on call at all times. Free prior tax years filing It is prohibited from being used for personal use (other than commuting) outside the limit of the police officer's arrest powers or the fire fighter's obligation to respond to an emergency. Free prior tax years filing It is clearly marked with painted insignia or words that make it readily apparent that it is a police or fire vehicle. Free prior tax years filing A marking on a license plate is not a clear marking for these purposes. Free prior tax years filing Qualified moving van. Free prior tax years filing   A qualified moving van is any truck or van used by a professional moving company for moving household or business goods if the following requirements are met. Free prior tax years filing No personal use of the van is allowed other than for travel to and from a move site or for minor personal use, such as a stop for lunch on the way from one move site to another. Free prior tax years filing Personal use for travel to and from a move site happens no more than five times a month on average. Free prior tax years filing Personal use is limited to situations in which it is more convenient to the employer, because of the location of the employee's residence in relation to the location of the move site, for the van not to be returned to the employer's business location. Free prior tax years filing Qualified specialized utility repair truck. Free prior tax years filing   A truck is a qualified specialized utility repair truck if it is not a van or pickup truck and all the following apply. Free prior tax years filing The truck was specifically designed for and is used to carry heavy tools, testing equipment, or parts. Free prior tax years filing Shelves, racks, or other permanent interior construction has been installed to carry and store the tools, equipment, or parts and would make it unlikely that the truck would be used, other than minimally, for personal purposes. Free prior tax years filing The employer requires the employee to drive the truck home in order to be able to respond in emergency situations for purposes of restoring or maintaining electricity, gas, telephone, water, sewer, or steam utility services. Free prior tax years filing Computers and Related Peripheral Equipment A computer is a programmable, electronically activated device capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention. Free prior tax years filing It consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. Free prior tax years filing Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. Free prior tax years filing The following are neither computers nor related peripheral equipment. Free prior tax years filing Any equipment that is an integral part of other property that is not a computer. Free prior tax years filing Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment. Free prior tax years filing Equipment of a kind used primarily for the user's amusement or entertainment, such as video games. Free prior tax years filing Can Employees Claim a Deduction? If you are an employee, you can claim a depreciation deduction for the use of your listed property (whether owned or rented) in performing services as an employee only if your use is a business use. Free prior tax years filing The use of your property in performing services as an employee is a business use only if both the following requirements are met. Free prior tax years filing The use is for your employer's convenience. Free prior tax years filing The use is required as a condition of your employment. Free prior tax years filing If these requirements are not met, you cannot deduct depreciation (including the section 179 deduction) or rent expenses for your use of the property as an employee. Free prior tax years filing Employer's convenience. Free prior tax years filing   Whether the use of listed property is for your employer's convenience must be determined from all the facts. Free prior tax years filing The use is for your employer's convenience if it is for a substantial business reason of the employer. Free prior tax years filing The use of listed property during your regular working hours to carry on your employer's business generally is for the employer's convenience. Free prior tax years filing Condition of employment. Free prior tax years filing   Whether the use of listed property is a condition of your employment depends on all the facts and circumstances. Free prior tax years filing The use of property must be required for you to perform your duties properly. Free prior tax years filing Your employer does not have to require explicitly that you use the property. Free prior tax years filing However, a mere statement by the employer that the use of the property is a condition of your employment is not sufficient. Free prior tax years filing Example 1. Free prior tax years filing Virginia Sycamore is employed as a courier with We Deliver, which provides local courier services. Free prior tax years filing She owns and uses a motorcycle to deliver packages to downtown offices. Free prior tax years filing We Deliver explicitly requires all delivery persons to own a car or motorcycle for use in their employment. Free prior tax years filing Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. Free prior tax years filing Example 2. Free prior tax years filing Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. Free prior tax years filing He must travel to these sites on a regular basis. Free prior tax years filing Uplift does not furnish an automobile or explicitly require him to use his own automobile. Free prior tax years filing However, it pays him for any costs he incurs in traveling to the various sites. Free prior tax years filing The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. Free prior tax years filing Example 3. Free prior tax years filing Assume the same facts as in Example 2 except that Uplift furnishes a car to Bill, who chooses to use his own car and receive payment for using it. Free prior tax years filing The use of his own car is neither for the convenience of Uplift nor required as a condition of employment. Free prior tax years filing Example 4. Free prior tax years filing Marilyn Lee is a pilot for Y Company, a small charter airline. Free prior tax years filing Y requires pilots to obtain 80 hours of flight time annually in addition to flight time spent with the airline. Free prior tax years filing Pilots usually can obtain these hours by flying with the Air Force Reserve or by flying part-time with another airline. Free prior tax years filing Marilyn owns her own airplane. Free prior tax years filing The use of her airplane to obtain the required flight hours is neither for the convenience of the employer nor required as a condition of employment. Free prior tax years filing Example 5. Free prior tax years filing David Rule is employed as an engineer with Zip, an engineering contracting firm. Free prior tax years filing He occasionally takes work home at night rather than work late in the office. Free prior tax years filing He owns and uses a home computer which is virtually identical to the office model. Free prior tax years filing His use of the computer is neither for the convenience of his employer nor required as a condition of employment. Free prior tax years filing What Is the Business-Use Requirement? You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciate listed property using GDS and a declining balance method if the property meets the business-use requirement. Free prior tax years filing To meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified business use. Free prior tax years filing If this requirement is not met, the following rules apply. Free prior tax years filing Property not used predominantly for qualified business use during the year it is placed in service does not qualify for the section 179 deduction. Free prior tax years filing Property not used predominantly for qualified business use during the year it is placed in service does not qualify for a special depreciation allowance. Free prior tax years filing Any depreciation deduction under MACRS for property not used predominantly for qualified business use during any year must be figured using the straight line method over the ADS recovery period. Free prior tax years filing This rule applies each year of the recovery period. Free prior tax years filing Excess depreciation on property previously used predominantly for qualified business use must be recaptured (included in income) in the first year in which it is no longer used predominantly for qualified business use. Free prior tax years filing A lessee must add an inclusion amount to income in the first year in which the leased property is not used predominantly for qualified business use. Free prior tax years filing Being required to use the straight line method for an item of listed property not used predominantly for qualified business use is not the same as electing the straight line method. Free prior tax years filing It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. Free prior tax years filing Exception for leased property. Free prior tax years filing   The business-use requirement generally does not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. Free prior tax years filing   You are considered regularly engaged in the business of leasing listed property only if you enter into contracts for the leasing of listed property with some frequency over a continuous period of time. Free prior tax years filing This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of your business in its entirety. Free prior tax years filing Occasional or incidental leasing activity is insufficient. Free prior tax years filing For example, if you lease only one passenger automobile during a tax year, you are not regularly engaged in the business of leasing automobiles. Free prior tax years filing An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. Free prior tax years filing How To Allocate Use To determine whether the business-use requirement is met, you must allocate the use of any item of listed property used for more than one purpose during the year among its various uses. Free prior tax years filing For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. Free prior tax years filing You determine the percentage of qualified business use by dividing the number of miles you drove the vehicle for business purposes during the year by the total number of miles you drove the vehicle for all purposes (including business miles) during the year. Free prior tax years filing For other listed property, allocate the property's use on the basis of the most appropriate unit of time the property is actually used (rather than merely being available for use). Free prior tax years filing For example, you can determine the percentage of business use of a computer by dividing the number of hours you used the computer for business purposes during the year by the total number of hours you used the computer for all purposes (including business use) during the year. Free prior tax years filing Entertainment use. Free prior tax years filing   Treat the use of listed property for entertainment, recreation, or amusement purposes as a business use only to the extent you can deduct expenses (other than interest and property tax expenses) due to its use as an ordinary and necessary business expense. Free prior tax years filing Commuting use. Free prior tax years filing   The use of an automobile for commuting is not business use, regardless of whether work is performed during the trip. Free prior tax years filing For example, a business telephone call made on a car telephone while commuting to work does not change the character of the trip from commuting to business. Free prior tax years filing This is also true for a business meeting held in a car while commuting to work. Free prior tax years filing Similarly, a business call made on an otherwise personal trip does not change the character of a trip from personal to business. Free prior tax years filing The fact that an automobile is used to display material that advertises the owner's or user's trade or business does not convert an otherwise personal use into business use. Free prior tax years filing Use of your automobile by another person. Free prior tax years filing   If someone else uses your automobile, do not treat that use as business use unless one of the following conditions applies. Free prior tax years filing That use is directly connected with your business. Free prior tax years filing You properly report the value of the use as income to the other person and withhold tax on the income where required. Free prior tax years filing You are paid a fair market rent. Free prior tax years filing Treat any payment to you for the use of the automobile as a rent payment for purposes of item (3). Free prior tax years filing Employee deductions. Free prior tax years filing   If you are an employee, do not treat your use of listed property as business use unless it is for your employer's convenience and is required as a condition of your employment. Free prior tax years filing See Can Employees Claim a Deduction , earlier. Free prior tax years filing Qualified Business Use Qualified business use of listed property is any use of the property in your trade or business. Free prior tax years filing However, it does not include the following uses. Free prior tax years filing The leasing of property to any 5% owner or related person (to the extent the property is used by a 5% owner or person related to the owner or lessee of the property). Free prior tax years filing The use of property as pay for the services of a 5% owner or related person. Free prior tax years filing The use of property as pay for services of any person (other than a 5% owner or related person), unless the value of the use is included in that person's gross income and income tax is withheld on that amount where required. Free prior tax years filing Property does not stop being used predominantly for qualified business use because of a transfer at death. Free prior tax years filing Exception for leasing or compensatory use of aircraft. Free prior tax years filing   Treat the leasing of any aircraft by a 5% owner or related person, or the compensatory use of any aircraft, as a qualified business use if at least 25% of the total use of the aircraft during the year is for a qualified business use. Free prior tax years filing 5% owner. Free prior tax years filing   For a business entity that is not a corporation, a 5% owner is any person who owns more than 5% of the capital or profits interest in the business. Free prior tax years filing   For a corporation, a 5% owner is any person who owns, or is considered to own, either of the following. Free prior tax years filing More than 5% of the outstanding stock of the corporation. Free prior tax years filing Stock possessing more than 5% of the total combined voting power of all stock in the corporation. Free prior tax years filing Related persons. Free prior tax years filing   For a description of related persons, see Related persons in the discussion on property owned or used in 1986 under What Method Can You Use To Depreciate Your Property in chapter 1 . Free prior tax years filing For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. Free prior tax years filing Examples. Free prior tax years filing   The following examples illustrate whether the use of business property is qualified business use. Free prior tax years filing Example 1. Free prior tax years filing John Maple is the sole proprietor of a plumbing contracting business. Free prior tax years filing John employs his brother, Richard, in the business. Free prior tax years filing As part of Richard's pay, he is allowed to use one of the company automobiles for personal use. Free prior tax years filing The company includes the value of the personal use of the automobile in Richard's gross income and properly withholds tax on it. Free prior tax years filing The use of the automobile is pay for the performance of services by a related person, so it is not a qualified business use. Free prior tax years filing Example 2. Free prior tax years filing John, in Example 1, allows unrelated employees to use company automobiles for personal purposes. Free prior tax years filing He does not include the value of the personal use of the company automobiles as part of their compensation and he does not withhold tax on the value of the use of the automobiles. Free prior tax years filing This use of company automobiles by employees is not a qualified business use. Free prior tax years filing Example 3. Free prior tax years filing James Company Inc. Free prior tax years filing owns several automobiles that its employees use for business purposes. Free prior tax years filing The employees also are allowed to take the automobiles home at night. Free prior tax years filing The fair market value of each employee's use of an automobile for any personal purpose, such as commuting to and from work, is reported as income to the employee and James Company withholds tax on it. Free prior tax years filing This use of company automobiles by employees, even for personal purposes, is a qualified business use for the company. Free prior tax years filing Investment Use The use of property to produce income in a nonbusiness activity (investment use) is not a qualified business use. Free prior tax years filing However, you can treat the investment use as business use to figure the depreciation deduction for the property in a given year. Free prior tax years filing Example 1. Free prior tax years filing Sarah Bradley uses a home computer 50% of the time to manage her investments. Free prior tax years filing She also uses the computer 40% of the time in her part-time consumer research business. Free prior tax years filing Sarah's home computer is listed property because it is not used at a regular business establishment. Free prior tax years filing She does not use the computer predominantly for qualified business use. Free prior tax years filing Therefore, she cannot elect a section 179 deduction or claim a special depreciation allowance for the computer. Free prior tax years filing She must depreciate it using the straight line method over the ADS recovery period. Free prior tax years filing Her combined business/investment use for determining her depreciation deduction is 90%. Free prior tax years filing Example 2. Free prior tax years filing If Sarah uses her computer 30% of the time to manage her investments and 60% of the time in her consumer research business, it is used predominantly for qualified business use. Free prior tax years filing She can elect a section 179 deduction and, if she does not deduct all the computer's cost, she can claim a special depreciation allowance and depreciate the computer using the 200% declining balance method over the GDS recovery period. Free prior tax years filing Her combined business/investment use for determining her depreciation deduction is 90%. Free prior tax years filing Recapture of Excess Depreciation If you used listed property more than 50% in a qualified business use in the year you placed it in service, you must recapture (include in income) excess depreciation in the first year you use it 50% or less. Free prior tax years filing You also increase the adjusted basis of your property by the same amount. Free prior tax years filing Excess depreciation is: The depreciation allowable for the property (including any section 179 deduction and special depreciation allowance claimed) for years before the first year you do not use the property predominantly for qualified business use, minus The depreciation that would have been allowable for those years if you had not used the property predominantly for qualified business use in the year you placed it in service. Free prior tax years filing To determine the amount in (2) above, you must refigure the depreciation using the straight line method and the ADS recovery period. Free prior tax years filing Example. Free prior tax years filing In June 2009, Ellen Rye purchased and placed in service a pickup truck that cost $18,000. Free prior tax years filing She used it only for qualified business use for 2009 through 2012. Free prior tax years filing Ellen claimed a section 179 deduction of $10,000 based on the purchase of the truck. Free prior tax years filing She began depreciating it using the 200% DB method over a 5-year GDS recovery period. Free prior tax years filing The pickup truck's gross vehicle weight was over 6,000 pounds, so it was not subject to the passenger automobile limits discussed later under Do the Passenger Automobile Limits Apply. Free prior tax years filing During 2013, she used the truck 50% for business and 50% for personal purposes. Free prior tax years filing She includes $4,018 excess depreciation in her gross income for 2013. Free prior tax years filing The excess depreciation is determined as follows. Free prior tax years filing Total section 179 deduction ($10,000) and depreciation claimed ($6,618) for 2009 through 2012. Free prior tax years filing (Depreciation is from Table A-1. Free prior tax years filing ) $16,618 Minus: Depreciation allowable (Table A-8):     2009 – 10% of $18,000 $1,800   2010 – 20% of $18,000 3,600   2011 – 20% of $18,000 3,600   2012 – 20% of $18,000 3,600 12,600 Excess depreciation $4,018 If Ellen's use of the truck does not change to 50% for business and 50% for personal purposes until 2015, there will be no excess depreciation. Free prior tax years filing The total depreciation allowable using Table A-8 through 2015 will be $18,000, which equals the total of the section 179 deduction and depreciation she will have claimed. Free prior tax years filing Where to figure and report recapture. Free prior tax years filing   Use Form 4797, Part IV, to figure the recapture amount. Free prior tax years filing Report the recapture amount as other income on the same form or schedule on which you took the depreciation deduction. Free prior tax years filing For example, report the recapture amount as other income on Schedule C (Form 1040) if you took the depreciation deduction on Schedule C. Free prior tax years filing If you took the depreciation deduction on Form 2106, report the recapture amount as other income on Form 1040, line 21. Free prior tax years filing Lessee's Inclusion Amount If you use leased listed property other than a passenger automobile for business/investment use, you must include an amount in your income in the first year your qualified business-use percentage is 50% or less. Free prior tax years filing Your qualified business-use percentage is the part of the property's total use that is qualified business use (defined earlier). Free prior tax years filing For the inclusion amount rules for a leased passenger automobile, see Leasing a Car in chapter 4 of Publication 463. Free prior tax years filing The inclusion amount is the sum of Amount A and Amount B, described next. Free prior tax years filing However, see the special rules for the inclusion amount, later, if your lease begins in the last 9 months of your tax year or is for less than one year. Free prior tax years filing Amount A. Free prior tax years filing   Amount A is: The fair market value of the property, multiplied by The business/investment use for the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A-19 in Appendix A . Free prior tax years filing   The fair market value of the property is the value on the first day of the lease term. Free prior tax years filing If the capitalized cost of an item of listed property is specified in the lease agreement, you must treat that amount as the fair market value. Free prior tax years filing Amount B. Free prior tax years filing   Amount B is: The fair market value of the property, multiplied by The average of the business/investment use for all tax years the property was leased that precede the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A–20 in Appendix A . Free prior tax years filing Maximum inclusion amount. Free prior tax years filing   The inclusion amount cannot be more than the sum of the deductible amounts of rent for the tax year in which the lessee must include the amount in gross income. Free prior tax years filing Inclusion amount worksheet. Free prior tax years filing   The following worksheet is provided to help you figure the inclusion amount for leased listed property. Free prior tax years filing Inclusion Amount Worksheet for Leased Listed Property 1. Free prior tax years filing Fair market value   2. Free prior tax years filing Business/investment use for first year business use is 50% or less   3. Free prior tax years filing Multiply line 1 by line 2. Free prior tax years filing   4. Free prior tax years filing Rate (%) from Table A-19   5. Free prior tax years filing Multiply line 3 by line 4. Free prior tax years filing This is Amount A. Free prior tax years filing   6. Free prior tax years filing Fair market value   7. Free prior tax years filing Average business/investment use for years property leased before the first year business use is 50% or less . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing . Free prior tax years filing   8. Free prior tax years filing Multiply line 6 by line 7   9. Free prior tax years filing Rate (%) from Table A-20   10. Free prior tax years filing Multiply line 8 by line 9. Free prior tax years filing This is Amount B. Free prior tax years filing   11. Free prior tax years filing Add line 5 and line 10. Free prior tax years filing This is your inclusion amount. Free prior tax years filing Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Free prior tax years filing )         Example. Free prior tax years filing On February 1, 2011, Larry House, a calendar year taxpayer, leased and placed in service a computer with a fair market value of $3,000. Free prior tax years filing The lease is for a period of 5 years. Free prior tax years filing Larry does not use the computer at a regular business establishment, so it is listed property. Free prior tax years filing His business use of the property (all of which is qualified business use) is 80% in 2011, 60% in 2012, and 40% in 2013. Free prior tax years filing He must add an inclusion amount to gross income for 2013, the first tax year his qualified business-use percentage is 50% or less. Free prior tax years filing The computer has a 5-year recovery period under both GDS and ADS. Free prior tax years filing 2013 is the third tax year of the lease, so the applicable percentage from Table A-19 is −19. Free prior tax years filing 8%. Free prior tax years filing The applicable percentage from Table A-20 is 22. Free prior tax years filing 0%. Free prior tax years filing Larry's deductible rent for the computer for 2013 is $800. Free prior tax years filing Larry uses the Inclusion amount worksheet. Free prior tax years filing to figure the amount he must include in income for 2013. Free prior tax years filing His inclusion amount is $224, which is the sum of −$238 (Amount A) and $462 (Amount B). Free prior tax years filing Inclusion Amount Worksheet for Leased Listed Property 1. Free prior tax years filing Fair market value $3,000   2. Free prior tax years filing Business/investment use for first year business use is 50% or less 40 % 3. Free prior tax years filing Multiply line 1 by line 2. Free prior tax years filing 1,200   4. Free prior tax years filing Rate (%) from Table A-19 −19. Free prior tax years filing 8 % 5. Free prior tax years filing Multiply line 3 by line 4. Free prior tax years filing This is Amount A. Free prior tax years filing −238   6. Free prior tax years filing Fair market value 3,000   7. Free prior tax years filing Average business/investment use for years property leased before the first year business use is 50% or less 70 % 8. Free prior tax years filing Multiply line 6 by line 7 2,100   9. Free prior tax years filing Rate (%) from Table A-20 22. Free prior tax years filing 0 % 10. Free prior tax years filing Multiply line 8 by line 9. Free prior tax years filing This is Amount B. Free prior tax years filing 462   11. Free prior tax years filing Add line 5 and line 10. Free prior tax years filing This is your inclusion amount. Free prior tax years filing Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Free prior tax years filing ) $224           Lease beginning in the last 9 months of your tax year. Free prior tax years filing    The inclusion amount is subject to a special rule if all the following apply. Free prior tax years filing The lease term begins within 9 months before the close of your tax year. Free prior tax years filing You do not use the property predominantly (more than 50%) for qualified business use during that part of the tax year. Free prior tax years filing The lease term continues into your next tax year. Free prior tax years filing Under this special rule, add the inclusion amount to income in the next tax year. Free prior tax years filing Figure the inclusion amount by taking into account the average of the business/investment use for both tax years (line 2 of the Inclusion Amount Worksheet for Leased Listed Property) and the applicable percentage for the tax year the lease term begins. Free prior tax years filing Skip lines 6 through 9 of the worksheet and enter zero on line 10. Free prior tax years filing Example 1. Free prior tax years filing On August 1, 2012, Julie Rule, a calendar year taxpayer, leased and placed in service an item of listed property. Free prior tax years filing The property is 5-year property with a fair market value of $10,000. Free prior tax years filing Her property has a recovery period of 5 years under ADS. Free prior tax years filing The lease is for 5 years. Free prior tax years filing Her business use of the property was 50% in 2012 and 90% in 2013. Free prior tax years filing She paid rent of $3,600 for 2012, of which $3,240 is deductible. Free prior tax years filing She must include $147 in income in 2013. Free prior tax years filing The $147 is the sum of Amount A and Amount B. Free prior tax years filing Amount A is $147 ($10,000 × 70% × 2. Free prior tax years filing 1%), the product of the fair market value, the average business use for 2012 and 2013, and the applicable percentage for year one from Table A-19 . Free prior tax years filing Amount B is zero. Free prior tax years filing Lease for less than one year. Free prior tax years filing   A special rule for the inclusion amount applies if the lease term is less than one year and you do not use the property predominantly (more than 50%) for qualified business use. Free prior tax years filing The amount included in income is the inclusion amount (figured as described in the preceding discussions) multiplied by a fraction. Free prior tax years filing The numerator of the fraction is the number of days in the lease term and the denominator is 365 (or 366 for leap years). Free prior tax years filing   The lease term for listed property other than residential rental or nonresidential real property includes options to renew. Free prior tax years filing If you have two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property, treat them as one lease. Free prior tax years filing Example 2. Free prior tax years filing On October 1, 2012, John Joyce, a calendar year taxpayer, leased and placed in service an item of listed property that is 3-year property. Free prior tax years filing This property had a fair market value of $15,000 and a recovery period of 5 years under ADS. Free prior tax years filing The lease term was 6 months (ending on March 31, 2013), during which he used the property 45% in business. Free prior tax years filing He must include $71 in income in 2013. Free prior tax years filing The $71 is the sum of Amount A and Amount B. Free prior tax years filing Amount A is $71 ($15,000 × 45% × 2. Free prior tax years filing 1% × 183/365), the product of the fair market value, the average business use for both years, and the applicable percentage for year one from Table A-19 , prorated for the length of the lease. Free prior tax years filing Amount B is zero. Free prior tax years filing Where to report inclusion amount. Free prior tax years filing   Report the inclusion amount figured as described in the preceding discussions as other income on the same form or schedule on which you took the deduction for your rental costs. Free prior tax years filing For example, report the inclusion amount as other income on Schedule C (Form 1040) if you took the deduction on Schedule C. Free prior tax years filing If you took the deduction for rental costs on Form 2106, report the inclusion amount as other income on Form 1040, line 21. Free prior tax years filing Do the Passenger Automobile Limits Apply? The depreciation deduction, including the section 179 deduction and special depreciation allowance, you can claim for a passenger automobile (defined earlier) each year is limited. Free prior tax years filing This section describes the maximum depreciation deduction amounts for 2013 and explains how to deduct, after the recovery period, the unrecovered basis of your property that results from applying the passenger automobile limit. Free prior tax years filing Exception for leased cars. Free prior tax years filing   The passenger automobile limits generally do not apply to passenger automobiles leased or held for leasing by anyone regularly engaged in the business of leasing passenger automobiles. Free prior tax years filing For information on when you are considered regularly engaged in the business of leasing listed property, including passenger automobiles, see Exception for leased property , earlier, under What Is the Business-Use Requirement . Free prior tax years filing Maximum Depreciation Deduction The passenger automobile limits are the maximum depreciation amounts you can deduct for a passenger automobile. Free prior tax years filing They are based on the date you placed the automobile in service. Free prior tax years filing Passenger Automobiles The maximum deduction amounts for most passenger automobiles are shown in the following table. Free prior tax years filing Maximum Depreciation Deduction for Passenger Automobiles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,1601 $5,100 $3,050 $1,875 2012 11,1601 5,100 3,050 1,875 2011 11,0602 4,900 2,950 1,775 2010 11,0602  4,900 2,950 1,775 2009 10,9603 4,800 2,850 1,775 2008 10,9603  4,800 2,850 1,775 2007 3,060 4,900 2,850 1,775 2006 2,960 4,800 2,850 1,775 2005 2,960 4,700 2,850 1,675 2004 10,6104 4,800 2,850 1,675 5/06/2003– 12/31/2003 10,7105 4,900 2,950 1,775 1/01/2003– 5/05/2003 7,6606 4,900 2,950 1,775 1If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Free prior tax years filing 2If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,060. Free prior tax years filing 3If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $2,960. Free prior tax years filing 4If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $2,960. Free prior tax years filing 5If you acquired the vehicle before 5/06/03, the maximum deduction is $7,660. Free prior tax years filing If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Free prior tax years filing 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Free prior tax years filing If your business/investment use of the automobile is less than 100%, you must reduce the maximum deduction amount by multiplying the maximum amount by the percentage of business/investment use determined on an annual basis during the tax year. Free prior tax years filing If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. Free prior tax years filing The numerator of the fraction is the number of months and partial months in the short tax year and the denominator is 12. Free prior tax years filing Example. Free prior tax years filing On April 15, 2013, Virginia Hart bought and placed in service a new car for $14,500. Free prior tax years filing She used the car only in her business. Free prior tax years filing She files her tax return based on the calendar year. Free prior tax years filing She does not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Free prior tax years filing Under MACRS, a car is 5-year property. Free prior tax years filing Since she placed her car in service on April 15 and used it only for business, she uses the percentages in Table A-1 to figure her MACRS depreciation on the car. Free prior tax years filing Virginia multiplies the $14,500 unadjusted basis of her car by 0. Free prior tax years filing 20 to get her MACRS depreciation of $2,900 for 2013. Free prior tax years filing This $2,900 is below the maximum depreciation deduction of $3,160 for passenger automobiles placed in service in 2013. Free prior tax years filing She can deduct the full $2,900. Free prior tax years filing Electric Vehicles The maximum depreciation deductions for passenger automobiles that are produced to run primarily on electricity are higher than those for other automobiles. Free prior tax years filing The maximum deduction amounts for electric vehicles placed in service after August 5, 1997, and before January 1, 2007, are shown in the following table. Free prior tax years filing Owners of electric vehicles placed in service after December 31, 2006, should use the table of maximum deduction amounts later for electric vehicles classified as passenger automobiles or use the table of maximum deduction amounts for trucks and vans later, for electric vehicles classified as trucks and vans. Free prior tax years filing Maximum Depreciation Deduction For Electric Vehicles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2006 $8,980 $14,400 $8,650 $5,225 2005 8,880 14,200 8,450 5,125 2004 31,8301 14,300 8,550 5,125 5/06/2003– 12/31/2003 32,0302 14,600 8,750 5,225 1/01/2003– 5/05/2003 22,8803 14,600 8,750 5,225 1If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $8,880. Free prior tax years filing 2If you acquired the vehicle before 5/06/03, the maximum deduction is $22,880. Free prior tax years filing If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Free prior tax years filing 3 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Free prior tax years filing Trucks and Vans The maximum depreciation deductions for trucks and vans placed in service after 2002 are higher than those for other passenger automobiles. Free prior tax years filing The maximum deduction amounts for trucks and vans are shown in the following table. Free prior tax years filing Maximum Depreciation Deduction For Trucks and Vans Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,3601 $5,400 $3,250 $1,975 2012 11,3601 5,300 3,150 1,875 2011 11,2602 5,200 3,150 1,875 2010 11,1603 5,100 3,050 1,875 2009 11,0604 4,900 2,950 1,775 2008 11,1605 5,100 3,050 1,875 2007 3,260 5,200 3,050 1,875 2006 3,260 5,200 3,150 1,875 2005 3,260 5,200 3,150 1,875 2004 10,9106 5,300 3,150 1,875 5/06/2003– 12/31/2003 11,0107 5,400 3,250 1,975 1/01/2003– 5/05/2003 7,9608 5,400 3,250 1,975 1 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,360. Free prior tax years filing 2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,260. Free prior tax years filing 3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Free prior tax years filing 4 If you elect not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,060. Free prior tax years filing 5If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,160. Free prior tax years filing 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, or the maximum deduction is $3,260. Free prior tax years filing 7 If you acquired the vehicle before 5/06/03, the maximum deduction is $7,960. Free prior tax years filing If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Free prior tax years filing 8 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Free prior tax years filing Depreciation Worksheet for Passenger Automobiles You can use the following worksheet to figure your depreciation deduction using the percentage tables. Free prior tax years filing Then use the information from this worksheet to prepare Form 4562. Free prior tax years filing Depreciation Worksheet for Passenger Automobiles   Part I   1. Free prior tax years filing MACRS system (GDS or ADS)     2. Free prior tax years filing Property class     3. Free prior tax years filing Date placed in service     4. Free prior tax years filing Recovery period     5. Free prior tax years filing Method and convention     6. Free prior tax years filing Depreciation rate (from tables)     7. Free prior tax years filing Maximum depreciation deduction for this year from the appropriate table       8. Free prior tax years filing Business/investment-use percentage       9. Free prior tax years filing Multiply line 7 by line 8. Free prior tax years filing This is your adjusted maximum depreciation deduction       10. Free prior tax years filing Section 179 deduction claimed this year (not more than line 9). Free prior tax years filing Enter -0- if this is not the year you placed the car in service. Free prior tax years filing         Note. Free prior tax years filing  1) If line 10 is equal to line 9, stop here. Free prior tax years filing Your combined section 179 and depreciation deduction (including your special depreciation allowance) is limited to the amount on line 9. Free prior tax years filing  2) If line 10 is less than line 9, complete Part II. Free prior tax years filing   Part II   11. Free prior tax years filing Subtract line 10 from line 9. Free prior tax years filing This is the limit on the amount you can deduct for depreciation (including any special depreciation allowance )       12. Free prior tax years filing Cost or other basis (reduced by any alternative motor vehicle credit 1or credit for electric vehicles 2)       13. Free prior tax years filing Multiply line 12 by line 8. Free prior tax years filing This is your business/investment cost       14. Free prior tax years filing Section 179 deduction claimed in the year you placed the car in service       15. Free prior tax years filing Subtract line 14 from line 13. Free prior tax years filing This is your tentative basis for depreciation       16. Free prior tax years filing Multiply line 15 by . Free prior tax years filing 50 if the 50% special depreciation allowance applies. Free prior tax years filing This is your special depreciation allowance. Free prior tax years filing Enter -0- if this is not the year you placed the car in service, the car is not qualified property, or you elected not to claim a special depreciation allowance       Note 1) If line 16 is equal to line 11, stop here. Free prior tax years filing Your depreciation deduction (including your special depreciation allowance) is limited to the amount on line 11. Free prior tax years filing  2) If line 16 is less than line 11, complete Part III. Free prior tax years filing   Part III   17. Free prior tax years filing Subtract line 16 from 11. Free prior tax years filing This is the limit on the amount you can deduct for MACRS depreciation       18. Free prior tax years filing Subtract line 16 from line 15. Free prior tax years filing This is your basis for depreciation. Free prior tax years filing       19. Free prior tax years filing Multiply line 18 by line 6. Free prior tax years filing This is your tentative MACRS depreciation deduction. Free prior tax years filing       20. Free prior tax years filing Enter the lesser of line 17 or line 19. Free prior tax years filing This is your MACRS depreciation deduction. Free prior tax years filing     1 When figuring the amount to enter on line 12, do not reduce your cost or other basis by any section 179 deduction you claimed for your car. Free prior tax years filing 2 Reduce the basis by the lesser of $4,000 or 10% of the cost of the vehicle even if the credit is less than that amount. Free prior tax years filing             Deductions After the Recovery Period If the depreciation deductions for your automobile are reduced under the passenger automobile limits, you will have unrecovered basis in your automobile at the end of the recovery period. Free prior tax years filing If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends. Free prior tax years filing You can claim a depreciation deduction in each succeeding tax year until you recover your full basis in the car. Free prior tax years filing The maximum amount you can deduct each year is determined by the date you placed the car in service and your business/investment-use percentage. Free prior tax years filing See Maximum Depreciation Deduction , earlier. Free prior tax years filing Unrecovered basis is the cost or other basis of the passenger automobile reduced by any clean-fuel vehicle deduction, electric vehicle credit, depreciation, and section 179 deductions that would have been allowable if you had used the car 100% for business and investment use and the passenger automobile limits had not applied. Free prior tax years filing You cannot claim a depreciation deduction for listed property other than passenger automobiles after the recovery period ends. Free prior tax years filing There is no unrecovered basis at the end of the recovery period because you are considered to have used this property 100% for business and investment purposes during all of the recovery period. Free prior tax years filing Example. Free prior tax years filing In May 2007, you bought and placed in service a car costing $31,500. Free prior tax years filing The car was 5-year property under GDS (MACRS). Free prior tax years filing You did not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Free prior tax years filing You used the car exclusively for business during the recovery period (2007 through 2012). Free prior tax years filing You figured your depreciation as shown below. Free prior tax years filing Year Percentage Amount Limit   Allowed 2007 20. Free prior tax years filing 0% $6,300 $2,960   $2,960 2008 32. Free prior tax years filing 0 10,080 4,800   4,800 2009 19. Free prior tax years filing 2 6,048 2,850   2,850 2010 11. Free prior tax years filing 52 3,629 1,675   1,675 2011 11. Free prior tax years filing 52 3,629 1,675   1,675 2012 5. Free prior tax years filing 76 1,814 1,675   1,675 Total   $15,635 At the end of 2012, you had an unrecovered basis of $15,865 ($31,500 − $15,635). Free prior tax years filing If in 2013 and later years you continue to use the car 100% for business, you can deduct each year the lesser of $1,675 or your remaining unrecovered basis. Free prior tax years filing If your business use of the car had been less than 100% during any year, your depreciation deduction would have been less than the maximum amount allowable for that year. Free prior tax years filing However, in figuring your unrecovered basis in the car, you would still reduce your basis by the maximum amount allowable as if the business use had been 100%. Free prior tax years filing For example, if you had used your car 60% for business instead of 100%, your allowable depreciation deductions would have been $9,519 ($15,865 × 60%), but you still would have to reduce your basis by $15,865 to determine your unrecovered basis. Free prior tax years filing Deductions For Passenger Automobiles Acquired in a Trade-in If you acquire a passenger automobile in a trade-in, depreciate the carryover basis separately as if the trade-in did not occur. Free prior tax years filing Depreciate the part of the new automobile's basis that exceeds its carryover basis (excess basis) as if it were newly placed in service property. Free prior tax years filing This excess basis is the additional cash paid for the new automobile in the trade-in. Free prior tax years filing The depreciation figured for the two components of the basis (carryover basis and excess basis) is subject to a single passenger automobile limit. Free prior tax years filing Special rules apply in determining the passenger automobile limits. Free prior tax years filing These rules and examples are discussed in section 1. Free prior tax years filing 168(i)-6(d)(3) of the regulations. Free prior tax years filing Instead of figuring depreciation for the carryover basis and the excess basis separately, you can elect to treat the old automobile as disposed of and both of the basis components for the new automobile as if placed in service at the time of the trade-in. Free prior tax years filing For more information, including how to make this election, see Election out under Property Acquired in a Like-kind Exchange or Involuntary Conversion in chapter 4 and sections 1. Free prior tax years filing 168(i)-6(i) and 1. Free prior tax years filing 168(i)-6(j) of the regulations. Free prior tax years filing What Records Must Be Kept? You cannot take any depreciation or section 179 deduction for the use of listed property unless you can prove your business/investment use with adequate records or with sufficient evidence to support your own statements. Free prior tax years filing For listed property, you must keep records for as long as any recapture can still occur. Free prior tax years filing Recapture can occur in any tax year of the recovery period. Free prior tax years filing Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. Free prior tax years filing You do not have to record information in an account book, diary, or similar record if the information is already shown on the receipt. Free prior tax years filing However, your records should back up your receipts in an orderly manner. Free prior tax years filing Elements of expenditure or use. Free prior tax years filing   Your records or other documentary evidence must support all the following. Free prior tax years filing The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses. Free prior tax years filing The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year. Free prior tax years filing The date of the expenditure or use. Free prior tax years filing The business or investment purpose for the expenditure or use. Free prior tax years filing   Written documents of your expenditure or use are generally better evidence than oral statements alone. Free prior tax years filing You do not have to keep a daily log. Free prior tax years filing However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time of the expenditure or use and backed up by other documents is preferable to a statement you prepare later. Free prior tax years filing Timeliness. Free prior tax years filing   You must record the elements of an expenditure or use at the time you have full knowledge of the elements. Free prior tax years filing An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use generally is considered a timely record if, in the regular course of business: The statement is given by an employee to the employer, or The statement is given by an independent contractor to the client or customer. Free prior tax years filing   For example, a log maintained on a weekly basis, that accounts for use during the week, will be considered a record made at or near the time of use. Free prior tax years filing Business purpose supported. Free prior tax years filing   Generally, an adequate record of business purpose must be in the form of a written statement. Free prior tax years filing However, the amount of detail necessary to establish a business purpose depends on the facts and circumstances of each case. Free prior tax years filing A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. Free prior tax years filing For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. Free prior tax years filing Business use supported. Free prior tax years filing   An adequate record contains enough information on each element of every business or investment use. Free prior tax years filing The amount of detail required to support the use depends on the facts and circumstances. Free prior tax years filing For example, a taxpayer who uses a truck for both business and personal purposes and whose only business use of the truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. Free prior tax years filing   Although you generally must prepare an adequate written record, you can prepare a record of the business use of listed property in a computer memory device that uses a logging program. Free prior tax years filing Separate or combined expenditures or uses. Free prior tax years filing   Each use by you normally is considered a separate use. Free prior tax years filing However, you can combine repeated uses as a single item. Free prior tax years filing   Record each expenditure as a separate item. Free prior tax years filing Do not combine it with other expenditures. Free prior tax years filing If you choose, however, you can combine amounts you spent for the use of listed property during a tax year, such as for gasoline or automobile repairs. Free prior tax years filing If you combine these expenses, you do not need to support the business purpose of each expense. Free prior tax years filing Instead, you can divide the expenses based on the total business use of the listed property. Free prior tax years filing   You can account for uses that can be considered part of a single use, such as a round trip or uninterrupted business use, by a single record. Free prior tax years filing For example, you can account for the use of a truck to make deliveries at several locations that begin and end at the business premises and can include a stop at the business in between deliveries by a single record of miles driven. Free prior tax years filing You can account for the use of a passenger automobile by a salesperson for a business trip away from home over a period of time by a single record of miles traveled. Free prior tax years filing Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. Free prior tax years filing Confidential information. Free prior tax years filing   If any of the information on the elements of an expenditure or use is confidential, you do not need to include it in the account book or similar record if you record it at or near the time of the expenditure or use. Free prior tax years filing You must keep it elsewhere and make it available as support to the IRS director for your area on request. Free prior tax years filing Substantial compliance. Free prior tax years filing   If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the satisfaction of the IRS director for your area, you can establish this element by any evidence the IRS director for your area deems adequate. Free prior tax years filing   If you fail to establish to the satisfaction of the IRS director for your area that you have substantially complied with the adequate records requirement for an element of an expenditure or use, you must establish the element as follows. Free prior tax years filing By your own oral or written statement containing detailed information as to the element. Free prior tax years filing By other evidence sufficient to establish the element. Free prior tax years filing   If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct evidence, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. Free prior tax years filing If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. Free prior tax years filing Sampling. Free prior tax years filing   You can maintain an adequate record for part of a tax year and use that record to support your business and investment use of listed property for the entire tax year if it can be shown by other evidence that the periods for which you maintain an adequate record are representative of the use throughout the year. Free prior tax years filing Example 1. Free prior tax years filing Denise Williams, a sole proprietor and calendar year taxpayer, operates an interior decorating business out of her home. Free prior tax years filing She uses her automobile for local business visits to the homes or offices of clients, for meetings with suppliers and subcontractors, and to pick up and deliver items to clients. Free prior tax years filing There is no other business use of the automobile, but she and family members also use it for personal purposes. Free prior tax years filing She maintains adequate records for the first 3 months of the year showing that 75% of the automobile use was for business. Free prior tax years filing Subcontractor invoices and paid bills show that her business continued at approximately the same rate for the rest of the year. Free prior tax years filing If there is no change in circumstances, such as the purchase of a second car for exclusive use in her business, the determination that her combined business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Free prior tax years filing Example 2. Free prior tax years filing Assume the same facts as in Example 1, except that Denise maintains adequate records during the first week of every month showing that 75% of her use of the automobile is for business. Free prior tax years filing Her business invoices show that her business continued at the same rate during the later weeks of each month so that her weekly records are representative of the automobile's business use throughout the month. Free prior tax years filing The determination that her business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Free prior tax years filing Example 3. Free prior tax years filing Bill Baker, a sole proprietor and calendar year taxpayer, is a salesman in a large metropolitan area for a company that manufactures household products. Free prior tax years filing For the first 3 weeks of each month, he occasionally uses his own automobile for business travel within the metropolitan area. Free prior tax years filing During these weeks, his business use of the automobile does not follow a consistent pattern. Free prior tax years filing During the fourth week of each month, he delivers all business orders taken during the previous month. Free prior tax years filing The business use of his automobile, as supported by adequate records, is 70% of its total use during that fourth week. Free prior tax years filing The determination based on the record maintained during the fourth week of the month that his business/investment use of the automobile for the tax year is 70% does not rest on sufficient supporting evidence because his use during that week is not representative of use during other periods. Free prior tax years filing Loss of records. Free prior tax years filing   When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. Free prior tax years filing How Is Listed Property Information Reported? You must provide the information about your listed property requested in Part V of Form 4562, Section A, if you claim either of the following deductions. Free prior tax years filing Any deduction for a vehicle. Free prior tax years filing A depreciation deduction for any other listed property. Free prior tax years filing If you claim any deduction for a vehicle, you also must provide the information requested in Section B. Free prior tax years filing If you provide the vehicle for your employee's use, the employee must give you this information. Free prior tax years filing If you provide any vehicle for use by an employee, you must first answer the questions in Section C to see if you meet an exception to completing Section B for that vehicle. Free prior tax years filing Vehicles used by your employees. Free prior tax years filing   You do not have to complete Section B, Part V, for vehicles used by your employees who are not more-than-5% owners or related persons if you meet at least one of the following requirements. Free prior tax years filing You maintain a written policy statement that prohibits one of the following uses of the vehicles. Free prior tax years filing All personal use including commuting. Free prior tax years filing Personal use, other than commuting, by employees who are not officers, directors, or 1%-or-more owners. Free prior tax years filing You treat all use of the vehicles by your employees as personal use. Free prior tax years filing You provide more than five vehicles for use by your employees, and you keep in your records the information on their use given to you by the employees. Free prior tax years filing For demonstrator automobiles provided to full-time salespersons, you maintain a written policy statement that limits the total mileage outside the salesperson's normal working hours and prohibits use of the automobile by anyone else, for vacation trips, or to store personal possessions. Free prior tax years filing Exceptions. Free prior tax years filing   If you file Form 2106, 2106-EZ, or Schedule C-EZ (Form 1040), and you are not required to file Form 4562, report information about listed property on that form and not on Form 4562. Free prior tax years filing Also, if you file Schedule C (Form 1040) and are claiming the standard mileage rate or actual vehicle expenses (except depreciation) and you are not required to file Form 4562 for any other reason, report vehicle information in Part IV of Schedule C and not on Form 4562. Free prior tax years filing Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Colorado Office of the Attorney General

Website: Colorado Office of the Attorney General

Address: Colorado Office of the Attorney General
Consumer Protection Section
1300 Broadway, 10th Floor
Denver, CO 80203

Phone Number: 720-508-6006

Toll-free: 1-800-222-4444 (CO)

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County Consumer Protection Offices

Pueblo County District Attorney's Office

Website: Pueblo County District Attorney's Office

Address: Pueblo County District Attorney's Office
Economic Crimes Unit
701 Court St.
Pueblo, CO 81003

Phone Number: 719-583-6030

Weld County District Attorney's Office

Website: Weld County District Attorney's Office

Address: Weld County District Attorney's Office
915 10th St.
PO Box 1167
Greeley, CO 80632-1167

Phone Number: 970-356-4010

Fourth Judicial District Attorney's Office

Website: Fourth Judicial District Attorney's Office

Address: Fourth Judicial District Attorney's Office
Economic Crimes Division
El Paso and Teller Counties
105 E. Vermijo Ave.
Colorado Springs, CO 80903

Phone Number: 719-520-6000 719-520-6002 (Fraud Hotline)

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City Consumer Protection Offices

Denver District Attorney's Office

Website: Denver District Attorney's Office

Address: Denver District Attorney's Office
Economic Crimes Unit
201 W. Colfax Ave.
Denver, CO 80202

Phone Number: 720-913-9179

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Regulatory Agencies

Website: Department of Regulatory Agencies

Address: Department of Regulatory Agencies
Division of Banking
1560 Broadway, Suite 975
Denver, CO 80202

Phone Number: 303-894-7575

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Regulatory Agencies

Website: Department of Regulatory Agencies

Address: Department of Regulatory Agencies
Division of Insurance
1560 Broadway, Suite 850
Denver, CO 80202

Phone Number: 303-894-7490

Toll-free: 1-800-930-3745 (CO)

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Regulatory Agencies

Website: Department of Regulatory Agencies

Address: Department of Regulatory Agencies
Division of Securities
1560 Broadway, Suite 900
Denver, CO 80202

Phone Number: 303-894-2320

TTY: 1-800-659-2656

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Public Utilities Commission

Website: Public Utilities Commission

Address: Public Utilities Commission
Consumer Protection Division
1560 Broadway, Suite 250
Denver, CO 80202

Phone Number: 303-894-2070

Toll-free: 1-800-456-0858 (CO)

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The Free Prior Tax Years Filing

Free prior tax years filing Publication 503 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. Free prior tax years filing Tax questions. Free prior tax years filing Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 503, such as legislation enacted after it was published, go to www. Free prior tax years filing irs. Free prior tax years filing gov/pub503. Free prior tax years filing Reminders Taxpayer identification number needed for each qualifying person. Free prior tax years filing  You must include on line 2 of Form 2441, Child and Dependent Care Expenses, the name and taxpayer identification number (generally the social security number) of each qualifying person. Free prior tax years filing See Taxpayer identification number under Qualifying Person Test, later. Free prior tax years filing You may have to pay employment taxes. Free prior tax years filing  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. Free prior tax years filing Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. Free prior tax years filing See Employment Taxes for Household Employers, later. Free prior tax years filing Photographs of missing children. Free prior tax years filing  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free prior tax years filing Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free prior tax years filing You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Free prior tax years filing Introduction This publication explains the tests you must meet to claim the credit for child and dependent care expenses. Free prior tax years filing It explains how to figure and claim the credit. Free prior tax years filing You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. Free prior tax years filing The credit can be up to 35% of your expenses. Free prior tax years filing To qualify, you must pay these expenses so you can work or look for work. Free prior tax years filing This publication also discusses some of the employment tax rules for household employers. Free prior tax years filing Dependent care benefits. Free prior tax years filing   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. Free prior tax years filing You must complete Form 2441, Part III, before you can figure the amount of your credit. Free prior tax years filing See Dependent Care Benefits under How To Figure the Credit, later. Free prior tax years filing Comments and suggestions. Free prior tax years filing   We welcome your comments about this publication and your suggestions for future editions. Free prior tax years filing   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Free prior tax years filing NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free prior tax years filing Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free prior tax years filing   You can send your comments from www. Free prior tax years filing irs. Free prior tax years filing gov/formspubs/. Free prior tax years filing Click on “More Information” and then on “Comment on Tax Forms and Publications. Free prior tax years filing ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Free prior tax years filing Ordering forms and publications. Free prior tax years filing   Visit www. Free prior tax years filing irs. Free prior tax years filing gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Free prior tax years filing Internal Revenue Service 1201 N. Free prior tax years filing Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Free prior tax years filing   If you have a tax question, check the information available on IRS. Free prior tax years filing gov or call 1-800-829-1040. Free prior tax years filing We cannot answer tax questions sent to either of the above addresses. Free prior tax years filing Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-10 Dependent Care Provider's Identification and Certification See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. Free prior tax years filing Prev  Up  Next   Home   More Online Publications