File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Free State Income Tax Forms Online

File An Extension On My TaxesTax 1040ezIrs Free File Program1040 Ez Form 2010Tax Form For MilitaryFree State FileIrs Amended Return InstructionsH&r Block Tax SoftwareTurbo Tax2010 Taxes Cheap 1099g Form W 2Amendment For Taxes2011 Taxes OnlineCan I Still E File My 2012 Tax Return1040 Ez Instructions 2013Income Tax 2012What Is A 1040nrFree State Tax Return FormsFile Late Tax Return1040ez 20122012 Irs Forms 1040I Filed My Taxes Wrong1040ez 2013Irs Extension Form 2012File Taxes FreeIrs Form 1040 Ez1040ez Tax TablesTax 1040ezIrs1040ez FormState ReturnsHow To Fill Out A 1040ezFree Tax PreparationMy Free Taxes Com2011 Amended Return2012 FreetaxusaHr Block Taxes Online1040ez Tax BookletPrior Year Tax ReturnsFree H&r Block Tax SoftwareHow To File 2008 Taxes Free OnlineFree 1040ez Tax Forms

Free State Income Tax Forms Online

Free state income tax forms online Index A Absence, temporary, Temporary absence from work. Free state income tax forms online , Temporary absence from work. Free state income tax forms online Accountable plans, Accountable Plans Address, change of, Reminders Adequate accounting, Adequate accounting. Free state income tax forms online Armed Forces, Retirees, survivors, and Armed Forces members. Free state income tax forms online , Members of the Armed Forces Distance test, special rule, Armed Forces. Free state income tax forms online Form 3903, how to complete, How to complete Form 3903 for members of the Armed Forces. Free state income tax forms online Services or reimbursements provided by government, Services or reimbursements provided by government. Free state income tax forms online Spouse and dependents, Spouse and dependents. Free state income tax forms online Assistance (see Tax help) C Change of address, Reminders Closely related in place, Closely related in place. Free state income tax forms online Closely related in time, Closely related in time. Free state income tax forms online D Deductible moving expenses, Deductible Moving Expenses, Moving expenses allocable to excluded foreign income. Free state income tax forms online Household goods, Household goods and personal effects. Free state income tax forms online Moving to and from storage, Moving goods and effects to and from storage. Free state income tax forms online Member of your household, Member of your household. Free state income tax forms online Moves in U. Free state income tax forms online S. Free state income tax forms online , Moves to Locations in the United States Moves outside U. Free state income tax forms online S. Free state income tax forms online , Moves to Locations Outside the United States Moving expenses allocable to excluded foreign income, Moving expenses allocable to excluded foreign income. Free state income tax forms online Personal effects, Household goods and personal effects. Free state income tax forms online Moving to and from storage, Moving goods and effects to and from storage. Free state income tax forms online Reasonable expenses, Reasonable expenses. Free state income tax forms online Storage expenses, Storage expenses. Free state income tax forms online , Storage expenses. Free state income tax forms online Travel by car, Travel by car. Free state income tax forms online Travel expenses, Travel expenses. Free state income tax forms online Distance test, Distance Test Armed Forces, special rule, Armed Forces. Free state income tax forms online First job, First job or return to full-time work. Free state income tax forms online Illustration of (Figure A), Main job location, Main job location. Free state income tax forms online Return to full-time work, First job or return to full-time work. Free state income tax forms online Worksheet 1, Distance Test E Employees Time test for, Time Test for Employees Estimated tax, Tax Withholding and Estimated Tax, Estimated tax. Free state income tax forms online Excess reimbursements, Excess reimbursement. Free state income tax forms online Excluded foreign income Moving expenses allocable to, Moving expenses allocable to excluded foreign income. Free state income tax forms online F Figures (see Tables and figures) First job, First job or return to full-time work. Free state income tax forms online Form 1040 Moving expense deduction, Where to deduct. Free state income tax forms online Form 3903 Armed Forces members, how to complete, How to complete Form 3903 for members of the Armed Forces. Free state income tax forms online Completing form, Completing Form 3903. Free state income tax forms online Moving expense deduction calculation, Form 3903 Form W-2 Reimbursements, You meet accountable plan rules. Free state income tax forms online , Expenses deducted in earlier year. Free state income tax forms online Government provided for Armed Forces members, Services or reimbursements provided by government. Free state income tax forms online Form W-4 Withholding allowance, Amount of income tax withheld. Free state income tax forms online Free tax services, Free help with your tax return. Free state income tax forms online Full-time work, defined, Full-time work. Free state income tax forms online H Help (see Tax help) Home, defined, Home defined. Free state income tax forms online Household goods, Household goods and personal effects. Free state income tax forms online Moving to and from storage, Moving goods and effects to and from storage. Free state income tax forms online I Important reminders, Reminders J Joint returns, Joint Return M Main job location Defined, Main job location. Free state income tax forms online More than one job, More than one job. Free state income tax forms online Union members, Union members. Free state income tax forms online Member of household, Member of your household. Free state income tax forms online Members of Armed Forces (see Armed Forces) Mileage rate, What's New Missing children, photographs of, Reminders Moves In U. Free state income tax forms online S. Free state income tax forms online , Moves to Locations in the United States Outside U. Free state income tax forms online S. Free state income tax forms online , Moves to Locations Outside the United States To and from storage, Moving goods and effects to and from storage. Free state income tax forms online Moving expenses, Who Can Deduct Moving Expenses, Deductible Moving Expenses (see also Deductible moving expenses) (see also Who can deduct) N Nonaccountable plans, Nonaccountable Plans Nondeductible expenses, Nondeductible Expenses Reimbursements of, Reimbursement of nondeductible expenses. Free state income tax forms online , Reimbursement for deductible and nondeductible expenses. Free state income tax forms online P Permanently retired, defined, Retirees who were working abroad. Free state income tax forms online Personal effects, Household goods and personal effects. Free state income tax forms online Moving to and from storage, Moving goods and effects to and from storage. Free state income tax forms online Publications (see Tax help) R Reasonable expenses, Reasonable expenses. Free state income tax forms online Reasonable period of time, Reasonable period of time. Free state income tax forms online Reimbursements, Reimbursements, Estimated tax. Free state income tax forms online Accountable plans, Accountable Plans Adequate accounting, Adequate accounting. Free state income tax forms online Armed Forces members, Services or reimbursements provided by government. Free state income tax forms online Estimated tax, Estimated tax. Free state income tax forms online Excess, Excess reimbursement. Free state income tax forms online Excluded from income, Reimbursements excluded from income. Free state income tax forms online Included in income, Reimbursements included in income. Free state income tax forms online Nonaccountable plans, Nonaccountable Plans Nondeductible expenses, Reimbursement of nondeductible expenses. Free state income tax forms online , Reimbursement for deductible and nondeductible expenses. Free state income tax forms online Reasonable period of time, Reasonable period of time. Free state income tax forms online Reporting moving expenses and reimbursements (Table 2), How and When To Report Types of plans, Types of Reimbursement Plans Reporting expenses, How and When To Report Expenses equal to or less than reimbursement, Expenses equal to or less than reimbursement. Free state income tax forms online Expenses greater than reimbursement, Expenses greater than reimbursement. Free state income tax forms online Form 3903, deduction calculation, Form 3903 Moving expenses and reimbursements (Table 2), How and When To Report Retirees who move to U. Free state income tax forms online S. Free state income tax forms online , Retirees, survivors, and Armed Forces members. Free state income tax forms online , Retirees or survivors. Free state income tax forms online Permanently retired, defined, Retirees who were working abroad. Free state income tax forms online Return to full-time work, First job or return to full-time work. Free state income tax forms online S Seasonal trade or business, Seasonal trade or business. Free state income tax forms online Seasonal work, Seasonal work. Free state income tax forms online Self-employed persons Time test, Time Test for Self-Employed Persons, Self-employment. Free state income tax forms online Table 1, Time Test for Employees Spouse of Armed Forces member, Spouse and dependents. Free state income tax forms online Standard mileage rate, What's New Storage expenses, Storage expenses. Free state income tax forms online , Storage expenses. Free state income tax forms online Survivors who move to U. Free state income tax forms online S. Free state income tax forms online , Retirees, survivors, and Armed Forces members. Free state income tax forms online , Retirees or survivors. Free state income tax forms online , Retirees or Survivors Who Move to the United States, Survivors of decedents who were working abroad. Free state income tax forms online When move begins, When a move begins. Free state income tax forms online T Tables and figures Distance test, Distance Test Nonmilitary move within U. Free state income tax forms online S. Free state income tax forms online , can you deduct expenses (Figure B), Seasonal work. Free state income tax forms online Reporting moving expenses and reimbursements (Table 2), How and When To Report Time test, satisfying for employees and self-employed persons (Table 1), Time Test for Employees Tax help, How To Get Tax Help Temporary absence, Temporary absence from work. Free state income tax forms online , Temporary absence from work. Free state income tax forms online Time test, Time Test Employees, Time Test for Employees Exceptions to, Exceptions to the Time Test Full-time work, Full-time work. Free state income tax forms online Joint return, Joint Return Not yet met, Time Test Not Yet Met Satisfying for employees and self-employed persons (Table 1), Time Test for Employees Seasonal trade or business, Seasonal trade or business. Free state income tax forms online Seasonal work, Seasonal work. Free state income tax forms online Self-employed persons, Time Test for Self-Employed Persons, Self-employment. Free state income tax forms online Temporary absence from work, Temporary absence from work. Free state income tax forms online , Temporary absence from work. Free state income tax forms online Travel by car, Travel by car. Free state income tax forms online Travel expenses, Travel expenses. Free state income tax forms online TTY/TDD information, How To Get Tax Help U Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Unions Main job location of member, Union members. Free state income tax forms online W When to deduct expenses, When To Deduct Expenses, Illustrated Example Choosing when to deduct, Choosing when to deduct. Free state income tax forms online Expenses not reimbursed, Expenses not reimbursed. Free state income tax forms online Expenses reimbursed, Expenses reimbursed. Free state income tax forms online How to make choice, How to make the choice. Free state income tax forms online Who can deduct, Who Can Deduct Moving Expenses, When a move begins. Free state income tax forms online Armed Forces, members of, Retirees, survivors, and Armed Forces members. Free state income tax forms online Distance test, Distance Test Nonmilitary move within U. Free state income tax forms online S. Free state income tax forms online (Figure B), Seasonal work. Free state income tax forms online Related to start of work, Move Related to Start of Work Retirees who move to U. Free state income tax forms online S. Free state income tax forms online , Retirees, survivors, and Armed Forces members. Free state income tax forms online , Retirees or survivors. Free state income tax forms online , Retirees or Survivors Who Move to the United States Survivors who move to U. Free state income tax forms online S. Free state income tax forms online , Retirees, survivors, and Armed Forces members. Free state income tax forms online , Retirees or survivors. Free state income tax forms online , Retirees or Survivors Who Move to the United States, Survivors of decedents who were working abroad. Free state income tax forms online Time test, Time Test Withholding, Tax Withholding and Estimated Tax Worksheet Distance test (Worksheet 1), Distance Test Prev  Up     Home   More Online Publications
Print - Click this link to Print this page

Non-filer Investigations - Criminal Investigation (CI)

Overview
Taxpayers who fail to file income tax returns and pay taxes pose a serious threat to tax administration and the American economy.

Who Must File
All citizens must comply with the requirements of the tax law to file returns and pay taxes.

Facts & Fiction of Frivolous Arguments
The 16th Amendment was ratified on February 3, 1913 giving Congress the power "to lay and collect taxes."

IRS Warns of Frivolous Tax Arguments
IRS issued Press Releases that summarize several cases where the taxpayer was fined or penalized for frivolous contentions.

Department of Justice Issues Injunction
The Department of Justice has issued several injunctions against promoters of illegal tax plans or shelters that urge taxpayer to violate the tax laws.

Statistical Data
Enforcement statistics on investigations initiated, prosecutions recommended, indictments, sentenced investigations and months to serve in prison.

Examples of Non-filer Investigations
Examples are written from public record documents filed in the district courts where the case was prosecuted.

 


Criminal Enforcement Home Page

How to Report Suspected Tax Fraud Activities

Page Last Reviewed or Updated: 30-Oct-2013

The Free State Income Tax Forms Online

Free state income tax forms online 1. Free state income tax forms online   Investment Income Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: General InformationSSN for joint account. Free state income tax forms online Custodian account for your child. Free state income tax forms online Penalty for failure to supply SSN. Free state income tax forms online Certification. Free state income tax forms online Underreported interest and dividends. Free state income tax forms online How to stop backup withholding due to underreporting. Free state income tax forms online How to stop backup withholding due to an incorrect identification number. Free state income tax forms online Reporting backup withholding. Free state income tax forms online Nonresident aliens. Free state income tax forms online Penalties. Free state income tax forms online Savings account with parent as trustee. Free state income tax forms online Interest IncomeInterest not reported on Form 1099-INT. Free state income tax forms online Nominees. Free state income tax forms online Incorrect amount. Free state income tax forms online Information reporting requirement. Free state income tax forms online Taxable Interest — General Below-Market Loans U. Free state income tax forms online S. Free state income tax forms online Savings Bonds U. Free state income tax forms online S. Free state income tax forms online Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Discount on Debt InstrumentsOriginal Issue Discount (OID) Market Discount Bonds Discount on Short-Term Obligations Election To Report All Interest as OID When To Report Interest IncomeConstructive receipt. Free state income tax forms online How To Report Interest IncomeSchedule B (Form 1040A or 1040). Free state income tax forms online Worksheet for savings bonds distributed from a retirement or profit-sharing plan. Free state income tax forms online File Form 1099-INT with the IRS. Free state income tax forms online Dividends and Other DistributionsDividends not reported on Form 1099-DIV. Free state income tax forms online Nominees. Free state income tax forms online Ordinary Dividends Capital Gain Distributions Nondividend Distributions Liquidating Distributions Distributions of Stock and Stock Rights Other Distributions How To Report Dividend IncomeElection. Free state income tax forms online Independent contractor. Free state income tax forms online Investment interest deducted. Free state income tax forms online Exception 1. Free state income tax forms online Exception 2. Free state income tax forms online Undistributed capital gains. Free state income tax forms online File Form 1099-DIV with the IRS. Free state income tax forms online Stripped Preferred Stock REMICs, FASITs, and Other CDOsREMICs Collateralized Debt Obligations (CDOs) FASITs S CorporationsLimit on losses and deductions. Free state income tax forms online Passive activity losses. Free state income tax forms online Form 8582. Free state income tax forms online Investment ClubsInvestments in name of member. Free state income tax forms online Tax Treatment of the Club Topics - This chapter discusses: Interest Income , Discount on Debt Instruments , When To Report Interest Income , How To Report Interest Income , Dividends and Other Distributions , How To Report Dividend Income , Stripped Preferred Stock , Real estate mortgage investment conduits (REMICs), financial asset securitization investment trusts (FASITs), and other collateralized debt obligations (CDOs) , S Corporations , and Investment Clubs . Free state income tax forms online Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 537 Installment Sales 590 Individual Retirement Arrangements (IRAs) 925 Passive Activity and At-Risk Rules 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses 1040 U. Free state income tax forms online S. Free state income tax forms online Individual Income Tax Return 1040A U. Free state income tax forms online S. Free state income tax forms online Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1099 General Instructions for Certain Information Returns 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 3115 Application for Change in Accounting Method 6251 Alternative Minimum Tax — Individuals 8582 Passive Activity Loss Limitations 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends 8815 Exclusion of Interest From Series EE and I U. Free state income tax forms online S. Free state income tax forms online Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. Free state income tax forms online S. Free state income tax forms online Savings Bonds Issued After 1989 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets 8960 Net Investment Income Tax—Individuals, Estates, and Trusts See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Free state income tax forms online General Information A few items of general interest are covered here. Free state income tax forms online Recordkeeping. Free state income tax forms online You should keep a list showing sources and investment income amounts you receive during the year. Free state income tax forms online Also keep the forms you receive showing your investment income (Forms 1099-INT, Interest Income, and 1099-DIV, Dividends and Distributions, for example) as an important part of your records. Free state income tax forms online Net investment income tax (NIIT). Free state income tax forms online   Beginning in 2013, you may be subject to the NIIT. Free state income tax forms online The NIIT is a 3. Free state income tax forms online 8% tax on the lesser of your net investment income or the amount of your modified adjusted gross income (MAGI) that is over a threshold amount based on your filing status. Free state income tax forms online    Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household (with qualifying person) $200,000 Qualifying Widow(er) with dependent child $250,000    For more information, see Form 8960 and Instructions for Form 8960. Free state income tax forms online Tax on unearned income of certain children. Free state income tax forms online   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Free state income tax forms online This may happen if all of the following are true. Free state income tax forms online The child had more than $2,000 of unearned income. Free state income tax forms online The child is required to file a tax return. Free state income tax forms online The child was: Under age 18 at the end of 2013, Age 18 at the end of 2013 and did not have earned income that was more than half of the child's support, or A full-time student over age 18 and under age 24 at the end of 2013 and did not have earned income that was more than half of the child's support. Free state income tax forms online At least one of the child's parents was alive at the end of 2013. Free state income tax forms online The child does not file a joint return for 2013. Free state income tax forms online A child born on January 1, 1996, is considered to be age 18 at the end of 2013; a child born on January 1, 1995, is considered to be age 19 at the end of 2013; a child born on January 1, 1990, is considered to be age 24 at the end of 2013. Free state income tax forms online   If all of these statements are true, Form 8615 must be completed and attached to the child's tax return. Free state income tax forms online If any of these statements is not true, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Free state income tax forms online    However, the parent can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Free state income tax forms online Use Form 8814 for this purpose. Free state income tax forms online   For more information about the tax on unearned income of children and the parents' election, see Publication 929, Tax Rules for Children and Dependents. Free state income tax forms online Beneficiary of an estate or trust. Free state income tax forms online   Interest, dividends, and other investment income you receive as a beneficiary of an estate or trust is generally taxable income. Free state income tax forms online You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Free state income tax forms online , from the fiduciary. Free state income tax forms online Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Free state income tax forms online Social security number (SSN). Free state income tax forms online   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. Free state income tax forms online This includes payers of interest and dividends. Free state income tax forms online If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. Free state income tax forms online SSN for joint account. Free state income tax forms online   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. Free state income tax forms online (For information on who owns the funds in a joint account, see Joint accounts , later. Free state income tax forms online ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. Free state income tax forms online This is because only one name and SSN can be shown on Form 1099. Free state income tax forms online   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. Free state income tax forms online For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. Free state income tax forms online Custodian account for your child. Free state income tax forms online   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. Free state income tax forms online For example, you must give your child's SSN to the payer of dividends on stock owned by your child, even though the dividends are paid to you as custodian. Free state income tax forms online Penalty for failure to supply SSN. Free state income tax forms online   You will be subject to a penalty if, when required, you fail to: Include your SSN on any return, statement, or other document, Give your SSN to another person who must include it on any return, statement, or other document, or Include the SSN of another person on any return, statement, or other document. Free state income tax forms online The penalty is $50 for each failure up to a maximum penalty of $100,000 for any calendar year. Free state income tax forms online   You will not be subject to this penalty if you can show that your failure to provide the SSN was due to reasonable cause and not to willful neglect. Free state income tax forms online   If you fail to supply an SSN, you may also be subject to backup withholding. Free state income tax forms online Backup withholding. Free state income tax forms online   Your investment income is generally not subject to regular withholding. Free state income tax forms online However, it may be subject to backup withholding to ensure that income tax is collected on the income. Free state income tax forms online Under backup withholding, the bank, broker, or other payer of interest, original issue discount (OID), dividends, cash patronage dividends, or royalties must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Free state income tax forms online   Backup withholding applies if: You do not give the payer your identification number (either a social security number or an employer identification number) in the required manner, The IRS notifies the payer that you gave an incorrect identification number, The IRS notifies the payer that you are subject to backup withholding on interest or dividends because you have underreported interest or dividends on your income tax return, or You are required, but fail, to certify that you are not subject to backup withholding for the reason described in (3). Free state income tax forms online Certification. Free state income tax forms online   For new accounts paying interest or dividends, you must certify under penalties of perjury that your SSN is correct and that you are not subject to backup withholding. Free state income tax forms online Your payer will give you a Form W-9, Request for Taxpayer Identification Number and Certification, or similar form, to make this certification. Free state income tax forms online If you fail to make this certification, backup withholding may begin immediately on your new account or investment. Free state income tax forms online Underreported interest and dividends. Free state income tax forms online   You will be considered to have underreported your interest and dividends if the IRS has determined for a tax year that: You failed to include any part of a reportable interest or dividend payment required to be shown on your return, or You were required to file a return and to include a reportable interest or dividend payment on that return, but you failed to file the return. Free state income tax forms online How to stop backup withholding due to underreporting. Free state income tax forms online   If you have been notified that you underreported interest or dividends, you can request a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. Free state income tax forms online You must show that at least one of the following situations applies. Free state income tax forms online No underreporting occurred. Free state income tax forms online You have a bona fide dispute with the IRS about whether underreporting occurred. Free state income tax forms online Backup withholding will cause or is causing an undue hardship, and it is unlikely that you will underreport interest and dividends in the future. Free state income tax forms online You have corrected the underreporting by filing a return if you did not previously file one and by paying all taxes, penalties, and interest due for any underreported interest or dividend payments. Free state income tax forms online   If the IRS determines that backup withholding should stop, it will provide you with a certification and will notify the payers who were sent notices earlier. Free state income tax forms online How to stop backup withholding due to an incorrect identification number. Free state income tax forms online   If you have been notified by a payer that you are subject to backup withholding because you have provided an incorrect SSN or employer identification number, you can stop it by following the instructions the payer gives you. Free state income tax forms online Reporting backup withholding. Free state income tax forms online   If backup withholding is deducted from your interest or dividend income or other reportable payment, the bank or other business must give you an information return for the year (for example, a Form 1099-INT) indicating the amount withheld. Free state income tax forms online The information return will show any backup withholding as “Federal income tax withheld. Free state income tax forms online ” Nonresident aliens. Free state income tax forms online    Generally, payments made to nonresident aliens are not subject to backup withholding. Free state income tax forms online You can use Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to certify exempt status. Free state income tax forms online However, this does not exempt you from the 30% (or lower treaty) withholding rate that may apply to your investment income. Free state income tax forms online For information on the 30% rate, see Publication 519, U. Free state income tax forms online S. Free state income tax forms online Tax Guide for Aliens. Free state income tax forms online Penalties. Free state income tax forms online   There are civil and criminal penalties for giving false information to avoid backup withholding. Free state income tax forms online The civil penalty is $500. Free state income tax forms online The criminal penalty, upon conviction, is a fine of up to $1,000, or imprisonment of up to 1 year, or both. Free state income tax forms online Where to report investment income. Free state income tax forms online   Table 1-1 gives an overview of the forms and schedules to use to report some common types of investment income. Free state income tax forms online But see the rest of this publication for detailed information about reporting investment income. Free state income tax forms online Joint accounts. Free state income tax forms online   If two or more persons hold property (such as a savings account, bond, or stock) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest or dividends from the property is determined by local law. Free state income tax forms online Community property states. Free state income tax forms online   If you are married and receive a distribution that is community income, one-half of the distribution is generally considered to be received by each spouse. Free state income tax forms online If you file separate returns, you must each report one-half of any taxable distribution. Free state income tax forms online See Publication 555, Community Property, for more information on community income. Free state income tax forms online   If the distribution is not considered community property and you and your spouse file separate returns, each of you must report your separate taxable distributions. Free state income tax forms online Example. Free state income tax forms online You and your spouse have a joint money market account. Free state income tax forms online Under state law, half the income from the account belongs to you, and half belongs to your spouse. Free state income tax forms online If you file separate returns, you each report half the income. Free state income tax forms online Income from property given to a child. Free state income tax forms online   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. Free state income tax forms online   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. Free state income tax forms online Savings account with parent as trustee. Free state income tax forms online   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. Free state income tax forms online The savings account legally belongs to the child. Free state income tax forms online The parents are not legally permitted to use any of the funds to support the child. Free state income tax forms online Table 1-1. Free state income tax forms online Where To Report Common Types of Investment Income (For detailed information about reporting investment income, see the rest of this publication, especially How To Report Interest Income and How To Report Dividend Income in chapter 1. Free state income tax forms online ) Type of Income If you file Form 1040, report on . Free state income tax forms online . Free state income tax forms online . Free state income tax forms online If you can file Form 1040A, report on . Free state income tax forms online . Free state income tax forms online . Free state income tax forms online If you can file Form 1040EZ, report on . Free state income tax forms online . Free state income tax forms online . Free state income tax forms online Tax-exempt interest (Form 1099-INT, box 8) Line 8b Line 8b Space to the left of line 2 (enter “TEI” and the amount) Taxable interest that totals $1,500 or less Line 8a (You may need to file Schedule B as well. Free state income tax forms online ) Line 8a (You may need to file Schedule B as well. Free state income tax forms online ) Line 2 Taxable interest that totals more than $1,500 Line 8a; also use Schedule B, line 1 Line 8a; also use Schedule B, line 1   Savings bond interest you will exclude because of higher education expenses Schedule B; also use Form 8815 Schedule B; also use Form 8815   Ordinary dividends that total $1,500 or less Line 9a (You may need to file Schedule B as well. Free state income tax forms online ) Line 9a (You may need to file Schedule B as well. Free state income tax forms online )   Ordinary dividends that total more than $1,500 Line 9a; also use Schedule B, line 5 Line 9a; also use Schedule B, line 5   Qualified dividends (if you do not have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2 Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2   Qualified dividends (if you have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, line 2 You cannot use Form 1040A    You cannot use Form 1040EZ Capital gain distributions (if you do not have to file Schedule D) Line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3 Line 10; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3   Capital gain distributions (if you have to file Schedule D) Schedule D, line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     Section 1250, 1202, or collectibles gain (Form 1099-DIV, box 2b, 2c, or 2d) Form 8949 and Schedule D     Nondividend distributions (Form 1099-DIV, box 3) Generally not reported*     Undistributed capital gains (Form 2439, boxes 1a - 1d) Schedule D     Gain or loss from sales of stocks or bonds Line 13; also use Form 8949, Schedule D, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet You cannot use Form 1040A   Gain or loss from exchanges of like-kind investment property Line 13; also use Schedule D, Form 8824, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     *Report any amounts in excess of your basis in your mutual fund shares on Form 8949. Free state income tax forms online Use Part II if you held the shares more than 1 year. Free state income tax forms online Use Part I if you held your mutual fund shares 1 year or less. Free state income tax forms online For details on Form 8949, see Reporting Capital Gains and Losses in chapter 4, and the Instructions for Form 8949. Free state income tax forms online Accuracy-related penalty. Free state income tax forms online   An accuracy-related penalty of 20% can be charged for underpayments of tax due to negligence or disregard of rules or regulations or substantial understatement of tax. Free state income tax forms online For information on the penalty and any interest that applies, see Penalties in chapter 2. Free state income tax forms online Interest Income This section discusses the tax treatment of different types of interest income. Free state income tax forms online In general, any interest that you receive or that is credited to your account and can be withdrawn is taxable income. Free state income tax forms online (It does not have to be entered in your passbook. Free state income tax forms online ) Exceptions to this rule are discussed later. Free state income tax forms online Form 1099-INT. Free state income tax forms online   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. Free state income tax forms online This form shows you the interest you received during the year. Free state income tax forms online Keep this form for your records. Free state income tax forms online You do not have to attach it to your tax return. Free state income tax forms online   Report on your tax return the total interest income you receive for the tax year. Free state income tax forms online Interest not reported on Form 1099-INT. Free state income tax forms online   Even if you do not receive Form 1099-INT, you must still report all of your interest income. Free state income tax forms online For example, you may receive distributive shares of interest from partnerships or S corporations. Free state income tax forms online This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Free state income tax forms online , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Free state income tax forms online Nominees. Free state income tax forms online   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. Free state income tax forms online   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on Nominee distributions , later, under How To Report Interest Income. Free state income tax forms online Incorrect amount. Free state income tax forms online   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Free state income tax forms online The new Form 1099-INT you receive will be marked “Corrected. Free state income tax forms online ” Form 1099-OID. Free state income tax forms online   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. Free state income tax forms online For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. Free state income tax forms online Exempt-interest dividends. Free state income tax forms online   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Free state income tax forms online (However, see Information reporting requirement , next. Free state income tax forms online ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Free state income tax forms online You do not reduce your basis for distributions that are exempt-interest dividends. Free state income tax forms online Information reporting requirement. Free state income tax forms online   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. Free state income tax forms online This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. Free state income tax forms online See How To Report Interest Income , later. Free state income tax forms online Note. Free state income tax forms online Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Free state income tax forms online The exempt-interest dividends subject to the alternative minimum tax are shown in box 11 of Form 1099-DIV. Free state income tax forms online See Form 6251 and its instructions for more information about this tax. Free state income tax forms online Private activity bonds are discussed later under State or Local Government Obligations. Free state income tax forms online Interest on VA dividends. Free state income tax forms online   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. Free state income tax forms online This includes interest paid on dividends on converted United States Government Life Insurance policies and on National Service Life Insurance policies. Free state income tax forms online Individual retirement arrangements (IRAs). Free state income tax forms online   Interest on a Roth IRA generally is not taxable. Free state income tax forms online Interest on a traditional IRA is tax deferred. Free state income tax forms online You generally do not include it in your income until you make withdrawals from the IRA. Free state income tax forms online See Publication 590 for more information. Free state income tax forms online Taxable Interest — General Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. Free state income tax forms online The following are some sources of taxable interest. Free state income tax forms online Dividends that are actually interest. Free state income tax forms online   Certain distributions commonly called dividends are actually interest. Free state income tax forms online You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. Free state income tax forms online  The “dividends” will be shown as interest income on Form 1099-INT. Free state income tax forms online Money market funds. Free state income tax forms online   Money market funds are offered by nonbank financial institutions such as mutual funds and stock brokerage houses, and pay dividends. Free state income tax forms online Generally, amounts you receive from money market funds should be reported as dividends, not as interest. Free state income tax forms online Certificates of deposit and other deferred interest accounts. Free state income tax forms online   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. Free state income tax forms online You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. Free state income tax forms online The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. Free state income tax forms online If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. Free state income tax forms online Interest subject to penalty for early withdrawal. Free state income tax forms online   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. Free state income tax forms online You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. Free state income tax forms online See Penalty on early withdrawal of savings under How To Report Interest Income, later, for more information on how to report the interest and deduct the penalty. Free state income tax forms online Money borrowed to invest in certificate of deposit. Free state income tax forms online   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. Free state income tax forms online You must report the total interest you earn on the certificate in your income. Free state income tax forms online If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. Free state income tax forms online See Interest Expenses in chapter 3. Free state income tax forms online Example. Free state income tax forms online You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. Free state income tax forms online The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. Free state income tax forms online The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. Free state income tax forms online The bank also gives you a statement showing that you paid $310 interest for 2013. Free state income tax forms online You must include the $575 in your income. Free state income tax forms online If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you can deduct $310, subject to the net investment income limit. Free state income tax forms online Gift for opening account. Free state income tax forms online   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. Free state income tax forms online   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. Free state income tax forms online For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. Free state income tax forms online The value is determined by the cost to the financial institution. Free state income tax forms online Example. Free state income tax forms online You open a savings account at your local bank and deposit $800. Free state income tax forms online The account earns $20 interest. Free state income tax forms online You also receive a $15 calculator. Free state income tax forms online If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. Free state income tax forms online You must report $35 interest income on your tax return. Free state income tax forms online Interest on insurance dividends. Free state income tax forms online   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. Free state income tax forms online However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. Free state income tax forms online Prepaid insurance premiums. Free state income tax forms online   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. Free state income tax forms online U. Free state income tax forms online S. Free state income tax forms online obligations. Free state income tax forms online   Interest on U. Free state income tax forms online S. Free state income tax forms online obligations, such as U. Free state income tax forms online S. Free state income tax forms online Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. Free state income tax forms online Interest on tax refunds. Free state income tax forms online   Interest you receive on tax refunds is taxable income. Free state income tax forms online Interest on condemnation award. Free state income tax forms online   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. Free state income tax forms online Installment sale payments. Free state income tax forms online   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. Free state income tax forms online That interest is taxable when you receive it. Free state income tax forms online If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. Free state income tax forms online See Unstated Interest and Original Issue Discount (OID) in Publication 537. Free state income tax forms online Interest on annuity contract. Free state income tax forms online   Accumulated interest on an annuity contract you sell before its maturity date is taxable. Free state income tax forms online Usurious interest. Free state income tax forms online   Usurious interest is interest charged at an illegal rate. Free state income tax forms online This is taxable as interest unless state law automatically changes it to a payment on the principal. Free state income tax forms online Interest income on frozen deposits. Free state income tax forms online   Exclude from your gross income interest on frozen deposits. Free state income tax forms online A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state in which the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. Free state income tax forms online   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). Free state income tax forms online If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income for information about reporting this interest income exclusion on your tax return. Free state income tax forms online   The interest you exclude is treated as credited to your account in the following year. Free state income tax forms online You must include it in income in the year you can withdraw it. Free state income tax forms online Example. Free state income tax forms online $100 of interest was credited on your frozen deposit during the year. Free state income tax forms online You withdrew $80 but could not withdraw any more as of the end of the year. Free state income tax forms online You must include $80 in your income and exclude $20 from your income for the year. Free state income tax forms online You must include the $20 in your income for the year you can withdraw it. Free state income tax forms online Bonds traded flat. Free state income tax forms online    If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. Free state income tax forms online The defaulted or unpaid interest is not income and is not taxable as interest if paid later. Free state income tax forms online When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. Free state income tax forms online Interest that accrues after the date of purchase, however, is taxable interest income for the year received or accrued. Free state income tax forms online See Bonds Sold Between Interest Dates , later in this chapter. Free state income tax forms online Below-Market Loans If you make a below-market gift or demand loan, you must report as interest income any forgone interest (defined later) from that loan. Free state income tax forms online The below-market loan rules and exceptions are described in this section. Free state income tax forms online For more information, see section 7872 of the Internal Revenue Code and its regulations. Free state income tax forms online If you receive a below-market loan, you may be able to deduct the forgone interest as well as any interest you actually paid, but not if it is personal interest. Free state income tax forms online Loans subject to the rules. Free state income tax forms online   The rules for below-market loans apply to: Gift loans, Pay-related loans, Corporation-shareholder loans, Tax avoidance loans, and Certain loans made to qualified continuing care facilities under a continuing care contract. Free state income tax forms online A pay-related loan is any below-market loan between an employer and an employee or between an independent contractor and a person for whom the contractor provides services. Free state income tax forms online A tax avoidance loan is any below-market loan where the avoidance of federal tax is one of the main purposes of the interest arrangement. Free state income tax forms online Forgone interest. Free state income tax forms online   For any period, forgone interest is: The amount of interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. Free state income tax forms online Applicable federal rate. Free state income tax forms online   Applicable federal rates are published by the IRS each month in the Internal Revenue Bulletin. Free state income tax forms online Some IRS offices have these bulletins available for research. Free state income tax forms online See chapter 5, How To Get Tax Help , for other ways to get this information. Free state income tax forms online Rules for below-market loans. Free state income tax forms online   The rules that apply to a below-market loan depend on whether the loan is a gift loan, demand loan, or term loan. Free state income tax forms online Gift and demand loans. Free state income tax forms online   A gift loan is any below-market loan where the forgone interest is in the nature of a gift. Free state income tax forms online   A demand loan is a loan payable in full at any time upon demand by the lender. Free state income tax forms online A demand loan is a below-market loan if no interest is charged or if interest is charged at a rate below the applicable federal rate. Free state income tax forms online   A demand loan or gift loan that is a below-market loan is generally treated as an arm's-length transaction in which the lender is treated as having made: A loan to the borrower in exchange for a note that requires the payment of interest at the applicable federal rate, and An additional payment to the borrower in an amount equal to the forgone interest. Free state income tax forms online The borrower is generally treated as transferring the additional payment back to the lender as interest. Free state income tax forms online The lender must report that amount as interest income. Free state income tax forms online   The lender's additional payment to the borrower is treated as a gift, dividend, contribution to capital, pay for services, or other payment, depending on the substance of the transaction. Free state income tax forms online The borrower may have to report this payment as taxable income, depending on its classification. Free state income tax forms online These transfers are considered to occur annually, generally on December 31. Free state income tax forms online Term loans. Free state income tax forms online   A term loan is any loan that is not a demand loan. Free state income tax forms online A term loan is a below-market loan if the amount of the loan is more than the present value of all payments due under the loan. Free state income tax forms online   A lender who makes a below-market term loan other than a gift loan is treated as transferring an additional lump-sum cash payment to the borrower (as a dividend, contribution to capital, etc. Free state income tax forms online ) on the date the loan is made. Free state income tax forms online The amount of this payment is the amount of the loan minus the present value, at the applicable federal rate, of all payments due under the loan. Free state income tax forms online An equal amount is treated as original issue discount (OID). Free state income tax forms online The lender must report the annual part of the OID as interest income. Free state income tax forms online The borrower may be able to deduct the OID as interest expense. Free state income tax forms online See Original Issue Discount (OID) , later. Free state income tax forms online Exceptions to the below-market loan rules. Free state income tax forms online   Exceptions to the below-market loan rules are discussed here. Free state income tax forms online Exception for loans of $10,000 or less. Free state income tax forms online   The rules for below-market loans do not apply to any day on which the total outstanding amount of loans between the borrower and lender is $10,000 or less. Free state income tax forms online This exception applies only to: Gift loans between individuals if the gift loan is not directly used to buy or carry income-producing assets, and Pay-related loans or corporation-shareholder loans if the avoidance of federal tax is not a principal purpose of the interest arrangement. Free state income tax forms online This exception does not apply to a term loan described in (2) earlier that previously has been subject to the below-market loan rules. Free state income tax forms online Those rules will continue to apply even if the outstanding balance is reduced to $10,000 or less. Free state income tax forms online Exception for loans to continuing care facilities. Free state income tax forms online   Loans to qualified continuing care facilities under continuing care contracts are not subject to the rules for below-market loans for the calendar year if the lender or the lender's spouse is age 62 or older at the end of the year. Free state income tax forms online For the definitions of qualified continuing care facility and continuing care contract, see Internal Revenue Code section 7872(h). Free state income tax forms online Exception for loans without significant tax effect. Free state income tax forms online   Loans are excluded from the below-market loan rules if their interest arrangements do not have a significant effect on the federal tax liability of the borrower or the lender. Free state income tax forms online These loans include: Loans made available by the lender to the general public on the same terms and conditions that are consistent with the lender's customary business practice; Loans subsidized by a federal, state, or municipal government that are made available under a program of general application to the public; Certain employee-relocation loans; Certain loans from a foreign person, unless the interest income would be effectively connected with the conduct of a U. Free state income tax forms online S. Free state income tax forms online trade or business and would not be exempt from U. Free state income tax forms online S. Free state income tax forms online tax under an income tax treaty; Gift loans to a charitable organization, contributions to which are deductible, if the total outstanding amount of loans between the organization and lender is $250,000 or less at all times during the tax year; and Other loans on which the interest arrangement can be shown to have no significant effect on the federal tax liability of the lender or the borrower. Free state income tax forms online For a loan described in (6) above, all the facts and circumstances are used to determine if the interest arrangement has a significant effect on the federal tax liability of the lender or borrower. Free state income tax forms online Some factors to be considered are: Whether items of income and deduction generated by the loan offset each other; The amount of these items; The cost to you of complying with the below-market loan rules, if they were to apply; and Any reasons other than taxes for structuring the transaction as a below-market loan. Free state income tax forms online If you structure a transaction to meet this exception and one of the principal purposes of that structure is the avoidance of federal tax, the loan will be considered a tax-avoidance loan, and this exception will not apply. Free state income tax forms online Limit on forgone interest for gift loans of $100,000 or less. Free state income tax forms online   For gift loans between individuals, if the outstanding loans between the lender and borrower total $100,000 or less, the forgone interest to be included in income by the lender and deducted by the borrower is limited to the amount of the borrower's net investment income for the year. Free state income tax forms online If the borrower's net investment income is $1,000 or less, it is treated as zero. Free state income tax forms online This limit does not apply to a loan if the avoidance of federal tax is one of the main purposes of the interest arrangement. Free state income tax forms online Effective dates. Free state income tax forms online    These rules apply to term loans made after June 6, 1984, and to demand loans outstanding after that date. Free state income tax forms online U. Free state income tax forms online S. Free state income tax forms online Savings Bonds This section provides tax information on U. Free state income tax forms online S. Free state income tax forms online savings bonds. Free state income tax forms online It explains how to report the interest income on these bonds and how to treat transfers of these bonds. Free state income tax forms online U. Free state income tax forms online S. Free state income tax forms online savings bonds currently offered to individuals include Series EE bonds and Series I bonds. Free state income tax forms online For other information on U. Free state income tax forms online S. Free state income tax forms online savings bonds, write to:  For Series HH/H: Bureau of the Fiscal Service Division of Customer Assistance P. Free state income tax forms online O. Free state income tax forms online Box 2186 Parkersburg, WV 26106-2186  For Series EE and I paper savings bonds: Bureau of the Fiscal Service Division of Customer Assistance P. Free state income tax forms online O. Free state income tax forms online Box 7012 Parkersburg, WV 26106-7012  For Series EE and I electronic bonds: Bureau of the Fiscal Service  Division of Customer Assistance P. Free state income tax forms online O. Free state income tax forms online Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. Free state income tax forms online treasurydirect. Free state income tax forms online gov/indiv/indiv. Free state income tax forms online htm. Free state income tax forms online Accrual method taxpayers. Free state income tax forms online   If you use an accrual method of accounting, you must report interest on U. Free state income tax forms online S. Free state income tax forms online savings bonds each year as it accrues. Free state income tax forms online You cannot postpone reporting interest until you receive it or until the bonds mature. Free state income tax forms online Cash method taxpayers. Free state income tax forms online   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. Free state income tax forms online S. Free state income tax forms online savings bonds when you receive it. Free state income tax forms online But see Reporting options for cash method taxpayers , later. Free state income tax forms online Series HH bonds. Free state income tax forms online   These bonds were issued at face value. Free state income tax forms online Interest is paid twice a year by direct deposit to your bank account. Free state income tax forms online If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. Free state income tax forms online   Series HH bonds were first offered in 1980 and last offered in August 2004. Free state income tax forms online Before 1980, series H bonds were issued. Free state income tax forms online Series H bonds are treated the same as series HH bonds. Free state income tax forms online If you are a cash method taxpayer, you must report the interest when you receive it. Free state income tax forms online   Series H bonds have a maturity period of 30 years. Free state income tax forms online Series HH bonds mature in 20 years. Free state income tax forms online The last series H bonds matured in 2009. Free state income tax forms online The last series HH bonds will mature in 2024. Free state income tax forms online Series EE and series I bonds. Free state income tax forms online   Interest on these bonds is payable when you redeem the bonds. Free state income tax forms online The difference between the purchase price and the redemption value is taxable interest. Free state income tax forms online Series EE bonds. Free state income tax forms online   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. Free state income tax forms online Before July 1980, series E bonds were issued. Free state income tax forms online The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. Free state income tax forms online Paper series EE and series E bonds are issued at a discount. Free state income tax forms online The face value is payable to you at maturity. Free state income tax forms online Electronic series EE bonds are issued at their face value. Free state income tax forms online The face value plus accrued interest is payable to you at maturity. Free state income tax forms online As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. Free state income tax forms online    Owners of paper series EE bonds can convert them to electronic bonds. Free state income tax forms online These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). Free state income tax forms online Series I bonds. Free state income tax forms online   Series I bonds were first offered in 1998. Free state income tax forms online These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. Free state income tax forms online The face value plus all accrued interest is payable to you at maturity. Free state income tax forms online Reporting options for cash method taxpayers. Free state income tax forms online   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. Free state income tax forms online Method 1. Free state income tax forms online Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature. Free state income tax forms online (However, see Savings bonds traded , later. Free state income tax forms online )  Note. Free state income tax forms online Series EE bonds issued in 1983 matured in 2013. Free state income tax forms online If you have used method 1, you generally must report the interest on these bonds on your 2013 return. Free state income tax forms online The last series E bonds were issued in 1980 and matured in 2010. Free state income tax forms online If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. Free state income tax forms online Method 2. Free state income tax forms online Choose to report the increase in redemption value as interest each year. Free state income tax forms online  You must use the same method for all series EE, series E, and series I bonds you own. Free state income tax forms online If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. Free state income tax forms online If you plan to cash your bonds in the same year you will pay for higher educational expenses, you may want to use method 1 because you may be able to exclude the interest from your income. Free state income tax forms online To learn how, see Education Savings Bond Program, later. Free state income tax forms online Change from method 1. Free state income tax forms online   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. Free state income tax forms online In the year of change, you must report all interest accrued to date and not previously reported for all your bonds. Free state income tax forms online   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. Free state income tax forms online Change from method 2. Free state income tax forms online   To change from method 2 to method 1, you must request permission from the IRS. Free state income tax forms online Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. Free state income tax forms online You have typed or printed the following number at the top: “131. Free state income tax forms online ” It includes your name and social security number under “131. Free state income tax forms online ” It includes the year of change (both the beginning and ending dates). Free state income tax forms online It identifies the savings bonds for which you are requesting this change. Free state income tax forms online It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest; and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. Free state income tax forms online   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). Free state income tax forms online   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. Free state income tax forms online On the statement, type or print “Filed pursuant to section 301. Free state income tax forms online 9100-2. Free state income tax forms online ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). Free state income tax forms online    By the date you file the original statement with your return, you must also send a signed copy to the address below. Free state income tax forms online    Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. Free state income tax forms online O. Free state income tax forms online Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. Free state income tax forms online Internal Revenue Service Attention: CC:IT&A  (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW Washington, DC 20224    Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115. Free state income tax forms online In that case, follow the form instructions for an automatic change. Free state income tax forms online No user fee is required. Free state income tax forms online Co-owners. Free state income tax forms online   If a U. Free state income tax forms online S. Free state income tax forms online savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. Free state income tax forms online One co-owner's funds used. Free state income tax forms online   If you used your funds to buy the bond, you must pay the tax on the interest. Free state income tax forms online This is true even if you let the other co-owner redeem the bond and keep all the proceeds. Free state income tax forms online Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. Free state income tax forms online The co-owner who redeemed the bond is a “nominee. Free state income tax forms online ” See Nominee distributions under How To Report Interest Income, later, for more information about how a person who is a nominee reports interest income belonging to another person. Free state income tax forms online Both co-owners' funds used. Free state income tax forms online   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. Free state income tax forms online Community property. Free state income tax forms online   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. Free state income tax forms online If you file separate returns, each of you generally must report one-half of the bond interest. Free state income tax forms online For more information about community property, see Publication 555. Free state income tax forms online Table 1-2. Free state income tax forms online   These rules are also shown in Table 1-2. Free state income tax forms online Child as only owner. Free state income tax forms online   Interest on U. Free state income tax forms online S. Free state income tax forms online savings bonds bought for and registered only in the name of your child is income to your child, even if you paid for the bonds and are named as beneficiary. Free state income tax forms online If the bonds are series EE, series E, or series I bonds, the interest on the bonds is income to your child in the earlier of the year the bonds are cashed or disposed of or the year the bonds mature, unless your child chooses to report the interest income each year. Free state income tax forms online Choice to report interest each year. Free state income tax forms online   The choice to report the accrued interest each year can be made either by your child or by you for your child. Free state income tax forms online This choice is made by filing an income tax return that shows all the interest earned to date, and by stating on the return that your child chooses to report the interest each year. Free state income tax forms online Either you or your child should keep a copy of this return. Free state income tax forms online   Unless your child is otherwise required to file a tax return for any year after making this choice, your child does not have to file a return only to report the annual accrual of U. Free state income tax forms online S. Free state income tax forms online savings bond interest under this choice. Free state income tax forms online However, see Tax on unearned income of certain children , earlier, under General Information. Free state income tax forms online Neither you nor your child can change the way you report the interest unless you request permission from the IRS, as discussed earlier under Change from method 2 . Free state income tax forms online Ownership transferred. Free state income tax forms online   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. Free state income tax forms online But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. Free state income tax forms online   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. Free state income tax forms online Example. Free state income tax forms online You bought series EE bonds entirely with your own funds. Free state income tax forms online You did not choose to report the accrued interest each year. Free state income tax forms online Later, you transfer the bonds to your former spouse under a divorce agreement. Free state income tax forms online You must include the deferred accrued interest, from the date of the original issue of the bonds to the date of transfer, in your income in the year of transfer. Free state income tax forms online Your former spouse includes in income the interest on the bonds from the date of transfer to the date of redemption. Free state income tax forms online Table 1-2. Free state income tax forms online Who Pays the Tax on U. Free state income tax forms online S. Free state income tax forms online Savings Bond Interest IF . Free state income tax forms online . Free state income tax forms online . Free state income tax forms online THEN the interest must be reported by . Free state income tax forms online . Free state income tax forms online . Free state income tax forms online you buy a bond in your name and the name of another person as co-owners, using only your own funds you. Free state income tax forms online you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. Free state income tax forms online you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. Free state income tax forms online you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. Free state income tax forms online If you file separate returns, both you and your spouse generally report one-half of the interest. Free state income tax forms online Purchased jointly. Free state income tax forms online   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. Free state income tax forms online The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. Free state income tax forms online This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. Free state income tax forms online   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. Free state income tax forms online But the new co-owner will report only his or her share of the interest earned after the transfer. Free state income tax forms online   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. Free state income tax forms online Example 1. Free state income tax forms online You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. Free state income tax forms online The bond was issued to you and your spouse as co-owners. Free state income tax forms online You both postpone reporting interest on the bond. Free state income tax forms online You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Free state income tax forms online At that time neither you nor your spouse has to report the interest earned to the date of reissue. Free state income tax forms online Example 2. Free state income tax forms online You bought a $1,000 series EE savings bond entirely with your own funds. Free state income tax forms online The bond was issued to you and your spouse as co-owners. Free state income tax forms online You both postponed reporting interest on the bond. Free state income tax forms online You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Free state income tax forms online You must report half the interest earned to the date of reissue. Free state income tax forms online Transfer to a trust. Free state income tax forms online   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. Free state income tax forms online However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. Free state income tax forms online You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. Free state income tax forms online   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. Free state income tax forms online See Savings bonds traded , later. Free state income tax forms online Decedents. Free state income tax forms online   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. Free state income tax forms online Decedent who reported interest each year. Free state income tax forms online   If the bonds transferred because of death were owned by a person who used an accrual method, or who used the cash method and had chosen to report the interest each year, the interest earned in the year of death up to the date of death must be reported on that person's final return. Free state income tax forms online The person who acquires the bonds includes in income only interest earned after the date of death. Free state income tax forms online Decedent who postponed reporting interest. Free state income tax forms online   If the transferred bonds were owned by a decedent who had used the cash method and had not chosen to report the interest each year, and who had bought the bonds entirely with his or her own funds, all interest earned before death must be reported in one of the following ways. Free state income tax forms online The surviving spouse or personal representative (executor, administrator, etc. Free state income tax forms online ) who files the final income tax return of the decedent can choose to include on that return all interest earned on the bonds before the decedent's death. Free state income tax forms online The person who acquires the bonds then includes in income only interest earned after the date of death. Free state income tax forms online If the choice in (1) is not made, the interest earned up to the date of death is income in respect of the decedent and should not be included in the decedent's final return. Free state income tax forms online All interest earned both before and after the decedent's death (except any part reported by the estate on its income tax return) is income to the person who acquires the bonds. Free state income tax forms online If that person uses the cash method and does not choose to report the interest each year, he or she can postpone reporting it until the year the bonds are cashed or disposed of or the year they mature, whichever is earlier. Free state income tax forms online In the year that person reports the interest, he or she can claim a deduction for any federal estate tax paid on the part of the interest included in the decedent's estate. Free state income tax forms online For more information on income in respect of a decedent, see Publication 559, Survivors, Executors, and Administrators. Free state income tax forms online Example 1. Free state income tax forms online Your uncle, a cash method taxpayer, died and left you a $1,000 series EE bond. Free state income tax forms online He had bought the bond for $500 and had not chosen to report the interest each year. Free state income tax forms online At the date of death, interest of $200 had accrued on the bond, and its value of $700 was included in your uncle's estate. Free state income tax forms online Your uncle's executor chose not to include the $200 accrued interest in your uncle's final income tax return. Free state income tax forms online The $200 is income in respect of the decedent. Free state income tax forms online You are a cash method taxpayer and do not choose to report the interest each year as it is earned. Free state income tax forms online If you cash the bond when it reaches maturity value of $1,000, you report $500 interest income—the difference between maturity value of $1,000 and the original cost of $500. Free state income tax forms online For that year, you can deduct (as a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit) any federal estate tax paid because the $200 interest was included in your uncle's estate. Free state income tax forms online Example 2. Free state income tax forms online If, in Example 1 , the executor had chosen to include the $200 accrued interest in your uncle's final return, you would report only $300 as interest when you cashed the bond at maturity. Free state income tax forms online $300 is the interest earned after your uncle's death. Free state income tax forms online Example 3. Free state income tax forms online If, in Example 1 , you make or have made the choice to report the increase in redemption value as interest each year, you include in gross income for the year you acquire the bond all of the unreported increase in value of all series E, series EE, and series I bonds you hold, including the $200 on the bond you inherited from your uncle. Free state income tax forms online Example 4. Free state income tax forms online When your aunt died, she owned series HH bonds that she had acquired in a trade for series EE bonds. Free state income tax forms online You were the beneficiary of these bonds. Free state income tax forms online Your aunt used the cash method and did not choose to report the interest on the series EE bonds each year as it accrued. Free state income tax forms online Your aunt's executor chose not to include any interest earned before your aunt's death on her final return. Free state income tax forms online The income in respect of the decedent is the sum of the unreported interest on the series EE bonds and the interest, if any, payable on the series HH bonds but not received as of the date of your aunt's death. Free state income tax forms online You must report any interest received during the year as income on your return. Free state income tax forms online The part of the interest payable but not received before your aunt's death is income in respect of the decedent and may qualify for the estate tax deduction. Free state income tax forms online For information on when to report the interest on the series EE bonds traded, see Savings bonds traded , later. Free state income tax forms online Savings bonds distributed from a retirement or profit-sharing plan. Free state income tax forms online   If you acquire a U. Free state income tax forms online S. Free state income tax forms online savings bond in a taxable distribution from a retirement or profit-sharing plan, your income for the year of distribution includes the bond's redemption value (its cost plus the interest accrued before the distribution). Free state income tax forms online When you redeem the bond (whether in the year of distribution or later), your interest income includes only the interest accrued after the bond was distributed. Free state income tax forms online To figure the interest reported as a taxable distribution and your interest income when you redeem the bond, see Worksheet for savings bonds distributed from a retirement or profit-sharing plan under How To Report Interest Income, later. Free state income tax forms online Savings bonds traded. Free state income tax forms online   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. Free state income tax forms online (You cannot trade series I bonds for series HH bonds. Free state income tax forms online After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. Free state income tax forms online ) Any cash you received is income up to the amount of the interest earned on the bonds traded. Free state income tax forms online When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. Free state income tax forms online Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. Free state income tax forms online Example. Free state income tax forms online You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. Free state income tax forms online You reported the $223 as taxable income on your tax return. Free state income tax forms online At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. Free state income tax forms online You hold the series HH bonds until maturity, when you receive $2,500. Free state income tax forms online You must report $300 as interest income in the year of maturity. Free state income tax forms online This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). Free state income tax forms online (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. Free state income tax forms online ) Choice to report interest in year of trade. Free state income tax forms online   You could have chosen to treat all of the previously unreported accrued interest on series EE or series E bonds traded for series HH bonds as income in the year of the trade. Free state income tax forms online If you made this choice, it is treated as a change from method 1. Free state income tax forms online See Change from method 1 under Series EE and series I bonds, earlier. Free state income tax forms online Form 1099-INT for U. Free state income tax forms online S. Free state income tax forms online savings bond interest. Free state income tax forms online   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. Free state income tax forms online Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. Free state income tax forms online However, your Form 1099-INT may show more interest than you have to include on your income tax return. Free state income tax forms online For example, this may happen if any of the following are true. Free state income tax forms online You chose to report the increase in the redemption value of the bond each year. Free state income tax forms online The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. Free state income tax forms online You received the bond from a decedent. Free state income tax forms online The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. Free state income tax forms online Ownership of the bond was transferred. Free state income tax forms online The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. Free state income tax forms online You were named as a co-owner, and the other co-owner contributed funds to buy the bond. Free state income tax forms online The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. Free state income tax forms online (See Co-owners , earlier in this section, for more information about the reporting requirements. Free state income tax forms online ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. Free state income tax forms online The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. Free state income tax forms online (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Free state income tax forms online , for the year of distribution. Free state income tax forms online )   For more information on including the correct amount of interest on your return, see U. Free state income tax forms online S. Free state income tax forms online savings bond interest previously reported or Nominee distributions under How To Report Interest Income, later. Free state income tax forms online    Interest on U. Free state income tax forms online S. Free state income tax forms online savings bonds is exempt from state and local taxes. Free state income tax forms online The Form 1099-INT you receive will indicate the amount that is for U. Free state income tax forms online S. Free state income tax forms online savings bonds interest in box 3. Free state income tax forms online Do not include this income on your state or local income tax return. Free state income tax forms online Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. Free state income tax forms online S. Free state income tax forms online savings bonds during the year if you pay qualified higher educational expenses during the same year. Free state income tax forms online This exclusion is known as the Education Savings Bond Program. Free state income tax forms online You do not qualify for this exclusion if your filing status is married filing separately. Free state income tax forms online Form 8815. Free state income tax forms online   Use Form 8815 to figure your exclusion. Free state income tax forms online Attach the form to your Form 1040 or Form 1040A. Free state income tax forms online Qualified U. Free state income tax forms online S. Free state income tax forms online savings bonds. Free state income tax forms online   A qualified U. Free state income tax forms online S. Free state income tax forms online savings bond is a series EE bond issued after 1989 or a series I bond. Free state income tax forms online The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). Free state income tax forms online You must be at least 24 years old before the bond's issue date. Free state income tax forms online For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. Free state income tax forms online    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. Free state income tax forms online Beneficiary. Free state income tax forms online   You can designate any individual (including a child) as a beneficiary of the bond. Free state income tax forms online Verification by IRS. Free state income tax forms online   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of Treasury. Free state income tax forms online Qualified expenses. Free state income tax forms online   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. Free state income tax forms online   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. Free state income tax forms online For information about these programs, see Publication 970, Tax Benefits for Education. Free state income tax forms online   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Free state income tax forms online Eligible educational institutions. Free state income tax forms online   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the Department of Education. Free state income tax forms online Reduction for certain benefits. Free state income tax forms online   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. Free state income tax forms online Tax-free part of scholarships and fellowships. Free state income tax forms online Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. Free state income tax forms online Expenses used to figure the tax-free portion of distributions from a qualified tuition program. Free state income tax forms online Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. Free state income tax forms online Any expense used in figuring the American Opportunity and lifetime learning credits. Free state income tax forms online For information about these benefits, see Publication 970. Free state income tax forms online Amount excludable. Free state income tax forms online   If the total proceeds (interest and principal) from the qualified U. Free state income tax forms online S. Free state income tax forms online savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. Free state income tax forms online If the proceeds are more than the expenses, you may be able to exclude only part of the interest. Free state income tax forms online   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. Free state income tax forms online The numer