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H And R Block Tax

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H And R Block Tax

H and r block tax 12. H and r block tax   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. H and r block tax Free help with your tax return. H and r block tax   You can get free help preparing your return nationwide from IRS-certified volunteers. H and r block tax The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. H and r block tax The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H and r block tax Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. H and r block tax In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. H and r block tax To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. H and r block tax gov, download the IRS2Go app, or call 1-800-906-9887. H and r block tax   As part of the TCE program, AARP offers the Tax-Aide counseling program. H and r block tax To find the nearest AARP Tax-Aide site, visit AARP's website at www. H and r block tax aarp. H and r block tax org/money/taxaide or call 1-888-227-7669. H and r block tax For more information on these programs, go to IRS. H and r block tax gov and enter “VITA” in the search box. H and r block tax Internet. H and r block tax    IRS. H and r block tax gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. H and r block tax Download the free IRS2Go app from the iTunes app store or from Google Play. H and r block tax Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. H and r block tax Check the status of your 2013 refund with the Where's My Refund? application on IRS. H and r block tax gov or download the IRS2Go app and select the Refund Status option. H and r block tax The IRS issues more than 9 out of 10 refunds in less than 21 days. H and r block tax Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. H and r block tax You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. H and r block tax The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. H and r block tax Use the Interactive Tax Assistant (ITA) to research your tax questions. H and r block tax No need to wait on the phone or stand in line. H and r block tax The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. H and r block tax When you reach the response screen, you can print the entire interview and the final response for your records. H and r block tax New subject areas are added on a regular basis. H and r block tax  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. H and r block tax gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. H and r block tax You can use the IRS Tax Map, to search publications and instructions by topic or keyword. H and r block tax The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. H and r block tax When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. H and r block tax Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. H and r block tax You can also ask the IRS to mail a return or an account transcript to you. H and r block tax Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. H and r block tax gov or by calling 1-800-908-9946. H and r block tax Tax return and tax account transcripts are generally available for the current year and the past three years. H and r block tax Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. H and r block tax Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. H and r block tax If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. H and r block tax Check the status of your amended return using Where's My Amended Return? Go to IRS. H and r block tax gov and enter Where's My Amended Return? in the search box. H and r block tax You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. H and r block tax It can take up to 3 weeks from the date you mailed it to show up in our system. H and r block tax Make a payment using one of several safe and convenient electronic payment options available on IRS. H and r block tax gov. H and r block tax Select the Payment tab on the front page of IRS. H and r block tax gov for more information. H and r block tax Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. H and r block tax Figure your income tax withholding with the IRS Withholding Calculator on IRS. H and r block tax gov. H and r block tax Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. H and r block tax Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. H and r block tax gov. H and r block tax Request an Electronic Filing PIN by going to IRS. H and r block tax gov and entering Electronic Filing PIN in the search box. H and r block tax Download forms, instructions and publications, including accessible versions for people with disabilities. H and r block tax Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. H and r block tax gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. H and r block tax An employee can answer questions about your tax account or help you set up a payment plan. H and r block tax Before you visit, check the Office Locator on IRS. H and r block tax gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. H and r block tax If you have a special need, such as a disability, you can request an appointment. H and r block tax Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. H and r block tax Apply for an Employer Identification Number (EIN). H and r block tax Go to IRS. H and r block tax gov and enter Apply for an EIN in the search box. H and r block tax Read the Internal Revenue Code, regulations, or other official guidance. H and r block tax Read Internal Revenue Bulletins. H and r block tax Sign up to receive local and national tax news and more by email. H and r block tax Just click on “subscriptions” above the search box on IRS. H and r block tax gov and choose from a variety of options. H and r block tax Phone. H and r block tax    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. H and r block tax Download the free IRS2Go app from the iTunes app store or from Google Play. H and r block tax Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. H and r block tax gov, or download the IRS2Go app. H and r block tax Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. H and r block tax The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H and r block tax Most VITA and TCE sites offer free electronic filing. H and r block tax Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. H and r block tax Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. H and r block tax Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. H and r block tax If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. H and r block tax The IRS issues more than 9 out of 10 refunds in less than 21 days. H and r block tax Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. H and r block tax Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. H and r block tax The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. H and r block tax Note, the above information is for our automated hotline. H and r block tax Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. H and r block tax Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. H and r block tax You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. H and r block tax It can take up to 3 weeks from the date you mailed it to show up in our system. H and r block tax Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). H and r block tax You should receive your order within 10 business days. H and r block tax Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. H and r block tax If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. H and r block tax Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. H and r block tax The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. H and r block tax These individuals can also contact the IRS through relay services such as the Federal Relay Service. H and r block tax Walk-in. H and r block tax   You can find a selection of forms, publications and services — in-person. H and r block tax Products. H and r block tax You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. H and r block tax Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. H and r block tax Services. H and r block tax You can walk in to your local TAC for face-to-face tax help. H and r block tax An employee can answer questions about your tax account or help you set up a payment plan. H and r block tax Before visiting, use the Office Locator tool on IRS. H and r block tax gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. H and r block tax Mail. H and r block tax   You can send your order for forms, instructions, and publications to the address below. H and r block tax You should receive a response within 10 business days after your request is received. H and r block tax Internal Revenue Service 1201 N. H and r block tax Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. H and r block tax The Taxpayer Advocate Service (TAS) is your voice at the IRS. H and r block tax Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. H and r block tax   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. H and r block tax We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. H and r block tax You face (or your business is facing) an immediate threat of adverse action. H and r block tax You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. H and r block tax   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. H and r block tax Here's why we can help: TAS is an independent organization within the IRS. H and r block tax Our advocates know how to work with the IRS. H and r block tax Our services are free and tailored to meet your needs. H and r block tax We have offices in every state, the District of Columbia, and Puerto Rico. H and r block tax   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. H and r block tax irs. H and r block tax gov/Advocate, or call us toll-free at 1-877-777-4778. H and r block tax   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. H and r block tax If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. H and r block tax Low Income Taxpayer Clinics. H and r block tax   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. H and r block tax Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. H and r block tax Visit www. H and r block tax irs. H and r block tax gov/Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. H and r block tax Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

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

State Consumer Protection Offices

Office of the Attorney General

Website: Office of the Attorney General

Address: Office of the Attorney General
Bureau of Consumer Protection
Strawberry Square, 15th Floor
Harrisburg, PA 17120

Phone Number: 717-787-3391

Toll-free: 1-800-441-2555 (PA) 1-888-520-6680 (Home Improvement)

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Regional Consumer Protection Offices

Erie Regional Office - Office of the Attorney General

Website: Erie Regional Office - Office of the Attorney General

Address: Erie Regional Office - Office of the Attorney General
Bureau of Consumer Protection
1001 State St., 10th Floor
Erie, PA 16501

Phone Number: 814-871-4371

Philadelphia Regional Office - Office of the Attorney General

Website: Philadelphia Regional Office - Office of the Attorney General

Address: Philadelphia Regional Office - Office of the Attorney General
Bureau of Consumer Protection
21 S. 12th St., 2nd Floor
Philadelphia, PA 19107

Phone Number: 215-560-2414

Pittsburgh Regional Office - Bureau of Consumer Protection

Website: Pittsburgh Regional Office - Bureau of Consumer Protection

Address: Pittsburgh Regional Office - Bureau of Consumer Protection
Bureau of Consumer Protection
Manor Complex, 6th Floor
564 Forbes Ave.
Pittsburgh, PA 15219

Phone Number: 412-565-5135

Scranton Regional Office of the Attorney General

Website: Scranton Regional Office of the Attorney General

Address: Scranton Regional Office of the Attorney General
Bureau of Consumer Protection
100 Samter Building
101 Penn Ave.
Scranton, PA 18503

Phone Number: 570-963-4913

State College Regional Office of the Attorney General

Website: State College Regional Office of the Attorney General

Address: State College Regional Office of the Attorney General
Bureau of Consumer Protection
444 E. College Ave., Suite 440
State College, PA 16801

Phone Number: 814-863-3900

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County Consumer Protection Offices

Bucks County Department of Consumer Protection

Website: Bucks County Department of Consumer Protection

Address: Bucks County Department of Consumer Protection
50 N. Main St.
Doylestown, PA 18901

Phone Number: 215-348-7442

Delaware County Consumer Affairs

Website: Delaware County Consumer Affairs

Address: Delaware County Consumer Affairs
201 W. Front St.
Government Center Building
Media, PA 19063

Phone Number: 610-891-4865

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Banking Authorities

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

Department of Banking

Website: Department of Banking

Address: Department of Banking
Consumer Services
17 N. Second St., Suite 1300
Harrisburg, PA 17101-2290

Phone Number: 717-787-1854

Toll-free: 1-800-722-2657

TTY: 1-800-679-5070

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Insurance Regulators

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

Insurance Department

Website: Insurance Department

Address: Insurance Department
Consumer Services
1209 Strawberry Square
Harrisburg, PA 17120

Phone Number: 717-787-2317

Toll-free: 1-877-881-6388 (PA)

TTY: 717-783-3898

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Securities Administrators

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

Securities Commission

Website: Securities Commission

Address: Securities Commission
17 N. 2nd St., Suite 1300
Harrisburg, PA 17101

Phone Number: 717-787-1854

Toll-free: 1-800-722-2657 (PA)

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Utility Commissions

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

Pennsylvania Office of Consumer Advocate

Website: Pennsylvania Office of Consumer Advocate

Address: Pennsylvania Office of Consumer Advocate
Office of the Attorney General
555 Walnut St.
5th Floor, Forum Place
Harrisburg, PA 17101-1923

Phone Number: 717-783-5048

Toll-free: 1-800-684-6560 (PA)

Public Utility Commission

Website: Public Utility Commission

Address: Public Utility Commission
Bureau of Consumer Services
PO Box 3265
Harrisburg, PA 17105-3265

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The H And R Block Tax

H and r block tax Publication 525 - Main Content Table of Contents Employee CompensationBabysitting. H and r block tax Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Business and Investment IncomeRents From Personal Property Royalties Partnership Income S Corporation Income Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Miscellaneous IncomeBartering Canceled Debts Host or Hostess Life Insurance Proceeds Recoveries Survivor Benefits Unemployment Benefits Welfare and Other Public Assistance Benefits Other Income RepaymentsMethod 1. H and r block tax Method 2. H and r block tax How To Get Tax HelpLow Income Taxpayer Clinics Employee Compensation In most cases, you must include in gross income everything you receive in payment for personal services. H and r block tax In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. H and r block tax You should receive a Form W-2 from your employer or former employer showing the pay you received for your services. H and r block tax Include all your pay on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ, even if you do not receive Form W-2, or you receive a Form W-2 that does not include all pay that should be included on the Form W-2. H and r block tax If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. H and r block tax These wages must be included on line 7 of Form 1040. H and r block tax See Form 8919 for more information. H and r block tax Childcare providers. H and r block tax   If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. H and r block tax If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. H and r block tax You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. H and r block tax Babysitting. H and r block tax   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. H and r block tax Bankruptcy. H and r block tax   If you filed for bankruptcy under Chapter 11 of the Bankruptcy Code, you must allocate your wages and withheld income tax. H and r block tax Your W-2 will show your total wages and withheld income tax for the year. H and r block tax On your tax return, you report the wages and withheld income tax for the period before you filed for bankruptcy. H and r block tax Your bankruptcy estate reports the wages and withheld income tax for the period after you filed for bankruptcy. H and r block tax If you receive other information returns (such as Form 1099-DIV, Dividends and Distributions, or 1099-INT, Interest Income) that report gross income to you, rather than to the bankruptcy estate, you must allocate that income. H and r block tax   The only exception is for purposes of figuring your self-employment tax, if you are self-employed. H and r block tax For that purpose, you must take into account all your self-employment income for the year from services performed both before and after the beginning of the case. H and r block tax   You must file a statement with your income tax return stating you filed a Chapter 11 bankruptcy case. H and r block tax The statement must show the allocation and describe the method used to make the allocation. H and r block tax For a sample of this statement and other information, see Notice 2006-83, 2006-40 I. H and r block tax R. H and r block tax B. H and r block tax 596, available at www. H and r block tax irs. H and r block tax gov/irb/2006-40_IRB/ar12. H and r block tax html. H and r block tax Miscellaneous Compensation This section discusses many types of employee compensation. H and r block tax The subjects are arranged in alphabetical order. H and r block tax Advance commissions and other earnings. H and r block tax   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. H and r block tax    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. H and r block tax If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), Itemized Deductions, or you may be able to take a credit for that year. H and r block tax See Repayments , later. H and r block tax Allowances and reimbursements. H and r block tax    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. H and r block tax If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. H and r block tax Back pay awards. H and r block tax   Include in income amounts you are awarded in a settlement or judgment for back pay. H and r block tax These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. H and r block tax They should be reported to you by your employer on Form W-2. H and r block tax Bonuses and awards. H and r block tax    Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. H and r block tax These include prizes such as vacation trips for meeting sales goals. H and r block tax If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. H and r block tax However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. H and r block tax Employee achievement award. H and r block tax   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. H and r block tax However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. H and r block tax Your employer can tell you whether your award is a qualified plan award. H and r block tax Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. H and r block tax   However, the exclusion does not apply to the following awards. H and r block tax A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. H and r block tax A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. H and r block tax Example. H and r block tax Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. H and r block tax Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. H and r block tax However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 − $1,600) in his income. H and r block tax Differential wage payments. H and r block tax   This is any payment made by an employer to an individual for any period during which the individual is, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages the individual would have received from the employer for that period. H and r block tax These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. H and r block tax The payments are reported as wages on Form W-2. H and r block tax Government cost-of-living allowances. H and r block tax   Most payments received by U. H and r block tax S. H and r block tax Government civilian employees for working abroad are taxable. H and r block tax However, certain cost-of-living allowances are tax free. H and r block tax Publication 516, U. H and r block tax S. H and r block tax Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. H and r block tax Nonqualified deferred compensation plans. H and r block tax   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. H and r block tax This amount is shown on Form W-2, box 12, using code Y. H and r block tax This amount is not included in your income. H and r block tax   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. H and r block tax This amount is included in your wages shown on Form W-2, box 1. H and r block tax It is also shown on Form W-2, box 12, using code Z. H and r block tax Nonqualified deferred compensation plans of nonqualified entities. H and r block tax   In most cases, any compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity is included in gross income when there is no substantial risk of forfeiture of the rights to such compensation. H and r block tax For this purpose, a nonqualified entity is: A foreign corporation unless substantially all of its income is: Effectively connected with the conduct of a trade or business in the United States, or Subject to a comprehensive foreign income tax. H and r block tax A partnership unless substantially all of its income is allocated to persons other than: Foreign persons for whom the income is not subject to a comprehensive foreign income tax, and Tax-exempt organizations. H and r block tax Note received for services. H and r block tax   If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. H and r block tax When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. H and r block tax Do not include that part again in your income. H and r block tax Include the rest of the payment in your income in the year of payment. H and r block tax   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. H and r block tax Severance pay. H and r block tax   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. H and r block tax Accrued leave payment. H and r block tax   If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. H and r block tax   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. H and r block tax You can reduce gross wages by the amount you repaid in the same tax year in which you received it. H and r block tax Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on your return and the wages on your Forms W-2. H and r block tax Outplacement services. H and r block tax   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. H and r block tax    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). H and r block tax Sick pay. H and r block tax   Pay you receive from your employer while you are sick or injured is part of your salary or wages. H and r block tax In addition, you must include in your income sick pay benefits received from any of the following payers. H and r block tax A welfare fund. H and r block tax A state sickness or disability fund. H and r block tax An association of employers or employees. H and r block tax An insurance company, if your employer paid for the plan. H and r block tax However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. H and r block tax For more information, see Other Sickness and Injury Benefits under Sickness and Injury Benefits, later. H and r block tax Social security and Medicare taxes paid by employer. H and r block tax   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. H and r block tax The payment is also treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. H and r block tax However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. H and r block tax Stock appreciation rights. H and r block tax   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. H and r block tax When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. H and r block tax You include the cash payment in income in the year you use the right. H and r block tax Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. H and r block tax Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. H and r block tax See Valuation of Fringe Benefits , later in this discussion, for information on how to determine the amount to include in income. H and r block tax Recipient of fringe benefit. H and r block tax   You are the recipient of a fringe benefit if you perform the services for which the fringe benefit is provided. H and r block tax You are considered to be the recipient even if it is given to another person, such as a member of your family. H and r block tax An example is a car your employer gives to your spouse for services you perform. H and r block tax The car is considered to have been provided to you and not to your spouse. H and r block tax   You do not have to be an employee of the provider to be a recipient of a fringe benefit. H and r block tax If you are a partner, director, or independent contractor, you also can be the recipient of a fringe benefit. H and r block tax Provider of benefit. H and r block tax   Your employer or another person for whom you perform services is the provider of a fringe benefit regardless of whether that person actually provides the fringe benefit to you. H and r block tax The provider can be a client or customer of an independent contractor. H and r block tax Accounting period. H and r block tax   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. H and r block tax Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. H and r block tax The general rule: benefits are reported for a full calendar year (January 1–December 31). H and r block tax The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. H and r block tax For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. H and r block tax Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. H and r block tax   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). H and r block tax Form W-2. H and r block tax   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. H and r block tax Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). H and r block tax However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). H and r block tax Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. H and r block tax Benefits you receive from the plan may be taxable, as explained, later, under Sickness and Injury Benefits . H and r block tax For information on the items covered in this section, other than Long-term care coverage , see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. H and r block tax Long-term care coverage. H and r block tax   Contributions by your employer to provide coverage for long-term care services generally are not included in your income. H and r block tax However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. H and r block tax This amount will be reported as wages in box 1 of your Form W-2. H and r block tax Archer MSA contributions. H and r block tax    Contributions by your employer to your Archer MSA generally are not included in your income. H and r block tax Their total will be reported in box 12 of Form W-2, with code R. H and r block tax You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. H and r block tax File the form with your return. H and r block tax Health flexible spending arrangement (health FSA). H and r block tax   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. H and r block tax   Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. H and r block tax The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. H and r block tax For more information, see Notice 2012-40, 2012-26 I. H and r block tax R. H and r block tax B. H and r block tax 1046, available at www. H and r block tax irs. H and r block tax gov/irb/2012-26 IRB/ar09. H and r block tax html. H and r block tax Health reimbursement arrangement (HRA). H and r block tax   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. H and r block tax Health savings accounts (HSA). H and r block tax   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. H and r block tax Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. H and r block tax Contributions made by your employer are not included in your income. H and r block tax Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. H and r block tax Distributions not used for qualified medical expenses are included in your income. H and r block tax See Publication 969 for the requirements of an HSA. H and r block tax   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. H and r block tax The contributions are treated as a distribution of money and are not included in the partner's gross income. H and r block tax Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. H and r block tax In both situations, the partner can deduct the contribution made to the partner's HSA. H and r block tax   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. H and r block tax The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. H and r block tax Qualified HSA funding distribution. H and r block tax   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. H and r block tax See Publication 590, Individual Retirement Arrangements (IRAs), for the requirements for these qualified HSA funding distributions. H and r block tax Failure to maintain eligibility. H and r block tax   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. H and r block tax If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. H and r block tax This income is also subject to an additional 10% tax. H and r block tax Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. H and r block tax See Instructions for Form 8839, Qualified Adoption Expenses, for more information. H and r block tax Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. H and r block tax They also are included as social security and Medicare wages in boxes 3 and 5. H and r block tax However, they are not included as wages in box 1. H and r block tax To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. H and r block tax File the form with your return. H and r block tax Athletic Facilities If your employer provides you with the free or low-cost use of an employer-operated gym or other athletic club on your employer's premises, the value is not included in your compensation. H and r block tax The gym must be used primarily by employees, their spouses, and their dependent children. H and r block tax If your employer pays for a fitness program provided to you at an off-site resort hotel or athletic club, the value of the program is included in your compensation. H and r block tax De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. H and r block tax In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. H and r block tax Also see Employee Discounts , later. H and r block tax Holiday gifts. H and r block tax   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. H and r block tax However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. H and r block tax Dependent Care Benefits If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. H and r block tax Dependent care benefits include: Amounts your employer pays directly to either you or your care provider for the care of your qualifying person while you work, and The fair market value of care in a daycare facility provided or sponsored by your employer. H and r block tax The amount you can exclude is limited to the lesser of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). H and r block tax Your employer must show the total amount of dependent care benefits provided to you during the year under a qualified plan in box 10 of your Form W-2. H and r block tax Your employer also will include any dependent care benefits over $5,000 in your wages shown in box 1 of your Form W-2. H and r block tax To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. H and r block tax See the Instructions for Form 2441 for more information. H and r block tax Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. H and r block tax For more information, see Publication 970. H and r block tax Employee Discounts If your employer sells you property or services at a discount, you may be able to exclude the amount of the discount from your income. H and r block tax The exclusion applies to discounts on property or services offered to customers in the ordinary course of the line of business in which you work. H and r block tax However, it does not apply to discounts on real property or property commonly held for investment (such as stocks or bonds). H and r block tax The exclusion is limited to the price charged nonemployee customers multiplied by the following percentage. H and r block tax For a discount on property, your employer's gross profit percentage (gross profit divided by gross sales) on all property sold during the employer's previous tax year. H and r block tax (Ask your employer for this percentage. H and r block tax ) For a discount on services, 20%. H and r block tax Financial Counseling Fees Financial counseling fees paid for you by your employer are included in your income and must be reported as part of wages. H and r block tax If the fees are for tax or investment counseling, they can be deducted on Schedule A (Form 1040) as a miscellaneous deduction (subject to the 2%-of-AGI limit). H and r block tax Qualified retirement planning services paid for you by your employer may be excluded from your income. H and r block tax For more information, see Retirement Planning Services , later. H and r block tax Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. H and r block tax However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. H and r block tax For exceptions to this rule, see Entire cost excluded , and Entire cost taxed , later. H and r block tax If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. H and r block tax Also, it is shown separately in box 12 with code C. H and r block tax Group-term life insurance. H and r block tax   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. H and r block tax Permanent benefits. H and r block tax   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. H and r block tax Your employer should be able to tell you the amount to include in your income. H and r block tax Accidental death benefits. H and r block tax   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. H and r block tax Former employer. H and r block tax   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. H and r block tax Also, it is shown separately in box 12 with code C. H and r block tax Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. H and r block tax You must pay these taxes with your income tax return. H and r block tax Include them on line 60, Form 1040, and follow the instructions forline 60. H and r block tax For more information, see the Instructions for Form 1040. H and r block tax Two or more employers. H and r block tax   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. H and r block tax If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. H and r block tax You must figure how much to include in your income. H and r block tax Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. H and r block tax Figuring the taxable cost. H and r block tax    Use the following worksheet to figure the amount to include in your income. H and r block tax   If you pay any part of the cost of the insurance, your entire payment reduces, dollar for dollar, the amount you otherwise would include in your income. H and r block tax However, you cannot reduce the amount to include in your income by: Payments for coverage in a different tax year, Payments for coverage through a cafeteria plan, unless the payments are after-tax contributions, or Payments for coverage not taxed to you because of the exceptions discussed later under Entire cost excluded . H and r block tax Worksheet 1. H and r block tax Figuring the Cost of Group-Term Life Insurance To Include in Income 1. H and r block tax Enter the total amount of your insurance coverage from your employer(s) 1. H and r block tax   2. H and r block tax Limit on exclusion for employer-provided group-term life insurance coverage 2. H and r block tax 50,000 3. H and r block tax Subtract line 2 from line 1 3. H and r block tax   4. H and r block tax Divide line 3 by $1,000. H and r block tax Figure to the nearest tenth 4. H and r block tax   5. H and r block tax Go to Table 1. H and r block tax Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. H and r block tax   6. H and r block tax Multiply line 4 by line 5 6. H and r block tax     7. H and r block tax Enter the number of full months of coverage at this cost 7. H and r block tax   8. H and r block tax Multiply line 6 by line 7 8. H and r block tax   9. H and r block tax Enter the premiums you paid per month 9. H and r block tax       10. H and r block tax Enter the number of months you paid the  premiums 10. H and r block tax       11. H and r block tax Multiply line 9 by line 10. H and r block tax 11. H and r block tax   12. H and r block tax Subtract line 11 from line 8. H and r block tax Include this amount in your income as wages 12. H and r block tax   Table 1. H and r block tax Cost of $1,000 of Group-Term Life Insurance for One Month   Age Cost     Under 25 $ . H and r block tax 05     25 through 29 . H and r block tax 06     30 through 34 . H and r block tax 08     35 through 39 . H and r block tax 09     40 through 44 . H and r block tax 10     45 through 49 . H and r block tax 15     50 through 54 . H and r block tax 23     55 through 59 . H and r block tax 43     60 through 64 . H and r block tax 66     65 through 69 1. H and r block tax 27     70 and older 2. H and r block tax 06   Example. H and r block tax You are 51 years old and work for employers A and B. H and r block tax Both employers provide group-term life insurance coverage for you for the entire year. H and r block tax Your coverage is $35,000 with employer A and $45,000 with employer B. H and r block tax You pay premiums of $4. H and r block tax 15 a month under the employer B group plan. H and r block tax You figure the amount to include in your income as follows. H and r block tax   Worksheet 1. H and r block tax Figuring the Cost of Group-Term Life Insurance To Include in Income—Illustrated 1. H and r block tax Enter the total amount of your insurance coverage from your employer(s) 1. H and r block tax 80,000 2. H and r block tax Limit on exclusion for employer-provided group-term life insurance coverage 2. H and r block tax 50,000 3. H and r block tax Subtract line 2 from line 1 3. H and r block tax 30,000 4. H and r block tax Divide line 3 by $1,000. H and r block tax Figure to the nearest tenth 4. H and r block tax 30. H and r block tax 0 5. H and r block tax Go to Table 1. H and r block tax Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. H and r block tax . H and r block tax 23 6. H and r block tax Multiply line 4 by line 5 6. H and r block tax 6. H and r block tax 90 7. H and r block tax Enter the number of full months of coverage at this cost. H and r block tax 7. H and r block tax 12 8. H and r block tax Multiply line 6 by line 7 8. H and r block tax 82. H and r block tax 80 9. H and r block tax Enter the premiums you paid per month 9. H and r block tax 4. H and r block tax 15     10. H and r block tax Enter the number of months you paid the premiums 10. H and r block tax 12     11. H and r block tax Multiply line 9 by line 10. H and r block tax 11. H and r block tax 49. H and r block tax 80 12. H and r block tax Subtract line 11 from line 8. H and r block tax Include this amount in your income as wages 12. H and r block tax 33. H and r block tax 00 The total amount to include in income for the cost of excess group-term life insurance is $33. H and r block tax Neither employer provided over $50,000 insurance coverage, so the wages shown on your Forms W-2 do not include any part of that $33. H and r block tax You must add it to the wages shown on your Forms W-2 and include the total on your return. H and r block tax Entire cost excluded. H and r block tax   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. H and r block tax You are permanently and totally disabled and have ended your employment. H and r block tax Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. H and r block tax A charitable organization to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. H and r block tax (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. H and r block tax ) The plan existed on January 1, 1984, and: You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. H and r block tax Entire cost taxed. H and r block tax   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply. H and r block tax The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. H and r block tax You are a key employee and your employer's plan discriminates in favor of key employees. H and r block tax Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. H and r block tax The meals are: Furnished on the business premises of your employer, and Furnished for the convenience of your employer. H and r block tax The lodging is: Furnished on the business premises of your employer, Furnished for the convenience of your employer, and A condition of your employment. H and r block tax (You must accept it in order to be able to properly perform your duties. H and r block tax ) You also do not include in your income the value of meals or meal money that qualifies as a de minimis fringe benefit. H and r block tax See De Minimis (Minimal) Benefits , earlier. H and r block tax Faculty lodging. H and r block tax   If you are an employee of an educational institution or an academic health center and you are provided with lodging that does not meet the three conditions given earlier, you still may not have to include the value of the lodging in income. H and r block tax However, the lodging must be qualified campus lodging, and you must pay an adequate rent. H and r block tax Academic health center. H and r block tax   This is an organization that meets the following conditions. H and r block tax Its principal purpose or function is to provide medical or hospital care or medical education or research. H and r block tax It receives payments for graduate medical education under the Social Security Act. H and r block tax One of its principal purposes or functions is to provide and teach basic and clinical medical science and research using its own faculty. H and r block tax Qualified campus lodging. H and r block tax   Qualified campus lodging is lodging furnished to you, your spouse, or one of your dependents by, or on behalf of, the institution or center for use as a home. H and r block tax The lodging must be located on or near a campus of the educational institution or academic health center. H and r block tax Adequate rent. H and r block tax   The amount of rent you pay for the year for qualified campus lodging is considered adequate if it is at least equal to the lesser of: 5% of the appraised value of the lodging, or The average of rentals paid by individuals (other than employees or students) for comparable lodging held for rent by the educational institution. H and r block tax If the amount you pay is less than the lesser of these amounts, you must include the difference in your income. H and r block tax   The lodging must be appraised by an independent appraiser and the appraisal must be reviewed on an annual basis. H and r block tax Example. H and r block tax Carl Johnson, a sociology professor for State University, rents a home from the university that is qualified campus lodging. H and r block tax The house is appraised at $200,000. H and r block tax The average rent paid for comparable university lodging by persons other than employees or students is $14,000 a year. H and r block tax Carl pays an annual rent of $11,000. H and r block tax Carl does not include in his income any rental value because the rent he pays equals at least 5% of the appraised value of the house (5% × $200,000 = $10,000). H and r block tax If Carl paid annual rent of only $8,000, he would have to include $2,000 in his income ($10,000 − $8,000). H and r block tax Moving Expense Reimbursements In most cases, if your employer pays for your moving expenses (either directly or indirectly) and the expenses would have been deductible if you paid them yourself, the value is not included in your income. H and r block tax See Publication 521 for more information. H and r block tax No-Additional-Cost Services The value of services you receive from your employer for free, at cost, or for a reduced price is not included in your income if your employer: Offers the same service for sale to customers in the ordinary course of the line of business in which you work, and Does not have a substantial additional cost (including any sales income given up) to provide you with the service (regardless of what you paid for the service). H and r block tax In most cases, no-additional-cost services are excess capacity services, such as airline, bus, or train tickets, hotel rooms, and telephone services. H and r block tax Example. H and r block tax You are employed as a flight attendant for a company that owns both an airline and a hotel chain. H and r block tax Your employer allows you to take personal flights (if there is an unoccupied seat) and stay in any one of their hotels (if there is an unoccupied room) at no cost to you. H and r block tax The value of the personal flight is not included in your income. H and r block tax However, the value of the hotel room is included in your income because you do not work in the hotel business. H and r block tax Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. H and r block tax Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. H and r block tax You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. H and r block tax Also, see Financial Counseling Fees , earlier. H and r block tax Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. H and r block tax A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. H and r block tax Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. H and r block tax However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. H and r block tax Exclusion limit. H and r block tax   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. H and r block tax   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. H and r block tax   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. H and r block tax   If the benefits have a value that is more than these limits, the excess must be included in your income. H and r block tax You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. H and r block tax Commuter highway vehicle. H and r block tax   This is a highway vehicle that seats at least six adults (not including the driver). H and r block tax At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). H and r block tax Transit pass. H and r block tax   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. H and r block tax Qualified parking. H and r block tax   This is parking provided to an employee at or near the employer's place of business. H and r block tax It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. H and r block tax It does not include parking at or near the employee's home. H and r block tax Qualified bicycle commuting. H and r block tax   This is reimbursement based on the number of qualified bicycle commuting months for the year. H and r block tax A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. H and r block tax The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. H and r block tax Tuition Reduction You can exclude a qualified tuition reduction from your income. H and r block tax This is the amount of a reduction in tuition: For education (below graduate level) furnished by an educational institution to an employee, former employee who retired or became disabled, or his or her spouse and dependent children. H and r block tax For education furnished to a graduate student at an educational institution if the graduate student is engaged in teaching or research activities for that institution. H and r block tax Representing payment for teaching, research, or other services if you receive the amount under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance program. H and r block tax For more information, see Publication 970. H and r block tax Working Condition Benefits If your employer provides you with a product or service and the cost of it would have been allowable as a business or depreciation deduction if you paid for it yourself, the cost is not included in your income. H and r block tax Example. H and r block tax You work as an engineer and your employer provides you with a subscription to an engineering trade magazine. H and r block tax The cost of the subscription is not included in your income because the cost would have been allowable to you as a business deduction if you had paid for the subscription yourself. H and r block tax Valuation of Fringe Benefits If a fringe benefit is included in your income, the amount included is generally its value determined under the general valuation rule or under the special valuation rules. H and r block tax For an exception, see Group-Term Life Insurance , earlier. H and r block tax General valuation rule. H and r block tax   You must include in your income the amount by which the fair market value of the fringe benefit is more than the sum of: The amount, if any, you paid for the benefit, plus The amount, if any, specifically excluded from your income by law. H and r block tax If you pay fair market value for a fringe benefit, no amount is included in your income. H and r block tax Fair market value. H and r block tax   The fair market value of a fringe benefit is determined by all the facts and circumstances. H and r block tax It is the amount you would have to pay a third party to buy or lease the benefit. H and r block tax This is determined without regard to: Your perceived value of the benefit, or The amount your employer paid for the benefit. H and r block tax Employer-provided vehicles. H and r block tax   If your employer provides a car (or other highway motor vehicle) to you, your personal use of the car is usually a taxable noncash fringe benefit. H and r block tax   Under the general valuation rules, the value of an employer-provided vehicle is the amount you would have to pay a third party to lease the same or a similar vehicle on the same or comparable terms in the same geographic area where you use the vehicle. H and r block tax An example of a comparable lease term is the amount of time the vehicle is available for your use, such as a 1-year period. H and r block tax The value cannot be determined by multiplying a cents-per-mile rate times the number of miles driven unless you prove the vehicle could have been leased on a cents-per-mile basis. H and r block tax Flights on employer-provided aircraft. H and r block tax   Under the general valuation rules, if your flight on an employer-provided piloted aircraft is primarily personal and you control the use of the aircraft for the flight, the value is the amount it would cost to charter the flight from a third party. H and r block tax   If there is more than one employee on the flight, the cost to charter the aircraft must be divided among those employees. H and r block tax The division must be based on all the facts, including which employee or employees control the use of the aircraft. H and r block tax Special valuation rules. H and r block tax   You generally can use a special valuation rule for a fringe benefit only if your employer uses the rule. H and r block tax If your employer uses a special valuation rule, you cannot use a different special rule to value that benefit. H and r block tax You always can use the general valuation rule discussed earlier, based on facts and circumstances, even if your employer uses a special rule. H and r block tax   If you and your employer use a special valuation rule, you must include in your income the amount your employer determines under the special rule minus the sum of: Any amount you repaid your employer, plus Any amount specifically excluded from income by law. H and r block tax The special valuation rules are the following. H and r block tax The automobile lease rule. H and r block tax The vehicle cents-per-mile rule. H and r block tax The commuting rule. H and r block tax The unsafe conditions commuting rule. H and r block tax The employer-operated eating-facility rule. H and r block tax   For more information on these rules, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. H and r block tax    For information on the non-commercial flight and commercial flight valuation rules, see sections 1. H and r block tax 61-21(g) and 1. H and r block tax 61-21(h) of the regulations. H and r block tax Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. H and r block tax (Your employer can tell you whether your retirement plan is qualified. H and r block tax ) However, the cost of life insurance coverage included in the plan may have to be included. H and r block tax See Group-Term Life Insurance , earlier, under Fringe Benefits. H and r block tax If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. H and r block tax However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. H and r block tax For information on distributions from retirement plans, see Publication 575 (or Publication 721, Tax Guide to U. H and r block tax S. H and r block tax Civil Service Retirement Benefits, if you are a federal employee or retiree). H and r block tax Elective Deferrals If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. H and r block tax The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. H and r block tax An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. H and r block tax However, it is included in wages subject to social security and Medicare taxes. H and r block tax Elective deferrals include elective contributions to the following retirement plans. H and r block tax Cash or deferred arrangements (section 401(k) plans). H and r block tax The Thrift Savings Plan for federal employees. H and r block tax Salary reduction simplified employee pension plans (SARSEP). H and r block tax Savings incentive match plans for employees (SIMPLE plans). H and r block tax Tax-sheltered annuity plans (403(b) plans). H and r block tax Section 501(c)(18)(D) plans. H and r block tax (But see Reporting by employer , later. H and r block tax ) Section 457 plans. H and r block tax Qualified automatic contribution arrangements. H and r block tax   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. H and r block tax You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. H and r block tax The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. H and r block tax   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. H and r block tax Overall limit on deferrals. H and r block tax   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3), earlier. H and r block tax The specific plan limits for the plans listed in (4) through (7), earlier, are discussed later. H and r block tax Amounts deferred under specific plan limits are part of the overall limit on deferrals. H and r block tax   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. H and r block tax However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. H and r block tax Catch-up contributions. H and r block tax   You may be allowed catch-up contributions (additional elective deferrals) if you are age 50 or older by the end of your tax year. H and r block tax For more information about catch-up contributions to 403(b) plans, see chapter 6 of Publication 571, Tax Sheltered Annuity Plans. H and r block tax   For more information about additional elective deferrals to: SEPs (SARSEPs), see Salary Reduction Simplified Employee Pension in chapter 2 of Publication 560, Retirement Plans for Small Business. H and r block tax SIMPLE plans, see How Much Can Be Contributed on Your Behalf? in chapter 3 of Publication 590. H and r block tax Section 457 plans, see Limit for deferrals under section 457 plans , later. H and r block tax Limit for deferrals under SIMPLE plans. H and r block tax   If you are a participant in a SIMPLE plan, you generally should not have deferred more than $12,000 in 2013. H and r block tax Amounts you defer under a SIMPLE plan count toward the overall limit ($17,500 for 2013) and may affect the amount you can defer under other elective deferral plans. H and r block tax Limit for tax-sheltered annuities. H and r block tax   If you are a participant in a tax-sheltered annuity plan (403(b) plan), the limit on elective deferrals for 2013 generally is $17,500. H and r block tax However, if you have at least 15 years of service with a public school system, a hospital, a home health service agency, a health and welfare service agency, a church, or a convention or association of churches (or associated organization), the limit on elective deferrals is increased by the least of the following amounts. H and r block tax $3,000, $15,000, reduced by the sum of: The additional pre-tax elective deferrals made in earlier years because of this rule, plus The aggregate amount of designated Roth contributions permitted for prior tax years because of this rule, or $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years. H and r block tax   If you qualify for the 15-year rule, your elective deferrals under this limit can be as high as $20,500 for 2013. H and r block tax   For more information, see Publication 571. H and r block tax Limit for deferral under section 501(c)(18) plans. H and r block tax   If you are a participant in a section 501(c)(18) plan (a trust created before June 25, 1959, funded only by employee contributions), you should have deferred no more than the lesser of $7,000 or 25% of your compensation. H and r block tax Amounts you defer under a section 501(c)(18) plan count toward the overall limit ($17,500 in 2013) and may affect the amount you can defer under other elective deferral plans. H and r block tax Limit for deferrals under section 457 plans. H and r block tax   If you are a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt organizations), you should have deferred no more than the lesser of your includible compensation or $17,500 in 2013. H and r block tax However, if you are within 3 years of normal retirement age, you may be allowed an increased limit if the plan allows it. H and r block tax See Increased limit , later. H and r block tax Includible compensation. H and r block tax   This is the pay you received for the year from the employer who maintained the section 457 plan. H and r block tax In most cases, it includes all the following payments. H and r block tax Wages and salaries. H and r block tax Fees for professional services. H and r block tax The value of any employer-provided qualified transportation fringe benefit (defined under Transportation , earlier) that is not included in your income. H and r block tax Other amounts received (cash or noncash) for personal services you performed, including, but not limited to, the following items. H and r block tax Commissions and tips. H and r block tax Fringe benefits. H and r block tax Bonuses. H and r block tax Employer contributions (elective deferrals) to: The section 457 plan. H and r block tax Qualified cash or deferred arrangements (section 401(k) plans) that are not included in your income. H and r block tax A salary reduction simplified employee pension (SARSEP). H and r block tax A tax-sheltered annuity (section 403(b) plan). H and r block tax A savings incentive match plan for employees (SIMPLE plan). H and r block tax A section 125 cafeteria plan. H and r block tax   Instead of using the amounts listed earlier to determine your includible compensation, your employer can use any of the following amounts. H and r block tax Your wages as defined for income tax withholding purposes. H and r block tax Your wages as reported in box 1 of Form W-2. H and r block tax Your wages that are subject to social security withholding (including elective deferrals). H and r block tax Increased limit. H and r block tax   During any, or all, of the last 3 years ending before you reach normal retirement age under the plan, your plan may provide that your limit is the lesser of: Twice the annual limit ($35,000 for 2013), or The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions). H and r block tax Catch-up contributions. H and r block tax   You generally can have additional elective deferrals made to your governmental section 457 plan if: You reached age 50 by the end of the year, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions. H and r block tax If you qualify, your limit can be the lesser of your includible compensation or $17,500, plus $5,500. H and r block tax However, if you are within 3 years of retirement age and your plan provides the increased limit, discussed earlier, that limit may be higher. H and r block tax Designated Roth contributions. H and r block tax   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. H and r block tax Designated Roth contributions are treated as elective deferrals, except that they are included in income. H and r block tax Your retirement plan must maintain separate accounts and recordkeeping for the designated Roth contributions. H and r block tax   Qualified distributions from a Roth plan are not included in income. H and r block tax In most cases, a distribution made before the end of the 5-tax-year period beginning with the first tax year for which you made a designated Roth contribution to the plan is not a qualified distribution. H and r block tax Reporting by employer. H and r block tax   Your employer generally should not include elective deferrals in your wages in box 1 of Form W-2. H and r block tax Instead, your employer should mark the Retirement plan checkbox in box 13 and show the total amount deferred in box 12. H and r block tax Section 501(c)(18)(D) contributions. H and r block tax   Wages shown in box 1 of your Form W-2 should not have been reduced for contributions you made to a section 501(c)(18)(D) retirement plan. H and r block tax The amount you contributed should be identified with code “H” in box 12. H and r block tax You may deduct the amount deferred subject to the limits that apply. H and r block tax Include your deduction in the total on Form 1040, line 36. H and r block tax Enter the amount and “501(c)(18)(D)” on the dotted line next to line 36. H and r block tax Designated Roth contributions. H and r block tax    These contributions are elective deferrals but are included in your wages in box 1 of Form W-2. H and r block tax Designated Roth contributions to a section 401(k) plan are reported using code AA in box 12, or, for section 403(b) plans, code BB in box 12. H and r block tax Excess deferrals. H and r block tax   If your deferrals exceed the limit, you must notify your plan by the date required by the plan. H and r block tax If the plan permits, the excess amount will be distributed to you. H and r block tax If you participate in more than one plan, you can have the excess paid out of any of the plans that permit these distributions. H and r block tax You must notify each plan by the date required by that plan of the amount to be paid from that particular plan. H and r block tax The plan then must pay you the amount of the excess, along with any income earned on that amount, by April 15 of the following year. H and r block tax   You must include the excess deferral in your income for the year of the deferral unless you have an excess deferral of a designated Roth contribution. H and r block tax File Form 1040 to add the excess deferral amount to your wages on line 7. H and r block tax Do not use Form 1040A or Form 1040EZ to report excess deferral amounts. H and r block tax Excess not distributed. H and r block tax   If you do not take out the excess amount, you cannot include it in the cost of the contract even though you included it in your income. H and r block tax Therefore, you are taxed twice on the excess deferral left in the plan—once when you contribute it, and again when you receive it as a distribution. H and r block tax Excess distributed to you. H and r block tax   If you take out the excess after the year of the deferral and you receive the corrective distribution by April 15 of the following year, do not include it in income again in the year you receive it. H and r block tax If you receive it later, you must include it in income in both the year of the deferral and the year you receive it. H and r block tax Any income on the excess deferral taken out is taxable in the tax year in which you take it out. H and r block tax If you take out part of the excess deferral and the income on it, allocate the distribution proportionately between the excess deferral and the income. H and r block tax    You should receive a Form 1099-R for the year in which the excess deferral is distributed to you. H and r block tax Use the following rules to report a corrective distribution shown on Form 1099-R for 2013. H and r block tax If the distribution was for a 2013 excess deferral, your Form 1099-R should have the code “8” in box 7. H and r block tax Add the excess deferral amount to your wages on your 2013 tax return. H and r block tax If the distribution was for a 2013 excess deferral to a designated Roth account, your Form 1099-R should have code “B” in box 7. H and r block tax Do not add this amount to your wages on your 2013 return. H and r block tax If the distribution was for a 2012 excess deferral, your Form 1099-R should have the code “P” in box 7. H and r block tax If you did not add the excess deferral amount to your wages on your 2012 tax return, you must file an amended return on Form 1040X, Amended U. H and r block tax S. H and r block tax Individual Income Tax Return. H and r block tax If you did not receive the distribution by April 15, 2013, you also must add it to your wages on your 2013 tax return. H and r block tax If the distribution was for the income earned on an excess deferral, your Form 1099-R should have the code “8” in box 7. H and r block tax Add the income amount to your wages on your 2013 income tax return, regardless of when the excess deferral was made. H and r block tax Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. H and r block tax Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution. H and r block tax ”    Even though a corrective distribution of excess deferrals is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. H and r block tax It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. H and r block tax Excess Contributions If you are a highly compensated employee, the total of your elective deferrals and other contributions made for you for any year under a section 401(k) plan or SARSEP can be, as a percentage of pay, no more than 125% of the average deferral percentage (ADP) of all eligible non-highly compensated employees. H and r block tax If the total contributed to the plan is more than the amount allowed under the ADP test, the excess contributions must be either distributed to you or recharacterized as after-tax employee contributions by treating them as distributed to you and then contributed by you to the plan. H and r block tax You must include the excess contributions in your income as wages on Form 1040, line 7. H and r block tax You cannot use Form 1040A or Form 1040EZ to report excess contribution amounts. H and r block tax If you receive a corrective distribution of excess contributions (and allocable income), it is included in your income in the year of the distribution. H and r block tax The allocable income is the amount of gain or loss through the end of the plan year for which the contribution was made that is allocable to the excess contributions. H and r block tax You should receive a Form 1099-R for the year the excess contributions are distributed to you. H and r block tax Add the distribution to your wages for that year. H and r block tax Even though a corrective distribution of excess contributions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. H and r block tax It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. H and r block tax Excess Annual Additions The amount contributed in 2013 to a defined contribution plan is generally limited to the lesser of 100% of your compensation or $51,000. H and r block tax Under certain circumstances, contributions that exceed these limits (excess annual additions) may be corrected by a distribution of your elective deferrals or a return of your after-tax contributions and earnings from these contributions. H and r block tax A corrective payment of excess annual additions consisting of elective deferrals or earnings from your after-tax contributions is fully taxable in the year paid. H and r block tax A corrective payment consisting of your after-tax contributions is not taxable. H and r block tax If you received a corrective payment of excess annual additions, you should receive a separate Form 1099-R for the year of the payment with the code “E” in box 7. H and r block tax Report the total payment shown in box 1 of Form 1099-R on line 16a of Form 1040 or line 12a of Form 1040A. H and r block tax Report the taxable amount shown in box 2a of Form 1099-R on line 16b of Form 1040 or line 12b of Form 1040A. H and r block tax Even though a corrective distribution of excess annual additions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. H and r block tax It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. H and r block tax Stock Options If you receive an option to buy or sell stock or other property as payment for your services, you may have income when you receive the option (the grant), when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option or property acquired through exercise of the option. H and r block tax The timing, type, and amount of income inclusion depend on whether you receive a nonstatutory stock option or a statutory stock option. H and r block tax Your employer can tell you which kind of option you hold. H and r block tax Nonstatutory Stock Options Grant of option. H and r block tax   If you are granted a nonstatutory stock option, you may have income when you receive the option. H and r block tax The amount of income to include and the time to include it depend on whether the fair market value of the option can be readily determined. H and r block tax The fair market value of an option can be readily determined if it is actively traded on an established market. H and r block tax    The fair market value of an option that is not traded on an established market can be readily determined only if all of the following conditions exist. H and r block tax You can transfer the option. H and r block tax You can exercise the option immediately in full. H and r block tax The option or the property subject to the option is not subject to any condition or restriction (other than a condition to secure payment of the purchase price) that has a significant effect on the fair market value of the option. H and r block tax The fair market value of the option privilege can be readily determined. H and r block tax The option privilege for an option to buy is the opportunity to benefit during the option's exercise period from any increase in the value of property subject to the option without risking any capital. H and r block tax For example, if during the exercise period the fair market value of stock subject to an option is greater than the option's exercise price, a profit may be realized by exercising the option and immediately selling the stock at its higher value. H and r block tax The option privilege for an option to sell is the opportunity to benefit during the exercise period from a decrease in the value of the property subject to the option. H and r block tax If you or a member of your family is an officer, director, or more-than-10% owner of an expatriated corporation, you may owe an excise tax on the value of nonstatutory options and other stock-based compensation from that corporation. H and r block tax For more information on the excise tax, see Internal Revenue Code section 4985. H and r block tax Option with readily determinable value. H and r block tax   If you receive a nonstatutory stock option that has a readily determinable fair market value at the time it is granted to you, the option is treated like other property received as compensation. H and r block tax See Restricted Property , later, for rules on how much income to include and when to include it. H and r block tax However, the rule described in that discussion for choosing to include the value of property in your income for the year of the transfer does not apply to a nonstatutory option. H and r block tax Option without readily determinable value. H and r block tax   If the fair market value of the option is not readily determinable at the time it is granted to you (even if it is determined later), you do not have income until you exercise or transfer the option. H and r block tax    Exercise or transfer of option. H and r block tax   When you exercise a nonstatutory stock option, the amount to include in your income depends on whether the option had a readily determinable value. H and r block tax Option with readily determinable value. H and r block tax   When you exercise a nonstatutory stock option that had a readily determinable value at the time the option was granted, you do not have to include any amount in income. H and r block tax Option without readily determinable value. H and r block tax   When you exercise a nonstatutory stock option that did not have a readily determinable value at the time the option was granted, the restricted prope