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H&r Block Free

H&r block free Index Symbols 10% additional tax, Early Distributions Tax, Age 59½ Rule, Additional 10% tax 2-year rule SIMPLE IRAs, Two-year rule. H&r block free 20% withholding, Other withholding rules. H&r block free 5-year rule, 5-year rule. H&r block free , Death before required beginning date. H&r block free 6% excise tax on excess contributions to Roth IRAs, What if You Contribute Too Much? 60-day period for rollovers, Time Limit for Making a Rollover Contribution A Account balance, IRA account balance. H&r block free Additional taxes, What Acts Result in Penalties or Additional Taxes?, Additional 10% tax (see also Penalties) Reporting, Reporting Additional Taxes Adjusted gross income (AGI), Modified adjusted gross income (AGI). H&r block free , Modified AGI. H&r block free (see also Modified adjusted gross income (AGI)) Retirement savings contributions credit, Adjusted gross income. H&r block free Age 50 Contributions, General Limit Age 59 1/2 rule, Age 59½ Rule Age 70 1/2 rule, Age 70½ rule. H&r block free Required minimum distributions, Distributions after the required beginning date. H&r block free Age limit Traditional IRA, When Can Contributions Be Made? Airline payments, Rollover of Airline Payments Alimony, Alimony and separate maintenance. H&r block free Annuity contracts, Annuity or endowment contracts. H&r block free Borrowing on, Borrowing on an annuity contract. H&r block free Distribution from insurance company, Annuity distributions from an insurance company. H&r block free Distribution from IRA account, Distribution of an annuity contract from your IRA account. H&r block free Early distributions, Annuity. H&r block free Assistance (see Tax help) B Basis Inherited IRAs, IRA with basis. H&r block free Roth IRAs, Basis of distributed property. H&r block free Traditional IRAs, Cost basis. H&r block free Beginning date, required, Distributions after the required beginning date. H&r block free Beneficiaries, IRA Beneficiaries, Death before required beginning date. H&r block free Change of, Change of beneficiary. H&r block free Death of beneficiary, Death of a beneficiary. H&r block free Early distributions to, Beneficiary. H&r block free Individual as, Beneficiary an individual. H&r block free More than one, More than one beneficiary. H&r block free , Multiple individual beneficiaries. H&r block free Not an individual, Beneficiary not an individual. H&r block free Roth IRAs, Distributions to beneficiaries. H&r block free Sole beneficiary spouse more than 10 years younger, Sole beneficiary spouse who is more than 10 years younger. H&r block free Bond purchase plans Rollovers from, Rollover from bond purchase plan. H&r block free Bonds, retirement (see Individual retirement bonds) Broker's commissions, Brokers' commissions. H&r block free , Brokers' commissions. H&r block free C Change in marital status, Change in marital status. H&r block free Change of beneficiary, Change of beneficiary. H&r block free Charitable distributions, qualified, Qualified charitable distributions. H&r block free Collectibles, Investment in Collectibles, Collectibles. H&r block free Community property, Community property laws. H&r block free Compensation Alimony, Alimony and separate maintenance. H&r block free Defined, What Is Compensation? Nontaxable combat pay, Nontaxable combat pay. H&r block free Self-employment, Self-employment loss. H&r block free Wages, salaries, etc. H&r block free , Wages, salaries, etc. H&r block free Conduit IRAs, IRA as a holding account (conduit IRA) for rollovers to other eligible plans. H&r block free Contribution limits More than one IRA, More than one IRA. H&r block free Contributions Designating the year, Designating year for which contribution is made. H&r block free Distributions in same year as, Both contributions for 2013 and distributions in 2013. H&r block free Excess (see Excess contributions) Less than maximum, Less Than Maximum Contributions Matching (SIMPLE), Matching contributions. H&r block free Nondeductible (see Nondeductible contributions) Not required, Contributions not required. H&r block free Qualified reservist repayments, Qualified reservist repayments. H&r block free Recharacterizing (see Recharacterization) Retirement savings contributions credit, Eligible contributions. H&r block free Roth IRAs, Can You Contribute to a Roth IRA?, Applying excess contributions. H&r block free SIMPLE plans, How Are Contributions Made?, How Much Can Be Contributed on Your Behalf? Traditional IRAs, How Much Can Be Contributed?, More Than Maximum Contributions When to contribute, When Can Contributions Be Made? Withdrawing before due date of return, Contributions Returned Before Due Date of Return Conversions From SIMPLE IRAs, Converting from a SIMPLE IRA. H&r block free To Roth IRAs, Conversions Credits Retirement savings contributions credit, Retirement Savings Contributions Credit (Saver's Credit), How to figure and report the credit. H&r block free D Death of beneficiary, Death of a beneficiary. H&r block free Deductions Figuring reduced IRA deduction, How To Figure Your Reduced IRA Deduction Phaseout, Deduction Phaseout Traditional IRAs, How Much Can You Deduct?, Examples — Worksheet for Reduced IRA Deduction for 2013 Deemed IRAs, Reminders, Reminders Defined benefit plans, Defined benefit plan. H&r block free Defined contribution plans, Defined contribution plan. H&r block free Disabilities, persons with Early distributions to, Disabled. H&r block free Distributions After required beginning date, Distributions after the required beginning date. H&r block free Age 59 1/2 rule, Age 59½ Rule Beneficiaries (see Beneficiaries) Contributions in same year as, Both contributions for 2013 and distributions in 2013. H&r block free Delivered outside U. H&r block free S. H&r block free , IRA distributions delivered outside the United States. H&r block free Figuring nontaxable and taxable amounts, Figuring the Nontaxable and Taxable Amounts From individual retirement accounts, Distributions from individual retirement account. H&r block free From individual retirement annuities, Distributions from individual retirement annuities. H&r block free Fully or partly taxable, Distributions Fully or Partly Taxable Income from, Income from IRA distributions. H&r block free Inherited IRAs (see Inherited IRAs) Insufficient, Excess Accumulations (Insufficient Distributions) Qualified charitable, Qualified charitable distributions. H&r block free Qualified HSA funding, One-time qualified HSA funding distribution. H&r block free Qualified reservist, Qualified reservist distributions. H&r block free Roth IRAs, Are Distributions Taxable?, How Do You Figure the Taxable Part? Ordering rules for, Ordering Rules for Distributions Recapture amount, Figuring your recapture amount. H&r block free SIMPLE IRAs, Are Distributions Taxable? Taxable status of, Are Distributions Taxable? Divorce Rollovers by former spouse, Distributions under divorce or similar proceedings (alternate payees). H&r block free Transfers incident to, Transfers Incident To Divorce E Early distributions, What Acts Result in Penalties or Additional Taxes?, Early Distributions, Nondeductible contributions. H&r block free (see also Penalties) Age 59 1/2 rule, Age 59½ Rule Defined, Early distributions defined. H&r block free Disability exception, Disabled. H&r block free First-time homebuyers, exception, First home. H&r block free Higher education expenses, exception, Higher education expenses. H&r block free Medical insurance, exception, Medical insurance. H&r block free Roth IRAs, Additional Tax on Early Distributions SIMPLE IRAs, Additional Tax on Early Distributions Tax, Early Distributions Tax Unreimbursed medical expenses, exception, Unreimbursed medical expenses. H&r block free Education expenses, Higher education expenses. H&r block free Employer and employee association trust accounts, Employer and Employee Association Trust Accounts Employer plans Covered by, Covered by an employer retirement plan. H&r block free Year(s) covered, For Which Year(s) Are You Covered? Employer retirement plans, Are You Covered by an Employer Plan? Defined benefit plans, Defined benefit plan. H&r block free Defined contribution plans, Defined contribution plan. H&r block free Effect of modified AGI on deduction (Table 1-2), Table 1-2. H&r block free Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work Limit if covered by, Limit if Covered by Employer Plan Prohibited transactions, Trust account set up by an employer or an employee association. H&r block free Endowment contracts (see Annuity contracts) Estate tax, Estate tax. H&r block free Deduction for inherited IRAs, Federal estate tax deduction. H&r block free Excess accumulations, Excess Accumulations (Insufficient Distributions), Make up of shortfall in distribution. H&r block free Roth IRAs, Distributions After Owner's Death Excess contributions, Excess Contributions Closed tax year, Closed tax year. H&r block free Deducted in earlier year, Excess contribution deducted in an earlier year. H&r block free Deducting in a later year, Deducting an Excess Contribution in a Later Year Due to incorrect rollover information, Excess due to incorrect rollover information. H&r block free Recharacterizing, Recharacterizing excess contributions. H&r block free Roth IRAs, What if You Contribute Too Much? Tax, Excess Contributions Tax Withdrawn after due date of return, Excess Contributions Withdrawn After Due Date of Return Withdrawn by due date of return, Excess Contributions Withdrawn by Due Date of Return Exempt transactions, Exempt Transactions Exxon Valdez settlement income, Rollover of Exxon Valdez Settlement Income , Rollover of Exxon Valdez Settlement Income F Failed financial institutions, Failed financial institutions. H&r block free Federal judges, Federal judges. H&r block free Fiduciaries Prohibited transactions, Fiduciary. H&r block free Filing before IRA contribution is made, Filing before a contribution is made. H&r block free Filing status, Filing Status Deduction phaseout and, Filing status. H&r block free Firefighters, volunteer, Volunteer firefighters. H&r block free First-time homebuyers, First home. H&r block free Five-year rule (see 5-year rule) Form 1040 Modified AGI calculation from, Form 1040. H&r block free , Form 1040NR. H&r block free Form 1040A Modified AGI calculation from, Form 1040A. H&r block free Form 1099-R, Reporting and Withholding Requirements for Taxable Amounts Distribution code 1 used on, Form 5329 not required. H&r block free Letter codes used on, Letter codes. H&r block free Number codes used on, Number codes. H&r block free Withdrawal of excess contribution, Form 1099-R. H&r block free Form 5329, Additional 10% tax, Reporting the tax. H&r block free , Reporting Additional Taxes Recapture tax, Recapture tax for changes in distribution method under equal payment exception. H&r block free Form 8606, Form 8606. H&r block free , Form 8606. H&r block free , Reporting your nontaxable distribution on Form 8606. H&r block free , Figuring the Nontaxable and Taxable Amounts Failure to file, penalty, Penalty for failure to file Form 8606. H&r block free Form 8880, How to figure and report the credit. H&r block free Form W-2 Employer retirement plans, Are You Covered by an Employer Plan? Free tax services, Free help with your tax return. H&r block free Frozen deposits, Frozen deposit. H&r block free Full-time student Retirement savings contributions credit, Full-time student. H&r block free H Help (see Tax help) Higher education expenses, Higher education expenses. H&r block free How to Set up an IRA, How Can a Traditional IRA Be Opened? Treat withdrawn contributions, How to treat withdrawn contributions. H&r block free HSA funding distributions, qualified, One-time qualified HSA funding distribution. H&r block free I Individual retirement accounts, Individual Retirement Account Distributions from, Distributions from individual retirement account. H&r block free Individual retirement annuities, Individual Retirement Annuity Distributions from, Distributions from individual retirement annuities. H&r block free Individual retirement arrangements (IRAs) How to set up, How Can a Traditional IRA Be Opened? When to set up, When Can a Traditional IRA Be Opened? Individual retirement bonds, Individual Retirement Bonds Cashing in, Cashing in retirement bonds. H&r block free Inherited IRAs, What if You Inherit an IRA?, More information. H&r block free Rollovers, Inherited IRAs. H&r block free Insufficient distributions, Excess Accumulations (Insufficient Distributions) Interest on IRA, Reminders Investment in collectibles Collectibles defined, Collectibles. H&r block free Exception, Exception. H&r block free K Kay Bailey Hutchison Spousal IRAs Contribution limits, Kay Bailey Hutchison Spousal IRA Limit Deductions, Kay Bailey Hutchison Spousal IRA. H&r block free Roth IRA contribution limits, Can you contribute to a Roth IRA for your spouse? Keogh plans Rollovers from, Keogh plans and rollovers. H&r block free L Last-in first-out rule, Last-in first-out rule. H&r block free Life expectancy, Life expectancy. H&r block free Life insurance, Life insurance contract. H&r block free Losses Roth IRAs, Recognizing Losses on Investments Traditional IRAs, Recognizing Losses on Traditional IRA Investments M Marital status, change in, Change in marital status. H&r block free Matching contributions (SIMPLE), Matching contributions. H&r block free Medical expenses, unreimbursed, Unreimbursed medical expenses. H&r block free Medical insurance, Medical insurance. H&r block free Military death gratuities, Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments Minimum distribution (see Required minimum distribution) Missing children, photographs of, Reminders Modified adjusted gross income (AGI) Employer retirement plan coverage and deduction (Table 1-2), Table 1-2. H&r block free Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work Figuring (Worksheet 1-1), Worksheet 1-1. H&r block free Figuring Your Modified AGI No employer retirement plan coverage and deduction (Table 1-3), Table 1-3. H&r block free Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work Roth IRAs, Modified AGI. H&r block free Effect on contribution amount (Table 2-1), Table 2-1. H&r block free Effect of Modified AGI on Roth IRA Contribution More than one beneficiary, More than one beneficiary. H&r block free More than one IRA, More than one IRA. H&r block free Recharacterization, More than one IRA. H&r block free Required minimum distribution, More than one IRA. H&r block free N Nondeductible contributions, Nondeductible Contributions, Nondeductible contributions. H&r block free Failure to report, Failure to report nondeductible contributions. H&r block free Overstatement penalty, Penalty for overstatement. H&r block free Notice Qualified employer plan to provide prior to rollover distribution, Written explanation to recipients. H&r block free Rollovers, Rollover notice. H&r block free P Partial rollovers, Partial rollovers. H&r block free , Partial rollover. H&r block free Penalties, What Acts Result in Penalties or Additional Taxes?, Form 5329 not required. H&r block free Early distributions, Early Distributions, Nondeductible contributions. H&r block free Excess accumulations, Excess Accumulations (Insufficient Distributions), Make up of shortfall in distribution. H&r block free Excess contributions, Excess Contributions Roth IRAs, What if You Contribute Too Much? Exempt transactions, Exempt Transactions, Services received at reduced or no cost. H&r block free Failure to file Form 8606, Penalty for failure to file Form 8606. H&r block free Overstatement of nondeductible contributions, Penalty for overstatement. H&r block free Prohibited transactions, Prohibited Transactions, Services received at reduced or no cost. H&r block free Reporting, Reporting Additional Taxes SIMPLE IRAs, Additional Tax on Early Distributions Phaseout of deduction, Deduction Phaseout Pledging account as security, Pledging an account as security. H&r block free Prohibited transactions, Prohibited Transactions, Services received at reduced or no cost. H&r block free Taxes on, Taxes on prohibited transactions. H&r block free Publications (see Tax help) Q Qualified charitable distributions, Qualified charitable distributions. H&r block free Qualified domestic relations orders (QDROs), Qualified domestic relations order. H&r block free Qualified settlement income, Rollover of Exxon Valdez Settlement Income , Rollover of Exxon Valdez Settlement Income R Recapture tax Changes in distribution method, Recapture tax for changes in distribution method under equal payment exception. H&r block free Receivership distributions, Receivership distributions. H&r block free Recharacterization, Recharacterizations, More than one IRA. H&r block free Determining amount of net income due to contribution and total amount to be recharacterized (Worksheet 1-3), Worksheet 1-3. H&r block free Determining the Amount of Net Income Due To an IRA Contribution and Total Amount To Be Recharacterized Reporting, Reporting a Recharacterization SIMPLE employer contributions, Recharacterizing employer contributions. H&r block free Timing of, Timing. H&r block free Reconversion, Reconversions Recordkeeping requirements Traditional IRAs, Nondeductible Contributions Reporting Additional taxes, Reporting Additional Taxes Deductible contributions, Reporting Deductible Contributions Nontaxable distribution on Form 8606, Reporting your nontaxable distribution on Form 8606. H&r block free Recharacterization, Reporting a Recharacterization Rollovers From employer plans, Reporting rollovers from employer plans. H&r block free From IRAs, Reporting rollovers from IRAs. H&r block free Taxable amounts, Reporting and Withholding Requirements for Taxable Amounts Taxable distributions, Reporting taxable distributions on your return. H&r block free Required beginning date, Distributions after the required beginning date. H&r block free Required minimum distribution, Reminders, When Must You Withdraw Assets? (Required Minimum Distributions), Annuity distributions from an insurance company. H&r block free Distribution period, Distribution period. H&r block free During lifetime, Distributions during your lifetime. H&r block free Figuring, Figuring the Owner's Required Minimum Distribution For beneficiary, Figuring the Beneficiary's Required Minimum Distribution Table to use, Which Table Do You Use To Determine Your Required Minimum Distribution? In year of owner's death, Distributions in the year of the owner's death. H&r block free Installments allowed, Installments allowed. H&r block free More than one IRA, More than one IRA. H&r block free Sole beneficiary spouse who is more than 10 years younger, Sole beneficiary spouse who is more than 10 years younger. H&r block free Reservists, Reservists. H&r block free Qualified reservist distribution, Qualified reservist distributions. H&r block free Qualified reservist repayments, Qualified reservist repayments. H&r block free Retirement bonds (see Individual retirement bonds) Retirement savings contributions credit, Retirement Savings Contributions Credit (Saver's Credit), How to figure and report the credit. H&r block free Rollovers, Rollovers, Reporting rollovers from employer plans. H&r block free Airline payments, Rollover of Airline Payments Amount, Amount. H&r block free Choosing an option (Table 1-5), Table 1-5. H&r block free Comparison of Payment to You Versus Direct Rollover Completed after 60-day period, Rollovers completed after the 60-day period. H&r block free Conduit IRAs, IRA as a holding account (conduit IRA) for rollovers to other eligible plans. H&r block free Direct rollover option, Direct rollover option. H&r block free Extension of period, Extension of rollover period. H&r block free From bond purchase plan, Rollover from bond purchase plan. H&r block free From employer's plan into a Roth IRA, Rollover From Employer's Plan Into a Roth IRA From employer's plan into an IRA, Rollover From Employer's Plan Into an IRA From Keogh plans, Keogh plans and rollovers. H&r block free From one IRA into another, Rollover From One IRA Into Another From Roth IRAs, Rollover From a Roth IRA From traditional IRA, Kinds of rollovers from a traditional IRA. H&r block free Inherited IRAs, Inherited IRAs. H&r block free Nonspouse beneficiary, Rollover by nonspouse beneficiary. H&r block free Notice, Rollover notice. H&r block free Partial, Partial rollovers. H&r block free , Partial rollover. H&r block free SIMPLE IRAs, Rollovers and Transfers Exception Tax treatment of rollover from traditional IRA to eligible retirement plan other than an IRA, Tax treatment of a rollover from a traditional IRA to an eligible retirement plan other than an IRA. H&r block free Time limit, Time Limit for Making a Rollover Contribution To Roth IRAs, Conversion methods. H&r block free To traditional IRA, Kinds of rollovers to a traditional IRA. H&r block free Waiting period between, Waiting period between rollovers. H&r block free , No waiting period between rollovers. H&r block free Withholding (see Withholding) Roth IRAs, Roth IRAs, Distributions After Owner's Death Age limit, Is there an age limit for contributions? Contribution limit reduced, Contribution limit reduced. H&r block free Contributions, Can You Contribute to a Roth IRA?, Applying excess contributions. H&r block free Timing of, When Can You Make Contributions? To traditional IRAs and to Roth IRAs, Roth IRAs and traditional IRAs. H&r block free Conversion, Converting From Any Traditional IRA Into a Roth IRA, Conversion by rollover from traditional to Roth IRA. H&r block free , Recharacterizing to a SEP IRA or SIMPLE IRA. H&r block free , Conversions Defined, What Is a Roth IRA? Distributions, Are Distributions Taxable?, How Do You Figure the Taxable Part? After death of owner, Distributions After Owner's Death Insufficient, Distributions After Owner's Death Ordering rules for, Ordering Rules for Distributions Early distributions, Additional Tax on Early Distributions Excess accumulations, Distributions After Owner's Death Excess contributions, What if You Contribute Too Much? Figuring taxable part, How Do You Figure the Taxable Part? Losses, Recognizing Losses on Investments Modified AGI Effect on contribution amount (Table 2-1), Table 2-1. H&r block free Effect of Modified AGI on Roth IRA Contribution Figuring (Worksheet 2-1), Worksheet 2-1. H&r block free Modified Adjusted Gross Income for Roth IRA Purposes Rollovers from, Rollover From a Roth IRA Setting up, When Can a Roth IRA Be Opened? Spouse, Can you contribute to a Roth IRA for your spouse? Traditional IRAs converted into, Converting From Any Traditional IRA Into a Roth IRA Withdrawing or using assets, Must You Withdraw or Use Assets? S Salary reduction arrangement, What Is a SIMPLE Plan? Savings Incentive Match Plans for Employees (see SIMPLE IRAs) Section 501(c)(18) plan, General Limit, Kay Bailey Hutchison Spousal IRA Limit Self-employed persons Deductible contributions, Self-employed. H&r block free Income of, Self-employment income. H&r block free SIMPLE plans, Self-employed individual. H&r block free SEP IRAs Recharacterizing to, Recharacterizing to a SEP IRA or SIMPLE IRA. H&r block free Separated taxpayers Filing status of, Lived apart from spouse. H&r block free Servicemembers group life insurance, Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments Services received at reduced or no cost, Services received at reduced or no cost. H&r block free SIMPLE IRAs, Savings Incentive Match Plans for Employees (SIMPLE), Two-year rule. H&r block free Contributions, How Are Contributions Made?, How Much Can Be Contributed on Your Behalf? Conversion from, Converting from a SIMPLE IRA. H&r block free Distributions, Are Distributions Taxable? Early distributions, , Additional Tax on Early Distributions Eligible employees, Eligible Employees Penalties, Additional Tax on Early Distributions Recharacterizing to, Recharacterizing to a SEP IRA or SIMPLE IRA. H&r block free Rollovers, Rollovers and Transfers Exception Salary reduction contribution limits, Salary reduction contributions limit. H&r block free Self-employed persons, Self-employed individual. H&r block free SIMPLE plan, defined, What Is a SIMPLE Plan? Traditional IRA, mistakenly moved to, Traditional IRA mistakenly moved to SIMPLE IRA. H&r block free , Traditional IRA mistakenly moved to SIMPLE IRA. H&r block free Two-year rule, Two-year rule. H&r block free Withdrawing or using assets, When Can You Withdraw or Use Assets? Simplified employee pensions (SEPs), Simplified Employee Pension (SEP) Social Security recipients, Social Security Recipients Spousal IRAs (see Kay Bailey Hutchison Spousal IRAs or Inherited IRAs) Students Education expenses, Higher education expenses. H&r block free Retirement savings contributions credit, Full-time student. H&r block free Surviving spouse, Surviving spouse. H&r block free , Surviving spouse. H&r block free Rollovers by, Distributions received by a surviving spouse. H&r block free T Tables Modified AGI Employer retirement plan coverage and deduction (Table 1-2), Table 1-2. H&r block free Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work No employer retirement plan coverage and deduction (Table 1-3), Table 1-3. H&r block free Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work Roth IRAs, effect on contribution (Table 2-1), Table 2-1. H&r block free Effect of Modified AGI on Roth IRA Contribution Rollover vs. H&r block free direct payment to taxpayer (Table 1-5), Table 1-5. H&r block free Comparison of Payment to You Versus Direct Rollover Using this publication (Table I-1), Table I-1. H&r block free Using This Publication Tax advantages of IRAs, What are some tax advantages of an IRA? Tax credits Retirement savings contributions credit, Retirement Savings Contributions Credit (Saver's Credit), How to figure and report the credit. H&r block free Tax help, How To Get Tax Help Tax year, Tax year. H&r block free Tax-sheltered annuities Rollovers from, Distribution from a tax-sheltered annuity. H&r block free Traditional IRAs, Traditional IRAs, Form 5329 not required. H&r block free Age 59 1/2 rule, Age 59½ Rule Contribution limits, How Much Can Be Contributed?, More Than Maximum Contributions Contributions, How Much Can Be Contributed?, More Than Maximum Contributions Due date, Contributions must be made by due date. H&r block free To Roth IRAs and to traditional IRAs, Roth IRAs and traditional IRAs. H&r block free Converting into Roth IRA, Converting From Any Traditional IRA Into a Roth IRA Cost basis, Cost basis. H&r block free Deductions, How Much Can You Deduct?, Examples — Worksheet for Reduced IRA Deduction for 2013 Defined, Introduction Disclosures, Required Disclosures Excess contributions, Excess Contributions Inherited IRAs, What if You Inherit an IRA?, More information. H&r block free Loss of IRA status, Loss of IRA status. H&r block free Losses, Recognizing Losses on Traditional IRA Investments Mistakenly moved to SIMPLE IRA, Traditional IRA mistakenly moved to SIMPLE IRA. H&r block free , Traditional IRA mistakenly moved to SIMPLE IRA. H&r block free Recordkeeping, Nondeductible Contributions Reduced IRA deduction for 2013, Examples — Worksheet for Reduced IRA Deduction for 2013 Rollovers (see Rollovers) Setting up, Who Can Open a Traditional IRA?, Required Disclosures Social Security recipients, Social Security Recipients Transfers, Can You Move Retirement Plan Assets? Types of, Kinds of traditional IRAs. H&r block free Withdrawing or using assets, When Can You Withdraw or Use Assets?, Excess Contributions Tax Transfers, Can You Move Retirement Plan Assets? Divorce, Transfers Incident To Divorce To Roth IRAs, Transfers to Roth IRAs. H&r block free , Can You Move Amounts Into a Roth IRA? Trustee to trustee, Trustee-to-Trustee Transfer, Conversion methods. H&r block free Trustee-to-trustee transfers, Trustee-to-Trustee Transfer To Roth IRAs, Conversion methods. H&r block free Trustees' fees, Trustees' fees. H&r block free , Trustees' fees. H&r block free Trusts As beneficiary, Trust as beneficiary. H&r block free TTY/TDD information, How To Get Tax Help Two-year rule SIMPLE IRAs, Two-year rule. H&r block free U Unreimbursed medical expenses, Unreimbursed medical expenses. H&r block free V Volunteer firefighters, Volunteer firefighters. H&r block free W Withdrawing or using assets Contribution withdrawal, before due date of return, Contributions Returned Before Due Date of Return Roth IRAs, Must You Withdraw or Use Assets? SIMPLE IRAs, When Can You Withdraw or Use Assets? Traditional IRAs, When Can You Withdraw or Use Assets?, Excess Contributions Tax Withholding, Reporting and Withholding Requirements for Taxable Amounts, Withholding. H&r block free Direct rollover option, Withholding. H&r block free Eligible rollover distribution paid to taxpayer, Withholding requirement. H&r block free Worksheets Figuring amount of net income due to IRA contribution and total amount to be recharacterized (Worksheet 1-3), Worksheet 1-3. H&r block free Determining the Amount of Net Income Due To an IRA Contribution and Total Amount To Be Recharacterized Figuring modified AGI (Worksheet 1-1), Worksheet 1-1. H&r block free Figuring Your Modified AGI Roth IRAs Figuring modified AGI (Worksheet 2-1), Worksheet 2-1. H&r block free Modified Adjusted Gross Income for Roth IRA Purposes Prev  Up     Home   More Online Publications
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IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

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Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone*
Bloomington 2017 S. Liberty Dr.
Bloomington, IN 47403

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)

 

**This office will be open 9:00 a.m. - 3:30 p.m. on 4/2**

 

Services Provided

(812) 337-7600
Columbus 2425 Northpark Dr.
Columbus, IN 47203

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)
 

Services Provided

(812) 379-7400
Evansville 7409 Eagle Crest Blvd.
Evansville, IN 47715

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(812) 474-4800
Ft. Wayne 201 E. Rudisill Blvd.
Fort Wayne, IN 46806

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(260) 458-5000
Indianapolis 575 N. Pennsylvania St.
Indianapolis, IN 46204

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(317) 685-7500 
Lafayette  955 Mezzanine Drive
Suite B
Lafayette, IN 47905 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)

 

Services Provided

(765) 449-3880 
Merrillville  233 E. 84th Dr.
Merrillville, IN 46410 

Monday-Friday - 8:30 a.m.-4:30 p.m.


Services Provided

(219) 736-4378
 
Muncie  225 N. High St.
Muncie, IN 47305 

Monday-Friday 8:30 a.m.- 4:30 p.m. 
(Closed for lunch 12:30 p.m.- 1:30 p.m.)
 

Services Provided

(765) 747-5533 
South Bend  100 E Wayne St
South Bend, IN 46601 

Monday-Friday - 8:30 a.m.-4:30 p.m.  
 

Services Provided

(574) 236-8149 
Terre Haute  801 Wabash Ave. 
Terre Haute, IN 47807 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)

 

Services Provided

(812) 231-6521 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (317) 685-7840 in Indianapolis or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
575 N. Pennsylvania St.
Room 573, Stop WI-665
Indianapolis, IN 46204

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The H&r Block Free

H&r block free 9. H&r block free   Depletion Table of Contents Introduction Topics - This chapter discusses: Who Can Claim Depletion? Mineral PropertyCost Depletion Percentage Depletion Oil and Gas Wells Mines and Geothermal Deposits Lessor's Gross Income TimberTimber units. H&r block free Depletion unit. H&r block free Introduction Depletion is the using up of natural resources by mining, drilling, quarrying stone, or cutting timber. H&r block free The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. H&r block free There are two ways of figuring depletion: cost depletion and percentage depletion. H&r block free For mineral property, you generally must use the method that gives you the larger deduction. H&r block free For standing timber, you must use cost depletion. H&r block free Topics - This chapter discusses: Who can claim depletion Mineral property Timber Who Can Claim Depletion? If you have an economic interest in mineral property or standing timber, you can take a deduction for depletion. H&r block free More than one person can have an economic interest in the same mineral deposit or timber. H&r block free In the case of leased property, the depletion deduction is divided between the lessor and the lessee. H&r block free You have an economic interest if both the following apply. H&r block free You have acquired by investment any interest in mineral deposits or standing timber. H&r block free You have a legal right to income from the extraction of the mineral or cutting of the timber to which you must look for a return of your capital investment. H&r block free A contractual relationship that allows you an economic or monetary advantage from products of the mineral deposit or standing timber is not, in itself, an economic interest. H&r block free A production payment carved out of, or retained on the sale of, mineral property is not an economic interest. H&r block free Individuals, corporations, estates, and trusts who claim depletion deductions may be liable for alternative minimum tax. H&r block free Basis adjustment for depletion. H&r block free   You must reduce the basis of your property by the depletion allowed or allowable, whichever is greater. H&r block free Mineral Property Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). H&r block free For this purpose, the term “property” means each separate interest you own in each mineral deposit in each separate tract or parcel of land. H&r block free You can treat two or more separate interests as one property or as separate properties. H&r block free See section 614 of the Internal Revenue Code and the related regulations for rules on how to treat separate mineral interests. H&r block free There are two ways of figuring depletion on mineral property. H&r block free Cost depletion. H&r block free Percentage depletion. H&r block free Generally, you must use the method that gives you the larger deduction. H&r block free However, unless you are an independent producer or royalty owner, you generally cannot use percentage depletion for oil and gas wells. H&r block free See Oil and Gas Wells , later. H&r block free Cost Depletion To figure cost depletion you must first determine the following. H&r block free The property's basis for depletion. H&r block free The total recoverable units of mineral in the property's natural deposit. H&r block free The number of units of mineral sold during the tax year. H&r block free Basis for depletion. H&r block free   To figure the property's basis for depletion, subtract all the following from the property's adjusted basis. H&r block free Amounts recoverable through: Depreciation deductions, Deferred expenses (including deferred exploration and development costs), and Deductions other than depletion. H&r block free The residual value of land and improvements at the end of operations. H&r block free The cost or value of land acquired for purposes other than mineral production. H&r block free Adjusted basis. H&r block free   The adjusted basis of your property is your original cost or other basis, plus certain additions and improvements, and minus certain deductions such as depletion allowed or allowable and casualty losses. H&r block free Your adjusted basis can never be less than zero. H&r block free See Publication 551, Basis of Assets, for more information on adjusted basis. H&r block free Total recoverable units. H&r block free   The total recoverable units is the sum of the following. H&r block free The number of units of mineral remaining at the end of the year (including units recovered but not sold). H&r block free The number of units of mineral sold during the tax year (determined under your method of accounting, as explained next). H&r block free   You must estimate or determine recoverable units (tons, pounds, ounces, barrels, thousands of cubic feet, or other measure) of mineral products using the current industry method and the most accurate and reliable information you can obtain. H&r block free You must include ores and minerals that are developed, in sight, blocked out, or assured. H&r block free You must also include probable or prospective ores or minerals that are believed to exist based on good evidence. H&r block free But see Elective safe harbor for owners of oil and gas property , later. H&r block free Number of units sold. H&r block free   You determine the number of units sold during the tax year based on your method of accounting. H&r block free Use the following table to make this determination. H&r block free    IF you  use . H&r block free . H&r block free . H&r block free THEN the units sold during the year are . H&r block free . H&r block free . H&r block free The cash method of accounting The units sold for which you receive payment during the tax year (regardless of the year of sale). H&r block free An accrual method of accounting The units sold based on your inventories and method of accounting for inventory. H&r block free   The number of units sold during the tax year does not include any for which depletion deductions were allowed or allowable in earlier years. H&r block free Figuring the cost depletion deduction. H&r block free   Once you have figured your property's basis for depletion, the total recoverable units, and the number of units sold during the tax year, you can figure your cost depletion deduction by taking the following steps. H&r block free Step Action Result 1 Divide your property's basis for depletion by total recoverable units. H&r block free Rate per unit. H&r block free 2 Multiply the rate per unit by units sold during the tax year. H&r block free Cost depletion deduction. H&r block free You must keep accounts for the depletion of each property and adjust these accounts each year for units sold and depletion claimed. H&r block free Elective safe harbor for owners of oil and gas property. H&r block free   Instead of using the method described earlier to determine the total recoverable units, you can use an elective safe harbor. H&r block free If you choose the elective safe harbor, the total recoverable units equal 105% of a property's proven reserves (both developed and undeveloped). H&r block free For details, see Revenue Procedure 2004-19 on page 563 of Internal Revenue Bulletin 2004-10, available at www. H&r block free irs. H&r block free gov/pub/irs-irbs/irb04-10. H&r block free pdf. H&r block free   To make the election, attach a statement to your timely filed (including extensions) original return for the first tax year for which the safe harbor is elected. H&r block free The statement must indicate that you are electing the safe harbor provided by Revenue Procedure 2004-19. H&r block free The election, if made, is effective for the tax year in which it is made and all later years. H&r block free It cannot be revoked for the tax year in which it is elected, but may be revoked in a later year. H&r block free Once revoked, it cannot be re-elected for the next 5 years. H&r block free Percentage Depletion To figure percentage depletion, you multiply a certain percentage, specified for each mineral, by your gross income from the property during the tax year. H&r block free The rates to be used and other rules for oil and gas wells are discussed later under Independent Producers and Royalty Owners and under Natural Gas Wells . H&r block free Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits . H&r block free Gross income. H&r block free   When figuring percentage depletion, subtract from your gross income from the property the following amounts. H&r block free Any rents or royalties you paid or incurred for the property. H&r block free The part of any bonus you paid for a lease on the property allocable to the product sold (or that otherwise gives rise to gross income) for the tax year. H&r block free A bonus payment includes amounts you paid as a lessee to satisfy a production payment retained by the lessor. H&r block free   Use the following fraction to figure the part of the bonus you must subtract. H&r block free No. H&r block free of units sold in the tax year Recoverable units from the property × Bonus Payments For oil and gas wells and geothermal deposits, more information about the definition of gross income from the property is under Oil and Gas Wells , later. H&r block free For other property, more information about the definition of gross income from the property is under Mines and Geothermal Deposits , later. H&r block free Taxable income limit. H&r block free   The percentage depletion deduction generally cannot be more than 50% (100% for oil and gas property) of your taxable income from the property figured without the depletion deduction and the domestic production activities deduction. H&r block free   Taxable income from the property means gross income from the property minus all allowable deductions (except any deduction for depletion or domestic production activities) attributable to mining processes, including mining transportation. H&r block free These deductible items include, but are not limited to, the following. H&r block free Operating expenses. H&r block free Certain selling expenses. H&r block free Administrative and financial overhead. H&r block free Depreciation. H&r block free Intangible drilling and development costs. H&r block free Exploration and development expenditures. H&r block free Deductible taxes (see chapter 5), but not taxes that you capitalize or take as a credit. H&r block free Losses sustained. H&r block free   The following rules apply when figuring your taxable income from the property for purposes of the taxable income limit. H&r block free Do not deduct any net operating loss deduction from the gross income from the property. H&r block free Corporations do not deduct charitable contributions from the gross income from the property. H&r block free If, during the year, you dispose of an item of section 1245 property that was used in connection with mineral property, reduce any allowable deduction for mining expenses by the part of any gain you must report as ordinary income that is allocable to the mineral property. H&r block free See section 1. H&r block free 613-5(b)(1) of the regulations for information on how to figure the ordinary gain allocable to the property. H&r block free Oil and Gas Wells You cannot claim percentage depletion for an oil or gas well unless at least one of the following applies. H&r block free You are either an independent producer or a royalty owner. H&r block free The well produces natural gas that is either sold under a fixed contract or produced from geopressured brine. H&r block free If you are an independent producer or royalty owner, see Independent Producers and Royalty Owners , next. H&r block free For information on the depletion deduction for wells that produce natural gas that is either sold under a fixed contract or produced from geopressured brine, see Natural Gas Wells , later. H&r block free Independent Producers and Royalty Owners If you are an independent producer or royalty owner, you figure percentage depletion using a rate of 15% of the gross income from the property based on your average daily production of domestic crude oil or domestic natural gas up to your depletable oil or natural gas quantity. H&r block free However, certain refiners, as explained next, and certain retailers and transferees of proven oil and gas properties, as explained next, cannot claim percentage depletion. H&r block free For information on figuring the deduction, see Figuring percentage depletion , later. H&r block free Refiners who cannot claim percentage depletion. H&r block free   You cannot claim percentage depletion if you or a related person refine crude oil and you and the related person refined more than 75,000 barrels on any day during the tax year based on average (rather than actual) daily refinery runs for the tax year. H&r block free The average daily refinery run is computed by dividing total refinery runs for the tax year by the total number of days in the tax year. H&r block free Related person. H&r block free   You and another person are related persons if either of you holds a significant ownership interest in the other person or if a third person holds a significant ownership interest in both of you. H&r block free For example, a corporation, partnership, estate, or trust and anyone who holds a significant ownership interest in it are related persons. H&r block free A partnership and a trust are related persons if one person holds a significant ownership interest in each of them. H&r block free For purposes of the related person rules, significant ownership interest means direct or indirect ownership of 5% or more in any one of the following. H&r block free The value of the outstanding stock of a corporation. H&r block free The interest in the profits or capital of a partnership. H&r block free The beneficial interests in an estate or trust. H&r block free Any interest owned by or for a corporation, partnership, trust, or estate is considered to be owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries. H&r block free Retailers who cannot claim percentage depletion. H&r block free   You cannot claim percentage depletion if both the following apply. H&r block free You sell oil or natural gas or their by-products directly or through a related person in any of the following situations. H&r block free Through a retail outlet operated by you or a related person. H&r block free To any person who is required under an agreement with you or a related person to use a trademark, trade name, or service mark or name owned by you or a related person in marketing or distributing oil, natural gas, or their by-products. H&r block free To any person given authority under an agreement with you or a related person to occupy any retail outlet owned, leased, or controlled by you or a related person. H&r block free The combined gross receipts from sales (not counting resales) of oil, natural gas, or their by-products by all retail outlets taken into account in (1) are more than $5 million for the tax year. H&r block free   For the purpose of determining if this rule applies, do not count the following. H&r block free Bulk sales (sales in very large quantities) of oil or natural gas to commercial or industrial users. H&r block free Bulk sales of aviation fuels to the Department of Defense. H&r block free Sales of oil or natural gas or their by-products outside the United States if none of your domestic production or that of a related person is exported during the tax year or the prior tax year. H&r block free Related person. H&r block free   To determine if you and another person are related persons, see Related person under Refiners who cannot claim percentage depletion, earlier. H&r block free Sales through a related person. H&r block free   You are considered to be selling through a related person if any sale by the related person produces gross income from which you may benefit because of your direct or indirect ownership interest in the person. H&r block free   You are not considered to be selling through a related person who is a retailer if all the following apply. H&r block free You do not have a significant ownership interest in the retailer. H&r block free You sell your production to persons who are not related to either you or the retailer. H&r block free The retailer does not buy oil or natural gas from your customers or persons related to your customers. H&r block free There are no arrangements for the retailer to acquire oil or natural gas you produced for resale or made available for purchase by the retailer. H&r block free Neither you nor the retailer knows of or controls the final disposition of the oil or natural gas you sold or the original source of the petroleum products the retailer acquired for resale. H&r block free Transferees who cannot claim percentage depletion. H&r block free   You cannot claim percentage depletion if you received your interest in a proven oil or gas property by transfer after 1974 and before October 12, 1990. H&r block free For a definition of the term “transfer,” see section 1. H&r block free 613A-7(n) of the regulations. H&r block free For a definition of the term “interest in proven oil or gas property,” see section 1. H&r block free 613A-7(p) of the regulations. H&r block free Figuring percentage depletion. H&r block free   Generally, as an independent producer or royalty owner, you figure your percentage depletion by computing your average daily production of domestic oil or gas and comparing it to your depletable oil or gas quantity. H&r block free If your average daily production does not exceed your depletable oil or gas quantity, you figure your percentage depletion by multiplying the gross income from the oil or gas property (defined later) by 15%. H&r block free If your average daily production of domestic oil or gas exceeds your depletable oil or gas quantity, you must make an allocation as explained later under Average daily production. H&r block free   In addition, there is a limit on the percentage depletion deduction. H&r block free See Taxable income limit , later. H&r block free Average daily production. H&r block free   Figure your average daily production by dividing your total domestic production of oil or gas for the tax year by the number of days in your tax year. H&r block free Partial interest. H&r block free   If you have a partial interest in the production from a property, figure your share of the production by multiplying total production from the property by your percentage of interest in the revenues from the property. H&r block free   You have a partial interest in the production from a property if you have a net profits interest in the property. H&r block free To figure the share of production for your net profits interest, you must first determine your percentage participation (as measured by the net profits) in the gross revenue from the property. H&r block free To figure this percentage, you divide the income you receive for your net profits interest by the gross revenue from the property. H&r block free Then multiply the total production from the property by your percentage participation to figure your share of the production. H&r block free Example. H&r block free Javier Robles owns oil property in which Pablo Olmos owns a 20% net profits interest. H&r block free During the year, the property produced 10,000 barrels of oil, which Javier sold for $200,000. H&r block free Javier had expenses of $90,000 attributable to the property. H&r block free The property generated a net profit of $110,000 ($200,000 − $90,000). H&r block free Pablo received income of $22,000 ($110,000 × . H&r block free 20) for his net profits interest. H&r block free Pablo determined his percentage participation to be 11% by dividing $22,000 (the income he received) by $200,000 (the gross revenue from the property). H&r block free Pablo determined his share of the oil production to be 1,100 barrels (10,000 barrels × 11%). H&r block free Depletable oil or natural gas quantity. H&r block free   Generally, your depletable oil quantity is 1,000 barrels. H&r block free Your depletable natural gas quantity is 6,000 cubic feet multiplied by the number of barrels of your depletable oil quantity that you choose to apply. H&r block free If you claim depletion on both oil and natural gas, you must reduce your depletable oil quantity (1,000 barrels) by the number of barrels you use to figure your depletable natural gas quantity. H&r block free Example. H&r block free You have both oil and natural gas production. H&r block free To figure your depletable natural gas quantity, you choose to apply 360 barrels of your 1000-barrel depletable oil quantity. H&r block free Your depletable natural gas quantity is 2. H&r block free 16 million cubic feet of gas (360 × 6000). H&r block free You must reduce your depletable oil quantity to 640 barrels (1000 − 360). H&r block free If you have production from marginal wells, see section 613A(c)(6) of the Internal Revenue Code to figure your depletable oil or natural gas quantity. H&r block free Also, see Notice 2012-50, available at www. H&r block free irs. H&r block free gov/irb/2012–31_IRB/index. H&r block free html. H&r block free Business entities and family members. H&r block free   You must allocate the depletable oil or gas quantity among the following related persons in proportion to each entity's or family member's production of domestic oil or gas for the year. H&r block free Corporations, trusts, and estates if 50% or more of the beneficial interest is owned by the same or related persons (considering only persons that own at least 5% of the beneficial interest). H&r block free You and your spouse and minor children. H&r block free A related person is anyone mentioned in the related persons discussion under Nondeductible loss in chapter 2 of Publication 544, except that for purposes of this allocation, item (1) in that discussion includes only an individual, his or her spouse, and minor children. H&r block free Controlled group of corporations. H&r block free   Members of the same controlled group of corporations are treated as one taxpayer when figuring the depletable oil or natural gas quantity. H&r block free They share the depletable quantity. H&r block free A controlled group of corporations is defined in section 1563(a) of the Internal Revenue Code, except that, for this purpose, the stock ownership requirement in that definition is “more than 50%” rather than “at least 80%. H&r block free ” Gross income from the property. H&r block free   For purposes of percentage depletion, gross income from the property (in the case of oil and gas wells) is the amount you receive from the sale of the oil or gas in the immediate vicinity of the well. H&r block free If you do not sell the oil or gas on the property, but manufacture or convert it into a refined product before sale or transport it before sale, the gross income from the property is the representative market or field price (RMFP) of the oil or gas, before conversion or transportation. H&r block free   If you sold gas after you removed it from the premises for a price that is lower than the RMFP, determine gross income from the property for percentage depletion purposes without regard to the RMFP. H&r block free   Gross income from the property does not include lease bonuses, advance royalties, or other amounts payable without regard to production from the property. H&r block free Average daily production exceeds depletable quantities. H&r block free   If your average daily production for the year is more than your depletable oil or natural gas quantity, figure your allowance for depletion for each domestic oil or natural gas property as follows. H&r block free Figure your average daily production of oil or natural gas for the year. H&r block free Figure your depletable oil or natural gas quantity for the year. H&r block free Figure depletion for all oil or natural gas produced from the property using a percentage depletion rate of 15%. H&r block free Multiply the result figured in (3) by a fraction, the numerator of which is the result figured in (2) and the denominator of which is the result figured in (1). H&r block free This is your depletion allowance for that property for the year. H&r block free Taxable income limit. H&r block free   If you are an independent producer or royalty owner of oil and gas, your deduction for percentage depletion is limited to the smaller of the following. H&r block free 100% of your taxable income from the property figured without the deduction for depletion and the deduction for domestic production activities under section 199 of the Internal Revenue Code. H&r block free For a definition of taxable income from the property, see Taxable income limit , earlier, under Mineral Property. H&r block free 65% of your taxable income from all sources, figured without the depletion allowance, the deduction for domestic production activities, any net operating loss carryback, and any capital loss carryback. H&r block free You can carry over to the following year any amount you cannot deduct because of the 65%-of-taxable-income limit. H&r block free Add it to your depletion allowance (before applying any limits) for the following year. H&r block free Partnerships and S Corporations Generally, each partner or S corporation shareholder, and not the partnership or S corporation, figures the depletion allowance separately. H&r block free (However, see Electing large partnerships must figure depletion allowance , later. H&r block free ) Each partner or shareholder must decide whether to use cost or percentage depletion. H&r block free If a partner or shareholder uses percentage depletion, he or she must apply the 65%-of-taxable-income limit using his or her taxable income from all sources. H&r block free Partner's or shareholder's adjusted basis. H&r block free   The partnership or S corporation must allocate to each partner or shareholder his or her share of the adjusted basis of each oil or gas property held by the partnership or S corporation. H&r block free The partnership or S corporation makes the allocation as of the date it acquires the oil or gas property. H&r block free   Each partner's share of the adjusted basis of the oil or gas property generally is figured according to that partner's interest in partnership capital. H&r block free However, in some cases, it is figured according to the partner's interest in partnership income. H&r block free   The partnership or S corporation adjusts the partner's or shareholder's share of the adjusted basis of the oil and gas property for any capital expenditures made for the property and for any change in partnership or S corporation interests. H&r block free Recordkeeping. H&r block free Each partner or shareholder must separately keep records of his or her share of the adjusted basis in each oil and gas property of the partnership or S corporation. H&r block free The partner or shareholder must reduce his or her adjusted basis by the depletion allowed or allowable on the property each year. H&r block free The partner or shareholder must use that reduced adjusted basis to figure cost depletion or his or her gain or loss if the partnership or S corporation disposes of the property. H&r block free Reporting the deduction. H&r block free   Information that you, as a partner or shareholder, use to figure your depletion deduction on oil and gas properties is reported by the partnership or S corporation on Schedule K-1 (Form 1065) or on Schedule K-1 (Form 1120S). H&r block free Deduct oil and gas depletion for your partnership or S corporation interest on Schedule E (Form 1040). H&r block free The depletion deducted on Schedule E is included in figuring income or loss from rental real estate or royalty properties. H&r block free The instructions for Schedule E explain where to report this income or loss and whether you need to file either of the following forms. H&r block free Form 6198, At-Risk Limitations. H&r block free Form 8582, Passive Activity Loss Limitations. H&r block free Electing large partnerships must figure depletion allowance. H&r block free   An electing large partnership, rather than each partner, generally must figure the depletion allowance. H&r block free The partnership figures the depletion allowance without taking into account the 65-percent-of-taxable-income limit and the depletable oil or natural gas quantity. H&r block free Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance. H&r block free   An electing large partnership is one that meets both the following requirements. H&r block free The partnership had 100 or more partners in the preceding year. H&r block free The partnership chooses to be an electing large partnership. H&r block free Disqualified persons. H&r block free   An electing large partnership does not figure the depletion allowance of its partners that are disqualified persons. H&r block free Disqualified persons must figure it themselves, as explained earlier. H&r block free   All the following are disqualified persons. H&r block free Refiners who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). H&r block free Retailers who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). H&r block free Any partner whose average daily production of domestic crude oil and natural gas is more than 500 barrels during the tax year in which the partnership tax year ends. H&r block free Average daily production is discussed earlier. H&r block free Natural Gas Wells You can use percentage depletion for a well that produces natural gas that is either Sold under a fixed contract, or Produced from geopressured brine. H&r block free Natural gas sold under a fixed contract. H&r block free   Natural gas sold under a fixed contract qualifies for a percentage depletion rate of 22%. H&r block free This is domestic natural gas sold by the producer under a contract that does not provide for a price increase to reflect any increase in the seller's tax liability because of the repeal of percentage depletion for gas. H&r block free The contract must have been in effect from February 1, 1975, until the date of sale of the gas. H&r block free Price increases after February 1, 1975, are presumed to take the increase in tax liability into account unless demonstrated otherwise by clear and convincing evidence. H&r block free Natural gas from geopressured brine. H&r block free   Qualified natural gas from geopressured brine is eligible for a percentage depletion rate of 10%. H&r block free This is natural gas that is both the following. H&r block free Produced from a well you began to drill after September 1978 and before 1984. H&r block free Determined in accordance with section 503 of the Natural Gas Policy Act of 1978 to be produced from geopressured brine. H&r block free Mines and Geothermal Deposits Certain mines, wells, and other natural deposits, including geothermal deposits, qualify for percentage depletion. H&r block free Mines and other natural deposits. H&r block free   For a natural deposit, the percentage of your gross income from the property that you can deduct as depletion depends on the type of deposit. H&r block free   The following is a list of the percentage depletion rates for the more common minerals. H&r block free DEPOSITS RATE Sulphur, uranium, and, if from deposits in the United States, asbestos, lead ore, zinc ore, nickel ore, and mica 22% Gold, silver, copper, iron ore, and certain oil shale, if from deposits in the United States 15% Borax, granite, limestone, marble, mollusk shells, potash, slate, soapstone, and carbon dioxide produced from a well 14% Coal, lignite, and sodium chloride 10% Clay and shale used or sold for use in making sewer pipe or bricks or used or sold for use as sintered or burned lightweight aggregates 7½% Clay used or sold for use in making drainage and roofing tile, flower pots, and kindred products, and gravel, sand, and stone (other than stone used or sold for use by a mine owner or operator as dimension or ornamental stone) 5%   You can find a complete list of minerals and their percentage depletion rates in section 613(b) of the Internal Revenue Code. H&r block free Corporate deduction for iron ore and coal. H&r block free   The percentage depletion deduction of a corporation for iron ore and coal (including lignite) is reduced by 20% of: The percentage depletion deduction for the tax year (figured without this reduction), minus The adjusted basis of the property at the close of the tax year (figured without the depletion deduction for the tax year). H&r block free Gross income from the property. H&r block free   For property other than a geothermal deposit or an oil or gas well, gross income from the property means the gross income from mining. H&r block free Mining includes all the following. H&r block free Extracting ores or minerals from the ground. H&r block free Applying certain treatment processes described later. H&r block free Transporting ores or minerals (generally, not more than 50 miles) from the point of extraction to the plants or mills in which the treatment processes are applied. H&r block free Excise tax. H&r block free   Gross income from mining includes the separately stated excise tax received by a mine operator from the sale of coal to compensate the operator for the excise tax the mine operator must pay to finance black lung benefits. H&r block free Extraction. H&r block free   Extracting ores or minerals from the ground includes extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. H&r block free This does not apply to extraction from waste or residue of prior mining by the purchaser of the waste or residue or the purchaser of the rights to extract ores or minerals from the waste or residue. H&r block free Treatment processes. H&r block free   The processes included as mining depend on the ore or mineral mined. H&r block free To qualify as mining, the treatment processes must be applied by the mine owner or operator. H&r block free For a listing of treatment processes considered as mining, see section 613(c)(4) of the Internal Revenue Code and the related regulations. H&r block free Transportation of more than 50 miles. H&r block free   If the IRS finds that the ore or mineral must be transported more than 50 miles to plants or mills to be treated because of physical and other requirements, the additional authorized transportation is considered mining and included in the computation of gross income from mining. H&r block free    If you wish to include transportation of more than 50 miles in the computation of gross income from mining, request an advance ruling from the IRS. H&r block free Include in the request the facts about the physical and other requirements that prevented the construction and operation of the plant within 50 miles of the point of extraction. H&r block free For more information about requesting an advance ruling, see Revenue Procedure 2013-1, available at www. H&r block free irs. H&r block free gov/irb/2013-01_IRB/ar11. H&r block free html. H&r block free Disposal of coal or iron ore. H&r block free   You cannot take a depletion deduction for coal (including lignite) or iron ore mined in the United States if both the following apply. H&r block free You disposed of it after holding it for more than 1 year. H&r block free You disposed of it under a contract under which you retain an economic interest in the coal or iron ore. H&r block free Treat any gain on the disposition as a capital gain. H&r block free Disposal to related person. H&r block free   This rule does not apply if you dispose of the coal or iron ore to one of the following persons. H&r block free A related person (as listed in chapter 2 of Publication 544). H&r block free A person owned or controlled by the same interests that own or control you. H&r block free Geothermal deposits. H&r block free   Geothermal deposits located in the United States or its possessions qualify for a percentage depletion rate of 15%. H&r block free A geothermal deposit is a geothermal reservoir of natural heat stored in rocks or in a watery liquid or vapor. H&r block free For percentage depletion purposes, a geothermal deposit is not considered a gas well. H&r block free   Figure gross income from the property for a geothermal steam well in the same way as for oil and gas wells. H&r block free See Gross income from the property , earlier, under Oil and Gas Wells. H&r block free Percentage depletion on a geothermal deposit cannot be more than 50% of your taxable income from the property. H&r block free Lessor's Gross Income In the case of leased property, the depletion deduction is divided between the lessor and the lessee. H&r block free A lessor's gross income from the property that qualifies for percentage depletion usually is the total of the royalties received from the lease. H&r block free Bonuses and advanced royalties. H&r block free   Bonuses and advanced royalties are payments a lessee makes before production to a lessor for the grant of rights in a lease or for minerals, gas, or oil to be extracted from leased property. H&r block free If you are the lessor, your income from bonuses and advanced royalties received is subject to an allowance for depletion, as explained in the next two paragraphs. H&r block free Figuring cost depletion. H&r block free   To figure cost depletion on a bonus, multiply your adjusted basis in the property by a fraction, the numerator of which is the bonus and the denominator of which is the total bonus and royalties expected to be received. H&r block free To figure cost depletion on advanced royalties, use the computation explained earlier under Cost Depletion , treating the number of units for which the advanced royalty is received as the number of units sold. H&r block free Figuring percentage depletion. H&r block free   In the case of mines, wells, and other natural deposits other than gas, oil, or geothermal property, you may use the percentage rates discussed earlier under Mines and Geothermal Deposits . H&r block free Any bonus or advanced royalty payments are generally part of the gross income from the property to which the rates are applied in making the calculation. H&r block free However, for oil, gas, or geothermal property, gross income does not include lease bonuses, advanced royalties, or other amounts payable without regard to production from the property. H&r block free Ending the lease. H&r block free   If you receive a bonus on a lease that ends or is abandoned before you derive any income from mineral extraction, include in income the depletion deduction you took. H&r block free Do this for the year the lease ends or is abandoned. H&r block free Also increase your adjusted basis in the property to restore the depletion deduction you previously subtracted. H&r block free   For advanced royalties, include in income the depletion claimed on minerals for which the advanced royalties were paid if the minerals were not produced before the lease ended. H&r block free Include this amount in income for the year the lease ends. H&r block free Increase your adjusted basis in the property by the amount you include in income. H&r block free Delay rentals. H&r block free   These are payments for deferring development of the property. H&r block free Since delay rentals are ordinary rent, they are ordinary income that is not subject to depletion. H&r block free These rentals can be avoided by either abandoning the lease, beginning development operations, or obtaining production. H&r block free Timber You can figure timber depletion only by the cost method. H&r block free Percentage depletion does not apply to timber. H&r block free Base your depletion on your cost or other basis in the timber. H&r block free Your cost does not include the cost of land or any amounts recoverable through depreciation. H&r block free Depletion takes place when you cut standing timber. H&r block free You can figure your depletion deduction when the quantity of cut timber is first accurately measured in the process of exploitation. H&r block free Figuring cost depletion. H&r block free   To figure your cost depletion allowance, you multiply the number of timber units cut by your depletion unit. H&r block free Timber units. H&r block free   When you acquire timber property, you must make an estimate of the quantity of marketable timber that exists on the property. H&r block free You measure the timber using board feet, log scale, cords, or other units. H&r block free If you later determine that you have more or less units of timber, you must adjust the original estimate. H&r block free   The term “timber property” means your economic interest in standing timber in each tract or block representing a separate timber account. H&r block free Depletion unit. H&r block free   You figure your depletion unit each year by taking the following steps. H&r block free Determine your cost or adjusted basis of the timber on hand at the beginning of the year. H&r block free Adjusted basis is defined under Cost Depletion in the discussion on Mineral Property. H&r block free Add to the amount determined in (1) the cost of any timber units acquired during the year and any additions to capital. H&r block free Figure the number of timber units to take into account by adding the number of timber units acquired during the year to the number of timber units on hand in the account at the beginning of the year and then adding (or subtracting) any correction to the estimate of the number of timber units remaining in the account. H&r block free Divide the result of (2) by the result of (3). H&r block free This is your depletion unit. H&r block free Example. H&r block free You bought a timber tract for $160,000 and the land was worth as much as the timber. H&r block free Your basis for the timber is $80,000. H&r block free Based on an estimated one million board feet (1,000 MBF) of standing timber, you figure your depletion unit to be $80 per MBF ($80,000 ÷ 1,000). H&r block free If you cut 500 MBF of timber, your depletion allowance would be $40,000 (500 MBF × $80). H&r block free When to claim depletion. H&r block free   Claim your depletion allowance as a deduction in the year of sale or other disposition of the products cut from the timber, unless you choose to treat the cutting of timber as a sale or exchange (explained below). H&r block free Include allowable depletion for timber products not sold during the tax year the timber is cut as a cost item in the closing inventory of timber products for the year. H&r block free The inventory is your basis for determining gain or loss in the tax year you sell the timber products. H&r block free Example. H&r block free The facts are the same as in the previous example except that you sold only half of the timber products in the cutting year. H&r block free You would deduct $20,000 of the $40,000 depletion that year. H&r block free You would add the remaining $20,000 depletion to your closing inventory of timber products. H&r block free Electing to treat the cutting of timber as a sale or exchange. H&r block free   You can elect, under certain circumstances, to treat the cutting of timber held for more than 1 year as a sale or exchange. H&r block free You must make the election on your income tax return for the tax year to which it applies. H&r block free If you make this election, subtract the adjusted basis for depletion from the fair market value of the timber on the first day of the tax year in which you cut it to figure the gain or loss on the cutting. H&r block free You generally report the gain as long-term capital gain. H&r block free The fair market value then becomes your basis for figuring your ordinary gain or loss on the sale or other disposition of the products cut from the timber. H&r block free For more information, see Timber in chapter 2 of Publication 544, Sales and Other Dispositions of Assets. H&r block free   You may revoke an election to treat the cutting of timber as a sale or exchange without IRS's consent. H&r block free The prior election (and revocation) is disregarded for purposes of making a subsequent election. H&r block free See Form T (Timber), Forest Activities Schedule, for more information. H&r block free Form T. H&r block free   Complete and attach Form T (Timber) to your income tax return if you claim a deduction for timber depletion, choose to treat the cutting of timber as a sale or exchange, or make an outright sale of timber. H&r block free Prev  Up  Next   Home   More Online Publications