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H&r Block State Tax Fee

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H&r Block State Tax Fee

H&r block state tax fee Index A Assistance (see Tax help) B Base amount, Base amount. H&r block state tax fee C Canadian social security benefits, Canadian or German social security benefits paid to U. H&r block state tax fee S. H&r block state tax fee residents. H&r block state tax fee Children's benefits, Children's benefits. H&r block state tax fee Comments on publication, Comments and suggestions. H&r block state tax fee D Deductions related to benefits, Deductions Related to Your Benefits $3,000 or less, Deduction $3,000 or less. H&r block state tax fee $3,000. H&r block state tax fee 01 or more, Deduction more than $3,000. H&r block state tax fee Disability benefits repaid, Disability payments. H&r block state tax fee E Estimated tax, Tax withholding and estimated tax. H&r block state tax fee F Form 1040, Reporting on Form 1040. H&r block state tax fee Form 1040A, Reporting on Form 1040A. H&r block state tax fee Form RRB-1042S, Form RRB-1042S, Payments by the Railroad Retirement Board 2013 (Nonresident Aliens) Form RRB-1099, Lump-sum payment reported on Form SSA-1099 or RRB-1099. H&r block state tax fee , Form RRB-1099, Payments by the Railroad Retirement Board 2013 Form SSA-1042S, Form SSA-1042S, Social Security Benefit Statement 2013 (Nonresident Aliens) Form SSA-1099, Lump-sum payment reported on Form SSA-1099 or RRB-1099. H&r block state tax fee , Appendix Form W-4V, Tax withholding and estimated tax. H&r block state tax fee Free tax services, Free help with your tax return. H&r block state tax fee Future developments Product page, Reminders G German social security benefits, Canadian or German social security benefits paid to U. H&r block state tax fee S. H&r block state tax fee residents. H&r block state tax fee H Help (see Tax help) J Joint returns, Joint return. H&r block state tax fee L Legal expenses, Legal expenses. H&r block state tax fee Lump-sum election, Lump-Sum Election Example, Example M Missing children, photographs of, Reminders N Nonresident aliens, Nonresident aliens. H&r block state tax fee Form RRB-1042S, Form RRB-1042S, Payments by the Railroad Retirement Board 2013 (Nonresident Aliens) Form SSA-1042S, Form SSA-1042S, Social Security Benefit Statement 2013 (Nonresident Aliens) Nontaxable benefits, Benefits not taxable. H&r block state tax fee P Permanent resident aliens, Lawful permanent residents. H&r block state tax fee Publications (see Tax help) R Railroad retirement benefits, Introduction Repayments Benefits received in earlier year, Repayment of benefits. H&r block state tax fee , Repayment of benefits received in an earlier year. H&r block state tax fee Disability benefits, Disability payments. H&r block state tax fee Gross benefits, Repayment of benefits. H&r block state tax fee , Repayments More Than Gross Benefits Reporting requirements, How To Report Your Benefits Lump-sum payment, Lump-sum payment reported on Form SSA-1099 or RRB-1099. H&r block state tax fee S Social Security benefits, Introduction Suggestions for publication, Comments and suggestions. H&r block state tax fee T Tax help, How To Get Tax Help Taxable benefits Determination of, Are Any of Your Benefits Taxable?, How Much Is Taxable? Maximum taxable part, Maximum taxable part. H&r block state tax fee Person receiving benefits determines, Who is taxed. H&r block state tax fee Worksheets, Worksheet A. H&r block state tax fee Examples, Examples, Worksheets Which to use, Which worksheet to use. H&r block state tax fee Total income, figuring, Figuring total income. H&r block state tax fee TTY/TDD information, How To Get Tax Help U U. H&r block state tax fee S. H&r block state tax fee citizens residing abroad, U. H&r block state tax fee S. H&r block state tax fee citizens residing abroad. H&r block state tax fee U. H&r block state tax fee S. H&r block state tax fee residents Canadian or German social security benefits paid to, Canadian or German social security benefits paid to U. H&r block state tax fee S. H&r block state tax fee residents. H&r block state tax fee W Withholding, Tax withholding and estimated tax. H&r block state tax fee Exemption from, Exemption from withholding. H&r block state tax fee Form W-4V, Tax withholding and estimated tax. H&r block state tax fee Voluntary, Tax withholding and estimated tax. H&r block state tax fee Worksheets Taxable benefits Blank Worksheet 1, Worksheets Filled-in Worksheet 1, Filled-in Worksheet 1. H&r block state tax fee Figuring Your Taxable Benefits, Filled-in Worksheet 1. H&r block state tax fee Figuring Your Taxable Benefits, Filled-in Worksheet 1. H&r block state tax fee Figuring Your Taxable Benefits, Filled-in Worksheet 1. H&r block state tax fee Figuring Your Taxable Benefits Quick calculation, sample, Worksheet A. H&r block state tax fee Prev  Up     Home   More Online Publications
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ARRA and HIRE Act Bond Guidance

IRS Invites Public to Comment on TEDB Allocation Process and Also Announces a 3-Month Extension to Issue Unexpired TEDB Allocations
The IRS seeks public comment on the reallocation of available amounts of volume cap for Tribal Economic Development Bonds in order to facilitate issuance by Indian tribal governments. Additionally, Indian tribal governments with unexpired volume cap allocations may request a three-month optional extension.

The American Recovery and Reinvestment Act of 2009: Information Center
Update on the new economic stimulus legislation.

IRS Releases Guidance on ARRA Bond Provisions
The latest guidance, forms and information on bond provisions enacted by the American Recovery & Reinvestment Act of 2009.

IRS Announces Tribal Economic Development Bonds Allocations
The IRS has announced the allocation, in two tranches, of $2 billion of volume cap to tribal governments under the new TEDBs program.

IRS Releases Guidance on HIRE Bond Provisions
The Service announced that Notice 2010-35 has been released. The Notice provides guidance for the new Federal refundable tax credit subsidy option (direct pay subsidy option) allowed by the enactment of the Hiring Incentives to Restore Employment Act (HIRE Act) on March 18, 2010. The Notice is also intended to quickly enable issuers to begin issuing these bonds for qualified purposes.

The Service Announces the Release of New and Revised Tax Exempt Bond Forms
The IRS announced that new Form 8038-TC and revised Forms 8038-CP, 8038, and 8038-G have been issued.

Application of the Treasury Offset Program to Payments to Issuers of Direct Pay Bonds
Information on the application of the Treasury Offset Program (TOPS) as it relates to subsidy payments made to issuers of direct pay bonds.

Tax Exempt Bonds Compliance Check Questionnaire on Direct Pay Bonds (February 2010)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division of the IRS conducted a compliance check questionnaire to evaluate the issuance and record retention policies, procedures and practices of issuers of direct pay build America bonds.

TIGTA Audit Report Finds BABs Payment Processing is Timely and Accurate
TIGTA finds initial build America bond subsidy payments were processed accurately and timely.

TIGTA Finds that Compliance Check Questionnaires by TEB were Appropriate
The compliance check questionnaires issued by the TEB office were appropriate for identifying indications of a high risk of potential noncompliance for BABs and were not examinations.

Page Last Reviewed or Updated: 26-Mar-2014

The H&r Block State Tax Fee

H&r block state tax fee 4. H&r block state tax fee   Special Situations Table of Contents Condominiums CooperativesDepreciation Property Changed to Rental UseBasis of Property Changed to Rental Use Figuring the Depreciation Deduction Renting Part of Property Not Rented for ProfitPostponing decision. H&r block state tax fee Example—Property Changed to Rental Use This chapter discusses some rental real estate activities that are subject to additional rules. H&r block state tax fee Condominiums A condominium is most often a dwelling unit in a multi-unit building, but can also take other forms, such as a townhouse or garden apartment. H&r block state tax fee If you own a condominium, you also own a share of the common elements, such as land, lobbies, elevators, and service areas. H&r block state tax fee You and the other condominium owners may pay dues or assessments to a special corporation that is organized to take care of the common elements. H&r block state tax fee Special rules apply if you rent your condominium to others. H&r block state tax fee You can deduct as rental expenses all the expenses discussed in chapters 1 and 2. H&r block state tax fee In addition, you can deduct any dues or assessments paid for maintenance of the common elements. H&r block state tax fee You cannot deduct special assessments you pay to a condominium management corporation for improvements. H&r block state tax fee However, you may be able to recover your share of the cost of any improvement by taking depreciation. H&r block state tax fee Cooperatives If you live in a cooperative, you do not own your apartment. H&r block state tax fee Instead, a corporation owns the apartments and you are a tenant-stockholder in the cooperative housing corporation. H&r block state tax fee If you rent your apartment to others, you usually can deduct, as a rental expense, all the maintenance fees you pay to the cooperative housing corporation. H&r block state tax fee In addition to the maintenance fees paid to the cooperative housing corporation, you can deduct your direct payments for repairs, upkeep, and other rental expenses, including interest paid on a loan used to buy your stock in the corporation. H&r block state tax fee Depreciation You will be depreciating your stock in the corporation rather than the apartment itself. H&r block state tax fee Figure your depreciation deduction as follows. H&r block state tax fee Figure the depreciation for all the depreciable real property owned by the corporation. H&r block state tax fee (Depreciation methods are discussed in chapter 2 of this publication and Publication 946. H&r block state tax fee ) If you bought your cooperative stock after its first offering, figure the depreciable basis of this property as follows. H&r block state tax fee Multiply your cost per share by the total number of outstanding shares. H&r block state tax fee Add to the amount figured in (a) any mortgage debt on the property on the date you bought the stock. H&r block state tax fee Subtract from the amount figured in (b) any mortgage debt that is not for the depreciable real property, such as the part for the land. H&r block state tax fee Subtract from the amount figured in (1) any depreciation for space owned by the corporation that can be rented but cannot be lived in by tenant-stockholders. H&r block state tax fee Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. H&r block state tax fee Multiply the result of (2) by the percentage you figured in (3). H&r block state tax fee This is your depreciation on the stock. H&r block state tax fee Your depreciation deduction for the year cannot be more than the part of your adjusted basis (defined in chapter 2) in the stock of the corporation that is allocable to your rental property. H&r block state tax fee Payments added to capital account. H&r block state tax fee   Payments earmarked for a capital asset or improvement, or otherwise charged to the corporation's capital account are added to the basis of your stock in the corporation. H&r block state tax fee For example, you cannot deduct a payment used to pave a community parking lot, install a new roof, or pay the principal of the corporation's mortgage. H&r block state tax fee   Treat as a capital cost the amount you were assessed for capital items. H&r block state tax fee This cannot be more than the amount by which your payments to the corporation exceeded your share of the corporation's mortgage interest and real estate taxes. H&r block state tax fee   Your share of interest and taxes is the amount the corporation elected to allocate to you, if it reasonably reflects those expenses for your apartment. H&r block state tax fee Otherwise, figure your share in the following manner. H&r block state tax fee Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. H&r block state tax fee Multiply the corporation's deductible interest by the number you figured in (1). H&r block state tax fee This is your share of the interest. H&r block state tax fee Multiply the corporation's deductible taxes by the number you figured in (1). H&r block state tax fee This is your share of the taxes. H&r block state tax fee Property Changed to Rental Use If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use. H&r block state tax fee You can deduct as rental expenses only the part of the expense that is for the part of the year the property was used or held for rental purposes. H&r block state tax fee You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. H&r block state tax fee However, you can include the home mortgage interest, qualified mortgage insurance premiums, and real estate tax expenses for the part of the year the property was held for personal use as an itemized deduction on Schedule A (Form 1040). H&r block state tax fee Example. H&r block state tax fee Your tax year is the calendar year. H&r block state tax fee You moved from your home in May and started renting it out on June 1. H&r block state tax fee You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. H&r block state tax fee Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. H&r block state tax fee When figuring depreciation, treat the property as placed in service on June 1. H&r block state tax fee Basis of Property Changed to Rental Use When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of fair market value or adjusted basis on the date of conversion. H&r block state tax fee Fair market value. H&r block state tax fee   This is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. H&r block state tax fee Sales of similar property, on or about the same date, may be helpful in figuring the fair market value of the property. H&r block state tax fee Figuring the basis. H&r block state tax fee   The basis for depreciation is the lesser of: The fair market value of the property on the date you changed it to rental use, or Your adjusted basis on the date of the change—that is, your original cost or other basis of the property, plus the cost of permanent additions or improvements since you acquired it, minus deductions for any casualty or theft losses claimed on earlier years' income tax returns and other decreases to basis. H&r block state tax fee For other increases and decreases to basis, see Adjusted Basis in chapter 2. H&r block state tax fee Example. H&r block state tax fee Several years ago you built your home for $140,000 on a lot that cost you $14,000. H&r block state tax fee Before changing the property to rental use this year, you added $28,000 of permanent improvements to the house and claimed a $3,500 casualty loss deduction for damage to the house. H&r block state tax fee Part of the improvements qualified for a $500 residential energy credit, which you claimed on your 2010 tax return. H&r block state tax fee Because land is not depreciable, you can only include the cost of the house when figuring the basis for depreciation. H&r block state tax fee The adjusted basis of the house at the time of the change in its use was $164,000 ($140,000 + $28,000 − $3,500 − $500). H&r block state tax fee On the date of the change in use, your property had a fair market value of $168,000, of which $21,000 was for the land and $147,000 was for the house. H&r block state tax fee The basis for depreciation on the house is the fair market value on the date of the change ($147,000), because it is less than your adjusted basis ($164,000). H&r block state tax fee Cooperatives If you change your cooperative apartment to rental use, figure your allowable depreciation as explained earlier. H&r block state tax fee (Depreciation methods are discussed in chapter 2 of this publication and Publication 946. H&r block state tax fee ) The basis of all the depreciable real property owned by the cooperative housing corporation is the smaller of the following amounts. H&r block state tax fee The fair market value of the property on the date you change your apartment to rental use. H&r block state tax fee This is considered to be the same as the corporation's adjusted basis minus straight line depreciation, unless this value is unrealistic. H&r block state tax fee The corporation's adjusted basis in the property on that date. H&r block state tax fee Do not subtract depreciation when figuring the corporation's adjusted basis. H&r block state tax fee If you bought the stock after its first offering, the corporation's adjusted basis in the property is the amount figured in (1) under Depreciation (under Cooperatives, near the beginning of this chapter). H&r block state tax fee The fair market value of the property is considered to be the same as the corporation's adjusted basis figured in this way minus straight line depreciation, unless the value is unrealistic. H&r block state tax fee Figuring the Depreciation Deduction To figure the deduction, use the depreciation system in effect when you convert your residence to rental use. H&r block state tax fee Generally, that will be MACRS for any conversion after 1986. H&r block state tax fee Treat the property as placed in service on the conversion date. H&r block state tax fee Example. H&r block state tax fee Your converted residence (see previous example under Figuring the basis) was available for rent on August 1. H&r block state tax fee Using Table 2-2d (see chapter 2), the percentage for Year 1 beginning in August is 1. H&r block state tax fee 364% and the depreciation deduction for Year 1 is $2,005 ($147,000 × . H&r block state tax fee 01364). H&r block state tax fee Renting Part of Property If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. H&r block state tax fee You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). H&r block state tax fee You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity, or painting the outside of the house. H&r block state tax fee There is no change in the types of expenses deductible for the personal-use part of your property. H&r block state tax fee Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). H&r block state tax fee You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. H&r block state tax fee You do not have to divide the expenses that belong only to the rental part of your property. H&r block state tax fee For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense. H&r block state tax fee If you install a second phone line strictly for your tenant's use, all of the cost of the second line is deductible as a rental expense. H&r block state tax fee You can deduct depreciation on the part of the house used for rental purposes as well as on the furniture and equipment you use for rental purposes. H&r block state tax fee How to divide expenses. H&r block state tax fee   If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between rental use and personal use. H&r block state tax fee You can use any reasonable method for dividing the expense. H&r block state tax fee It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. H&r block state tax fee The two most common methods for dividing an expense are (1) the number of rooms in your home, and (2) the square footage of your home. H&r block state tax fee Example. H&r block state tax fee You rent a room in your house. H&r block state tax fee The room is 12 × 15 feet, or 180 square feet. H&r block state tax fee Your entire house has 1,800 square feet of floor space. H&r block state tax fee You can deduct as a rental expense 10% of any expense that must be divided between rental use and personal use. H&r block state tax fee If your heating bill for the year for the entire house was $600, $60 ($600 × . H&r block state tax fee 10) is a rental expense. H&r block state tax fee The balance, $540, is a personal expense that you cannot deduct. H&r block state tax fee Duplex. H&r block state tax fee   A common situation is the duplex where you live in one unit and rent out the other. H&r block state tax fee Certain expenses apply to the entire property, such as mortgage interest and real estate taxes, and must be split to determine rental and personal expenses. H&r block state tax fee Example. H&r block state tax fee You own a duplex and live in one half, renting the other half. H&r block state tax fee Both units are approximately the same size. H&r block state tax fee Last year, you paid a total of $10,000 mortgage interest and $2,000 real estate taxes for the entire property. H&r block state tax fee You can deduct $5,000 mortgage interest and $1,000 real estate taxes on Schedule E (Form 1040), and if you itemize your deductions, you can deduct the other $5,000 mortgage interest and $1,000 real estate taxes on Schedule A (Form 1040). H&r block state tax fee Not Rented for Profit If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. H&r block state tax fee You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. H&r block state tax fee Where to report. H&r block state tax fee   Report your not-for-profit rental income on Form 1040 or 1040NR, line 21. H&r block state tax fee For example, if you are filing Form 1040, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A (Form 1040) if you itemize your deductions. H&r block state tax fee   If you itemize your deductions, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. H&r block state tax fee You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. H&r block state tax fee Presumption of profit. H&r block state tax fee   If your rental income is more than your rental expenses for at least 3 years out of a period of 5 consecutive years, you are presumed to be renting your property to make a profit. H&r block state tax fee Postponing decision. H&r block state tax fee   If you are starting your rental activity and do not have 3 years showing a profit, you can elect to have the presumption made after you have the 5 years of experience required by the test. H&r block state tax fee You may choose to postpone the decision of whether the rental is for profit by filing Form 5213. H&r block state tax fee You must file Form 5213 within 3 years after the due date of your return (determined without extensions) for the year in which you first carried on the activity or, if earlier, within 60 days after receiving written notice from the Internal Revenue Service proposing to disallow deductions attributable to the activity. H&r block state tax fee More information. H&r block state tax fee   For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535. H&r block state tax fee Example—Property Changed to Rental Use In January, Eileen Johnson bought a condominium apartment to live in. H&r block state tax fee Instead of selling the house she had been living in, she decided to change it to rental property. H&r block state tax fee Eileen selected a tenant and started renting the house on February 1. H&r block state tax fee Eileen charges $750 a month for rent and collects it herself. H&r block state tax fee Eileen also received a $750 security deposit from her tenant. H&r block state tax fee Because she plans to return it to her tenant at the end of the lease, she does not include it in her income. H&r block state tax fee Her rental expenses for the year are as follows. H&r block state tax fee   Mortgage interest $1,800     Fire insurance (1-year policy) 100     Miscellaneous repairs (after renting) 297     Real estate taxes imposed and paid 1,200   Eileen must divide the real estate taxes, mortgage interest, and fire insurance between the personal use of the property and the rental use of the property. H&r block state tax fee She can deduct eleven-twelfths of these expenses as rental expenses. H&r block state tax fee She can include the balance of the allowable taxes and mortgage interest on Schedule A (Form 1040) if she itemizes. H&r block state tax fee She cannot deduct the balance of the fire insurance because it is a personal expense. H&r block state tax fee Eileen bought this house in 1984 for $35,000. H&r block state tax fee Her property tax was based on assessed values of $10,000 for the land and $25,000 for the house. H&r block state tax fee Before changing it to rental property, Eileen added several improvements to the house. H&r block state tax fee She figures her adjusted basis as follows:   Improvements Cost     House $25,000     Remodeled kitchen 4,200     Recreation room 5,800     New roof 1,600     Patio and deck 2,400     Adjusted basis $39,000   On February 1, when Eileen changed her house to rental property, the property had a fair market value of $152,000. H&r block state tax fee Of this amount, $35,000 was for the land and $117,000 was for the house. H&r block state tax fee Because Eileen's adjusted basis is less than the fair market value on the date of the change, Eileen uses $39,000 as her basis for depreciation. H&r block state tax fee As specified for residential rental property, Eileen must use the straight line method of depreciation over the GDS or ADS recovery period. H&r block state tax fee She chooses the GDS recovery period of 27. H&r block state tax fee 5 years. H&r block state tax fee She uses Table 2-2d to find her depreciation percentage. H&r block state tax fee Since she placed the property in service in February, the percentage is 3. H&r block state tax fee 182%. H&r block state tax fee On April 1, Eileen bought a new dishwasher for the rental property at a cost of $425. H&r block state tax fee The dishwasher is personal property used in a rental real estate activity, which has a 5-year recovery period. H&r block state tax fee She uses Table 2-2a to find the percentage for Year 1 under “Half-year convention” (20%) to figure her depreciation deduction. H&r block state tax fee On May 1, Eileen paid $4,000 to have a furnace installed in the house. H&r block state tax fee The furnace is residential rental property. H&r block state tax fee Because she placed the property in service in May, the percentage from Table 2-2d is 2. H&r block state tax fee 273%. H&r block state tax fee Eileen figures her net rental income or loss for the house as follows: Total rental income received  ($750 × 11) $8,250 Minus: Expenses     Mortgage interest ($1,800 × 11/12) $1,650   Fire insurance ($100 × 11/12) 92   Miscellaneous repairs 297   Real estate taxes ($1,200 × 11/12) 1,100   Total expenses 3,139 Balance $5,111 Minus: Depreciation     House ($39,000 × . H&r block state tax fee 03182) $1,241   Dishwasher ($425 × . H&r block state tax fee 20) 85   Furnace ($4,000 × . H&r block state tax fee 02273) 91   Total depreciation 1,417 Net rental income for house   $3,694       Eileen uses Schedule E, Part I, to report her rental income and expenses. H&r block state tax fee She enters her income, expenses, and depreciation for the house in the column for Property A. H&r block state tax fee Since all property was placed in service this year, Eileen must use Form 4562 to figure the depreciation. H&r block state tax fee See the Instructions for Form 4562 for more information on preparing the form. H&r block state tax fee Prev  Up  Next   Home   More Online Publications