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How To Amend A 2012 Tax Return

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How To Amend A 2012 Tax Return

How to amend a 2012 tax return Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. How to amend a 2012 tax return A pension is generally a series of payments made to you after you retire from work. How to amend a 2012 tax return Pension payments are made regularly and are for past services with an employer. How to amend a 2012 tax return An annuity is a series of payments under a contract. How to amend a 2012 tax return You can buy the contract alone or you can buy it with the help of your employer. How to amend a 2012 tax return Annuity payments are made regularly for more than one full year. How to amend a 2012 tax return Note. How to amend a 2012 tax return Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. How to amend a 2012 tax return Types of pensions and annuities. How to amend a 2012 tax return   Particular types of pensions and annuities include: Fixed period annuities. How to amend a 2012 tax return You receive definite amounts at regular intervals for a definite length of time. How to amend a 2012 tax return Annuities for a single life. How to amend a 2012 tax return You receive definite amounts at regular intervals for life. How to amend a 2012 tax return The payments end at death. How to amend a 2012 tax return Joint and survivor annuities. How to amend a 2012 tax return The first annuitant receives a definite amount at regular intervals for life. How to amend a 2012 tax return After he or she dies, a second annuitant receives a definite amount at regular intervals for life. How to amend a 2012 tax return The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. How to amend a 2012 tax return Variable annuities. How to amend a 2012 tax return You receive payments that may vary in amount for a definite length of time or for life. How to amend a 2012 tax return The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. How to amend a 2012 tax return Disability pensions. How to amend a 2012 tax return You are under minimum retirement age and receive payments because you retired on disability. How to amend a 2012 tax return If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. How to amend a 2012 tax return If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. How to amend a 2012 tax return A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. How to amend a 2012 tax return This plan must meet Internal Revenue Code requirements. How to amend a 2012 tax return It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. How to amend a 2012 tax return However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. How to amend a 2012 tax return A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. How to amend a 2012 tax return A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. How to amend a 2012 tax return   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. How to amend a 2012 tax return A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. How to amend a 2012 tax return It does not qualify for most of the tax benefits of a qualified plan. How to amend a 2012 tax return Annuity worksheets. How to amend a 2012 tax return   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. How to amend a 2012 tax return Request for a ruling. How to amend a 2012 tax return   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. How to amend a 2012 tax return This is treated as a request for a ruling. How to amend a 2012 tax return See Requesting a Ruling on Taxation of Annuity near the end of this publication. How to amend a 2012 tax return Withholding tax and estimated tax. How to amend a 2012 tax return   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. How to amend a 2012 tax return If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. How to amend a 2012 tax return Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. How to amend a 2012 tax return Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). How to amend a 2012 tax return These payments are also known as amounts received as an annuity. How to amend a 2012 tax return If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. How to amend a 2012 tax return In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. How to amend a 2012 tax return The amount of each payment that is more than the part that represents your net cost is taxable. How to amend a 2012 tax return Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. How to amend a 2012 tax return These terms are explained in the following discussions. How to amend a 2012 tax return Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. How to amend a 2012 tax return First, find your net cost of the contract as of the annuity starting date (defined later). How to amend a 2012 tax return To find this amount, you must first figure the total premiums, contributions, or other amounts paid. How to amend a 2012 tax return This includes the amounts your employer contributed if you were required to include these amounts in income. How to amend a 2012 tax return It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). How to amend a 2012 tax return From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. How to amend a 2012 tax return Any additional premiums paid for double indemnity or disability benefits. How to amend a 2012 tax return Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). How to amend a 2012 tax return The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. How to amend a 2012 tax return Example. How to amend a 2012 tax return On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. How to amend a 2012 tax return The annuity starting date is July 1. How to amend a 2012 tax return This is the date you use in figuring your investment in the contract and your expected return (discussed later). How to amend a 2012 tax return Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. How to amend a 2012 tax return Foreign employment. How to amend a 2012 tax return   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. How to amend a 2012 tax return The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. How to amend a 2012 tax return Foreign employment contributions while a nonresident alien. How to amend a 2012 tax return   In determining your cost, special rules apply if you are a U. How to amend a 2012 tax return S. How to amend a 2012 tax return citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. How to amend a 2012 tax return Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. How to amend a 2012 tax return Death benefit exclusion. How to amend a 2012 tax return   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. How to amend a 2012 tax return The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. How to amend a 2012 tax return How to adjust your total cost. How to amend a 2012 tax return   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. How to amend a 2012 tax return Add it to the cost or unrecovered cost of the annuity at the annuity starting date. How to amend a 2012 tax return See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. How to amend a 2012 tax return Net cost. How to amend a 2012 tax return   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. How to amend a 2012 tax return This is the unrecovered investment in the contract as of the annuity starting date. How to amend a 2012 tax return If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. How to amend a 2012 tax return Refund feature. How to amend a 2012 tax return   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. How to amend a 2012 tax return Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. How to amend a 2012 tax return   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. How to amend a 2012 tax return Zero value of refund feature. How to amend a 2012 tax return   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. How to amend a 2012 tax return   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). How to amend a 2012 tax return   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. How to amend a 2012 tax return Examples. How to amend a 2012 tax return The first example shows how to figure the value of the refund feature when there is only one beneficiary. How to amend a 2012 tax return Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. How to amend a 2012 tax return In both examples, the taxpayer elects to use Tables V through VIII. How to amend a 2012 tax return If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return At age 65, Barbara bought for $21,053 an annuity with a refund feature. How to amend a 2012 tax return She will get $100 a month for life. How to amend a 2012 tax return Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. How to amend a 2012 tax return In this case, the contract cost and the total guaranteed return are the same ($21,053). How to amend a 2012 tax return Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. How to amend a 2012 tax return 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. How to amend a 2012 tax return For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). How to amend a 2012 tax return In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return John died while still employed. How to amend a 2012 tax return His widow, Eleanor, age 48, receives $171 a month for the rest of her life. How to amend a 2012 tax return John's son, Elmer, age 9, receives $50 a month until he reaches age 18. How to amend a 2012 tax return John's contributions to the retirement fund totaled $7,559. How to amend a 2012 tax return 45, with interest on those contributions of $1,602. How to amend a 2012 tax return 53. How to amend a 2012 tax return The guarantee or total refund feature of the contract is $9,161. How to amend a 2012 tax return 98 ($7,559. How to amend a 2012 tax return 45 plus $1,602. How to amend a 2012 tax return 53). How to amend a 2012 tax return The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. How to amend a 2012 tax return 9 $71,614. How to amend a 2012 tax return 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. How to amend a 2012 tax return 0 5,400. How to amend a 2012 tax return 00   3) Total expected return   $77,014. How to amend a 2012 tax return 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. How to amend a 2012 tax return 45   2) Guaranteed amount (contributions of $7,559. How to amend a 2012 tax return 45 plus interest of $1,602. How to amend a 2012 tax return 53) $9,161. How to amend a 2012 tax return 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. How to amend a 2012 tax return 00   4) Net guaranteed amount $3,761. How to amend a 2012 tax return 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. How to amend a 2012 tax return 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. How to amend a 2012 tax return 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. How to amend a 2012 tax return See the discussion of expected return, later in this publication. How to amend a 2012 tax return Free IRS help. How to amend a 2012 tax return   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. How to amend a 2012 tax return Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. How to amend a 2012 tax return The following discussions explain how to figure the expected return with each type of annuity. How to amend a 2012 tax return A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. How to amend a 2012 tax return Fixed period annuity. How to amend a 2012 tax return   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. How to amend a 2012 tax return It is the total amount you will get beginning at the annuity starting date. How to amend a 2012 tax return You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). How to amend a 2012 tax return To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. How to amend a 2012 tax return Single life annuity. How to amend a 2012 tax return   If you are to get annuity payments for the rest of your life, find your expected return as follows. How to amend a 2012 tax return You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. How to amend a 2012 tax return These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). How to amend a 2012 tax return   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. How to amend a 2012 tax return See Adjustments to Tables I, II, V, VI, and VIA following Table I. How to amend a 2012 tax return Example. How to amend a 2012 tax return Henry bought an annuity contract that will give him an annuity of $500 a month for his life. How to amend a 2012 tax return If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. How to amend a 2012 tax return 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. How to amend a 2012 tax return 2 multiple by +. How to amend a 2012 tax return 1. How to amend a 2012 tax return His expected return would then be $115,800 ($6,000 × 19. How to amend a 2012 tax return 3). How to amend a 2012 tax return Annuity for shorter of life or specified period. How to amend a 2012 tax return   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. How to amend a 2012 tax return To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. How to amend a 2012 tax return Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. How to amend a 2012 tax return Example. How to amend a 2012 tax return Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. How to amend a 2012 tax return She was age 65 at her birthday nearest the annuity starting date. How to amend a 2012 tax return She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. How to amend a 2012 tax return 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. How to amend a 2012 tax return See Special Elections, later. How to amend a 2012 tax return Joint and survivor annuities. How to amend a 2012 tax return   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. How to amend a 2012 tax return To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. How to amend a 2012 tax return If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. How to amend a 2012 tax return See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. How to amend a 2012 tax return Example. How to amend a 2012 tax return John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. How to amend a 2012 tax return At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. How to amend a 2012 tax return The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. How to amend a 2012 tax return 0 Expected return $132,000 Different payments to survivor. How to amend a 2012 tax return   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. How to amend a 2012 tax return If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. How to amend a 2012 tax return 0 Multiple for Gerald, age 70 (from Table V)   16. How to amend a 2012 tax return 0 Difference: Multiple applicable to Mary   6. How to amend a 2012 tax return 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. How to amend a 2012 tax return 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. How to amend a 2012 tax return 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. How to amend a 2012 tax return Your husband died while still employed. How to amend a 2012 tax return Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. How to amend a 2012 tax return Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. How to amend a 2012 tax return You were 50 years old at the annuity starting date. How to amend a 2012 tax return Marie was 16 and Jean was 14. How to amend a 2012 tax return Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. How to amend a 2012 tax return 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. How to amend a 2012 tax return 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. How to amend a 2012 tax return 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. How to amend a 2012 tax return Computation Under the General Rule Note. How to amend a 2012 tax return Variable annuities use a different computation for determining the exclusion amounts. How to amend a 2012 tax return See Variable annuities later. How to amend a 2012 tax return Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. How to amend a 2012 tax return   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. How to amend a 2012 tax return See Death benefit exclusion , earlier. How to amend a 2012 tax return Step 2. How to amend a 2012 tax return   Figure your expected return. How to amend a 2012 tax return Step 3. How to amend a 2012 tax return   Divide Step 1 by Step 2 and round to three decimal places. How to amend a 2012 tax return This will give you the exclusion percentage. How to amend a 2012 tax return Step 4. How to amend a 2012 tax return   Multiply the exclusion percentage by the first regular periodic payment. How to amend a 2012 tax return The result is the tax-free part of each pension or annuity payment. How to amend a 2012 tax return   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. How to amend a 2012 tax return However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. How to amend a 2012 tax return   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. How to amend a 2012 tax return Step 5. How to amend a 2012 tax return   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. How to amend a 2012 tax return This will give you the tax-free part of the total payment for the year. How to amend a 2012 tax return    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. How to amend a 2012 tax return This fractional amount is multiplied by your exclusion percentage to get the tax-free part. How to amend a 2012 tax return Step 6. How to amend a 2012 tax return   Subtract the tax-free part from the total payment you received. How to amend a 2012 tax return The rest is the taxable part of your pension or annuity. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return You purchased an annuity with an investment in the contract of $10,800. How to amend a 2012 tax return Under its terms, the annuity will pay you $100 a month for life. How to amend a 2012 tax return The multiple for your age (age 65) is 20. How to amend a 2012 tax return 0 as shown in Table V. How to amend a 2012 tax return Your expected return is $24,000 (20 × 12 × $100). How to amend a 2012 tax return Your cost of $10,800, divided by your expected return of $24,000, equals 45. How to amend a 2012 tax return 0%. How to amend a 2012 tax return This is the percentage you will not have to include in income. How to amend a 2012 tax return Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. How to amend a 2012 tax return If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). How to amend a 2012 tax return Example 2. How to amend a 2012 tax return Gerald bought a joint and survivor annuity. How to amend a 2012 tax return Gerald's investment in the contract is $62,712 and the expected return is $121,200. How to amend a 2012 tax return The exclusion percentage is 51. How to amend a 2012 tax return 7% ($62,712 ÷ $121,200). How to amend a 2012 tax return Gerald will receive $500 a month ($6,000 a year). How to amend a 2012 tax return Each year, until his net cost is recovered, $3,102 (51. How to amend a 2012 tax return 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. How to amend a 2012 tax return If Gerald dies, his wife will receive $350 a month ($4,200 a year). How to amend a 2012 tax return If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. How to amend a 2012 tax return 7%). How to amend a 2012 tax return Each year, until the entire net cost is recovered, his wife will receive $2,171. How to amend a 2012 tax return 40 (51. How to amend a 2012 tax return 7% of her payments received of $4,200) tax free. How to amend a 2012 tax return She will include $2,028. How to amend a 2012 tax return 60 ($4,200 − $2,171. How to amend a 2012 tax return 40) in her income tax return. How to amend a 2012 tax return Example 3. How to amend a 2012 tax return Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. How to amend a 2012 tax return Your two daughters each receive annual annuities of $1,800 until they reach age 18. How to amend a 2012 tax return Your husband contributed $25,576 to the plan. How to amend a 2012 tax return You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. How to amend a 2012 tax return Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. How to amend a 2012 tax return The exclusion percentage of 18. How to amend a 2012 tax return 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. How to amend a 2012 tax return Each full year $864 (18. How to amend a 2012 tax return 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. How to amend a 2012 tax return Each year, until age 18, $324 (18. How to amend a 2012 tax return 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. How to amend a 2012 tax return Part-year payments. How to amend a 2012 tax return   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. How to amend a 2012 tax return   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. How to amend a 2012 tax return For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. How to amend a 2012 tax return   If you received a fractional payment, follow Step 5, discussed earlier. How to amend a 2012 tax return This gives you the tax-free part of your total payment. How to amend a 2012 tax return Example. How to amend a 2012 tax return On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. How to amend a 2012 tax return The applicable multiple from Table V is 23. How to amend a 2012 tax return 3 (age 61). How to amend a 2012 tax return Her expected return is $34,950 ($125 × 12 × 23. How to amend a 2012 tax return 3). How to amend a 2012 tax return Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. How to amend a 2012 tax return 1%. How to amend a 2012 tax return Each payment received will consist of 63. How to amend a 2012 tax return 1% return of cost and 36. How to amend a 2012 tax return 9% taxable income, until her net cost of the contract is fully recovered. How to amend a 2012 tax return During the first year, Mary received three payments of $125, or $375, of which $236. How to amend a 2012 tax return 63 (63. How to amend a 2012 tax return 1% × $375) is a return of cost. How to amend a 2012 tax return The remaining $138. How to amend a 2012 tax return 37 is included in income. How to amend a 2012 tax return Increase in annuity payments. How to amend a 2012 tax return   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. How to amend a 2012 tax return All increases in the installment payments are fully taxable. How to amend a 2012 tax return   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. How to amend a 2012 tax return 72-5(a)(5) of the regulations. How to amend a 2012 tax return Example. How to amend a 2012 tax return Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. How to amend a 2012 tax return In figuring the taxable part, Joe elects to use Tables V through VIII. How to amend a 2012 tax return The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. How to amend a 2012 tax return His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. How to amend a 2012 tax return 0 × $1,764 annual payment). How to amend a 2012 tax return The exclusion percentage is $7,938 ÷ $35,280, or 22. How to amend a 2012 tax return 5%. How to amend a 2012 tax return During the year he received 11 monthly payments of $147, or $1,617. How to amend a 2012 tax return Of this amount, 22. How to amend a 2012 tax return 5% × $147 × 11 ($363. How to amend a 2012 tax return 83) is tax free as a return of cost and the balance of $1,253. How to amend a 2012 tax return 17 is taxable. How to amend a 2012 tax return Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). How to amend a 2012 tax return The tax-free part is still only 22. How to amend a 2012 tax return 5% of the annuity payments as of the annuity starting date (22. How to amend a 2012 tax return 5% × $147 × 12 = $396. How to amend a 2012 tax return 90 for a full year). How to amend a 2012 tax return The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. How to amend a 2012 tax return Variable annuities. How to amend a 2012 tax return   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. How to amend a 2012 tax return   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. How to amend a 2012 tax return If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. How to amend a 2012 tax return Example. How to amend a 2012 tax return Frank purchased a variable annuity at age 65. How to amend a 2012 tax return The total cost of the contract was $12,000. How to amend a 2012 tax return The annuity starting date is January 1 of the year of purchase. How to amend a 2012 tax return His annuity will be paid, starting July 1, in variable annual installments for his life. How to amend a 2012 tax return The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. How to amend a 2012 tax return   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. How to amend a 2012 tax return Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. How to amend a 2012 tax return The result is added to the previously figured periodic tax-free part. How to amend a 2012 tax return The sum is the amount of each future payment that will be tax free. How to amend a 2012 tax return Example. How to amend a 2012 tax return Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. How to amend a 2012 tax return Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. How to amend a 2012 tax return Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. How to amend a 2012 tax return 00 Amount received in second year 500. How to amend a 2012 tax return 00 Difference $100. How to amend a 2012 tax return 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. How to amend a 2012 tax return 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. How to amend a 2012 tax return 4) $5. How to amend a 2012 tax return 43 Revised annual tax-free part for third and later years ($600 + $5. How to amend a 2012 tax return 43) $605. How to amend a 2012 tax return 43 Amount taxable in third year ($1,200 − $605. How to amend a 2012 tax return 43) $594. How to amend a 2012 tax return 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. How to amend a 2012 tax return 72–4(d)(3) of the Income Tax Regulations. How to amend a 2012 tax return The statement must also show the following information: The annuity starting date and your age on that date. How to amend a 2012 tax return The first day of the first period for which you received an annuity payment in the current year. How to amend a 2012 tax return Your investment in the contract as originally figured. How to amend a 2012 tax return The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. How to amend a 2012 tax return Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. How to amend a 2012 tax return Exclusion limited to net cost. How to amend a 2012 tax return   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). How to amend a 2012 tax return This is the unrecovered investment in the contract as of the annuity starting date. How to amend a 2012 tax return   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. How to amend a 2012 tax return This deduction is not subject to the 2%-of-adjusted-gross-income limit. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return Your annuity starting date is after 1986. How to amend a 2012 tax return Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. How to amend a 2012 tax return There is no refund feature. How to amend a 2012 tax return Your monthly annuity payment is $833. How to amend a 2012 tax return 33. How to amend a 2012 tax return Your exclusion ratio is 12% and you exclude $100 a month. How to amend a 2012 tax return Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. How to amend a 2012 tax return Thereafter, your annuity payments are fully taxable. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. How to amend a 2012 tax return The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. How to amend a 2012 tax return The exclusion ratio is 10. How to amend a 2012 tax return 8%, and your monthly exclusion is $90. How to amend a 2012 tax return After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). How to amend a 2012 tax return An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. How to amend a 2012 tax return Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. How to amend a 2012 tax return Exclusion not limited to net cost. How to amend a 2012 tax return   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. How to amend a 2012 tax return If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. How to amend a 2012 tax return The total exclusion may be more than your investment in the contract. How to amend a 2012 tax return How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. How to amend a 2012 tax return Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. How to amend a 2012 tax return These tables correspond to the old Tables I through IV. How to amend a 2012 tax return In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. How to amend a 2012 tax return If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. How to amend a 2012 tax return However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). How to amend a 2012 tax return Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. How to amend a 2012 tax return Contributions made both before July 1986 and after June 1986. How to amend a 2012 tax return   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. How to amend a 2012 tax return (See the examples below. How to amend a 2012 tax return )    Making the election. How to amend a 2012 tax return Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. How to amend a 2012 tax return 72–6 of the Income Tax Regulations. How to amend a 2012 tax return ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. How to amend a 2012 tax return   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. How to amend a 2012 tax return You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. How to amend a 2012 tax return    Advantages of election. How to amend a 2012 tax return In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. How to amend a 2012 tax return    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. How to amend a 2012 tax return If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. How to amend a 2012 tax return   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. How to amend a 2012 tax return Payment of the $42,000 contribution is guaranteed under a refund feature. How to amend a 2012 tax return Bill is 55 years old as of the annuity starting date. How to amend a 2012 tax return For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. How to amend a 2012 tax return       Pre- July 1986   Post- June 1986 A. How to amend a 2012 tax return Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. How to amend a 2012 tax return of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. How to amend a 2012 tax return Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. How to amend a 2012 tax return Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. How to amend a 2012 tax return 7   28. How to amend a 2012 tax return 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. How to amend a 2012 tax return Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . How to amend a 2012 tax return 079   . How to amend a 2012 tax return 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). How to amend a 2012 tax return The taxable part of his annuity is $22,080 ($24,000 minus $1,920). How to amend a 2012 tax return If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). How to amend a 2012 tax return Example 2. How to amend a 2012 tax return Al is age 62 at his nearest birthday to the annuity starting date. How to amend a 2012 tax return Al's wife is age 60 at her nearest birthday to the annuity starting date. How to amend a 2012 tax return The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. How to amend a 2012 tax return The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. How to amend a 2012 tax return Al makes the election described in Example 1 . How to amend a 2012 tax return For purposes of this example, assume the refund feature adjustment is zero. How to amend a 2012 tax return If an adjustment is required, IRS will figure the amount. How to amend a 2012 tax return See Requesting a Ruling on Taxation of Annuity near the end of this publication. How to amend a 2012 tax return       Pre-  July 1986   Post-  June 1986 A. How to amend a 2012 tax return Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. How to amend a 2012 tax return Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. How to amend a 2012 tax return Expected return         1) Multiple for both annuitants from Tables II and VI 25. How to amend a 2012 tax return 4   28. How to amend a 2012 tax return 8   2) Multiple for first annuitant from Tables I and V 16. How to amend a 2012 tax return 9   22. How to amend a 2012 tax return 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. How to amend a 2012 tax return 5   6. How to amend a 2012 tax return 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. How to amend a 2012 tax return Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . How to amend a 2012 tax return 209   . How to amend a 2012 tax return 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). How to amend a 2012 tax return The taxable part of his annuity is $9,216 ($12,000 − $2,784). How to amend a 2012 tax return The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. How to amend a 2012 tax return After Al's death, his widow will apply the same exclusion percentages (20. How to amend a 2012 tax return 9% and 2. How to amend a 2012 tax return 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. How to amend a 2012 tax return Annuity received after June 30, 1986. How to amend a 2012 tax return   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. How to amend a 2012 tax return Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. How to amend a 2012 tax return    Make the election by attaching the following statement to your income tax return. How to amend a 2012 tax return    “I elect, under section 1. How to amend a 2012 tax return 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. How to amend a 2012 tax return ”   The statement must also include your name, address, and social security number. How to amend a 2012 tax return   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. How to amend a 2012 tax return Disqualifying form of payment or settlement. How to amend a 2012 tax return   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. How to amend a 2012 tax return See regulations section 1. How to amend a 2012 tax return 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. How to amend a 2012 tax return You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. How to amend a 2012 tax return Worksheets for Determining Taxable Annuity Worksheets I and II. How to amend a 2012 tax return   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. How to amend a 2012 tax return 72–6(d)(6) Election. How to amend a 2012 tax return Worksheet I For Determining Taxable Annuity Under Regulations Section 1. How to amend a 2012 tax return 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. How to amend a 2012 tax return   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. How to amend a 2012 tax return )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. How to amend a 2012 tax return If not, the IRS will calculate the refund feature percentage. How to amend a 2012 tax return             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. How to amend a 2012 tax return   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. How to amend a 2012 tax return   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. How to amend a 2012 tax return   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. How to amend a 2012 tax return     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. How to amend a 2012 tax return 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. How to amend a 2012 tax return   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. How to amend a 2012 tax return )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. How to amend a 2012 tax return If not, the IRS will calculate the refund feature percentage. How to amend a 2012 tax return             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. How to amend a 2012 tax return   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. How to amend a 2012 tax return   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. How to amend a 2012 tax return Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. How to amend a 2012 tax return   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. How to amend a 2012 tax return   Actuarial Tables Please click here for the text description of the image. How to amend a 2012 tax return Actuarial Tables Please click here for the text description of the image. How to amend a 2012 tax return Actuarial Tables Please click here for the text description of the image. How to amend a 2012 tax return Actuarial tables Please click here for the text description of the image. 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How to amend a 2012 tax return   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. How to amend a 2012 tax return You should call the IRS for the proper fee. How to amend a 2012 tax return A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. How to amend a 2012 tax return Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. How to amend a 2012 tax return O. How to amend a 2012 tax return Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. How to amend a 2012 tax return When to make the request. How to amend a 2012 tax return   Please note that requests sent between February 1 and April 15 may experience some delay. How to amend a 2012 tax return We process requests in the order received, and we will reply to your request as soon as we can process it. How to amend a 2012 tax return If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. How to amend a 2012 tax return S. How to amend a 2012 tax return Individual Income Tax Return, to get an extension of time to file. How to amend a 2012 tax return Information you must furnish. How to amend a 2012 tax return   You must furnish the information listed below so the IRS can comply with your request. How to amend a 2012 tax return Failure to furnish the information will result in a delay in processing your request. How to amend a 2012 tax return Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. How to amend a 2012 tax return Copies of any documents showing distributions, annuity rates, and annuity options available to you. How to amend a 2012 tax return A copy of any Form 1099–R you received since your annuity began. How to amend a 2012 tax return A statement indicating whether you have filed your return for the year for which you are making the request. How to amend a 2012 tax return If you have requested an extension of time to file that return, please indicate the extension date. How to amend a 2012 tax return Your daytime phone number. How to amend a 2012 tax return Your current mailing address. How to amend a 2012 tax return A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. How to amend a 2012 tax return Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. How to amend a 2012 tax return A completed Tax Information Sheet (or facsimile) shown on the next page. How to amend a 2012 tax return Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. How to amend a 2012 tax return This statement must be signed by the retiree or the survivor annuitant. How to amend a 2012 tax return It cannot be signed by a representative. How to amend a 2012 tax return Tax Information Sheet Please click here for the text description of the image. How to amend a 2012 tax return Tax Information Sheet Please click here for the text description of the image. How to amend a 2012 tax return Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. How to amend a 2012 tax return Free help with your tax return. How to amend a 2012 tax return   You can get free help preparing your return nationwide from IRS-certified volunteers. How to amend a 2012 tax return The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. How to amend a 2012 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. How to amend a 2012 tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. How to amend a 2012 tax return In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. How to amend a 2012 tax return To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. How to amend a 2012 tax return gov, download the IRS2Go app, or call 1-800-906-9887. How to amend a 2012 tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. How to amend a 2012 tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. How to amend a 2012 tax return aarp. How to amend a 2012 tax return org/money/taxaide or call 1-888-227-7669. How to amend a 2012 tax return For more information on these programs, go to IRS. How to amend a 2012 tax return gov and enter “VITA” in the search box. How to amend a 2012 tax return Internet. How to amend a 2012 tax return    IRS. How to amend a 2012 tax return gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. How to amend a 2012 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. How to amend a 2012 tax return Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. How to amend a 2012 tax return Check the status of your 2013 refund with the Where's My Refund? application on IRS. How to amend a 2012 tax return gov or download the IRS2Go app and select the Refund Status option. How to amend a 2012 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. How to amend a 2012 tax return Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. How to amend a 2012 tax return You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. How to amend a 2012 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. How to amend a 2012 tax return Use the Interactive Tax Assistant (ITA) to research your tax questions. How to amend a 2012 tax return No need to wait on the phone or stand in line. How to amend a 2012 tax return The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. How to amend a 2012 tax return When you reach the response screen, you can print the entire interview and the final response for your records. How to amend a 2012 tax return New subject areas are added on a regular basis. How to amend a 2012 tax return  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. How to amend a 2012 tax return gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. How to amend a 2012 tax return You can use the IRS Tax Map, to search publications and instructions by topic or keyword. How to amend a 2012 tax return The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. How to amend a 2012 tax return When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. How to amend a 2012 tax return Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. How to amend a 2012 tax return You can also ask the IRS to mail a return or an account transcript to you. How to amend a 2012 tax return Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. How to amend a 2012 tax return gov or by calling 1-800-908-9946. How to amend a 2012 tax return Tax return and tax account transcripts are generally available for the current year and the past three years. How to amend a 2012 tax return Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. How to amend a 2012 tax return Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. How to amend a 2012 tax return If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. How to amend a 2012 tax return Check the status of your amended return using Where's My Amended Return? Go to IRS. How to amend a 2012 tax return gov and enter Where's My Amended Return? in the search box. How to amend a 2012 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. How to amend a 2012 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. How to amend a 2012 tax return Make a payment using one of several safe and convenient electronic payment options available on IRS. How to amend a 2012 tax return gov. How to amend a 2012 tax return Select the Payment tab on the front page of IRS. How to amend a 2012 tax return gov for more information. How to amend a 2012 tax return Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. How to amend a 2012 tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. How to amend a 2012 tax return gov. How to amend a 2012 tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. How to amend a 2012 tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. How to amend a 2012 tax return gov. How to amend a 2012 tax return Request an Electronic Filing PIN by going to IRS. How to amend a 2012 tax return gov and entering Electronic Filing PIN in the search box. How to amend a 2012 tax return Download forms, instructions and publications, including accessible versions for people with disabilities. How to amend a 2012 tax return Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. How to amend a 2012 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. How to amend a 2012 tax return An employee can answer questions about your tax account or help you set up a payment plan. How to amend a 2012 tax return Before you visit, check the Office Locator on IRS. How to amend a 2012 tax return gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. How to amend a 2012 tax return If you have a special need, such as a disability, you can request an appointment. How to amend a 2012 tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. How to amend a 2012 tax return Apply for an Employer Identification Number (EIN). How to amend a 2012 tax return Go to IRS. How to amend a 2012 tax return gov and enter Apply for an EIN in the search box. How to amend a 2012 tax return Read the Internal Revenue Code, regulations, or other official guidance. How to amend a 2012 tax return Read Internal Revenue Bulletins. How to amend a 2012 tax return Sign up to receive local and national tax news and more by email. How to amend a 2012 tax return Just click on “subscriptions” above the search box on IRS. How to amend a 2012 tax return gov and choose from a variety of options. How to amend a 2012 tax return    Phone. How to amend a 2012 tax return You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. How to amend a 2012 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. How to amend a 2012 tax return Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. How to amend a 2012 tax return gov, or download the IRS2Go app. How to amend a 2012 tax return Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. How to amend a 2012 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. How to amend a 2012 tax return Mos
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How to amend a 2012 tax return 1. How to amend a 2012 tax return   Filing and Paying Business Taxes Table of Contents Introduction Useful Items - You may want to see: Identification NumbersNew EIN. How to amend a 2012 tax return Employee. How to amend a 2012 tax return Other payee. How to amend a 2012 tax return Income TaxDo I Have To File an Income Tax Return? How Do I File? IRS e-file (Electronic Filing) When Is My Tax Return Due? How Do I Pay Income Tax? Self-Employment (SE) TaxHow to become insured under social security. How to amend a 2012 tax return Earning credits in 2013 and 2014. How to amend a 2012 tax return Employment Taxes Excise Taxes Information ReturnsWaiver of penalties. How to amend a 2012 tax return Penalties. How to amend a 2012 tax return Introduction This chapter explains the business taxes you may have to pay and the forms you may have to file. How to amend a 2012 tax return It also discusses taxpayer identification numbers. How to amend a 2012 tax return Table 1-1 lists the benefits of filing electronically. How to amend a 2012 tax return Table 1-2 lists the federal taxes you may have to pay, their due dates, and the forms you use to report them. How to amend a 2012 tax return Table 1-3 provides checklists that highlight the typical forms and schedules you may need to file if you ever go out of business. How to amend a 2012 tax return You may want to get Publication 509, Tax Calendars. How to amend a 2012 tax return It has tax calendars that tell you when to file returns and make tax payments. How to amend a 2012 tax return Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 1040 U. How to amend a 2012 tax return S. How to amend a 2012 tax return Individual Income Tax Return 1040-ES Estimated Tax for Individuals Sch C (Form 1040) Profit or Loss From Business Sch C-EZ (Form 1040) Net Profit From Business Sch SE (Form 1040) Self-Employment Tax See chapter 12 for information about getting publications and forms. How to amend a 2012 tax return Identification Numbers This section explains three types of taxpayer identification numbers, who needs them, when to use them, and how to get them. How to amend a 2012 tax return Social security number (SSN). How to amend a 2012 tax return   Generally, use your SSN as your taxpayer identification number. How to amend a 2012 tax return You must put this number on each of your individual income tax forms, such as Form 1040 and its schedules. How to amend a 2012 tax return   To apply for an SSN, use Form SS-5, Application for a Social Security Card. How to amend a 2012 tax return This form is available at Social Security Administration (SSA) offices or by calling 1-800-772-1213. How to amend a 2012 tax return It is also available from the SSA website at www. How to amend a 2012 tax return socialsecurity. How to amend a 2012 tax return gov. How to amend a 2012 tax return Individual taxpayer identification number (ITIN). How to amend a 2012 tax return   The IRS will issue an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN. How to amend a 2012 tax return In general, if you need to obtain an ITIN, you must attach Form W-7, Application for IRS Individual Taxpayer Identification Number, with your signed, original, completed tax return and any other required documentation and mail them to the following address. How to amend a 2012 tax return  Internal Revenue Service ITIN Operation P. How to amend a 2012 tax return O. How to amend a 2012 tax return Box 149342 Austin, TX 78714-9342 The exceptions are covered in detail in the instructions for Form W-7. How to amend a 2012 tax return If you must include another person's SSN on your return and that person does not have and cannot get an SSN, enter that person's ITIN. How to amend a 2012 tax return The application is also available in Spanish. How to amend a 2012 tax return The form is available at IRS. How to amend a 2012 tax return gov or you can call 1-800-829-3676 to order the form. How to amend a 2012 tax return    An ITIN is for tax use only. How to amend a 2012 tax return It does not entitle the holder to social security benefits or change the holder's employment or immigration status. How to amend a 2012 tax return Employer identification number (EIN). How to amend a 2012 tax return   You must also have an EIN to use as a taxpayer identification number if you do either of the following. How to amend a 2012 tax return Pay wages to one or more employees. How to amend a 2012 tax return File pension or excise tax returns. How to amend a 2012 tax return   If you must have an EIN, include it along with your SSN on your Schedule C or C-EZ. How to amend a 2012 tax return   You can apply for an EIN: Online by clicking on the Employer ID Numbers (EINs) link at www. How to amend a 2012 tax return irs. How to amend a 2012 tax return gov/businesses/small. How to amend a 2012 tax return The EIN is issued immediately once the application information is validated. How to amend a 2012 tax return By telephone at 1-800-829-4933. How to amend a 2012 tax return By mailing or faxing Form SS-4, Application for Employer Identification Number. How to amend a 2012 tax return New EIN. How to amend a 2012 tax return   You may need to get a new EIN if either the form or the ownership of your business changes. How to amend a 2012 tax return For more information, see Publication 1635, Understanding Your EIN. How to amend a 2012 tax return When you need identification numbers of other persons. How to amend a 2012 tax return   In operating your business, you will probably make certain payments you must report on information returns. How to amend a 2012 tax return These payments are discussed under Information Returns, later in this chapter. How to amend a 2012 tax return You must give the recipient of these payments (the payee) a statement showing the total amount paid during the year. How to amend a 2012 tax return You must include the payee's identification number and your identification number on the returns and statements. How to amend a 2012 tax return Employee. How to amend a 2012 tax return   If you have employees, you must get an SSN from each of them. How to amend a 2012 tax return Record the name and SSN of each employee exactly as they are shown on the employee's social security card. How to amend a 2012 tax return If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. How to amend a 2012 tax return This may occur if the employee's name was changed due to marriage or divorce. How to amend a 2012 tax return   Form W-4, Employee's Withholding Allowance Certificate, is completed by each employee so the correct federal income tax can be withheld from their pay. How to amend a 2012 tax return   If your employee does not have an SSN, he or she should file Form SS-5 with the SSA. How to amend a 2012 tax return Other payee. How to amend a 2012 tax return   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. How to amend a 2012 tax return If you must report payments to an organization, such as a corporation or partnership, you must get its EIN. How to amend a 2012 tax return   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. How to amend a 2012 tax return   A payee who does not provide you with an identification number may be subject to backup withholding. How to amend a 2012 tax return For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. How to amend a 2012 tax return Income Tax This part explains whether you have to file an income tax return and when you file it. How to amend a 2012 tax return It also explains how you pay the tax. How to amend a 2012 tax return Do I Have To File an Income Tax Return? You have to file an income tax return for 2013 if your net earnings from self-employment were $400 or more. How to amend a 2012 tax return If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions. How to amend a 2012 tax return How Do I File? File your income tax return on Form 1040 and attach Schedule C or Schedule C-EZ. How to amend a 2012 tax return Enter the net profit or loss from Schedule C or Schedule C-EZ on page 1 of Form 1040. How to amend a 2012 tax return Use Schedule C to figure your net profit or loss from your business. How to amend a 2012 tax return If you operated more than one business as a sole proprietorship, you must attach a separate Schedule C for each business. How to amend a 2012 tax return You can use the simpler Schedule C-EZ if you operated only one business as a sole proprietorship, you did not have a net loss, and you meet the other requirements listed in Part I of the schedule. How to amend a 2012 tax return IRS e-file (Electronic Filing) Please click here for the text description of the image. How to amend a 2012 tax return E-file logo You may be able to file your tax returns electronically using an IRS e-file option. How to amend a 2012 tax return Table 1-1 lists the benefits of IRS e-file. How to amend a 2012 tax return IRS e-file uses automation to replace most of the manual steps needed to process paper returns. How to amend a 2012 tax return As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. How to amend a 2012 tax return As with a paper return, you are responsible for making sure your return contains accurate information and is filed on time. How to amend a 2012 tax return Using e-file does not affect your chances of an IRS examination of your return. How to amend a 2012 tax return You can file most commonly used business forms using IRS e-file. How to amend a 2012 tax return For more information, visit IRS. How to amend a 2012 tax return gov. How to amend a 2012 tax return Electronic signatures. How to amend a 2012 tax return   Paperless filing is easier than you think and it's available to most taxpayers who file electronically—including those first-time filers who were 16 or older at the end of 2013. How to amend a 2012 tax return If you file electronically using tax preparation software or a tax professional, you will participate in the Self-Select PIN (personal identification number) program. How to amend a 2012 tax return If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures. How to amend a 2012 tax return    To create a PIN, you must know your adjusted gross income (AGI) from your originally filed 2012 income tax return (not from an amended return, Form 1040X, or any math error notice from the IRS). How to amend a 2012 tax return You will also need to provide your date of birth (DOB). How to amend a 2012 tax return Make sure your DOB is accurate and matches the information on record with the Social Security Administration before you e-file. How to amend a 2012 tax return To do this, check your annual Social Security Statement. How to amend a 2012 tax return   With a Self-Select PIN, there is nothing to sign and nothing to mail—not even your Forms W-2. How to amend a 2012 tax return For more details on the Self-Select PIN program, visit IRS. How to amend a 2012 tax return gov. How to amend a 2012 tax return State returns. How to amend a 2012 tax return   In most states, you can file an electronic state return simultaneously with your federal return. How to amend a 2012 tax return For more information, check with your local IRS office, state tax agency, tax professional, or IRS. How to amend a 2012 tax return gov. How to amend a 2012 tax return Refunds. How to amend a 2012 tax return   You can have your refund check mailed to you, or you can have your refund deposited directly to your checking or savings account. How to amend a 2012 tax return   With e-file, your refund will be issued in half the time as when filing on paper. How to amend a 2012 tax return Most refunds are issued within 3 weeks. How to amend a 2012 tax return If you choose Direct Deposit, you can receive your refund in as few as 10 days. How to amend a 2012 tax return Offset against debts. How to amend a 2012 tax return   As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. How to amend a 2012 tax return You will be notified if the refund you claimed has been offset against your debts. How to amend a 2012 tax return Refund inquiries. How to amend a 2012 tax return   You can check the status of your refund if it has been at least 24 hours (4 weeks if you mailed a paper return) from the date you filed your return. How to amend a 2012 tax return Be sure to have a copy of your tax return available because you will need to know the filing status, the first social security number shown on the return, and the exact whole-dollar amount of the refund. How to amend a 2012 tax return To check on your refund, do one of the following. How to amend a 2012 tax return Go to IRS. How to amend a 2012 tax return gov and click on Where's My Refund. How to amend a 2012 tax return Call 1-800-829-4477 for automated refund information, and follow the recorded instructions. How to amend a 2012 tax return Call 1-800-829-1954 during the hours shown in your form instructions. How to amend a 2012 tax return Balance due. How to amend a 2012 tax return   If you owe tax, you must pay it by April 15, 2014, to avoid late-payment penalties and interest. How to amend a 2012 tax return You can make your payment electronically by scheduling an electronic funds withdrawal from your checking or savings account or by credit card. How to amend a 2012 tax return Using an Authorized IRS e-file Provider Many tax professionals can electronically file paperless returns for their clients. How to amend a 2012 tax return You have two options. How to amend a 2012 tax return You can prepare your return, take it to an authorized IRS e-file provider, and have the provider transmit it electronically to the IRS. How to amend a 2012 tax return You can have an authorized IRS e-file provider prepare your return and transmit it for you electronically. How to amend a 2012 tax return You will be asked to complete Form 8879, IRS e-file Signature Authorization, to authorize the provider to enter your self-selected PIN on your return. How to amend a 2012 tax return Depending on the provider and the specific services requested, a fee may be charged. How to amend a 2012 tax return To find an authorized IRS e-file provider near you, go to IRS. How to amend a 2012 tax return gov or look for an “Authorized IRS e-file Provider” sign. How to amend a 2012 tax return Using Your Personal Computer A computer with Internet access is all you need to file your tax return using IRS e-file. How to amend a 2012 tax return When you use your personal computer, you can e-file your return from your home any time of the day or night. How to amend a 2012 tax return Sign your return electronically using a self-selected PIN to complete the process. How to amend a 2012 tax return There is no signature form to submit or Forms W-2 to send in. How to amend a 2012 tax return Free Internet filing options. How to amend a 2012 tax return   More taxpayers can now prepare and e-file their individual income tax returns free using commercial tax preparation software accessible through IRS. How to amend a 2012 tax return gov or www. How to amend a 2012 tax return usa. How to amend a 2012 tax return gov. How to amend a 2012 tax return The IRS is partnering with the tax software industry to offer free preparation and filing services to a significant number of taxpayers. How to amend a 2012 tax return Security and privacy certificate programs will assure tax data is safe and secure. How to amend a 2012 tax return To see if you qualify for these services, visit the Return Preparation and Filing Options page at IRS. How to amend a 2012 tax return gov. How to amend a 2012 tax return   If you cannot use the free services, you can buy tax preparation software at various electronics stores or computer and office supply stores. How to amend a 2012 tax return You can also download software from the Internet or prepare and file your return completely online by using tax preparation software available on the Internet. How to amend a 2012 tax return Filing Through Employers and Financial Institutions Some businesses offer free e-file to their employees, members, or customers. How to amend a 2012 tax return Others offer it for a fee. How to amend a 2012 tax return Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit. How to amend a 2012 tax return Free Help With Your Return Free help in preparing your return is available nationwide from IRS-trained volunteers. How to amend a 2012 tax return The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers, and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. How to amend a 2012 tax return Some locations offer free electronic filing. How to amend a 2012 tax return Table 1-1. How to amend a 2012 tax return Benefits of IRS e-file Accuracy • Your chance of getting an error notice from the IRS is significantly reduced. How to amend a 2012 tax return Security • Your privacy and security are assured. How to amend a 2012 tax return Electronic signatures • Create your own personal identification number (PIN) and file a completely paperless return through your tax preparation software or tax professional. How to amend a 2012 tax return There is nothing to mail. How to amend a 2012 tax return Proof of acceptance • You receive an electronic acknowledgment within 48 hours that the IRS has accepted your return for processing. How to amend a 2012 tax return Fast refunds • You get your refund faster with Direct Deposit—in as few as 10 days. How to amend a 2012 tax return Free Internet filing options • Use IRS. How to amend a 2012 tax return gov to access commercial tax preparation and e-file services available at no cost to eligible taxpayers. How to amend a 2012 tax return Electronic payment options • Convenient, safe, and secure electronic payment options are available. How to amend a 2012 tax return E-file and pay your taxes in a single step. How to amend a 2012 tax return Schedule an electronic funds withdrawal from your checking or savings account (up to and including April 15, 2014) or pay by credit card. How to amend a 2012 tax return Federal/State filing • Prepare and file your federal and state tax returns together and double the benefits you get from e-file. How to amend a 2012 tax return When Is My Tax Return Due? Form 1040 for calendar year 2013 is due by April 15, 2014. How to amend a 2012 tax return If you use a fiscal year (explained in chapter 2), your return is due by the 15th day of the 4th month after the end of your fiscal year. How to amend a 2012 tax return If you file late, you may have to pay penalties and interest. How to amend a 2012 tax return If you cannot file your return on time, use Form 4868, Application for Automatic Extension of Time To File U. How to amend a 2012 tax return S. How to amend a 2012 tax return Individual Income Tax Return, to request an automatic 6-month extension. How to amend a 2012 tax return For calendar year taxpayers, this will extend the tax filing due date until October 15. How to amend a 2012 tax return Filing an extension does not extend the time to pay your taxes, only the time to file the tax return. How to amend a 2012 tax return How Do I Pay Income Tax? Federal income tax is a pay-as-you-go tax. How to amend a 2012 tax return You must pay it as you earn or receive income during the year. How to amend a 2012 tax return An employee usually has income tax withheld from his or her pay. How to amend a 2012 tax return If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. How to amend a 2012 tax return You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax (discussed later), of $1,000 or more when you file your return. How to amend a 2012 tax return Use Form 1040-ES to figure and pay the tax. How to amend a 2012 tax return If you do not have to make estimated tax payments, you can pay any tax due when you file your return. How to amend a 2012 tax return For more information on estimated tax, see Publication 505, Tax Withholding and Estimated Tax. How to amend a 2012 tax return What are my payment options?   You can pay your estimated tax electronically using various options. How to amend a 2012 tax return If you pay electronically, there is no need to mail in Form 1040-ES payment vouchers. How to amend a 2012 tax return These options include: Paying electronically through the Electronic Federal Tax Payment System (EFTPS). How to amend a 2012 tax return Paying by authorizing an electronic funds withdrawal when you file Form 1040 electronically. How to amend a 2012 tax return Paying by credit or debit card over the phone or by Internet. How to amend a 2012 tax return Other options include crediting an overpayment from your 2013 return to your 2014 estimated tax, or mailing a check or money order with a Form 1040-ES payment voucher. How to amend a 2012 tax return EFTPS    To enroll in EFTPS, go to www. How to amend a 2012 tax return eftps. How to amend a 2012 tax return gov or call 1-800-555-4477. How to amend a 2012 tax return When you request a new EIN and you will have a tax obligation, you are automatically enrolled in EFTPS. How to amend a 2012 tax return Benefits of EFTPS: The chance of an error in making your payments is reduced. How to amend a 2012 tax return You receive immediate confirmation of every transaction. How to amend a 2012 tax return Penalty for underpayment of tax. How to amend a 2012 tax return   If you did not pay enough income tax and self-employment tax for 2013 by withholding or by making estimated tax payments, you may have to pay a penalty on the amount not paid. How to amend a 2012 tax return The IRS will figure the penalty for you and send you a bill. How to amend a 2012 tax return Or you can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you have to pay a penalty and to figure the penalty amount. How to amend a 2012 tax return For more information, see Publication 505. How to amend a 2012 tax return Self-Employment (SE) Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. How to amend a 2012 tax return It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. How to amend a 2012 tax return If you earned income as a statutory employee, you do not pay SE tax on that income. How to amend a 2012 tax return Social security coverage. How to amend a 2012 tax return   Social security benefits are available to self-employed persons just as they are to wage earners. How to amend a 2012 tax return Your payments of SE tax contribute to your coverage under the social security system. How to amend a 2012 tax return Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. How to amend a 2012 tax return By not reporting all of your self-employment income, you could cause your social security benefits to be lower when you retire. How to amend a 2012 tax return How to become insured under social security. How to amend a 2012 tax return   You must be insured under the social security system before you begin receiving social security benefits. How to amend a 2012 tax return You are insured if you have the required number of credits (also called quarters of coverage), discussed next. How to amend a 2012 tax return Earning credits in 2013 and 2014. How to amend a 2012 tax return   For 2013, you received one credit, up to a maximum of four credits, for each $1,160 ($1,200 for 2014) of income subject to social security taxes. How to amend a 2012 tax return Therefore, for 2013, if you had income (self-employment and wages) of $4,640 that was subject to social security taxes, you receive four credits ($4,640 ÷ $1,160). How to amend a 2012 tax return   For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office. How to amend a 2012 tax return    Making false statements to get or to increase social security benefits may subject you to penalties. How to amend a 2012 tax return The Social Security Administration (SSA) time limit for posting self-employment income. How to amend a 2012 tax return   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. How to amend a 2012 tax return If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. How to amend a 2012 tax return The SSA will not change its records to increase your self-employment income. How to amend a 2012 tax return Who must pay self-employment tax. How to amend a 2012 tax return   You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. How to amend a 2012 tax return Your net earnings from self-employment (excluding church employee income) were $400 or more. How to amend a 2012 tax return You had church employee income of $108. How to amend a 2012 tax return 28 or more. How to amend a 2012 tax return The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. How to amend a 2012 tax return SE tax rate. How to amend a 2012 tax return   For 2013, the SE tax rate on net earnings is 15. How to amend a 2012 tax return 3% (12. How to amend a 2012 tax return 4% social security tax plus 2. How to amend a 2012 tax return 9% Medicare tax). How to amend a 2012 tax return Maximum earnings subject to SE tax. How to amend a 2012 tax return   Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. How to amend a 2012 tax return 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. How to amend a 2012 tax return   All your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. How to amend a 2012 tax return 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. How to amend a 2012 tax return   If wages and tips you receive as an employee are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. How to amend a 2012 tax return 4% social security part of the SE tax on any of your net earnings. How to amend a 2012 tax return However, you must pay the 2. How to amend a 2012 tax return 9% Medicare part of the SE tax on all your net earnings. How to amend a 2012 tax return Deduct one-half of your SE tax as an adjustment to income on line 27 of Form 1040. How to amend a 2012 tax return   More information. How to amend a 2012 tax return   For information on methods of calculating SE tax, see Chapter 10, Self-Employment Tax. How to amend a 2012 tax return Table 1-2. How to amend a 2012 tax return Which Forms Must I File? IF you are liable for: THEN use Form: DUE by:1 Income tax 1040 and Schedule C or C-EZ2 15th day of 4th month after end of  tax year. How to amend a 2012 tax return Self-employment tax Schedule SE File with Form 1040. How to amend a 2012 tax return Estimated tax 1040-ES 15th day of 4th, 6th, and 9th months of tax year, and 15th day of 1st month after the end of tax year. How to amend a 2012 tax return Social security and Medicare taxes and income tax withholding 941 or 944 April 30, July 31, October 31, and January 313. How to amend a 2012 tax return     See Publication 15. How to amend a 2012 tax return Providing information on social security and Medicare taxes and income tax withholding W-2 (to employee)  W-2 and W-3 (to the Social Security Administration) January 313. How to amend a 2012 tax return   Last day of February (March 31 if filing electronically)3. How to amend a 2012 tax return Federal unemployment (FUTA) tax 940 January 313. How to amend a 2012 tax return     April 30, July 31, October 31, and January 31, but only if the liability for unpaid tax is more than $500. How to amend a 2012 tax return Filing information returns for payments to nonemployees and transactions with other persons See Information Returns Forms 1099 – to the recipient by January 31 and to the IRS by February 28 (March 31 if filing electronically). How to amend a 2012 tax return     Other forms – see the General Instructions for Certain Information Returns. How to amend a 2012 tax return Excise tax See Excise Taxes See the instructions to the forms. How to amend a 2012 tax return 1 If a due date falls on a Saturday, Sunday, or legal holiday, file by the next day that is not a Saturday, Sunday, or legal holiday. How to amend a 2012 tax return For more information, see Publication 509, Tax Calendars. How to amend a 2012 tax return 2 File a separate schedule for each business. How to amend a 2012 tax return 3 See the form instructions if you go out of business, change the form of your business, or stop paying wages. How to amend a 2012 tax return     Employment Taxes If you have employees, you will need to file forms to report employment taxes. How to amend a 2012 tax return Employment taxes include the following items. How to amend a 2012 tax return Social security and Medicare taxes. How to amend a 2012 tax return Federal income tax withholding. How to amend a 2012 tax return Federal unemployment (FUTA) tax. How to amend a 2012 tax return For more information, see Publication 15 (Circular E), Employer's Tax Guide. How to amend a 2012 tax return That publication explains your tax responsibilities as an employer. How to amend a 2012 tax return To help you determine whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. How to amend a 2012 tax return That publication has information to help you determine whether an individual is an independent contractor or an employee. How to amend a 2012 tax return If you incorrectly classify an employee as an independent contractor, you may be held liable for employment taxes for that worker plus a penalty. How to amend a 2012 tax return An independent contractor is someone who is self-employed. How to amend a 2012 tax return You do not generally have to withhold or pay any taxes on payments made to an independent contractor. How to amend a 2012 tax return Excise Taxes This section identifies some of the excise taxes you may have to pay and the forms you have to file if you do any of the following. How to amend a 2012 tax return Manufacture or sell certain products. How to amend a 2012 tax return Operate certain kinds of businesses. How to amend a 2012 tax return Use various kinds of equipment, facilities, or products. How to amend a 2012 tax return Receive payment for certain services. How to amend a 2012 tax return For more information on excise taxes, see Publication 510, Excise Taxes. How to amend a 2012 tax return Form 720. How to amend a 2012 tax return   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. How to amend a 2012 tax return Environmental taxes on the sale or use of ozone-depleting chemicals and imported products containing or manufactured with these chemicals. How to amend a 2012 tax return Communications and air transportation taxes. How to amend a 2012 tax return Fuel taxes. How to amend a 2012 tax return Tax on the first retail sale of heavy trucks, trailers, and tractors. How to amend a 2012 tax return Manufacturers taxes on the sale or use of a variety of different articles. How to amend a 2012 tax return Tax on indoor tanning services. How to amend a 2012 tax return Form 2290. How to amend a 2012 tax return   There is a federal excise tax on the use of certain trucks, truck tractors, and buses on public highways. How to amend a 2012 tax return The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. How to amend a 2012 tax return Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. How to amend a 2012 tax return For more information, see the Instructions for Form 2290. How to amend a 2012 tax return Depositing excise taxes. How to amend a 2012 tax return   If you have to file a quarterly excise tax return on Form 720, you may have to deposit your excise taxes before the return is due. How to amend a 2012 tax return For details on depositing excise taxes, see the Instructions for Form 720. How to amend a 2012 tax return Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. How to amend a 2012 tax return The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. How to amend a 2012 tax return You must give a copy of each information return you are required to file to the recipient or payer. How to amend a 2012 tax return In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. How to amend a 2012 tax return For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. How to amend a 2012 tax return Form 1099-MISC. How to amend a 2012 tax return   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your business. How to amend a 2012 tax return These payments include the following items. How to amend a 2012 tax return Payments of $600 or more for services performed for your business by people not treated as your employees, such as fees to subcontractors, attorneys, accountants, or directors. How to amend a 2012 tax return Rent payments of $600 or more, other than rents paid to real estate agents. How to amend a 2012 tax return Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. How to amend a 2012 tax return Royalty payments of $10 or more. How to amend a 2012 tax return Payments to certain crew members by operators of fishing boats. How to amend a 2012 tax return You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. How to amend a 2012 tax return Form W-2. How to amend a 2012 tax return   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. How to amend a 2012 tax return You can file Form W-2 online. How to amend a 2012 tax return For more information about Form W-2, see the General Instructions for Forms W-2 and W-3. How to amend a 2012 tax return Penalties. How to amend a 2012 tax return   The law provides for the following penalties if you do not file Form 1099-MISC or Form W-2 or do not correctly report the information. How to amend a 2012 tax return For more information, see the General Instructions for Certain Information Returns. How to amend a 2012 tax return Failure to file information returns. How to amend a 2012 tax return This penalty applies if you do not file information returns by the due date, do not include all required information, or report incorrect information. How to amend a 2012 tax return Failure to furnish correct payee statements. How to amend a 2012 tax return This penalty applies if you do not furnish a required statement to a payee by the required date, do not include all required information, or report incorrect information. How to amend a 2012 tax return Waiver of penalties. How to amend a 2012 tax return   These penalties will not apply if you can show that the failure was due to reasonable cause and not willful neglect. How to amend a 2012 tax return   In addition, there is no penalty for failure to include all required information, or for including incorrect information, on a de minimis (small) number of information returns if you correct the errors by August 1 of the year the returns are due. How to amend a 2012 tax return (A de minimis number of returns is the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. How to amend a 2012 tax return ) Form 8300. How to amend a 2012 tax return   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction, or two or more related business transactions. How to amend a 2012 tax return Cash includes U. How to amend a 2012 tax return S. How to amend a 2012 tax return and foreign coin and currency. How to amend a 2012 tax return It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. How to amend a 2012 tax return Cash does not include a check drawn on an individual's personal account (personal check). How to amend a 2012 tax return For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). How to amend a 2012 tax return Penalties. How to amend a 2012 tax return   There are civil and criminal penalties, including up to 5 years in prison, for not filing Form 8300, filing (or causing the filing of) a false or fraudulent Form 8300, or structuring a transaction to evade reporting requirements. How to amend a 2012 tax return Table 1-3. How to amend a 2012 tax return Going Out of Business Checklists (Note. How to amend a 2012 tax return The following checklists highlight the typical final forms and schedules you may need to file if you ever go out of business. How to amend a 2012 tax return For more information, see the instructions for the listed forms. How to amend a 2012 tax return ) IF you are liable for:   THEN you may need to: Income tax □ File Schedule C or C-EZ with your Form 1040 for the year in which you go out of business. How to amend a 2012 tax return   □ File Form 4797 with your Form 1040 for each year in which you sell or exchange property used in your business or in which the business use of certain section 179 or listed property drops to 50% or less. How to amend a 2012 tax return   □ File Form 8594 with your Form 1040 if you sold your business. How to amend a 2012 tax return Self-employment tax □ File Schedule SE with your Form 1040 for the year in which you go out of business. How to amend a 2012 tax return Employment taxes □ File Form 941 (or Form 944) for the calendar quarter in which you make final wage payments. How to amend a 2012 tax return Note. How to amend a 2012 tax return Do not forget to check the box and enter the date final wages were paid on line 15 of Form 941 or line 14 of Form 944. How to amend a 2012 tax return   □ File Form 940 for the calendar year in which final wages were paid. How to amend a 2012 tax return Note. How to amend a 2012 tax return Do not forget to check box d, Final: Business closed or stopped paying wages, under Type of Return. How to amend a 2012 tax return Information returns □ Provide Forms W-2 to your employees for the calendar year in which you make final wage payments. How to amend a 2012 tax return Note. How to amend a 2012 tax return These forms are generally due by the due date of your final Form 941 or Form 944. How to amend a 2012 tax return   □ File Form W-3 to file Forms W-2. How to amend a 2012 tax return Note. How to amend a 2012 tax return These forms are generally due within 1 month after the due date of your final Form 941 or Form 944. How to amend a 2012 tax return   □ Provide Forms 1099-MISC to each person to whom you have paid at least $600 for services (including parts and materials) during the calendar year in which you go out of business. How to amend a 2012 tax return   □ File Form 1096 to file Forms 1099-MISC. 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