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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

How To Do Tax Amendment

How To Amend TaxPrint Free 1040ez Tax FormH&r Block Online Tax Return1040 Ez InstructionsE File A 1040xFree Tax Forms 20112009 Income Tax FormsEz Tax FormVita Tax ProgramTax FilingHow Do I File Back Taxes2009 Form 1040 EzFile Taxes Online For Free1040ez Form BookletOne Source Talent ChicagoOregon Tax Return Form 1040ezFree Federal And State Tax Filing 2012Free Tax Filing For Low IncomeHr Block For MilitaryAmended FormHow To File An Amended Tax Return 2011Www Hrblock Com Lp Efile Html &otppartnerid 9012&campaignid Ps_mcm_9012_0011&omnisource Msn Camp028d E Efile Free M Desktop BmmTaxact 2011 Free DownloadFile Taxes Online FreeIndividual Income Tax Return Resident 2012 N111040 XWhere To File 2011 Tax ReturnFile 2005 TaxesH And R Block Login2011 Federal Income Tax Forms 1040 EzHow Much Do Students Get Back In TaxesCan You File Your 2011 Taxes To 2013 FilingWww Hrblock Com MyreturnstatusFile 2007 Taxes OnlineIrs Free File Using Form 1040 EzIrsFree 1040ezIrs Gov Freefile State TaxesHow To File An Amendment For TaxesIrs 1040ez Form

How To Do Tax Amendment

How to do tax amendment 4. How to do tax amendment   Farm Business Expenses Table of Contents What's New for 2013 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Deductible ExpensesReasonable allocation. How to do tax amendment Prepaid Farm Supplies Prepaid Livestock Feed Labor Hired Repairs and Maintenance Interest Breeding Fees Fertilizer and Lime Taxes Insurance Rent and Leasing Depreciation Business Use of Your Home Truck and Car Expenses Travel Expenses Marketing Quota Penalties Tenant House Expenses Items Purchased for Resale Other Expenses Domestic Production Activities Deduction Capital ExpensesForestation and reforestation costs. How to do tax amendment Nondeductible ExpensesPersonal, Living, and Family Expenses Other Nondeductible Items Losses From Operating a FarmAt-Risk Limits Passive Activity Limits Excess Farm Loss Limit Not-for-Profit FarmingUsing the presumption later. How to do tax amendment Category 1. How to do tax amendment Category 2. How to do tax amendment Category 3. How to do tax amendment What's New for 2013 Standard mileage rate. How to do tax amendment  For 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56. How to do tax amendment 5 cents. How to do tax amendment See Truck and Car Expenses , later. How to do tax amendment Simplified method for business use of home deduction. How to do tax amendment  The IRS now provides a simplified method to determine your expenses for business use of your home. How to do tax amendment For more information, see Schedule C (Form 1040), Part II, and its instructions. How to do tax amendment Introduction You can generally deduct the current costs of operating your farm. How to do tax amendment Current costs are expenses you do not have to capitalize or include in inventory costs. How to do tax amendment However, your deduction for the cost of livestock feed and certain other supplies may be limited. How to do tax amendment If you have an operating loss, you may not be able to deduct all of it. How to do tax amendment Topics - This chapter discusses: Deductible expenses Domestic production activities deduction Capital expenses Nondeductible expenses Losses from operating a farm Not-for-profit farming Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home 925 Passive Activity and At-Risk Rules 936 Home Mortgage Interest Deduction Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch F (Form 1040) Profit or Loss From Farming 1045 Application for Tentative Refund 5213 Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit 8903 Domestic Production Activities Deduction See chapter 16 for information about getting publications and forms. How to do tax amendment Deductible Expenses The ordinary and necessary costs of operating a farm for profit are deductible business expenses. How to do tax amendment “Ordinary” means what most farmers do and “necessary” means what is useful and helpful in farming. How to do tax amendment Schedule F, Part II, lists some common farm expenses that are typically deductible. How to do tax amendment This chapter discusses many of these expenses, as well as others not listed on Schedule F. How to do tax amendment Reimbursed expenses. How to do tax amendment   If the reimbursement is received in the same year that the expense is claimed, reduce the expense by the amount of the reimbursement. How to do tax amendment If the reimbursement is received in a year after the expense is claimed, include the reimbursement amount in income. How to do tax amendment See Refund or reimbursement under Income From Other Sources in chapter 3. How to do tax amendment Personal and business expenses. How to do tax amendment   Some expenses you pay during the tax year may be part personal and part business. How to do tax amendment These may include expenses for gasoline, oil, fuel, water, rent, electricity, telephone, automobile upkeep, repairs, insurance, interest, and taxes. How to do tax amendment   You must allocate these mixed expenses between their business and personal parts. How to do tax amendment Generally, the personal part of these expenses is not deductible. How to do tax amendment The business portion of the expenses is deductible on Schedule F. How to do tax amendment Example. How to do tax amendment You paid $1,500 for electricity during the tax year. How to do tax amendment You used 1/3 of the electricity for personal purposes and 2/3 for farming. How to do tax amendment Under these circumstances, you can deduct $1,000 (2/3 of $1,500) of your electricity expense as a farm business expense. How to do tax amendment Reasonable allocation. How to do tax amendment   It is not always easy to determine the business and nonbusiness parts of an expense. How to do tax amendment There is no method of allocation that applies to all mixed expenses. How to do tax amendment Any reasonable allocation is acceptable. How to do tax amendment What is reasonable depends on the circumstances in each case. How to do tax amendment Prepaid Farm Supplies Prepaid farm supplies include the following items if paid for during the year. How to do tax amendment Feed, seed, fertilizer, and similar farm supplies not used or consumed during the year, but not including farm supplies that you would have consumed during the year if not for a fire, storm, flood, other casualty, disease, or drought. How to do tax amendment Poultry (including egg-laying hens and baby chicks) bought for use (or for both use and resale) in your farm business. How to do tax amendment However, include only the amount that would be deductible in the following year if you had capitalized the cost and deducted it ratably over the lesser of 12 months or the useful life of the poultry. How to do tax amendment Poultry bought for resale and not resold during the year. How to do tax amendment Deduction limit. How to do tax amendment   If you use the cash method of accounting to report your income and expenses, your deduction for prepaid farm supplies in the year you pay for them may be limited to 50% of your other deductible farm expenses for the year (all Schedule F deductions except prepaid farm supplies). How to do tax amendment This limit does not apply if you meet one of the exceptions described later. How to do tax amendment See Chapter 2 for a discussion of the cash method of accounting. How to do tax amendment   If the limit applies, you can deduct the excess cost of farm supplies other than poultry in the year you use or consume the supplies. How to do tax amendment The excess cost of poultry bought for use (or for both use and resale) in your farm business is deductible in the year following the year you pay for it. How to do tax amendment The excess cost of poultry bought for resale is deductible in the year you sell or otherwise dispose of that poultry. How to do tax amendment Example. How to do tax amendment You may not qualify for the exception described next. How to do tax amendment During 2013, you bought fertilizer ($4,000), feed ($1,000), and seed ($500) for use on your farm in the following year. How to do tax amendment Your total prepaid farm supplies expense for 2013 is $5,500. How to do tax amendment Your other deductible farm expenses totaled $10,000 for 2013. How to do tax amendment Therefore, your deduction for prepaid farm supplies cannot be more than $5,000 (50% of $10,000) for 2013. How to do tax amendment The excess prepaid farm supplies expense of $500 ($5,500 − $5,000) is deductible in a later tax year when you use or consume the supplies. How to do tax amendment Exceptions. How to do tax amendment   This limit on the deduction for prepaid farm supplies expense does not apply if you are a farm-related taxpayer and either of the following apply. How to do tax amendment Your prepaid farm supplies expense is more than 50% of your other deductible farm expenses because of a change in business operations caused by unusual circumstances. How to do tax amendment Your total prepaid farm supplies expense for the preceding 3 tax years is less than 50% of your total other deductible farm expenses for those 3 tax years. How to do tax amendment   You are a farm-related taxpayer if any of the following tests apply. How to do tax amendment Your main home is on a farm. How to do tax amendment Your principal business is farming. How to do tax amendment A member of your family meets (1) or (2). How to do tax amendment For this purpose, your family includes your brothers and sisters, half-brothers and half-sisters, spouse, parents, grandparents, children, grandchildren, and aunts and uncles and their children. How to do tax amendment    Whether or not the deduction limit for prepaid farm supplies applies, your expenses for prepaid livestock feed may be subject to the rules for advance payment of livestock feed, discussed next. How to do tax amendment Prepaid Livestock Feed If you report your income and expenses under the cash method of accounting, you cannot deduct in the year paid the cost of feed your livestock will consume in a later year unless you meet all the following tests. How to do tax amendment The payment is for the purchase of feed rather than a deposit. How to do tax amendment The prepayment has a business purpose and is not merely for tax avoidance. How to do tax amendment Deducting the prepayment does not result in a material distortion of your income. How to do tax amendment If you meet all three tests, you can deduct the prepaid feed, subject to the limit on prepaid farm supplies discussed earlier. How to do tax amendment If you fail any of these tests, you can deduct the prepaid feed only in the year it is consumed. How to do tax amendment This rule does not apply to the purchase of commodity futures contracts. How to do tax amendment Payment for the purchase of feed. How to do tax amendment   Whether a payment is for the purchase of feed or a deposit depends on the facts and circumstances in each case. How to do tax amendment It is for the purchase of feed if you can show you made it under a binding commitment to accept delivery of a specific quantity of feed at a fixed price and you are not entitled, by contract or business custom, to a refund or repurchase. How to do tax amendment   The following are some factors that show a payment is a deposit rather than for the purchase of feed. How to do tax amendment The absence of specific quantity terms. How to do tax amendment The right to a refund of any unapplied payment credit at the end of the contract. How to do tax amendment The seller's treatment of the payment as a deposit. How to do tax amendment The right to substitute other goods or products for those specified in the contract. How to do tax amendment   A provision permitting substitution of ingredients to vary the particular feed mix to meet your livestock's current diet requirements will not suggest a deposit. How to do tax amendment Further, a price adjustment to reflect market value at the date of delivery is not, by itself, proof of a deposit. How to do tax amendment Business purpose. How to do tax amendment   The prepayment has a business purpose only if you have a reasonable expectation of receiving some business benefit from prepaying the cost of livestock feed. How to do tax amendment The following are some examples of business benefits. How to do tax amendment Fixing maximum prices and securing an assured feed supply. How to do tax amendment Securing preferential treatment in anticipation of a feed shortage. How to do tax amendment   Other factors considered in determining the existence of a business purpose are whether the prepayment was a condition imposed by the seller and whether that condition was meaningful. How to do tax amendment No material distortion of income. How to do tax amendment   The following are some factors considered in determining whether deducting prepaid livestock feed materially distorts income. How to do tax amendment Your customary business practice in conducting your livestock operations. How to do tax amendment The expense in relation to past purchases. How to do tax amendment The time of year you made the purchase. How to do tax amendment The expense in relation to your income for the year. How to do tax amendment Labor Hired You can deduct reasonable wages paid for regular farm labor, piecework, contract labor, and other forms of labor hired to perform your farming operations. How to do tax amendment You can pay wages in cash or in noncash items such as inventory, capital assets, or assets used in your business. How to do tax amendment The cost of boarding farm labor is a deductible labor cost. How to do tax amendment Other deductible costs you incur for farm labor include health insurance, workers' compensation insurance, and other benefits. How to do tax amendment If you must withhold social security, Medicare, and income taxes from your employees' cash wages, you can still deduct the full amount of wages before withholding. How to do tax amendment See chapter 13 for more information on employment taxes. How to do tax amendment Also, deduct the employer's share of the social security and Medicare taxes you must pay on your employees' wages as a farm business expense on Schedule F, line 29. How to do tax amendment See Taxes , later. How to do tax amendment Property for services. How to do tax amendment   If you transfer property to an employee in payment for services, you can deduct as wages paid the fair market value of the property on the date of transfer. How to do tax amendment If the employee pays you anything for the property, deduct as wages the fair market value of the property minus the payment by the employee for the property. How to do tax amendment   Treat the wages deducted as an amount received for the property. How to do tax amendment You may have a gain or loss to report if the property's adjusted basis on the date of transfer is different from its fair market value. How to do tax amendment Any gain or loss has the same character the exchanged property had in your hands. How to do tax amendment For more information, see chapter 8. How to do tax amendment Child as an employee. How to do tax amendment   You can deduct reasonable wages or other compensation you pay to your child for doing farmwork if a true employer-employee relationship exists between you and your child. How to do tax amendment Include these wages in the child's income. How to do tax amendment The child may have to file an income tax return. How to do tax amendment These wages may also be subject to social security and Medicare taxes if your child is age 18 or older. How to do tax amendment For more information, see Family Employees in chapter 13. How to do tax amendment    A Form W-2, Wage and Tax Statement, should be issued to the child employee. How to do tax amendment   The fact that your child spends the wages to buy clothes or other necessities you normally furnish does not prevent you from deducting your child's wages as a farm expense. How to do tax amendment The amount of wages paid to the child could cause a loss of the dependency exemption depending on how the child uses the money. How to do tax amendment Spouse as an employee. How to do tax amendment   You can deduct reasonable wages or other compensation you pay to your spouse if a true employer-employee relationship exists between you and your spouse. How to do tax amendment Wages you pay to your spouse are subject to social security and Medicare taxes. How to do tax amendment For more information, see Family Employees in chapter 13. How to do tax amendment Nondeductible Pay You cannot deduct wages paid for certain household work, construction work, and maintenance of your home. How to do tax amendment However, those wages may be subject to the employment taxes discussed in chapter 13. How to do tax amendment Household workers. How to do tax amendment   Do not deduct amounts paid to persons engaged in household work, except to the extent their services are used in boarding or otherwise caring for farm laborers. How to do tax amendment Construction labor. How to do tax amendment   Do not deduct wages paid to hired help for the construction of new buildings or other improvements. How to do tax amendment These wages are part of the cost of the building or other improvement. How to do tax amendment You must capitalize them. How to do tax amendment Maintaining your home. How to do tax amendment   If your farm employee spends time maintaining or repairing your home, the wages and employment taxes you pay for that work are nondeductible personal expenses. How to do tax amendment For example, assume you have a farm employee for the entire tax year and the employee spends 5% of the time maintaining your home. How to do tax amendment The employee devotes the remaining time to work on your farm. How to do tax amendment You cannot deduct 5% of the wages and employment taxes you pay for that employee. How to do tax amendment Employment Credits Reduce your deduction for wages by the amount of any employment credits you claim such as the work opportunity credit for qualified tax-exempt organizations hiring qualified veterans (Form 5884-C). How to do tax amendment Repairs and Maintenance You can deduct most expenses for the repair and maintenance of your farm property. How to do tax amendment Common items of repair and maintenance are repainting, replacing shingles and supports on farm buildings, and periodic or routine maintenance of trucks, tractors, and other farm machinery. How to do tax amendment However, repairs to, or overhauls of, depreciable property that substantially prolong the life of the property, increase its value, or adapt it to a different use are capital expenses. How to do tax amendment For example, if you repair the barn roof, the cost is deductible. How to do tax amendment But if you replace the roof, it is a capital expense. How to do tax amendment For more information, see Capital Expenses , later. How to do tax amendment Interest You can deduct as a farm business expense interest paid on farm mortgages and other obligations you incur in your farm business. How to do tax amendment Cash method. How to do tax amendment   If you use the cash method of accounting, you can generally deduct interest paid during the tax year. How to do tax amendment You cannot deduct interest paid with funds received from the original lender through another loan, advance, or other arrangement similar to a loan. How to do tax amendment You can, however, deduct the interest when you start making payments on the new loan. How to do tax amendment For more information, see Cash Method in chapter 2. How to do tax amendment Prepaid interest. How to do tax amendment   Under the cash method, you generally cannot deduct any interest paid before the year it is due. How to do tax amendment Interest paid in advance may be deducted only in the tax year in which it is due. How to do tax amendment Accrual method. How to do tax amendment   If you use an accrual method of accounting, you can deduct only interest that has accrued during the tax year. How to do tax amendment However, you cannot deduct interest owed to a related person who uses the cash method until payment is made and the interest is includible in the gross income of that person. How to do tax amendment For more information, see Accrual Method in chapter 2. How to do tax amendment Allocation of interest. How to do tax amendment   If you use the proceeds of a loan for more than one purpose, you must allocate the interest on that loan to each use. How to do tax amendment Allocate the interest to the following categories. How to do tax amendment Trade or business interest. How to do tax amendment Passive activity interest. How to do tax amendment Investment interest. How to do tax amendment Portfolio interest. How to do tax amendment Personal interest. How to do tax amendment   You generally allocate interest on a loan the same way you allocate the loan proceeds. How to do tax amendment You allocate loan proceeds by tracing disbursements to specific uses. How to do tax amendment The easiest way to trace disbursements to specific uses is to keep the proceeds of a particular loan separate from any other funds. How to do tax amendment Secured loan. How to do tax amendment   The allocation of loan proceeds and the related interest is generally not affected by the use of property that secures the loan. How to do tax amendment Example. How to do tax amendment You secure a loan with property used in your farming business. How to do tax amendment You use the loan proceeds to buy a car for personal use. How to do tax amendment You must allocate interest expense on the loan to personal use (purchase of the car) even though the loan is secured by farm business property. How to do tax amendment If the property that secures the loan is your home, you generally do not allocate the loan proceeds or the related interest. How to do tax amendment The interest is usually deductible as qualified home mortgage interest, regardless of how the loan proceeds are used. How to do tax amendment However, you can choose to treat the loan as not secured by your home. How to do tax amendment For more information, see Publication 936. How to do tax amendment Allocation period. How to do tax amendment   The period for which a loan is allocated to a particular use begins on the date the proceeds are used and ends on the earlier of the following dates. How to do tax amendment The date the loan is repaid. How to do tax amendment The date the loan is reallocated to another use. How to do tax amendment More information. How to do tax amendment   For more information on interest, see chapter 4 in Publication 535. How to do tax amendment Breeding Fees You can deduct breeding fees as a farm business expense. How to do tax amendment However, if you use an accrual method of accounting, you must capitalize breeding fees and allocate them to the cost basis of the calf, foal, etc. How to do tax amendment For more information on who must use an accrual method of accounting, see Accrual Method Required under Accounting Methods in chapter 2. How to do tax amendment Fertilizer and Lime You can deduct in the year paid or incurred the cost of fertilizer, lime, and other materials applied to farmland to enrich, neutralize, or condition it if the benefits last a year or less. How to do tax amendment You can also deduct the cost of applying these materials in the year you pay or incur it. How to do tax amendment However, see Prepaid Farm Supplies , earlier, for a rule that may limit your deduction for these materials. How to do tax amendment If the benefits of the fertilizer, lime, or other materials last substantially more than one year, you generally capitalize their cost and deduct a part each year the benefits last. How to do tax amendment However, you can choose to deduct these expenses in the year paid or incurred. How to do tax amendment If you make this choice, you will need IRS approval if you later decide to capitalize the cost of previously deducted items. How to do tax amendment If you sell farmland on which fertilizer or lime has been applied and if the selling price of the land includes part or all of the cost of the fertilizer or lime, you report the sale amount attributable to the fertilizer or lime as ordinary income. How to do tax amendment Farmland, for these purposes, is land used for producing crops, fruits, or other agricultural products or for sustaining livestock. How to do tax amendment It does not include land you have never used previously for producing crops or sustaining livestock. How to do tax amendment You cannot deduct initial land preparation costs. How to do tax amendment (See Capital Expenses , later. How to do tax amendment ) Include government payments you receive for lime or fertilizer in income. How to do tax amendment See Fertilizer and Lime under Agricultural Program Payments in chapter 3. How to do tax amendment Taxes You can deduct as a farm business expense the real estate and personal property taxes on farm business assets, such as farm equipment, animals, farmland, and farm buildings. How to do tax amendment You also can deduct the social security and Medicare taxes you pay to match the amount withheld from the wages of farm employees and any federal unemployment tax you pay. How to do tax amendment For information on employment taxes, see chapter 13. How to do tax amendment Allocation of taxes. How to do tax amendment   The taxes on the part of your farm you use as your home (including the furnishings and surrounding land not used for farming) are nonbusiness taxes. How to do tax amendment You may be able to deduct these nonbusiness taxes as itemized deductions on Schedule A (Form 1040). How to do tax amendment To determine the nonbusiness part, allocate the taxes between the farm assets and nonbusiness assets. How to do tax amendment The allocation can be done from the assessed valuations. How to do tax amendment If your tax statement does not show the assessed valuations, you can usually get them from the tax assessor. How to do tax amendment State and local general sales taxes. How to do tax amendment   State and local general sales taxes on nondepreciable farm business expense items are deductible as part of the cost of those items. How to do tax amendment Include state and local general sales taxes imposed on the purchase of assets for use in your farm business as part of the cost you depreciate. How to do tax amendment Also treat the taxes as part of your cost if they are imposed on the seller and passed on to you. How to do tax amendment State and federal income taxes. How to do tax amendment   Individuals cannot deduct state and federal income taxes as farm business expenses. How to do tax amendment Individuals can deduct state and local income taxes only as an itemized deduction on Schedule A (Form 1040). How to do tax amendment However, you cannot deduct federal income tax. How to do tax amendment Highway use tax. How to do tax amendment   You can deduct the federal use tax on highway motor vehicles paid on a truck or truck tractor used in your farm business. How to do tax amendment For information on the tax itself, including information on vehicles subject to the tax, see the Instructions for Form 2290, Heavy Highway Vehicle Use Tax Return. How to do tax amendment Self-employment tax deduction. How to do tax amendment   You can deduct as an adjustment to income on Form 1040 one-half of your self-employment tax in figuring your adjusted gross income. How to do tax amendment For more information, see chapter 12. How to do tax amendment Insurance You generally can deduct the ordinary and necessary cost of insurance for your farm business as a business expense. How to do tax amendment This includes premiums you pay for the following types of insurance. How to do tax amendment Fire, storm, crop, theft, liability, and other insurance on farm business assets. How to do tax amendment Health and accident insurance on your farm employees. How to do tax amendment Workers' compensation insurance set by state law that covers any claims for job-related bodily injuries or diseases suffered by employees on your farm, regardless of fault. How to do tax amendment Business interruption insurance. How to do tax amendment State unemployment insurance on your farm employees (deductible as taxes if they are considered taxes under state law). How to do tax amendment Insurance to secure a loan. How to do tax amendment   If you take out a policy on your life or on the life of another person with a financial interest in your farm business to get or protect a business loan, you cannot deduct the premiums as a business expense. How to do tax amendment In the event of death, the proceeds of the policy are not taxed as income even if they are used to liquidate the debt. How to do tax amendment Advance premiums. How to do tax amendment   Deduct advance payments of insurance premiums only in the year to which they apply, regardless of your accounting method. How to do tax amendment Example. How to do tax amendment On June 28, 2013, you paid a premium of $3,000 for fire insurance on your barn. How to do tax amendment The policy will cover a period of 3 years beginning on July 1, 2013. How to do tax amendment Only the cost for the 6 months in 2013 is deductible as an insurance expense on your 2013 calendar year tax return. How to do tax amendment Deduct $500, which is the premium for 6 months of the 36-month premium period, or 6/36 of $3,000. How to do tax amendment In both 2014 and 2015, deduct $1,000 (12/36 of $3,000). How to do tax amendment Deduct the remaining $500 in 2016. How to do tax amendment Had the policy been effective on January 1, 2013, the deductible expense would have been $1,000 for each of the years 2013, 2014, and 2015, based on one-third of the premium used each year. How to do tax amendment Business interruption insurance. How to do tax amendment   Use and occupancy and business interruption insurance premiums are deductible as a business expense. How to do tax amendment This insurance pays for lost profits if your business is shut down due to a fire or other cause. How to do tax amendment Report any proceeds in full on Schedule F, Part I. How to do tax amendment Self-employed health insurance deduction. How to do tax amendment   If you are self-employed, you can deduct as an adjustment to income on Form 1040 your payments for medical, dental, and qualified long-term care insurance coverage for yourself, your spouse, and your dependents when figuring your adjusted gross income on your Form 1040. How to do tax amendment Effective March 30, 2010, the insurance can also cover any child of yours under age 27 at the end of 2013, even if the child was not your dependent. How to do tax amendment Generally, this deduction cannot be more than the net profit from the business under which the plan was established. How to do tax amendment   If you or your spouse is also an employee of another person, you cannot take the deduction for any month in which you are eligible to participate in a subsidized health plan maintained by your employer or your spouse's employer. How to do tax amendment   Generally, use the Self-Employed Health Insurance Deduction Worksheet in the Instructions for Form 1040 to figure your deduction. How to do tax amendment Include the remaining part of the insurance payment in your medical expenses on Schedule A (Form 1040) if you itemize your deductions. How to do tax amendment   For more information, see Deductible Premiums in Publication 535, chapter 6. How to do tax amendment Rent and Leasing If you lease property for use in your farm business, you can generally deduct the rent you pay on Schedule F. How to do tax amendment However, you cannot deduct rent you pay in crop shares if you deduct the cost of raising the crops as farm expenses. How to do tax amendment Advance payments. How to do tax amendment   Deduct advance payments of rent only in the year to which they apply, regardless of your accounting method. How to do tax amendment Farm home. How to do tax amendment   If you rent a farm, do not deduct the part of the rental expense that represents the fair rental value of the farm home in which you live. How to do tax amendment Lease or Purchase If you lease a farm building or equipment, you must determine whether or not the agreement must be treated as a conditional sales contract rather than a lease. How to do tax amendment If the agreement is treated as a conditional sales contract, the payments under the agreement (so far as they do not represent interest or other charges) are payments for the purchase of the property. How to do tax amendment Do not deduct these payments as rent, but capitalize the cost of the property and recover this cost through depreciation. How to do tax amendment Conditional sales contract. How to do tax amendment   Whether an agreement is a conditional sales contract depends on the intent of the parties. How to do tax amendment Determine intent based on the provisions of the agreement and the facts and circumstances that exist when you make the agreement. How to do tax amendment No single test, or special combination of tests, always applies. How to do tax amendment However, in general, an agreement may be considered a conditional sales contract rather than a lease if any of the following is true. How to do tax amendment The agreement applies part of each payment toward an equity interest you will receive. How to do tax amendment You get title to the property after you make a stated amount of required payments. How to do tax amendment The amount you must pay to use the property for a short time is a large part of the amount you would pay to get title to the property. How to do tax amendment You pay much more than the current fair rental value of the property. How to do tax amendment You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. How to do tax amendment Determine this value when you make the agreement. How to do tax amendment You have an option to buy the property at a nominal price compared to the total amount you have to pay under the agreement. How to do tax amendment The agreement designates part of the payments as interest, or part of the payments can be easily recognized as interest. How to do tax amendment Example. How to do tax amendment You lease new farm equipment from a dealer who both sells and leases. How to do tax amendment The agreement includes an option to purchase the equipment for a specified price. How to do tax amendment The lease payments and the specified option price equal the sales price of the equipment plus interest. How to do tax amendment Under the agreement, you are responsible for maintenance, repairs, and the risk of loss. How to do tax amendment For federal income tax purposes, the agreement is a conditional sales contract. How to do tax amendment You cannot deduct any of the lease payments as rent. How to do tax amendment You can deduct interest, repairs, insurance, depreciation, and other expenses related to the equipment. How to do tax amendment Motor vehicle leases. How to do tax amendment   Special rules apply to lease agreements that have a terminal rental adjustment clause. How to do tax amendment In general, this is a clause that provides for a rental price adjustment based on the amount the lessor is able to sell the vehicle for at the end of the lease. How to do tax amendment If your rental agreement contains a terminal rental adjustment clause, treat the agreement as a lease if the agreement otherwise qualifies as a lease. How to do tax amendment For more information, see Internal Revenue Code (IRC) section 7701(h). How to do tax amendment Leveraged leases. How to do tax amendment   Special rules apply to leveraged leases of equipment (arrangements in which the equipment is financed by a nonrecourse loan from a third party). How to do tax amendment For more information, see Publication 535, chapter 3, and Revenue Procedure 2001-28, which begins on page 1156 of Internal Revenue Bulletin 2001-19 at www. How to do tax amendment irs. How to do tax amendment gov/pub/irs-irbs/irb01-19. How to do tax amendment pdf. How to do tax amendment Depreciation If property you acquire to use in your farm business is expected to last more than one year, you generally cannot deduct the entire cost in the year you acquire it. How to do tax amendment You must recover the cost over more than one year and deduct part of it each year on Schedule F as depreciation or amortization. How to do tax amendment However, you can choose to deduct part or all of the cost of certain qualifying property, up to a limit, as a section 179 deduction in the year you place it in service. How to do tax amendment Depreciation, amortization, and the section 179 deduction are discussed in chapter 7. How to do tax amendment Business Use of Your Home You can deduct expenses for the business use of your home if you use part of your home exclusively and regularly: As the principal place of business for any trade or business in which you engage, As a place to meet or deal with patients, clients, or customers in the normal course of your trade or business, or In connection with your trade or business, if you are using a separate structure that is not attached to your home. How to do tax amendment Your home office will qualify as your principal place of business for deducting expenses for its use if you meet both of the following requirements. How to do tax amendment You use it exclusively and regularly for the administrative or management activities of your trade or business. How to do tax amendment You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. How to do tax amendment If you use part of your home for business, you must divide the expenses of operating your home between personal and business use. How to do tax amendment The IRS now provides a simplified method to determine your expenses for business use of your home. How to do tax amendment For more information, see Schedule C (Form 1040), Part II, and its instructions. How to do tax amendment Deduction limit. How to do tax amendment   If your gross income from farming equals or exceeds your total farm expenses (including expenses for the business use of your home), you can deduct all your farm expenses. How to do tax amendment But if your gross income from farming is less than your total farm expenses, your deduction for certain expenses for the use of your home in your farming business is limited. How to do tax amendment   Your deduction for otherwise nondeductible expenses, such as utilities, insurance, and depreciation (with depreciation taken last), cannot be more than the gross income from farming minus the following expenses. How to do tax amendment The business part of expenses you could deduct even if you did not use your home for business (such as deductible mortgage interest, real estate taxes, and casualty and theft losses). How to do tax amendment Farm expenses other than expenses that relate to the use of your home. How to do tax amendment If you are self-employed, do not include your deduction for half of your self-employment tax. How to do tax amendment   Deductions over the current year's limit can be carried over to your next tax year. How to do tax amendment They are subject to the deduction limit for the next tax year. How to do tax amendment More information. How to do tax amendment   See Publication 587 for more information on deducting expenses for the business use of your home. How to do tax amendment Telephone expense. How to do tax amendment   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. How to do tax amendment However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for your farm business, are deductible business expenses. How to do tax amendment Cell phone charges for calls relating to your farm business are deductible. How to do tax amendment If the cell phone you use for your farm business is part of a family cell phone plan, you must allocate and deduct only the portion of the charges attributable to farm business calls. How to do tax amendment Truck and Car Expenses You can deduct the actual cost of operating a truck or car in your farm business. How to do tax amendment Only expenses for business use are deductible. How to do tax amendment These include such items as gasoline, oil, repairs, license tags, insurance, and depreciation (subject to certain limits). How to do tax amendment Standard mileage rate. How to do tax amendment   Instead of using actual costs, under certain conditions you can use the standard mileage rate. How to do tax amendment The standard mileage rate for each mile of business use is 56. How to do tax amendment 5 cents in 2013. How to do tax amendment You can use the standard mileage rate for a car or a light truck, such as a van, pickup, or panel truck, you own or lease. How to do tax amendment   You cannot use the standard mileage rate if you operate five or more cars or light trucks at the same time. How to do tax amendment You are not using five or more vehicles at the same time if you alternate using the vehicles (you use them at different times) for business. How to do tax amendment Example. How to do tax amendment Maureen owns a car and four pickup trucks that are used in her farm business. How to do tax amendment Her farm employees use the trucks and she uses the car for business. How to do tax amendment Maureen cannot use the standard mileage rate for the car or the trucks. How to do tax amendment This is because all five vehicles are used in Maureen's farm business at the same time. How to do tax amendment She must use actual expenses for all vehicles. How to do tax amendment Business use percentage. How to do tax amendment   You can claim 75% of the use of a car or light truck as business use without any records if you used the vehicle during most of the normal business day directly in connection with the business of farming. How to do tax amendment You choose this method of substantiating business use the first year the vehicle is placed in service. How to do tax amendment Once you make this choice, you may not change to another method later. How to do tax amendment The following are uses directly connected with the business of farming. How to do tax amendment Cultivating land. How to do tax amendment Raising or harvesting any agricultural or horticultural commodity. How to do tax amendment Raising, shearing, feeding, caring for, training, and managing animals. How to do tax amendment Driving to the feed or supply store. How to do tax amendment   If you keep records and they show that your business use was more than 75%, you may be able to claim more. How to do tax amendment See Recordkeeping requirements under Travel Expenses , below. How to do tax amendment More information. How to do tax amendment   For more information on deductible truck and car expenses, see Publication 463, chapter 4. How to do tax amendment If you pay your employees for the use of their truck or car in your farm business, see Reimbursements to employees under Travel Expenses next. How to do tax amendment Travel Expenses You can deduct ordinary and necessary expenses you incur while traveling away from home for your farm business. How to do tax amendment You cannot deduct lavish or extravagant expenses. How to do tax amendment Usually, the location of your farm business is considered your home for tax purposes. How to do tax amendment You are traveling away from home if: Your duties require you to be absent from your farm substantially longer than an ordinary work day, and You need to get sleep or rest to meet the demands of your work while away from home. How to do tax amendment If you meet these requirements and can prove the time, place, and business purpose of your travel, you can deduct your ordinary and necessary travel expenses. How to do tax amendment The following are some types of deductible travel expenses. How to do tax amendment Air, rail, bus, and car transportation; Meals and lodging; Dry cleaning and laundry; Telephone and fax; Transportation between your hotel and your temporary work or business meeting location; and Tips for any of the above expenses. How to do tax amendment Meals. How to do tax amendment   You ordinarily can deduct only 50% of your business-related meals expenses. How to do tax amendment You can deduct the cost of your meals while traveling on business only if your business trip is overnight or long enough to require you to stop for sleep or rest to properly perform your duties. How to do tax amendment You cannot deduct any of the cost of meals if it is not necessary for you to rest, unless you meet the rules for business entertainment. How to do tax amendment For information on entertainment expenses, see Publication 463, chapter 2. How to do tax amendment   The expense of a meal includes amounts you spend for your food, beverages, taxes, and tips relating to the meal. How to do tax amendment You can deduct either 50% of the actual cost or 50% of a standard meal allowance that covers your daily meal and incidental expenses. How to do tax amendment    Recordkeeping requirements. How to do tax amendment You must be able to prove your deductions for travel by adequate records or other evidence that will support your own statement. How to do tax amendment Estimates or approximations do not qualify as proof of an expense. How to do tax amendment   You should keep an account book or similar record, supported by adequate documentary evidence, such as receipts, that together support each element of an expense. How to do tax amendment Generally, it is best to record the expense and get documentation of it at the time you pay it. How to do tax amendment   If you choose to deduct a standard meal allowance rather than the actual expense, you do not have to keep records to prove amounts spent for meals and incidental items. How to do tax amendment However, you must still keep records to prove the actual amount of other travel expenses, and the time, place, and business purpose of your travel. How to do tax amendment More information. How to do tax amendment   For detailed information on travel, recordkeeping, and the standard meal allowance, see Publication 463. How to do tax amendment Reimbursements to employees. How to do tax amendment   You generally can deduct reimbursements you pay to your employees for travel and transportation expenses they incur in the conduct of your business. How to do tax amendment Employees may be reimbursed under an accountable or nonaccountable plan. How to do tax amendment Under an accountable plan, the employee must provide evidence of expenses. How to do tax amendment Under a nonaccountable plan, no evidence of expenses is required. How to do tax amendment If you reimburse expenses under an accountable plan, deduct them as travel and transportation expenses. How to do tax amendment If you reimburse expenses under a nonaccountable plan, you must report the reimbursements as wages on Form W-2 and deduct them as wages. How to do tax amendment For more information, see Publication 535, chapter 11. How to do tax amendment Marketing Quota Penalties You can deduct as Other expenses on Schedule F penalties you pay for marketing crops in excess of farm marketing quotas. How to do tax amendment However, if you do not pay the penalty, but instead the purchaser of your crop deducts it from the payment to you, include in gross income only the amount you received. How to do tax amendment Do not take a separate deduction for the penalty. How to do tax amendment Tenant House Expenses You can deduct the costs of maintaining houses and their furnishings for tenants or hired help as farm business expenses. How to do tax amendment These costs include repairs, utilities, insurance, and depreciation. How to do tax amendment The value of a dwelling you furnish to a tenant under the usual tenant-farmer arrangement is not taxable income to the tenant. How to do tax amendment Items Purchased for Resale If you use the cash method of accounting, you ordinarily deduct the cost of livestock and other items purchased for resale only in the year of sale. How to do tax amendment You deduct this cost, including freight charges for transporting the livestock to the farm, on Schedule F, Part I. How to do tax amendment However, see Chickens, seeds, and young plants , below. How to do tax amendment Example. How to do tax amendment You use the cash method of accounting. How to do tax amendment In 2013, you buy 50 steers you will sell in 2014. How to do tax amendment You cannot deduct the cost of the steers on your 2013 tax return. How to do tax amendment You deduct their cost on your 2014 Schedule F, Part I. How to do tax amendment Chickens, seeds, and young plants. How to do tax amendment   If you are a cash method farmer, you can deduct the cost of hens and baby chicks bought for commercial egg production, or for raising and resale, as an expense on Schedule F, Part I, in the year paid if you do it consistently and it does not distort income. How to do tax amendment You also can deduct the cost of seeds and young plants bought for further development and cultivation before sale as an expense on Schedule F, Part I, when paid if you do this consistently and you do not figure your income on the crop method. How to do tax amendment However, see Prepaid Farm Supplies , earlier, for a rule that may limit your deduction for these items. How to do tax amendment   If you deduct the cost of chickens, seeds, and young plants as an expense, report their entire selling price as income. How to do tax amendment You cannot also deduct the cost from the selling price. How to do tax amendment   You cannot deduct the cost of seeds and young plants for Christmas trees and timber as an expense. How to do tax amendment Deduct the cost of these seeds and plants through depletion allowances. How to do tax amendment For more information, see Depletion in chapter 7. How to do tax amendment   The cost of chickens and plants used as food for your family is never deductible. How to do tax amendment   Capitalize the cost of plants with a preproductive period of more than 2 years, unless you can elect out of the uniform capitalization rules. How to do tax amendment These rules are discussed in chapter 6. How to do tax amendment Example. How to do tax amendment You use the cash method of accounting. How to do tax amendment In 2013, you buy 500 baby chicks to raise for resale in 2014. How to do tax amendment You also buy 50 bushels of winter wheat seed in 2013 that you sow in the fall. How to do tax amendment Unless you previously adopted the method of deducting these costs in the year you sell the chickens or the harvested crops, you can deduct the cost of both the baby chicks and the seed wheat in 2013. How to do tax amendment Election to use crop method. How to do tax amendment   If you use the crop method, you can delay deducting the cost of seeds and young plants until you sell them. How to do tax amendment You must get IRS approval to use the crop method. How to do tax amendment If you follow this method, deduct the cost from the selling price to determine your profit on Schedule F, Part I. How to do tax amendment For more information, see Crop method under Special Methods of Accounting in chapter 2. How to do tax amendment Choosing a method. How to do tax amendment   You can adopt either the crop method or the cash method for deducting the cost in the first year you buy egg-laying hens, pullets, chicks, or seeds and young plants. How to do tax amendment   Although you must use the same method for egg-laying hens, pullets, and chicks, you can use a different method for seeds and young plants. How to do tax amendment Once you use a particular method for any of these items, use it for those items until you get IRS approval to change your method. How to do tax amendment For more information, see Change in Accounting Method in chapter 2. How to do tax amendment Other Expenses The following list, while not all-inclusive, shows some expenses you can deduct as other farm expenses on Schedule F, Part II. How to do tax amendment These expenses must be for business purposes and  (1) paid, if you use the cash method of accounting, or (2) incurred, if you use an accrual method of accounting. How to do tax amendment Accounting fees. How to do tax amendment Advertising. How to do tax amendment Business travel and meals. How to do tax amendment Commissions. How to do tax amendment Consultant fees. How to do tax amendment Crop scouting expenses. How to do tax amendment Dues to cooperatives. How to do tax amendment Educational expenses (to maintain and improve farming skills). How to do tax amendment Farm-related attorney fees. How to do tax amendment Farm magazines. How to do tax amendment Ginning. How to do tax amendment Insect sprays and dusts. How to do tax amendment Litter and bedding. How to do tax amendment Livestock fees. How to do tax amendment Marketing fees. How to do tax amendment Milk assessment. How to do tax amendment Recordkeeping expenses. How to do tax amendment Service charges. How to do tax amendment Small tools expected to last one year or less. How to do tax amendment Stamps and stationery. How to do tax amendment Subscriptions to professional, technical, and trade journals that deal with farming. How to do tax amendment Tying material and containers. How to do tax amendment Loan expenses. How to do tax amendment   You prorate and deduct loan expenses, such as legal fees and commissions, you pay to get a farm loan over the term of the loan. How to do tax amendment Tax preparation fees. How to do tax amendment   You can deduct as a farm business expense on Schedule F the cost of preparing that part of your tax return relating to your farm business. How to do tax amendment You may be able to deduct the remaining cost on Schedule A (Form 1040) if you itemize your deductions. How to do tax amendment   You also can deduct on Schedule F the amount you pay or incur in resolving tax issues relating to your farm business. How to do tax amendment Domestic Production Activities Deduction Generally, you are allowed a deduction for income attributable to domestic production activities. How to do tax amendment You can deduct 9% of the lesser of your qualified production activities income or your taxable income (adjusted gross income for individuals) for the tax year. How to do tax amendment Your deduction is limited to 50% of the Form W-2 wages you paid for the tax year that are properly allocable to domestic production gross receipts. How to do tax amendment For this purpose, Form W-2 wages do not include noncash wages paid for agricultural labor, such as compensation paid as commodities. How to do tax amendment Also, excluded from Form W-2 wages are wages paid to your children under age 18 and nontaxable fringe benefits. How to do tax amendment Income from cooperatives. How to do tax amendment   If you receive a patronage dividend or qualified per-unit retain allocation from a cooperative which is engaged in the manufacturing, production, growth, or extraction in whole or in significant part of any agricultural or horticultural product or in the marketing of agricultural or horticultural products, your income from the cooperative can give rise to a domestic production activities deduction. How to do tax amendment This deduction amount is reported on Form 1099-PATR, box 6. How to do tax amendment In order for you to qualify for the deduction, the cooperative is required to send you a written notice designating your portion of the domestic production activities deduction. How to do tax amendment More information. How to do tax amendment   For more information on the domestic production activities deduction, see the Instructions for Form 8903. How to do tax amendment Capital Expenses A capital expense is a payment, or a debt incurred, for the acquisition, improvement, or restoration of an asset that is expected to last more than one year. How to do tax amendment You include the expense in the basis of the asset. How to do tax amendment Uniform capitalization rules also require you to capitalize or include in inventory certain other expenses. How to do tax amendment See chapters 2  and 6. How to do tax amendment Capital expenses are generally not deductible, but they may be depreciable. How to do tax amendment However, you can elect to deduct certain capital expenses, such as the following. How to do tax amendment The cost of fertilizer, lime, etc. How to do tax amendment (See Fertilizer and Lime under Deductible Expenses , earlier. How to do tax amendment ) Soil and water conservation expenses. How to do tax amendment (See chapter 5. How to do tax amendment ) The cost of property that qualifies for a deduction under section 179. How to do tax amendment (See chapter 7. How to do tax amendment ) Business start-up costs. How to do tax amendment (See Business start-up and organizational costs , later. How to do tax amendment ) Forestation and reforestation costs. How to do tax amendment (See Forestation and reforestation costs , later. How to do tax amendment ) Generally, the costs of the following items, including the costs of material, hired labor, and installation, are capital expenses. How to do tax amendment Land and buildings. How to do tax amendment Additions, alterations, and improvements to buildings, etc. How to do tax amendment Cars and trucks. How to do tax amendment Equipment and machinery. How to do tax amendment Fences. How to do tax amendment Draft, breeding, sport, and dairy livestock. How to do tax amendment Repairs to machinery, equipment, trucks, and cars that prolong their useful life, increase their value, or adapt them to different use. How to do tax amendment Water wells, including drilling and equipping costs. How to do tax amendment Land preparation costs, such as: Clearing land for farming, Leveling and conditioning land, Purchasing and planting trees, Building irrigation canals and ditches, Laying irrigation pipes, Installing drain tile, Modifying channels or streams, Constructing earthen, masonry, or concrete tanks, reservoirs, or dams, and Building roads. How to do tax amendment Business start-up and organizational costs. How to do tax amendment   You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. How to do tax amendment The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. How to do tax amendment Any remaining costs must be amortized. How to do tax amendment See chapter 7. How to do tax amendment   You elect to deduct start-up or organizational costs by claiming the deduction on the income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. How to do tax amendment However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). How to do tax amendment Clearly indicate the election on your amended return and write “Filed pursuant to section 301. How to do tax amendment 9100-2” at the top of the amended return. How to do tax amendment File the amended return at the same address you filed the original return. How to do tax amendment The election applies when figuring taxable income for the current tax year and all subsequent years. How to do tax amendment   You can choose to forgo the election by clearly electing to capitalize your start-up or organizational costs on an income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. How to do tax amendment For more information about start-up and organizational costs, see chapter 7. How to do tax amendment Crop production expenses. How to do tax amendment   The uniform capitalization rules generally require you to capitalize expenses incurred in producing plants. How to do tax amendment However, except for certain taxpayers required to use an accrual method of accounting, the capitalization rules do not apply to plants with a preproductive period of 2 years or less. How to do tax amendment For more information, see Uniform Capitalization Rules in chapter 6. How to do tax amendment Timber. How to do tax amendment   Capitalize the cost of acquiring timber. How to do tax amendment Do not include the cost of land in the cost of the timber. How to do tax amendment You must generally capitalize direct costs incurred in reforestation. How to do tax amendment However, you can elect to deduct some forestation and reforestation costs. How to do tax amendment See Forestation and reforestation costs next. How to do tax amendment Reforestation costs include the following. How to do tax amendment Site preparation costs, such as: Girdling, Applying herbicide, Baiting rodents, and Clearing and controlling brush. How to do tax amendment The cost of seed or seedlings. How to do tax amendment Labor and tool expenses. How to do tax amendment Depreciation on equipment used in planting or seeding. How to do tax amendment Costs incurred in replanting to replace lost seedlings. How to do tax amendment You can choose to capitalize certain indirect reforestation costs. How to do tax amendment   These capitalized amounts are your basis for the timber. How to do tax amendment Recover your basis when you sell the timber or take depletion allowances when you cut the timber. How to do tax amendment See Depletion in chapter 7. How to do tax amendment Forestation and reforestation costs. How to do tax amendment   You can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. How to do tax amendment Any remaining costs can be amortized over an 84-month period. How to do tax amendment See chapter 7. How to do tax amendment If you make an election to deduct or amortize qualifying reforestation costs, you should create and maintain separate timber accounts for each qualified timber property. How to do tax amendment The accounts should include all reforestation treatments and the dates they were applied. How to do tax amendment Any qualified timber property that is subject to the deduction or amortization election cannot be included in any other timber account for which depletion is allowed. How to do tax amendment The timber account should be maintained until the timber is disposed of. How to do tax amendment For more information, see Notice 2006-47, 2006-20 I. How to do tax amendment R. How to do tax amendment B. How to do tax amendment 892, available at  www. How to do tax amendment irs. How to do tax amendment gov/irb/2006-20_IRB/ar11. How to do tax amendment html. How to do tax amendment   You elect to deduct forestation and reforestation costs by claiming the deduction on the income tax return filed by the due date (including extensions) for the tax year in which the expenses were paid or incurred. How to do tax amendment If you are filing Form T (Timber), Forest Activities Schedule, also complete Form T (Timber), Part IV. How to do tax amendment If you are not filing Form T (Timber), attach a statement to your return with the following information. How to do tax amendment The unique stand identification numbers. How to do tax amendment The total number of acres reforested during the tax year. How to do tax amendment The nature of the reforestation treatments. How to do tax amendment The total amounts of the qualified reforestation expenditures eligible to be amortized or deducted. How to do tax amendment   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). How to do tax amendment Clearly indicate the election on your amended return and write “Filed pursuant to section 301. How to do tax amendment 9100-2” at the top of the amended return. How to do tax amendment File the amended return at the same address you filed the original return. How to do tax amendment    For more information about forestation and reforestation costs, see chapter 7. How to do tax amendment    For more information about timber, see Agriculture Handbook Number 731, Forest Landowners' Guide to the Federal Income Tax. How to do tax amendment You can view this publication on the Internet at  www. How to do tax amendment fs. How to do tax amendment fed. How to do tax amendment us/publications. How to do tax amendment Christmas tree cultivation. How to do tax amendment   If you are in the business of planting and cultivating Christmas trees to sell when they are more than 6 years old, capitalize expenses incurred for planting and stump culture and add them to the basis of the standing trees. How to do tax amendment Recover these expenses as part of your adjusted basis when you sell the standing trees or as depletion allowances when you cut the trees. How to do tax amendment For more information, see Timber Depletion under Depletion in chapter 7. How to do tax amendment   You can deduct as business expenses the costs incurred for shearing and basal pruning of these trees. How to do tax amendment Expenses incurred for silvicultural practices, such as weeding or cleaning, and noncommercial thinning are also deductible as business expenses. How to do tax amendment   Capitalize the cost of land improvements, such as road grading, ditching, and fire breaks, that have a useful life beyond the tax year. How to do tax amendment If the improvements do not have a determinable useful life, add their cost to the basis of the land. How to do tax amendment The cost is recovered when you sell or otherwise dispose of it. How to do tax amendment If the improvements have a determinable useful life, recover their cost through depreciation. How to do tax amendment Capitalize the cost of equipment and other depreciable assets, such as culverts and fences, to the extent you do not use them in planting Christmas trees. How to do tax amendment Recover these costs through depreciation. How to do tax amendment Nondeductible Expenses You cannot deduct personal expenses and certain other items on your tax return even if they relate to your farm. How to do tax amendment Personal, Living, and Family Expenses You cannot deduct certain personal, living, and family expenses as business expenses. How to do tax amendment These include rent and insurance premiums paid on property used as your home, life insurance premiums on yourself or your family, the cost of maintaining cars, trucks, or horses for personal use, allowances to minor children, attorneys' fees and legal expenses incurred in personal matters, and household expenses. How to do tax amendment Likewise, the cost of purchasing or raising produce or livestock consumed by you or your family is not deductible. How to do tax amendment Other Nondeductible Items You cannot deduct the following items on your tax return. How to do tax amendment Loss of growing plants, produce, and crops. How to do tax amendment   Losses of plants, produce, and crops raised for sale are generally not deductible. How to do tax amendment However, you may have a deductible loss on plants with a preproductive period of more than 2 years. How to do tax amendment See chapter 11 for more information. How to do tax amendment Repayment of loans. How to do tax amendment   You cannot deduct the repayment of a loan. How to do tax amendment However, if you use the proceeds of a loan for farm business expenses, you can deduct the interest on the loan. How to do tax amendment See Interest , earlier. How to do tax amendment Estate, inheritance, legacy, succession, and gift taxes. How to do tax amendment   You cannot deduct estate, inheritance, legacy, succession, and gift taxes. How to do tax amendment Loss of livestock. How to do tax amendment   You cannot deduct as a loss the value of raised livestock that die if you deducted the cost of raising them as an expense. How to do tax amendment Losses from sales or exchanges between related persons. How to do tax amendment   You cannot deduct losses from sales or exchanges of property between you and certain related persons, including your spouse, brother, sister, ancestor, or lineal descendant. How to do tax amendment For more information, see chapter 2 of Publication 544, Sales and Other Dispositions of Assets. How to do tax amendment Cost of raising unharvested crops. How to do tax amendment   You cannot deduct the cost of raising unharvested crops sold with land owned more than one year if you sell both at the same time and to the same person. How to do tax amendment Add these costs to the basis of the land to determine the gain or loss on the sale. How to do tax amendment For more information, see Section 1231 Gains and Losses in chapter 9. How to do tax amendment Cost of unharvested crops bought with land. How to do tax amendment   Capitalize the purchase price of land, including the cost allocable to unharvested crops. How to do tax amendment You cannot deduct the cost of the crops at the time of purchase. How to do tax amendment However, you can deduct this cost in figuring net profit or loss in the tax year you sell the crops. How to do tax amendment Cost related to gifts. How to do tax amendment   You cannot deduct costs related to your gifts of agricultural products or property held for sale in the ordinary course of your business. How to do tax amendment The costs are not deductible in the year of the gift or any later year. How to do tax amendment For example, you cannot deduct the cost of raising cattle or the cost of planting and raising unharvested wheat on parcels of land given as a gift to your children. How to do tax amendment Club dues and membership fees. How to do tax amendment   Generally, you cannot deduct amounts you pay or incur for membership in any club organized for business, pleasure, recreation, or any other social purpose. How to do tax amendment This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. How to do tax amendment Exception. How to do tax amendment   The following organizations will not be treated as a club organized for business, pleasure, recreation, or other social purposes, unless one of its main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. How to do tax amendment Boards of trade. How to do tax amendment Business leagues. How to do tax amendment Chambers of commerce. How to do tax amendment Civic or public service organizations. How to do tax amendment Professional associations. How to do tax amendment Trade associations. How to do tax amendment Real estate boards. How to do tax amendment Fines and penalties. How to do tax amendment   You cannot deduct fines and penalties, except penalties for exceeding marketing quotas, discussed earlier. How to do tax amendment Losses From Operating a Farm If your deductible farm expenses are more than your farm income, you have a loss from the operation of your farm. How to do tax amendment The amount of the loss you can deduct when figuring your taxable income may be limited. How to do tax amendment To figure your deductible loss, you must apply the following limits. How to do tax amendment The at-risk limits. How to do tax amendment The passive activity limits. How to do tax amendment The following discussions explain these limits. How to do tax amendment If your deductible loss after applying these limits is more than your other income for the year, you may have a net operating loss. How to do tax amendment See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. How to do tax amendment If you do not carry on your farming activity to make a profit, your loss deduction may be limited by the not-for-profit rules. How to do tax amendment See Not-for-Profit Farming, later. How to do tax amendment At-Risk Limits The at-risk rules limit your deduction for losses from most business or income-producing activities, including farming. How to do tax amendment These rules limit the losses you can deduct when figuring your taxable income. How to do tax amendment The deductible loss from an activity is limited to the amount you have at risk in the activity. How to do tax amendment You are at risk in any activity for: The money and adjusted basis of property you contribute to the activity, and Amounts you borrow for use in the activity if: You are personally liable for repayment, or You pledge property (other than property used in the activity) as security for the loan. How to do tax amendment You are not at risk, however, for amounts you borrow for use in a farming activity from a person who has an interest in the activity (other than as a creditor) or a person related to someone (other than you) having such an interest. How to do tax amendment For more information, see Publication 925. How to do tax amendment Passive Activity Limits A passive activity is generally any activity involving the conduct of any trade or business in which you do not materially participate. How to do tax amendment Generally, a rental activity is a passive activity. How to do tax amendment If you have a passive activity, special rules limit the loss you can deduct in the tax year. How to do tax amendment You generally can deduct losses from passive activities only up to income from passive activities. How to do tax amendment Credits are similarly limited. How to do tax amendment For more information, see Publication 925. How to do tax amendment Excess Farm Loss Limit For tax years beginning after 2009, excess farm losses (defined below) are not deductible if you received certain applicable subsidies. How to do tax amendment This limit applies to any farming businesses, other than a C corporation, that received a direct or counter-cyclical payment (or any payment in lieu of such payments) under title I of the Food, Conservation, and Energy Act of 2008, or from a Commodity Credit Corporation loan. How to do tax amendment Your farming losses are limited to the greater of: $300,000 ($150,000 for a married person filing a separate return), or The total net farm income for the prior five tax years. How to do tax amendment Farming losses from casualty losses or losses by reason of disease or drought are disregarded for purposes of figuring this limitation. How to do tax amendment Also, the limitation on farm losses should be applied before the passive activity loss rules are applied. How to do tax amendment For more details, see IRC section 461(j). How to do tax amendment Excess farm loss. How to do tax amendment   Generally, an excess farm loss is the amount of your farming loss that exceeds the amount of the limitation (as described above). How to do tax amendment This loss can be determined by taking the excess of: The total deductions for the tax year from your farming businesses, over The total gross income or gain for the tax year from your farming businesses, plus the greater of: $300,000 ($150,000 for a married person filing a separate return), or The excess (if any) of the total gross income or gain from your farming businesses for the prior five tax years over the total deductions from your farming businesses for the prior five tax years. How to do tax amendment   Excess farm losses that are disallowed can be carried forward to the next tax year and treated as a deduction from that year. How to do tax amendment Not-for-Profit Farming If you operate a farm for profit, you can deduct all the ordinary and necessary expenses of carrying on the business of farming on Schedule F. How to do tax amendment However, if you do not carry on your farming activity, or other activity you engage or invest in, to make a profit, you report the income from the activity on Form 1040, line 21, and you can deduct expenses of carrying on the activity only if you itemize your deductions on Schedule A (Form 1040). How to do tax amendment Also, there is a limit on the deductions you can take. How to do tax amendment You cannot use a loss from that activity to offset income from other activities. How to do tax amendment Activities you do as a hobby, or mainly for sport or recreation, come under this limit. How to do tax amendment An investment activity intended only to produce tax losses for the investors also comes under this limit. How to do tax amendment The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. How to do tax amendment It does not apply to corporations other than S corporations. How to do tax amendment In determining whether you are carrying on your farming activity for profit, all the facts are taken into account. How to do tax amendment No one factor alone is decisive. How to do tax amendment Among the factors to consider are whether: You operate your farm in a businesslike manner; The time and effort you spend on farming indicate you intend to make it profitable; You depend on income from farming for your livelihood; Your losses are due to circumstances beyond your control or are normal in the start-up phase of farming; You change your methods of operation in an attempt to improve profitability; You, or your advisors, have the knowledge needed to carry on the farming activity as a successful business; You were successful in making a profit in similar activities in the past; You make a profit from farming in some years and the amount of profit you make; and You can expect to make a future profit from the appreciation of the assets used in the farming activity. How to do tax amendment Presumption of profit. How to do tax amendment   Your farming or other activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. How to do tax amendment Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. How to do tax amendment The activity must be substantially the same for each year within this period. How to do tax amendment You have a profit when the gross income from an activity is more than the deductions for it. How to do tax amendment   If a taxpayer dies before the end of the 5-year (or 7-year) period, the period ends on the date of the taxpayer's death. How to do tax amendment   If your business or investment activity passes this 3- (or 2-) years-of-profit test, presume it is carried on for profit. How to do tax amendment This means the limits discussed here do not apply. How to do tax amendment You can take all your business deductions from the activity on Schedule F, even for the years that you have a loss. How to do tax amendment You can rely on this presumption in every case, unless the IRS shows it is not valid. How to do tax amendment   If you fail the 3- (or 2-) years-of-profit test, you still may be considered to operate your farm for profit by considering the factors listed earlier. How to do tax amendment Using the presumption later. How to do tax amendment   If you are starting out in farming and do not have 3 (or 2) years showing a profit, you may want to take advantage of this presumption later, after you have had the 5 (or 7) years of experience allowed by the test. How to do tax amendment   You can choose to do this by filing Form 5213. How to do tax amendment Filing this form postpones any determination that your farming activity is not carried on for profit until 5 (or 7) years have passed since you first started farming. How to do tax amendment You must file Form 5213 within 3 years after the due date of your return for the year in which you first carried on the activity, or, if earlier, within 60 days after receiving a written notice from the IRS proposing to disallow deductions attributable to the activity. How to do tax amendment   The benefit gained by making this choice is that the IRS will not immediately question whether your farming activity is engaged in for profit. How to do tax amendment Accordingly, it will not limit your deductions. How to do tax amendment Rather, you will gain time to earn a profit in 3 (or 2) out of the first 5 (or 7) years you carry on the farming activity. How to do tax amendment If you show 3 (or 2) years of profit at the end of this period, your deductions are not limited under these rules. How to do tax amendment If you do not have 3 (or 2) years of profit (and cannot otherwise show that you operated your farm for profit), the limit applies retroactively to any year in the 5-year (or 7-year) period with a loss. How to do tax amendment   Filing Form 5213 automatically extends the period of limitations on any year
Español

Office of Personnel Management (OPM)

OPM manages the civil service of the federal government, coordinates recruiting of new government employees, and manages their health insurance and retirement benefits programs. OPM also provides resources for locating student jobs, summer jobs, scholarships, and internships.

Contact the Agency or Department

Website: Office of Personnel Management (OPM) (Federal employment information)

E-mail:

Address: 1900 E St., NW
Washington, DC 20415

Phone Number: (202) 606-1800

TTY: (202) 606-2532

The How To Do Tax Amendment

How to do tax amendment Index A Assistance (see Tax help) F Free tax services, How To Get Tax Help H Help (see Tax help) M More information (see Tax help) P Publications (see Tax help) T Tax help, How To Get Tax Help Taxpayer Advocate, Taxpayer Advocate Service. How to do tax amendment TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications