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How To File Past Taxes

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How To File Past Taxes

How to file past taxes 20. How to file past taxes   Deducción Estándar Table of Contents Qué Hay de Nuevo Introduction Cantidad de la Deducción Estándar Deducción Estándar para DependientesDefinición del ingreso del trabajo. How to file past taxes Quién Debe Detallar las DeduccionesCuándo detallar las deducciones. How to file past taxes Personas casadas que presentan la declaración por separado. How to file past taxes Qué Hay de Nuevo Aumento de la deducción estándar. How to file past taxes  La deducción estándar para ciertos contribuyentes que no detallen sus deducciones en el Anexo A del Formulario 1040 es mayor en el año 2013 de lo que fue en el año 2012. How to file past taxes La cantidad de la deducción depende de su estado civil para efectos de la declaración. How to file past taxes Puede utilizar las Tablas de Deducción Estándar para el año 2013 en este capítulo para calcular la deducción estándar. How to file past taxes Introduction Este capítulo trata sobre los siguientes temas: Cómo calcular la cantidad de su deducción estándar. How to file past taxes La deducción estándar para dependientes. How to file past taxes Quién debe detallar las deducciones. How to file past taxes La mayoría de los contribuyentes tienen la opción de tomar la deducción estándar o detallar sus deducciones. How to file past taxes Si tene la opción, puede utilizar el método que resulte en la cantidad menor de impuestos. How to file past taxes La deducción estándar es una cantidad en dólares que reduce su ingreso tributable. How to file past taxes La deducción estándar es un beneficio que, para muchos contribuyentes, elimina la necesidad de detallar deducciones, tales como gastos médicos, aportaciones hechas a obras caritativas, e impuestos, en el Anexo A del Formulario 1040. How to file past taxes La deducción estándar es mayor para los contribuyentes que: Tengan 65 años de edad o más o Sean ciegos. How to file past taxes Usted se beneficia de la deducción estándar si ésta es mayor que el total de las deducciones detalladas permisibles. How to file past taxes Personas que no reúnen los requisitos para la deducción estándar. How to file past taxes   Su deducción estándar es cero y debe detallar todas las deducciones que tenga si: Su estado civil para efectos de la declaración es casado que presenta la declaración por separado y su cónyuge detalla las deducciones en su propia declaración, Presenta una declaración de impuestos para un año tributario corto debido a un cambio en su período contable anual, o Es extranjero no residente o extranjero con doble residencia durante el año. How to file past taxes Se le considera extranjero con doble residencia si tuvo estatus de ambos extranjero no residente y extranjero residente durante el año. How to file past taxes Nota. How to file past taxes Si es extranjero no residente que está casado con un ciudadano estadounidense o es residente extranjero al final del año, puede elegir ser tratado como residente estadounidense. How to file past taxes Vea la Publicación 519, U. How to file past taxes S. How to file past taxes Tax Guide for Aliens (Guía sobre los impuestos federales estadounidenses para extranjeros), en inglés. How to file past taxes Si elige esta opción, puede tomar la deducción estándar. How to file past taxes Si alguna exención suya puede ser reclamada en la declaración de impuestos de otra persona (tal como la declaración de sus padres), es posible que su deducción estándar sea limitada. How to file past taxes Vea Deducción Estándar para Dependientes , más adelante. How to file past taxes Cantidad de la Deducción Estándar La cantidad de la deducción estándar depende de su estado civil para efectos de la declaración, si tiene 65 años de edad o más o es ciego, y si otro contribuyente puede reclamar una exención por usted. How to file past taxes Generalmente, las cantidades de deducción estándar se ajustan cada año, conforme a la inflación. How to file past taxes La cantidad de la deducción estándar para la mayoría de los contribuyentes se muestra en la Tabla 20-1. How to file past taxes Declaración final de un fallecido. How to file past taxes   La deducción estándar para la declaración final de impuestos de un fallecido es igual a la que hubiese sido si el fallecido hubiese seguido con vida. How to file past taxes No obstante, si el fallecido no tenía 65 años de edad o más al morir, no puede reclamar la deducción estándar más alta, concedida por cumplir esa edad. How to file past taxes Deducción Estándar Más Alta por Edad (65 Años de Edad o Más) Si tiene 65 años de edad o más el último día del año y no detalla sus deducciones, tiene derecho a una deducción estándar más alta. How to file past taxes Se considera que tiene 65 años de edad el día antes de cumplir sus 65 años. How to file past taxes Por lo tanto, puede tomar una deducción estándar más alta para el año 2013 si nació antes del 2 de enero de 1949. How to file past taxes Utilice la Tabla 20-2 para calcular la cantidad de la deducción estándar. How to file past taxes Deducción Estándar Más Alta por Ceguera Si es ciego en el último día del año y no detalla sus deducciones, tiene derecho a una deducción estándar más alta. How to file past taxes No está totalmente ciego. How to file past taxes   Si no está totalmente ciego, tiene que obtener una declaración certificada de un oftalmólogo u optometrista que indique que: Aún cuando tiene sus espejuelos o lentes de contacto puestos, su ojo mejor no registra una cifra de vista mejor que el 20/200 o Su campo visual es de 20 grados o menos. How to file past taxes   Si es poco probable que la condición de su vista vaya a mejorar más allá de estos límites, dicha declaración debería estipular este hecho. How to file past taxes Tiene que guardar esta declaración con sus registros. How to file past taxes   Si su vista se puede corregir más allá de estos límites únicamente con lentes de contacto que sólo pueda usar durante un corto lapso de tiempo debido a dolor, infección o úlceras, usted puede tomar la deducción estándar más alta por ceguera si reúne los demás requisitos. How to file past taxes Cónyuge de 65 Años o Más o Ciego Puede tomar la deducción estándar mayor si su cónyuge tiene 65 años o más de edad o está ciego y: Ustedes presentan una declaración conjunta o Usted presenta una declaración separada y reclama una exención por su cónyuge porque el mismo no tuvo ningún ingreso bruto; y otro contribuyente no pudo haber reclamado a su cónyuge como dependiente. How to file past taxes No puede tomar la deducción estándar más alta por una persona que no sea usted o su cónyuge. How to file past taxes Ejemplos Los siguientes ejemplos muestran cómo determinar su deducción estándar utilizando la Tabla 20-1 y 20-2. How to file past taxes Ejemplo 1. How to file past taxes Carlos, de 46 años de edad, y Ana, de 33 años de edad, presentan una declaración conjunta en el año 2013. How to file past taxes Ninguno de los dos es ciego ni puede ser reclamado como dependiente. How to file past taxes Ellos optan por no detallar sus deducciones. How to file past taxes Ellos utilizan la Tabla 20-1. How to file past taxes La deducción estándar para ambos es $12,200. How to file past taxes Ejemplo 2. How to file past taxes Los datos son los mismos que en el Ejemplo 1, salvo que Carlos está ciego al final del año 2013. How to file past taxes Carlos y Ana utilizan la Tabla 20-2. How to file past taxes La deducción estándar para ambos es $13,400. How to file past taxes Ejemplo 3. How to file past taxes Roberto y María presentan una declaración conjunta para 2013. How to file past taxes Los dos son mayores de 65 años de edad. How to file past taxes Ninguno de los dos es ciego y ninguno de los dos puede ser reclamado como dependiente. How to file past taxes Si ellos no detallan las deducciones, utilizan la Tabla 20-2. How to file past taxes Su deducción estándar es $14,600. How to file past taxes Deducción Estándar para Dependientes La deducción estándar de una persona quien otra persona puede reclamar como dependiente en su declaración de impuestos suele limitarse a la cantidad siguiente que sea mayor: $1,000 o El ingreso del trabajo de la persona para el año, más $350 (pero no en exceso de la cantidad normal de la deducción estándar, generalmente $6,100). How to file past taxes Sin embargo, la deducción estándar podría ser más alta si la persona tiene 65 años de edad o más o si es ciego. How to file past taxes Si alguna exención suya (o de su cónyuge si presentan una declaración conjunta) se puede reclamar en la declaración de impuestos de otra persona, utilice la Tabla 20-3 para determinar su deducción estándar. How to file past taxes Definición del ingreso del trabajo. How to file past taxes   El ingreso del trabajo corresponde a salarios, sueldos, propinas, honorarios por servicios profesionales y otras cantidades recibidas como pagos por trabajo que usted de hecho realiza. How to file past taxes    Para propósitos de la deducción estándar, el ingreso del trabajo también incluye toda parte de una beca de estudios o de una beca de desarrollo profesional que usted tenga que incluir en el ingreso bruto. How to file past taxes Vea Becas de estudios y becas de desarrollo profesional en el capítulo 12, para más información sobre qué se considera una beca de estudios o una beca de desarrollo profesional. How to file past taxes Ejemplo 1. How to file past taxes Miguel es soltero. How to file past taxes Sus padres reclaman una exención por él en su declaración de impuestos del año 2013. How to file past taxes Tiene ingresos de intereses de $780 y un salario de $150. How to file past taxes No tiene deducciones detalladas. How to file past taxes Miguel utiliza la Tabla 20-3 para calcular su deducción estándar. How to file past taxes Él anota $150 (su ingreso del trabajo) en la línea 1, $500 ($150 + $350) en la línea 3, $1,000 (la cantidad mayor entre $500 y $1,000) en la línea 5, y $6,100 en la línea 6. How to file past taxes Su deducción estándar, la cual se anota en la línea 7a, es de $1,000 (la cantidad menor entre $1,000 y $6,100). How to file past taxes Ejemplo 2. How to file past taxes José, un estudiante universitario a tiempo completo con 22 años de edad, puede ser reclamado como dependiente en la declaración de impuestos del año 2013 de sus padres. How to file past taxes José está casado y presenta una declaración por separado. How to file past taxes Su esposa no detalla sus deducciones en su declaración. How to file past taxes José tiene ingresos de intereses de $1,500 y un salario de $3,800. How to file past taxes Él no tiene deducciones detalladas. How to file past taxes José utiliza la Tabla 20-3 para calcular su deducción estándar. How to file past taxes Él anota su ingreso de trabajo de $3,800 en la línea 1. How to file past taxes Él suma las líneas 1 y 2 y anota $4,150 en la línea 3. How to file past taxes En la línea 5, él anota $4,150, la cantidad mayor entre las líneas 3 y 4. How to file past taxes Ya que José está casado y presenta una declaración por separado, él anota $6,100 en la línea 6. How to file past taxes En la línea 7a, él anota $4,150, como su deducción estándar, porque es menos de $6,100, la cantidad en la línea 6. How to file past taxes Ejemplo 3. How to file past taxes Carla, que es soltera, puede ser reclamada como dependiente en la declaración de impuestos del año 2013 de sus padres. How to file past taxes Tiene 18 años de edad y es ciega. How to file past taxes Tiene ingresos de intereses de $1,300 y un salario de $2,900. How to file past taxes Ella no tiene deducciones detalladas. How to file past taxes Carla consulta la Tabla 20-3 para encontrar su deducción estándar. How to file past taxes Ella anota su salario de $2,900 en la línea 1. How to file past taxes Suma las líneas 1 y 2 y anota $3,250 en la línea 3. How to file past taxes En la línea 5, anota $3,250, la mayor entre las líneas 3 y 4. How to file past taxes Ya que ella es soltera, Carla anota $6,100 en la línea 6. How to file past taxes Anota $3,250 en la línea 7a. How to file past taxes Esta es la menor entre las cantidades de las líneas 5 y 6. How to file past taxes Ya que ella marcó el recuadro en la parte superior de la hoja, ella anota $1,500 en la línea 7b. How to file past taxes Luego, suma las cantidades de las líneas 7a y 7b y anota su deducción estándar de $4,750 en la línea 7c. How to file past taxes Ejemplo 4. How to file past taxes Edgardo es soltero. How to file past taxes Sus padres pueden reclamar una exención por él en su declaración del 2013. How to file past taxes Su salario es de $7,000, tiene ingresos por intereses de $500, y pérdida de negocio de $3,000. How to file past taxes Él no tiene deducciones detalladas. How to file past taxes Edgardo utiliza la Tabla 20-3 para calcular su deducción estándar. How to file past taxes Él anota $4,000 ($7,000 - $ 3,000) en la línea 1. How to file past taxes Suma las líneas 1 y 2 y anota $4,350 en la línea 3. How to file past taxes En la línea 5, anota $4,350, la cantidad mayor entre las líneas 3 y 4. How to file past taxes Ya que él es soltero, Edgardo anota $6,100 en la línea 6. How to file past taxes En la línea 7a, anota $4,350 como su deducción estándar porque es menor de $6,100, la cantidad que fue anotada en la línea 6. How to file past taxes Quién Debe Detallar las Deducciones Debe detallar las deducciones si el total de las mismas es mayor que la cantidad de la deducción estándar. How to file past taxes Además, debe detallar las deducciones si no reúne los requisitos para la deducción estándar, según se explicó anteriormente bajo Personas que no reúnen los requisitos para la deducción estándar . How to file past taxes Debe calcular primero las deducciones detalladas y comparar aquella cantidad con su deducción estándar para asegurarse de estar utilizando el método que le brinda el mayor beneficio. How to file past taxes Puede estar sujeto a un límite en algunas de sus deducciones detalladas si su ingreso bruto ajustado es mayor que: $250,000 si es soltero ($275,000 si es cabeza de familia, $300,000 si es casado que presenta una declaración conjunta o viudo(a) que reúne los requisitos; o $150,000 si es casado que presenta la declaración por separado). How to file past taxes Vea el capítulo 29 o las instrucciones para el Anexo A (Formulario 1040) para más información sobre cómo calcular la cantidad exacta de sus deducciones detalladas. How to file past taxes Cuándo detallar las deducciones. How to file past taxes   Es posible que le convenga detallar sus deducciones en el Anexo A (Formulario 1040) si usted: No reúne los requisitos para la deducción estándar o la cantidad que puede reclamar está limitada, Tuvo gastos médicos o dentales cuantiosos que no fueron cubiertos por su seguro durante el año, Pagó intereses e impuestos sobre su vivienda, Tuvo gastos de negocio del empleado cuantiosos que no fueron reembolsados por su empleador u otras deducciones misceláneas, Tuvo pérdidas por hechos fortuitos o por robo cuantiosas que no fueron cubiertas por su seguro, Hizo aportaciones cuantiosas a instituciones de caridad calificadas, o Tiene deducciones detalladas cuyo total es mayor que la deducción estándar a la que, por lo demás, tiene derecho. How to file past taxes Estas deducciones se explican en los capítulos 21 al 28. How to file past taxes   Si decide detallar las deducciones, complete el Anexo A y adjúntelo a su Formulario 1040. How to file past taxes Anote la cantidad de la línea 29 del Anexo A en la línea 40 del Formulario 1040. How to file past taxes Puede optar por detallar las deducciones para impuestos estatales u otros propósitos. How to file past taxes   Aun si sus deducciones detalladas son menos que su deducción estándar, puede optar por detallar sus deducciones en la declaración de impuestos federales en vez de tomar la deducción estándar. How to file past taxes Es posible que le convenga hacer esto si, por ejemplo, el beneficio tributario de detallar sus deducciones en la declaración de impuestos estatales es mayor que el beneficio tributario que pierde si no toma la deducción estándar en la declaración de impuestos federales. How to file past taxes Para elegir esta opción, tiene que marcar el recuadro de la línea 30 del Anexo A. How to file past taxes Si cambia de idea. How to file past taxes   Si no detalla las deducciones y más tarde se da cuenta de que debió haberlas detallado –o si detalla las deducciones y más tarde se da cuenta de que no debió haberlo hecho– puede cambiar su declaración de impuestos presentando el Formulario 1040X, Amended U. How to file past taxes S. How to file past taxes Individual Income Tax Return (Declaración enmendada del impuesto federal sobre el ingreso personal en los Estados Unidos), en inglés. How to file past taxes Vea Declaraciones Enmendadas y Solicitudes de Reembolso en el capítulo 1 para más información sobre las declaraciones enmendadas. How to file past taxes Personas casadas que presentan la declaración por separado. How to file past taxes   Puede cambiar de método para tomar deducciones sólo si usted y su cónyuge hacen los mismos cambios. How to file past taxes Cada uno de los dos tienen que presentar una autorización para permitir la determinación de impuestos adicionales que cualquiera de ustedes pueda adeudar como resultado de dicho cambio. How to file past taxes    Usted y su cónyuge pueden utilizar el método que les resulte en el total de impuestos más bajo, aunque uno de ustedes quizá pague más impuestos de los que hubiera pagado al utilizar el otro método. How to file past taxes Tanto usted como su cónyuge tienen que utilizar el mismo método para reclamar deducciones. How to file past taxes Si uno de ustedes detalla sus deducciones, el otro debe detallar sus deducciones también, porque él o ella no reunirá los requisitos para la deducción estándar. How to file past taxes Vea Personas que no reúnen los requisitos para la deduccón estándar , anteriormente. How to file past taxes Tablas de Deducción Estándar para el 2013 Si usted es casado que presenta la declaración por separado y su cónyuge detalla las deducciones, o si usted es extranjero con doble residencia, no puede tomar la deducción estándar aunque haya nacido antes del 2 de enero de 1949 o sea ciego. How to file past taxes Tabla 20-1. How to file past taxes Tabla de Deducción Estándar para la Mayoría de las Personas* Si su estado civil para efectos de la  declaración es Entonces su  deducción  estándar es: Soltero o casado que presenta la declaración por separado $6,100 Casado que presenta la declaración conjunta o viudo(a) que reúne los requisitos con hijo dependiente 12,200 Cabeza de familia 8,950 * No utilice esta tabla si nació antes del 2 de enero de 1949, o es ciego, o si alguien más puede reclamar una exención por usted (o por su cónyuge, si es casado que presenta la declaración conjuntamente). How to file past taxes En vez de ésta, utilice la Tabla 20-2 ó 20-3. How to file past taxes Tabla 20-2. How to file past taxes Tabla de la Deducción Estándar para Personas que Nacieron Antes del 2 de enero de 1949 o que sean ciegas* Marque el número correcto de recuadros siguientes. How to file past taxes Luego pase a la tabla. How to file past taxes Usted: Nació antes del  2 de enero de 1949□ Es ciego□ Su cónyuge, si reclama  una exención por él o ella: Nació antes del  2 de enero de 1949 □ Es ciego□ Número total de recuadros que marcó   SI su estado civil para   efectos de la  declaración es Y el número en el  recuadro de arriba es ENTONCES su deducción  estándar es: Soltero 1 $7,600   2 9,100 Casado que presenta la 1 $13,400 declaración conjunta o 2 14,600 viudo(a) que reúne los requisitos 3 15,800 con hijo dependiente 4 17,000 Casado que presenta 1 $7,300 la declaración por separado 2 8,500   3 9,700   4 10,900 Cabeza de familia 1 $10,450   2 11,950 *Si alguien más puede reclamar una exención por usted (o su cónyuge, si presenta la declaración conjunta), utilice la tabla 20-3, en vez de ésta. How to file past taxes Tabla 20-3. How to file past taxes Tabla de Deducción Estándar para Dependientes Utilice esta hoja de trabajo sólo si alguien más puede reclamar una exención por usted (o por su cónyuge, si es casado que presenta la declaración conjuntamente). How to file past taxes Marque el número correcto de recuadros más abajo. How to file past taxes Luego pase a la hoja de trabajo. How to file past taxes Usted:   Nació antes del 2 de enero de 1949 □ Es ciego □ Su cónyuge, si reclama una exención por él o ella: Nació antes del 2 de enero de 1949 □ Es ciego □ Número total de recuadros que marcó 1. How to file past taxes Anote su ingreso del trabajo (definido más abajo). How to file past taxes Si no tiene ninguno, anote -0-. How to file past taxes 1. How to file past taxes   2. How to file past taxes Cantidad adicional. How to file past taxes 2. How to file past taxes $350 3. How to file past taxes Sume las líneas 1 y 2. How to file past taxes 3. How to file past taxes   4. How to file past taxes Deducción estándar mínima. How to file past taxes 4. How to file past taxes $1,000 5. How to file past taxes De las líneas 3 ó 4, anote la cantidad mayor. How to file past taxes 5. How to file past taxes   6. How to file past taxes Anote una de las cantidades siguientes según su estado civil para efectos de la declaración. How to file past taxes Soltero o Casado que presenta la declaración por separado—$6,100 Casado que presenta la declaración conjunta—$12,200 Cabeza de familia—$8,950 6. How to file past taxes   7. How to file past taxes Deducción estándar. How to file past taxes         a. How to file past taxes De las líneas 5 ó 6, anote la cantidad que sea menor. How to file past taxes Si nació después del 1 de enero de 1949, y no es ciego, pare. How to file past taxes Ésta es su deducción estándar. How to file past taxes De lo contrario, pase a la línea 7b. How to file past taxes 7a. How to file past taxes     b. How to file past taxes Si nació antes del 2 de enero de 1949, o si es ciego, multiplique $1,500 ($1,200 si es casado) por la cifra en la línea de arriba. How to file past taxes 7b. How to file past taxes     c. How to file past taxes Sume las líneas 7a y 7b. How to file past taxes Ésta es su deducción estándar para el año 2013. How to file past taxes 7c. How to file past taxes   El ingreso del trabajo incluye salarios, sueldos, propinas, honorarios por servicios profesionales y otras remuneraciones recibidas por servicios personales que usted prestó. How to file past taxes También incluye toda cantidad recibida por concepto de beca que deba incluir en sus ingresos. How to file past taxes Prev  Up  Next   Home   More Online Publications
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How to file past taxes 1. How to file past taxes   Deducting Business Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: What Can I Deduct?Cost of Goods Sold Capital Expenses Capital versus Deductible Expenses Personal versus Business Expenses How Much Can I Deduct?Not-for-profit limits. How to file past taxes At-risk limits. How to file past taxes Passive activities. How to file past taxes Net operating loss. How to file past taxes When Can I Deduct an Expense?Economic performance. How to file past taxes Not-for-Profit ActivitiesGross Income Limit on Deductions What's New Optional safe harbor method to determine the business use of a home deduction. How to file past taxes  Beginning in 2013, you can use the optional safe harbor method to determine the deduction for the business use of your home. How to file past taxes See Optional safe harbor method under Business use of your home , later. How to file past taxes Introduction This chapter covers the general rules for deducting business expenses. How to file past taxes Business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit. How to file past taxes Topics - This chapter discusses: What you can deduct How much you can deduct When you can deduct Not-for-profit activities Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 538 Accounting Periods and Methods 542 Corporations 547 Casualties, Disasters, and Thefts 587 Business Use of Your Home 925 Passive Activity and At-Risk Rules 936 Home Mortgage Interest Deduction 946 How To Depreciate Property Form (and Instructions) Sch A (Form 1040) Itemized Deductions 5213 Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit See chapter 12 for information about getting publications and forms. How to file past taxes What Can I Deduct? To be deductible, a business expense must be both ordinary and necessary. How to file past taxes An ordinary expense is one that is common and accepted in your industry. How to file past taxes A necessary expense is one that is helpful and appropriate for your trade or business. How to file past taxes An expense does not have to be indispensable to be considered necessary. How to file past taxes Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year you paid or incurred it. How to file past taxes In some cases you may not be allowed to deduct the expense at all. How to file past taxes Therefore, it is important to distinguish usual business expenses from expenses that include the following. How to file past taxes The expenses used to figure cost of goods sold, Capital expenses, and Personal expenses. How to file past taxes Cost of Goods Sold If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. How to file past taxes Some of your business expenses may be included in figuring cost of goods sold. How to file past taxes Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. How to file past taxes If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense. How to file past taxes The following are types of expenses that go into figuring cost of goods sold. How to file past taxes The cost of products or raw materials, including freight. How to file past taxes Storage. How to file past taxes Direct labor (including contributions to pension or annuity plans) for workers who produce the products. How to file past taxes Factory overhead. How to file past taxes Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. How to file past taxes Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs. How to file past taxes This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million. How to file past taxes For more information, see the following sources. How to file past taxes Cost of goods sold—chapter 6 of Publication 334. How to file past taxes Inventories—Publication 538. How to file past taxes Uniform capitalization rules—Publication 538 and section 263A of the Internal Revenue Code and the related regulations. How to file past taxes Capital Expenses You must capitalize, rather than deduct, some costs. How to file past taxes These costs are a part of your investment in your business and are called “capital expenses. How to file past taxes ” Capital expenses are considered assets in your business. How to file past taxes In general, you capitalize three types of costs. How to file past taxes Business start-up costs (See Tip below). How to file past taxes Business assets. How to file past taxes Improvements. How to file past taxes You can elect to deduct or amortize certain business start-up costs. How to file past taxes See chapters 7 and 8. How to file past taxes Cost recovery. How to file past taxes   Although you generally cannot take a current deduction for a capital expense, you may be able to recover the amount you spend through depreciation, amortization, or depletion. How to file past taxes These recovery methods allow you to deduct part of your cost each year. How to file past taxes In this way, you are able to recover your capital expense. How to file past taxes See Amortization (chapter 8) and Depletion (chapter 9) in this publication. How to file past taxes A taxpayer can elect to deduct a portion of the costs of certain depreciable property as a section 179 deduction. How to file past taxes A greater portion of these costs can be deducted if the property is qualified disaster assistance property. How to file past taxes See Publication 946 for details. How to file past taxes Going Into Business The costs of getting started in business, before you actually begin business operations, are capital expenses. How to file past taxes These costs may include expenses for advertising, travel, or wages for training employees. How to file past taxes If you go into business. How to file past taxes   When you go into business, treat all costs you had to get your business started as capital expenses. How to file past taxes   Usually you recover costs for a particular asset through depreciation. How to file past taxes Generally, you cannot recover other costs until you sell the business or otherwise go out of business. How to file past taxes However, you can choose to amortize certain costs for setting up your business. How to file past taxes See Starting a Business in chapter 8 for more information on business start-up costs. How to file past taxes If your attempt to go into business is unsuccessful. How to file past taxes   If you are an individual and your attempt to go into business is not successful, the expenses you had in trying to establish yourself in business fall into two categories. How to file past taxes The costs you had before making a decision to acquire or begin a specific business. How to file past taxes These costs are personal and nondeductible. How to file past taxes They include any costs incurred during a general search for, or preliminary investigation of, a business or investment possibility. How to file past taxes The costs you had in your attempt to acquire or begin a specific business. How to file past taxes These costs are capital expenses and you can deduct them as a capital loss. How to file past taxes   If you are a corporation and your attempt to go into a new trade or business is not successful, you may be able to deduct all investigatory costs as a loss. How to file past taxes   The costs of any assets acquired during your unsuccessful attempt to go into business are a part of your basis in the assets. How to file past taxes You cannot take a deduction for these costs. How to file past taxes You will recover the costs of these assets when you dispose of them. How to file past taxes Business Assets There are many different kinds of business assets; for example, land, buildings, machinery, furniture, trucks, patents, and franchise rights. How to file past taxes You must fully capitalize the cost of these assets, including freight and installation charges. How to file past taxes Certain property you produce for use in your trade or business must be capitalized under the uniform capitalization rules. How to file past taxes See Regulations section 1. How to file past taxes 263A-2 for information on these rules. How to file past taxes Improvements Improvements are generally major expenditures. How to file past taxes Some examples are: new electric wiring, a new roof, a new floor, new plumbing, bricking up windows to strengthen a wall, and lighting improvements. How to file past taxes The costs of making improvements to a business asset are capital expenses if the improvements add to the value of the asset, appreciably lengthen the time you can use it, or adapt it to a different use. How to file past taxes Beginning in 2014, you must capitalize as improvements costs that are for the betterment of a unit of property, restore the unit of property, or adapt the unit of property to a new or different use. How to file past taxes Temporary regulations allow you to capitalize costs meeting the above criteria for tax years beginning after 2011. How to file past taxes However, you can currently deduct repairs that keep your property in a normal efficient operating condition as a business expense. How to file past taxes Treat as repairs amounts paid to replace parts of a machine that only keep it in a normal operating condition. How to file past taxes Restoration plan. How to file past taxes   Capitalize the cost of reconditioning, improving, or altering your property as part of a general restoration plan to make it suitable for your business. How to file past taxes This applies even if some of the work would by itself be classified as repairs. How to file past taxes Capital versus Deductible Expenses To help you distinguish between capital and deductible expenses, different examples are given below. How to file past taxes Motor vehicles. How to file past taxes   You usually capitalize the cost of a motor vehicle you use in your business. How to file past taxes You can recover its cost through annual deductions for depreciation. How to file past taxes   There are dollar limits on the depreciation you can claim each year on passenger automobiles used in your business. How to file past taxes See Publication 463. How to file past taxes   Generally, repairs you make to your business vehicle are currently deductible. How to file past taxes However, amounts you pay to recondition and overhaul a business vehicle are capital expenses and are recovered through depreciation. How to file past taxes Roads and driveways. How to file past taxes    The cost of building a private road on your business property and the cost of replacing a gravel driveway with a concrete one are capital expenses you may be able to depreciate. How to file past taxes The cost of maintaining a private road on your business property is a deductible expense. How to file past taxes Tools. How to file past taxes   Unless the uniform capitalization rules apply, amounts spent for tools used in your business are deductible expenses if the tools have a life expectancy of less than 1 year or their cost is minor. How to file past taxes Machinery parts. How to file past taxes   Unless the uniform capitalization rules apply, the cost of replacing short-lived parts of a machine to keep it in good working condition, but not add to its life, is a deductible expense. How to file past taxes Heating equipment. How to file past taxes   The cost of changing from one heating system to another is a capital expense. How to file past taxes Personal versus Business Expenses Generally, you cannot deduct personal, living, or family expenses. How to file past taxes However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. How to file past taxes You can deduct the business part. How to file past taxes For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you generally can deduct 70% of the interest as a business expense. How to file past taxes The remaining 30% is personal interest and generally is not deductible. How to file past taxes See chapter 4 for information on deducting interest and the allocation rules. How to file past taxes Business use of your home. How to file past taxes   If you use part of your home for business, you may be able to deduct expenses for the business use of your home. How to file past taxes These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. How to file past taxes   To qualify to claim expenses for the business use of your home, you must meet both of the following tests. How to file past taxes The business part of your home must be used exclusively and regularly for your trade or business. How to file past taxes The business part of your home must be: Your principal place of business, or A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) used in connection with your trade or business. How to file past taxes   You generally do not have to meet the exclusive use test for the part of your home that you regularly use either for the storage of inventory or product samples, or as a daycare facility. How to file past taxes   Your home office qualifies as your principal place of business if you meet the following requirements. How to file past taxes You use the office exclusively and regularly for administrative or management activities of your trade or business. How to file past taxes You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. How to file past taxes   If you have more than one business location, determine your principal place of business based on the following factors. How to file past taxes The relative importance of the activities performed at each location. How to file past taxes If the relative importance factor does not determine your principal place of business, consider the time spent at each location. How to file past taxes Optional safe harbor method. How to file past taxes   Beginning in 2013, individual taxpayers can use the optional safe harbor method to determine the amount of deductible expenses attributable to certain business use of a residence during the tax year. How to file past taxes This method is an alternative to the calculation, allocation, and substantiation of actual expenses. How to file past taxes   The deduction under the optional method is limited to $1,500 per year based on $5 a square foot for up to 300 square feet. How to file past taxes Under this method, you claim your allowable mortgage interest, real estate taxes, and casualty losses on the home as itemized deductions on Schedule A (Form 1040). How to file past taxes You are not required to allocate these deductions between personal and business use, as is required under the regular method. How to file past taxes If you use the optional method, you cannot depreciate the portion of your home used in a trade or business. How to file past taxes   Business expenses unrelated to the home, such as advertising, supplies, and wages paid to employees, are still fully deductible. How to file past taxes All of the requirements discussed earlier under Business use of your home still apply. How to file past taxes   For more information on the deduction for business use of your home, including the optional safe harbor method, see Publication 587. How to file past taxes    If you were entitled to deduct depreciation on the part of your home used for business, you cannot exclude the part of the gain from the sale of your home that equals any depreciation you deducted (or could have deducted) for periods after May 6, 1997. How to file past taxes Business use of your car. How to file past taxes   If you use your car exclusively in your business, you can deduct car expenses. How to file past taxes If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. How to file past taxes Generally, commuting expenses between your home and your business location, within the area of your tax home, are not deductible. How to file past taxes   You can deduct actual car expenses, which include depreciation (or lease payments), gas and oil, tires, repairs, tune-ups, insurance, and registration fees. How to file past taxes Or, instead of figuring the business part of these actual expenses, you may be able to use the standard mileage rate to figure your deduction. How to file past taxes Beginning in 2013, the standard mileage rate is 56. How to file past taxes 5 cents per mile. How to file past taxes   If you are self-employed, you can also deduct the business part of interest on your car loan, state and local personal property tax on the car, parking fees, and tolls, whether or not you claim the standard mileage rate. How to file past taxes   For more information on car expenses and the rules for using the standard mileage rate, see Publication 463. How to file past taxes How Much Can I Deduct? Generally, you can deduct the full amount of a business expense if it meets the criteria of ordinary and necessary and it is not a capital expense. How to file past taxes Recovery of amount deducted (tax benefit rule). How to file past taxes   If you recover part of an expense in the same tax year in which you would have claimed a deduction, reduce your current year expense by the amount of the recovery. How to file past taxes If you have a recovery in a later year, include the recovered amount in income in that year. How to file past taxes However, if part of the deduction for the expense did not reduce your tax, you do not have to include that part of the recovered amount in income. How to file past taxes   For more information on recoveries and the tax benefit rule, see Publication 525. How to file past taxes Payments in kind. How to file past taxes   If you provide services to pay a business expense, the amount you can deduct is limited to your out-of-pocket costs. How to file past taxes You cannot deduct the cost of your own labor. How to file past taxes   Similarly, if you pay a business expense in goods or other property, you can deduct only what the property costs you. How to file past taxes If these costs are included in the cost of goods sold, do not deduct them again as a business expense. How to file past taxes Limits on losses. How to file past taxes   If your deductions for an investment or business activity are more than the income it brings in, you have a loss. How to file past taxes There may be limits on how much of the loss you can deduct. How to file past taxes Not-for-profit limits. How to file past taxes   If you carry on your business activity without the intention of making a profit, you cannot use a loss from it to offset other income. How to file past taxes See Not-for-Profit Activities , later. How to file past taxes At-risk limits. How to file past taxes   Generally, a deductible loss from a trade or business or other income-producing activity is limited to the investment you have “at risk” in the activity. How to file past taxes You are at risk in any activity for the following. How to file past taxes The money and adjusted basis of property you contribute to the activity. How to file past taxes 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 file past taxes For more information, see Publication 925. How to file past taxes Passive activities. How to file past taxes   Generally, you are in a passive activity if you have a trade or business activity in which you do not materially participate, or a rental activity. How to file past taxes In general, deductions for losses from passive activities only offset income from passive activities. How to file past taxes You cannot use any excess deductions to offset other income. How to file past taxes In addition, passive activity credits can only offset the tax on net passive income. How to file past taxes Any excess loss or credits are carried over to later years. How to file past taxes Suspended passive losses are fully deductible in the year you completely dispose of the activity. How to file past taxes For more information, see Publication 925. How to file past taxes Net operating loss. How to file past taxes   If your deductions are more than your income for the year, you may have a “net operating loss. How to file past taxes ” You can use a net operating loss to lower your taxes in other years. How to file past taxes See Publication 536 for more information. How to file past taxes   See Publication 542 for information about net operating losses of corporations. How to file past taxes When Can I Deduct an Expense? When you can deduct an expense depends on your accounting method. How to file past taxes An accounting method is a set of rules used to determine when and how income and expenses are reported. How to file past taxes The two basic methods are the cash method and the accrual method. How to file past taxes Whichever method you choose must clearly reflect income. How to file past taxes For more information on accounting methods, see Publication 538. How to file past taxes Cash method. How to file past taxes   Under the cash method of accounting, you generally deduct business expenses in the tax year you pay them. How to file past taxes Accrual method. How to file past taxes   Under an accrual method of accounting, you generally deduct business expenses when both of the following apply. How to file past taxes The all-events test has been met. How to file past taxes The test is met when: All events have occurred that fix the fact of liability, and The liability can be determined with reasonable accuracy. How to file past taxes Economic performance has occurred. How to file past taxes Economic performance. How to file past taxes   You generally cannot deduct or capitalize a business expense until economic performance occurs. How to file past taxes If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided, or the property is used. How to file past taxes If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. How to file past taxes Example. How to file past taxes Your tax year is the calendar year. How to file past taxes In December 2013, the Field Plumbing Company did some repair work at your place of business and sent you a bill for $600. How to file past taxes You paid it by check in January 2014. How to file past taxes If you use the accrual method of accounting, deduct the $600 on your tax return for 2013 because all events have occurred to “fix” the fact of liability (in this case the work was completed), the liability can be determined, and economic performance occurred in that year. How to file past taxes If you use the cash method of accounting, deduct the expense on your 2014 return. How to file past taxes Prepayment. How to file past taxes   You generally cannot deduct expenses in advance, even if you pay them in advance. How to file past taxes This rule applies to both the cash and accrual methods. How to file past taxes It applies to prepaid interest, prepaid insurance premiums, and any other expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. How to file past taxes Example. How to file past taxes In 2013, you sign a 10-year lease and immediately pay your rent for the first 3 years. How to file past taxes Even though you paid the rent for 2013, 2014, and 2015, you can only deduct the rent for 2013 on your 2013 tax return. How to file past taxes You can deduct the rent for 2014 and 2015 on your tax returns for those years. How to file past taxes Contested liability. How to file past taxes   Under the cash method, you can deduct a contested liability only in the year you pay the liability. How to file past taxes Under the accrual method, you can deduct contested liabilities such as taxes (except foreign or U. How to file past taxes S. How to file past taxes possession income, war profits, and excess profits taxes) either in the tax year you pay the liability (or transfer money or other property to satisfy the obligation) or in the tax year you settle the contest. How to file past taxes However, to take the deduction in the year of payment or transfer, you must meet certain conditions. How to file past taxes See Regulations section 1. How to file past taxes 461-2. How to file past taxes Related person. How to file past taxes   Under an accrual method of accounting, you generally deduct expenses when you incur them, even if you have not yet paid them. How to file past taxes However, if you and the person you owe are related and that person uses the cash method of accounting, you must pay the expense before you can deduct it. How to file past taxes Your deduction is allowed when the amount is includible in income by the related cash method payee. How to file past taxes See Related Persons in Publication 538. How to file past taxes Not-for-Profit Activities If you do not carry on your business or investment activity to make a profit, you cannot use a loss from the activity to offset other income. How to file past taxes Activities you do as a hobby, or mainly for sport or recreation, are often not entered into for profit. How to file past taxes The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. How to file past taxes It does not apply to corporations other than S corporations. How to file past taxes In determining whether you are carrying on an activity for profit, several factors are taken into account. How to file past taxes No one factor alone is decisive. How to file past taxes Among the factors to consider are whether: You carry on the activity in a businesslike manner, The time and effort you put into the activity indicate you intend to make it profitable, You depend on the income for your livelihood, Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), You change your methods of operation in an attempt to improve profitability, You (or your advisors) have the knowledge needed to carry on the activity as a successful business, You were successful in making a profit in similar activities in the past, The activity makes a profit in some years, and You can expect to make a future profit from the appreciation of the assets used in the activity. How to file past taxes Presumption of profit. How to file past taxes   An 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 file past taxes 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 file past taxes The activity must be substantially the same for each year within this period. How to file past taxes You have a profit when the gross income from an activity exceeds the deductions. How to file past taxes   If a taxpayer dies before the end of the 5-year (or 7-year) period, the “test” period ends on the date of the taxpayer's death. How to file past taxes   If your business or investment activity passes this 3- (or 2-) years-of-profit test, the IRS will presume it is carried on for profit. How to file past taxes This means the limits discussed here will not apply. How to file past taxes You can take all your business deductions from the activity, even for the years that you have a loss. How to file past taxes You can rely on this presumption unless the IRS later shows it to be invalid. How to file past taxes Using the presumption later. How to file past taxes   If you are starting an activity and do not have 3 (or 2) years showing a profit, you can elect to have the presumption made after you have the 5 (or 7) years of experience allowed by the test. How to file past taxes   You can elect to do this by filing Form 5213. How to file past taxes Filing this form postpones any determination that your activity is not carried on for profit until 5 (or 7) years have passed since you started the activity. How to file past taxes   The benefit gained by making this election is that the IRS will not immediately question whether your activity is engaged in for profit. How to file past taxes Accordingly, it will not restrict your deductions. How to file past taxes Rather, you will gain time to earn a profit in the required number of years. How to file past taxes 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 file past taxes If you do not have 3 (or 2) years of profit, the limit can be applied retroactively to any year with a loss in the 5-year (or 7-year) period. How to file past taxes   Filing Form 5213 automatically extends the period of limitations on any year in the 5-year (or 7-year) period to 2 years after the due date of the return for the last year of the period. How to file past taxes The period is extended only for deductions of the activity and any related deductions that might be affected. How to file past taxes    You must file Form 5213 within 3 years after the due date of your return (determined without extensions) for the year in which you first carried on the activity, or, if earlier, within 60 days after receiving written notice from the Internal Revenue Service proposing to disallow deductions attributable to the activity. How to file past taxes Gross Income Gross income from a not-for-profit activity includes the total of all gains from the sale, exchange, or other disposition of property, and all other gross receipts derived from the activity. How to file past taxes Gross income from the activity also includes capital gains and rents received for the use of property which is held in connection with the activity. How to file past taxes You can determine gross income from any not-for-profit activity by subtracting the cost of goods sold from your gross receipts. How to file past taxes However, if you determine gross income by subtracting cost of goods sold from gross receipts, you must do so consistently, and in a manner that follows generally accepted methods of accounting. How to file past taxes Limit on Deductions If your activity is not carried on for profit, take deductions in the following order and only to the extent stated in the three categories. How to file past taxes If you are an individual, these deductions may be taken only if you itemize. How to file past taxes These deductions may be taken on Schedule A (Form 1040). How to file past taxes Category 1. How to file past taxes   Deductions you can take for personal as well as for business activities are allowed in full. How to file past taxes For individuals, all nonbusiness deductions, such as those for home mortgage interest, taxes, and casualty losses, belong in this category. How to file past taxes Deduct them on the appropriate lines of Schedule A (Form 1040). How to file past taxes For tax years beginning after December 31, 2008, you can deduct a casualty loss on property you own for personal use only to the extent it is more than $500 and exceeds 10% of your adjusted gross income (AGI). How to file past taxes The 10% AGI limitation does not apply to net disaster losses resulting from federally declared disasters in 2008 and 2009, and individuals are allowed to claim the net disaster losses even if they do not itemize their deductions. How to file past taxes The reduction amount returns to $100 for tax years beginning after December 31, 2009. How to file past taxes See Publication 547 for more information on casualty losses. How to file past taxes For the limits that apply to home mortgage interest, see Publication 936. How to file past taxes Category 2. How to file past taxes   Deductions that do not result in an adjustment to the basis of property are allowed next, but only to the extent your gross income from the activity is more than your deductions under the first category. How to file past taxes Most business deductions, such as those for advertising, insurance premiums, interest, utilities, and wages, belong in this category. How to file past taxes Category 3. How to file past taxes   Business deductions that decrease the basis of property are allowed last, but only to the extent the gross income from the activity exceeds the deductions you take under the first two categories. How to file past taxes Deductions for depreciation, amortization, and the part of a casualty loss an individual could not deduct in category (1) belong in this category. How to file past taxes Where more than one asset is involved, allocate depreciation and these other deductions proportionally. How to file past taxes    Individuals must claim the amounts in categories (2) and (3) as miscellaneous deductions on Schedule A (Form 1040). How to file past taxes They are subject to the 2%-of-adjusted-gross-income limit. How to file past taxes See Publication 529 for information on this limit. How to file past taxes Example. How to file past taxes Adriana is engaged in a not-for-profit activity. How to file past taxes The income and expenses of the activity are as follows. How to file past taxes Gross income $3,200 Subtract:     Real estate taxes $700   Home mortgage interest 900   Insurance 400   Utilities 700   Maintenance 200   Depreciation on an automobile 600   Depreciation on a machine 200 3,700 Loss $(500)   Adriana must limit her deductions to $3,200, the gross income she earned from the activity. How to file past taxes The limit is reached in category (3), as follows. How to file past taxes Limit on deduction $3,200 Category 1: Taxes and interest $1,600   Category 2: Insurance, utilities, and maintenance 1,300 2,900 Available for Category 3 $ 300   The $800 of depreciation is allocated between the automobile and machine as follows. How to file past taxes $600 $800 x $300 = $225 depreciation for the automobile             $200 $800 x $300 = $75 depreciation for the machine The basis of each asset is reduced accordingly. How to file past taxes Adriana includes the $3,200 of gross income on line 21 (other income) of Form 1040. How to file past taxes The $1,600 for category (1) is deductible in full on the appropriate lines for taxes and interest on Schedule A (Form 1040). How to file past taxes Adriana deducts the remaining $1,600 ($1,300 for category (2) and $300 for category (3)) as other miscellaneous deductions on Schedule A (Form 1040) subject to the 2%-of-adjusted-gross-income limit. How to file past taxes Partnerships and S corporations. How to file past taxes   If a partnership or S corporation carries on a not-for-profit activity, these limits apply at the partnership or S corporation level. How to file past taxes They are reflected in the individual shareholder's or partner's distributive shares. How to file past taxes More than one activity. How to file past taxes   If you have several undertakings, each may be a separate activity or several undertakings may be combined. How to file past taxes The following are the most significant facts and circumstances in making this determination. How to file past taxes The degree of organizational and economic interrelationship of various undertakings. How to file past taxes The business purpose that is (or might be) served by carrying on the various undertakings separately or together in a business or investment setting. How to file past taxes The similarity of the undertakings. How to file past taxes   The IRS will generally accept your characterization if it is supported by facts and circumstances. How to file past taxes    If you are carrying on two or more different activities, keep the deductions and income from each one separate. How to file past taxes Figure separately whether each is a not-for-profit activity. How to file past taxes Then figure the limit on deductions and losses separately for each activity that is not for profit. How to file past taxes Prev  Up  Next   Home   More Online Publications