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Irs File 2011 Taxes

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Irs File 2011 Taxes

Irs file 2011 taxes Part Five -   Standard Deduction and Itemized Deductions After you have figured your adjusted gross income, you are ready to subtract the deductions used to figure taxable income. Irs file 2011 taxes You can subtract either the standard deduction or itemized deductions. Irs file 2011 taxes Itemized deductions are deductions for certain expenses that are listed on Schedule A (Form 1040). Irs file 2011 taxes The ten chapters in this part discuss the standard deduction, each itemized deduction, and a limit on some of your itemized deductions if your adjusted gross income is more than certain amounts. Irs file 2011 taxes See chapter 20 for the factors to consider when deciding whether to subtract the standard deduction or itemized deductions. Irs file 2011 taxes Table of Contents 20. Irs file 2011 taxes   Standard DeductionWhat's New Introduction Standard Deduction Amount Standard Deduction for Dependents Who Should ItemizeWhen to itemize. Irs file 2011 taxes Married persons who filed separate returns. Irs file 2011 taxes 21. Irs file 2011 taxes   Medical and Dental ExpensesWhat's New Introduction Useful Items - You may want to see: What Are Medical Expenses? What Expenses Can You Include This Year?Community property states. Irs file 2011 taxes How Much of the Expenses Can You Deduct? Whose Medical Expenses Can You Include?Yourself Spouse Dependent Decedent What Medical Expenses Are Includible?Insurance Premiums Meals and Lodging Transportation Disabled Dependent Care Expenses How Do You Treat Reimbursements?Insurance Reimbursement Damages for Personal Injuries How Do You Figure and Report the Deduction on Your Tax Return?What Tax Form Do You Use? Impairment-Related Work Expenses Health Insurance Costs for Self-Employed Persons 22. Irs file 2011 taxes   TaxesIntroductionIndian tribal government. Irs file 2011 taxes Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. Irs file 2011 taxes Real Estate TaxesReal estate taxes for prior years. Irs file 2011 taxes Examples. Irs file 2011 taxes Form 1099-S. Irs file 2011 taxes Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct 23. Irs file 2011 taxes   Interest ExpenseIntroduction Useful Items - You may want to see: Home Mortgage InterestAmount Deductible Points Mortgage Insurance Premiums Form 1098, Mortgage Interest Statement Investment InterestInvestment Property Allocation of Interest Expense Limit on Deduction Items You Cannot DeductPersonal Interest Allocation of Interest How To ReportMore than one borrower. Irs file 2011 taxes Mortgage proceeds used for business or investment. Irs file 2011 taxes 24. Irs file 2011 taxes   ContributionsIntroduction Useful Items - You may want to see: Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions of PropertyException. Irs file 2011 taxes Household items. Irs file 2011 taxes Deduction more than $500. Irs file 2011 taxes Form 1098-C. Irs file 2011 taxes Filing deadline approaching and still no Form 1098-C. Irs file 2011 taxes Exception 1—vehicle used or improved by organization. Irs file 2011 taxes Exception 2—vehicle given or sold to needy individual. Irs file 2011 taxes Deduction $500 or less. Irs file 2011 taxes Right to use property. Irs file 2011 taxes Tangible personal property. Irs file 2011 taxes Future interest. Irs file 2011 taxes Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value When To DeductChecks. Irs file 2011 taxes Text message. Irs file 2011 taxes Credit card. Irs file 2011 taxes Pay-by-phone account. Irs file 2011 taxes Stock certificate. Irs file 2011 taxes Promissory note. Irs file 2011 taxes Option. Irs file 2011 taxes Borrowed funds. Irs file 2011 taxes Limits on DeductionsCarryovers Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To Report 25. Irs file 2011 taxes   Nonbusiness Casualty and Theft LossesWhat's New Introduction Useful Items - You may want to see: CasualtyFamily pet. Irs file 2011 taxes Progressive deterioration. Irs file 2011 taxes Damage from corrosive drywall. Irs file 2011 taxes Theft Loss on Deposits Proof of Loss Figuring a LossDecrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Single Casualty on Multiple Properties Deduction Limits$100 Rule 10% Rule When To Report Gains and LossesDisaster Area Loss How To Report Gains and Losses 26. Irs file 2011 taxes   Car Expenses and Other Employee Business ExpensesWhat's New Introduction Useful Items - You may want to see: Travel ExpensesTraveling Away From Home Tax Home Temporary Assignment or Job What Travel Expenses Are Deductible? Travel in the United States Travel Outside the United States Conventions Entertainment Expenses50% Limit What Entertainment Expenses Are Deductible? What Entertainment Expenses Are Not Deductible? Gift Expenses Transportation ExpensesArmed Forces reservists. Irs file 2011 taxes Parking fees. Irs file 2011 taxes Advertising display on car. Irs file 2011 taxes Car pools. Irs file 2011 taxes Hauling tools or instruments. Irs file 2011 taxes Union members' trips from a union hall. Irs file 2011 taxes Car Expenses RecordkeepingHow To Prove Expenses How Long To Keep Records and Receipts How To ReportGifts. Irs file 2011 taxes Statutory employees. Irs file 2011 taxes Reimbursements Completing Forms 2106 and 2106-EZ Special Rules 27. Irs file 2011 taxes   Tax Benefits for Work-Related EducationWhat's New Introduction Useful Items - You may want to see: Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Irs file 2011 taxes Transportation Expenses Travel Expenses No Double Benefit Allowed Reimbursements Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping 28. Irs file 2011 taxes   Miscellaneous DeductionsWhat's New Introduction Useful Items - You may want to see: Deductions Subject to the 2% LimitUnreimbursed Employee Expenses (Line 21) Tax Preparation Fees (Line 22) Other Expenses (Line 23) Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses 29. Irs file 2011 taxes   Limit on Itemized DeductionsIntroduction Useful Items - You may want to see: Are You Subject to the Limit? Which Itemized Deductions Are Limited? Which Itemized Deductions Are Not Limited? How Do You Figure the Limit?Example. Irs file 2011 taxes Prev  Up  Next   Home   More Online Publications
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New Two-Year Period to Adopt Restated Pre-approved DC Plans

The IRS expects to issue most opinion and advisory letters for the latest round of pre-approved defined contribution plans on March 31, 2014. Employers using pre-approved defined contribution plan documents must adopt plan documents restated for the 2010 Cumulative List by April 30, 2016 (Announcement 2014-16).

Determination letters for pre-approved defined contribution plans

Starting May 1, 2014, and ending April 30, 2016, employers can submit applications for individual determination letters for pre-approved defined contribution plans.

An employer who adopts a master & prototype plan (standardized or non-standardized) may not apply for its own determination letter on Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans (instructions) – instead, the employer should rely on the letter issued to the plan sponsor.

However, an adopting employer who made limited modifications to its volume submitter plan may apply for a determination letter on Form 5307. If the modifications are extensive, causing the plan to be treated as an individually designed plan, the employer must instead file Form 5300, Application for Determination for Employee Benefit Plan.

See Revenue Procedure 2014-6, sections 8 and 9 for more information on determination letter applications for pre-approved plans.

Additional resources

 

Page Last Reviewed or Updated: 27-Mar-2014

The Irs File 2011 Taxes

Irs file 2011 taxes 12. Irs file 2011 taxes   Self-Employment Tax Table of Contents What's New for 2013 What's New for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Why Pay Self-Employment Tax? How To Pay Self-Employment TaxReplacing a lost social security card. Irs file 2011 taxes Name change. Irs file 2011 taxes Penalty for underpayment of estimated tax. Irs file 2011 taxes Who Must Pay Self-Employment Tax?Limited partner. Irs file 2011 taxes Community property. Irs file 2011 taxes Figuring Self-Employment EarningsLandlord Participation in Farming Methods for Figuring Net EarningsRegular Method Farm Optional Method Nonfarm Optional Method Using Both Optional Methods Reporting Self-Employment Tax What's New for 2013 Tax rates. Irs file 2011 taxes  For tax years beginning in 2013, the social security part of the self-employment tax increases from 10. Irs file 2011 taxes 4% to 12. Irs file 2011 taxes 4%. Irs file 2011 taxes The Medicare part of the tax remains at 2. Irs file 2011 taxes 9%. Irs file 2011 taxes As a result, the self-employment tax is increased from 13. Irs file 2011 taxes 3% to 15. Irs file 2011 taxes 3%. Irs file 2011 taxes Additional Medicare Tax. Irs file 2011 taxes . Irs file 2011 taxes  For tax years beginning in 2013, a 0. Irs file 2011 taxes 9% Additional Medicare Tax applies to your Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above a threshold amount. Irs file 2011 taxes Use Form 8959, Additional Medicare Tax, to figure this tax. Irs file 2011 taxes For more information, see the Instructions for Form 8959. Irs file 2011 taxes Maximum net earnings. Irs file 2011 taxes  The maximum net self-employment earnings subject to the social security part (12. Irs file 2011 taxes 4%) of the self-employment tax increased to $113,700 for 2013. Irs file 2011 taxes There is no maximum limit on earnings subject to the Medicare part (2. Irs file 2011 taxes 9%). Irs file 2011 taxes What's New for 2014 Maximum net earnings. Irs file 2011 taxes  The maximum net self-employment earnings subject to the social security part of the self-employment tax for 2014 will be discussed in the 2013 Publication 334. Irs file 2011 taxes Introduction Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Irs file 2011 taxes It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. Irs file 2011 taxes You usually have to pay SE tax if you are self-employed. Irs file 2011 taxes You are usually self-employed if you operate your own farm on land you either own or rent. Irs file 2011 taxes You have to figure SE tax on Schedule SE (Form 1040). Irs file 2011 taxes Farmers who have employees may have to pay the employer's share of social security and Medicare taxes, as well. Irs file 2011 taxes See chapter 13 for information on employment taxes. Irs file 2011 taxes Self-employment tax rate. Irs file 2011 taxes   For tax years beginning in 2013, the self-employment tax rate is 15. Irs file 2011 taxes 3%. Irs file 2011 taxes The rate consists of two parts: 12. Irs file 2011 taxes 4% for social security (old-age, survivors, and disability insurance) and 2. Irs file 2011 taxes 9% for Medicare (hospital insurance). Irs file 2011 taxes Topics - This chapter discusses: Why pay self-employment tax How to pay self-employment tax Who must pay self-employment tax Figuring self-employment earnings Landlord participation in farming Methods for figuring net earnings Reporting self-employment tax Useful Items - You may want to see: Publication 541 Partnerships Form (and Instructions) 1040 U. Irs file 2011 taxes S. Irs file 2011 taxes Individual Income Tax Return Sch F (Form 1040) Profit or Loss From Farming Sch SE (Form 1040) Self-Employment Tax 1065 U. Irs file 2011 taxes S. Irs file 2011 taxes Return of Partnership Income Sch K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Irs file 2011 taxes See chapter 16 for information about getting publications and forms. Irs file 2011 taxes Why Pay Self-Employment Tax? Social security benefits are available to self-employed persons just as they are to wage earners. Irs file 2011 taxes Your payments of SE tax contribute to your coverage under the social security system. Irs file 2011 taxes Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Irs file 2011 taxes How to become insured under social security. Irs file 2011 taxes   You must be insured under the social security system before you begin receiving social security benefits. Irs file 2011 taxes You are insured if you have the required number of credits (also called quarters of coverage). Irs file 2011 taxes Earning credits in 2013. Irs file 2011 taxes   You can earn a maximum of four credits per year. Irs file 2011 taxes For 2013, you earn one credit for each $1,160 of combined wages and self-employment earnings subject to social security tax. Irs file 2011 taxes You need $4,640 ($1,160 × 4) of combined wages and self-employment earnings subject to social security tax to earn four credits in 2013. Irs file 2011 taxes It does not matter whether the income is earned in 1 quarter or is spread over 2 or more quarters. Irs file 2011 taxes For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office or visit the SSA website at www. Irs file 2011 taxes socialsecurity. Irs file 2011 taxes gov. Irs file 2011 taxes Making false statements to get or to increase social security benefits may subject you to penalties. Irs file 2011 taxes The Social Security Administration (SSA) time limit for posting self-employment earnings. Irs file 2011 taxes   Generally, the SSA will give you credit only for self-employment earnings reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Irs file 2011 taxes    If you file your tax return or report a change in your self-employment earnings after the SSA time limit for posting self-employment earnings, the SSA may change its records, but only to remove or reduce the amount. Irs file 2011 taxes The SSA will not change its records to increase your self-employment earnings after the SSA time limit listed above. Irs file 2011 taxes How To Pay Self-Employment Tax To pay SE tax, you must have a social security number (SSN) or an individual taxpayer identification number (ITIN). Irs file 2011 taxes This section explains how to: Obtain an SSN or ITIN, and Pay your SE tax using estimated tax. Irs file 2011 taxes An ITIN does not entitle you to social security benefits. Irs file 2011 taxes Obtaining an ITIN does not change your immigration or employment status under U. Irs file 2011 taxes S. Irs file 2011 taxes law. Irs file 2011 taxes Obtaining a social security number. Irs file 2011 taxes   If you have never had an SSN, apply for one using Form SS-5, Application for a Social Security Card. Irs file 2011 taxes The application is also available in Spanish. Irs file 2011 taxes You can get this form at any Social Security office or by calling 1-800-772-1213. Irs file 2011 taxes    You can also download Form SS-5 from the Social Security Administration website at  www. Irs file 2011 taxes socialsecurity. Irs file 2011 taxes gov. Irs file 2011 taxes   If you have a social security number from the time you were an employee, you must use that number. Irs file 2011 taxes Do not apply for a new one. Irs file 2011 taxes Replacing a lost social security card. Irs file 2011 taxes   If you have a number but lost your card, file Form SS-5. Irs file 2011 taxes You will get a new card showing your original number, not a new number. Irs file 2011 taxes Name change. Irs file 2011 taxes   If your name has changed since you received your social security card, complete Form SS-5 to report a name change. Irs file 2011 taxes Obtaining an individual taxpayer identification number. Irs file 2011 taxes   The IRS will issue you an ITIN, for tax use only, if you are a nonresident or resident alien and you do not have, and are not eligible to get, an SSN. Irs file 2011 taxes To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number. Irs file 2011 taxes You can get this form by calling 1-800-829-3676. Irs file 2011 taxes For more information on ITINs, see Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number. Irs file 2011 taxes Form W-7 and Publication 1915 are also available in Spanish. Irs file 2011 taxes    You can also download Form W-7 from the IRS website at IRS. Irs file 2011 taxes gov. Irs file 2011 taxes Paying estimated tax. Irs file 2011 taxes   Estimated tax is the method used to pay tax (including SE tax) on income not subject to withholding. Irs file 2011 taxes You generally have to make estimated tax payments if you expect to owe tax, including SE tax, of $1,000 or more when you file your return. Irs file 2011 taxes Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax. Irs file 2011 taxes   However, if at least two-thirds of your gross income for 2013 or 2014 was from farming and you file your 2014 Form 1040 and pay all the tax due by March 2, 2015, you do not have to pay any estimated tax. Irs file 2011 taxes For more information about estimated tax for farmers, see chapter 15. Irs file 2011 taxes Penalty for underpayment of estimated tax. Irs file 2011 taxes   You may have to pay a penalty if you do not pay enough estimated tax by its due date. Irs file 2011 taxes Who Must Pay Self-Employment Tax? You must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. Irs file 2011 taxes The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. Irs file 2011 taxes Aliens. Irs file 2011 taxes   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. Irs file 2011 taxes S. Irs file 2011 taxes citizens. Irs file 2011 taxes Nonresident aliens are not subject to self-employment tax. Irs file 2011 taxes However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. Irs file 2011 taxes S. Irs file 2011 taxes residents for self-employment tax purposes. Irs file 2011 taxes For more information on aliens, see Publication 519, U. Irs file 2011 taxes S. Irs file 2011 taxes Tax Guide for Aliens. Irs file 2011 taxes Are you self-employed?   You are self-employed if you carry on a trade or business (such as running a farm) as a sole proprietor, an independent contractor, a member of a partnership, or are otherwise in business for yourself. Irs file 2011 taxes A trade or business is generally an activity carried on for a livelihood or in good faith to make a profit. Irs file 2011 taxes Share farmer. Irs file 2011 taxes   You are a self-employed farmer under an income-sharing arrangement if both the following apply. Irs file 2011 taxes You produce a crop or raise livestock on land belonging to another person. Irs file 2011 taxes Your share of the crop or livestock, or the proceeds from their sale, depends on the amount produced. Irs file 2011 taxes Your net farm profit or loss from the income-sharing arrangement is reported on Schedule F (Form 1040) and included in your self-employment earnings. Irs file 2011 taxes   If you produce a crop or livestock on land belonging to another person and are to receive a specified rate of pay, a fixed sum of money, or a fixed quantity of the crop or livestock, and not a share of the crop or livestock or their proceeds, you may be either self-employed or an employee of the landowner. Irs file 2011 taxes This will depend on whether the landowner has the right to direct or control your performance of services. Irs file 2011 taxes Example. Irs file 2011 taxes A share farmer produces a crop on land owned by another person on a 50-50 crop-share basis. Irs file 2011 taxes Under the terms of their agreement, the share farmer furnishes the labor and half the cost of seed and fertilizer. Irs file 2011 taxes The landowner furnishes the machinery and equipment used to produce and harvest the crop, and half the cost of seed and fertilizer. Irs file 2011 taxes The share farmer is provided a house in which to live. Irs file 2011 taxes The landowner and the share farmer decide on a cropping plan. Irs file 2011 taxes The share farmer is a self-employed farmer for purposes of the agreement to produce the crops, and the share farmer's part of the profit or loss from the crops is reported on Schedule F (Form 1040) and included in self-employment earnings. Irs file 2011 taxes The tax treatment of the landowner is discussed later under Landlord Participation in Farming. Irs file 2011 taxes Contract farming. Irs file 2011 taxes   Under typical contract farming arrangements, the grower receives a fixed payment per unit of crops or finished livestock delivered to the processor or packing company. Irs file 2011 taxes Since the grower typically furnishes labor and bears some production risk, the payments are reported on Schedule F and are therefore subject to self-employment tax. Irs file 2011 taxes 4-H Club or FFA project. Irs file 2011 taxes   If an individual participates in a 4-H Club or Future Farmers of America (FFA) project, any net income received from sales or prizes related to the project may be subject to income tax. Irs file 2011 taxes Report the net income as “Other income” on line 21 of Form 1040. Irs file 2011 taxes If necessary, attach a statement showing the gross income and expenses. Irs file 2011 taxes The net income may not be subject to SE tax if the project is primarily for educational purposes and not for profit, and is completed by the individual under the rules and economic restrictions of the sponsoring 4-H or FFA organization. Irs file 2011 taxes Such a project is generally not considered a trade or business. Irs file 2011 taxes Partners in a partnership. Irs file 2011 taxes   Generally, you are self-employed if you are a member of a partnership that carries on a trade or business. Irs file 2011 taxes Limited partner. Irs file 2011 taxes   If you are a limited partner, your partnership income is generally not subject to SE tax. Irs file 2011 taxes However, guaranteed payments you receive for services you perform for the partnership are subject to SE tax and should be reported to you in box 14 of your Schedule K-1 (Form 1065). Irs file 2011 taxes Business Owned and Operated by Spouses. Irs file 2011 taxes   If you and your spouse jointly own and operate a farm as an unincorporated business and share in the profits and losses, you are partners in a partnership whether or not you have a formal partnership agreement. Irs file 2011 taxes You must file Form 1065, instead of Schedule F, unless you make a joint election to be treated as a qualified joint venture. Irs file 2011 taxes Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. Irs file 2011 taxes Qualified joint venture. Irs file 2011 taxes   If you and your spouse each materially participate as the only members of a jointly owned and operated farm, and you file a joint tax return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. Irs file 2011 taxes For an explanation of “material participation,” see the instructions for Schedule C, line G, and the instructions for Schedule F, line E. Irs file 2011 taxes   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Irs file 2011 taxes Each of you must file a separate Schedule F and a separate Schedule SE. Irs file 2011 taxes For more information, see Qualified Joint Venture in the Instructions for Schedule SE (Form 1040). Irs file 2011 taxes Spouse employee. Irs file 2011 taxes   If your spouse is your employee, not your partner, you must withhold and pay social security and Medicare taxes for him or her. Irs file 2011 taxes For more information about employment taxes, see chapter 13. Irs file 2011 taxes Community property. Irs file 2011 taxes   If you are a partner and your distributive share of any income or loss from a trade or business carried on by the partnership is community property, treat your share as your self-employment earnings. Irs file 2011 taxes Do not treat any of your share as self-employment earnings of your spouse. Irs file 2011 taxes Figuring Self-Employment Earnings Farmer. Irs file 2011 taxes   If you are self-employed as a farmer, use Schedule F (Form 1040) to figure your self-employment earnings. Irs file 2011 taxes Partnership income or loss. Irs file 2011 taxes   If you are a member of a partnership that carries on a trade or business, the partnership should report your self-employment earnings in box 14, code A, of your Schedule K-1 (Form 1065). Irs file 2011 taxes Box 14 of Schedule K-1 may also provide amounts for gross farming or fishing income (code B) and gross nonfarm income (code C). Irs file 2011 taxes Use these amounts if you use the farm or nonfarm optional method to figure net earnings from self-employment (see Methods for Figuring Net Earnings , later). Irs file 2011 taxes   If you are a general partner, you may need to reduce these reported earnings by amounts you claim as a section 179 deduction, unreimbursed partnership expenses, or depletion on oil and gas properties. Irs file 2011 taxes   If the amount reported is a loss, include only the deductible amount when you figure your total self-employment earnings. Irs file 2011 taxes   For more information, see the Partner's Instructions for Schedule K-1 (Form 1065). Irs file 2011 taxes   For general information on partnerships, see Publication 541. Irs file 2011 taxes More than one business. Irs file 2011 taxes   If you have self-employment earnings from more than one trade, business, or profession, you generally must combine the net profit or loss from each to determine your total self-employment earnings. Irs file 2011 taxes A loss from one business reduces your profit from another business. Irs file 2011 taxes However, do not combine earnings from farm and nonfarm businesses if you are using one of the optional methods (discussed later) to figure net earnings. Irs file 2011 taxes Community property. Irs file 2011 taxes   If any of the income from a farm or business, other than a partnership, is community property under state law, it is included in the self-employment earnings of the spouse carrying on the trade or business. Irs file 2011 taxes Lost income payments. Irs file 2011 taxes   Lost income payments received from insurance or other sources for reducing or stopping farming activities are included in self-employment earnings. Irs file 2011 taxes These include USDA payments to compensate for lost income resulting from reductions in tobacco quotas and allotments. Irs file 2011 taxes Even if you are not farming when you receive the payment, it is included in self-employment earnings if it relates to your farm business (even though it is temporarily inactive). Irs file 2011 taxes A connection exists if it is clear the payment would not have been made but for your conduct of your farm business. Irs file 2011 taxes Gain or loss. Irs file 2011 taxes   A gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers is not included in self-employment earnings. Irs file 2011 taxes It does not matter whether the disposition is a sale, exchange, or involuntary conversion. Irs file 2011 taxes For example, gains or losses from the disposition of the following types of property are not included in self-employment earnings. Irs file 2011 taxes Investment property. Irs file 2011 taxes Depreciable property or other fixed assets used in your trade or business. Irs file 2011 taxes Livestock held for draft, breeding, sport, or dairy purposes, and not held primarily for sale, regardless of how long the livestock was held, or whether it was raised or purchased. Irs file 2011 taxes Unharvested standing crops sold with land held more than 1 year. Irs file 2011 taxes Timber, coal, or iron ore held for more than 1 year if an economic interest was retained, such as a right to receive coal royalties. Irs file 2011 taxes   A gain or loss from the cutting of timber is not included in self-employment earnings if the cutting is treated as a sale or exchange. Irs file 2011 taxes For more information on electing to treat the cutting of timber as a sale or exchange, see Timber in chapter 8. Irs file 2011 taxes Wages and salaries. Irs file 2011 taxes   Wages and salaries received for services performed as an employee and covered by social security or railroad retirement are not included in self-employment earnings. Irs file 2011 taxes   Wages paid in kind to you for agricultural labor, such as commodity wages, are not included in self-employment earnings. Irs file 2011 taxes Retired partner. Irs file 2011 taxes   Retirement income received by a partner from his or her partnership under a written plan is not included in self-employment earnings if all the following apply. Irs file 2011 taxes The retired partner performs no services for the partnership during the year. Irs file 2011 taxes The retired partner is owed only the retirement payments. Irs file 2011 taxes The retired partner's share (if any) of the partnership capital was fully paid to the retired partner. Irs file 2011 taxes The payments to the retired partner are lifelong periodic payments. Irs file 2011 taxes Conservation Reserve Program (CRP) payments. Irs file 2011 taxes   Under the Conservation Reserve Program (CRP), if you own or operate highly erodible or other specified cropland, you may enter into a longterm contract with the USDA, agreeing to convert to a less intensive use of that cropland. Irs file 2011 taxes You must include the annual rental payments and any onetime incentive payment you receive under the program on Schedule F, lines 4a and 4b. Irs file 2011 taxes Cost share payments you receive may qualify for the costsharing exclusion. Irs file 2011 taxes See Cost-Sharing Exclusion (Improvements), above. Irs file 2011 taxes CRP payments are reported to you on Form 1099G. Irs file 2011 taxes Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. Irs file 2011 taxes See the instructions for Schedule SE (Form 1040). Irs file 2011 taxes Self-employed health insurance deduction. Irs file 2011 taxes   You cannot deduct the self-employed health insurance deduction you report on Form 1040, line 29, from self-employment earnings on Schedule SE (Form 1040). Irs file 2011 taxes Landlord Participation in Farming As a general rule, income and deductions from rentals and from personal property leased with real estate are not included in determining self-employment earnings. Irs file 2011 taxes However, income and deductions from farm rentals, including government commodity program payments received by a landowner who rents land, are included if the rental arrangement provides that the landowner will, and does, materially participate in the production or management of production of the farm products on the land. Irs file 2011 taxes Crop shares. Irs file 2011 taxes   Rent paid in the form of crop shares is included in self-employment earnings for the year you sell, exchange, give away, or use the crop shares if you meet one of the four material participation tests (discussed next) at the time the crop shares are produced. Irs file 2011 taxes Feeding such crop shares to livestock is considered using them. Irs file 2011 taxes Your gross income for figuring your self-employment earnings includes the fair market value of the crop shares when they are used as feed. Irs file 2011 taxes Material participation for landlords. Irs file 2011 taxes   You materially participate if you have an arrangement with your tenant for your participation and you meet one or more of the following tests. Irs file 2011 taxes You do at least three of the following. Irs file 2011 taxes Pay, using cash or credit, at least half the direct costs of producing the crop or livestock. Irs file 2011 taxes Furnish at least half the tools, equipment, and livestock used in the production activities. Irs file 2011 taxes Advise or consult with your tenant. Irs file 2011 taxes Inspect the production activities periodically. Irs file 2011 taxes You regularly and frequently make, or take an important part in making, management decisions substantially contributing to or affecting the success of the enterprise. Irs file 2011 taxes You work 100 hours or more spread over a period of 5 weeks or more in activities connected with agricultural production. Irs file 2011 taxes You do things that, considered in their totality, show you are materially and significantly involved in the production of the farm commodities. Irs file 2011 taxes These tests may be used as general guides for determining whether you are a material participant. Irs file 2011 taxes Example. Irs file 2011 taxes Drew Houston agrees to produce a crop on J. Irs file 2011 taxes Clarke's cotton farm, with each receiving half the proceeds. Irs file 2011 taxes Clarke advises Houston when to plant, spray, and pick the cotton. Irs file 2011 taxes During the growing season, Clarke inspects the crop every few days to determine whether Houston is properly taking care of the crop. Irs file 2011 taxes Houston furnishes all labor needed to grow and harvest the crop. Irs file 2011 taxes The management decisions made by Clarke in connection with the care of the cotton crop and his regular inspection of the crop establish that he participates to a material degree in the cotton production operations. Irs file 2011 taxes The income Clarke receives from his cotton farm is included in his self-employment earnings. Irs file 2011 taxes Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. Irs file 2011 taxes The regular method. Irs file 2011 taxes The farm optional method. Irs file 2011 taxes The nonfarm optional method. Irs file 2011 taxes You must use the regular method unless you are eligible to use one or both of the optional methods. Irs file 2011 taxes See Figure 12-1 , shown later. Irs file 2011 taxes Figure 12-1. Irs file 2011 taxes Can I Use the Optional Methods? Please click here for the text description of the image. Irs file 2011 taxes Figure 12–1. Irs file 2011 taxes Can I Use the Optional Methods? Why use an optional method?   You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. Irs file 2011 taxes You want to receive credit for social security benefit coverage. Irs file 2011 taxes You incurred child or dependent care expenses for which you could claim a credit. Irs file 2011 taxes (An optional method may increase your earned income, which could increase your credit. Irs file 2011 taxes ) You are entitled to the earned income credit. Irs file 2011 taxes (An optional method may increase your earned income, which could increase your credit. Irs file 2011 taxes ) You are entitled to the additional child tax credit. Irs file 2011 taxes (An optional method may increase your earned income, which could increase your credit. Irs file 2011 taxes ) Effects of using an optional method. Irs file 2011 taxes   Using an optional method could increase your SE tax. Irs file 2011 taxes Paying more SE tax may result in you getting higher social security disability or retirement benefits. Irs file 2011 taxes   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller SE tax or no SE tax using the regular method. Irs file 2011 taxes   The optional methods may be used only to figure your SE tax. Irs file 2011 taxes To figure your income tax, include your actual self-employment earnings in gross income, regardless of which method you use to determine SE tax. Irs file 2011 taxes Regular Method Multiply your total self-employment earnings by 92. Irs file 2011 taxes 35% (. Irs file 2011 taxes 9235) to get your net earnings under the regular method. Irs file 2011 taxes See Short Schedule SE, line 4, or Long Schedule SE, line 4a. Irs file 2011 taxes Net earnings figured using the regular method are also called “actual net earnings. Irs file 2011 taxes ” Farm Optional Method Use the farm optional method only for self-employment earnings from a farming business. Irs file 2011 taxes You can use this method if you meet either of the following tests. Irs file 2011 taxes Your gross farm income is $6,960 or less. Irs file 2011 taxes Your net farm profits are less than $5,024. Irs file 2011 taxes Gross farm income. Irs file 2011 taxes   Your gross farm income is the total of the amounts from: Schedule F (Form 1040), line 9, and Schedule K-1 (Form 1065), box 14, code B (from farm partnerships). Irs file 2011 taxes Net farm profits. Irs file 2011 taxes   Net farm profits generally are the total of the amounts from: Schedule F (Form 1040), line 34, and Schedule K-1 (Form 1065), box 14, code A (from farm partnerships). Irs file 2011 taxes However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. Irs file 2011 taxes For more information, see Partnership income or loss , earlier. Irs file 2011 taxes Figuring farm net earnings. Irs file 2011 taxes   If you meet either of the two tests explained above, use Table 12-1. Irs file 2011 taxes Figuring Farm Net Earnings , to figure your net earnings from self-employment under the farm optional method. Irs file 2011 taxes Table 12-1. Irs file 2011 taxes Figuring Farm Net Earnings IF your gross farm income  is. Irs file 2011 taxes . Irs file 2011 taxes . Irs file 2011 taxes THEN your net earnings are equal to. Irs file 2011 taxes . Irs file 2011 taxes . Irs file 2011 taxes $6,960 or less Two-thirds of your gross farm income. Irs file 2011 taxes More than $6,960 $4,640 Optional method can reduce or eliminate SE tax. Irs file 2011 taxes   If your gross farm income is $6,960 or less and your farm net earnings figured under the farm optional method are less than your actual net earnings, you can use the farm optional method to reduce or eliminate your SE tax. Irs file 2011 taxes Your actual net earnings are your net earnings figured using the regular method, explained earlier. Irs file 2011 taxes Example. Irs file 2011 taxes Your gross farm income is $540 and your net farm profit is $460. Irs file 2011 taxes Consequently, your net earnings figured under the farm optional method are $360 (2/3 of $540) and your actual net earnings are $425 (92. Irs file 2011 taxes 35% of $460). Irs file 2011 taxes You owe no SE tax if you use the optional method because your net earnings under the farm optional method are less than $400. Irs file 2011 taxes Nonfarm Optional Method This is an optional method available for determining net earnings from nonfarm self-employment, much like the farm optional method. Irs file 2011 taxes If you are also engaged in a nonfarm business, you may be able to use this method to figure your nonfarm net earnings. Irs file 2011 taxes You can use this method even if you do not use the farm optional method for determining your farm net earnings and even if you have a net loss from your nonfarm business. Irs file 2011 taxes For more information about the nonfarm optional method, see Publication 334. Irs file 2011 taxes You cannot combine farm and nonfarm self-employment earnings to figure your net earnings under either of the optional methods. Irs file 2011 taxes Using Both Optional Methods If you use both optional methods, you must add the net earnings figured under each method to arrive at your total net earnings from self-employment. Irs file 2011 taxes You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. Irs file 2011 taxes If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. Irs file 2011 taxes Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. Irs file 2011 taxes Then, enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. Irs file 2011 taxes Most taxpayers can use Section A–Short Schedule SE to figure their SE tax. Irs file 2011 taxes However, certain taxpayers must use Section B–Long Schedule SE. Irs file 2011 taxes Use the chart on page 1 of Schedule SE to find out which one to use. Irs file 2011 taxes If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. Irs file 2011 taxes Deduction for employer-equivalent portion of self-employment tax. Irs file 2011 taxes   You can deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income. Irs file 2011 taxes This deduction only affects your income tax. Irs file 2011 taxes It does not affect either your net earnings from self-employment or your SE tax. Irs file 2011 taxes   To deduct the tax, enter on Form 1040, line 27, the amount shown on Section A, Line 6, or Section B, line 13, Deduction for employer-equivalent portion of self-employment tax, of the Schedule SE. Irs file 2011 taxes Joint return. Irs file 2011 taxes   Even if you file a joint return, you cannot file a joint Schedule SE. Irs file 2011 taxes This is true whether one spouse or both spouses have self-employment earnings. Irs file 2011 taxes Your spouse is not considered self-employed just because you are. Irs file 2011 taxes If both of you have self-employment earnings, each of you must complete a separate Schedule SE. Irs file 2011 taxes However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. Irs file 2011 taxes Attach both schedules to the joint return. Irs file 2011 taxes If you and your spouse operate a business as a partnership, see Business Owned and Operated by Spouses and Qualified joint venture , earlier, under Who Must Pay Self-Employment Tax . Irs file 2011 taxes Prev  Up  Next   Home   More Online Publications