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Irs1040ez

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Irs1040ez

Irs1040ez Index A Abandonment, Abandonment Accounting method Accrual, Accrual Method Cash, Cash Method Change in, Changes in Methods of Accounting Crop, Crop method. Irs1040ez Farm inventory, Farm Inventory Accounting periods, Introduction Accrual method of accounting, Accrual Method Additional Medicare Tax withholding, What's New for 2013, Additional Medicare Tax. Irs1040ez Adjusted basis for installment sale, Adjusted basis for installment sale purposes. Irs1040ez Adjusted basis of assets, Adjusted Basis Agricultural activity codes, Schedule F, Reminders Agricultural program payments, Agricultural Program Payments Agricultural structure, defined, Agricultural structure. Irs1040ez Alternative Depreciation System (ADS), Required use of ADS. Irs1040ez , ADS election. Irs1040ez Amortization Going into business, Business Start-Up Costs Reforestation expenses, Reforestation Costs Section 197 intangibles, Section 197 Intangibles Assessments By conservation district, Assessment by Conservation District Depreciable property, Assessment for Depreciable Property Assistance (see Tax help) Automobiles, depreciation, Limits for passenger automobiles. Irs1040ez B Bankruptcy, Bankruptcy. Irs1040ez Barter income, Barter income. Irs1040ez Basis Adjusted, Adjusted basis. Irs1040ez Installment sale, Adjusted basis for installment sale purposes. Irs1040ez Involuntary conversion, Basis for depreciation. Irs1040ez Like-kind exchange, Basis for depreciation. Irs1040ez Partner's basis, Property Distributed From a Partnership or Corporation Replacement property, Basis of replacement property. Irs1040ez Shareholder's basis, Property Distributed From a Partnership or Corporation Basis of assets Adjusted basis, Adjusted Basis Allocating to several assets, Allocating the Basis Changed to business use, Property changed from personal to business or rental use. Irs1040ez Constructing assets, Constructing assets. Irs1040ez Cost, Cost Basis Decreases, Decreases to Basis Depreciation, What Is the Basis for Depreciation? Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Gifts, Property Received as a Gift Increases, Increases to Basis Real property, Real Property Received for services, Property received for services. Irs1040ez Uniform capitalization rules, Uniform Capitalization Rules Below-market loans, Below-market loans. Irs1040ez Books and records, Importance of Records Breeding fees, Breeding Fees Business income limit, section 179 expense deduction, Business Income Limit Business use of home, Business Use of Your Home C Canceled debt, Cancellation of Debt Capital assets, Capital Assets Capital expenses, Capital Expenses Car expenses, Truck and Car Expenses Cash method of accounting, Cash Method Casualties and thefts Adjustments to basis, Adjustments to basis. Irs1040ez Casualty, defined, Casualty. Irs1040ez Disaster area losses, Disaster Area Losses Leased property, Leased property. Irs1040ez Livestock, Livestock or produce bought for resale. Irs1040ez , Raised draft, breeding, dairy, or sporting animals. Irs1040ez Reimbursement, Insurance and other reimbursements. Irs1040ez Reporting gains and losses, Reporting Gains and Losses Theft, defined, Theft. Irs1040ez Change in accounting method, Changes in Methods of Accounting Chickens, purchased, Chickens, seeds, and young plants. Irs1040ez Christmas trees, Christmas tree cultivation. Irs1040ez , Christmas trees. Irs1040ez Club dues, Club dues and membership fees. Irs1040ez Comments on publication, Comments and suggestions. Irs1040ez Commodity Futures, Hedging (Commodity Futures) Wages, Noncash wages. Irs1040ez Commodity Credit Corporation (CCC) Loans, Commodity Credit Corporation (CCC) Loans Market gain, Market Gain Community property, Community property. Irs1040ez , Community property. Irs1040ez Computer, software, Computer software. Irs1040ez Condemnation, Casualties, Thefts, and Condemnations, Condemnation Conservation Cost-sharing exclusion, Conservation Expenses District assessments, Assessment by Conservation District Expenses, Conservation Expenses Plans, Conservation plan. Irs1040ez Conservation Reserve Program, Conservation Reserve Program (CRP) payments. Irs1040ez Conservation Reserve Program (CRP), Conservation Reserve Program (CRP) Constructing assets, Constructing assets. Irs1040ez Constructive receipt of income, Constructive receipt. Irs1040ez Contamination, Soil or other environmental contamination. Irs1040ez Contract price, Contract price. Irs1040ez Converted wetland, Converted Wetland and Highly Erodible Cropland Cooperatives, income from, Income From Cooperatives Cost-sharing exclusion, Cost-Sharing Exclusion (Improvements) Counter-cyclical payments, Direct payments and counter-cyclical payments. Irs1040ez , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Credits Employment, Employment Credits Fuel tax, Fuel tax credit and refund. Irs1040ez , How To Claim a Credit or Refund, Claiming a Credit Social security and Medicare, Earning credits in 2013. Irs1040ez Social security coverage, How to become insured under social security. Irs1040ez State unemployment tax, Tax rate and credit. Irs1040ez Crew leaders, Crew Leaders Crop Destroyed, Standing crop destroyed by casualty. Irs1040ez Insurance proceeds, Crop Insurance and Crop Disaster Payments Method of accounting, Crop method. Irs1040ez Shares, Rents (Including Crop Shares) Unharvested, Cost of raising unharvested crops. Irs1040ez , Section 1231 transactions. Irs1040ez , Gain or loss. Irs1040ez Cropland, highly erodible, Converted Wetland and Highly Erodible Cropland D Damage Casualties and thefts, Casualties and Thefts Crop insurance, Crop Insurance and Crop Disaster Payments Tree seedlings, Tree Seedlings Debt Bad, Nonbusiness bad debt. Irs1040ez Canceled, Cancellation of Debt, Canceled debt excluded from income. Irs1040ez , Cancellation of debt. Irs1040ez , Canceled debt. Irs1040ez Nonrecourse, Amount realized on a nonrecourse debt. Irs1040ez Qualified farm, Qualified Farm Debt Qualified principal residence, Qualified Principal Residence Debt Recourse, Amount realized on a recourse debt. Irs1040ez Depletion, Depletion Depreciation, Claiming the Special Depreciation Allowance ADS election, ADS election. Irs1040ez Conservation assets, Depreciable conservation assets. Irs1040ez Deduction, Overview of Depreciation Incorrect amount deducted, How Do You Correct Depreciation Deductions? Limit for automobiles, Limits for passenger automobiles. Irs1040ez Listed property, Additional Rules for Listed Property Raised livestock, Livestock. Irs1040ez Recapture, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Section 1250 Property When to file, Do You Have To File Form 4562? Depreciation allowable, Basis adjustment for depreciation allowed or allowable. Irs1040ez Depreciation allowed, Basis adjustment for depreciation allowed or allowable. Irs1040ez Direct payments, Direct payments and counter-cyclical payments. Irs1040ez , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Disaster area losses, Disaster Area Losses Disaster payments, Crop Insurance and Crop Disaster Payments Disaster relief grants, Federal disaster relief grants. Irs1040ez Disaster relief payments, Qualified disaster relief payments. Irs1040ez Dispositions, Sale or other disposal of land during 9-year period. Irs1040ez , Gain on sale of farmland. Irs1040ez , Introduction Domestic production activities deduction, Domestic Production Activities Deduction Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E e-file, Reminders Easement, Easements and rights-of-way. Irs1040ez , Easements. Irs1040ez Election ADS depreciation, Electing ADS. Irs1040ez , ADS election. Irs1040ez Amortization Business start-up costs, Business Start-Up Costs Reforestation costs, Reforestation Costs Crop method, Election to use crop method. Irs1040ez Cutting of timber, Election to treat cutting as a sale or exchange. Irs1040ez Deducting conservation expenses, When to Deduct or Capitalize Not excluding cost-sharing payments, Electing not to exclude payments. Irs1040ez Out of installment method, Electing out of the installment method. Irs1040ez Postponing casualty gain, Postponing Gain Postponing reporting crop insurance proceeds, Election to postpone reporting until the following year. Irs1040ez Section 179 expense deduction, How Do You Elect the Deduction? Electronic filing, Reminders Embryo transplants, Transplanted embryo. Irs1040ez Employer identification number, Reminders, Employer identification number (EIN). Irs1040ez Endangered species recovery expenses, Endangered species recovery expenses. Irs1040ez Environmental contamination, Soil or other environmental contamination. Irs1040ez Estimated tax Farm gross income, Gross Income From Farming Gross income, Gross Income Penalties, Estimated Tax Penalty for 2013 Exchanges Basis Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Like-Kind Exchanges Excise taxes Credit, Claiming a Credit Diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Farming purposes, Fuels Used in Farming Home use of fuels, Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines Off-highway uses, Fuels Used in Off-Highway Business Use Refund, Claiming a Refund F Fair market value defined, Fair market value (FMV). Irs1040ez , Fair market value (FMV). Irs1040ez Family member Business expenses, Special rule for related persons. Irs1040ez Installment sale, Sale to a related person. Irs1040ez Like-kind exchange, Like-kind exchanges between related persons. Irs1040ez Loss on sale or exchange of property, Losses from sales or exchanges between related persons. Irs1040ez Personal-use property, Personal-use property. Irs1040ez Social security coverage, Family Employees Farm Business expenses, Farm Business Expenses Business, defined, Business of Farming Defined, Farm defined. Irs1040ez , Farm. Irs1040ez Income averaging, Income Averaging for Farmers Rental, Farm rental. Irs1040ez Sale of, Sale of a Farm Farmer, Farmer. Irs1040ez Federal unemployment tax (FUTA), Federal Unemployment (FUTA) Tax Fertilizer, Fertilizer and Lime, Fertilizer and Lime Foreclosure, Foreclosure or Repossession Forestation costs, Forestation and reforestation costs. Irs1040ez Form 1099-A, Form 1099-A. Irs1040ez , Forms 1099-A and 1099-C. Irs1040ez 1099-C, Cancellation of Debt, Form 1099-C. Irs1040ez , Forms 1099-A and 1099-C. Irs1040ez 1099-G, Market Gain, Payment to More Than One Person 1099-MISC, Reminders, Nonemployee compensation. Irs1040ez 1099-PATR, Form 1099-PATR. Irs1040ez 1128, Introduction 2210-F, Estimated Tax Penalty for 2013 3115, Changes in Methods of Accounting 4136, Claiming a Credit 4562, Do You Have To File Form 4562? 4797, Form 4797. Irs1040ez , Recapture. Irs1040ez , Reporting the exchange. Irs1040ez 4835, Rents (Including Crop Shares) 5213, Using the presumption later. Irs1040ez 6252, Form 6252. Irs1040ez 8822, Reminders 8824, Reporting the exchange. Irs1040ez 8849, Claiming a Refund 8886, Reminders 940, Form 940. Irs1040ez 943, Form 943. Irs1040ez 982, Form 982 I-9, Form I-9. Irs1040ez SS-4, Reminders, Employer identification number (EIN). Irs1040ez SS-5, Obtaining a social security number. Irs1040ez T (Timber), Form T (Timber). Irs1040ez W-2, Form W-2. Irs1040ez W-4, Reminders, New hire reporting. Irs1040ez , Form W-4. Irs1040ez W-4V, Commodity Credit Corporation (CCC) Loans, Crop Insurance and Crop Disaster Payments W-7, Obtaining an individual taxpayer identification number. Irs1040ez Free tax services, How To Get Tax Help, Free help with your tax return. Irs1040ez Fuel tax credit or refund, Fuel tax credit and refund. Irs1040ez , How To Claim a Credit or Refund G Gains and losses Basis of assets, Cost Basis Capital assets, defined, Capital Assets Casualty, How To Figure a Loss, Figuring a Gain Installment sales, Installment Sales Livestock, Livestock Long- or short-term, Long and Short Term Ordinary or capital, Ordinary or Capital Gain or Loss Sale of farm, Sale of a Farm Section 1231, Section 1231 Gains and Losses Theft, How To Figure a Loss, Figuring a Gain Timber, Timber General asset accounts, How Do You Use General Asset Accounts? Gifts, Crop shares you give to others (gift). Irs1040ez , Cost related to gifts. Irs1040ez , Property Received as a Gift, Gift. Irs1040ez Going into business, Business Start-Up Costs Grants, disaster relief, Federal disaster relief grants. Irs1040ez Gross profit percentage, Gross profit percentage. Irs1040ez Gross profit, defined, Gross profit. Irs1040ez Guarantee, Debt not payable on demand. Irs1040ez H Health insurance deduction, Self-employed health insurance deduction. Irs1040ez Hedging, Hedging (Commodity Futures) Help (see Tax help) Highway use tax, Highway use tax. Irs1040ez Holding period, Holding period. Irs1040ez Horticultural structure, Horticultural structure. Irs1040ez I Illegal irrigation subsidy, Illegal federal irrigation subsidy. Irs1040ez Important dates, Important Dates for 2014 Improvements, Cost-Sharing Exclusion (Improvements) Income Accounting for, Accounting Methods Accrual method of accounting, Income Canceled debt excluded, Cancellation of Debt From farming, Farm Income, Gross income from farming. Irs1040ez , Gross Income From Farming Gross, Gross Income Not-for-profit farming, Not-for-Profit Farming Pasture, Pasture income and rental. Irs1040ez Schedule F, Farm Income Withholding of tax, Federal Income Tax Withholding Income averaging (see Farm: Income averaging) Incorrect amount of depreciation deducted, How Do You Correct Depreciation Deductions? Individual taxpayer identification number (ITIN), Obtaining an individual taxpayer identification number. Irs1040ez Inherited property, Inherited Property Insolvency, Insolvency. Irs1040ez Installment sales, Form 6252. Irs1040ez Electing out, Electing out of the installment method. Irs1040ez Farm, sale of, Installment Sale of a Farm Figuring income, Figuring Installment Sale Income Reporting income, Form 6252. Irs1040ez Unstated interest, Unstated interest. Irs1040ez Insurance, Insurance, Self-employed health insurance deduction. Irs1040ez Intangible property, Section 197 Intangibles Interest Expense, Interest Income, Interest income. Irs1040ez Unstated, Unstated interest. Irs1040ez Inventory Items included, Farm Inventory Methods of valuation, Inventory valuation methods. Irs1040ez Involuntary conversions, Involuntary Conversions, Property acquired in a like-kind exchange or involuntary conversion. Irs1040ez , Introduction Irrigation Illegal subsidy, Illegal federal irrigation subsidy. Irs1040ez Project, Irrigation Project L Labor hired, Labor Hired Landlord participation, Landlord Participation in Farming Lease or purchase, Lease or Purchase Life tenant (see Term interests) Like-kind exchanges, Like-Kind Exchanges, Like-Kind Exchanges Lime, Fertilizer and Lime Limits At-risk, At-Risk Limits Business use of home, Deduction limit. Irs1040ez Capital losses, Treatment of Capital Losses Conservation expenses, Assessment for Depreciable Property, 25% Limit on Deduction Depreciation Business-use, What Is the Business-Use Requirement? Excluded farm debt, Exclusion limit. Irs1040ez Farm losses, Losses From Operating a Farm Loss of personal-use property, Deduction Limits on Losses of Personal-Use Property Not-for-profit farming, Not-for-Profit Farming Passive activity, Passive Activity Limits Percentage depletion, Taxable income limit. Irs1040ez Prepaid farm supplies, Deduction limit. Irs1040ez Reforestation costs, Reforestation Costs Section 179 expense deduction Automobile, Limits for passenger automobiles. Irs1040ez Business income, Business Income Limit Dollar, Dollar Limits Time to keep records, How Long To Keep Records Listed property Defined, What Is Listed Property? Passenger automobile, Passenger automobiles. Irs1040ez Rules, Additional Rules for Listed Property Livestock, Section 1231 transactions. Irs1040ez Casualty and theft losses, Livestock or produce bought for resale. Irs1040ez Crop shares, Crop shares you use to feed livestock. Irs1040ez Depreciation, Livestock. Irs1040ez Diseased, Diseased livestock. Irs1040ez Feed assistance, Feed Assistance and Payments Immature, Immature livestock. Irs1040ez Losses, Loss of livestock. Irs1040ez , Livestock Purchased, Purchased livestock. Irs1040ez Raised, Raised livestock. Irs1040ez Sale of, Sales of Farm Products, Livestock Unit-livestock-price, inventory valuation, Unit-livestock-price method. Irs1040ez Used in a farm business, Livestock used in farm business. Irs1040ez Weather-related sales, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. Irs1040ez Loans, Commodity Credit Corporation (CCC) Loans, Loan expenses. Irs1040ez Losses At-risk limits, At-Risk Limits Casualty, Casualties, Thefts, and Condemnations Disaster areas, Disaster Area Losses Farming, Farming Losses Growing crops, Loss of growing plants, produce, and crops. Irs1040ez Hobby farming, Not-for-Profit Farming Livestock, Livestock, Diseased livestock. Irs1040ez Nondeductible, Other Nondeductible Items Theft, Casualties, Thefts, and Condemnations Lost income payments, Lost income payments. Irs1040ez Lost property, Mislaid or lost property. Irs1040ez M MACRS property Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. Irs1040ez Like-kind exchange, Property acquired in a like-kind exchange or involuntary conversion. Irs1040ez Nontaxable transfer, Property acquired in a nontaxable transfer. Irs1040ez Market gain, reporting, Market Gain Marketing quota penalties, Marketing Quota Penalties Material participation, Landlord Participation in Farming Meals, Meals. Irs1040ez Membership fees, Club dues and membership fees. Irs1040ez Methods of accounting, Accounting Methods Modified ACRS (MACRS) ADS election, ADS election. Irs1040ez Conventions, Which Convention Applies? Depreciation methods, Which Depreciation Method Applies? Exchange, Property acquired in a like-kind exchange or involuntary conversion. Irs1040ez Figuring the deduction, How Is the Depreciation Deduction Figured? Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. Irs1040ez Nontaxable transfer, Property acquired in a nontaxable transfer. Irs1040ez Percentage tables, Rules for using the tables. Irs1040ez Property classes, Which Property Class Applies Under GDS? Recovery periods, Which Recovery Period Applies? N New hire reporting, New hire reporting. Irs1040ez Noncapital asset, Noncapital Assets Nontaxable exchanges, Like-Kind Exchanges Nontaxable transfer of MACRS property, Property acquired in a nontaxable transfer. Irs1040ez Not-for-profit farming, Not-for-Profit Farming O Organizational costs, Business start-up and organizational costs. Irs1040ez P Partners, limited, Limited partner. Irs1040ez Partners, retired, Retired partner. Irs1040ez Partners, Spouse, Business Owned and Operated by Spouses. Irs1040ez Partnership, Partnership income or loss. Irs1040ez Passenger automobile, Passenger automobiles. Irs1040ez Pasture income, Pasture income and rental. Irs1040ez Patronage dividends, Patronage Dividends Payments considered received, Payments Received or Considered Received Payments received, Payments Received or Considered Received Penalties Estimated tax, Estimated Tax Penalty for 2013 Returns, Estimated Tax Penalty for 2013 Trust fund recovery, Trust fund recovery penalty. Irs1040ez Per-unit retain certificates, Per-Unit Retain Certificates Personal expenses, Personal, Living, and Family Expenses Placed in service, Placed in Service, What Is the Placed-in-Service Date? Postponing casualty gain, Postponing Gain Prepaid expense Advance premiums, Advance premiums. Irs1040ez Extends useful life, Prepayment. Irs1040ez Farm supplies, Prepaid Farm Supplies Livestock feed, Prepaid Livestock Feed Prizes, Prizes. Irs1040ez Produce, Sales of Farm Products Property Changed to business use, Property changed from personal to business or rental use. Irs1040ez Received for services, Property received for services. Irs1040ez Repairs and improvements, How Do You Treat Repairs and Improvements? Section 1231, Section 1231 transactions. Irs1040ez Section 1245, Section 1245 Property Section 1250, Section 1250 Property Section 1252, Section 1252 property. Irs1040ez Section 1255, Section 1255 property. Irs1040ez Tangible personal, Tangible personal property. Irs1040ez Publications (see Tax help) Q Qualified disaster relief payments, Qualified disaster relief payments. Irs1040ez Qualified farm debt, Qualified Farm Debt Qualified joint venture, Qualified joint venture. Irs1040ez Qualified principal residence debt, Qualified Principal Residence Debt R Recapture Amortization, Depreciation and amortization. Irs1040ez Basis reductions, Recapture of basis reductions. Irs1040ez Certain depreciation, Recapture of certain depreciation. Irs1040ez Cost-sharing payments, Recapture. Irs1040ez Depreciation, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Depreciation recapture. Irs1040ez Section 1245 property, Section 1245 Property Section 1250 property, Section 1250 Property Section 179 expense deduction, When Must You Recapture the Deduction? Section 179 GO Zone property, Recapture for qualified section 179 GO Zone property. Irs1040ez Special depreciation allowance, When Must You Recapture an Allowance Recordkeeping, Importance of Records, Meals. Irs1040ez Records on depreciable property, Depreciation Recapture Reforestation costs, Forestation and reforestation costs. Irs1040ez , Reforestation Costs Refund Deduction taken, Refund or reimbursement. Irs1040ez Fuel tax, Fuel tax credit and refund. Irs1040ez , Including the Credit or Refund in Income Reimbursements Casualties and thefts, Casualty and theft losses. Irs1040ez , Casualties and Thefts, Insurance and other reimbursements. Irs1040ez Deduction taken, Refund or reimbursement. Irs1040ez Expenses, Reimbursed expenses. Irs1040ez Feed assistance, Feed Assistance and Payments Real estate taxes, Real estate taxes. Irs1040ez Reforestation expenses, Qualifying costs. Irs1040ez To employees, Reimbursements to employees. Irs1040ez Related persons, Special rule for related persons. Irs1040ez , Losses from sales or exchanges between related persons. Irs1040ez , Special rules for related persons. Irs1040ez , Like-kind exchanges between related persons. Irs1040ez , Sale to a related person. Irs1040ez , Buying replacement property from a related person. Irs1040ez , Related persons. Irs1040ez Rental income, Rents (Including Crop Shares) Rented property, improvements, Improvements to rented property. Irs1040ez Repairs, Repairs and Maintenance Repairs and improvements, How Do You Treat Repairs and Improvements? Repayment of income, Repayment of income. Irs1040ez Replacement Period, Replacement Period Property, Replacement Property Reportable transactions. Irs1040ez , Reminders Repossessions, Foreclosure or Repossession Right-of-way income, Easements and rights-of-way. Irs1040ez S Sale of home, Sale of your home. Irs1040ez Section 179 expense deduction, Section 179 Expense Deduction How to elect, How Do You Elect the Deduction? Listed property, Additional Rules for Listed Property Qualifying property, What Property Qualifies? Recapture, When Must You Recapture the Deduction? Self-employed health insurance, Self-employed health insurance deduction. Irs1040ez Self-employed health insurance deduction, Self-employed health insurance deduction. Irs1040ez Self-employment tax Community property, Community property. Irs1040ez Deduction, Deduction for employer-equivalent portion of self-employment tax. Irs1040ez How to pay, How To Pay Self-Employment Tax Landlord participation, Landlord Participation in Farming Material participation, Material participation for landlords. Irs1040ez Maximum net earnings, What's New for 2013 Methods for figuring net earnings, Methods for Figuring Net Earnings Optional method, Farm Optional Method Regular method, Regular Method Rental income, Landlord Participation in Farming Reporting, Reporting Self-Employment Tax Self-employment tax rate, Self-employment tax rate. Irs1040ez Share farming, Share farmer. Irs1040ez Tax rates, What's New for 2013 Who must pay, Who Must Pay Self-Employment Tax? Selling expenses, Selling expenses. Irs1040ez Selling price Defined, Selling price. Irs1040ez Reduced, Selling price reduced. Irs1040ez Settlement costs (fees), Settlement costs. Irs1040ez Social security and Medicare Credits of coverage, Earning credits in 2013. Irs1040ez Withholding of tax, Social Security and Medicare Taxes Social security number, Obtaining a social security number. Irs1040ez Software, computer, Computer software. Irs1040ez Soil Conservation, Conservation Expenses Contamination, Soil or other environmental contamination. Irs1040ez Special depreciation allowance How to elect not to claim, How Can You Elect Not To Claim the Allowance? Recapture, When Must You Recapture an Allowance Standard mileage rate, Standard mileage rate. Irs1040ez Start-up costs for businesses, Business start-up and organizational costs. Irs1040ez Suggestions for publication, Comments and suggestions. Irs1040ez T Tangible personal property, Tangible personal property. Irs1040ez Tax help, How To Get Tax Help Tax preparation fees, Tax preparation fees. Irs1040ez Tax shelter At-risk limits, At-Risk Limits Defined, Tax shelter. Irs1040ez Tax-free exchanges, Like-Kind Exchanges Taxes Excise, Excise Taxes Federal use, Highway use tax. Irs1040ez General, Taxes Self-employment, Self-Employment Tax State and federal, State and federal income taxes. Irs1040ez State and local general sales, State and local general sales taxes. Irs1040ez Withholding, Federal income tax withholding. Irs1040ez , Social Security and Medicare Taxes, Federal Income Tax Withholding Telephone expense, Telephone expense. Irs1040ez Tenant house expenses, Tenant House Expenses Term interests, Certain term interests in property. Irs1040ez Theft losses, Casualties, Thefts, and Condemnations Timber, Timber. Irs1040ez , Timber Depletion, Timber Tobacco quota buyout payments, Tobacco Quota Buyout Program Payments Tobacco settlement payments, National Tobacco Growers' Settlement Trust Fund Payments Trade-in, Sale and Purchase Travel expenses, Travel Expenses Truck expenses, Truck and Car Expenses Trust fund recovery penalty, Trust fund recovery penalty. Irs1040ez TTY/TDD information, How To Get Tax Help U Uniform capitalization rules Basis of assets, Uniform Capitalization Rules Inventory, Uniform capitalization rules. Irs1040ez Unstated interest, Unstated interest. Irs1040ez W Wages and salaries, Wages and salaries. Irs1040ez Water conservation, Conservation Expenses Water well, Water well. Irs1040ez , Water wells. Irs1040ez Weather-related sales, livestock, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. Irs1040ez Withholding Income tax, Federal Income Tax Withholding Social security and Medicare tax, Social Security and Medicare Taxes Prev  Up     Home   More Online Publications
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The Irs1040ez

Irs1040ez Publication 971 - Main Content Table of Contents How To Request ReliefException for agreements relating to TEFRA partnership proceedings. Irs1040ez The IRS Must Contact Your Spouse or Former Spouse Tax Court Review of Request Community Property LawsRelief for Married Persons Who Did Not File Joint Returns Innocent Spouse ReliefUnderstated Tax Erroneous Items Actual Knowledge or Reason To Know Indications of Unfairness for Innocent Spouse Relief Separation of Liability ReliefLimitations on Relief Equitable ReliefConditions for Getting Equitable Relief Factors for Determining Whether To Grant Equitable Relief RefundsProof Required Refunds Under Equitable Relief Limit on Amount of Refund Filled-in Form 8857 Flowcharts How To Request Relief File Form 8857 to ask the IRS for the types of relief discussed in this publication. Irs1040ez If you are requesting relief for more than three tax years, you must file an additional Form 8857. Irs1040ez The IRS will review your Form 8857 and let you know if you qualify. Irs1040ez A completed Form 8857 is shown later. Irs1040ez When to file Form 8857. Irs1040ez   You should file Form 8857 as soon as you become aware of a tax liability for which you believe only your spouse or former spouse should be held responsible. Irs1040ez The following are some of the ways you may become aware of such a liability. Irs1040ez The IRS is examining your tax return and proposing to increase your tax liability. Irs1040ez The IRS sends you a notice. Irs1040ez   You must file Form 8857 no later than two years after the date on which the IRS first attempted to collect the tax from you that occurs after July 22, 1998. Irs1040ez (But see the exceptions below for different filing deadlines that apply. Irs1040ez ) For this reason, do not delay filing because you do not have all the documentation. Irs1040ez   Collection activities that may start the 2-year period are: The IRS offset your income tax refund against an amount you owed on a joint return for another year and the IRS informed you about your right to file Form 8857. Irs1040ez The filing of a claim by the IRS in a court proceeding in which you were a party or the filing of a claim in a proceeding that involves your property. Irs1040ez This includes the filing of a proof of claim in a bankruptcy proceeding. Irs1040ez The filing of a suit by the United States against you to collect the joint liability. Irs1040ez The issuance of a section 6330 notice, which notifies you of the IRS' intent to levy and your right to a collection due process (CDP) hearing. Irs1040ez The collection-related notices include, but are not limited to, Letter 11 and Letter 1058. Irs1040ez Exception for equitable relief. Irs1040ez   On July 25, 2011, the IRS issued Notice 2011-70 (available at www. Irs1040ez irs. Irs1040ez gov/irb/2011-32_IRB/ar11. Irs1040ez html) expanding the amount of time to request equitable relief. Irs1040ez The amount of time to request equitable relief depends on whether you are seeking relief from a balance due, seeking a credit or refund, or both: Balance Due – Generally, you must file your request within the time period the IRS has to collect the tax. Irs1040ez Generally, the IRS has 10 years from the date the tax liability was assessed to collect the tax. Irs1040ez In certain cases, the 10-year period is suspended. Irs1040ez The amount of time the suspension is in effect will extend the time the IRS has to collect the tax. Irs1040ez See Pub. Irs1040ez 594, The IRS Collection Process, for details. Irs1040ez Credit or Refund – Generally, you must file your request within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. Irs1040ez But you may have more time to file if you live in a federally declared disaster area or you are physically or mentally unable to manage your financial affairs. Irs1040ez See Pub. Irs1040ez 556, Examination of Returns, Appeal Rights, and Claims for Refund, for details. Irs1040ez Both a Balance Due and a Credit or Refund – If you are seeking a refund of amounts you paid and relief from a balance due over and above what you have paid, the time period for credit or refund will apply to any payments you have made, and the time period for collection of a balance due amount will apply to any unpaid liability. Irs1040ez Exception for relief based on community property laws. Irs1040ez   If you are requesting relief based on community property laws, a different filing deadline applies. Irs1040ez See Relief from liability arising from community property law discussed later under Community Property Laws . Irs1040ez Form 8857 filed by or on behalf of a decedent. Irs1040ez   An executor (including any other duly appointed representative) may pursue a Form 8857 filed during the decedent's lifetime. Irs1040ez An executor (including any other duly appointed representative) may also file Form 8857 as long as the decedent satisfied the eligibility requirements while alive. Irs1040ez For purposes of separation of liability relief (discussed later), the decedent's marital status is determined on the earlier of the date relief was requested or the date of death. Irs1040ez Situations in which you are not entitled to relief. Irs1040ez   You are not entitled to innocent spouse relief for any tax year to which the following situations apply. Irs1040ez In a final decision dated after July 22, 1998, a court considered whether to grant you relief from joint liability and decided not to do so. Irs1040ez In a final decision dated after July 22, 1998, a court did not consider whether to grant you relief from joint liability, but you meaningfully participated in the proceeding and could have asked for relief. Irs1040ez You entered into an offer in compromise with the IRS. Irs1040ez You entered into a closing agreement with the IRS that disposed of the same liability for which you want to seek relief. Irs1040ez Exception for agreements relating to TEFRA partnership proceedings. Irs1040ez   You may be entitled to relief, discussed in (4) earlier, if you entered into a closing agreement for both partnership items and nonpartnership items, while you were a party to a pending TEFRA partnership proceeding. Irs1040ez (TEFRA is an acronym that refers to the “Tax Equity and Fiscal Responsibility Act of 1982” that prescribed the tax treatment of partnership items. Irs1040ez ) You are not entitled to relief for the nonpartnership items, but you will be entitled to relief for the partnership items (if you otherwise qualify). Irs1040ez Transferee liability not affected by innocent spouse relief provisions. Irs1040ez   The innocent spouse relief provisions do not affect tax liabilities that arise under federal or state transferee liability or property laws. Irs1040ez Therefore, even if you are relieved of the tax liability under the innocent spouse relief provisions, you may remain liable for the unpaid tax, interest, and penalties to the extent provided by these laws. Irs1040ez Example. Irs1040ez Herb and Wanda timely filed their 2008 joint income tax return on April 15, 2009. Irs1040ez Herb died in March 2010, and the executor of Herb's will transferred all of the estate's assets to Wanda. Irs1040ez In August 2010, the IRS assessed a deficiency for the 2008 return. Irs1040ez The items causing the deficiency belong to Herb. Irs1040ez Wanda is relieved of the deficiency under the innocent spouse relief provisions, and Herb's estate remains solely liable for it. Irs1040ez However, the IRS may collect the deficiency from Wanda to the extent permitted under federal or state transferee liability or property laws. Irs1040ez The IRS Must Contact Your Spouse or Former Spouse By law, the IRS must contact your spouse or former spouse. Irs1040ez There are no exceptions, even for victims of spousal abuse or domestic violence. Irs1040ez We will inform your spouse or former spouse that you filed Form 8857 and will allow him or her to participate in the process. Irs1040ez If you are requesting relief from joint and several liability on a joint return, the IRS must also inform him or her of its preliminary and final determinations regarding your request for relief. Irs1040ez However, to protect your privacy, the IRS will not disclose your personal information (for example, your current name, address, phone number(s), information about your employer, your income or assets) or any other information that does not relate to making a determination about your request for relief from liability. Irs1040ez If you petition the Tax Court (explained below), your spouse or former spouse may see your personal information. Irs1040ez Tax Court Review of Request After you file Form 8857, you may be able to petition (ask) the United States Tax Court to review your request for relief in the following two situations. Irs1040ez The IRS sends you a final determination letter regarding your request for relief. Irs1040ez You do not receive a final determination letter from the IRS within six months from the date you filed Form 8857. Irs1040ez If you seek equitable relief for an underpaid tax, you will be able to get a Tax Court review of your request only if the tax arose or remained unpaid on or after December 20, 2006. Irs1040ez The United States Tax Court is an independent judicial body and is not part of the IRS. Irs1040ez You must file a petition with the United States Tax Court in order for it to review your request for relief. Irs1040ez You must file the petition no later than the 90th day after the date the IRS mails its final determination notice to you. Irs1040ez If you do not file a petition, or you file it late, the Tax Court cannot review your request for relief. Irs1040ez You can get a copy of the rules for filing a petition by writing to the Tax Court at the following address:    United States Tax Court 400 Second Street, NW Washington, DC 20217 Or you can visit the Tax Court's website at www. Irs1040ez ustaxcourt. Irs1040ez gov Community Property Laws You must generally follow community property laws when filing a tax return if you are married and live in a community property state. Irs1040ez Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Irs1040ez Generally, community property laws require you to allocate community income and expenses equally between both spouses. Irs1040ez However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Irs1040ez Relief for Married Persons Who Did Not File Joint Returns Married persons who live in community property states, but who did not file joint returns, have two ways to get relief. Irs1040ez Relief From Liability Arising From Community Property Law You are not responsible for the tax relating to an item of community income if all the following conditions exist. Irs1040ez You did not file a joint return for the tax year. Irs1040ez You did not include the item of community income in gross income. Irs1040ez The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. Irs1040ez Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. Irs1040ez Your spouse's (or former spouse's) distributive share of partnership income. Irs1040ez Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). Irs1040ez Use the appropriate community property law to determine what is separate property. Irs1040ez Any other income that belongs to your spouse (or former spouse) under community property law. Irs1040ez You establish that you did not know of, and had no reason to know of, that community income. Irs1040ez See  Actual Knowledge or Reason To Know , below. Irs1040ez Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. Irs1040ez See Indications of unfairness for liability arising from community property law, later. Irs1040ez Actual knowledge or reason to know. Irs1040ez   You knew or had reason to know of an item of community income if: You actually knew of the item of community income, or A reasonable person in similar circumstances would have known of the item of community income. Irs1040ez Amount of community income unknown. Irs1040ez   If you are aware of the source of the item of community income or the income-producing activity, but are unaware of the specific amount, you are considered to know or have reason to know of the item of community income. Irs1040ez Not knowing the specific amount is not a basis for relief. Irs1040ez Reason to know. Irs1040ez   The IRS will consider all facts and circumstances in determining whether you had reason to know of an item of community income. Irs1040ez The facts and circumstances include: The nature of the item of community income and the amount of the item relative to other income items. Irs1040ez The financial situation of you and your spouse (or former spouse). Irs1040ez Your educational background and business experience. Irs1040ez Whether the item of community income represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Irs1040ez Indications of unfairness for liability arising from community property law. Irs1040ez   The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax due to the item of community income. Irs1040ez   The following are examples of factors the IRS will consider. Irs1040ez Whether you received a benefit, either directly or indirectly, from the omitted item of community income (defined below). Irs1040ez Whether your spouse (or former spouse) deserted you. Irs1040ez Whether you and your spouse have been divorced or separated. Irs1040ez  For other factors see Factors for Determining Whether To Grant Equitable Relief later. Irs1040ez Benefit from omitted item of community income. Irs1040ez   A benefit includes normal support, but does not include de minimis (small) amounts. Irs1040ez Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers received several years after the filing of the return. Irs1040ez   For example, if you receive property, including life insurance proceeds, from your spouse (or former spouse) and the property is traceable to omitted items of community income attributable to your spouse (or former spouse), you are considered to have benefitted from those omitted items of community income. Irs1040ez Equitable Relief If you do not qualify for the relief described above and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief (discussed later). Irs1040ez How and When To Request Relief You request relief by filing Form 8857, as discussed earlier. Irs1040ez Fill in Form 8857 according to the instructions. Irs1040ez For relief from liability arising from community property law, you must file Form 8857 no later than 6 months before the expiration of the period of limitations on assessment (including extensions) against your spouse for the tax year for which you are requesting relief. Irs1040ez However, if the IRS begins an examination of your return during that 6-month period, the latest time for requesting relief is 30 days after the date the IRS' initial contact letter to you. Irs1040ez The period of limitation on assessment is the amount of time, generally three years, that the IRS has from the date you filed the return to assess taxes that you owe. Irs1040ez Innocent Spouse Relief By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Irs1040ez Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). Irs1040ez However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. Irs1040ez The IRS can collect these amounts from either you or your spouse (or former spouse). Irs1040ez You must meet all of the following conditions to qualify for innocent spouse relief. Irs1040ez You filed a joint return. Irs1040ez There is an understated tax on the return that is due to erroneous items (defined later) of your spouse (or former spouse). Irs1040ez You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed). Irs1040ez See Actual Knowledge or Reason To Know, later. Irs1040ez Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax. Irs1040ez See Indications of Unfairness for Innocent Spouse Relief , later. Irs1040ez Innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. Irs1040ez A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Irs1040ez Understated Tax You have an understated tax if the IRS determined that your total tax should be more than the amount that was actually shown on your return. Irs1040ez Erroneous Items Erroneous items are either of the following. Irs1040ez Unreported income. Irs1040ez This is any gross income item received by your spouse (or former spouse) that is not reported. Irs1040ez Incorrect deduction, credit, or basis. Irs1040ez This is any improper deduction, credit, or property basis claimed by your spouse (or former spouse). Irs1040ez The following are examples of erroneous items. Irs1040ez The expense for which the deduction is taken was never paid or incurred. Irs1040ez For example, your spouse, a cash-basis taxpayer, deducted $10,000 of advertising expenses on Schedule C of your joint Form 1040, but never paid for any advertising. Irs1040ez The expense does not qualify as a deductible expense. Irs1040ez For example, your spouse claimed a business fee deduction of $10,000 that was for the payment of state fines. Irs1040ez Fines are not deductible. Irs1040ez No factual argument can be made to support the deductibility of the expense. Irs1040ez For example, your spouse claimed $4,000 for security costs related to a home office, which were actually veterinary and food costs for your family's two dogs. Irs1040ez Actual Knowledge or Reason To Know You knew or had reason to know of an understated tax if: You actually knew of the understated tax, or A reasonable person in similar circumstances would have known of the understated tax. Irs1040ez Actual knowledge. Irs1040ez   If you actually knew about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Irs1040ez You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Irs1040ez For information about the criteria for determining whether you actually knew about an erroneous item, see Actual Knowledge later under Separation of Liability Relief. Irs1040ez Reason to know. Irs1040ez   If you had reason to know about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Irs1040ez You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Irs1040ez   The IRS will consider all facts and circumstances in determining whether you had reason to know of an understated tax due to an erroneous item. Irs1040ez The facts and circumstances include: The nature of the erroneous item and the amount of the erroneous item relative to other items. Irs1040ez The financial situation of you and your spouse (or former spouse). Irs1040ez Your educational background and business experience. Irs1040ez The extent of your participation in the activity that resulted in the erroneous item. Irs1040ez Whether you failed to ask, at or before the time the return was signed, about items on the return or omitted from the return that a reasonable person would question. Irs1040ez Whether the erroneous item represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Irs1040ez Partial relief when a portion of erroneous item is unknown. Irs1040ez   You may qualify for partial relief if, at the time you filed your return, you had no knowledge or reason to know of only a portion of an erroneous item. Irs1040ez You will be relieved of the understated tax due to that portion of the item if all other requirements are met for that portion. Irs1040ez Example. Irs1040ez At the time you signed your joint return, you knew that your spouse did not report $5,000 of gambling winnings. Irs1040ez The IRS examined your tax return several months after you filed it and determined that your spouse's unreported gambling winnings were actually $25,000. Irs1040ez You established that you did not know about, and had no reason to know about, the additional $20,000 because of the way your spouse handled gambling winnings. Irs1040ez The understated tax due to the $20,000 will qualify for innocent spouse relief if you meet the other requirements. Irs1040ez The understated tax due to the $5,000 of gambling winnings you knew about will not qualify for relief. Irs1040ez Indications of Unfairness for Innocent Spouse Relief The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax. Irs1040ez The following are examples of factors the IRS will consider. Irs1040ez Whether you received a significant benefit (defined below), either directly or indirectly, from the understated tax. Irs1040ez Whether your spouse (or former spouse) deserted you. Irs1040ez Whether you and your spouse have been divorced or separated. Irs1040ez Whether you received a benefit on the return from the understated tax. Irs1040ez For other factors, see Factors for Determining Whether To Grant Equitable Relief later under Equitable Relief. Irs1040ez Significant benefit. Irs1040ez   A significant benefit is any benefit in excess of normal support. Irs1040ez Normal support depends on your particular circumstances. Irs1040ez Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers that may be received several years after the year of the understated tax. Irs1040ez Example. Irs1040ez You receive money from your spouse that is beyond normal support. Irs1040ez The money can be traced to your spouse's lottery winnings that were not reported on your joint return. Irs1040ez You will be considered to have received a significant benefit from that income. Irs1040ez This is true even if your spouse gives you the money several years after he or she received it. Irs1040ez Separation of Liability Relief Under this type of relief, the understated tax (plus interest and penalties) on your joint return is allocated between you and your spouse (or former spouse). Irs1040ez The understated tax allocated to you is generally the amount you are responsible for. Irs1040ez This type of relief is available only for unpaid liabilities resulting from the understated tax. Irs1040ez Refunds are not allowed. Irs1040ez To request separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Irs1040ez You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Irs1040ez (Under this rule, you are no longer married if you are widowed. Irs1040ez ) You were not a member of the same household (explained below) as the spouse with whom you filed the joint return at any time during the 12-month per- iod ending on the date you file Form 8857. Irs1040ez Members of the same household. Irs1040ez   You and your spouse are not members of the same household if you are living apart and are estranged. Irs1040ez However, you and your spouse are considered members of the same household if any of the following conditions are met. Irs1040ez You and your spouse reside in the same dwelling. Irs1040ez You and your spouse reside in separate dwellings but are not estranged, and one of you is temporarily absent from the other's household as explained in (3) below. Irs1040ez Either spouse is temporarily absent from the household and it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Irs1040ez Examples of temporary absences include absence due to imprisonment, illness, business, vacation, military service, or education. Irs1040ez Burden of proof. Irs1040ez   You must be able to prove that you meet all of the requirements for separation of liability relief (except actual knowledge) and that you did not transfer property to avoid tax (discussed later). Irs1040ez You must also establish the basis for allocating the erroneous items. Irs1040ez Limitations on Relief Even if you meet the requirements discussed previously, separation of liability relief will not be granted in the following situations. Irs1040ez The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Irs1040ez A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Irs1040ez The IRS proves that at the time you signed your joint return, you had actual knowledge (explained below) of any erroneous items giving rise to the deficiency that were allocable to your spouse (or former spouse). Irs1040ez For the definition of erroneous items, see Erroneous Items earlier under Innocent Spouse Relief. Irs1040ez Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Irs1040ez See Transfers of Property To Avoid Tax , later. Irs1040ez Actual Knowledge The relief discussed here does not apply to any part of the understated tax due to your spouse's (or former spouse's) erroneous items of which you had actual knowledge. Irs1040ez You and your spouse (or former spouse) remain jointly and severally liable for this part of the understated tax. Irs1040ez If you had actual knowledge of only a portion of an erroneous item, the IRS will not grant relief for that portion of the item. Irs1040ez You had actual knowledge of an erroneous item if: You knew that an item of unreported income was received. Irs1040ez (This rule applies whether or not there was a receipt of cash. Irs1040ez ) You knew of the facts that made an incorrect deduction or credit unallowable. Irs1040ez For a false or inflated deduction, you knew that the expense was not incurred, or not incurred to the extent shown on the tax return. Irs1040ez Knowledge of the source of an erroneous item is not sufficient to establish actual knowledge. Irs1040ez Also, your actual knowledge may not be inferred when you merely had a reason to know of the erroneous item. Irs1040ez Similarly, the IRS does not have to establish that you knew of the source of an erroneous item in order to establish that you had actual knowledge of the item itself. Irs1040ez Your actual knowledge of the proper tax treatment of an erroneous item is not relevant for purposes of demonstrating that you had actual knowledge of that item. Irs1040ez Neither is your actual knowledge of how the erroneous item was treated on the tax return. Irs1040ez For example, if you knew that your spouse received dividend income, relief is not available for that income even if you did not know it was taxable. Irs1040ez Example. Irs1040ez Bill and Karen Green filed a joint return showing Karen's wages of $50,000 and Bill's self-employment income of $10,000. Irs1040ez The IRS audited their return and found that Bill did not report $20,000 of self-employment income. Irs1040ez The additional income resulted in a $6,000 understated tax, plus interest and penalties. Irs1040ez After obtaining a legal separation from Bill, Karen filed Form 8857 to request separation of liability relief. Irs1040ez The IRS proved that Karen actually knew about the $20,000 of additional income at the time she signed the joint return. Irs1040ez Bill is liable for all of the understated tax, interest, and penalties because all of it was due to his unreported income. Irs1040ez Karen is also liable for the understated tax, interest, and penalties due to the $20,000 of unreported income because she actually knew of the item. Irs1040ez The IRS can collect the entire $6,000 plus interest and penalties from either Karen or Bill because they are jointly and individually liable for it. Irs1040ez Factors supporting actual knowledge. Irs1040ez   The IRS may rely on all facts and circumstances in determining whether you actually knew of an erroneous item at the time you signed the return. Irs1040ez The following are examples of factors the IRS may use. Irs1040ez Whether you made a deliberate effort to avoid learning about the item in order to be shielded from liability. Irs1040ez Whether you and your spouse (or former spouse) jointly owned the property that resulted in the erroneous item. Irs1040ez Exception for spousal abuse or domestic violence. Irs1040ez   Even if you had actual knowledge, you may still qualify for relief if you establish that: You were the victim of spousal abuse or domestic violence before signing the return, and Because of that abuse, you did not challenge the treatment of any items on the return because you were afraid your spouse (or former spouse) would retaliate against you. Irs1040ez   If you establish that you signed your joint return under duress (threat of harm or other form of coercion), then it is not a joint return, and you are not liable for any tax shown on that return or any tax deficiency for that return. Irs1040ez However, you may be required to file a separate return for that tax year. Irs1040ez For more information about duress, see the instructions for Form 8857. Irs1040ez Transfers of Property To Avoid Tax If your spouse (or former spouse) transfers property (or the right to property) to you for the main purpose of avoiding tax or payment of tax, the tax liability allocated to you will be increased by the fair market value of the property on the date of the transfer. Irs1040ez The increase may not be more than the entire amount of the liability. Irs1040ez A transfer will be presumed to have as its main purpose the avoidance of tax or payment of tax if the transfer is made after the date that is 1 year before the date on which the IRS sent its first letter of proposed deficiency. Irs1040ez This presumption will not apply if: The transfer was made under a divorce decree, separate maintenance agreement, or a written instrument incident to such an agreement, or You establish that the transfer did not have as its main purpose the avoidance of tax or payment of tax. Irs1040ez If the presumption does not apply, but the IRS can establish that the purpose of the transfer was the avoidance of tax or payment of tax, the tax liability allocated to you will be increased as explained above. Irs1040ez Equitable Relief If you do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law, you may still be relieved of responsibility for tax, interest, and penalties through equitable relief. Irs1040ez Unlike innocent spouse relief or separation of liability relief, you can get equitable relief from an understated tax (defined earlier under Innocent Spouse Relief ) or an underpaid tax. Irs1040ez An underpaid tax is an amount of tax you properly reported on your return but you have not paid. Irs1040ez For example, your joint 2009 return shows that you and your spouse owed $5,000. Irs1040ez You paid $2,000 with the return. Irs1040ez You have an underpaid tax of $3,000. Irs1040ez Conditions for Getting Equitable Relief You may qualify for equitable relief if you meet all of the following conditions. Irs1040ez You are not eligible for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Irs1040ez You have an understated tax or an underpaid tax. Irs1040ez You did not pay the tax. Irs1040ez However, see Refunds , later, for situations in which you are entitled to a refund of payments you made. Irs1040ez You establish that, taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated or underpaid tax. Irs1040ez See Factors for Determining Whether To Grant Equitable Relief, later. Irs1040ez You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Irs1040ez A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Irs1040ez Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Irs1040ez See Transfers of Property To Avoid Tax, earlier, under Separation of Liability Relief. Irs1040ez You did not file or fail to file your return with the intent to commit fraud. Irs1040ez The income tax liability from which you seek relief must be attributable to an item of the spouse (or former spouse) with whom you filed the joint return, unless one of the following exceptions applies: The item is attributable or partially attributable to you solely due to the operation of community property law. Irs1040ez If you meet this exception, that item will be considered attributable to your spouse (or former spouse) for purposes of equitable relief. Irs1040ez If the item is titled in your name, the item is presumed to be attributable to you. Irs1040ez However, you can rebut this presumption based on the facts and circumstances. Irs1040ez You did not know, and had no reason to know, that funds intended for the payment of tax were misappropriated by your spouse (or former spouse) for his or her benefit. Irs1040ez If you meet this exception, the IRS will consider granting equitable relief although the underpaid tax may be attributable in part or in full to your item, and only to the extent the funds intended for payment were taken by your spouse (or former spouse). Irs1040ez You establish that you were the victim of spousal abuse or domestic violence before signing the return, and that, as a result of the prior abuse, you did not challenge the treatment of any items on the return for fear of your spouse's (or former spouse's) retaliation. Irs1040ez If you meet this exception, relief will be considered although the understated tax or underpaid tax may be attributable in part or in full to your item. Irs1040ez Factors for Determining Whether To Grant Equitable Relief The IRS will consider all of the facts and circumstances in order to determine whether it is unfair to hold you responsible for the understated or underpaid tax. Irs1040ez The following are examples of factors that the IRS will consider to determine whether to grant equitable relief. Irs1040ez The IRS will consider all factors and weigh them appropriately. Irs1040ez Relevant Factors The following are examples of factors that may be relevant to whether the IRS will grant equitable relief. Irs1040ez Whether you are separated (whether legally or not) or divorced from your spouse. Irs1040ez A temporary absence, such as an absence due to imprisonment, illness, business, vacation, military service, or education, is not considered separation for this purpose. Irs1040ez A temporary absence is one where it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Irs1040ez Whether you would suffer a significant economic hardship if relief is not granted. Irs1040ez (In other words, you would not be able to pay your reasonable basic living expenses. Irs1040ez ) Whether you have a legal obligation under a divorce decree or agreement to pay the tax. Irs1040ez This factor will not weigh in favor of relief if you knew or had reason to know, when entering into the divorce decree or agreement, that your former spouse would not pay the income tax liability. Irs1040ez Whether you received a significant benefit (beyond normal support) from the underpaid tax or item causing the understated tax. Irs1040ez (For a definition of significant benefit, see Indications of Unfairness for Innocent Spouse Relief earlier. Irs1040ez ) Whether you have made a good faith effort to comply with federal income tax laws for the tax year for which you are requesting relief or the following years. Irs1040ez Whether you knew or had reason to know about the items causing the understated tax or that the tax would not be paid, as explained next. Irs1040ez Knowledge or reason to know. Irs1040ez   In the case of an underpaid tax, the IRS will consider whether you did not know and had no reason to know that your spouse (or former spouse) would not pay the income tax liability. Irs1040ez   In the case of an income tax liability that arose from an understated tax, the IRS will consider whether you did not know and had no reason to know of the item causing the understated tax. Irs1040ez Reason to know of the item giving rise to the understated tax will not be weighed more heavily than other factors. Irs1040ez Actual knowledge of the item giving rise to the understated tax, however, is a strong factor weighing against relief. Irs1040ez This strong factor may be overcome if the factors in favor of equitable relief are particularly compelling. Irs1040ez Reason to know. Irs1040ez   In determining whether you had reason to know, the IRS will consider your level of education, any deceit or evasiveness of your spouse (or former spouse), your degree of involvement in the activity generating the income tax liability, your involvement in business and household financial matters, your business or financial expertise, and any lavish or unusual expenditures compared with past spending levels. Irs1040ez Example. Irs1040ez You and your spouse filed a joint 2009 return. Irs1040ez That return showed you owed $10,000. Irs1040ez You had $5,000 of your own money and you took out a loan to pay the other $5,000. Irs1040ez You gave 2 checks for $5,000 each to your spouse to pay the $10,000 liability. Irs1040ez Without telling you, your spouse took the $5,000 loan and spent it on himself. Irs1040ez You and your spouse were divorced in 2010. Irs1040ez In addition, you had no knowledge or reason to know at the time you signed the return that the tax would not be paid. Irs1040ez These facts indicate to the IRS that it may be unfair to hold you liable for the $5,000 underpaid tax. Irs1040ez The IRS will consider these facts, together with all of the other facts and circumstances, to determine whether to grant you equitable relief from the $5,000 underpaid tax. Irs1040ez Factors Weighing in Favor of Equitable Relief The following are examples of factors that will weigh in favor of equitable relief, but will not weigh against equitable relief. Irs1040ez Whether your spouse (or former spouse) abused you. Irs1040ez Whether you were in poor mental or physical health on the date you signed the return or at the time you requested relief. Irs1040ez Refunds If you are granted relief, refunds are: Permitted under innocent spouse relief as explained later under Limit on Amount of Refund . Irs1040ez Not permitted under separation of liability relief. Irs1040ez Permitted in limited circumstances under equitable relief, as explained under Refunds Under Equitable Relief. Irs1040ez Proof Required The IRS will only refund payments you made with your own money. Irs1040ez However, you must provide proof that you made the payments with your own money. Irs1040ez Examples of proof are a copy of your bank statement or a canceled check. Irs1040ez No proof is required if your individual refund was used by the IRS to pay a tax you owed on a joint tax return for another year. Irs1040ez Refunds Under Equitable Relief In the following situations, you are eligible to receive a refund of certain payments you made. Irs1040ez Underpaid tax. Irs1040ez   If you are granted relief for an underpaid tax, you are eligible for a refund of separate payments that you made after July 22, 1998. Irs1040ez However, you are not eligible for refunds of payments made with the joint return, joint payments, or payments that your spouse (or former spouse) made. Irs1040ez For example, withholding tax and estimated tax payments cannot be refunded because they are considered made with the joint return. Irs1040ez   The amount of the refund is subject to the limit discussed later under Limit on Amount of Refund. Irs1040ez Understated tax. Irs1040ez   If you are granted relief for an understated tax, you are eligible for a refund of certain payments made under an installment agreement that you entered into with the IRS, if you have not defaulted on the installment agreement. Irs1040ez You are not in default if the IRS did not issue you a notice of default or take any action to end the installment agreement. Irs1040ez Only installment payments made after the date you filed Form 8857 are eligible for a refund. Irs1040ez   The amount of the refund is subject to the limit discussed next. Irs1040ez Limit on Amount of Refund The amount of your refund is limited. Irs1040ez Read the following chart to find out the limit. Irs1040ez IF you file Form 8857. Irs1040ez . Irs1040ez . Irs1040ez THEN the refund cannot be more than. Irs1040ez . Irs1040ez . Irs1040ez Within 3 years after filing your return The part of the tax paid within 3 years (plus any extension of time for filing your return) before you filed Form 8857. Irs1040ez After the 3-year period, but within 2 years from the time you paid the tax The tax you paid within 2 years immediately before you filed Form 8857. Irs1040ez Filled-in Form 8857 This part explains how Janie Boulder fills out Form 8857 to request innocent spouse relief. Irs1040ez Janie and Joe Boulder filed a joint tax return for 2007. Irs1040ez They claimed one dependency exemption for their son Michael. Irs1040ez Their return was adjusted by the IRS because Joe did not report a $5,000 award he won that year. Irs1040ez Janie did not know about the award when the return was filed. Irs1040ez They agreed to the adjustment but could not pay the additional amount due of $815 ($650 tax + $165 penalty and interest). Irs1040ez Janie and Joe were divorced on May 13, 2009. Irs1040ez In February 2010, Janie filed her 2009 federal income tax return as head of household. Irs1040ez She expected a refund of $1,203. Irs1040ez In May 2010, she received a notice informing her that the IRS had offset her refund against the $815 owed on her joint 2007 income tax return and that she had a right to file Form 8857. Irs1040ez Janie applies the conditions listed earlier under Innocent Spouse Relief to see if she qualifies for relief. Irs1040ez Janie meets the first and second conditions because the joint tax return they filed has an understated tax due to Joe's erroneous item. Irs1040ez Janie believes she meets the third condition. Irs1040ez She did not know about the award and had no reason to know about it because of the secretive way Joe conducted his financial affairs. Irs1040ez Janie believes she meets the fourth condition. Irs1040ez She believes it would be unfair to be held liable for the tax because she did not benefit from the award. Irs1040ez Joe spent it on personal items for his use only. Irs1040ez Because Janie believes she qualifies for innocent spouse relief, she first completes Part I of Form 8857 to determine if she should file the form. Irs1040ez In Part I, she makes all entries under the Tax Year 1 column because she is requesting relief for only one year. Irs1040ez Part I Line 1. Irs1040ez   She enters “2007” on line 1 because this is the tax year for which she is requesting relief. Irs1040ez Line 2. Irs1040ez   She checks the box because she wants a refund. Irs1040ez Note. Irs1040ez Because the IRS used her individual refund to pay the tax owed on the joint tax return, she does not need to provide proof of payment. Irs1040ez Line 3. Irs1040ez   She checks the “No” box because the IRS did not use her share of a joint refund to pay Joe's past-due debts. Irs1040ez Line 4. Irs1040ez   She checks the “Yes” box because she filed a joint tax return for tax year 2007. Irs1040ez Line 5. Irs1040ez   She skips this line because she checked the “Yes” box on line 4. Irs1040ez Part II Line 6. Irs1040ez   She enters her name, address, social security number, county, and best daytime phone number. Irs1040ez Part III Line 7. Irs1040ez   She enters Joe's name, address, social security number, and best daytime phone number. Irs1040ez Line 8. Irs1040ez   She checks the “divorced since” box and enters the date she was divorced as “05/13/2009. Irs1040ez ” She attaches a copy of her entire divorce decree (not Illustrated) to the form. Irs1040ez Line 9. Irs1040ez   She checks the box for “High school diploma, equivalent, or less,” because she had completed high school when her 2007 joint tax return was filed. Irs1040ez Line 10. Irs1040ez   She checks the “No” box because she was not a victim of spousal abuse or domestic violence. Irs1040ez Line 11. Irs1040ez   She checks the “No” box because neither she nor Joe incurred any large expenses during the year for which she wants relief. Irs1040ez Line 12. Irs1040ez   She checks the “Yes” box because she signed the 2007 joint tax return. Irs1040ez Line 13. Irs1040ez   She checks the “No” box because she did not have a mental or physical condition when the return was filed and does not have one now. Irs1040ez Part IV Line 14. Irs1040ez   Because she was not involved in preparing the return, she checks the box, “You were not involved in preparing the returns. Irs1040ez ” Line 15. Irs1040ez   She checks the box, “You did not know anything was incorrect or missing” because she did not know that Joe had received a $5,000 award. Irs1040ez She explains this in the space provided. Irs1040ez Line 16. Irs1040ez   She checks the box, “You knew that person had income” because she knew Joe had income from wages. Irs1040ez She also lists Joe's income. Irs1040ez Under “Type of Income” she enters “wages. Irs1040ez ” Under “Who paid it to that person,” she enters the name of Joe's employer, “Allied. Irs1040ez ” Under “Tax Year 1” she enters the amount of Joe's wages, “$40,000. Irs1040ez ” Because she is only requesting relief for one tax year, she leaves the entry spaces for “Tax Year 2” and “Tax Year 3” blank. Irs1040ez Line 17. Irs1040ez   She checks the “No” box because she did not know any amount was owed to the IRS when the 2007 return was signed. Irs1040ez Line 18. Irs1040ez   She checks the “No” box because, when the return was signed, she was not having financial problems. Irs1040ez Line 19. Irs1040ez   She checks the box, “You were not involved in handling money for the household” because Joe handled all the money for the household. Irs1040ez She provides additional information in the space provided. Irs1040ez Line 20. Irs1040ez   She checks the “No” box because Joe has never transferred money or property to her. Irs1040ez Part V Line 21. Irs1040ez   She enters the number “1” on both the line for “Adults” and the line for “Children” because her current household consists of herself and her son. Irs1040ez Line 22. Irs1040ez   She enters her average monthly income for her entire household. Irs1040ez Line 23. Irs1040ez   She lists her assets, which are $500 for the fair market value of a car, $450 in her checking account, and $100 in her savings account. Irs1040ez Signing and mailing Form 8857. Irs1040ez    Janie signs and dates the form. Irs1040ez She attaches the copy of her divorce decree (not illustrated) required by line 8. Irs1040ez Finally, she sends the form to the IRS address or fax number shown in the instructions for Form 8857. Irs1040ez This image is too large to be displayed in the current screen. Irs1040ez Please click the link to view the image. Irs1040ez Boulder's filled-in Form 8857 page 1 This image is too large to be displayed in the current screen. Irs1040ez Please click the link to view the image. Irs1040ez Boulder's filled-in Form 8857 page 2 This image is too large to be displayed in the current screen. Irs1040ez Please click the link to view the image. Irs1040ez Boulder's filled-in Form 8857 page 3 This image is too large to be displayed in the current screen. Irs1040ez Please click the link to view the image. Irs1040ez Boulder's filled-in Form 8857 page 4 Flowcharts The following flowcharts provide a quick way for determining whether you may qualify for relief. Irs1040ez But do not rely on these flowcharts alone. Irs1040ez Also read the earlier discussions. Irs1040ez Figure A. Irs1040ez Do You Qualify for Innocent Spouse Relief? Please click here for the text description of the image. Irs1040ez "Do You Qualify for Innocent Spouse Relief?" Figure B. Irs1040ez Do You Qualify for Separation of Liability Relief? Please click here for the text description of the image. Irs1040ez "Do You Qualify for Separation of Liability Relief?" Figure C. Irs1040ez Do You Qualify for Equitable Relief? This image is too large to be displayed in the current screen. Irs1040ez Please click the link to view the image. Irs1040ez "Do You Qualify for Equitable Relief?" Prev  Up  Next   Home   More Online Publications