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Need File Back Taxes

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Need File Back Taxes

Need file back taxes 3. Need file back taxes   Reporting Rental Income, Expenses, and Losses Table of Contents Which Forms To UseSchedule E (Form 1040) Schedule C (Form 1040), Profit or Loss From Business Qualified Joint Venture Limits on Rental LossesAt-Risk Rules Passive Activity Limits Casualties and Thefts Example Figuring the net income or loss for a residential rental activity may involve more than just listing the income and deductions on Schedule E (Form 1040). Need file back taxes There are activities which do not qualify to use Schedule E, such as when the activity is not engaged in to make a profit or when you provide substantial services in conjunction with the property. Need file back taxes There are also the limitations which may need to be applied if you have a net loss on Schedule E. Need file back taxes There are two: (1) the limitation based on the amount of investment you have at risk in your rental activity, and (2) the special limits imposed on passive activities. Need file back taxes You may also have a gain or loss related to your rental property from a casualty or theft. Need file back taxes This is considered separately from the income and expense information you report on Schedule E. Need file back taxes Which Forms To Use The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). Need file back taxes However, do not use that schedule to report a not-for-profit activity. Need file back taxes See Not Rented for Profit , in chapter 4. Need file back taxes There are also other rental situations in which forms other than Schedule E would be used. Need file back taxes Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. Need file back taxes , you normally report your rental income and expenses on Schedule E, Part I. Need file back taxes List your total income, expenses, and depreciation for each rental property. Need file back taxes Be sure to enter the number of fair rental and personal use days on line 2. Need file back taxes If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. Need file back taxes Complete lines 1 and 2 for each property. Need file back taxes However, fill in lines 23a through 26 on only one Schedule E. Need file back taxes On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. Need file back taxes To find out if you need to attach Form 4562, see Form 4562 , later. Need file back taxes If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. Need file back taxes Form 6198, At-Risk Limitations. Need file back taxes See At-Risk Rules , later. Need file back taxes Also see Publication 925. Need file back taxes Form 8582, Passive Activity Loss Limitations. Need file back taxes See Passive Activity Limits , later. Need file back taxes Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. Need file back taxes If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. Need file back taxes Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). Need file back taxes Form 4562. Need file back taxes   You must complete and attach Form 4562 for rental activities only if you are claiming: Depreciation, including the special depreciation allowance, on property placed in service during 2013; Depreciation on listed property (such as a car), regardless of when it was placed in service; or Any other car expenses, including the standard mileage rate or lease expenses. Need file back taxes Otherwise, figure your depreciation on your own worksheet. Need file back taxes You do not have to attach these computations to your return, but you should keep them in your records for future reference. Need file back taxes   See Publication 946 for information on preparing Form 4562. Need file back taxes Schedule C (Form 1040), Profit or Loss From Business Generally, Schedule C is used when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer. Need file back taxes Providing substantial services. Need file back taxes   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Need file back taxes Use Form 1065, U. Need file back taxes S. Need file back taxes Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Need file back taxes Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. Need file back taxes For information, see Publication 334, Tax Guide for Small Business. Need file back taxes Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. Need file back taxes For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5. Need file back taxes Qualified Joint Venture If you and your spouse each materially participate (see Material participation under Passive Activity Limits, later) as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Need file back taxes This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. Need file back taxes If you make this election, you must report rental real estate income on Schedule E (or Schedule C if you provide substantial services). Need file back taxes You will not be required to file Form 1065 for any year the election is in effect. Need file back taxes Rental real estate income generally is not included in net earnings from self-employment subject to self-employment tax and generally is subject to the passive activity limits. Need file back taxes If you and your spouse filed a Form 1065 for the year prior to the election, the partnership terminates at the end of the tax year immediately preceding the year the election takes effect. Need file back taxes For more information on qualified joint ventures, go to IRS. Need file back taxes gov and enter “qualified joint venture” in the search box. Need file back taxes Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. Need file back taxes You must consider these rules in the order shown below. Need file back taxes Both are discussed in this section. Need file back taxes At-risk rules. Need file back taxes These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. Need file back taxes This applies only if the real property was placed in service after 1986. Need file back taxes Passive activity limits. Need file back taxes Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. Need file back taxes However, there are exceptions. Need file back taxes At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. Need file back taxes Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. Need file back taxes In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. Need file back taxes You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. Need file back taxes Any loss that is disallowed because of the at-risk limits is treated as a deduction from the same activity in the next tax year. Need file back taxes See Publication 925 for a discussion of the at-risk rules. Need file back taxes Form 6198. Need file back taxes   If you are subject to the at-risk rules, file Form 6198, At-Risk Limitations, with your tax return. Need file back taxes Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. Need file back taxes For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. Need file back taxes For a discussion of activities that are not considered rental activities, see Rental Activities in Publication 925. Need file back taxes Deductions or losses from passive activities are limited. Need file back taxes You generally cannot offset income, other than passive income, with losses from passive activities. Need file back taxes Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Need file back taxes Any excess loss or credit is carried forward to the next tax year. Need file back taxes Exceptions to the rules for figuring passive activity limits for personal use of a dwelling unit and for rental real estate with active participation are discussed later. Need file back taxes For a detailed discussion of these rules, see Publication 925. Need file back taxes Real estate professionals. Need file back taxes   If you are a real estate professional, complete line 43 of Schedule E. Need file back taxes      You qualify as a real estate professional for the tax year if you meet both of the following requirements. Need file back taxes More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate. Need file back taxes You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate. Need file back taxes If you qualify as a real estate professional, rental real estate activities in which you materially participated are not passive activities. Need file back taxes For purposes of determining whether you materially participated in your rental real estate activities, each interest in rental real estate is a separate activity unless you elect to treat all your interests in rental real estate as one activity. Need file back taxes   Do not count personal services you perform as an employee in real property trades or businesses unless you are a 5% owner of your employer. Need file back taxes You are a 5% owner if you own (or are considered to own) more than 5% of your employer's outstanding stock, or capital or profits interest. Need file back taxes   Do not count your spouse's personal services to determine whether you met the requirements listed earlier to qualify as a real estate professional. Need file back taxes However, you can count your spouse's participation in an activity in determining if you materially participated. Need file back taxes Real property trades or businesses. Need file back taxes   A real property trade or business is a trade or business that does any of the following with real property. Need file back taxes Develops or redevelops it. Need file back taxes Constructs or reconstructs it. Need file back taxes Acquires it. Need file back taxes Converts it. Need file back taxes Rents or leases it. Need file back taxes Operates or manages it. Need file back taxes Brokers it. Need file back taxes Choice to treat all interests as one activity. Need file back taxes   If you were a real estate professional and had more than one rental real estate interest during the year, you can choose to treat all the interests as one activity. Need file back taxes You can make this choice for any year that you qualify as a real estate professional. Need file back taxes If you forgo making the choice for one year, you can still make it for a later year. Need file back taxes   If you make the choice, it is binding for the tax year you make it and for any later year that you are a real estate professional. Need file back taxes This is true even if you are not a real estate professional in any intervening year. Need file back taxes (For that year, the exception for real estate professionals will not apply in determining whether your activity is subject to the passive activity rules. Need file back taxes )   See the Instructions for Schedule E for information about making this choice. Need file back taxes Material participation. Need file back taxes   Generally, you materially participated in an activity for the tax year if you were involved in its operations on a regular, continuous, and substantial basis during the year. Need file back taxes For details, see Publication 925 or the Instructions for Schedule C. Need file back taxes Participating spouse. Need file back taxes   If you are married, determine whether you materially participated in an activity by also counting any participation in the activity by your spouse during the year. Need file back taxes Do this even if your spouse owns no interest in the activity or files a separate return for the year. Need file back taxes Form 8582. Need file back taxes    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. Need file back taxes See Form 8582 not required , later in this chapter, to determine if you must complete Form 8582. Need file back taxes   If you are required to complete Form 8582 and are also subject to the at-risk rules, include the amount from Form 6198, line 21 (deductible loss) in column (b) of Form 8582, Worksheet 1 or 3, as required. Need file back taxes Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. Need file back taxes Instead, follow the rules explained in chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Need file back taxes Exception for Rental Real Estate With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Need file back taxes This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Need file back taxes Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Need file back taxes Example. Need file back taxes Jane is single and has $40,000 in wages, $2,000 of passive income from a limited partnership, and $3,500 of passive loss from a rental real estate activity in which she actively participated. Need file back taxes $2,000 of Jane's $3,500 loss offsets her passive income. Need file back taxes The remaining $1,500 loss can be deducted from her $40,000 wages. Need file back taxes The special allowance is not available if you were married, lived with your spouse at any time during the year, and are filing a separate return. Need file back taxes Active participation. Need file back taxes   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Need file back taxes Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions. Need file back taxes Example. Need file back taxes Mike is single and had the following income and losses during the tax year:   Salary $42,300     Dividends 300     Interest 1,400     Rental loss (4,000)   The rental loss was from the rental of a house Mike owned. Need file back taxes Mike had advertised and rented the house to the current tenant himself. Need file back taxes He also collected the rents, which usually came by mail. Need file back taxes All repairs were either made or contracted out by Mike. Need file back taxes Although the rental loss is from a passive activity, because Mike actively participated in the rental property management he can use the entire $4,000 loss to offset his other income. Need file back taxes Maximum special allowance. Need file back taxes   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. Need file back taxes   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. Need file back taxes If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Need file back taxes   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. Need file back taxes Modified adjusted gross income (MAGI). Need file back taxes   This is your adjusted gross income from Form 1040, U. Need file back taxes S. Need file back taxes Individual Income Tax Return, line 38, or Form 1040NR, U. Need file back taxes S. Need file back taxes Nonresident Alien Income Tax Return, line 37, figured without taking into account: The taxable amount of social security or equivalent tier 1 railroad retirement benefits, The deductible contributions to traditional individual retirement accounts (IRAs) and section 501(c)(18) pension plans, The exclusion from income of interest from Series EE and I U. Need file back taxes S. Need file back taxes savings bonds used to pay higher educational expenses, The exclusion of amounts received under an employer's adoption assistance program, Any passive activity income or loss included on Form 8582, Any rental real estate loss allowed to real estate professionals, Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the Instructions for Form 8582), The deduction allowed for one-half of self-employment tax, The deduction allowed for interest paid on student loans, The deduction for qualified tuition and related fees, and The domestic production activities deduction (see the Instructions for Form 8903). Need file back taxes Form 8582 not required. Need file back taxes   Do not complete Form 8582 if you meet all of the following conditions. Need file back taxes Your only passive activities were rental real estate activities in which you actively participated. Need file back taxes Your overall net loss from these activities is $25,000 or less ($12,500 or less if married filing separately and you lived apart from your spouse all year). Need file back taxes If married filing separately, you lived apart from your spouse all year. Need file back taxes You have no prior year unallowed losses from these (or any other passive) activities. Need file back taxes You have no current or prior year unallowed credits from passive activities. Need file back taxes Your MAGI is $100,000 or less ($50,000 or less if married filing separately and you lived apart from your spouse all year). Need file back taxes You do not hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust. Need file back taxes   If you meet all of the conditions listed above, your rental real estate activities are not limited by the passive activity rules and you do not have to complete Form 8582. Need file back taxes On lines 23a through 23e of your Schedule E, enter the applicable amounts. Need file back taxes Casualties and Thefts As a result of a casualty or theft, you may have a loss related to your rental property. Need file back taxes You may be able to deduct the loss on your income tax return. Need file back taxes Casualty. Need file back taxes   This is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Need file back taxes Such events include a storm, fire, or earthquake. Need file back taxes Theft. Need file back taxes   This is defined as the unlawful taking and removing of your money or property with the intent to deprive you of it. Need file back taxes Gain from casualty or theft. Need file back taxes   It is also possible to have a gain from a casualty or theft if you receive money, including insurance, that is more than your adjusted basis in the property. Need file back taxes Generally, you must report this gain. Need file back taxes However, under certain circumstances, you may defer paying tax by choosing to postpone reporting the gain. Need file back taxes To do this, you generally must buy replacement property within 2 years after the close of the first tax year in which any part of your gain is realized. Need file back taxes In certain circumstances, the replacement period can be greater than 2 years; see Replacement Period in Publication 547 for more information. Need file back taxes The cost of the replacement property must be equal to or more than the net insurance or other payment you received. Need file back taxes More information. Need file back taxes   For information on business and nonbusiness casualty and theft losses, see Publication 547. Need file back taxes How to report. Need file back taxes    If you had a casualty or theft that involved property used in your rental activity, figure the net gain or loss in Section B of Form 4684, Casualties and Thefts. Need file back taxes Follow the Instructions for Form 4684 for where to carry your net gain or loss. Need file back taxes Example In February 2008, Marie Pfister bought a rental house for $135,000 (house $120,000 and land $15,000) and immediately began renting it out. Need file back taxes In 2013, she rented it all 12 months for a monthly rental fee of $1,125. Need file back taxes In addition to her rental income of $13,500 (12 x $1,125), Marie had the following expenses. Need file back taxes Mortgage interest $8,000 Fire insurance (1-year policy) 250 Miscellaneous repairs 400 Real estate taxes imposed and paid 500 Maintenance 200 Marie depreciates the residential rental property under MACRS GDS. Need file back taxes This means using the straight line method over a recovery period of 27. Need file back taxes 5 years. Need file back taxes She uses Table 2-2d to find her depreciation percentage. Need file back taxes Because she placed the property in service in February 2008, she continues to use that row of Table 2-2d. Need file back taxes For year 6, the rate is 3. Need file back taxes 636%. Need file back taxes Marie figures her net rental income or loss for the house as follows: Total rental income received  ($1,125 × 12) $13,500 Minus: Expenses     Mortgage interest $8,000   Fire insurance 250   Miscellaneous repairs 400   Real estate taxes 500   Maintenance 200   Total expenses 9,350 Balance $4,150 Minus: Depreciation ($120,000 x 3. Need file back taxes 636%) 4,363 Net rental (loss) for house ($213)       Marie had a net loss for the year. Need file back taxes Because she actively participated in her passive rental real estate activity and her loss was less than $25,000, she can deduct the loss on her return. Need file back taxes Marie also meets all of the requirements for not having to file Form 8582. Need file back taxes She uses Schedule E, Part I, to report her rental income and expenses. Need file back taxes She enters her income, expenses, and depreciation for the house in the column for Property A and enters her loss on line 22. Need file back taxes Form 4562 is not required. Need file back taxes Prev  Up  Next   Home   More Online Publications
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Need file back taxes 14. Need file back taxes   Excise Taxes Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Fuels Used in FarmingBuyer of fuel, including undyed diesel fuel or undyed kerosene. Need file back taxes Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Need file back taxes Custom application of fertilizer and pesticide. Need file back taxes Fuel not used for farming. Need file back taxes Dyed Diesel Fuel and Dyed Kerosene Fuels Used in Off-Highway Business Use Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines How To Claim a Credit or RefundCredit only. Need file back taxes Claiming a Credit Claiming a Refund Including the Credit or Refund in Income Introduction You may be eligible to claim a credit on your income tax return for the federal excise tax on certain fuels. Need file back taxes You may also be eligible to claim a quarterly refund of the fuel taxes during the year, instead of waiting to claim a credit on your income tax return. Need file back taxes Whether you can claim a credit or refund depends on whether the fuel was taxed and the purpose (nontaxable use) for which you used the fuel. Need file back taxes The nontaxable uses of fuel for which a farmer may claim a credit or refund are generally the following. Need file back taxes Use on a farm for farming purposes. Need file back taxes Off-highway business use. Need file back taxes Uses other than as a fuel in a propulsion engine, such as home use. Need file back taxes Table 14-1 presents an overview of credits and refunds that may be claimed for fuels used for the nontaxable uses listed above. Need file back taxes See Publication 510, Excise Taxes, for more information. Need file back taxes Topics - This chapter discusses: Fuels used in farming Dyed diesel fuel and dyed kerosene Fuels used in off-highway business use Fuels used for household purposes How to claim a credit or refund Including the credit or refund in income Useful Items - You may want to see: Publication 510 Excise Taxes Form (and Instructions) 720 Quarterly Federal Excise Tax Return 4136 Credit for Federal Tax Paid on Fuels 8849 Claim for Refund of Excise Taxes See chapter 16 for information about getting publications and forms. Need file back taxes Fuels Used in Farming Owners, operators, and tenants of farms and certain other persons may be eligible to claim a credit or refund of excise taxes on fuel used in the trade or business of farming, when used on a farm in the United States for farming purposes. Need file back taxes See Table 14-1 for a list of available fuel tax credits and refunds. Need file back taxes Fuel is used on a farm for farming purposes only if used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. Need file back taxes Farm. Need file back taxes   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms, orchards, plantations, ranches, nurseries, ranges, and feed yards for finishing cattle. Need file back taxes It also includes structures such as greenhouses used primarily for raising agricultural or horticultural commodities. Need file back taxes A fish farm is an area where fish are grown or raised and not merely caught or harvested. Need file back taxes Table 14-1. Need file back taxes Fuel Tax Credits and Refunds at a Glance Use this table to see if you can take a credit or refund for a nontaxable use of the fuel listed. Need file back taxes Fuel Used On a Farm for Farming Purposes Off-Highway Business Use Household Use or Use Other Than as a Fuel1 Gasoline Credit only Credit or refund None Aviation gasoline Credit only None None Undyed diesel fuel and undyed kerosene Credit or refund Credit or refund2 Credit or refund2 Kerosene for use in aviation Credit or refund None None Dyed diesel fuel and dyed kerosene None None None Other Fuels (including alternative fuels)3 Credit or refund Credit or refund None 1For a use other than as fuel in a propulsion engine. Need file back taxes 2Applies to undyed kerosene not sold from a blocked pump or, under certain circumstances, for blending with undyed diesel fuel to be used for heating purposes. Need file back taxes See Reg. Need file back taxes 48. Need file back taxes 6427-10 (b)(1) for the definition of a blocked pump. Need file back taxes 3Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under Internal Revenue Code section 4081. Need file back taxes It includes the alternative fuels: liquefied petroleum gas (LPG),“P” Series fuels, compressed natural gas (CNG), liquefied hydrogen, any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, liquid fuel derived from biomass, liquid natural gas (LNG), liquefied gas derived from biomass, and compressed gas derived from biomass. Need file back taxes Farming purposes. Need file back taxes   As the owner, tenant, or operator and the ultimate purchaser of fuel that you purchased, you use the fuel on a farm for farming purposes if you use it in any of the following ways. Need file back taxes To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. Need file back taxes To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. Need file back taxes To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. Need file back taxes To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. Need file back taxes For this use to qualify, you must have produced more than half the commodity so treated during the tax year. Need file back taxes The more-than-one-half test applies separately to each commodity. Need file back taxes Commodity means a single raw product. Need file back taxes For example, apples and peaches are two separate commodities. Need file back taxes To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if these activities are incidental to your farming operations. Need file back taxes Your tree operations are incidental only if they are minor in nature when compared to the total farming operations. Need file back taxes   If any other person, such as a neighbor or custom operator (independent contractor), performs a service for you on your farm for any of the purposes included in list items (1) or (2), above, you are considered to be the ultimate purchaser who used the fuel on a farm for farming purposes. Need file back taxes Therefore, you can still claim the credit or refund for the fuel so used. Need file back taxes However, see Custom application of fertilizer and pesticide, later. Need file back taxes If the other person performs any other services for you on your farm for purposes not included in list items (1) or (2) above, no one can claim the credit or refund for fuel used on your farm for those other services. Need file back taxes Buyer of fuel, including undyed diesel fuel or undyed kerosene. Need file back taxes   If doubt exists whether the owner, tenant, or operator of the farm bought the fuel, determine who actually bore the cost of the fuel. Need file back taxes For example, if the owner of a farm and his or her tenant equally share the cost of gasoline used on the farm, each can claim a credit for the tax on half the fuel used. Need file back taxes Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Need file back taxes   Usually, the farmer is the only person who can make a claim for credit or refund for the tax on undyed diesel fuel, undyed kerosene, or other fuels (including alternative fuel) used for farming purposes. Need file back taxes However, see Custom application of fertilizer and pesticide, next. Need file back taxes Also see Dyed Diesel Fuel and Dyed Kerosene, later. Need file back taxes Example. Need file back taxes Farm owner Haleigh Blue hired custom operator Tyler Steele to cultivate the soil on her farm. Need file back taxes Tyler used 200 gallons of undyed diesel fuel that he purchased to perform the work on Haleigh's farm. Need file back taxes In addition, Haleigh hired contractor Lee Brown to pack and store her apple crop. Need file back taxes Lee bought 25 gallons of undyed diesel fuel to use in packing the apples. Need file back taxes Haleigh can claim the credit for the 200 gallons of undyed diesel fuel used by Tyler on her farm because it qualifies as fuel used on the farm for farming purposes. Need file back taxes No one can claim a credit for the 25 gallons used by Lee because that fuel was not used for a farming purpose included in list items (1) or (2), above. Need file back taxes In the above example, both Tyler Steele and Lee Brown could have purchased dyed (untaxed) diesel fuel for their tasks. Need file back taxes Custom application of fertilizer and pesticide. Need file back taxes   Fuel used on a farm for farming purposes includes fuel used in the application (including aerial application) of fertilizer, pesticides, or other substances. Need file back taxes Generally, the applicator is treated as having used the fuel on a farm for farming purposes. Need file back taxes For applicators using highway vehicles, only the fuel used on the farm is exempt. Need file back taxes Fuel used traveling on the highway to and from the farm is taxable. Need file back taxes Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as used for a farming purpose. Need file back taxes For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. Need file back taxes For kerosene used in aviation, the ultimate purchaser may make the claim or waive the right to make the claim to the registered ultimate vendor. Need file back taxes A sample waiver is included as Model Waiver L in the appendix of Publication 510. Need file back taxes A registered ultimate vendor is the person who sells undyed diesel fuel, undyed kerosene, or kerosene for use in aviation to the user (ultimate purchaser) of the fuel for use on a farm for farming purposes. Need file back taxes To claim a credit or refund of tax, the ultimate vendor must be registered with the Internal Revenue Service at the time the claim is made. Need file back taxes However, registered ultimate vendors cannot make claims for undyed diesel fuel and undyed kerosene sold for use on a farm for farming purposes. Need file back taxes Fuel not used for farming. Need file back taxes   You do not use fuel on a farm for farming purposes when you use it in any of the following ways. Need file back taxes Off the farm, such as on the highway or in noncommercial aviation, even if the fuel is used in transporting livestock, feed, crops, or equipment. Need file back taxes For personal use, such as lawn mowing. Need file back taxes In processing, packaging, freezing, or canning operations. Need file back taxes In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. Need file back taxes All-terrain vehicles (ATVs). Need file back taxes   Fuel used in ATVs on a farm for farming purposes, discussed earlier, is eligible for a credit or refund of excise taxes on the fuel. Need file back taxes Fuel used in ATVs for nonfarming purposes is not eligible for a credit or refund of the taxes. Need file back taxes If ATVs are used both for farming and nonfarming purposes, only that portion of the fuel used for farming purposes is eligible for the credit or refund. Need file back taxes Dyed Diesel Fuel and Dyed Kerosene If you purchase dyed diesel fuel or dyed kerosene for a nontaxable use, you must use it only on a farm for farming purposes or for other nontaxable purposes. Need file back taxes For example, you should not use dyed diesel fuel in a truck that is used both on the farm for farming purposes and on the highway, even though the highway use is in connection with farm business. Need file back taxes Excise tax applies to the fuel used by the truck on the highways. Need file back taxes In this situation, undyed (taxed) fuel should be purchased for the truck. Need file back taxes You should keep fuel records of the use of the truck on the farm for farming purposes, and for other uses. Need file back taxes You may be eligible for a credit or refund for the excise tax on fuel used on the farm for farming purposes. Need file back taxes Penalty. Need file back taxes   A penalty is imposed on any person who knowingly uses, sells, or alters dyed diesel fuel or dyed kerosene for any purpose other than a nontaxable use. Need file back taxes The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Need file back taxes After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Need file back taxes For more information on this penalty, see Publication 510. Need file back taxes Fuels Used in Off-Highway Business Use You may be eligible to claim a credit or refund for the excise tax on fuel used in an off-highway business use. Need file back taxes Off-highway business use. Need file back taxes   This is any use of fuel in a trade or business or in an income-producing activity. Need file back taxes The use must not be in a highway vehicle registered or required to be registered for use on public highways. Need file back taxes Off-highway business use generally does not include any use in a recreational motorboat. Need file back taxes Examples. Need file back taxes   Off-highway business use includes the use of fuels in a trade or business in any of the following ways. Need file back taxes In stationary machines such as generators, compressors, power saws, and similar equipment; For cleaning ; and In forklift trucks, bulldozers, and earthmovers. Need file back taxes   Off-highway nonbusiness (taxable) use of fuel includes: use in minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. Need file back taxes For more information, see Publication 510. Need file back taxes Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines You may be eligible to claim a credit or refund for the excise tax on undyed diesel fuel or kerosene used for home heating, lighting, and cooking. Need file back taxes This also applies to diesel fuel and kerosene used in a home generator to produce electricity for home use. Need file back taxes Home use of a fuel does not include use in a propulsion engine and it is not considered an off-highway business use. Need file back taxes How To Claim a Credit or Refund You may be able to claim a credit or refund of the excise tax on fuels you use for nontaxable uses. Need file back taxes The basic rules for claiming credits and refunds are listed in Table 14-2 . Need file back taxes Table 14-2. Need file back taxes Claiming a Credit or Refund of Excise Taxes This table gives the basic rules for claiming a credit or refund of excise taxes on fuels used for a nontaxable use. Need file back taxes   Credit Refund Which form to use Form 4136, Credit for Federal Tax Paid on Fuels Form 8849, Claim for Refund of Excise Taxes, and Schedule 1 (Form 8849), Nontaxable Use of Fuels Type of form Annual Quarterly When to file With your income tax return By the last day of the quarter following the last quarter included in the claim Amount of tax Any amount $750 or more1 1You may carry over an amount less than $750 to the next quarter. Need file back taxes Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. Need file back taxes You do not have to use any special form, but the records should establish the following information. Need file back taxes The total number of gallons bought and used during the period covered by your claim. Need file back taxes The dates of the purchases. Need file back taxes The names and addresses of suppliers and amounts bought from each during the period covered by your claim. Need file back taxes The nontaxable use for which you used the fuel. Need file back taxes The number of gallons used for each nontaxable use. Need file back taxes It is important that your records separately show the number of gallons used for each nontaxable use that qualifies as a claim. Need file back taxes For more information about recordkeeping, see Publication 583, Starting a Business and Keeping Records. Need file back taxes Credit or refund. Need file back taxes   A credit is an amount that reduces the tax on your income tax return when you file it at the end of the year. Need file back taxes If you meet certain requirements, you may claim a refund during the year instead of waiting until you file your income tax return. Need file back taxes Credit only. Need file back taxes   You can claim the following taxes only as a credit on your income tax return. Need file back taxes Tax on gasoline and aviation gasoline you used on a farm for farming purposes. Need file back taxes Tax on fuels (including undyed diesel fuel or undyed kerosene) you used for nontaxable uses if the total for the tax year is less than $750. Need file back taxes Tax on fuel you did not include in any claim for refund previously filed for any quarter of the tax year. Need file back taxes Claiming a Credit You make a claim for a fuel tax credit on Form 4136 and attach it to your income tax return. Need file back taxes Do not claim a credit for any excise tax for which you have filed a refund claim. Need file back taxes How to claim a credit. Need file back taxes   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, trust, or farmers' cooperative association. Need file back taxes Individuals. Need file back taxes   You claim the credit on the “Credit for federal tax on fuels” line of your Form 1040. Need file back taxes If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. Need file back taxes Partnership. Need file back taxes   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Need file back taxes , showing each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. Need file back taxes Each partner claims the credit on his or her income tax return for the partner's share of the fuel used by the partnership. Need file back taxes An electing large partnership can claim the credit on the “Other payments” line of Form 1065-B, U. Need file back taxes S. Need file back taxes Return of Income for Electing Large Partnerships. Need file back taxes Other entities. Need file back taxes   Corporations, S corporations, farmers' cooperative associations, and trusts make the claim on the appropriate line of their income tax return. Need file back taxes When to claim a credit. Need file back taxes   You can claim a fuel tax credit on your income tax return for the year you used the fuel. Need file back taxes You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Need file back taxes A claim for credit or refund of an overpayment must generally be filed within the later of: Three years from the date the original return was filed, or Two years from the date the tax was paid. Need file back taxes Claiming a Refund Generally, you may claim a refund of excise taxes on Form 8849. Need file back taxes Complete and attach to Form 8849 the appropriate Form 8849 schedule(s). Need file back taxes The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. Need file back taxes If you file Form 720, you can use its Schedule C for your refund claims for the quarter. Need file back taxes See the Instructions for Form 720. Need file back taxes Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Form 720 or Form 4136. Need file back taxes You may file a claim for refund for any quarter of your tax year for which you can claim $750 or more. Need file back taxes This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year. Need file back taxes If you cannot claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750 for that quarter. Need file back taxes If you cannot claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136. Need file back taxes Only one claim can be filed for a quarter. Need file back taxes You cannot claim a refund for excise tax on gasoline and aviation gasoline used on a farm for farming purposes. Need file back taxes You must claim a credit on your income tax return for the tax. Need file back taxes How to file a quarterly claim. Need file back taxes   File the claim for refund by filling out Schedule 1 (Form 8849) and attaching it to Form 8849. Need file back taxes Send it to the address shown in the instructions. Need file back taxes If you file Form 720, you can use its Schedule C for your refund claims. Need file back taxes See the Instructions for Form 720. Need file back taxes When to file a quarterly claim. Need file back taxes   You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. Need file back taxes If you do not file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier. Need file back taxes    In most situations, the amount claimed as a credit or refund will be less than the amount deducted as fuel tax expense because the Leaking Underground Storage Tank (LUST) tax of $0. Need file back taxes 001 per gallon is generally not subject to credit or refund. Need file back taxes Including the Credit or Refund in Income Include any credit or refund of excise taxes on fuels in your gross income if you claimed the total cost of the fuel (including the excise taxes) as an expense deduction that reduced your income tax liability. Need file back taxes Which year you include a credit or refund in gross income depends on whether you use the cash or an accrual method of accounting. Need file back taxes Cash method. Need file back taxes   If you use the cash method and file a claim for refund, include the refund amount in gross income for the tax year in which you receive the refund. Need file back taxes If you claim a credit on your income tax return, include the credit amount in gross income for the tax year in which you file Form 4136. Need file back taxes If you file an amended return and claim a credit, include the credit amount in gross income for the tax year in which you receive the credit. Need file back taxes Example. Need file back taxes Sharon Brown, a farmer who uses the cash method, filed her 2012 Form 1040 on March 3, 2013. Need file back taxes On her Schedule F, she deducted the total cost of gasoline (including $110 of excise taxes) used on the farm for farming purposes. Need file back taxes Then, on Form 4136, she claimed the $110 as a credit. Need file back taxes Sharon reports the $110 as other income on line 8b of her 2013 Schedule F. Need file back taxes Accrual method. Need file back taxes   If you use an accrual method, include the amount of credit or refund in gross income for the tax year in which you used the fuels. Need file back taxes It does not matter whether you filed for a quarterly refund or claimed the entire amount as a credit. Need file back taxes Example. Need file back taxes Patty Green, a farmer who uses the accrual method, files her 2012 Form 1040 on April 15, 2013. Need file back taxes On Schedule F, she deducts the total cost of gasoline (including $155 of excise taxes) she used on the farm for farming purposes during 2012. Need file back taxes On Form 4136, Patty claims the $155 as a credit. Need file back taxes She reports the $155 as other income on line 8b of her 2012 Schedule F. Need file back taxes Prev  Up  Next   Home   More Online Publications