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Revised Tax Return

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Revised Tax Return

Revised tax return 2. Revised tax return   Filing Requirements and Required Disclosures Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Annual Information ReturnsSupporting Organization Annual Information Return Unrelated Business Income Tax ReturnEstimated tax. Revised tax return Employment Tax ReturnsException. Revised tax return FUTA tax exception. Revised tax return FICA tax exemption election. Revised tax return Revoking the election. Revised tax return Definitions. Revised tax return Effect on employees. Revised tax return Political Organization Income Tax ReturnExempt function. Revised tax return Political organization taxable income. Revised tax return Separate fund. Revised tax return Failure to file. Revised tax return Failure to pay on time. Revised tax return Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. Revised tax return Publicly traded securities. Revised tax return Exceptions. Revised tax return Form 8283. Revised tax return Information Provided to DonorsDisclosure of Quid Pro Quo Contributions Acknowledgment of Charitable Contributions of $250 or More Acknowledgment of Vehicle Contribution Qualified Intellectual Property Report of Cash Received Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting FormsAnnual Information Return Public Inspection of Exemption Application Political Organization Reporting Forms Required DisclosuresSolicitation of Nondeductible Contributions Sales of Information or Services Available Free From Government Dues Used for Lobbying or Political Activities Prohibited Tax Shelter Transactions Miscellaneous RulesOrganizational Changes and Exempt Status Introduction Most exempt organizations (including private foundations) must file various returns and reports at some time during (or following the close of) their accounting period. Revised tax return Topics - This chapter discusses: Annual information returns Unrelated business income tax return Employment tax returns Political organization income tax return Reporting requirements for a political organization Donee information return Information provided to donors Report of cash received Public inspection of exemption applications, annual returns, and political organizations reporting forms Required disclosures Miscellaneous rules Useful Items - You may want to see: Publication 15 Circular E, Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 598 Tax on Unrelated Business Income of Exempt Organizations Form (and Instructions) 941 Employer's Quarterly Federal Tax Return 990 Return of Organization Exempt From Income Tax 990-EZ Short Form Return of Organization Exempt From Income Tax Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support Schedule B (Form 990, 990-EZ, or 990-PF) Schedule of Contributors Schedule C (Form 990 or 990-EZ) Political Campaign and Lobbying Activities Schedule D (Form 990) Supplemental Financial Statements Schedule E (Form 990 or 990-EZ) Schools Schedule F (Form 990) Statement of Activities Outside the United States Schedule G (Form 990 or 990-EZ) Supplemental Information Regarding Fundraising or Gaming Activities Schedule H (Form 990) Hospitals Schedule I (Form 990) Grants and Other Assistance to Organizations, Governments, and Individuals in the United States Schedule J (Form 990) Compensation Information Schedule K (Form 990) Supplemental Information on Tax-Exempt Bonds Schedule L (Form 990 or 990-EZ) Transactions With Interested Persons Schedule M (Form 990) Noncash Contributions Schedule N (Form 990 or 990-EZ) Liquidation, Termination, Dissolution, or Significant Disposition of Assets Schedule O (Form 990 or 990-EZ) Supplemental Information to Form 990 Schedule R (Form 990) Related Organizations and Unrelated Partnerships 990-PF Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation 990-BL Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons 990-T Exempt Organization Business Income Tax Return 990-W Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations 1120-POL U. Revised tax return S. Revised tax return Income Tax Return for Certain Political Organizations 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code 5768 Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation 6069 Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption from Employer Social Security and Medicare Taxes 8282 Donee Information Return 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8453-X Political Organization Declaration for Electronic Filing of Notice of Section 527 Status 8822-B Change of Address-Business 8868 Application for Extension of Time to File an Exempt Organization Return 8870 Information Return for Transfers Associated with Certain Personal Benefits Contracts 8871 Political Organization Notice of Section 527 Status 8872 Political Organization Report of Contributions and Expenditures 8886-T Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction 8899 Notice of Income from Donated Intellectual Property 8940 Request for Miscellaneous Determination See chapter 6 for information about getting these publications and forms. Revised tax return Annual Information Returns Every organization exempt from federal income tax under section 501(a) must file an Annual Exempt Organization Return except: A church, an interchurch organization of local units of a church, a convention or association of churches, An integrated auxiliary of a church, A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs, A school below college level affiliated with a church or operated by a religious order, Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries, An exclusively religious activity of any religious order, A state institution, the income of which is excluded from gross income under section 115, A corporation described in section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States, and is exempt from Federal income taxes, A stock bonus, pension, or profit-sharing trust that qualifies under section 401 (required to file Form 5500, Annual Return/Report of Employee Benefit Plan), A religious or apostolic organization described in section 501(d) (required to file Form 1065, U. Revised tax return S. Revised tax return Return of Partnership Income), A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48, 1995-2 C. Revised tax return B. Revised tax return 418, www. Revised tax return irs. Revised tax return gov/pub/irs-tege/rp1995-48. Revised tax return pdf, A private foundation described in section 501(c)(3) and exempt under section 501(a) (required to file Form 990-PF, Return of Private Foundation), A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee, An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less, or A foreign organization, or an organization located in a U. Revised tax return S. Revised tax return possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. Revised tax return Supporting Organization Annual Information Return For tax years ending after August 17, 2006, all section 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ with the IRS regardless of the organization's gross receipts, unless it qualifies as one of the following: An integrated auxiliary of a church; The exclusively religious activities of a religious order; or An organization, the gross receipts of which are normally not more than $5,000, that supports a section 509(a)(3) religious order. Revised tax return If the organization is described in item (3) above, then it must submit Form 990-N (e-Postcard) unless it voluntarily files Form 990 or 990-EZ. Revised tax return On its annual information return, at Part I, Schedule A (Form 990 or 990-EZ) a supporting organization must: List the section 509(a)(3) organizations to which it provides support, Indicate whether it is a Type I, Type II, or Type III supporting organization, and Certify that the organization is not controlled directly or indirectly by disqualified persons (other than by foundation managers and other than one or more publicly supported organizations). Revised tax return Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Small tax-exempt organizations with annual gross receipts normally $50,000 or less must submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, with the IRS each year, if they choose not to file a Form 990 or 990-EZ. Revised tax return Form 990-N requires the following information: The organization's legal name, and mailing address; Any name under which it operates and does business; Its Internet website address (if any); Its taxpayer identification number; The name and address of a principal officer; Organization's annual tax period; Verification that the organization's annual gross receipts are normally $50,000 or less; and Notification if the organization has terminated. Revised tax return Form 990-N is due by the 15th day of the fifth month after the close of the tax year. Revised tax return For tax years beginning after December 31, 2006, any organization that fails to meet its annual reporting requirement for 3 consecutive years will automatically lose its tax-exempt status. Revised tax return To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. Revised tax return Exceptions. Revised tax return   This filing requirement does not apply to: Churches, their integrated auxiliaries, and conventions or associations of churches; Organizations that are included in a group return; Private foundations required to file Form 990-PF; and Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. Revised tax return Forms 990 and 990-EZ Exempt organizations, other than private foundations, must file their annual information returns on Form 990 or 990-EZ, unless excepted from filing or allowed to submit Form 990-N, described earlier. Revised tax return Generally, political organizations with gross receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or more for the tax year are required to file Form 990 or 990-EZ unless specifically excepted from filing the annual return. Revised tax return The following political organizations are not required to file Form 990 or Form 990-EZ. Revised tax return A state or local committee of a political party. Revised tax return A political committee of a state or local candidate. Revised tax return A caucus or association of state or local officials. Revised tax return A political organization that is required to report as a political committee under the Federal Election Campaign Act. Revised tax return A 501(c) organization that has expenditures for influencing or attempting to influence the selection, nomination, election, or appointment of any individual for a federal, state, or local public office. Revised tax return Form 990-EZ. Revised tax return   This is a shortened version of Form 990. Revised tax return It is designed for use by small exempt organizations and nonexempt charitable trusts. Revised tax return   Beginning in tax year 2010, an organization can file either Form 990 or 990-EZ if it meets the following: Its gross receipts during the year are less than $200,000. Revised tax return Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. Revised tax return If your organization does not meet either of these conditions, you cannot file Form 990-EZ. Revised tax return Instead you must file Form 990. Revised tax return Group return. Revised tax return   A group return on Form 990 may be filed by a central, parent, or like organization for two or more local organizations, none of which is a private foundation. Revised tax return This return is in addition to the central organization's separate annual return if it must file a return. Revised tax return It cannot be included in the group return. Revised tax return See the instructions for Form 990 for the conditions under which this procedure may be used. Revised tax return    In any year that an organization is properly included as a subordinate organization on a group return, it should not file its own Form 990. Revised tax return Schedule A (Form 990 or 990-EZ). Revised tax return   Organizations, other than private foundations, that are described in section 501(c)(3) and that are otherwise required to file Form 990 or 990-EZ must also complete Schedule A of that form. Revised tax return Schedule B (Form 990, Form 990-EZ, or 990-PF). Revised tax return   Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. Revised tax return Schedule O (Form 990). Revised tax return   Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. Revised tax return   Other schedules may be required to be filed with Form 990 or 990-EZ. Revised tax return See the instructions for Form 990 or the instructions for Form 990-EZ for more information. Revised tax return Report significant new or changed program services and changes to organizational documents. Revised tax return    An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to EO Determinations. Revised tax return EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents. Revised tax return See Miscellaneous Rules, Organization Changes and Exempt Status, later. Revised tax return Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. Revised tax return These organizations are discussed in chapter 3. Revised tax return Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. Revised tax return If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. Revised tax return See Regulations section 301. Revised tax return 6033-4 for more information. Revised tax return The IRS may waive the requirement to file electronically in cases of undue hardship. Revised tax return For information on filing a waiver, see Notice 2010-13, 2010-4 I. Revised tax return R. Revised tax return B. Revised tax return 327, available at www. Revised tax return irs. Revised tax return gov/ir/2010-04_IRSB/ar14. Revised tax return html. Revised tax return Form 990. Revised tax return   An organization is required to file Form 990 electronically if it files at least 250 returns during the calendar year and has total assets of $10 million or more at the end of the tax year. Revised tax return Form 990-PF. Revised tax return   An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. Revised tax return Due Date Forms 990, 990-EZ, or 990-PF must be filed by the 15th day of the fifth month after the end of your organization's accounting period. Revised tax return Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. Revised tax return Extension of time to file. Revised tax return   Use Form 8868 to request an automatic 3-month extension of time to file Forms 990, 990-EZ, or 990-PF and also to apply for an additional (not automatic) 3-month extension if needed. Revised tax return   Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. Revised tax return For more information, see Form 8868 and its instructions. Revised tax return   When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. Revised tax return However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. Revised tax return Application for exemption pending. Revised tax return   An organization that claims to be exempt under section 501(a) but has not established its exempt status by the due date for filing an information return must complete and file Form 990, 990-EZ, 990–N or 990-PF (if it considers itself a private foundation), unless the organization is exempt from Form 990-series filing requirements. Revised tax return If the organization's application is pending with the IRS, it must so indicate on Forms 990, 990-EZ, or 990-PF (whichever applies) by checking the application pending block at the top of page 1 of the return. Revised tax return For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. Revised tax return State reporting requirements. Revised tax return   Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. Revised tax return See the instructions for those forms. Revised tax return Form 8870. Revised tax return   Organizations that filed a Form 990, 990-EZ, or 990-PF, and paid premiums or received transfers on certain life insurance, annuity, and endowment contracts (personal benefit contracts), must file Form 8870. Revised tax return For more information, see Form 8870 and the instructions for that form. Revised tax return Automatic Revocation If the organization fails to file a Form 990, 990-EZ, or 990-PF, or fails to submit a Form 990-N, as required, for 3 consecutive years, it will automatically lose its tax-exempt status by operation of law. Revised tax return The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. Revised tax return gov. Revised tax return This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. Revised tax return The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. Revised tax return It also includes the effective date of the automatic revocation and the date it was posted to the list. Revised tax return The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. Revised tax return Tax Effect of Loss of Tax-Exempt Status If your organization’s tax-exempt status is automatically revoked, you may be required to file one of the following federal income tax returns and pay any applicable income taxes: Form 1120, U. Revised tax return S. Revised tax return Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of your organization’s tax year, or Form 1041, U. Revised tax return S. Revised tax return Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of your organization’s tax year. Revised tax return In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to received tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database). Revised tax return An organization whose exemption was automatically revoked must apply for tax exemption in order to regain its tax exemption (even if it was not originally required to apply). Revised tax return In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. Revised tax return For more information about automatic revocation, go to IRS. Revised tax return gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. Revised tax return Penalties Penalties for failure to file. Revised tax return   Generally, an exempt organization that fails to file a required return must pay a penalty of $20 a day for each day the failure continues. Revised tax return The same penalty will apply if the organization does not give all the information required on the return or does not give the correct information. Revised tax return Maximum penalty. Revised tax return   The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. Revised tax return Organization with gross receipts over $1 million. Revised tax return   For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000. Revised tax return Managers. Revised tax return   If the organization is subject to this penalty, the IRS may specify a date by which the return or correct information must be supplied by the organization. Revised tax return Failure to comply with this demand will result in a penalty imposed upon the manager of the organization, or upon any other person responsible for filing a correct return. Revised tax return The penalty is $10 a day for each day that a return is not filed after the period given for filing. Revised tax return The maximum penalty imposed on all persons with respect to any one return is $5,000. Revised tax return Exception for reasonable cause. Revised tax return   No penalty will be imposed if reasonable cause for failure to file timely can be shown. Revised tax return Unrelated Business Income Tax Return Even though your organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. Revised tax return Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. Revised tax return If your organization has $1,000 or more of unrelated business income, you must file Form 990-T in addition to your required annual information return. Revised tax return Estimated tax. Revised tax return   Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. Revised tax return Use Form 990-W to figure your organization's estimated tax payments. Revised tax return Travel tour programs. Revised tax return   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose to which tax exemption was granted to the organization. Revised tax return   Whether travel tour activities conducted by an organization are substantially related to the organization's tax exempt purpose is determined by looking at all the relevant facts and circumstances, including, but not limited to, how a travel tour is developed, promoted, and operated. Revised tax return Example. Revised tax return ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). Revised tax return As part of its activities, ABC operates a travel tour program. Revised tax return The program is open to all current members of ABC and their guests. Revised tax return ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. Revised tax return Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. Revised tax return XYZ pays ABC a per person fee for each participant. Revised tax return Although the literature advertising the tours encourages ABC members to continue their lifelong learning by joining the tours, and a faculty member of ABC's related university frequently joins the tour as a guest of the alumni association, none of the tours include any scheduled instruction or curriculum related to the destinations being visited. Revised tax return The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. Revised tax return Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. Revised tax return Therefore, ABC's tour program is an unrelated trade or business. Revised tax return For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. Revised tax return Employment Tax Returns Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA), unless that employer is specifically excepted by law from those requirements, or if the taxes clearly do not apply. Revised tax return For more information, obtain a copy of Publication 15, which summarizes the responsibilities of an employer, Publication 15-A, Publication 15-B, and Form 941. Revised tax return Small Business Health Care Tax Credit. Revised tax return   If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. Revised tax return Go to IRS. Revised tax return gov and select Affordable Care Act Tax Provisions for more details. Revised tax return See Small Business Health Care Tax Credit at www. Revised tax return irs. Revised tax return gov/newsroom/article/0,,id=223666,00. Revised tax return html. Revised tax return Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. Revised tax return   The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). Revised tax return The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer's share of social security tax. Revised tax return The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. Revised tax return This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. Revised tax return   The credit can be as high as $6,240 for qualified tax-exempt organizations. Revised tax return The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. Revised tax return The amount of the credit for qualified tax-exempt organizations may not exceed the organization's employer social security tax for the period for which the credit is claimed. Revised tax return   All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. Revised tax return The process for certifying veterans for this credit is the same for all employers. Revised tax return For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. Revised tax return Notice 2012-13, 2012-9 I. Revised tax return R. Revised tax return B. Revised tax return 421, also provides additional guidance on submission Form 8850. Revised tax return   Organizations described in section 501(c) and exempt from taxation under section 501(a) may claim the credit for qualified veterans who begin work on or after Nov. Revised tax return 22, 2011, and before January 1, 2013. Revised tax return After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, Form 5884-C. Revised tax return File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. Revised tax return It is recommended that qualified tax-exempt employers do not reduce their required deposits in anticipation of any credit as the forms are processed separately. Revised tax return In addition to Form 5884-C and its instructions, tax-exempt employers should see Notice 2012-13 and the Frequently Asked Questions & Answers for more details for claiming the credit. Revised tax return Trust fund recovery penalty. Revised tax return   If any person required to collect, truthfully account for, and pay over any of these taxes willfully fails to satisfy any of these requirements or willfully tries in any way to evade or defeat any of them, that person will be subject to a penalty. Revised tax return The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. Revised tax return The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. Revised tax return Exception. Revised tax return   The penalty is not imposed on any unpaid volunteer director or member of a board of trustees of an exempt organization if the unpaid volunteer serves solely in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which the penalty is imposed. Revised tax return   This exception does not apply if it results in no one being liable for the penalty. Revised tax return FICA and FUTA tax exceptions. Revised tax return   Payments for services performed by a minister of a church in the exercise of the ministry, or a member of a religious order performing duties required by the order, are generally not subject to FICA or FUTA taxes. Revised tax return FUTA tax exception. Revised tax return   Payments for services performed by an employee of a religious, charitable, educational, or other organization described in section 501(c)(3) that are generally subject to FICA taxes if the payments are $100 or more for the year, are not subject to FUTA taxes. Revised tax return FICA tax exemption election. Revised tax return   Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. Revised tax return   To elect the exemption, Form 8274 must be filed before the first date on which a quarterly employment tax return would otherwise be due from the electing organization. Revised tax return The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. Revised tax return   The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. Revised tax return Revoking the election. Revised tax return   The election can be revoked by the IRS if the organization fails to file Form W-2, Wage and Tax Statement, for 2 years and fails to furnish certain information upon request by the IRS. Revised tax return Such revocation will apply retroactively to the beginning of the 2-year period. Revised tax return Definitions. Revised tax return   For purposes of this election, the term church means a church, a convention or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or by a convention or association of churches. Revised tax return   The term qualified church-controlled organization means any church-controlled section 501(c)(3) tax-exempt organization, other than an organization that both: Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public at other than a nominal charge that is substantially less than the cost of providing such goods, services, or facilities, and Normally receives more than 25% of its support from the sum of governmental sources and receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities that are not unrelated trades or businesses. Revised tax return Effect on employees. Revised tax return   If a church or qualified church-controlled organization has made an election, payment for services performed for that church or organization, other than in an unrelated trade or business, will not be subject to FICA taxes. Revised tax return However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. Revised tax return The tax applies to income of $108. Revised tax return 28 or more for the tax year from that church or organization, and no deductions for trade or business expenses are allowed against this self-employment income. Revised tax return   Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. Revised tax return Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. Revised tax return Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. Revised tax return S. Revised tax return Income Tax Return for Certain Political Organizations, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527. Revised tax return A political organization that has $25,000 ($100,000 for a qualified state or local political organization) or more in gross receipts for the tax year must file Form 990 or Form 990-EZ (and Schedule B of the form), unless excepted. Revised tax return See Forms 990 and 990-EZ , earlier. Revised tax return Political organization. Revised tax return   A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. Revised tax return Exempt function. Revised tax return   An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. Revised tax return It also includes certain office expenses of a holder of public office or an office in a political organization. Revised tax return Certain political organizations are required to notify the IRS that they are section 527 organizations. Revised tax return These organizations must use Form 8871. Revised tax return Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. Revised tax return For a discussion on these forms, see Reporting Requirements for a Political Organization, later. Revised tax return Political organization taxable income. Revised tax return   Political organization taxable income is the excess of: Gross income for the tax year (excluding exempt function income) minus Deductions directly connected with the earning of gross income. Revised tax return To figure taxable income, allow for a $100 specific deduction, but do not allow for the net operating loss deduction, the dividends-received deduction, and other special deductions for corporations. Revised tax return Exempt organization not a political organization. Revised tax return   An organization exempt under section 501(c) that spends any amount for an exempt function must file Form 1120-POL for any year which it has political taxable income. Revised tax return These organizations must include in gross income the lesser of: The total amount of its exempt function expenditures, or The organization's net investment income. Revised tax return Separate fund. Revised tax return   A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. Revised tax return The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. Revised tax return Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. Revised tax return Due date. Revised tax return   Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. Revised tax return Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. Revised tax return If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. Revised tax return    Form 1120-POL is not required of an exempt organization that makes expenditures for political purposes if its gross income does not exceed its directly connected deductions by more than $100 for the tax year. Revised tax return Extension of time to file. Revised tax return    Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. Revised tax return The extension will be granted if you complete Form 7004 properly, make a proper estimate of the tax (if applicable), file Form 1120-POL by the due date, and pay any tax due. Revised tax return Failure to file. Revised tax return   A political organization that fails to file Form 1120-POL is subject to a penalty equal to 5% of the tax due for each month (or partial month) the return is late up to a maximum of 25% of the tax due, unless the organization shows the failure was due to reasonable cause. Revised tax return For more information about filing Form 1120-POL, refer to the instructions accompanying the form. Revised tax return Failure to pay on time. Revised tax return   An organization that does not pay the tax when due generally may have to pay a penalty of 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. Revised tax return The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. Revised tax return Reporting Requirements for a Political Organization Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. Revised tax return The organization is also required to periodically report certain contributions received and expenditures made by the organization. Revised tax return To notify the IRS of section 527 treatment, an organization must file Form 8871. Revised tax return To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. Revised tax return Form 8871 A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. Revised tax return However, an organization is not required to file Form 8871 if: It reasonably expects its annual gross receipts to always be less than $25,000. Revised tax return It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. Revised tax return S. Revised tax return C. Revised tax return 431(4)). Revised tax return It is a state or local candidate committee. Revised tax return It is a state or local committee of a political party. Revised tax return It is a section 501(c) organization that has made an “exempt function expenditure. Revised tax return ” All other political organizations are required to file Form 8871. Revised tax return An organization must provide on Form 8871: Its name and address (including any business address, if different) and its electronic mailing address; Its purpose; The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its board of directors; The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ. Revised tax return Employer identification number. Revised tax return   If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. Revised tax return IRS. Revised tax return gov/businesses/small. Revised tax return By telephone at 1-800-829-4933 from 7:00 a. Revised tax return m. Revised tax return to 10:00 p. Revised tax return m. Revised tax return in the organization's local time zone. Revised tax return By mailing or faxing Form SS-4. Revised tax return   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. Revised tax return Due dates. Revised tax return   The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. Revised tax return If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. Revised tax return When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. Revised tax return   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. Revised tax return How to file. Revised tax return   An organization must file Form 8871 electronically via the IRS Internet website at www. Revised tax return IRS. Revised tax return gov/polorgs (Keyword: political orgs). Revised tax return Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. Revised tax return   After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. Revised tax return Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872. Revised tax return Penalties Failure to file. Revised tax return   An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. Revised tax return Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income. Revised tax return   Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. Revised tax return If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed. Revised tax return    The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. Revised tax return Fraudulent returns. Revised tax return   Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both. Revised tax return Waiver of penalties. Revised tax return   The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect. Revised tax return Additional information. Revised tax return   For more information on Form 8871, see the form and its instructions. Revised tax return For a discussion on the public inspection requirements for the form, see Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms , later. Revised tax return Form 8872 Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except: A political organization that is not required to file Form 8871 (discussed earlier). Revised tax return A political organization that is subject to tax on its income because it did not file or amend Form 8871. Revised tax return A qualified state or local political organization (QSLPO), discussed below. Revised tax return All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. Revised tax return Qualified state or local political organization. Revised tax return   A state or local political organization may be a QSLPO if: All of its political activities relate solely to state or local public office (or office in a state or local political organization). Revised tax return It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS. Revised tax return The state agency and the organization make the reports publicly available. Revised tax return No federal candidate or office holder: Controls or materially participates in the direction of the organization, Solicits contributions for the organization, or Directs the disbursements of the organization. Revised tax return Information required on Form 8872. Revised tax return   If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872. Revised tax return   If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made. Revised tax return   For additional information that is required, see Form 8872. Revised tax return Due dates. Revised tax return   The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year). Revised tax return   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. Revised tax return Election year filing. Revised tax return    In election years, Form 8872 must be filed on either a quarterly or a monthly basis. Revised tax return Both a pre-election report and a post-election report are also required to be filed in an election year. Revised tax return An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). Revised tax return Nonelection year filing. Revised tax return    In nonelection years, the form must be filed on a semiannual or monthly basis. Revised tax return A complete listing of these filing periods are in the Form 8872 Instructions. Revised tax return A nonelection year is any odd-numbered year. Revised tax return How to file. Revised tax return   Form 8872 can be filed either electronically or by mail. Revised tax return However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. Revised tax return    To file by mail, send Form 8872 to the:   Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. Revised tax return   File electronically via the IRS internet website at www. Revised tax return IRS. Revised tax return gov/polorgs. Revised tax return You will need a user ID and password to electronically file Form 8872. Revised tax return Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail. Revised tax return   Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: Internal Revenue Service Attn: Request for 8872 Password Mail Stop 6273 Ogden, UT 84201 Lost username and password. Revised tax return   If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. Revised tax return You can also fax your request to (801) 620-3249. Revised tax return It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. Revised tax return Penalty A penalty will be imposed if the organization is required to file Form 8872 and it: Fails to file the form by the due date, or Files the form but fails to report all of the information required or reports incorrect information. Revised tax return The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. Revised tax return Fraudulent returns. Revised tax return   Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both. Revised tax return Waiver of penalties. Revised tax return   The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect. Revised tax return Donee Information Return Dispositions of donated property. Revised tax return   If an organization receives charitable deduction property and within three years sells, exchanges, or otherwise disposes of the property, the organization must file Form 8282, Donee Information Return. Revised tax return However, an organization is not required to file Form 8282 if: The property is valued at $500 or less, or The property is consumed or distributed for charitable purposes. Revised tax return   Form 8282 must be filed with the IRS within 125 days after the disposition. Revised tax return Additionally, a copy of Form 8282 must be given to the donor. Revised tax return If the organization fails to file the required information return, penalties may apply. Revised tax return Charitable deduction property. Revised tax return   This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283, Noncash Charitable Contributions. Revised tax return Publicly traded securities. Revised tax return   These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. Revised tax return Appraisal summary. Revised tax return   If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. Revised tax return below. Revised tax return Exceptions. Revised tax return   A written appraisal is not needed if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane), if your deduction for the vehicle is limited to the gross proceeds from its sale, Intellectual property, Certain securities considered to have market quotations readily available (see Regulations section 1. Revised tax return 170A-13(c)(7)(xi)(B)), Inventory and other property donated by a corporation that are qualified contributions for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or Any donation of stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. Revised tax return   The donee organization is not a qualified appraiser for the purpose of valuing the donated property. Revised tax return For more information, get Publication 561, Determining the Value of Donated Property. Revised tax return Form 8283. Revised tax return   For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. Revised tax return The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. Revised tax return The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. Revised tax return The signature does not represent concurrence in the appraised value of the contributed property. Revised tax return A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. Revised tax return The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. Revised tax return A copy of Form 8283 must be given to the donee. Revised tax return Information Provided to Donors In some situations, a donor must obtain certain information from a donee organization to obtain a deduction for a charitable contribution. Revised tax return In other situations, the donee organization is required to provide information to the donor. Revised tax return A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. Revised tax return (See Disclosure statement. Revised tax return later. Revised tax return ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. Revised tax return See Quid pro quo contribution below for an example. Revised tax return Failure to make the required disclosure may result in a penalty to the organization. Revised tax return A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. Revised tax return In certain circumstances, an organization may be able to meet both of these requirements with the same written document. Revised tax return Disclosure of Quid Pro Quo Contributions A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution over $75. Revised tax return Quid pro quo contribution. Revised tax return   A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. Revised tax return Your charitable organization must provide the donor a written statement informing the donor of the fair market value of the items or services it provided in exchange for the contribution. Revised tax return Generally, a written statement is required for each payment, whenever the contribution portion is over $75. Revised tax return Example. Revised tax return If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. Revised tax return In this example, the charitable part of the payment is $60. Revised tax return Even though the deductible part of the payment is not more than $75, a written statement must be filed because the total payment is more than $75. Revised tax return If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. Revised tax return Disclosure statement. Revised tax return   The required written disclosure statement must: Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity, and Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received. Revised tax return The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. Revised tax return If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution. Revised tax return   No disclosure statement is required if any of the following are true. Revised tax return The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. Revised tax return B. Revised tax return 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. Revised tax return B. Revised tax return 507 (as adjusted for inflation), Revenue Procedure 92-49. Revised tax return There is no donative element involved in a particular transaction with a charity (for example, there is generally no donative element involved in a visitor's purchase from a museum gift shop). Revised tax return There is only an intangible religious benefit provided to the donor. Revised tax return The intangible religious benefit must be provided to the donor by an organization organized exclusively for religious purposes, and must be of a type that generally is not sold in a commercial transaction outside the donative context. Revised tax return For example, a donor who, for a payment, is granted admission to a religious ceremony for which there is no admission charge is provided an intangible religious benefit. Revised tax return A donor is not provided intangible religious benefits for payments made for tuition for education leading to a recognized degree, travel services, or consumer goods. Revised tax return The donor makes a payment of $75 or less per year and receives only annual membership benefits that consist of: Any rights or privileges (other than the right to purchase tickets for college athletic events) that the taxpayer can exercise often during the membership period, such as free or discounted admissions or parking or preferred access to goods or services, or Admission to events that are open only to members and the cost per person of which is within the limits for low-cost articles described in Revenue Procedure 90-12 (as adjusted for inflation), Revenue Procedure 90-12. Revised tax return Good faith estimate of fair market value (FMV). Revised tax return   An organization can use any reasonable method to estimate the FMV of goods or services it provided to a donor, as long as it applies the method in good faith. Revised tax return   The organization can estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. Revised tax return Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. Revised tax return Example 1. Revised tax return A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. Revised tax return The tennis professional provides 1-hour lessons on a commercial basis for $100. Revised tax return A good faith estimate of the lesson's FMV is $100. Revised tax return Example 2. Revised tax return For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. Revised tax return A good faith estimate of the FMV of the right to hold the event in the museum can be made by using the cost of renting a hotel ballroom with a capacity, amenities, and atmosphere comparable to the museum room, even though the hotel ballroom lacks the unique art displayed in the museum room. Revised tax return If the hotel ballroom rents for $2,500, a good faith estimate of the FMV of the right to hold the event in the museum is $2,500. Revised tax return Example 3. Revised tax return For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. Revised tax return The artist does not provide tours on a commercial basis. Revised tax return Tours of the museum normally are free to the public. Revised tax return A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. Revised tax return Penalty for failure to disclose. Revised tax return   A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. Revised tax return The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. Revised tax return The charity can avoid the penalty if it can show that the failure was due to reasonable cause. Revised tax return Acknowledgment of Charitable Contributions of $250 or More A donor can deduct a charitable contribution of $250 or more only if the donor has a written acknowledgment from the charitable organization. Revised tax return The donor must get the acknowledgment by the earlier of: The date the donor files the original return for the year the contribution is made, or The due date, including extensions, for filing the return. Revised tax return The donor is responsible for requesting and obtaining the written acknowledgment from the donee. Revised tax return A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor's instructions or otherwise) distributes the amount received to one or more charities. Revised tax return Quid pro quo contribution. Revised tax return   If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the acknowledgment must include a good faith estimate of the value of the goods or services. Revised tax return See Disclosure of Quid Pro Quo Contributions earlier. Revised tax return Form of acknowledgment. Revised tax return   Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. Revised tax return For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. Revised tax return Cash contributions. Revised tax return   To deduct a contribution of cash, a check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. Revised tax return In the case of a lump-sum contribution (rather than a contribution by payroll deduction) made through the Combined Federal Campaign or a similar program such as a United Way Campaign, the written communication must include the name of the donee organization that is the ultimate recipient of the charitable contribution. Revised tax return Contributions by payroll deduction. Revised tax return   An organization may substantiate an employee's contribution by deduction from its payroll by: A pay stub, Form W-2, or other document showing a contribution to a donee organization, together with A pledge card or other document from the donee organization that shows its name. Revised tax return   For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. Revised tax return The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. Revised tax return Acknowledgment of Vehicle Contribution If an exempt organization receives a contribution of a qualified vehicle with a claimed value of more than $500, the donee organization is required to provide a contemporaneous written acknowledgment to the donor. Revised tax return The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. Revised tax return See section 3. Revised tax return 03 of Notice 2005-44 for guidance on the information that must be included in a contemporaneous written acknowledgment and the deadline for furnishing the acknowledgment to the donor. Revised tax return Any donee organization that provides a contemporaneous written acknowledgment to a donor is required to report to the IRS the information contained in the acknowledgment. Revised tax return The report is due by February 28 (March 31 if filing electronically) of the year following the year in which the donee organization provides the acknowledgment to the donor. Revised tax return The organization must file the report on Copy A of Form 1098-C. Revised tax return An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. Revised tax return S. Revised tax return Information Returns. Revised tax return See the Instructions for Form 1096 for the correct filing location. Revised tax return An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. Revised tax return Specifications for filing Form 1098-C electronically or magnetically can be found in Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically at www. Revised tax return IRS. Revised tax return gov/pub/irs-pdf/p1220. Revised tax return pdf. Revised tax return Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. Revised tax return However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. Revised tax return See the Instructions for Form 1098-C. Revised tax return Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. Revised tax return The contents of the acknowledgment depend upon whether the organization: Sells a qualified vehicle without any significant intervening use or material improvement, Intends to make a significant intervening use of or material improvement to a qualified vehicle prior to sale, or Sells a qualified vehicle to a needy individual at a price significantly below fair market value, or a gratuitous transfer to a needy individual in direct furtherance of a charitable purpose of the organization of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. Revised tax return For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. Revised tax return R. Revised tax return B. Revised tax return 1287, at www. Revised tax return irs. Revised tax return gov/irb/2005-25_IRB/2005-25_IRB/ar09. Revised tax return html. Revised tax return Material improvements or significant intervening use. Revised tax return   To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's regularly conducted activities, and the use must be significant, not incidental. Revised tax return Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. Revised tax return For this purpose, use includes providing transportation on a regular basis for a significant period of time or significant use directly related to training in vehicle repair. Revised tax return Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. Revised tax return Examples of significant use include: Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. Revised tax return Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. Revised tax return   Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. Revised tax return To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. Revised tax return Material improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning or repair of upholstery, and installation of theft deterrent devices. Revised tax return Penalties. Revised tax return   If your charitable organization receives contributions of used motor vehicles, boats, and airplanes valued over $500 it may be subject to a penalty if it knowingly: Fails to furnish an acknowledgement in a timely manner, showing the required information, or Furnishes a false or fraudulent acknowledgement of the contribution. Revised tax return    Other penalties may apply. Revised tax return See Part O in the 2012 General Instructions for Certain Information Returns. Revised tax return   An acknowledgment containing a certification will be presumed to be false or fraudulent if the qualified vehicle is sold to a buyer other than a needy individual without a significant intervening use or material improvement within 6 months of the date of the contribution. Revised tax return   If a charity sells a donated vehicle at auction, the IRS will not accept as substantiation an acknowledgment from the charity stating that the vehicle is to be transferred to a needy individual for significantly below fair market value. Revised tax return Vehicles sold at auction are not sold at prices significantly below fair market value, and the IRS will not treat vehicles sold at auction as qualifying for this exception. Revised tax return   The penalty for a false or fraudulent acknowledgment where the donee certifies that the vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use or the donee certifies that the vehicle is to be transferred to a needy individual for significantly below fair market value in furtherance of the donee's charitable purpose is the larger of $5,000 or the claimed value of the vehicle multiplied by 39. Revised tax return 6%. Revised tax return   The penalty for an acknowledgment relating to a qualified vehicle being sold in an arm's length transaction to an unrelated party is the larger of the gross proceeds from the sale or the sales price stated in the acknowledgment multiplied by 39. Revised tax return 6%. Revised tax return Qualified Intellectual Property A taxpayer who contributes qualified intellectual property to a charity may be entitled to a charitable deduction, in addition to any initial deduction allowed in the year of contribution. Revised tax return The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. Revised tax return To qualify for the additional charitable deduction, the donor must provide notice to the donee at the time of the contribution that the donor intends to treat the contribution as qualified intellectual property contribution for purposes of sections 170(m) and 6050L. Revised tax return Every donee organization described in section 170(c) (except a private foundation as defined in section 509(a) that is not described in section 170(b)(1)(F)) that receives or accrues net income from a charitable gift of qualified intellectual property must file Form 8899. Revised tax return Form 8899. Revised tax return   Form 8899, Notice of Income From Donated Intellectual Property, is used by a donee to report net income from qualified intellectual property to the donor of the property and to the IRS and is due by the last day of the first full month following the close of the donee’s tax year. Revised tax return This form must be filed for each tax year of the donee in which the donated property produces net income, but only if all or part of that tax year occurs during the 10-year period beginning on the date of the contribution and that tax year does not begin after the expiration of the legal life of the donated property. Revised tax return Qualified donee income. Revised tax return   Qualified donee income is any net income received by or accrued to the donee that is properly allocable to the qualified intellectual property for the tax year of the donee which ends within or with the tax year of the donor. Revised tax return Income is not treated as allocated to qualified intellectual property if it is received or accrued after the earlier of the expiration of the legal life of the qualified intellectual property, or the 10-year period beginning with the date of
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Return Preparer Office Federal Tax Return Preparer Statistics

Data current as of 3/3/2014

Number of Individuals with Current Preparer Tax Identification Numbers (PTINs) for 2014†

671,491

Professional Credentials

Attorneys

28,803

Certified Public Accountants

208,347

Enrolled Actuaries

443

Enrolled Agents

48,434

Enrolled Retirement Plan Agents

675

 

 

Other Categories

Supervised Preparers*

57,906

Non-1040 Preparers*

44,414

 

 

† Cumulative number of individuals issued PTINs since 9/28/2010: 1,030,773

‡ Some preparers have multiple professional credentials.

* These numbers do not include attorneys, certified public accountants, or enrolled agents. Also, preparers may be both supervised and non-1040 filers.

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Page Last Reviewed or Updated: 04-Mar-2014

The Revised Tax Return

Revised tax return 4. Revised tax return   Filing U. Revised tax return S. Revised tax return Tax Returns Table of Contents Who Must FileFiling Requirement if Possession Income Is Excluded When To FileExtension of Time To File Where To File Special Rules for Completing Your U. Revised tax return S. Revised tax return Tax ReturnU. Revised tax return S. Revised tax return Armed Forces. Revised tax return Deductions if Possession Income Is Excluded Foreign Tax Credit if Possession Income Is Excluded Self-Employment Tax Additional Medicare Tax Net Investment Income Tax Paying Your TaxesEstimated Tax Double TaxationCompetent Authority Assistance The information in chapter 3 will tell you if a U. Revised tax return S. Revised tax return income tax return is required for your situation. Revised tax return If a U. Revised tax return S. Revised tax return return is required, your next step is to see if you meet the filing requirements. Revised tax return If you do meet the filing requirements, the information presented in this chapter will help you understand the special procedures involved. Revised tax return This chapter discusses: Filing requirements, When to file your return, Where to send your return, How to adjust your deductions and credits if you are excluding income from American Samoa or Puerto Rico, How to make estimated tax payments and pay self-employment tax, and How to request assistance in resolving instances of double taxation. Revised tax return Who Must File If you are not required to file a possession tax return that includes your worldwide income, you must generally file a U. Revised tax return S. Revised tax return income tax return if your gross income is at least the amount shown in Table 4-1, later, for your filing status and age. Revised tax return If you were a bona fide resident of American Samoa or Puerto Rico and are able to exclude your possession income from your U. Revised tax return S. Revised tax return tax return, your filing requirement may be less than the amount in Table 4-1. Revised tax return For details, see the information under Filing Requirement if Possession Income Is Excluded , later. Revised tax return Some individuals (such as those who can be claimed as a dependent on another person's return or who owe certain taxes, such as self-employment tax) must file a tax return even though the gross income is less than the amount shown in Table 4-1 for their filing status and age. Revised tax return For more information, see the Form 1040 instructions. Revised tax return Filing Requirement if Possession Income Is Excluded If you were a bona fide resident of American Samoa or Puerto Rico and qualify to exclude possession income on your U. Revised tax return S. Revised tax return tax return, you must determine your adjusted filing requirement. Revised tax return Generally, your filing requirement is based on the total of your (and your spouse's if filing a joint return) personal exemption(s) plus your standard deduction. Revised tax return Personal exemption. Revised tax return   When figuring your filing requirement, your personal exemption is allowed in full. Revised tax return Do not reduce it for this purpose. Revised tax return Do not include exemptions for your dependents. Revised tax return Allowable standard deduction. Revised tax return   Unless your filing status is married filing separately, the minimum income level at which you must file a return is based, in part, on the standard deduction for your filing status and age. Revised tax return Because the standard deduction applies to all types of income, it must be divided between your excluded income and income from other sources. Revised tax return Multiply the regular standard deduction for your filing status and age (this is zero if you are married filing a separate return; all others, see Form 1040 instructions) by the following fraction:      Gross income subject to U. Revised tax return S. Revised tax return income tax     Gross income from all sources (including excluded possession income)   Example. Revised tax return Barbara Spruce, a U. Revised tax return S. Revised tax return citizen, is single, under 65, and a bona fide resident of American Samoa. Revised tax return During 2013, she received $20,000 of income from American Samoa sources (qualifies for exclusion) and $8,000 of income from sources outside the possession (subject to U. Revised tax return S. Revised tax return income tax). Revised tax return Her allowable standard deduction for 2013 is figured as follows:   $8,000 $28,000 × $6,100 (regular standard deduction) = $1,743   Adjusted filing requirement. Revised tax return   Figure your adjusted filing requirement by adding the amount of your allowable standard deduction to the amount of your personal exemption. Revised tax return You must file a U. Revised tax return S. Revised tax return income tax return if your gross income is at least the amount shown on line 3 of the following worksheet. Revised tax return    1. Revised tax return Enter the allowable standard deduction you figured earlier under Allowable standard deduction . Revised tax return If your filing status is married filing separately, enter -0-   2. Revised tax return Personal exemption. Revised tax return If your filing status is married filing jointly, enter $7,800; if someone can claim you as a dependent, enter -0-; otherwise, enter $3,900   3. Revised tax return Add lines 1 and 2. Revised tax return You must file a U. Revised tax return S. Revised tax return income tax return if your gross income from sources outside the relevant possession is at least this amount   Table 4-1. Revised tax return 2013 Filing Requirements Chart for Most Taxpayers IF your filing status is. Revised tax return . Revised tax return . Revised tax return AND at the end of 2013 you were*. Revised tax return . Revised tax return . Revised tax return THEN file a return if your gross income** was at least. Revised tax return . Revised tax return . Revised tax return single under 65 $10,000 65 or older $11,500 married filing jointly*** under 65 (both spouses) $20,000 65 or older (one spouse) $21,200 65 or older (both spouses) $22,400 married filing separately any age $3,900 head of household under 65 $12,850 65 or older $14,350 qualifying widow(er)  with dependent child under 65 $16,100 65 or older $17,300 * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Revised tax return ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you can exclude part or all of it). Revised tax return Do not include social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2013, or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). Revised tax return If (a) or (b) applies, see the instructions for Form 1040 or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must include in gross income. Revised tax return *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900 you must file a return regardless of your age. Revised tax return Example 1. Revised tax return James and Joan Thompson, one over 65, are U. Revised tax return S. Revised tax return citizens and bona fide residents of Puerto Rico during the entire tax year. Revised tax return They file a joint income tax return. Revised tax return During 2013, they received $35,000 of income from Puerto Rico sources (qualifies for exclusion) and $6,000 of income from sources outside Puerto Rico (subject to U. Revised tax return S. Revised tax return income tax). Revised tax return Their allowable standard deduction for 2013 is figured as follows:   $6,000 $41,000 × $13,400 ( standard deduction for 65 or older (one spouse) ) = $1,961   The Thompsons do not have to file a U. Revised tax return S. Revised tax return income tax return because their gross income subject to U. Revised tax return S. Revised tax return tax ($6,000) is less than their allowable standard deduction plus their personal exemptions ($1,961+ $7,800= $9,761). Revised tax return Example 2. Revised tax return Barbara Spruce (see Example under Allowable standard deduction, earlier), however, must file a U. Revised tax return S. Revised tax return income tax return because her gross income subject to U. Revised tax return S. Revised tax return tax ($8,000) is more than her allowable standard deduction plus her personal exemption ($1,743 + $3,900 = $5,643). Revised tax return If you must file a U. Revised tax return S. Revised tax return income tax return, you may be able to file a paperless return using IRS e-file. Revised tax return See your form instructions or visit our website at IRS. Revised tax return gov. Revised tax return When To File If you file on a calendar year basis, the due date for filing your U. Revised tax return S. Revised tax return income tax return is April 15 following the end of your tax year. Revised tax return If you use a fiscal year (a year ending on the last day of a month other than December), the due date is the 15th day of the 4th month after the end of your fiscal year. Revised tax return If any due date falls on a Saturday, Sunday, or legal holiday, your tax return is due on the next business day. Revised tax return For your 2013 tax return, the due date is April 15, 2014. Revised tax return If you mail your federal tax return, it is considered timely if it bears an official postmark dated on or before the due date, including any extensions. Revised tax return If you use a private delivery service designated by the IRS, generally the postmark date is the date the private delivery service records in its database or marks on the mailing label. Revised tax return See your form instructions for a list of designated private delivery services. Revised tax return Extension of Time To File You can get an extension of time to file your U. Revised tax return S. Revised tax return income tax return. Revised tax return Special rules apply for those living outside the United States. Revised tax return Automatic 6-Month Extension If you cannot file your 2013 return by the due date, you can get an automatic 6-month extension of time to file. Revised tax return Example. Revised tax return If your return must be filed by April 15, 2014, you will have until October 15, 2014, to file. Revised tax return Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes. Revised tax return If you do not pay the amount due by the regular due date (generally April 15), you will owe interest on any unpaid tax from the original due date to the date you pay the tax. Revised tax return You may also be charged penalties (see the Instructions for Form 4868). Revised tax return How to get the automatic extension. Revised tax return   You can get the automatic 6-month extension if you do one of the following by the due date for filing your return. Revised tax return E-file Form 4868 using your personal computer or a tax professional. Revised tax return E-file and pay by credit or debit card. Revised tax return Your payment must be at least $1. Revised tax return You may pay by phone or over the Internet. Revised tax return Do not file Form 4868. Revised tax return File a paper Form 4868. Revised tax return If you are a fiscal year taxpayer, you must file a paper Form 4868. Revised tax return See Form 4868 for information on getting an extension using these options. Revised tax return When to file. Revised tax return   You must request the automatic extension by the due date for your return. Revised tax return You can file your return any time before the 6-month extension period ends. Revised tax return When you file your return. Revised tax return   Enter any payment you made related to the extension of time to file on Form 1040, line 68. Revised tax return If you file Form 1040A, U. Revised tax return S. Revised tax return Individual Income Tax Return, or Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, include that payment in your total payments on Form 1040A, line 41, or Form 1040EZ, line 9. Revised tax return Also enter “Form 4868” and the amount paid in the space to the left of the entry space for line 41 or line 9. Revised tax return You cannot ask the Internal Revenue Service to figure your tax if you use the extension of time to file. Revised tax return Individuals Outside the United States and Puerto Rico You are allowed an automatic 2-month extension (until June 16, 2014, if you use the calendar year) to file your 2013 return and pay any federal income tax due if: You are a U. Revised tax return S. Revised tax return citizen or resident, and On the due date of your return: You are living outside of the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and Puerto Rico. Revised tax return However, if you pay the tax due after the regular due date (generally April 15), interest will be charged from April 15 until the date the tax is paid. Revised tax return If you serve in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. Revised tax return For more information, see Publication 3, Armed Forces' Tax Guide. Revised tax return Married taxpayers. Revised tax return   If you file a joint return, only one spouse has to qualify for this automatic extension. Revised tax return However, if you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies. Revised tax return How to get the extension. Revised tax return   To use this special automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. Revised tax return (See the situations listed under (2), earlier. Revised tax return ) Extension beyond 2 months. Revised tax return   If you cannot file your 2013 return within the automatic 2-month extension period, you can get an additional 4-month extension, for a total of 6 months. Revised tax return File Form 4868 by the end of the automatic extension period (June 16, 2014 for calendar year taxpayers). Revised tax return Be sure to check the box on Form 4868, line 8, if appropriate. Revised tax return   In addition to this 6-month extension, taxpayers who are out of the country (as defined under (2) earlier) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Revised tax return   To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Revised tax return Send the letter by the extended due date (October 15 for calendar year taxpayers) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   You will not receive any notification from the IRS unless your request is denied for being untimely. Revised tax return Where To File Use the addresses listed below if you have to file Form 1040 with the United States and you are excluding possession income from American Samoa or Puerto Rico. Revised tax return If you are not including a check or a money order, send your U. Revised tax return S. Revised tax return tax return and all attachments to:   Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Revised tax return S. Revised tax return tax return and all attachments to:  Internal Revenue Service P. Revised tax return O. Revised tax return Box 1303 Charlotte, NC 28201-1303 USA Also send your U. Revised tax return S. Revised tax return return to these addresses if you are attaching Form 5074 or Form 8689. Revised tax return If you are not in either of the above categories, send your return to the address shown in the Form 1040 instructions for the possession or state in which you reside. Revised tax return Special Rules for Completing Your U. Revised tax return S. Revised tax return Tax Return If you are not excluding possession income from your U. Revised tax return S. Revised tax return tax return, follow the instructions for the specific forms you file. Revised tax return However, you may not qualify to claim the earned income credit (EIC). Revised tax return Earned income credit. Revised tax return   Even if you maintain a household in one of the possessions discussed in this publication that is your main home and the home of your qualifying child, you cannot claim the earned income credit on your U. Revised tax return S. Revised tax return tax return. Revised tax return This credit is available only if you maintain the household in the United States or you are serving on extended active duty in the U. Revised tax return S. Revised tax return Armed Forces. Revised tax return U. Revised tax return S. Revised tax return Armed Forces. Revised tax return   U. Revised tax return S. Revised tax return military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Revised tax return Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Revised tax return Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Revised tax return Income from American Samoa or Puerto Rico excluded. Revised tax return   You will not be allowed to take deductions and credits that apply to the excluded income. Revised tax return The additional information you need follows. Revised tax return Deductions if Possession Income Is Excluded Deductions that specifically apply to your excluded possession income, such as employee business expenses, are not allowable on your U. Revised tax return S. Revised tax return income tax return. Revised tax return Deductions that do not specifically apply to any particular type of income must be divided between your excluded income from sources in the relevant possession and income from all other sources to find the part that you can deduct on your U. Revised tax return S. Revised tax return tax return. Revised tax return Examples of such deductions are alimony payments, the standard deduction, and certain itemized deductions (such as medical expenses, charitable contributions, real estate taxes, and mortgage interest on your home). Revised tax return Figuring the deduction. Revised tax return   To find the part of a deduction that is allowable, multiply the deduction by the following fraction. Revised tax return   Gross income subject to U. Revised tax return S. Revised tax return income tax     Gross income from all sources (including excluded possession income)   Adjustments to Income Your adjusted gross income equals your gross income minus certain deductions (adjustments). Revised tax return Moving expense deduction. Revised tax return   Generally, expenses of a move to a possession are directly attributable to wages, salaries, and other earned income from that possession. Revised tax return Likewise, the expenses of a move back to the United States are generally attributable to U. Revised tax return S. Revised tax return earned income. Revised tax return   If you are claiming expenses for a move to a relevant possession, how and where you will deduct the expenses depends on your status as a bona fide resident and if any of your possession income is excluded on your U. Revised tax return S. Revised tax return tax return. Revised tax return For more information, see Moving expense deduction in chapter 3 under the name of the relevant possession. Revised tax return   If you are claiming expenses for a move from a U. Revised tax return S. Revised tax return possession to the United States, use Form 3903 to figure your deductible expenses and enter the amount on Form 1040, line 26. Revised tax return For purposes of deducting moving expenses, the possessions are considered part of the United States. Revised tax return See Publication 521, Moving Expenses, for information about what expenses are deductible. Revised tax return Self-employment tax deduction. Revised tax return   Generally, if you are reporting self-employment income on your U. Revised tax return S. Revised tax return return, you can include the deductible part of your self-employment tax on Form 1040, line 27. Revised tax return This is an income tax deduction only; it is not a deduction in figuring net earnings from self-employment (for self-employment tax). Revised tax return   However, if you are a bona fide resident of American Samoa or Puerto Rico and you exclude all of your self-employment income from gross income, you cannot take the deduction on Form 1040, line 27, because the deduction is related to excluded income. Revised tax return   If only part of your self-employment income is excluded, the part of the deduction that is based on the nonexcluded income is allowed. Revised tax return This would happen if, for instance, you have two businesses and only the income from one of them is excludable. Revised tax return   For purposes of the deduction only, figure the self-employment tax on the nonexcluded income by multiplying your total self-employment tax (from Schedule SE (Form 1040)), Self-Employment Tax) by the following fraction. Revised tax return   Self-employment income subject to U. Revised tax return S. Revised tax return income tax     Total self-employment income (including excluded possession income)   The result is your self-employment tax on nonexcluded income. Revised tax return Include the deductible part of this amount on Form 1040, line 27. Revised tax return Individual retirement arrangement (IRA) deduction. Revised tax return   Do not take excluded income into account when figuring your deductible IRA contribution. Revised tax return Standard Deduction The standard deduction is composed of the regular standard deduction amount and the additional standard deduction for taxpayers who are blind or age 65 or over. Revised tax return To find the amount you can claim on Form 1040, line 40, first figure your full standard deduction according to the Instructions for Form 1040. Revised tax return Then multiply your full standard deduction by the following fraction. Revised tax return   Gross income subject to U. Revised tax return S. Revised tax return income tax     Gross income from all sources (including excluded possession income)   In the space above line 40, enter “Standard deduction modified due to income excluded under section 931 (if American Samoa) or section 933 (if Puerto Rico). Revised tax return ” This calculation may not be the same as the one you used to determine if you need to file a U. Revised tax return S. Revised tax return tax return. Revised tax return Itemized Deductions Most itemized deductions do not apply to a particular type of income. Revised tax return However, itemized deductions can be divided into three categories. Revised tax return Those that apply specifically to excluded income, such as employee business expenses, are not deductible. Revised tax return Those that apply specifically to income subject to U. Revised tax return S. Revised tax return income tax, which might also be employee business expenses, are fully allowable under the Instructions for Schedule A (Form 1040), Itemized Deductions. Revised tax return Those that do not apply to specific income must be allocated between your gross income subject to U. Revised tax return S. Revised tax return income tax and your total gross income from all sources. Revised tax return The example given later shows how to figure the deductible part of each type of expense that is not related to specific income. Revised tax return Example. Revised tax return In 2013, you and your spouse are both under 65 and U. Revised tax return S. Revised tax return citizens who are bona fide residents of Puerto Rico during the entire tax year. Revised tax return You file a joint income tax return. Revised tax return During 2013, you earned $20,000 from Puerto Rican sources (excluded from U. Revised tax return S. Revised tax return gross income) and your spouse earned $60,000 from the U. Revised tax return S. Revised tax return Government. Revised tax return You have $16,000 of itemized deductions that do not apply to any specific type of income. Revised tax return These are medical expenses of $4,000, real estate taxes of $5,000, home mortgage interest of $6,000, and charitable contributions of $1,000 (cash contributions). Revised tax return You determine the amount of each deduction that you can claim on your Schedule A (Form 1040), Itemized Deductions, by multiplying the deduction by the fraction shown under Figuring the deduction , earlier under Deductions if Possession Income is Excluded. Revised tax return   Medical Expenses   $60,000$80,000 × $4,000 = $3,000  (enter on line 1  of Schedule A)     Real Estate Taxes   $60,000$80,000 × $5,000 = $3,750  (enter on line 6  of Schedule A)     Home Mortgage Interest   $60,000$80,000 × $6,000 = $4,500  (enter on line 10 or 11 of  Schedule A)     Charitable Contributions (cash contributions)   $60,000$80,000 × $1,000 = $750  (enter on line 16 of Schedule A)   Enter on Schedule A (Form 1040) only the allowable portion of each deduction. Revised tax return Overall limitation on itemized deductions. Revised tax return   If your adjusted gross income (discussed earlier) is over $300,000 if married filing jointly or qualifying widow(er); $275,000 if head of household; $250,000 if single; or $150,000 if married filing separately; see the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040), to figure your itemized deductions. Revised tax return Personal Exemptions Personal exemptions are allowed in full even if excluding possession income. Revised tax return However, depending upon your adjusted gross income and filing status, the amount you can deduct may be reduced. Revised tax return See the Deduction for Exemptions Worksheet—Line 42 in the instructions for Form 1040. Revised tax return Foreign Tax Credit if Possession Income Is Excluded If you must report American Samoa or Puerto Rico source income on your U. Revised tax return S. Revised tax return tax return, you can claim a foreign tax credit for income taxes paid to the possession on that income. Revised tax return However, you cannot claim a foreign tax credit for taxes paid on possession income that is excluded on your U. Revised tax return S. Revised tax return tax return. Revised tax return The foreign tax credit is generally figured on Form 1116. Revised tax return If you have income, such as U. Revised tax return S. Revised tax return Government wages, that is not excludable, and you also have possession source income that is excludable, you must figure the credit by reducing your foreign taxes paid or accrued by the taxes based on the excluded income. Revised tax return You make this reduction for each separate income category. Revised tax return To find the amount of this reduction, use the following formula for each income category. Revised tax return Excluded income from possession sources less deductible expenses based on that income x Tax paid or accrued to the possession = Reduction in foreign taxes Total income subject to possession tax less deductible expenses based on that income Enter the amount of the reduction on Form 1116, line 12. Revised tax return For more information on the foreign tax credit, see Publication 514. Revised tax return Example. Revised tax return Jason and Lynn Reddy are U. Revised tax return S. Revised tax return citizens who were bona fide residents of Puerto Rico during all of 2013. Revised tax return They file a joint tax return. Revised tax return The following table shows their excludable and taxable income for U. Revised tax return S. Revised tax return federal income tax purposes. Revised tax return   Taxable   Excludable Jason's wages from  U. Revised tax return S. Revised tax return Government $25,000     Lynn's wages from Puerto Rico  corp. Revised tax return     $15,000 Dividend from Puerto Rico corp. Revised tax return doing business in Puerto Rico     200 Dividend from U. Revised tax return S. Revised tax return  corp. Revised tax return doing business  in U. Revised tax return S. Revised tax return * 1,000     Totals $26,000   $15,200 * Income from sources outside Puerto Rico is taxable. Revised tax return   Jason and Lynn must file 2013 income tax returns with both Puerto Rico and the United States. Revised tax return They have gross income of $26,000 for U. Revised tax return S. Revised tax return tax purposes. Revised tax return They paid taxes to Puerto Rico of $4,000 ($3,980 on their wages and $20 on the dividend from the Puerto Rico corporation). Revised tax return They figure their foreign tax credit on two Forms 1116, which they must attach to their U. Revised tax return S. Revised tax return return. Revised tax return They fill out one Form 1116 for wages and one Form 1116 for the dividend. Revised tax return Jason and Lynn figure the Puerto Rico taxes on excluded income as follows. Revised tax return   Wages: ($15,000 ÷ $40,000) × $3,980 = $1,493   Dividend: ($200 ÷ $200) × $20 = $20 They enter $1,493 on Form 1116, line 12, for wages and $20 on the second Form 1116, line 12, for the dividend. Revised tax return Self-Employment Tax Self-employment tax includes both social security and Medicare taxes for individuals who are self-employed. Revised tax return A U. Revised tax return S. Revised tax return citizen or resident alien who is self-employed must pay self-employment tax on net self-employment earnings of $400 or more. Revised tax return This rule applies whether or not the earnings are excludable from gross income (or whether or not a U. Revised tax return S. Revised tax return income tax return must otherwise be filed). Revised tax return Bona fide residents of the possessions discussed in this publication are considered U. Revised tax return S. Revised tax return residents for this purpose and are subject to the self-employment tax. Revised tax return Forms to file. Revised tax return   If you have net self-employment income and are subject to self-employment tax, file one of the following with the United States. Revised tax return If you are required to file Form 1040 with the United States, complete Schedule SE (Form 1040) and attach it to your Form 1040. Revised tax return If you are not required to file Form 1040 with the United States and you are a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, file Form 1040-SS. Revised tax return If you are a resident of Puerto Rico, you can file the Spanish-language Form 1040-PR instead. Revised tax return Do not file forms 1040-SS or 1040-PR with Form 1040. Revised tax return If you are required to pay Additional Medicare Tax (discussed later) on your self-employment income, attach Form 8959, Additional Medicare Tax to Form 1040, Form 1040-SS, or Form 1040-PR, as applicable. Revised tax return Chapter 11 Bankruptcy cases. Revised tax return   While you are a debtor in a chapter 11 bankruptcy case, your net profit or loss from self-employment will be included on the income tax return (Form 1041, U. Revised tax return S. Revised tax return Income Tax Return for Estates and Trusts) of the bankruptcy estate. Revised tax return However, you—not the bankruptcy estate—are responsible for paying self-employment tax on your net earnings from self-employment. Revised tax return   Use Schedule SE (Form 1040), Form 1040-SS, or Form 1040-PR, as determined above, to figure your correct amount of self-employment tax. Revised tax return   For other reporting requirements, see Chapter 11 Bankruptcy Cases in the Instructions for Form 1040. Revised tax return Additional Medicare Tax Beginning in 2013, a 0. Revised tax return 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). Revised tax return Medicare wages and self-employment income are combined to determine if income exceeds the threshold. Revised tax return A self-employment loss should not be considered for purposes of this tax. Revised tax return RRTA compensation should be separately compared to the threshold. Revised tax return Your employer is responsible for withholding the 0. Revised tax return 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. Revised tax return You should consider this withholding, if applicable, in determining whether you need to make estimated tax payments. Revised tax return There are no special rules for U. Revised tax return S. Revised tax return citizens and nonresident aliens living abroad for purposes of this provision. Revised tax return Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. Revised tax return For more information, see Form 8959, Additional Medicare Tax, and its instructions or visit www. Revised tax return irs. Revised tax return gov and enter the following words in the search box: Additional Medicare Tax. Revised tax return You cannot include the Additional Medicare Tax as a deductible part of your self-employment tax. Revised tax return Net Investment Income Tax Beginning in 2013, the Net Investment Income Tax (NIIT) imposes a 3. Revised tax return 8% tax on the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Revised tax return Bona fide residents of Puerto Rico and American Samoa who may have a federal income tax return filing obligation may be liable for the NIIT if the taxpayer’s modified adjusted gross income from non-territory sources exceeds a specified threshold amount. Revised tax return The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Revised tax return Bona fide residents must take into account any additional tax liability associated with the NIIT when calculating your estimated tax payments. Revised tax return Forms to file. Revised tax return   If you are a bona fide resident of American Samoa and Puerto Rico and you are required to pay the NIIT, you must file Form 1040 with the United States and attach Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts. Revised tax return For more information, see Form 8960 and its instructions. Revised tax return Paying Your Taxes You may find that not all of your income tax has been paid through withholding by either the United States or the possession. Revised tax return This is often true if you have income that is not subject to withholding, such as self-employment, interest, or rental income. Revised tax return In this situation, you may need to make estimated tax payments. Revised tax return Estimated Tax If your estimated income tax obligation is to the United States, use the worksheet in the Form 1040-ES package to figure your estimated tax, including self-employment tax. Revised tax return Include the Additional Medicare Tax and Net Investment Income Tax if applicable. Revised tax return If you are paying by check or money order, use the payment vouchers in the Form 1040-ES package. Revised tax return Or, you can make your payments electronically and not have to file any paper forms. Revised tax return See the Form 1040-ES instructions for information on making payments. Revised tax return Double Taxation Mutual agreement procedures exist to settle issues where there is inconsistent tax treatment between the IRS and the taxing authorities of the following possessions. Revised tax return American Samoa. Revised tax return The Commonwealth of Puerto Rico. Revised tax return The Commonwealth of the Northern Mariana Islands. Revised tax return Guam. Revised tax return The U. Revised tax return S. Revised tax return Virgin Islands. Revised tax return These issues usually involve allocations of income, deductions, credits, or allowances between related persons; determinations of residency; and determinations of the source of income and related expenses. Revised tax return Competent Authority Assistance The tax coordination agreements between the United States and the possession tax departments contain provisions allowing the competent authorities of the United States and the relevant possession to resolve, by mutual agreement, inconsistent tax treatment by the two jurisdictions. Revised tax return How to make your request. Revised tax return   Your request for competent authority assistance must include all the information listed in Revenue Procedure 2006-23, 2006-20 I. Revised tax return R. Revised tax return B. Revised tax return 900 available at www. Revised tax return irs. Revised tax return gov/pub/irs-irbs/irb06-49. Revised tax return pdf. Revised tax return    Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. Revised tax return S. Revised tax return competent authority assistance under tax treaties. Revised tax return As noted, an update to Revenue Procedure 2006-23 will be published in the future. Revised tax return   Your request must be in the form of a letter addressed to the Deputy Commissioner (International) LB&I. Revised tax return It must contain a statement that competent authority assistance is requested under the mutual agreement procedure with the possession. Revised tax return You (or a person having authority to sign your federal return) must sign and date the request. Revised tax return    Send your written request for U. Revised tax return S. Revised tax return assistance under this procedure to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, N. Revised tax return W. Revised tax return  Routing: M4-365 Washington, DC 20224 (Attention: TAIT) Nonresident aliens generally must present their initial request for assistance to the relevant possession tax agency. Revised tax return Credit or Refund In addition to the tax assistance request, if you seek a credit or refund of any overpayment of U. Revised tax return S. Revised tax return tax paid on the income in question, you should file a claim on Form 1040X, Amended U. Revised tax return S. Revised tax return Individual Income Tax Return. Revised tax return Indicate on the form that a request for assistance under the mutual agreement procedure with the possession has been filed. Revised tax return Attach a copy of the request to the form. Revised tax return Also, you should take whatever steps must be taken under the possession tax code to prevent the expiration of the statutory period for filing a claim for credit or refund of a possession tax. Revised tax return See Revenue Procedure 2006-54 (or its successor), section 9, for complete information. Revised tax return Prev  Up  Next   Home   More Online Publications