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State Tax E File

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State Tax E File

State tax e file 10. State tax e file   Retirement Plans, Pensions, and Annuities Table of Contents What's New Reminder IntroductionThe General Rule. State tax e file Individual retirement arrangements (IRAs). State tax e file Civil service retirement benefits. State tax e file Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. State tax e file How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. State tax e file Exclusion not limited to cost. State tax e file Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. State tax e file Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries What's New For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). State tax e file However, these distributions are taken into account when determining the modified adjusted gross income threshold. State tax e file Distributions from a nonqualified retirement plan are included in net investment income. State tax e file See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. State tax e file Reminder Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. State tax e file For more information, see Designated Roth accounts discussed later. State tax e file Introduction This chapter discusses the tax treatment of distributions you receive from: An employee pension or annuity from a qualified plan, A disability retirement, and A purchased commercial annuity. State tax e file What is not covered in this chapter. State tax e file   The following topics are not discussed in this chapter. State tax e file The General Rule. State tax e file   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). State tax e file For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. State tax e file For more information about the General Rule, see Publication 939, General Rule for Pensions and Annuities. State tax e file Individual retirement arrangements (IRAs). State tax e file   Information on the tax treatment of amounts you receive from an IRA is in chapter 17. State tax e file Civil service retirement benefits. State tax e file    If you are retired from the federal government (regular, phased, or disability retirement), see Publication 721, Tax Guide to U. State tax e file S. State tax e file Civil Service Retirement Benefits. State tax e file Publication 721 also covers the information that you need if you are the survivor or beneficiary of a federal employee or retiree who died. State tax e file Useful Items - You may want to see: Publication 575 Pension and Annuity Income 721 Tax Guide to U. State tax e file S. State tax e file Civil Service Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. State tax e file 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts General Information Designated Roth accounts. State tax e file   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. State tax e file Elective deferrals that are designated as Roth contributions are included in your income. State tax e file However, qualified distributions are not included in your income. State tax e file See Publication 575 for more information. State tax e file In-plan rollovers to designated Roth accounts. State tax e file   If you are a participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. State tax e file The rollover of any untaxed amounts must be included in income. State tax e file See Publication 575 for more information. State tax e file More than one program. State tax e file   If you receive benefits from more than one program under a single trust or plan of your employer, such as a pension plan and a profit-sharing plan, you may have to figure the taxable part of each pension or annuity contract separately. State tax e file Your former employer or the plan administrator should be able to tell you if you have more than one pension or annuity contract. State tax e file Section 457 deferred compensation plans. State tax e file    If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. State tax e file If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. State tax e file You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. State tax e file You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. State tax e file   Your 457(b) plan may have a designated Roth account option. State tax e file If so, you may be able to roll over amounts to the designated Roth account or make contributions. State tax e file Elective deferrals to a designated Roth account are included in your income. State tax e file Qualified distributions from a designated Roth account are not subject to tax. State tax e file   This chapter covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. State tax e file For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525, Taxable and Nontaxable Income. State tax e file   For general information on these deferred compensation plans, see Section 457 Deferred Compensation Plans in Publication 575. State tax e file Disability pensions. State tax e file   If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. State tax e file You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. State tax e file Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. State tax e file    You may be entitled to a tax credit if you were permanently and totally disabled when you retired. State tax e file For information on the credit for the elderly or the disabled, see chapter 33. State tax e file   Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. State tax e file Report the payments on Form 1040, lines 16a and 16b, or on Form 1040A, lines 12a and 12b. State tax e file    Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. State tax e file For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. State tax e file   For more information on how to report disability pensions, including military and certain government disability pensions, see chapter 5. State tax e file Retired public safety officers. State tax e file   An eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from a government retirement plan to the provider of accident, health, or long-term disability insurance. State tax e file See Insurance Premiums for Retired Public Safety Officers in Publication 575 for more information. State tax e file Railroad retirement benefits. State tax e file   Part of any railroad retirement benefits you receive is treated for tax purposes as social security benefits, and part is treated as an employee pension. State tax e file For information about railroad retirement benefits treated as social security benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. State tax e file For information about railroad retirement benefits treated as an employee pension, see Railroad Retirement Benefits in Publication 575. State tax e file Withholding and estimated tax. State tax e file   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable parts of amounts paid to you. State tax e file You can tell the payer how much to withhold, or not to withhold, by filing Form W-4P. State tax e file If you choose not to have tax withheld, or you do not have enough tax withheld, you may have to pay estimated tax. State tax e file   If you receive an eligible rollover distribution, you cannot choose not to have tax withheld. State tax e file Generally, 20% will be withheld, but no tax will be withheld on a direct rollover of an eligible rollover distribution. State tax e file See Direct rollover option under Rollovers, later. State tax e file   For more information, see Pensions and Annuities under Tax Withholding for 2014 in chapter 4. State tax e file Qualified plans for self-employed individuals. State tax e file   Qualified plans set up by self-employed individuals are sometimes called Keogh or H. State tax e file R. State tax e file 10 plans. State tax e file Qualified plans can be set up by sole proprietors, partnerships (but not a partner), and corporations. State tax e file They can cover self-employed persons, such as the sole proprietor or partners, as well as regular (common-law) employees. State tax e file    Distributions from a qualified plan are usually fully taxable because most recipients have no cost basis. State tax e file If you have an investment (cost) in the plan, however, your pension or annuity payments from a qualified plan are taxed under the Simplified Method. State tax e file For more information about qualified plans, see Publication 560, Retirement Plans for Small Business. State tax e file Purchased annuities. State tax e file   If you receive pension or annuity payments from a privately purchased annuity contract from a commercial organization, such as an insurance company, you generally must use the General Rule to figure the tax-free part of each annuity payment. State tax e file For more information about the General Rule, get Publication 939. State tax e file Also, see Variable Annuities in Publication 575 for the special provisions that apply to these annuity contracts. State tax e file Loans. State tax e file   If you borrow money from your retirement plan, you must treat the loan as a nonperiodic distribution from the plan unless certain exceptions apply. State tax e file This treatment also applies to any loan under a contract purchased under your retirement plan, and to the value of any part of your interest in the plan or contract that you pledge or assign. State tax e file This means that you must include in income all or part of the amount borrowed. State tax e file Even if you do not have to treat the loan as a nonperiodic distribution, you may not be able to deduct the interest on the loan in some situations. State tax e file For details, see Loans Treated as Distributions in Publication 575. State tax e file For information on the deductibility of interest, see chapter 23. State tax e file Tax-free exchange. State tax e file   No gain or loss is recognized on an exchange of an annuity contract for another annuity contract if the insured or annuitant remains the same. State tax e file However, if an annuity contract is exchanged for a life insurance or endowment contract, any gain due to interest accumulated on the contract is ordinary income. State tax e file See Transfers of Annuity Contracts in Publication 575 for more information about exchanges of annuity contracts. State tax e file How To Report If you file Form 1040, report your total annuity on line 16a and the taxable part on line 16b. State tax e file If your pension or annuity is fully taxable, enter it on line 16b; do not make an entry on line 16a. State tax e file If you file Form 1040A, report your total annuity on line 12a and the taxable part on line 12b. State tax e file If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. State tax e file More than one annuity. State tax e file   If you receive more than one annuity and at least one of them is not fully taxable, enter the total amount received from all annuities on Form 1040, line 16a, or Form 1040A, line 12a, and enter the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. State tax e file If all the annuities you receive are fully taxable, enter the total of all of them on Form 1040, line 16b, or Form 1040A, line 12b. State tax e file Joint return. State tax e file   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on Form 1040, line 16a, or Form 1040A, line 12a, and report the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. State tax e file Cost (Investment in the Contract) Before you can figure how much, if any, of a distribution from your pension or annuity plan is taxable, you must determine your cost (your investment in the contract) in the pension or annuity. State tax e file Your total cost in the plan includes the total premiums, contributions, or other amounts you paid. State tax e file This includes the amounts your employer contributed that were taxable to you when paid. State tax e file Cost does not include any amounts you deducted or were excluded from your income. State tax e file From this total cost, subtract any refunds of premiums, rebates, dividends, unrepaid loans that were not included in your income, or other tax-free amounts that you received by the later of the annuity starting date or the date on which you received your first payment. State tax e file Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. State tax e file Designated Roth accounts. State tax e file   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. State tax e file Your cost will also include any in-plan Roth rollovers you included in income. State tax e file Foreign employment contributions. State tax e file   If you worked in a foreign country and contributions were made to your retirement plan, special rules apply in determining your cost. State tax e file See Foreign employment contributions under Cost (Investment in the Contract) in Publication 575. State tax e file Taxation of Periodic Payments Fully taxable payments. State tax e file   Generally, if you did not pay any part of the cost of your employee pension or annuity and your employer did not withhold part of the cost from your pay while you worked, the amounts you receive each year are fully taxable. State tax e file You must report them on your income tax return. State tax e file Partly taxable payments. State tax e file   If you paid part of the cost of your pension or annuity, you are not taxed on the part of the pension or annuity you receive that represents a return of your cost. State tax e file The rest of the amount you receive is generally taxable. State tax e file You figure the tax-free part of the payment using either the Simplified Method or the General Rule. State tax e file Your annuity starting date and whether or not your plan is qualified determine which method you must or may use. State tax e file   If your annuity starting date is after November 18, 1996, and your payments are from a qualified plan, you must use the Simplified Method. State tax e file Generally, you must use the General Rule if your annuity is paid under a nonqualified plan, and you cannot use this method if your annuity is paid under a qualified plan. State tax e file   If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. State tax e file   If your annuity is paid under a qualified plan and your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. State tax e file Exclusion limit. State tax e file   Your annuity starting date determines the total amount of annuity payments that you can exclude from your taxable income over the years. State tax e file Once your annuity starting date is determined, it does not change. State tax e file If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. State tax e file That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. State tax e file Exclusion limited to cost. State tax e file   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. State tax e file Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. State tax e file This deduction is not subject to the 2%-of-adjusted-gross-income limit. State tax e file Exclusion not limited to cost. State tax e file   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. State tax e file If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. State tax e file The total exclusion may be more than your cost. State tax e file Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. State tax e file For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. State tax e file For any other annuity, this number is the number of monthly annuity payments under the contract. State tax e file Who must use the Simplified Method. State tax e file   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you both: Receive pension or annuity payments from a qualified employee plan, qualified employee annuity, or a tax-sheltered annuity (403(b)) plan, and On your annuity starting date, you were either under age 75, or entitled to less than 5 years of guaranteed payments. State tax e file Guaranteed payments. State tax e file   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. State tax e file If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. State tax e file How to use the Simplified Method. State tax e file    Complete the Simplified Method Worksheet in Publication 575 to figure your taxable annuity for 2013. State tax e file Single-life annuity. State tax e file    If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. State tax e file Enter on line 3 the number shown for your age at the annuity starting date. State tax e file Multiple-lives annuity. State tax e file   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. State tax e file Enter on line 3 the number shown for the combined ages of you and the youngest survivor annuitant at the annuity starting date. State tax e file   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. State tax e file Instead you must use Table 1 and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. State tax e file    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity next year. State tax e file Example. State tax e file Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. State tax e file Bill's annuity starting date is January 1, 2013. State tax e file The benefits are to be paid for the joint lives of Bill and his wife Kathy, age 65. State tax e file Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. State tax e file Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. State tax e file Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. State tax e file Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet. State tax e file His completed worksheet is shown in Worksheet 10-A. State tax e file Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. State tax e file Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. State tax e file The full amount of any annuity payments received after 310 payments are paid must be included in gross income. State tax e file If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. State tax e file This deduction is not subject to the 2%-of-adjusted- gross-income limit. State tax e file Worksheet 10-A. State tax e file Simplified Method Worksheet for Bill Smith 1. State tax e file Enter the total pension or annuity payments received this year. State tax e file Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1. State tax e file 14,400 2. State tax e file Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*. State tax e file See Cost (Investment in the Contract) , earlier 2. State tax e file 31,000       Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). State tax e file Otherwise, go to line 3. State tax e file         3. State tax e file Enter the appropriate number from Table 1 below. State tax e file But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. State tax e file 310     4. State tax e file Divide line 2 by the number on line 3 4. State tax e file 100     5. State tax e file Multiply line 4 by the number of months for which this year's payments were made. State tax e file If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. State tax e file Otherwise, go to line 6 5. State tax e file 1,200     6. State tax e file Enter any amounts previously recovered tax free in years after 1986. State tax e file This is the amount shown on line 10 of your worksheet for last year 6. State tax e file -0-     7. State tax e file Subtract line 6 from line 2 7. State tax e file 31,000     8. State tax e file Enter the smaller of line 5 or line 7 8. State tax e file 1,200 9. State tax e file Taxable amount for year. State tax e file Subtract line 8 from line 1. State tax e file Enter the result, but not less than zero. State tax e file Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b 9. State tax e file 13,200   Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. State tax e file If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers in Publication 575 before entering an amount on your tax return. State tax e file     10. State tax e file Was your annuity starting date before 1987? □ Yes. State tax e file STOP. State tax e file Do not complete the rest of this worksheet. State tax e file  ☑ No. State tax e file Add lines 6 and 8. State tax e file This is the amount you have recovered tax free through 2013. State tax e file You will need this number if you need to fill out this worksheet next year 10. State tax e file 1,200 11. State tax e file Balance of cost to be recovered. State tax e file Subtract line 10 from line 2. State tax e file If zero, you will not have to complete this worksheet next year. State tax e file The payments you receive next year will generally be fully taxable 11. State tax e file 29,800 TABLE 1 FOR LINE 3 ABOVE   AND your annuity starting date was— IF the age at annuity starting date was. State tax e file . State tax e file . State tax e file before November 19, 1996, enter on line 3. State tax e file . State tax e file . State tax e file after November 18, 1996, enter on line 3. State tax e file . State tax e file . State tax e file 55 or under 300 360 56–60 260 310 61–65 240 260 66–70 170 210 71 or older 120 160 TABLE 2 FOR LINE 3 ABOVE IF the combined ages at annuity starting date were. State tax e file . State tax e file . State tax e file   THEN enter on line 3. State tax e file . State tax e file . State tax e file 110 or under   410 111–120   360 121–130   310 131–140   260 141 or older   210 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. State tax e file Who must use the General Rule. State tax e file   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. State tax e file Annuity starting before November 19, 1996. State tax e file   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. State tax e file You also had to use it for any fixed-period annuity. State tax e file If you did not have to use the General Rule, you could have chosen to use it. State tax e file If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. State tax e file   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. State tax e file Who cannot use the General Rule. State tax e file   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. State tax e file See Who must use the Simplified Method , earlier. State tax e file More information. State tax e file   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. State tax e file Taxation of Nonperiodic Payments Nonperiodic distributions are also known as amounts not received as an annuity. State tax e file They include all payments other than periodic payments and corrective distributions. State tax e file Examples of nonperiodic payments are cash withdrawals, distributions of current earnings, certain loans, and the value of annuity contracts transferred without full and adequate consideration. State tax e file Corrective distributions of excess plan contributions. State tax e file   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. State tax e file To correct an excess, your plan may distribute it to you (along with any income earned on the excess). State tax e file For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. State tax e file Figuring the taxable amount of nonperiodic payments. State tax e file   How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. State tax e file If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. State tax e file If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. State tax e file Annuity starting date. State tax e file   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. State tax e file Distribution on or after annuity starting date. State tax e file   If you receive a nonperiodic payment from your annuity contract on or after the annuity starting date, you generally must include all of the payment in gross income. State tax e file Distribution before annuity starting date. State tax e file   If you receive a nonperiodic distribution before the annuity starting date from a qualified retirement plan, you generally can allocate only part of it to the cost of the contract. State tax e file You exclude from your gross income the part that you allocate to the cost. State tax e file You include the remainder in your gross income. State tax e file   If you receive a nonperiodic distribution before the annuity starting date from a plan other than a qualified retirement plan (nonqualified plan), it is allocated first to earnings (the taxable part) and then to the cost of the contract (the tax-free part). State tax e file This allocation rule applies, for example, to a commercial annuity contract you bought directly from the issuer. State tax e file    Distributions from nonqualified plans are subject to the net investment income tax. State tax e file See the Instructions for Form 8960. State tax e file   For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Publication 575. State tax e file Lump-Sum Distributions This section on lump-sum distributions only applies if the plan participant was born before January 2, 1936. State tax e file If the plan participant was born after January 1, 1936, the taxable amount of this nonperiodic payment is reported as discussed earlier. State tax e file A lump-sum distribution is the distribution or payment in one tax year of a plan participant's entire balance from all of the employer's qualified plans of one kind (for example, pension, profit-sharing, or stock bonus plans). State tax e file A distribution from a nonqualified plan (such as a privately purchased commercial annuity or a section 457 deferred compensation plan of a state or local government or tax-exempt organization) cannot qualify as a lump-sum distribution. State tax e file The participant's entire balance from a plan does not include certain forfeited amounts. State tax e file It also does not include any deductible voluntary employee contributions allowed by the plan after 1981 and before 1987. State tax e file For more information about distributions that do not qualify as lump-sum distributions, see Distributions that do not qualify under Lump-Sum Distributions in Publication 575. State tax e file If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. State tax e file The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. State tax e file The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. State tax e file You may be able to use the 10-year tax option, discussed later, to figure tax on the ordinary income part. State tax e file Use Form 4972 to figure the separate tax on a lump-sum distribution using the optional methods. State tax e file The tax figured on Form 4972 is added to the regular tax figured on your other income. State tax e file This may result in a smaller tax than you would pay by including the taxable amount of the distribution as ordinary income in figuring your regular tax. State tax e file How to treat the distribution. State tax e file   If you receive a lump-sum distribution, you may have the following options for how you treat the taxable part. State tax e file Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and the part from participation after 1973 as ordinary income. State tax e file Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and use the 10-year tax option to figure the tax on the part from participation after 1973 (if you qualify). State tax e file Use the 10-year tax option to figure the tax on the total taxable amount (if you qualify). State tax e file Roll over all or part of the distribution. State tax e file See Rollovers , later. State tax e file No tax is currently due on the part rolled over. State tax e file Report any part not rolled over as ordinary income. State tax e file Report the entire taxable part of the distribution as ordinary income on your tax return. State tax e file   The first three options are explained in the following discussions. State tax e file Electing optional lump-sum treatment. State tax e file   You can choose to use the 10-year tax option or capital gain treatment only once after 1986 for any plan participant. State tax e file If you make this choice, you cannot use either of these optional treatments for any future distributions for the participant. State tax e file Taxable and tax-free parts of the distribution. State tax e file    The taxable part of a lump-sum distribution is the employer's contributions and income earned on your account. State tax e file You may recover your cost in the lump sum and any net unrealized appreciation (NUA) in employer securities tax free. State tax e file Cost. State tax e file   In general, your cost is the total of: The plan participant's nondeductible contributions to the plan, The plan participant's taxable costs of any life insurance contract distributed, Any employer contributions that were taxable to the plan participant, and Repayments of any loans that were taxable to the plan participant. State tax e file You must reduce this cost by amounts previously distributed tax free. State tax e file Net unrealized appreciation (NUA). State tax e file   The NUA in employer securities (box 6 of Form 1099-R) received as part of a lump-sum distribution is generally tax free until you sell or exchange the securities. State tax e file (For more information, see Distributions of employer securities under Taxation of Nonperiodic Payments in Publication 575. State tax e file ) Capital Gain Treatment Capital gain treatment applies only to the taxable part of a lump-sum distribution resulting from participation in the plan before 1974. State tax e file The amount treated as capital gain is taxed at a 20% rate. State tax e file You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. State tax e file Complete Part II of Form 4972 to choose the 20% capital gain election. State tax e file For more information, see Capital Gain Treatment under Lump-Sum Distributions in Publication 575. State tax e file 10-Year Tax Option The 10-year tax option is a special formula used to figure a separate tax on the ordinary income part of a lump-sum distribution. State tax e file You pay the tax only once, for the year in which you receive the distribution, not over the next 10 years. State tax e file You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. State tax e file The ordinary income part of the distribution is the amount shown in box 2a of the Form 1099-R given to you by the payer, minus the amount, if any, shown in box 3. State tax e file You also can treat the capital gain part of the distribution (box 3 of Form 1099-R) as ordinary income for the 10-year tax option if you do not choose capital gain treatment for that part. State tax e file Complete Part III of Form 4972 to choose the 10-year tax option. State tax e file You must use the special Tax Rate Schedule shown in the instructions for Part III to figure the tax. State tax e file Publication 575 illustrates how to complete Form 4972 to figure the separate tax. State tax e file Rollovers If you withdraw cash or other assets from a qualified retirement plan in an eligible rollover distribution, you can defer tax on the distribution by rolling it over to another qualified retirement plan or a traditional IRA. State tax e file For this purpose, the following plans are qualified retirement plans. State tax e file A qualified employee plan. State tax e file A qualified employee annuity. State tax e file A tax-sheltered annuity plan (403(b) plan). State tax e file An eligible state or local government section 457 deferred compensation plan. State tax e file Eligible rollover distributions. State tax e file   Generally, an eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan. State tax e file For information about exceptions to eligible rollover distributions, see Publication 575. State tax e file Rollover of nontaxable amounts. State tax e file   You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another qualified retirement plan that is a qualified employee plan or a 403(b) plan, or to a traditional or Roth IRA. State tax e file The transfer must be made either through a direct rollover to a qualified plan or 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional or Roth IRA. State tax e file   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. State tax e file   Any after-tax contributions that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. State tax e file To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. State tax e file For more information, see the Form 8606 instructions. State tax e file Direct rollover option. State tax e file   You can choose to have any part or all of an eligible rollover distribution paid directly to another qualified retirement plan that accepts rollover distributions or to a traditional or Roth IRA. State tax e file If you choose the direct rollover option, or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. State tax e file Payment to you option. State tax e file   If an eligible rollover distribution is paid to you, 20% generally will be withheld for income tax. State tax e file However, the full amount is treated as distributed to you even though you actually receive only 80%. State tax e file You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional or Roth IRA. State tax e file (See Pensions and Annuities under Tax Withholding for 2014 in chapter 4. State tax e file )    If you decide to roll over an amount equal to the distribution before withholding, your contribution to the new plan or IRA must include other money (for example, from savings or amounts borrowed) to replace the amount withheld. State tax e file Time for making rollover. State tax e file   You generally must complete the rollover of an eligible rollover distribution paid to you by the 60th day following the day on which you receive the distribution from your employer's plan. State tax e file (If an amount distributed to you becomes a frozen deposit in a financial institution during the 60-day period after you receive it, the rollover period is extended for the period during which the distribution is in a frozen deposit in a financial institution. State tax e file )   The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. State tax e file   The administrator of a qualified plan must give you a written explanation of your distribution options within a reasonable period of time before making an eligible rollover distribution. State tax e file Qualified domestic relations order (QDRO). State tax e file   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan that you receive under a QDRO. State tax e file If you receive the distribution as an employee's spouse or former spouse (not as a nonspousal beneficiary), the rollover rules apply to you as if you were the employee. State tax e file You can roll over the distribution from the plan into a traditional IRA or to another eligible retirement plan. State tax e file See Rollovers in Publication 575 for more information on benefits received under a QDRO. State tax e file Rollover by surviving spouse. State tax e file   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan you receive as the surviving spouse of a deceased employee. State tax e file The rollover rules apply to you as if you were the employee. State tax e file You can roll over a distribution into a qualified retirement plan or a traditional or Roth IRA. State tax e file For a rollover to a Roth IRA, see Rollovers to Roth IRAs , later. State tax e file    A distribution paid to a beneficiary other than the employee's surviving spouse is generally not an eligible rollover distribution. State tax e file However, see Rollovers by nonspouse beneficiary next. State tax e file Rollovers by nonspouse beneficiary. State tax e file   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you may be able to roll over tax free all or a portion of a distribution you receive from an eligible retirement plan of the employee. State tax e file The distribution must be a direct trustee-to-trustee transfer to your traditional or Roth IRA that was set up to receive the distribution. State tax e file The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. State tax e file For information on inherited IRAs, see What if You Inherit an IRA? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs). State tax e file Retirement bonds. State tax e file   If you redeem retirement bonds purchased under a qualified bond purchase plan, you can roll over the proceeds that exceed your basis tax free into an IRA (as discussed in Publication 590) or a qualified employer plan. State tax e file Designated Roth accounts. State tax e file   You can roll over an eligible rollover distribution from a designated Roth account into another designated Roth account or a Roth IRA. State tax e file If you want to roll over the part of the distribution that is not included in income, you must make a direct rollover of the entire distribution or you can roll over the entire amount (or any portion) to a Roth IRA. State tax e file For more information on rollovers from designated Roth accounts, see Rollovers in Publication 575. State tax e file In-plan rollovers to designated Roth accounts. State tax e file   If you are a plan participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. State tax e file The rollover of any untaxed amounts must be included in income. State tax e file See Designated Roth accounts under Rollovers in Publication 575 for more information. State tax e file Rollovers to Roth IRAs. State tax e file   You can roll over distributions directly from a qualified retirement plan (other than a designated Roth account) to a Roth IRA. State tax e file   You must include in your gross income distributions from a qualified retirement plan (other than a designated Roth account) that you would have had to include in income if you had not rolled them over into a Roth IRA. State tax e file You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions to the plan that were taxable to you when paid. State tax e file In addition, the 10% tax on early distributions does not apply. State tax e file More information. State tax e file   For more information on the rules for rolling over distributions, see Rollovers in Publication 575. State tax e file Special Additional Taxes To discourage the use of pension funds for purposes other than normal retirement, the law imposes additional taxes on early distributions of those funds and on failures to withdraw the funds timely. State tax e file Ordinarily, you will not be subject to these taxes if you roll over all early distributions you receive, as explained earlier, and begin drawing out the funds at a normal retirement age, in reasonable amounts over your life expectancy. State tax e file These special additional taxes are the taxes on: Early distributions, and Excess accumulation (not receiving minimum distributions). State tax e file These taxes are discussed in the following sections. State tax e file If you must pay either of these taxes, report them on Form 5329. State tax e file However, you do not have to file Form 5329 if you owe only the tax on early distributions and your Form 1099-R correctly shows a “1” in box 7. State tax e file Instead, enter 10% of the taxable part of the distribution on Form 1040, line 58 and write “No” under the heading “Other Taxes” to the left of line 58. State tax e file Even if you do not owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040. State tax e file This applies if you meet an exception to the tax on early distributions but box 7 of your Form 1099-R does not indicate an exception. State tax e file Tax on Early Distributions Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. State tax e file This tax applies to the part of the distribution that you must include in gross income. State tax e file For this purpose, a qualified retirement plan is: A qualified employee plan, A qualified employee annuity plan, A tax-sheltered annuity plan, or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). State tax e file 5% rate on certain early distributions from deferred annuity contracts. State tax e file   If an early withdrawal from a deferred annuity is otherwise subject to the 10% additional tax, a 5% rate may apply instead. State tax e file A 5% rate applies to distributions under a written election providing a specific schedule for the distribution of your interest in the contract if, as of March 1, 1986, you had begun receiving payments under the election. State tax e file On line 4 of Form 5329, multiply the line 3 amount by 5% instead of 10%. State tax e file Attach an explanation to your return. State tax e file Distributions from Roth IRAs allocable to a rollover from an eligible retirement plan within the 5-year period. State tax e file   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from an eligible retirement plan to a Roth IRA, you take a distribution from the Roth IRA, you may have to pay the additional 10% tax on early distributions. State tax e file You generally must pay the 10% additional tax on any amount attributable to the part of the rollover that you had to include in income. State tax e file The additional tax is figured on Form 5329. State tax e file For more information, see Form 5329 and its instructions. State tax e file For information on qualified distributions from Roth IRAs, see Additional Tax on Early Distributions in chapter 2 of Publication 590. State tax e file Distributions from designated Roth accounts allocable to in-plan Roth rollovers within the 5-year period. State tax e file   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from a 401(k), 403(b), or 457(b) plan to a designated Roth account, you take a distribution from the designated Roth account, you may have to pay the additional 10% tax on early distributions. State tax e file You generally must pay the 10% additional tax on any amount attributable to the part of the in-plan rollover that you had to include in income. State tax e file The additional tax is figured on Form 5329. State tax e file For more information, see Form 5329 and its instructions. State tax e file For information on qualified distributions from designated Roth accounts, see Designated Roth accounts under Taxation of Periodic Payments in Publication 575. State tax e file Exceptions to tax. State tax e file    Certain early distributions are excepted from the early distribution tax. State tax e file If the payer knows that an exception applies to your early distribution, distribution code “2,” “3,” or “4” should be shown in box 7 of your Form 1099-R and you do not have to report the distribution on Form 5329. State tax e file If an exception applies but distribution code “1” (early distribution, no known exception) is shown in box 7, you must file Form 5329. State tax e file Enter the taxable amount of the distribution shown in box 2a of your Form 1099-R on line 1 of Form 5329. State tax e file On line 2, enter the amount that can be excluded and the exception number shown in the Form 5329 instructions. State tax e file    If distribution code “1” is incorrectly shown on your Form 1099-R for a distribution received when you were age 59½ or older, include that distribution on Form 5329. State tax e file Enter exception number “12” on line 2. State tax e file General exceptions. State tax e file   The tax does not apply to distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after your separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. State tax e file Additional exceptions for qualified retirement plans. State tax e file   The tax does not apply to distributions that are: From a qualified retirement plan (other than an IRA) after your separation from service in or after the year you reached age 55 (age 50 for qualified public safety employees), From a qualified retirement plan (other than an IRA) to an alternate payee under a qualified domestic relations order, From a qualified retirement plan to the extent you have deductible medical expenses that exceed 10% (or 7. State tax e file 5% if you or your spouse are age 65 or older) of your adjusted gross income, whether or not you itemize your deductions for the year, From an employer plan under a written election that provides a specific schedule for distribution of your entire interest if, as of March 1, 1986, you had separated from service and had begun receiving payments under the election, From an employee stock ownership plan for dividends on employer securities held by the plan, From a qualified retirement plan due to an IRS levy of the plan, From elective deferral accounts under 401(k) or 403(b) plans or similar arrangements that are qualified reservist distributions, or Phased retirement annuity payments made to federal employees. State tax e file See Pub. State tax e file 721 for more information on the phased retirement program. State tax e file Qualified public safety employees. State tax e file   If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. State tax e file You are a qualified public safety employee if you provide police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50. State tax e file Qualified reservist distributions. State tax e file   A qualified reservist distribution is not subject to the additional tax on early distributions. State tax e file A qualified reservist distribution is a distribution (a) from elective deferrals under a section 401(k) or 403(b) plan, or a similar arrangement, (b) to an individual ordered or called to active duty (because he or she is a member of a reserve component) for a period of more than 179 days or for an indefinite period, and (c) made during the period beginning on the date of the order or call and ending at the close of the active duty period. State tax e file You must have been ordered or called to active duty after September 11, 2001. State tax e file For more information, see Qualified reservist distributions under Special Additional Taxes in Publication 575. State tax e file Additional exceptions for nonqualified annuity contracts. State tax e file   The tax does not apply to distributions from: A deferred annuity contract to the extent allocable to investment in the contract before August 14, 1982, A deferred annuity contract under a qualified personal injury settlement, A deferred annuity contract purchased by your employer upon termination of a qualified employee plan or qualified employee annuity plan and held by your employer until your separation from service, or An immediate annuity contract (a single premium contract providing substantially equal annuity payments that start within 1 year from the date of purchase and are paid at least annually). State tax e file Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date (defined later). State tax e file The payments each year cannot be less than the required minimum distribution. State tax e file Required distributions not made. State tax e file   If the actual distributions to you in any year are less than the minimum required distribution for that year, you are subject to an additional tax. State tax e file The tax equals 50% of the part of the required minimum distribution that was not distributed. State tax e file   For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan)(for benefits accruing after 1986). State tax e file Waiver. State tax e file   The tax may be waived if you establish that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. State tax e file See the Instructions for Form 5329 for the procedure to follow if you believe you qualify for a waiver of this tax. State tax e file State insurer delinquency proceedings. State tax e file   You might not receive the minimum distribution because assets are invested in a contract issued by an insurance company in state insurer delinquency proceedings. State tax e file If your payments are reduced below the minimum due to these proceedings, you should contact your plan administrator. State tax e file Under certain conditions, you will not have to pay the 50% excise tax. State tax e file Required beginning date. State tax e file   Unless the rule for 5% owners applies, you generally must begin to receive distributions from your qualified retirement plan by April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. State tax e file However, your plan may require you to begin to receive distributions by April 1 of the year that follows the year in which you reach age 70½, even if you have not retired. State tax e file   If you reached age 70½ in 2013, you may be required to receive your first distribution by April 1, 2014. State tax e file Your required distribution then must be made for 2014 by December 31, 2014. State tax e file 5% owners. State tax e file   If you are a 5% owner, you must begin to receive distributions by April 1 of the year that follows the calendar year in which you reach age 70½. State tax e file   You are a 5% owner if, for the plan year ending in the calendar year in which you reach age 70½, you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the outstanding stock (or more than 5% of the total voting power of all stock) of the employer, or more than 5% of the capital or profits interest in the employer. State tax e file Age 70½. State tax e file   You reach age 70½ on the date that is 6 calendar months after the date of your 70th birthday. State tax e file   For example, if you are retired and your 70th birthday was on June 30, 2013, you were age 70½ on December 30, 2013. State tax e file If your 70th birthday was on July 1, 2013, you reached age 70½ on January 1, 2014. State tax e file Required distributions. State tax e file   By the required beginning date, as explained earlier, you must either: Receive your entire interest in the plan (for a tax-sheltered annuity, your entire benefit accruing after 1986), or Begin receiving periodic distributions in annual amounts calculated to distribute your entire interest (for a tax-sheltered annuity, your entire benefit accruing after 1986) over your life or life expectancy or over the joint lives or joint life expectancies of you and a designated beneficiary (or over a shorter period). State tax e file Additional information. State tax e file   For more information on this rule, see Tax on Excess Accumulation in Publication 575. State tax e file Form 5329. State tax e file   You must file Form 5329 if you owe tax because you did not receive a minimum required distribution from your qualified retirement plan. State tax e file Survivors and Beneficiaries Generally, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. State tax e file However, some special rules apply. State tax e file See Publication 575 for more information. State tax e file Survivors of employees. State tax e file   If you are entitled to receive a survivor annuity on the death of an employee who died, you can exclude part of each annuity payment as a tax-free recovery of the employee's investment in the contract. State tax e file You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee. State tax e file Survivors of retirees. State tax e file   If you receive benefits as a survivor under a joint and survivor annuity, include those benefits in income in the same way the retiree would have included them in income. State tax e file If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule and recovered all of the cost tax free, your survivor payments are fully taxable. State tax e file    If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage to your initial survivor annuity payment called for in the contract. State tax e file The resulting tax-free amount will then remain fixed. State tax e file Any increases in the survivor annuity are fully taxable. State tax e file    If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. State tax e file This amount remains fixed even if the annuity payments are increased or decreased. State tax e file See Simplified Method , earlier. State tax e file   In any case, if the annuity starting date is after 1986, the total exclusion over the years cannot be more than the cost. State tax e file Estate tax deduction. State tax e file   If your annuity was a joint and survivor annuity that was included in the decedent's estate, an estate tax may have been paid on it. State tax e file You can deduct the part of the total estate tax that was based on the annuity. State tax e file The deceased annuitant must have died after the annuity starting date. State tax e file (For details, see section 1. State tax e file 691(d)-1 of the regulations. State tax e file ) Deduct it in equal amounts over your remaining life expectancy. State tax e file   If the decedent died before the annuity starting date of a deferred annuity contract and you receive a death benefit under that contract, the amount you receive (either in a lump sum or as periodic payments) in excess of the decedent's cost is included in your gross income as income in respect of a decedent for which you may be able to claim an estate tax deduction. State tax e file   You can take the estate tax deduction as an itemized deduction on Schedule A, Form 1040. State tax e file This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. State tax e file See Publication 559, Survivors, Executors, and Administrators, for more information on the estate tax deduction. State tax e file Prev  Up  Next   Home   More Online Publications
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Acceptance Agent Program

Effective June 22, 2012, the IRS has made interim changes that affect the Individual Taxpayer Identification Number (ITIN) application process. Some of the information below, including the documentation requirements for individuals seeking an ITIN, has been superseded by these changes. Taxpayers and their representatives should review these changes, which are further explained in these Frequently Asked Questions, before requesting an ITIN.

The following is a public list of Acceptance Agents for Forms W-7. This list is updated quarterly.

National / International CPA Firms *

  • Deloitte and Touche, LLP
  • Ernst & Young LLP
  • KPMG LLP
  • PricewaterhouseCoopers LLP
  • BDO

* Check local telephone directory for nearest location.

* Acceptance Agents are denoted with an asterisk. Certified Acceptance Agents are not denoted with an asterisk.

Acceptance Agents Outside of the U.S.

Belgium Brazil Canada Dominican Republic Germany
Guam Hong Kong Israel Italy Japan
Mexico Netherlands New Zealand Norway Philippines
Portugal Puerto Rico Singapore United Kingdom Venezuela

 

U.S. Acceptance Agents by State

Alabama Alaska Arizona Arkansas
California Colorado Connecticut Delaware
District of Columbia Florida Georgia Hawaii
Idaho Illinois Indiana Iowa
Kansas Kentucky Louisiana Maine
Maryland Massachusetts Michigan Minnesota
Mississippi Missouri Montana Nebraska
Nevada New Hampshire New Jersey New Mexico
New York North Carolina North Dakota Ohio
Oklahoma Oregon Pennsylvania Rhode Island
South Carolina South Dakota Tennessee Texas
Utah Vermont Virginia Washington
West Virginia Wisconsin Wyoming .

 

Page Last Reviewed or Updated: 19-Mar-2014

The State Tax E File

State tax e file 24. State tax e file   Contributions Table of Contents Introduction Useful Items - You may want to see: Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions of PropertyException. State tax e file Household items. State tax e file Deduction more than $500. State tax e file Form 1098-C. State tax e file Filing deadline approaching and still no Form 1098-C. State tax e file Exception 1—vehicle used or improved by organization. State tax e file Exception 2—vehicle given or sold to needy individual. State tax e file Deduction $500 or less. State tax e file Right to use property. State tax e file Tangible personal property. State tax e file Future interest. State tax e file Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value When To DeductChecks. State tax e file Text message. State tax e file Credit card. State tax e file Pay-by-phone account. State tax e file Stock certificate. State tax e file Promissory note. State tax e file Option. State tax e file Borrowed funds. State tax e file Limits on DeductionsCarryovers Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To Report Introduction This chapter explains how to claim a deduction for your charitable contributions. State tax e file It discusses the following topics. State tax e file The types of organizations to which you can make deductible charitable contributions. State tax e file The types of contributions you can deduct. State tax e file How much you can deduct. State tax e file What records you must keep. State tax e file How to report your charitable contributions. State tax e file A charitable contribution is a donation or gift to, or for the use of, a qualified organization. State tax e file It is voluntary and is made without getting, or expecting to get, anything of equal value. State tax e file Form 1040 required. State tax e file    To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. State tax e file The amount of your deduction may be limited if certain rules and limits explained in this chapter apply to you. State tax e file The limits are explained in detail in Publication 526. State tax e file Useful Items - You may want to see: Publication 526 Charitable Contributions 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. State tax e file Most organizations other than churches and governments must apply to the IRS to become a qualified organization. State tax e file How to check whether an organization can receive deductible charitable contributions. State tax e file   You can ask any organization whether it is a qualified organization, and most will be able to tell you. State tax e file Or go to IRS. State tax e file gov. State tax e file Click on “Tools” and then on “Exempt Organizations Select Check” (www. State tax e file irs. State tax e file gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). State tax e file This online tool will enable you to search for qualified organizations. State tax e file You can also call the IRS to find out if an organization is qualified. State tax e file Call 1-877-829-5500. State tax e file People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. State tax e file Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. State tax e file gsa. State tax e file gov/fedrelay. State tax e file Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. State tax e file A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). State tax e file It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. State tax e file Certain organizations that foster national or international amateur sports competition also qualify. State tax e file War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). State tax e file Domestic fraternal societies, orders, and associations operating under the lodge system. State tax e file (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. State tax e file ) Certain nonprofit cemetery companies or corporations. State tax e file (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. State tax e file ) The United States or any state, the District of Columbia, a U. State tax e file S. State tax e file possession (including Puerto Rico), a political subdivision of a state or U. State tax e file S. State tax e file possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. State tax e file (Your contribution to this type of organization is only deductible if it is to be used solely for public purposes. State tax e file ) Examples. State tax e file    The following list gives some examples of qualified organizations. State tax e file Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. State tax e file Most nonprofit charitable organizations such as the American Red Cross and the United Way. State tax e file Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. State tax e file This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. State tax e file However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . State tax e file Nonprofit hospitals and medical research organizations. State tax e file Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. State tax e file Nonprofit volunteer fire companies. State tax e file Nonprofit organizations that develop and maintain public parks and recreation facilities. State tax e file Civil defense organizations. State tax e file Certain foreign charitable organizations. State tax e file   Under income tax treaties with Canada, Israel, and Mexico, you may be able to deduct contributions to certain Canadian, Israeli, or Mexican charitable organizations. State tax e file Generally, you must have income from sources in that country. State tax e file For additional information on the deduction of contributions to Canadian charities, see Publication 597, Information on the United States–Canada Income Tax Treaty. State tax e file If you need more information on how to figure your contribution to Mexican and Israeli charities, see Publication 526. State tax e file Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. State tax e file A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. State tax e file The contributions must be made to a qualified organization and not set aside for use by a specific person. State tax e file If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. State tax e file See Contributions of Property , later in this chapter. State tax e file Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. State tax e file See Limits on Deductions , later. State tax e file In addition, the total of your charitable contribution deduction and certain other itemized deductions may be limited. State tax e file See chapter 29. State tax e file Table 24-1 gives examples of contributions you can and cannot deduct. State tax e file Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. State tax e file Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. State tax e file If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. State tax e file For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. State tax e file Example 1. State tax e file You pay $65 for a ticket to a dinner-dance at a church. State tax e file Your entire $65 payment goes to the church. State tax e file The ticket to the dinner-dance has a fair market value of $25. State tax e file When you buy your ticket, you know that its value is less than your payment. State tax e file To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). State tax e file You can deduct $40 as a contribution to the church. State tax e file Example 2. State tax e file At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. State tax e file The amount you pay is no more than the fair rental value. State tax e file You have not made a deductible charitable contribution. State tax e file Athletic events. State tax e file   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. State tax e file   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. State tax e file Subtract the price of the tickets from your payment. State tax e file You can deduct 80% of the remaining amount as a charitable contribution. State tax e file Example 1. State tax e file You pay $300 a year for membership in a university's athletic scholarship program. State tax e file The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. State tax e file You can deduct $240 (80% of $300) as a charitable contribution. State tax e file Table 24-1. State tax e file Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. State tax e file See the rest of this chapter for more information and additional rules and limits that may apply. State tax e file Deductible As  Charitable Contributions Not Deductible  As Charitable Contributions Money or property you give to:  Churches, synagogues, temples, mosques, and other religious organizations Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park) Nonprofit schools and hospitals The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. State tax e file War veterans groups   Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Money or property you give to:  Civic leagues, social and sports clubs, labor unions, and chambers of commerce Foreign organizations (except certain Canadian, Israeli, and Mexican charities) Groups that are run for personal profit Groups whose purpose is to lobby for law changes Homeowners' associations Individuals Political groups or candidates for public office   Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank    Example 2. State tax e file The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. State tax e file You must subtract the usual price of a ticket ($120) from your $300 payment. State tax e file The result is $180. State tax e file Your deductible charitable contribution is $144 (80% of $180). State tax e file Charity benefit events. State tax e file   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. State tax e file   If there is an established charge for the event, that charge is the value of your benefit. State tax e file If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. State tax e file Whether you use the tickets or other privileges has no effect on the amount you can deduct. State tax e file However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. State tax e file    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. State tax e file If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. State tax e file Example. State tax e file You pay $40 to see a special showing of a movie for the benefit of a qualified organization. State tax e file Printed on the ticket is “Contribution—$40. State tax e file ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). State tax e file Membership fees or dues. State tax e file    You may be able to deduct membership fees or dues you pay to a qualified organization. State tax e file However, you can deduct only the amount that is more than the value of the benefits you receive. State tax e file    You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. State tax e file They are not qualified organizations. State tax e file Certain membership benefits can be disregarded. State tax e file   Both you and the organization can disregard the following membership benefits if you receive them in return for an annual payment of $75 or less. State tax e file Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. State tax e file Admission, while you are a member, to events open only to members of the organization, if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. State tax e file 20. State tax e file Token items. State tax e file   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. State tax e file You receive only a small item or other benefit of token value. State tax e file The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. State tax e file Written statement. State tax e file   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. State tax e file The statement must say that you can deduct only the amount of your payment that is more than the value of the goods or services you received. State tax e file It must also give you a good faith estimate of the value of those goods or services. State tax e file   The organization can give you the statement either when it solicits or when it receives the payment from you. State tax e file Exception. State tax e file   An organization will not have to give you this statement if one of the following is true. State tax e file The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. State tax e file You receive only items whose value is not substantial as described under Token items , earlier. State tax e file You receive only membership benefits that can be disregarded, as described earlier. State tax e file Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. State tax e file You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization as part of a program of the organization to provide educational opportunities for the student, Is not your relative or dependent, and Is a full-time student in the twelfth or any lower grade at a school in the United States. State tax e file You can deduct up to $50 a month for each full calendar month the student lives with you. State tax e file Any month when conditions (1) through (3) are met for 15 days or more counts as a full month. State tax e file For additional information, see Expenses Paid for Student Living With You in Publication 526. State tax e file Mutual exchange program. State tax e file   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. State tax e file Table 24-2. State tax e file Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. State tax e file All of the rules explained in this chapter also apply. State tax e file See, in particular, Out-of-Pocket Expenses in Giving Services . State tax e file Question Answer I volunteer 6 hours a week in the office of a qualified organization. State tax e file The receptionist is paid $10 an hour for the same work. State tax e file Can I deduct $60 a week for my time?    No, you cannot deduct the value of your time or services. State tax e file The office is 30 miles from my home. State tax e file Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. State tax e file If you don't want to figure your actual costs, you can deduct 14 cents for each mile. State tax e file I volunteer as a Red Cross nurse's aide at a hospital. State tax e file Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. State tax e file I pay a babysitter to watch my children while I volunteer for a qualified organization. State tax e file Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. State tax e file (If you have childcare expenses so you can work for pay, see chapter 32. State tax e file ) Out-of-Pocket Expenses in Giving Services Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. State tax e file The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. State tax e file Table 24-2 contains questions and answers that apply to some individuals who volunteer their services. State tax e file Conventions. State tax e file   If a qualified organization selects you to attend a convention as its representative, you can deduct unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight in connection with the convention. State tax e file However, see Travel , later. State tax e file   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. State tax e file You also cannot deduct transportation, meals and lodging, and other expenses for your spouse or children. State tax e file    You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. State tax e file You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. State tax e file Uniforms. State tax e file   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. State tax e file Foster parents. State tax e file   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. State tax e file A qualified organization must select the individuals you take into your home for foster care. State tax e file    You can deduct expenses that meet both of the following requirements. State tax e file They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. State tax e file They are incurred primarily to benefit the qualified organization. State tax e file   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. State tax e file For details, see chapter 3. State tax e file Example. State tax e file You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. State tax e file Your unreimbursed expenses are not deductible as charitable contributions. State tax e file Car expenses. State tax e file   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, that are directly related to the use of your car in giving services to a charitable organization. State tax e file You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. State tax e file    If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. State tax e file   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. State tax e file   You must keep reliable written records of your car expenses. State tax e file For more information, see Car expenses under Records To Keep, later. State tax e file Travel. State tax e file   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. State tax e file This applies whether you pay the expenses directly or indirectly. State tax e file You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. State tax e file   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. State tax e file Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. State tax e file However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. State tax e file Example 1. State tax e file You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. State tax e file You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. State tax e file You participate in the activities of the group and enjoy your time with them. State tax e file You oversee the breaking of camp and you transport the group home. State tax e file You can deduct your travel expenses. State tax e file Example 2. State tax e file You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. State tax e file The project is sponsored by a charitable organization. State tax e file In most circumstances, you cannot deduct your expenses. State tax e file Example 3. State tax e file You work for several hours each morning on an archaeological dig sponsored by a charitable organization. State tax e file The rest of the day is free for recreation and sightseeing. State tax e file You cannot take a charitable contribution deduction even though you work very hard during those few hours. State tax e file Example 4. State tax e file You spend the entire day attending a charitable organization's regional meeting as a chosen representative. State tax e file In the evening you go to the theater. State tax e file You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. State tax e file Daily allowance (per diem). State tax e file   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. State tax e file You may be able to deduct any necessary travel expenses that are more than the allowance. State tax e file Deductible travel expenses. State tax e file   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. State tax e file Because these travel expenses are not business-related, they are not subject to the same limits as business-related expenses. State tax e file For information on business travel expenses, see Travel Expenses in chapter 26. State tax e file Contributions You Cannot Deduct There are some contributions you cannot deduct, such as those made to specific individuals and those made to nonqualified organizations. State tax e file (See Contributions to Individuals and Contributions to Nonqualified Organizations , next. State tax e file ) There are others you can deduct only part of, as discussed later under Contributions From Which You Benefit . State tax e file Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. State tax e file Contributions to fraternal societies made for the purpose of paying medical or burial expenses of deceased members. State tax e file Contributions to individuals who are needy or worthy. State tax e file You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. State tax e file But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. State tax e file Example. State tax e file You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. State tax e file However, you cannot deduct contributions earmarked for relief of a particular individual or family. State tax e file Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. State tax e file Expenses you paid for another person who provided services to a qualified organization. State tax e file Example. State tax e file Your son does missionary work. State tax e file You pay his expenses. State tax e file You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. State tax e file Payments to a hospital that are for a specific patient's care or for services for a specific patient. State tax e file You cannot deduct these payments even if the hospital is operated by a city, a state, or other qualified organization. State tax e file Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. State tax e file Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. State tax e file Chambers of commerce and other business leagues or organizations (but see chapter 28). State tax e file Civic leagues and associations. State tax e file Communist organizations. State tax e file Country clubs and other social clubs. State tax e file Most foreign organizations (other than certain Canadian, Israeli, or Mexican charitable organizations). State tax e file For details, see Publication 526. State tax e file Homeowners' associations. State tax e file Labor unions (but see chapter 28). State tax e file Political organizations and candidates. State tax e file Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. State tax e file See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. State tax e file These contributions include the following. State tax e file Contributions for lobbying. State tax e file This includes amounts that you earmark for use in, or in connection with, influencing specific legislation. State tax e file Contributions to a retirement home for room, board, maintenance, or admittance. State tax e file Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. State tax e file Costs of raffles, bingo, lottery, etc. State tax e file You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. State tax e file For information on how to report gambling winnings and losses, see Gambling winnings in chapter 12 and Gambling Losses Up to the Amount of Gambling Winnings in chapter 28. State tax e file Dues to fraternal orders and similar groups. State tax e file However, see Membership fees or dues , earlier, under Contributions You Can Deduct. State tax e file Tuition, or amounts you pay instead of tuition. State tax e file You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. State tax e file You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. State tax e file ” Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. State tax e file Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. State tax e file The cost of meals you eat while you perform services for a qualified organization unless it is necessary for you to be away from home overnight while performing the services. State tax e file Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final (but see Adoption Credit in chapter 37, and the instructions for Form 8839, Qualified Adoption Expenses). State tax e file You also may be able to claim an exemption for the child. State tax e file See Adopted child in chapter 3. State tax e file Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property (but see chapter 28). State tax e file Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. State tax e file However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. State tax e file See Giving Property That Has Increased in Value , later. State tax e file For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. State tax e file Clothing and household items. State tax e file   You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. State tax e file Exception. State tax e file   You can take a deduction for a contribution of an item of clothing or household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. State tax e file Household items. State tax e file   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. State tax e file   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. State tax e file Cars, boats, and airplanes. State tax e file    The following rules apply to any donation of a qualified vehicle. State tax e file A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. State tax e file Deduction more than $500. State tax e file   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. State tax e file If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. State tax e file Form 1098-C. State tax e file   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. State tax e file The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. State tax e file   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453 and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. State tax e file   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. State tax e file    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. State tax e file But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. State tax e file Filing deadline approaching and still no Form 1098-C. State tax e file   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. State tax e file Request an automatic 6-month extension of time to file your return. State tax e file You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. State tax e file S. State tax e file Individual Income Tax Return. State tax e file  For more information, see Automatic Extension in chapter 1. State tax e file File the return on time without claiming the deduction for the qualified vehicle. State tax e file After receiving the Form 1098-C, file an amended return, Form 1040X, claiming the deduction. State tax e file Attach Copy B of Form 1098-C (or other statement) to the amended return. State tax e file For more information about amended returns, see Amended Returns and Claims for Refund in chapter 1. State tax e file Exceptions. State tax e file   There are two exceptions to the rules just described for deductions of more than $500. State tax e file Exception 1—vehicle used or improved by organization. State tax e file   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. State tax e file But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. State tax e file The Form 1098-C (or other statement) will show whether this exception applies. State tax e file Exception 2—vehicle given or sold to needy individual. State tax e file   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. State tax e file But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. State tax e file The Form 1098-C (or other statement) will show whether this exception applies. State tax e file   This exception does not apply if the organization sells the vehicle at auction. State tax e file In that case, you cannot deduct the vehicle's fair market value. State tax e file Example. State tax e file Anita donates a used car to a qualified organization. State tax e file She bought it 3 years ago for $9,000. State tax e file A used car guide shows the fair market value for this type of car is $6,000. State tax e file However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. State tax e file Neither exception 1 nor exception 2 applies. State tax e file If Anita itemizes her deductions, she can deduct $2,900 for her donation. State tax e file She must attach Form 1098-C and Form 8283 to her return. State tax e file Deduction $500 or less. State tax e file   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. State tax e file But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. State tax e file   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. State tax e file The statement must contain the information and meet the tests for an acknowledgment described under Deductions of At Least $250 But Not More Than $500 under Records To Keep, later. State tax e file Partial interest in property. State tax e file   Generally, you cannot deduct a charitable contribution of less than your entire interest in property. State tax e file Right to use property. State tax e file   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. State tax e file For exceptions and more information, see Partial Interest in Property Not in Trust in Publication 561. State tax e file Future interests in tangible personal property. State tax e file   You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. State tax e file Tangible personal property. State tax e file   This is any property, other than land or buildings, that can be seen or touched. State tax e file It includes furniture, books, jewelry, paintings, and cars. State tax e file Future interest. State tax e file   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. State tax e file Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. State tax e file Publication 561 contains a more complete discussion. State tax e file Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. State tax e file Used clothing and household items. State tax e file   The fair market value of used clothing and household goods is usually far less than what you paid for them when they were new. State tax e file   For used clothing, you should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. State tax e file See Household Goods in Publication 561 for information on the valuation of household goods, such as furniture, appliances, and linens. State tax e file Example. State tax e file Dawn Greene donated a coat to a thrift store operated by her church. State tax e file She paid $300 for the coat 3 years ago. State tax e file Similar coats in the thrift store sell for $50. State tax e file The fair market value of the coat is $50. State tax e file Dawn's donation is limited to $50. State tax e file Cars, boats, and airplanes. State tax e file   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. State tax e file Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. State tax e file The guides may be published monthly or seasonally and for different regions of the country. State tax e file These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. State tax e file The prices are not “official” and these publications are not considered an appraisal of any specific donated property. State tax e file But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. State tax e file   You can also find used car pricing information on the Internet. State tax e file Example. State tax e file You donate a used car in poor condition to a local high school for use by students studying car repair. State tax e file A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. State tax e file However, the guide shows the price for a private party sale of the car is only $750. State tax e file The fair market value of the car is considered to be $750. State tax e file Large quantities. State tax e file   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. State tax e file Giving Property That Has Decreased in Value If you contribute property with a fair market value that is less than your basis in it, your deduction is limited to its fair market value. State tax e file You cannot claim a deduction for the difference between the property's basis and its fair market value. State tax e file Giving Property That Has Increased in Value If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. State tax e file Your basis in property is generally what you paid for it. State tax e file See chapter 13 if you need more information about basis. State tax e file Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. State tax e file Ordinary income property. State tax e file   Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at fair market value on the date it was contributed. State tax e file Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined in chapter 14) held 1 year or less. State tax e file Amount of deduction. State tax e file   The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. State tax e file Generally, this rule limits the deduction to your basis in the property. State tax e file Example. State tax e file You donate stock you held for 5 months to your church. State tax e file The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). State tax e file Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation). State tax e file Capital gain property. State tax e file   Property is capital gain property if you would have recognized long-term capital gain had you sold it at fair market value on the date of the contribution. State tax e file It includes capital assets held more than 1 year, as well as certain real property and depreciable property used in your trade or business and, generally, held more than 1 year. State tax e file Amount of deduction — general rule. State tax e file   When figuring your deduction for a contribution of capital gain property, you generally can use the fair market value of the property. State tax e file Exceptions. State tax e file   In certain situations, you must reduce the fair market value by any amount that would have been long-term capital gain if you had sold the property for its fair market value. State tax e file Generally, this means reducing the fair market value to the property's cost or other basis. State tax e file Bargain sales. State tax e file   A bargain sale of property is a sale or exchange for less than the property's fair market value. State tax e file A bargain sale to a qualified organization is partly a charitable contribution and partly a sale or exchange. State tax e file A bargain sale may result in a taxable gain. State tax e file More information. State tax e file   For more information on donating appreciated property, see Giving Property That Has Increased in Value in Publication 526. State tax e file When To Deduct You can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year, as explained later under Carryovers ). State tax e file This applies whether you use the cash or an accrual method of accounting. State tax e file Time of making contribution. State tax e file   Usually, you make a contribution at the time of its unconditional delivery. State tax e file Checks. State tax e file   A check you mail to a charity is considered delivered on the date you mail it. State tax e file Text message. State tax e file   Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account. State tax e file Credit card. State tax e file    Contributions charged on your credit card are deductible in the year you make the charge. State tax e file Pay-by-phone account. State tax e file    Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. State tax e file Stock certificate. State tax e file   A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. State tax e file However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution is not delivered until the date the stock is transferred on the books of the corporation. State tax e file Promissory note. State tax e file   If you issue and deliver a promissory note to a charity as a contribution, it is not a contribution until you make the note payments. State tax e file Option. State tax e file    If you grant a charity an option to buy real property at a bargain price, it is not a contribution until the organization exercises the option. State tax e file Borrowed funds. State tax e file   If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan. State tax e file Limits on Deductions The amount you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income (AGI). State tax e file Your deduction may be further limited to 30% or 20% of your AGI, depending on the type of property you give and the type of organization you give it to. State tax e file If your total contributions for the year are 20% or less of your AGI, these limits do not apply to you. State tax e file The limits are discussed in detail under Limits on Deductions in Publication 526. State tax e file A higher limit applies to certain qualified conservation contributions. State tax e file See Publication 526 for details. State tax e file Carryovers You can carry over any contributions you cannot deduct in the current year because they exceed your adjusted-gross-income limits. State tax e file You can deduct the excess in each of the next 5 years until it is used up, but not beyond that time. State tax e file For more information, see Carryovers in Publication 526. State tax e file Records To Keep You must keep records to prove the amount of the contributions you make during the year. State tax e file The kind of records you must keep depends on the amount of your contributions and whether they are: Cash contributions, Noncash contributions, or Out-of-pocket expenses when donating your services. State tax e file Note. State tax e file An organization generally must give you a written statement if it receives a payment from you that is more than $75 and is partly a contribution and partly for goods or services. State tax e file (See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. State tax e file ) Keep the statement for your records. State tax e file It may satisfy all or part of the recordkeeping requirements explained in the following discussions. State tax e file Cash Contributions Cash contributions include those paid by cash, check, electronic funds transfer, debit card, credit card, or payroll deduction. State tax e file You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following. State tax e file A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. State tax e file Bank records may include: A canceled check, A bank or credit union statement, or A credit card statement. State tax e file A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution. State tax e file The payroll deduction records described next. State tax e file Payroll deductions. State tax e file   If you make a contribution by payroll deduction, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the date and amount of the contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization. State tax e file If your employer withheld $250 or more from a single paycheck, see Contributions of $250 or More , next. State tax e file Contributions of $250 or More You can claim a deduction for a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization or certain payroll deduction records. State tax e file If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions. State tax e file Amount of contribution. State tax e file   In figuring whether your contribution is $250 or more, do not combine separate contributions. State tax e file For example, if you gave your church $25 each week, your weekly payments do not have to be combined. State tax e file Each payment is a separate contribution. State tax e file   If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution. State tax e file   If you made a payment that is partly for goods and services, as described earlier under Contributions From Which You Benefit , your contribution is the amount of the payment that is more than the value of the goods and services. State tax e file Acknowledgment. State tax e file   The acknowledgment must meet these tests. State tax e file It must be written. State tax e file It must include: The amount of cash you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), A description and good faith estimate of the value of any goods or services described in (b) (other than intangible religious benefits), and A statement that the only benefit you received was an intangible religious benefit, if that was the case. State tax e file The acknowledgment does not need to describe or estimate the value of an intangible religious benefit. State tax e file An intangible religious benefit is a benefit that generally is not sold in commercial transactions outside a donative (gift) context. State tax e file An example is admission to a religious ceremony. State tax e file You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. State tax e file   If the acknowledgment does not show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. State tax e file If the acknowledgment shows the date of the contribution and meets the other tests just described, you do not need any other records. State tax e file Payroll deductions. State tax e file   If you make a contribution by payroll deduction and your employer withholds $250 or more from a single paycheck, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the amount withheld as a contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization and states the organization does not provide goods or services in return for any contribution made to it by payroll deduction. State tax e file A single pledge card may be kept for all contributions made by payroll deduction regardless of amount as long as it contains all the required information. State tax e file   If the pay stub, Form W-2, pledge card, or other document does not show the date of the contribution, you must have another document that does show the date of the contribution. State tax e file If the pay stub, Form W-2, pledge card, or other document shows the date of the contribution, you do not need any other records except those just described in (1) and (2). State tax e file Noncash Contributions For a contribution not made in cash, the records you must keep depend on whether your deduction for the contribution is: Less than $250, At least $250 but not more than $500, Over $500 but not more than $5,000, or Over $5,000. State tax e file Amount of deduction. State tax e file   In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any charitable organization during the year. State tax e file   If you received goods or services in return, as described earlier in Contributions From Which You Benefit , reduce your contribution by the value of those goods or services. State tax e file If you figure your deduction by reducing the fair market value of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value , your contribution is the reduced amount. State tax e file Deductions of Less Than $250 If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing: The name of the charitable organization, The date and location of the charitable contribution, and A reasonably detailed description of the property. State tax e file A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing the information in (1), (2), and (3) will serve as a receipt. State tax e file You are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site). State tax e file Additional records. State tax e file   You must also keep reliable written records for each item of contributed property. State tax e file Your written records must include the following information. State tax e file The name and address of the organization to which you contributed. State tax e file The date and location of the contribution. State tax e file A description of the property in detail reasonable under the circumstances. State tax e file For a security, keep the name of the issuer, the type of security, and whether it is regularly traded on a stock exchange or in an over-the-counter market. State tax e file The fair market value of the property at the time of the contribution and how you figured the fair market value. State tax e file If it was determined by appraisal, keep a signed copy of the appraisal. State tax e file The cost or other basis of the property, if you must reduce its fair market value by appreciation. State tax e file Your records should also include the amount of the reduction and how you figured it. State tax e file The amount you claim as a deduction for the tax year as a result of the contribution, if you contribute less than your entire interest in the property during the tax year. State tax e file Your records must include the amount you claimed as a deduction in any earlier years for contributions of other interests in this property. State tax e file They must also include the name and address of each organization to which you contributed the other interests, the place where any such tangible property is located or kept, and the name of any person in possession of the property, other than the organization to which you contributed it. State tax e file The terms of any conditions attached to the contribution of property. State tax e file Deductions of At Least $250 But Not More Than $500 If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. State tax e file If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions. State tax e file The acknowledgment must contain the information in items (1) through (3) under Deductions of Less Than $250 , earlier, and your written records must include the information listed in that discussion under Additional records . State tax e file The acknowledgment must also meet these tests. State tax e file It must be written. State tax e file It must include: A description (but not necessarily the value) of any property you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), and A description and good faith estimate of the value of any goods or services described in (b). State tax e file If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in a commercial transaction outside the donative context, the acknowledgment must say so and does not need to describe or estimate the value of the benefit. State tax e file You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. State tax e file Deductions Over $500 You are required to give additional information if you claim a deduction over $500 for noncash charitable contributions. State tax e file See Records To Keep in Publication 526 for more information. State tax e file Out-of-Pocket Expenses If you give services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, the following two rules apply. State tax e file You must have adequate records to prove the amount of the expenses. State tax e file If any of your unreimbursed out-of-pocket expenses, considered separately, are $250 or more (for example, you pay $250 or more for an airline ticket to attend a convention of a qualified organization as a chosen representative), you must get an acknowledgment from the qualified organization that contains: A description of the services you provided, A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred, A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and A statement that the only benefit you received was an intangible religious benefit, if that was the case. State tax e file The acknowledgment does not need to describe or estimate the value of an intangible religious benefit (defined earlier under Acknowledgment ). State tax e file You must get the acknowledgment on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. State tax e file Car expenses. State tax e file   If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. State tax e file Whether your records are considered reliable depends on all the facts and circumstances. State tax e file Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses. State tax e file   For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. State tax e file If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. State tax e file If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose. State tax e file   See Car expenses under Out-of-Pocket Expenses in Giving Services, earlier, for the expenses you can deduct. State tax e file How To Report Report your charitable contributions on Schedule A (Form 1040). State tax e file If your total deduction for all noncash contributions for the year is over $500, you must also file Form 8283. State tax e file See How To Report in Publication 526 for more information. State tax e file Prev  Up  Next   Home   More Online Publications