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Tax Unemployed

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Tax Unemployed

Tax unemployed 8. Tax unemployed   Business Expenses Table of Contents Introduction Useful Items - You may want to see: Bad DebtsAccrual method. Tax unemployed Cash method. Tax unemployed Car and Truck ExpensesOffice in the home. Tax unemployed Methods for Deducting Car and Truck Expenses Reimbursing Your Employees for Expenses Depreciation Employees' PayFringe benefits. Tax unemployed InsuranceHow to figure the deduction. Tax unemployed Interest Legal and Professional FeesTax preparation fees. Tax unemployed Pension Plans Rent Expense Taxes Travel, Meals, and EntertainmentTransportation. Tax unemployed Taxi, commuter bus, and limousine. Tax unemployed Baggage and shipping. Tax unemployed Car or truck. Tax unemployed Meals and lodging. Tax unemployed Cleaning. Tax unemployed Telephone. Tax unemployed Tips. Tax unemployed More information. Tax unemployed Business Use of Your HomeExceptions to exclusive use. Tax unemployed Other Expenses You Can Deduct Expenses You Cannot Deduct Introduction You can deduct the costs of operating your business. Tax unemployed These costs are known as business expenses. Tax unemployed These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year. Tax unemployed To be deductible, a business expense must be both ordinary and necessary. Tax unemployed An ordinary expense is one that is common and accepted in your field of business. Tax unemployed A necessary expense is one that is helpful and appropriate for your business. Tax unemployed An expense does not have to be indispensable to be considered necessary. Tax unemployed For more information about the general rules for deducting business expenses, see chapter 1 in Publication 535, Business Expenses. Tax unemployed If you have an expense that is partly for business and partly personal, separate the personal part from the business part. Tax unemployed The personal part is not deductible. Tax unemployed Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 946 How To Depreciate Property See chapter 12 for information about getting publications and forms. Tax unemployed Bad Debts If someone owes you money you cannot collect, you have a bad debt. Tax unemployed There are two kinds of bad debts, business bad debts and nonbusiness bad debts. Tax unemployed A business bad debt is generally one that comes from operating your trade or business. Tax unemployed You may be able to deduct business bad debts as an expense on your business tax return. Tax unemployed Business bad debt. Tax unemployed   A business bad debt is a loss from the worthlessness of a debt that was either of the following. Tax unemployed Created or acquired in your business. Tax unemployed Closely related to your business when it became partly or totally worthless. Tax unemployed A debt is closely related to your business if your primary motive for incurring the debt is a business reason. Tax unemployed   Business bad debts are mainly the result of credit sales to customers. Tax unemployed They can also be the result of loans to suppliers, clients, employees, or distributors. Tax unemployed Goods and services customers have not paid for are shown in your books as either accounts receivable or notes receivable. Tax unemployed If you are unable to collect any part of these accounts or notes receivable, the uncollectible part is a business bad debt. Tax unemployed    You can take a bad debt deduction for these accounts and notes receivable only if the amount you were owed was included in your gross income either for the year the deduction is claimed or for a prior year. Tax unemployed Accrual method. Tax unemployed   If you use an accrual method of accounting, you normally report income as you earn it. Tax unemployed You can take a bad debt deduction for an uncollectible receivable if you have included the uncollectible amount in income. Tax unemployed Cash method. Tax unemployed   If you use the cash method of accounting, you normally report income when you receive payment. Tax unemployed You cannot take a bad debt deduction for amounts owed to you that you have not received and cannot collect if you never included those amounts in income. Tax unemployed More information. Tax unemployed   For more information about business bad debts, see chapter 10 in Publication 535. Tax unemployed Nonbusiness bad debts. Tax unemployed   All other bad debts are nonbusiness bad debts and are deductible as short-term capital losses on Form 8949 and Schedule D (Form 1040). Tax unemployed For more information on nonbusiness bad debts, see Publication 550, Investment Income and Expenses. Tax unemployed Car and Truck Expenses If you use your car or truck in your business, you may be able to deduct the costs of operating and maintaining your vehicle. Tax unemployed You also may be able to deduct other costs of local transportation and traveling away from home overnight on business. Tax unemployed You may qualify for a tax credit for qualified plug-in electric vehicles, qualified plug-in electric drive motor vehicles, and alternative motor vehicles you place in service during the year. Tax unemployed See Form 8936 and Form 8910 for more information. Tax unemployed Local transportation expenses. Tax unemployed   Local transportation expenses include the ordinary and necessary costs of all the following. Tax unemployed Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. Tax unemployed Tax home is defined later. Tax unemployed Visiting clients or customers. Tax unemployed Going to a business meeting away from your regular workplace. Tax unemployed Getting from your home to a temporary workplace when you have one or more regular places of work. Tax unemployed These temporary workplaces can be either within the area of your tax home or outside that area. Tax unemployed Local business transportation does not include expenses you have while traveling away from home overnight. Tax unemployed Those expenses are deductible as travel expenses and are discussed later under Travel, Meals, and Entertainment. Tax unemployed However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. Tax unemployed   Generally, your tax home is your regular place of business, regardless of where you maintain your family home. Tax unemployed It includes the entire city or general area in which your business or work is located. Tax unemployed Example. Tax unemployed You operate a printing business out of rented office space. Tax unemployed You use your van to deliver completed jobs to your customers. Tax unemployed You can deduct the cost of round-trip transportation between your customers and your print shop. Tax unemployed    You cannot deduct the costs of driving your car or truck between your home and your main or regular workplace. Tax unemployed These costs are personal commuting expenses. Tax unemployed Office in the home. Tax unemployed   Your workplace can be your home if you have an office in your home that qualifies as your principal place of business. Tax unemployed For more information, see Business Use of Your Home, later. Tax unemployed Example. Tax unemployed You are a graphics designer. Tax unemployed You operate your business out of your home. Tax unemployed Your home qualifies as your principal place of business. Tax unemployed You occasionally have to drive to your clients to deliver your completed work. Tax unemployed You can deduct the cost of the round-trip transportation between your home and your clients. Tax unemployed Methods for Deducting Car and Truck Expenses For local transportation or overnight travel by car or truck, you generally can use one of the following methods to figure your expenses. Tax unemployed Standard mileage rate. Tax unemployed Actual expenses. Tax unemployed Standard mileage rate. Tax unemployed   You may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. Tax unemployed For 2013, the standard mileage rate is 56. Tax unemployed 5 cents per mile. Tax unemployed    If you choose to use the standard mileage rate for a year, you cannot deduct your actual expenses for that year except for business-related parking fees and tolls. Tax unemployed Choosing the standard mileage rate. Tax unemployed   If you want to use the standard mileage rate for a car or truck you own, you must choose to use it in the first year the car is available for use in your business. Tax unemployed In later years, you can choose to use either the standard mileage rate or actual expenses. Tax unemployed   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). Tax unemployed Standard mileage rate not allowed. Tax unemployed   You cannot use the standard mileage rate if you: Operate five or more cars at the same time, Claimed a depreciation deduction using any method other than straight line, for example, ACRS or MACRS, Claimed a section 179 deduction on the car, Claimed the special depreciation allowance on the car, Claimed actual car expenses for a car you leased, or Are a rural mail carrier who received a qualified reimbursement. Tax unemployed Parking fees and tolls. Tax unemployed   In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls. Tax unemployed (Parking fees you pay to park your car at your place of work are nondeductible commuting expenses. Tax unemployed ) Actual expenses. Tax unemployed   If you do not choose to use the standard mileage rate, you may be able to deduct your actual car or truck expenses. Tax unemployed    If you qualify to use both methods, figure your deduction both ways to see which gives you a larger deduction. Tax unemployed   Actual car expenses include the costs of the following items. Tax unemployed Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. Tax unemployed You can divide your expenses based on the miles driven for each purpose. Tax unemployed Example. Tax unemployed You are the sole proprietor of a flower shop. Tax unemployed You drove your van 20,000 miles during the year. Tax unemployed 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use (including commuting miles). Tax unemployed You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. Tax unemployed More information. Tax unemployed   For more information about the rules for claiming car and truck expenses, see Publication 463. Tax unemployed Reimbursing Your Employees for Expenses You generally can deduct the amount you reimburse your employees for car and truck expenses. Tax unemployed The reimbursement you deduct and the manner in which you deduct it depend in part on whether you reimburse the expenses under an accountable plan or a nonaccountable plan. Tax unemployed For details, see chapter 11 in Publication 535. Tax unemployed That chapter explains accountable and nonaccountable plans and tells you whether to report the reimbursement on your employee's Form W-2, Wage and Tax Statement. Tax unemployed Depreciation If property you acquire to use in your business is expected to last more than 1 year, you generally cannot deduct the entire cost as a business expense in the year you acquire it. Tax unemployed You must spread the cost over more than 1 tax year and deduct part of it each year on Schedule C. Tax unemployed This method of deducting the cost of business property is called depreciation. Tax unemployed The discussion here is brief. Tax unemployed You will find more information about depreciation in Publication 946. Tax unemployed What property can be depreciated?   You can depreciate property if it meets all the following requirements. Tax unemployed It must be property you own. Tax unemployed It must be used in business or held to produce income. Tax unemployed You never can depreciate inventory (explained in chapter 2) because it is not held for use in your business. Tax unemployed It must have a useful life that extends substantially beyond the year it is placed in service. Tax unemployed It must have a determinable useful life, which means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. Tax unemployed You never can depreciate the cost of land because land does not wear out, become obsolete, or get used up. Tax unemployed It must not be excepted property. Tax unemployed This includes property placed in service and disposed of in the same year. Tax unemployed Repairs. Tax unemployed    You cannot depreciate repairs and replacements that do not increase the value of your property, make it more useful, or lengthen its useful life. Tax unemployed You can deduct these amounts on line 21 of Schedule C or line 2 of Schedule C-EZ. Tax unemployed Depreciation method. Tax unemployed   The method for depreciating most business and investment property placed in service after 1986 is called the Modified Accelerated Cost Recovery System (MACRS). Tax unemployed MACRS is discussed in detail in Publication 946. Tax unemployed Section 179 deduction. Tax unemployed   You can elect to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. Tax unemployed This deduction is known as the “section 179 deduction. Tax unemployed ” The maximum amount you can elect to deduct during 2013 is generally $500,000 (higher limits apply to certain property). Tax unemployed See IRC 179(e). Tax unemployed   This limit is generally reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2 million. Tax unemployed The total amount of depreciation (including the section 179 deduction) you can take for a passenger automobile you use in your business and first place in service in 2013 is $3,160 ($11,160 if you take the special depreciation allowance for qualified passenger automobiles placed in service in 2013). Tax unemployed Special rules apply to trucks and vans. Tax unemployed For more information, see Publication 946. Tax unemployed It explains what property qualifies for the deduction, what limits apply to the deduction, and when and how to recapture the deduction. Tax unemployed    Your section 179 election for the cost of any sport utility vehicle (SUV) and certain other vehicles is limited to $25,000. Tax unemployed For more information, see the Instructions for Form 4562 or Publication 946. Tax unemployed Listed property. Tax unemployed   You must follow special rules and recordkeeping requirements when depreciating listed property. Tax unemployed Listed property is any of the following. Tax unemployed Most passenger automobiles. Tax unemployed Most other property used for transportation. Tax unemployed Any property of a type generally used for entertainment, recreation, or amusement. Tax unemployed Certain computers and related peripheral equipment. Tax unemployed   For more information about listed property, see Publication 946. Tax unemployed Form 4562. Tax unemployed   Use Form 4562, Depreciation and Amortization, if you are claiming any of the following. Tax unemployed Depreciation on property placed in service during the current tax year. Tax unemployed A section 179 deduction. Tax unemployed Depreciation on any listed property (regardless of when it was placed in service). Tax unemployed    If you have to use Form 4562, you must file Schedule C. Tax unemployed You cannot use Schedule C-EZ. Tax unemployed   Employees' Pay You can generally deduct on Schedule C the pay you give your employees for the services they perform for your business. Tax unemployed The pay may be in cash, property, or services. Tax unemployed To be deductible, your employees' pay must be an ordinary and necessary expense and you must pay or incur it in the tax year. Tax unemployed In addition, the pay must meet both the following tests. Tax unemployed The pay must be reasonable. Tax unemployed The pay must be for services performed. Tax unemployed Chapter 2 in Publication 535 explains and defines these requirements. Tax unemployed You cannot deduct your own salary or any personal withdrawals you make from your business. Tax unemployed As a sole proprietor, you are not an employee of the business. Tax unemployed If you had employees during the year, you must use Schedule C. Tax unemployed You cannot use Schedule C-EZ. Tax unemployed Kinds of pay. Tax unemployed   Some of the ways you may provide pay to your employees are listed below. Tax unemployed For an explanation of each of these items, see chapter 2 in Publication 535. Tax unemployed Awards. Tax unemployed Bonuses. Tax unemployed Education expenses. Tax unemployed Fringe benefits (discussed later). Tax unemployed Loans or advances you do not expect the employee to repay if they are for personal services actually performed. Tax unemployed Property you transfer to an employee as payment for services. Tax unemployed Reimbursements for employee business expenses. Tax unemployed Sick pay. Tax unemployed Vacation pay. Tax unemployed Fringe benefits. Tax unemployed   A fringe benefit is a form of pay for the performance of services. Tax unemployed The following are examples of fringe benefits. Tax unemployed Benefits under qualified employee benefit programs. Tax unemployed Meals and lodging. Tax unemployed The use of a car. Tax unemployed Flights on airplanes. Tax unemployed Discounts on property or services. Tax unemployed Memberships in country clubs or other social clubs. Tax unemployed Tickets to entertainment or sporting events. Tax unemployed   Employee benefit programs include the following. Tax unemployed Accident and health plans. Tax unemployed Adoption assistance. Tax unemployed Cafeteria plans. Tax unemployed Dependent care assistance. Tax unemployed Educational assistance. Tax unemployed Group-term life insurance coverage. Tax unemployed Welfare benefit funds. Tax unemployed   You can generally deduct the cost of fringe benefits you provide on your Schedule C in whatever category the cost falls. Tax unemployed For example, if you allow an employee to use a car or other property you lease, deduct the cost of the lease as a rent or lease expense. Tax unemployed If you own the property, include your deduction for its cost or other basis as a section 179 deduction or a depreciation deduction. Tax unemployed    You may be able to exclude all or part of the fringe benefits you provide from your employees' wages. Tax unemployed For more information about fringe benefits and the exclusion of benefits, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Tax unemployed Insurance You can generally deduct premiums you pay for the following kinds of insurance related to your business. Tax unemployed Fire, theft, flood, or similar insurance. Tax unemployed Credit insurance that covers losses from business bad debts. Tax unemployed Group hospitalization and medical insurance for employees, including long-term care insurance. Tax unemployed Liability insurance. Tax unemployed Malpractice insurance that covers your personal liability for professional negligence resulting in injury or damage to patients or clients. Tax unemployed Workers' compensation insurance set by state law that covers any claims for bodily injuries or job-related diseases suffered by employees in your business, regardless of fault. Tax unemployed Contributions to a state unemployment insurance fund are deductible as taxes if they are considered taxes under state law. Tax unemployed Overhead insurance that pays for business overhead expenses you have during long periods of disability caused by your injury or sickness. Tax unemployed Car and other vehicle insurance that covers vehicles used in your business for liability, damages, and other losses. Tax unemployed If you operate a vehicle partly for personal use, deduct only the part of the insurance premium that applies to the business use of the vehicle. Tax unemployed If you use the standard mileage rate to figure your car expenses, you cannot deduct any car insurance premiums. Tax unemployed Life insurance covering your employees if you are not directly or indirectly the beneficiary under the contract. Tax unemployed Business interruption insurance that pays for lost profits if your business is shut down due to a fire or other cause. Tax unemployed Nondeductible premiums. Tax unemployed   You cannot deduct premiums on the following kinds of insurance. Tax unemployed Self-insurance reserve funds. Tax unemployed You cannot deduct amounts credited to a reserve set up for self-insurance. Tax unemployed This applies even if you cannot get business insurance coverage for certain business risks. Tax unemployed However, your actual losses may be deductible. Tax unemployed For more information, see Publication 547, Casualties, Disasters, and Thefts. Tax unemployed Loss of earnings. Tax unemployed You cannot deduct premiums for a policy that pays for your lost earnings due to sickness or disability. Tax unemployed However, see item (8) in the previous list. Tax unemployed Certain life insurance and annuities. Tax unemployed For contracts issued before June 9, 1997, you cannot deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. Tax unemployed You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. Tax unemployed A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business. Tax unemployed For contracts issued after June 8, 1997, you generally cannot deduct the premiums on any life insurance policy, endowment contract, or annuity contract if you are directly or indirectly a beneficiary. Tax unemployed The disallowance applies without regard to whom the policy covers. Tax unemployed Insurance to secure a loan. Tax unemployed If you take out a policy on your life or on the life of another person with a financial interest in your business to get or protect a business loan, you cannot deduct the premiums as a business expense. Tax unemployed Nor can you deduct the premiums as interest on business loans or as an expense of financing loans. Tax unemployed In the event of death, the proceeds of the policy are not taxed as income even if they are used to liquidate the debt. Tax unemployed Self-employed health insurance deduction. Tax unemployed   You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for you and your family. Tax unemployed How to figure the deduction. Tax unemployed   Generally, you can use the worksheet in the Form 1040 instructions to figure your deduction. Tax unemployed However, if any of the following apply, you must use the worksheet in chapter 6 of Publication 535. Tax unemployed You have more than one source of income subject to self-employment tax. Tax unemployed You file Form 2555 or Form 2555-EZ (relating to foreign earned income). Tax unemployed You are using amounts paid for qualified long-term care insurance to figure the deduction. Tax unemployed Prepayment. Tax unemployed   You cannot deduct expenses in advance, even if you pay them in advance. Tax unemployed This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Tax unemployed Example. Tax unemployed In 2013, you signed a 3-year insurance contract. Tax unemployed Even though you paid the premiums for 2013, 2014, and 2015 when you signed the contract, you can only deduct the premium for 2013 on your 2013 tax return. Tax unemployed You can deduct in 2014 and 2015 the premium allocable to those years. Tax unemployed More information. Tax unemployed   For more information about deducting insurance, see chapter 6 in Publication 535. Tax unemployed Interest You can generally deduct as a business expense all interest you pay or accrue during the tax year on debts related to your business. Tax unemployed Interest relates to your business if you use the proceeds of the loan for a business expense. Tax unemployed It does not matter what type of property secures the loan. Tax unemployed You can deduct interest on a debt only if you meet all of the following requirements. Tax unemployed You are legally liable for that debt. Tax unemployed Both you and the lender intend that the debt be repaid. Tax unemployed You and the lender have a true debtor-creditor relationship. Tax unemployed You cannot deduct on Schedule C or C-EZ the interest you paid on personal loans. Tax unemployed If a loan is part business and part personal, you must divide the interest between the personal part and the business part. Tax unemployed Example. Tax unemployed In 2013, you paid $600 interest on a car loan. Tax unemployed During 2013, you used the car 60% for business and 40% for personal purposes. Tax unemployed You are claiming actual expenses on the car. Tax unemployed You can only deduct $360 (60% × $600) for 2013 on Schedule C or C-EZ. Tax unemployed The remaining interest of $240 is a nondeductible personal expense. Tax unemployed More information. Tax unemployed   For more information about deducting interest, see chapter 4 in Publication 535. Tax unemployed That chapter explains the following items. Tax unemployed Interest you can deduct. Tax unemployed Interest you cannot deduct. Tax unemployed How to allocate interest between personal and business use. Tax unemployed When to deduct interest. Tax unemployed The rules for a below-market interest rate loan. Tax unemployed (This is generally a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. Tax unemployed ) Legal and Professional Fees Legal and professional fees, such as fees charged by accountants, that are ordinary and necessary expenses directly related to operating your business are deductible on Schedule C or C-EZ. Tax unemployed However, you usually cannot deduct legal fees you pay to acquire business assets. Tax unemployed Add them to the basis of the property. Tax unemployed If the fees include payments for work of a personal nature (such as making a will), you can take a business deduction only for the part of the fee related to your business. Tax unemployed The personal part of legal fees for producing or collecting taxable income, doing or keeping your job, or for tax advice may be deductible on Schedule A (Form 1040) if you itemize deductions. Tax unemployed For more information, see Publication 529, Miscellaneous Deductions. Tax unemployed Tax preparation fees. Tax unemployed   You can deduct on Schedule C or C-EZ the cost of preparing that part of your tax return relating to your business as a sole proprietor or statutory employee. Tax unemployed You can deduct the remaining cost on Schedule A (Form 1040) if you itemize your deductions. Tax unemployed   You can also deduct on Schedule C or C-EZ the amount you pay or incur in resolving asserted tax deficiencies for your business as a sole proprietor or statutory employee. Tax unemployed Pension Plans You can set up and maintain the following small business retirement plans for yourself and your employees. Tax unemployed SEP (Simplified Employee Pension) plans. Tax unemployed SIMPLE (Savings Incentive Match Plan for Employees) plans. Tax unemployed Qualified plans (including Keogh or H. Tax unemployed R. Tax unemployed 10 plans). Tax unemployed SEP, SIMPLE, and qualified plans offer you and your employees a tax favored way to save for retirement. Tax unemployed You can deduct contributions you make to the plan for your employees on line 19 of Schedule C. Tax unemployed If you are a sole proprietor, you can deduct contributions you make to the plan for yourself on line 28 of Form 1040. Tax unemployed You can also deduct trustees' fees if contributions to the plan do not cover them. Tax unemployed Earnings on the contributions are generally tax free until you or your employees receive distributions from the plan. Tax unemployed You may also be able to claim a tax credit of 50% of the first $1,000 of qualified startup costs if you begin a new qualified defined benefit or defined contribution plan (including a 401(k) plan), SIMPLE plan, or simplified employee pension. Tax unemployed Under certain plans, employees can have you contribute limited amounts of their before-tax pay to a plan. Tax unemployed These amounts (and earnings on them) are generally tax free until your employees receive distributions from the plan. Tax unemployed For more information on retirement plans for small business, see Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans). Tax unemployed Publication 590, Individual Retirement Arrangements (IRAs), discusses other tax favored ways to save for retirement. Tax unemployed Rent Expense Rent is any amount you pay for the use of property you do not own. Tax unemployed In general, you can deduct rent as a business expense only if the rent is for property you use in your business. Tax unemployed If you have or will receive equity in or title to the property, you cannot deduct the rent. Tax unemployed Unreasonable rent. Tax unemployed   You cannot take a rental deduction for unreasonable rents. Tax unemployed Ordinarily, the issue of reasonableness arises only if you and the lessor are related. Tax unemployed Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. Tax unemployed Rent is not unreasonable just because it is figured as a percentage of gross receipts. Tax unemployed   Related persons include members of your immediate family, including only brothers and sisters (either whole or half), your spouse, ancestors, and lineal descendants. Tax unemployed For a list of the other related persons, see section 267 of the Internal Revenue Code. Tax unemployed Rent on your home. Tax unemployed   If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. Tax unemployed You must meet the requirements for business use of your home. Tax unemployed For more information, see Business Use of Your Home , later. Tax unemployed Rent paid in advance. Tax unemployed   Generally, rent paid in your business is deductible in the year paid or accrued. Tax unemployed If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. Tax unemployed You can deduct the rest of your payment only over the period to which it applies. Tax unemployed More information. Tax unemployed   For more information about rent, see chapter 3 in Publication 535. Tax unemployed Taxes You can deduct on Schedule C or C-EZ various federal, state, local, and foreign taxes directly attributable to your business. Tax unemployed Income taxes. Tax unemployed   You can deduct on Schedule C or C-EZ a state tax on gross income (as distinguished from net income) directly attributable to your business. Tax unemployed You can deduct other state and local income taxes on Schedule A (Form 1040) if you itemize your deductions. Tax unemployed Do not deduct federal income tax. Tax unemployed Employment taxes. Tax unemployed   You can deduct the social security, Medicare, and federal unemployment (FUTA) taxes you paid out of your own funds as an employer. Tax unemployed Employment taxes are discussed briefly in chapter 1. Tax unemployed You can also deduct payments you made as an employer to a state unemployment compensation fund or to a state disability benefit fund. Tax unemployed Deduct these payments as taxes. Tax unemployed Self-employment tax. Tax unemployed   You can deduct one-half of your self-employment tax on line 27 of Form 1040. Tax unemployed Self-employment tax is discussed in chapters 1 and 10. Tax unemployed Personal property tax. Tax unemployed   You can deduct on Schedule C or C-EZ any tax imposed by a state or local government on personal property used in your business. Tax unemployed   You can also deduct registration fees for the right to use property within a state or local area. Tax unemployed Example. Tax unemployed May and Julius Winter drove their car 7,000 business miles out of a total of 10,000 miles. Tax unemployed They had to pay $25 for their annual state license tags and $20 for their city registration sticker. Tax unemployed They also paid $235 in city personal property tax on the car, for a total of $280. Tax unemployed They are claiming their actual car expenses. Tax unemployed Because they used the car 70% for business, they can deduct 70% of the $280, or $196, as a business expense. Tax unemployed Real estate taxes. Tax unemployed   You can deduct on Schedule C or C-EZ the real estate taxes you pay on your business property. Tax unemployed Deductible real estate taxes are any state, local, or foreign taxes on real estate levied for the general public welfare. Tax unemployed The taxing authority must base the taxes on the assessed value of the real estate and charge them uniformly against all property under its jurisdiction. Tax unemployed   For more information about real estate taxes, see chapter 5 in Publication 535. Tax unemployed That chapter explains special rules for deducting the following items. Tax unemployed Taxes for local benefits, such as those for sidewalks, streets, water mains, and sewer lines. Tax unemployed Real estate taxes when you buy or sell property during the year. Tax unemployed Real estate taxes if you use an accrual method of accounting and choose to accrue real estate tax related to a definite period ratably over that period. Tax unemployed Sales tax. Tax unemployed   Treat any sales tax you pay on a service or on the purchase or use of property as part of the cost of the service or property. Tax unemployed If the service or the cost or use of the property is a deductible business expense, you can deduct the tax as part of that service or cost. Tax unemployed If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. Tax unemployed If the property is depreciable, add the sales tax to the basis for depreciation. Tax unemployed For information on the basis of property, see Publication 551, Basis of Assets. Tax unemployed    Do not deduct state and local sales taxes imposed on the buyer that you must collect and pay over to the state or local government. Tax unemployed Do not include these taxes in gross receipts or sales. Tax unemployed Excise taxes. Tax unemployed   You can deduct on Schedule C or C-EZ all excise taxes that are ordinary and necessary expenses of carrying on your business. Tax unemployed Excise taxes are discussed briefly in chapter 1. Tax unemployed Fuel taxes. Tax unemployed   Taxes on gasoline, diesel fuel, and other motor fuels you use in your business are usually included as part of the cost of the fuel. Tax unemployed Do not deduct these taxes as a separate item. Tax unemployed   You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. Tax unemployed For more information, see Publication 510, Excise Taxes. Tax unemployed Travel, Meals, and Entertainment This section briefly explains the kinds of travel and entertainment expenses you can deduct on Schedule C or C-EZ. Tax unemployed Table 8-1. Tax unemployed When Are Entertainment Expenses Deductible? (Note. Tax unemployed The following is a summary of the rules for deducting entertainment expenses. Tax unemployed For more details about these rules, see Publication 463. Tax unemployed ) General rule You can deduct ordinary and necessary expenses to entertain a client, customer, or employee if the expenses meet the directly-related test or the associated test. Tax unemployed Definitions Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation, and includes meals provided to a customer or client. Tax unemployed An ordinary expense is one that is common and accepted in your field of business, trade, or profession. Tax unemployed A necessary expense is one that is helpful and appropriate, although not necessarily required, for your business. Tax unemployed Tests to be met Directly-related test Entertainment took place in a clear business setting, or Main purpose of entertainment was the active conduct of business, and You did engage in business with the person during the entertainment period, and You had more than a general expectation of getting income or some other specific business benefit. Tax unemployed   Associated test Entertainment is associated with your trade or business, and Entertainment directly precedes or follows a substantial business discussion. Tax unemployed Other rules You cannot deduct the cost of your meal as an entertainment expense if you are claiming the meal as a travel expense. Tax unemployed You cannot deduct expenses that are lavish or extravagant under the circumstances. Tax unemployed You generally can deduct only 50% of your unreimbursed entertainment expenses. Tax unemployed Travel expenses. Tax unemployed   These are the ordinary and necessary expenses of traveling away from home for your business. Tax unemployed You are traveling away from home if both the following conditions are met. Tax unemployed Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work. Tax unemployed You need to get sleep or rest to meet the demands of your work while away from home. Tax unemployed Generally, your tax home is your regular place of business, regardless of where you maintain your family home. Tax unemployed It includes the entire city or general area in which your business is located. Tax unemployed See Publication 463 for more information. Tax unemployed   The following is a brief discussion of the expenses you can deduct. Tax unemployed Transportation. Tax unemployed   You can deduct the cost of travel by airplane, train, bus, or car between your home and your business destination. Tax unemployed Taxi, commuter bus, and limousine. Tax unemployed   You can deduct fares for these and other types of transportation between the airport or station and your hotel, or between the hotel and your work location away from home. Tax unemployed Baggage and shipping. Tax unemployed   You can deduct the cost of sending baggage and sample or display material between your regular and temporary work locations. Tax unemployed Car or truck. Tax unemployed   You can deduct the costs of operating and maintaining your vehicle when traveling away from home on business. Tax unemployed You can deduct actual expenses or the standard mileage rate (discussed earlier under Car and Truck Expenses), as well as business-related tolls and parking. Tax unemployed If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Tax unemployed Meals and lodging. Tax unemployed   You can deduct the cost of meals and lodging if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Tax unemployed In most cases, you can deduct only 50% of your meal expenses. Tax unemployed Cleaning. Tax unemployed   You can deduct the costs of dry cleaning and laundry while on your business trip. Tax unemployed Telephone. Tax unemployed   You can deduct the cost of business calls while on your business trip, including business communication by fax machine or other communication devices. Tax unemployed Tips. Tax unemployed   You can deduct the tips you pay for any expense in this list. Tax unemployed More information. Tax unemployed   For more information about travel expenses, see Publication 463. Tax unemployed Entertainment expenses. Tax unemployed   You may be able to deduct business-related entertainment expenses for entertaining a client, customer, or employee. Tax unemployed In most cases, you can deduct only 50% of these expenses. Tax unemployed   The following are examples of entertainment expenses. Tax unemployed Entertaining guests at nightclubs, athletic clubs, theaters, or sporting events. Tax unemployed Providing meals, a hotel suite, or a car to business customers or their families. Tax unemployed To be deductible, the expenses must meet the rules listed in Table 8-1. Tax unemployed For details about these rules, see Publication 463. Tax unemployed Reimbursing your employees for expenses. Tax unemployed   You generally can deduct the amount you reimburse your employees for travel and entertainment expenses. Tax unemployed The reimbursement you deduct and the manner in which you deduct it depend in part on whether you reimburse the expenses under an accountable plan or a nonaccountable plan. Tax unemployed For details, see chapter 11 in Publication 535. Tax unemployed That chapter explains accountable and nonaccountable plans and tells you whether to report the reimbursement on your employee's Form W-2, Wage and Tax Statement. Tax unemployed Business Use of Your Home To deduct expenses related to the part of your home used for business, you must meet specific requirements. Tax unemployed Even then, your deduction may be limited. Tax unemployed To qualify to claim expenses for business use of your home, you must meet the following tests. Tax unemployed Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use , later), Regular, For your business, and The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your business, or A separate structure (not attached to your home) you use in connection with your business. Tax unemployed Exclusive use. Tax unemployed   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Tax unemployed The area used for business can be a room or other separately identifiable space. Tax unemployed The space does not need to be marked off by a permanent partition. Tax unemployed   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Tax unemployed Example. Tax unemployed You are an attorney and use a den in your home to write legal briefs and prepare clients' tax returns. Tax unemployed Your family also uses the den for recreation. Tax unemployed The den is not used exclusively in your profession, so you cannot claim a business deduction for its use. Tax unemployed Exceptions to exclusive use. Tax unemployed   You do not have to meet the exclusive use test if you use part of your home in either of the following ways. Tax unemployed For the storage of inventory or product samples. Tax unemployed As a daycare facility. Tax unemployed For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Tax unemployed Regular use. Tax unemployed   To qualify under the regular use test, you must use a specific area of your home for business on a continuing basis. Tax unemployed You do not meet the test if your business use of the area is only occasional or incidental, even if you do not use that area for any other purpose. Tax unemployed Principal place of business. Tax unemployed   You can have more than one business location, including your home, for a single trade or business. Tax unemployed To qualify to deduct the expenses for the business use of your home under the principal place of business test, your home must be your principal place of business for that business. Tax unemployed To determine your principal place of business, you must consider all the facts and circumstances. Tax unemployed   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. Tax unemployed You use it exclusively and regularly for administrative or management activities of your business. Tax unemployed You have no other fixed location where you conduct substantial administrative or management activities of your business. Tax unemployed   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. Tax unemployed The relative importance of the activities performed at each location. Tax unemployed If the relative importance factor does not determine your principal place of business, you can also consider the time spent at each location. Tax unemployed   If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Tax unemployed However, for other ways to qualify to deduct home office expenses, see Publication 587. Tax unemployed Deduction limit. Tax unemployed   If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home. Tax unemployed If your gross income from the business use is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited. Tax unemployed   Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation (with depreciation taken last), allocable to the business is limited to the gross income from the business use of your home minus the sum of the following. Tax unemployed The business part of expenses you could deduct even if you did not use your home for business (such as mortgage interest, real estate taxes, and casualty and theft losses that are allowable as itemized deductions on Schedule A (Form 1040)). Tax unemployed The business expenses that relate to the business activity in the home (for example, business phone, supplies, and depreciation on equipment), but not to the use of the home itself. Tax unemployed Do not include in (2) above your deduction for one-half of your self-employment tax. Tax unemployed   Use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. Tax unemployed New simplified method. Tax unemployed    The IRS now provides a simplified method to determine your expenses for business use of your home. Tax unemployed The simplified method is an alternative to calculating and substantiating actual expenses. Tax unemployed In most cases, you will figure your deduction by multiplying $5 by the area of your home used for a qualified business use. Tax unemployed The area you use to figure your deduction is limited to 300 square feet. Tax unemployed For more information, see the Instructions for Schedule C. Tax unemployed More information. Tax unemployed   For more information on deducting expenses for the business use of your home, see Publication 587. Tax unemployed Other Expenses You Can Deduct You may also be able to deduct the following expenses. Tax unemployed See Publication 535 to find out whether you can deduct them. Tax unemployed Advertising. Tax unemployed Bank fees. Tax unemployed Donations to business organizations. Tax unemployed Education expenses. Tax unemployed Energy efficient commercial buildings deduction expenses. Tax unemployed Impairment-related expenses. Tax unemployed Interview expense allowances. Tax unemployed Licenses and regulatory fees. Tax unemployed Moving machinery. Tax unemployed Outplacement services. Tax unemployed Penalties and fines you pay for late performance or nonperformance of a contract. Tax unemployed Repairs that keep your property in a normal efficient operating condition. Tax unemployed Repayments of income. Tax unemployed Subscriptions to trade or professional publications. Tax unemployed Supplies and materials. Tax unemployed Utilities. Tax unemployed Expenses You Cannot Deduct You usually cannot deduct the following as business expenses. Tax unemployed For more information, see Publication 535. Tax unemployed Bribes and kickbacks. Tax unemployed Charitable contributions. Tax unemployed Demolition expenses or losses. Tax unemployed Dues to business, social, athletic, luncheon, sporting, airline, and hotel clubs. Tax unemployed Lobbying expenses. Tax unemployed Penalties and fines you pay to a governmental agency or instrumentality because you broke the law. Tax unemployed Personal, living, and family expenses. Tax unemployed Political contributions. Tax unemployed Repairs that add to the value of your property or significantly increase its life. Tax unemployed Prev  Up  Next   Home   More Online Publications
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National Bipartisan Commission on the Future of Medicare

The National Bipartisan Commission on the Future of Medicare was active from 1997-1999. The final recommendation of the commission failed to receive the support of 2/3 of the commissioners. The recommendation itself is still available at the website.

The Tax Unemployed

Tax unemployed Publication 550 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. Tax unemployed Tax questions. Tax unemployed Future Developments For the latest information about developments related to Publication 550, such as legislation enacted after it was published, go to www. Tax unemployed irs. Tax unemployed gov/pub550. Tax unemployed What's New Net investment income tax (NIIT). Tax unemployed  Beginning in 2013, you may be subject to the NIIT. Tax unemployed The NIIT applies at a rate of 3. Tax unemployed 8% to certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts. Tax unemployed See Net investment income tax (NIIT) , later. Tax unemployed Maximum capital gain rates. Tax unemployed  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Tax unemployed See Capital Gain Tax Rates , later, for more information. Tax unemployed Gift tax exclusion amount increased. Tax unemployed  For calendar year 2013, the first $14,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts. Tax unemployed See Property Received as a Gift , later. Tax unemployed Reminders Mutual fund distributions. Tax unemployed  Publication 564, Mutual Fund Distributions, has been incorporated into this publication. Tax unemployed Foreign source income. Tax unemployed  If you are a U. Tax unemployed S. Tax unemployed citizen with investment income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt by U. Tax unemployed S. Tax unemployed law. Tax unemployed This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Tax unemployed Employee stock options. Tax unemployed  If you received an option to buy or sell stock or other property as payment for your services, see Publication 525, Taxable and Nontaxable Income, for the special tax rules that apply. Tax unemployed Photographs of missing children. Tax unemployed  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Tax unemployed Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Tax unemployed You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Tax unemployed Introduction This publication provides information on the tax treatment of investment income and expenses. Tax unemployed It includes information on the tax treatment of investment income and expenses for individual shareholders of mutual funds or other regulated investment companies, such as money market funds. Tax unemployed It explains what investment income is taxable and what investment expenses are deductible. Tax unemployed It explains when and how to show these items on your tax return. Tax unemployed It also explains how to determine and report gains and losses on the disposition of investment property and provides information on property trades and tax shelters. Tax unemployed The glossary at the end of this publication defines many of the terms used. Tax unemployed Investment income. Tax unemployed   This generally includes interest, dividends, capital gains, and other types of distributions including mutual fund distributions. Tax unemployed Investment expenses. Tax unemployed   These include interest paid or incurred to acquire investment property and expenses to manage or collect income from investment property. Tax unemployed Qualified retirement plans and IRAs. Tax unemployed   The rules in this publication do not apply to mutual fund shares held in individual retirement arrangements (IRAs), section 401(k) plans, and other qualified retirement plans. Tax unemployed The value of the mutual fund shares and earnings allocated to you are included in your retirement plan assets and stay tax free generally until the plan distributes them to you. Tax unemployed The tax rules that apply to retirement plan distributions are explained in the following publications. Tax unemployed Publication 560, Retirement Plans for Small Business. Tax unemployed Publication 571, Tax-Sheltered Annuity Plans. Tax unemployed Publication 575, Pension and Annuity Income. Tax unemployed Publication 590, Individual Retirement Arrangements (IRAs). Tax unemployed Publication 721, Tax Guide to U. Tax unemployed S. Tax unemployed Civil Service Retirement Benefits. Tax unemployed    Comments and suggestions. Tax unemployed   We welcome your comments about this publication and your suggestions for future editions. Tax unemployed   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Tax unemployed NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Tax unemployed Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Tax unemployed   You can send your comments from www. Tax unemployed irs. Tax unemployed gov/formspubs/. Tax unemployed Click on “More Information” and then on “Comment on Tax Forms and Publications. Tax unemployed ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Tax unemployed Ordering forms and publications. Tax unemployed   Visit www. Tax unemployed irs. Tax unemployed gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Tax unemployed Internal Revenue Service 1201 N. Tax unemployed Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Tax unemployed   If you have a tax question, check the information available on IRS. Tax unemployed gov or call 1-800-829-1040. Tax unemployed We cannot answer tax questions sent to either of the above addresses. Tax unemployed Prev  Up  Next   Home   More Online Publications