File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Turbotax For 2010 Tax Year

Irs Gov Ez FormHow To File Your 2012 Tax ReturnHow To File An Amended Tax Return 2011Free Tax Filing For Low IncomeFile 2012 Taxes For Free1040ez Forms And InstructionsDownload Irs Form 1040xRevised Tax ReturnTax Form AmendmentAmending TaxFree Federal Tax PreparationFederal Income Tax Forms For 2012How To Do State Taxes For Free1040 Online1040ez Tax TableFile 2009 Taxes TurbotaxTax Form 1040nrFree E File Federal And State Tax ReturnAmend A ReturnH&r Block Free Tax FormFree Tax Filing OnlineFile 1040ez Online FreeEfile State TaxIncome Tax Return FilingFederal Tax Ez Form 2011How To File An Amended Tax Return 20131040x Amended FormMypay Dfas Mil Mypay1040ez Online FilingStudent TaxFree State Taxes FilingFree Tax Extension FilingFile Taxes 2011File Taxes 2010Instructions For Filing An Amended Tax ReturnHow Do I File 2011 Taxes OnlineHow To Amend TaxIrs Tax Form 940 2012Irs Tax Forms 1040 2010Back Taxes Help

Turbotax For 2010 Tax Year

Turbotax for 2010 tax year Publication 80 - Introductory Material Table of Contents Future Developments What's New Reminders Calendar Future Developments For the latest information about developments related to Publication 80 (Circular SS), such as legislation enacted after it was published, go to www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/pub80. Turbotax for 2010 tax year What's New Social security and Medicare tax for 2014. Turbotax for 2010 tax year  The social security tax rate is 6. Turbotax for 2010 tax year 2% each for the employee and employer, unchanged from 2013. Turbotax for 2010 tax year The social security wage base limit is $117,000. Turbotax for 2010 tax year The Medicare tax rate is 1. Turbotax for 2010 tax year 45% each for the employee and employer, unchanged from 2013. Turbotax for 2010 tax year There is no wage base limit for Medicare tax. Turbotax for 2010 tax year Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Turbotax for 2010 tax year Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. Turbotax for 2010 tax year Change of responsible party. Turbotax for 2010 tax year . Turbotax for 2010 tax year  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. Turbotax for 2010 tax year Form 8822-B must be filed within 60 days of the change. Turbotax for 2010 tax year If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. Turbotax for 2010 tax year For a definition of “responsible party”, see the Form 8822-B instructions. Turbotax for 2010 tax year Same-sex marriage. Turbotax for 2010 tax year  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Turbotax for 2010 tax year For more information, see Revenue Ruling 2013-17, 2013-38 I. Turbotax for 2010 tax year R. Turbotax for 2010 tax year B. Turbotax for 2010 tax year 201, available at www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/irb/2013-38_IRB/ar07. Turbotax for 2010 tax year html. Turbotax for 2010 tax year Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Turbotax for 2010 tax year Notice 2013-61, 2013-44 I. Turbotax for 2010 tax year R. Turbotax for 2010 tax year B. Turbotax for 2010 tax year 432, is available at www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/irb/2013-44_IRB/ar10. Turbotax for 2010 tax year html. Turbotax for 2010 tax year Reminders Additional Medicare Tax withholding. Turbotax for 2010 tax year  In addition to withholding Medicare tax at 1. Turbotax for 2010 tax year 45%, you must withhold a 0. Turbotax for 2010 tax year 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Turbotax for 2010 tax year You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Turbotax for 2010 tax year Additional Medicare Tax is only imposed on the employee. Turbotax for 2010 tax year There is no employer share of Additional Medicare Tax. Turbotax for 2010 tax year All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Turbotax for 2010 tax year For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Employment and Payments , in section 12. Turbotax for 2010 tax year For more information on Additional Medicare Tax, visit IRS. Turbotax for 2010 tax year gov and enter “Additional Medicare Tax” in the search box. Turbotax for 2010 tax year Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Turbotax for 2010 tax year  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. Turbotax for 2010 tax year Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Turbotax for 2010 tax year For more information, visit IRS. Turbotax for 2010 tax year gov and enter “work opportunity tax credit” in the search box. Turbotax for 2010 tax year Outsourcing payroll duties. Turbotax for 2010 tax year  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. Turbotax for 2010 tax year The employer remains responsible if the third party fails to perform any required action. Turbotax for 2010 tax year If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. Turbotax for 2010 tax year gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. Turbotax for 2010 tax year Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). Turbotax for 2010 tax year  The IRS will not assert that an employer has understated liability for social security and Medicare taxes because they failed to treat services performed before January 1, 2015, in the CNMI by a resident of the Philippines as employment as defined under Internal Revenue Code section 3121(b). Turbotax for 2010 tax year For more information, see Announcement 2012-43, 2012-51 I. Turbotax for 2010 tax year R. Turbotax for 2010 tax year B. Turbotax for 2010 tax year 723, available at www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/irb/2012-51_IRB/ar15. Turbotax for 2010 tax year html. Turbotax for 2010 tax year CNMI government employees now subject to social security and Medicare taxes. Turbotax for 2010 tax year  Beginning in the fourth calendar quarter of 2012, CNMI government employees are subject to social security and Medicare taxes. Turbotax for 2010 tax year COBRA premium assistance credit. Turbotax for 2010 tax year  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008 and May 31, 2010, and to premiums paid for up to 15 months. Turbotax for 2010 tax year See COBRA premium assistance credit in Publication 15 (Circular E), Employer's Tax Guide. Turbotax for 2010 tax year You can get Publication 15 (Circular E) at IRS. Turbotax for 2010 tax year gov. Turbotax for 2010 tax year You must receive written notice from the IRS to file Form 944. Turbotax for 2010 tax year  If you have been filing Forms 941-SS and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941-SS, you must contact the IRS to request to file Form 944. Turbotax for 2010 tax year You must receive written notice from the IRS to file Form 944 instead of Forms 941-SS before you may file this form. Turbotax for 2010 tax year For more information on requesting to file Form 944 visit IRS. Turbotax for 2010 tax year gov and enter “file employment taxes annually” in the search box. Turbotax for 2010 tax year Federal employers in the CNMI. Turbotax for 2010 tax year  The U. Turbotax for 2010 tax year S. Turbotax for 2010 tax year Treasury Department and the CNMI Division of Revenue and Taxation entered into an agreement under 5 USC 5517 in December 2006. Turbotax for 2010 tax year Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal income taxes) and deposit the CNMI taxes with the CNMI Treasury for employees who are subject to CNMI taxes and whose regular place of federal employment is in the CNMI. Turbotax for 2010 tax year Federal employers are also required to file quarterly and annual reports with the CNMI Division of Revenue and Taxation. Turbotax for 2010 tax year For questions, contact the CNMI Division of Revenue and Taxation. Turbotax for 2010 tax year Change of address. Turbotax for 2010 tax year  Use Form 8822-B to notify the IRS of an address change. Turbotax for 2010 tax year Do not mail Form 8822-B with your employment tax return. Turbotax for 2010 tax year Federal tax deposits must be made by electronic funds transfer. Turbotax for 2010 tax year  You must use electronic funds transfer to make all federal tax deposits. Turbotax for 2010 tax year Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Turbotax for 2010 tax year If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Turbotax for 2010 tax year Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Turbotax for 2010 tax year EFTPS is a free service provided by the Department of Treasury. Turbotax for 2010 tax year Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Turbotax for 2010 tax year For more information on making federal tax deposits, see How To Deposit in section 8. Turbotax for 2010 tax year For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www. Turbotax for 2010 tax year eftps. Turbotax for 2010 tax year gov or call 1-800-555-4477 (U. Turbotax for 2010 tax year S. Turbotax for 2010 tax year Virgin Islands only) or 303-967-5916 (toll call) or 1-800-733-4829 (TDD). Turbotax for 2010 tax year Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Turbotax for 2010 tax year Electronic filing and payment. Turbotax for 2010 tax year  Using electronic options can make filing a return and paying your federal tax easier. Turbotax for 2010 tax year Use the Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full, whether you rely on a tax professional or prepare your own taxes. Turbotax for 2010 tax year You can use IRS e-file to file certain returns. Turbotax for 2010 tax year If there is a balance due on the return, you can e-file and e-pay in a single step by authorizing an electronic funds withdrawal (EFW) from your bank account while e-filing. Turbotax for 2010 tax year Do not use EFW to pay taxes that are required to be deposited. Turbotax for 2010 tax year Visit the IRS website at www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/efile for more information on filing electronically. Turbotax for 2010 tax year For more information on paying your taxes using EFW, visit the IRS website at www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/e-pay. Turbotax for 2010 tax year A fee may be charged to file electronically. Turbotax for 2010 tax year For EFTPS, visit www. Turbotax for 2010 tax year eftps. Turbotax for 2010 tax year gov or call EFTPS Customer Service at 1-800-555-4477 (U. Turbotax for 2010 tax year S. Turbotax for 2010 tax year Virgin Islands only) or 303-967-5916 (toll call). Turbotax for 2010 tax year For electronic filing of Forms W-2AS, W-2CM, W-2GU, W-2VI, Wage and Tax Statements; W-3SS, Transmittal of Wage and Tax Statements; and W-2c, Corrected Wage and Tax Statement, visit www. Turbotax for 2010 tax year socialsecurity. Turbotax for 2010 tax year gov/employer. Turbotax for 2010 tax year If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. Turbotax for 2010 tax year If a valid EIN is not provided, the return or payment will not be processed. Turbotax for 2010 tax year This may result in penalties and delays in processing your return or payment. Turbotax for 2010 tax year Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. Turbotax for 2010 tax year  Employers in American Samoa, the CNMI, Guam, and the U. Turbotax for 2010 tax year S. Turbotax for 2010 tax year Virgin Islands can now use the Social Security Administration's W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet. Turbotax for 2010 tax year Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. Turbotax for 2010 tax year For more information, visit Social Security Administration's SSA website at www. Turbotax for 2010 tax year ssa. Turbotax for 2010 tax year gov/bso/bsowelcome. Turbotax for 2010 tax year htm. Turbotax for 2010 tax year Credit or debit card payments. Turbotax for 2010 tax year  For information on paying your taxes with a credit or debit card, visit the IRS website at www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/e-pay. Turbotax for 2010 tax year However, do not use credit or debit cards to make federal tax deposits. Turbotax for 2010 tax year Hiring new employees. Turbotax for 2010 tax year  Record the number and name from each new employee's social security card. Turbotax for 2010 tax year An employee who does not have a social security card should apply for one on Form SS-5, Application for a Social Security Card. Turbotax for 2010 tax year See section 3. Turbotax for 2010 tax year Reporting discrepancies between Forms 941-SS (or Form 944) and Forms W-2. Turbotax for 2010 tax year  File Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Form 944), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. Turbotax for 2010 tax year For more information, see the Instructions for Schedule D (Form 941). Turbotax for 2010 tax year Apply for an employer identification number (EIN) online. Turbotax for 2010 tax year  You can apply for an EIN online by visiting IRS. Turbotax for 2010 tax year gov and clicking on the Apply for an EIN Online link under Tools. Turbotax for 2010 tax year Dishonored payments. Turbotax for 2010 tax year  Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. Turbotax for 2010 tax year The penalty is $25 or 2% of the payment, whichever is more. Turbotax for 2010 tax year However, the penalty on dishonored payments of $24. Turbotax for 2010 tax year 99 or less is an amount equal to the payment. Turbotax for 2010 tax year For example, a dishonored payment of $18 is charged a penalty of $18. Turbotax for 2010 tax year Private delivery services. Turbotax for 2010 tax year  You can use certain private delivery services designated by the IRS to send tax returns or payments. Turbotax for 2010 tax year The list includes only the following: DHL Express (DHL): DHL Same Day Service. Turbotax for 2010 tax year Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Turbotax for 2010 tax year United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Turbotax for 2010 tax year M. Turbotax for 2010 tax year , UPS Worldwide Express Plus, and UPS Worldwide Express. Turbotax for 2010 tax year For the IRS mailing address to use if you are using a private delivery service, go to IRS. Turbotax for 2010 tax year gov and enter “private delivery service” in the search box. Turbotax for 2010 tax year Your private delivery service can tell you how to get written proof of the mailing date. Turbotax for 2010 tax year Private delivery services cannot deliver items to P. Turbotax for 2010 tax year O. Turbotax for 2010 tax year boxes. Turbotax for 2010 tax year You must use the U. Turbotax for 2010 tax year S. Turbotax for 2010 tax year Postal Service to mail any item to an IRS P. Turbotax for 2010 tax year O. Turbotax for 2010 tax year box address. Turbotax for 2010 tax year Recordkeeping. Turbotax for 2010 tax year  Keep all records of employment taxes for 4 years. Turbotax for 2010 tax year These should be available for IRS review. Turbotax for 2010 tax year There is no required format for such records, but they should include your EIN; the amounts and dates of all wage payments (including fringe benefits) and tips reported; the names, addresses, and occupations of employees receiving such payments and their social security numbers; copies of returns filed; dates of employment; and the dates and amounts of deposits made. Turbotax for 2010 tax year Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. Turbotax for 2010 tax year See Farm Crew Leaders in section 2. Turbotax for 2010 tax year Disregarded entities and qualified subchapter S subsidiaries (QSubs). Turbotax for 2010 tax year  Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. Turbotax for 2010 tax year Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. Turbotax for 2010 tax year See Regulations sections 1. Turbotax for 2010 tax year 1361-4(a)(7) and 301. Turbotax for 2010 tax year 7701-2(c)(2)(iv). Turbotax for 2010 tax year Photographs of missing children. Turbotax for 2010 tax year  The IRS is a proud partner with the National Center for Missing and Exploited Children. Turbotax for 2010 tax year Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Turbotax for 2010 tax year 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. Turbotax for 2010 tax year Calendar   If any date for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. Turbotax for 2010 tax year A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. Turbotax for 2010 tax year However, a statewide legal holiday does not delay the due date of federal tax deposits. Turbotax for 2010 tax year See Deposits on Business Days Only in section 8. Turbotax for 2010 tax year For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Turbotax for 2010 tax year S. Turbotax for 2010 tax year Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. Turbotax for 2010 tax year See Private delivery services under Reminders. Turbotax for 2010 tax year The following are important dates and responsibilities. Turbotax for 2010 tax year Also see Publication 509, Tax Calendars. Turbotax for 2010 tax year By January 31. Turbotax for 2010 tax year   Furnish wage and tax statements to employees. Turbotax for 2010 tax year Give each employee a completed Form W-2AS, W-2CM, W-2GU, or W-2VI. Turbotax for 2010 tax year See section 10 for more information. Turbotax for 2010 tax year File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the IRS. Turbotax for 2010 tax year If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file. Turbotax for 2010 tax year U. Turbotax for 2010 tax year S. Turbotax for 2010 tax year Virgin Islands employers only must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Turbotax for 2010 tax year Pay or deposit (if more than $500) any balance of the tax due. Turbotax for 2010 tax year If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Turbotax for 2010 tax year File Form 944 with the IRS if you were notified by the IRS to file Form 944 instead of quarterly Forms 941-SS. Turbotax for 2010 tax year If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Turbotax for 2010 tax year By February 28. Turbotax for 2010 tax year  File paper wage and tax statements with the Social Security Administration (SSA). Turbotax for 2010 tax year File Copy A of Forms W-2AS, W-2CM, W-2GU, or W-2VI, and Form W-3SS with the Social Security Administration (SSA). Turbotax for 2010 tax year For electronically filed returns, see By March 31 next. Turbotax for 2010 tax year By March 31. Turbotax for 2010 tax year  File electronic Forms W-2AS, W-2CM, W-2GU, or W-2VI with the SSA. Turbotax for 2010 tax year Visit the SSA's Reporting Instructions & Information webpage at www. Turbotax for 2010 tax year socialsecurity. Turbotax for 2010 tax year gov/employer for more information. Turbotax for 2010 tax year By April 30, July 31, October 31, and January 31. Turbotax for 2010 tax year  File Form 941-SS with the IRS. Turbotax for 2010 tax year If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Turbotax for 2010 tax year Do not file Forms 941-SS for these quarters if you have been notified to file Form 944 and you did not request to file quarterly Forms 941-SS. Turbotax for 2010 tax year Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. Turbotax for 2010 tax year If $500 or less, carry it over to the next quarter. Turbotax for 2010 tax year See section 11 for more information. Turbotax for 2010 tax year Prev  Up  Next   Home   More Online Publications
Español

U.S. Department of Health and Human Services (HHS)

The Department of Health and Human Services protects the health of all Americans and provides essential human services.

The Turbotax For 2010 Tax Year

Turbotax for 2010 tax year 4. Turbotax for 2010 tax year   Farm Business Expenses Table of Contents What's New for 2013 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Deductible ExpensesReasonable allocation. Turbotax for 2010 tax year Prepaid Farm Supplies Prepaid Livestock Feed Labor Hired Repairs and Maintenance Interest Breeding Fees Fertilizer and Lime Taxes Insurance Rent and Leasing Depreciation Business Use of Your Home Truck and Car Expenses Travel Expenses Marketing Quota Penalties Tenant House Expenses Items Purchased for Resale Other Expenses Domestic Production Activities Deduction Capital ExpensesForestation and reforestation costs. Turbotax for 2010 tax year Nondeductible ExpensesPersonal, Living, and Family Expenses Other Nondeductible Items Losses From Operating a FarmAt-Risk Limits Passive Activity Limits Excess Farm Loss Limit Not-for-Profit FarmingUsing the presumption later. Turbotax for 2010 tax year Category 1. Turbotax for 2010 tax year Category 2. Turbotax for 2010 tax year Category 3. Turbotax for 2010 tax year What's New for 2013 Standard mileage rate. Turbotax for 2010 tax year  For 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56. Turbotax for 2010 tax year 5 cents. Turbotax for 2010 tax year See Truck and Car Expenses , later. Turbotax for 2010 tax year Simplified method for business use of home deduction. Turbotax for 2010 tax year  The IRS now provides a simplified method to determine your expenses for business use of your home. Turbotax for 2010 tax year For more information, see Schedule C (Form 1040), Part II, and its instructions. Turbotax for 2010 tax year Introduction You can generally deduct the current costs of operating your farm. Turbotax for 2010 tax year Current costs are expenses you do not have to capitalize or include in inventory costs. Turbotax for 2010 tax year However, your deduction for the cost of livestock feed and certain other supplies may be limited. Turbotax for 2010 tax year If you have an operating loss, you may not be able to deduct all of it. Turbotax for 2010 tax year Topics - This chapter discusses: Deductible expenses Domestic production activities deduction Capital expenses Nondeductible expenses Losses from operating a farm Not-for-profit farming Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home 925 Passive Activity and At-Risk Rules 936 Home Mortgage Interest Deduction Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch F (Form 1040) Profit or Loss From Farming 1045 Application for Tentative Refund 5213 Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit 8903 Domestic Production Activities Deduction See chapter 16 for information about getting publications and forms. Turbotax for 2010 tax year Deductible Expenses The ordinary and necessary costs of operating a farm for profit are deductible business expenses. Turbotax for 2010 tax year “Ordinary” means what most farmers do and “necessary” means what is useful and helpful in farming. Turbotax for 2010 tax year Schedule F, Part II, lists some common farm expenses that are typically deductible. Turbotax for 2010 tax year This chapter discusses many of these expenses, as well as others not listed on Schedule F. Turbotax for 2010 tax year Reimbursed expenses. Turbotax for 2010 tax year   If the reimbursement is received in the same year that the expense is claimed, reduce the expense by the amount of the reimbursement. Turbotax for 2010 tax year If the reimbursement is received in a year after the expense is claimed, include the reimbursement amount in income. Turbotax for 2010 tax year See Refund or reimbursement under Income From Other Sources in chapter 3. Turbotax for 2010 tax year Personal and business expenses. Turbotax for 2010 tax year   Some expenses you pay during the tax year may be part personal and part business. Turbotax for 2010 tax year These may include expenses for gasoline, oil, fuel, water, rent, electricity, telephone, automobile upkeep, repairs, insurance, interest, and taxes. Turbotax for 2010 tax year   You must allocate these mixed expenses between their business and personal parts. Turbotax for 2010 tax year Generally, the personal part of these expenses is not deductible. Turbotax for 2010 tax year The business portion of the expenses is deductible on Schedule F. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year You paid $1,500 for electricity during the tax year. Turbotax for 2010 tax year You used 1/3 of the electricity for personal purposes and 2/3 for farming. Turbotax for 2010 tax year Under these circumstances, you can deduct $1,000 (2/3 of $1,500) of your electricity expense as a farm business expense. Turbotax for 2010 tax year Reasonable allocation. Turbotax for 2010 tax year   It is not always easy to determine the business and nonbusiness parts of an expense. Turbotax for 2010 tax year There is no method of allocation that applies to all mixed expenses. Turbotax for 2010 tax year Any reasonable allocation is acceptable. Turbotax for 2010 tax year What is reasonable depends on the circumstances in each case. Turbotax for 2010 tax year Prepaid Farm Supplies Prepaid farm supplies include the following items if paid for during the year. Turbotax for 2010 tax year Feed, seed, fertilizer, and similar farm supplies not used or consumed during the year, but not including farm supplies that you would have consumed during the year if not for a fire, storm, flood, other casualty, disease, or drought. Turbotax for 2010 tax year Poultry (including egg-laying hens and baby chicks) bought for use (or for both use and resale) in your farm business. Turbotax for 2010 tax year However, include only the amount that would be deductible in the following year if you had capitalized the cost and deducted it ratably over the lesser of 12 months or the useful life of the poultry. Turbotax for 2010 tax year Poultry bought for resale and not resold during the year. Turbotax for 2010 tax year Deduction limit. Turbotax for 2010 tax year   If you use the cash method of accounting to report your income and expenses, your deduction for prepaid farm supplies in the year you pay for them may be limited to 50% of your other deductible farm expenses for the year (all Schedule F deductions except prepaid farm supplies). Turbotax for 2010 tax year This limit does not apply if you meet one of the exceptions described later. Turbotax for 2010 tax year See Chapter 2 for a discussion of the cash method of accounting. Turbotax for 2010 tax year   If the limit applies, you can deduct the excess cost of farm supplies other than poultry in the year you use or consume the supplies. Turbotax for 2010 tax year The excess cost of poultry bought for use (or for both use and resale) in your farm business is deductible in the year following the year you pay for it. Turbotax for 2010 tax year The excess cost of poultry bought for resale is deductible in the year you sell or otherwise dispose of that poultry. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year You may not qualify for the exception described next. Turbotax for 2010 tax year During 2013, you bought fertilizer ($4,000), feed ($1,000), and seed ($500) for use on your farm in the following year. Turbotax for 2010 tax year Your total prepaid farm supplies expense for 2013 is $5,500. Turbotax for 2010 tax year Your other deductible farm expenses totaled $10,000 for 2013. Turbotax for 2010 tax year Therefore, your deduction for prepaid farm supplies cannot be more than $5,000 (50% of $10,000) for 2013. Turbotax for 2010 tax year The excess prepaid farm supplies expense of $500 ($5,500 − $5,000) is deductible in a later tax year when you use or consume the supplies. Turbotax for 2010 tax year Exceptions. Turbotax for 2010 tax year   This limit on the deduction for prepaid farm supplies expense does not apply if you are a farm-related taxpayer and either of the following apply. Turbotax for 2010 tax year Your prepaid farm supplies expense is more than 50% of your other deductible farm expenses because of a change in business operations caused by unusual circumstances. Turbotax for 2010 tax year Your total prepaid farm supplies expense for the preceding 3 tax years is less than 50% of your total other deductible farm expenses for those 3 tax years. Turbotax for 2010 tax year   You are a farm-related taxpayer if any of the following tests apply. Turbotax for 2010 tax year Your main home is on a farm. Turbotax for 2010 tax year Your principal business is farming. Turbotax for 2010 tax year A member of your family meets (1) or (2). Turbotax for 2010 tax year For this purpose, your family includes your brothers and sisters, half-brothers and half-sisters, spouse, parents, grandparents, children, grandchildren, and aunts and uncles and their children. Turbotax for 2010 tax year    Whether or not the deduction limit for prepaid farm supplies applies, your expenses for prepaid livestock feed may be subject to the rules for advance payment of livestock feed, discussed next. Turbotax for 2010 tax year Prepaid Livestock Feed If you report your income and expenses under the cash method of accounting, you cannot deduct in the year paid the cost of feed your livestock will consume in a later year unless you meet all the following tests. Turbotax for 2010 tax year The payment is for the purchase of feed rather than a deposit. Turbotax for 2010 tax year The prepayment has a business purpose and is not merely for tax avoidance. Turbotax for 2010 tax year Deducting the prepayment does not result in a material distortion of your income. Turbotax for 2010 tax year If you meet all three tests, you can deduct the prepaid feed, subject to the limit on prepaid farm supplies discussed earlier. Turbotax for 2010 tax year If you fail any of these tests, you can deduct the prepaid feed only in the year it is consumed. Turbotax for 2010 tax year This rule does not apply to the purchase of commodity futures contracts. Turbotax for 2010 tax year Payment for the purchase of feed. Turbotax for 2010 tax year   Whether a payment is for the purchase of feed or a deposit depends on the facts and circumstances in each case. Turbotax for 2010 tax year It is for the purchase of feed if you can show you made it under a binding commitment to accept delivery of a specific quantity of feed at a fixed price and you are not entitled, by contract or business custom, to a refund or repurchase. Turbotax for 2010 tax year   The following are some factors that show a payment is a deposit rather than for the purchase of feed. Turbotax for 2010 tax year The absence of specific quantity terms. Turbotax for 2010 tax year The right to a refund of any unapplied payment credit at the end of the contract. Turbotax for 2010 tax year The seller's treatment of the payment as a deposit. Turbotax for 2010 tax year The right to substitute other goods or products for those specified in the contract. Turbotax for 2010 tax year   A provision permitting substitution of ingredients to vary the particular feed mix to meet your livestock's current diet requirements will not suggest a deposit. Turbotax for 2010 tax year Further, a price adjustment to reflect market value at the date of delivery is not, by itself, proof of a deposit. Turbotax for 2010 tax year Business purpose. Turbotax for 2010 tax year   The prepayment has a business purpose only if you have a reasonable expectation of receiving some business benefit from prepaying the cost of livestock feed. Turbotax for 2010 tax year The following are some examples of business benefits. Turbotax for 2010 tax year Fixing maximum prices and securing an assured feed supply. Turbotax for 2010 tax year Securing preferential treatment in anticipation of a feed shortage. Turbotax for 2010 tax year   Other factors considered in determining the existence of a business purpose are whether the prepayment was a condition imposed by the seller and whether that condition was meaningful. Turbotax for 2010 tax year No material distortion of income. Turbotax for 2010 tax year   The following are some factors considered in determining whether deducting prepaid livestock feed materially distorts income. Turbotax for 2010 tax year Your customary business practice in conducting your livestock operations. Turbotax for 2010 tax year The expense in relation to past purchases. Turbotax for 2010 tax year The time of year you made the purchase. Turbotax for 2010 tax year The expense in relation to your income for the year. Turbotax for 2010 tax year Labor Hired You can deduct reasonable wages paid for regular farm labor, piecework, contract labor, and other forms of labor hired to perform your farming operations. Turbotax for 2010 tax year You can pay wages in cash or in noncash items such as inventory, capital assets, or assets used in your business. Turbotax for 2010 tax year The cost of boarding farm labor is a deductible labor cost. Turbotax for 2010 tax year Other deductible costs you incur for farm labor include health insurance, workers' compensation insurance, and other benefits. Turbotax for 2010 tax year If you must withhold social security, Medicare, and income taxes from your employees' cash wages, you can still deduct the full amount of wages before withholding. Turbotax for 2010 tax year See chapter 13 for more information on employment taxes. Turbotax for 2010 tax year Also, deduct the employer's share of the social security and Medicare taxes you must pay on your employees' wages as a farm business expense on Schedule F, line 29. Turbotax for 2010 tax year See Taxes , later. Turbotax for 2010 tax year Property for services. Turbotax for 2010 tax year   If you transfer property to an employee in payment for services, you can deduct as wages paid the fair market value of the property on the date of transfer. Turbotax for 2010 tax year If the employee pays you anything for the property, deduct as wages the fair market value of the property minus the payment by the employee for the property. Turbotax for 2010 tax year   Treat the wages deducted as an amount received for the property. Turbotax for 2010 tax year You may have a gain or loss to report if the property's adjusted basis on the date of transfer is different from its fair market value. Turbotax for 2010 tax year Any gain or loss has the same character the exchanged property had in your hands. Turbotax for 2010 tax year For more information, see chapter 8. Turbotax for 2010 tax year Child as an employee. Turbotax for 2010 tax year   You can deduct reasonable wages or other compensation you pay to your child for doing farmwork if a true employer-employee relationship exists between you and your child. Turbotax for 2010 tax year Include these wages in the child's income. Turbotax for 2010 tax year The child may have to file an income tax return. Turbotax for 2010 tax year These wages may also be subject to social security and Medicare taxes if your child is age 18 or older. Turbotax for 2010 tax year For more information, see Family Employees in chapter 13. Turbotax for 2010 tax year    A Form W-2, Wage and Tax Statement, should be issued to the child employee. Turbotax for 2010 tax year   The fact that your child spends the wages to buy clothes or other necessities you normally furnish does not prevent you from deducting your child's wages as a farm expense. Turbotax for 2010 tax year The amount of wages paid to the child could cause a loss of the dependency exemption depending on how the child uses the money. Turbotax for 2010 tax year Spouse as an employee. Turbotax for 2010 tax year   You can deduct reasonable wages or other compensation you pay to your spouse if a true employer-employee relationship exists between you and your spouse. Turbotax for 2010 tax year Wages you pay to your spouse are subject to social security and Medicare taxes. Turbotax for 2010 tax year For more information, see Family Employees in chapter 13. Turbotax for 2010 tax year Nondeductible Pay You cannot deduct wages paid for certain household work, construction work, and maintenance of your home. Turbotax for 2010 tax year However, those wages may be subject to the employment taxes discussed in chapter 13. Turbotax for 2010 tax year Household workers. Turbotax for 2010 tax year   Do not deduct amounts paid to persons engaged in household work, except to the extent their services are used in boarding or otherwise caring for farm laborers. Turbotax for 2010 tax year Construction labor. Turbotax for 2010 tax year   Do not deduct wages paid to hired help for the construction of new buildings or other improvements. Turbotax for 2010 tax year These wages are part of the cost of the building or other improvement. Turbotax for 2010 tax year You must capitalize them. Turbotax for 2010 tax year Maintaining your home. Turbotax for 2010 tax year   If your farm employee spends time maintaining or repairing your home, the wages and employment taxes you pay for that work are nondeductible personal expenses. Turbotax for 2010 tax year For example, assume you have a farm employee for the entire tax year and the employee spends 5% of the time maintaining your home. Turbotax for 2010 tax year The employee devotes the remaining time to work on your farm. Turbotax for 2010 tax year You cannot deduct 5% of the wages and employment taxes you pay for that employee. Turbotax for 2010 tax year Employment Credits Reduce your deduction for wages by the amount of any employment credits you claim such as the work opportunity credit for qualified tax-exempt organizations hiring qualified veterans (Form 5884-C). Turbotax for 2010 tax year Repairs and Maintenance You can deduct most expenses for the repair and maintenance of your farm property. Turbotax for 2010 tax year Common items of repair and maintenance are repainting, replacing shingles and supports on farm buildings, and periodic or routine maintenance of trucks, tractors, and other farm machinery. Turbotax for 2010 tax year However, repairs to, or overhauls of, depreciable property that substantially prolong the life of the property, increase its value, or adapt it to a different use are capital expenses. Turbotax for 2010 tax year For example, if you repair the barn roof, the cost is deductible. Turbotax for 2010 tax year But if you replace the roof, it is a capital expense. Turbotax for 2010 tax year For more information, see Capital Expenses , later. Turbotax for 2010 tax year Interest You can deduct as a farm business expense interest paid on farm mortgages and other obligations you incur in your farm business. Turbotax for 2010 tax year Cash method. Turbotax for 2010 tax year   If you use the cash method of accounting, you can generally deduct interest paid during the tax year. Turbotax for 2010 tax year You cannot deduct interest paid with funds received from the original lender through another loan, advance, or other arrangement similar to a loan. Turbotax for 2010 tax year You can, however, deduct the interest when you start making payments on the new loan. Turbotax for 2010 tax year For more information, see Cash Method in chapter 2. Turbotax for 2010 tax year Prepaid interest. Turbotax for 2010 tax year   Under the cash method, you generally cannot deduct any interest paid before the year it is due. Turbotax for 2010 tax year Interest paid in advance may be deducted only in the tax year in which it is due. Turbotax for 2010 tax year Accrual method. Turbotax for 2010 tax year   If you use an accrual method of accounting, you can deduct only interest that has accrued during the tax year. Turbotax for 2010 tax year However, you cannot deduct interest owed to a related person who uses the cash method until payment is made and the interest is includible in the gross income of that person. Turbotax for 2010 tax year For more information, see Accrual Method in chapter 2. Turbotax for 2010 tax year Allocation of interest. Turbotax for 2010 tax year   If you use the proceeds of a loan for more than one purpose, you must allocate the interest on that loan to each use. Turbotax for 2010 tax year Allocate the interest to the following categories. Turbotax for 2010 tax year Trade or business interest. Turbotax for 2010 tax year Passive activity interest. Turbotax for 2010 tax year Investment interest. Turbotax for 2010 tax year Portfolio interest. Turbotax for 2010 tax year Personal interest. Turbotax for 2010 tax year   You generally allocate interest on a loan the same way you allocate the loan proceeds. Turbotax for 2010 tax year You allocate loan proceeds by tracing disbursements to specific uses. Turbotax for 2010 tax year The easiest way to trace disbursements to specific uses is to keep the proceeds of a particular loan separate from any other funds. Turbotax for 2010 tax year Secured loan. Turbotax for 2010 tax year   The allocation of loan proceeds and the related interest is generally not affected by the use of property that secures the loan. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year You secure a loan with property used in your farming business. Turbotax for 2010 tax year You use the loan proceeds to buy a car for personal use. Turbotax for 2010 tax year You must allocate interest expense on the loan to personal use (purchase of the car) even though the loan is secured by farm business property. Turbotax for 2010 tax year If the property that secures the loan is your home, you generally do not allocate the loan proceeds or the related interest. Turbotax for 2010 tax year The interest is usually deductible as qualified home mortgage interest, regardless of how the loan proceeds are used. Turbotax for 2010 tax year However, you can choose to treat the loan as not secured by your home. Turbotax for 2010 tax year For more information, see Publication 936. Turbotax for 2010 tax year Allocation period. Turbotax for 2010 tax year   The period for which a loan is allocated to a particular use begins on the date the proceeds are used and ends on the earlier of the following dates. Turbotax for 2010 tax year The date the loan is repaid. Turbotax for 2010 tax year The date the loan is reallocated to another use. Turbotax for 2010 tax year More information. Turbotax for 2010 tax year   For more information on interest, see chapter 4 in Publication 535. Turbotax for 2010 tax year Breeding Fees You can deduct breeding fees as a farm business expense. Turbotax for 2010 tax year However, if you use an accrual method of accounting, you must capitalize breeding fees and allocate them to the cost basis of the calf, foal, etc. Turbotax for 2010 tax year For more information on who must use an accrual method of accounting, see Accrual Method Required under Accounting Methods in chapter 2. Turbotax for 2010 tax year Fertilizer and Lime You can deduct in the year paid or incurred the cost of fertilizer, lime, and other materials applied to farmland to enrich, neutralize, or condition it if the benefits last a year or less. Turbotax for 2010 tax year You can also deduct the cost of applying these materials in the year you pay or incur it. Turbotax for 2010 tax year However, see Prepaid Farm Supplies , earlier, for a rule that may limit your deduction for these materials. Turbotax for 2010 tax year If the benefits of the fertilizer, lime, or other materials last substantially more than one year, you generally capitalize their cost and deduct a part each year the benefits last. Turbotax for 2010 tax year However, you can choose to deduct these expenses in the year paid or incurred. Turbotax for 2010 tax year If you make this choice, you will need IRS approval if you later decide to capitalize the cost of previously deducted items. Turbotax for 2010 tax year If you sell farmland on which fertilizer or lime has been applied and if the selling price of the land includes part or all of the cost of the fertilizer or lime, you report the sale amount attributable to the fertilizer or lime as ordinary income. Turbotax for 2010 tax year Farmland, for these purposes, is land used for producing crops, fruits, or other agricultural products or for sustaining livestock. Turbotax for 2010 tax year It does not include land you have never used previously for producing crops or sustaining livestock. Turbotax for 2010 tax year You cannot deduct initial land preparation costs. Turbotax for 2010 tax year (See Capital Expenses , later. Turbotax for 2010 tax year ) Include government payments you receive for lime or fertilizer in income. Turbotax for 2010 tax year See Fertilizer and Lime under Agricultural Program Payments in chapter 3. Turbotax for 2010 tax year Taxes You can deduct as a farm business expense the real estate and personal property taxes on farm business assets, such as farm equipment, animals, farmland, and farm buildings. Turbotax for 2010 tax year You also can deduct the social security and Medicare taxes you pay to match the amount withheld from the wages of farm employees and any federal unemployment tax you pay. Turbotax for 2010 tax year For information on employment taxes, see chapter 13. Turbotax for 2010 tax year Allocation of taxes. Turbotax for 2010 tax year   The taxes on the part of your farm you use as your home (including the furnishings and surrounding land not used for farming) are nonbusiness taxes. Turbotax for 2010 tax year You may be able to deduct these nonbusiness taxes as itemized deductions on Schedule A (Form 1040). Turbotax for 2010 tax year To determine the nonbusiness part, allocate the taxes between the farm assets and nonbusiness assets. Turbotax for 2010 tax year The allocation can be done from the assessed valuations. Turbotax for 2010 tax year If your tax statement does not show the assessed valuations, you can usually get them from the tax assessor. Turbotax for 2010 tax year State and local general sales taxes. Turbotax for 2010 tax year   State and local general sales taxes on nondepreciable farm business expense items are deductible as part of the cost of those items. Turbotax for 2010 tax year Include state and local general sales taxes imposed on the purchase of assets for use in your farm business as part of the cost you depreciate. Turbotax for 2010 tax year Also treat the taxes as part of your cost if they are imposed on the seller and passed on to you. Turbotax for 2010 tax year State and federal income taxes. Turbotax for 2010 tax year   Individuals cannot deduct state and federal income taxes as farm business expenses. Turbotax for 2010 tax year Individuals can deduct state and local income taxes only as an itemized deduction on Schedule A (Form 1040). Turbotax for 2010 tax year However, you cannot deduct federal income tax. Turbotax for 2010 tax year Highway use tax. Turbotax for 2010 tax year   You can deduct the federal use tax on highway motor vehicles paid on a truck or truck tractor used in your farm business. Turbotax for 2010 tax year For information on the tax itself, including information on vehicles subject to the tax, see the Instructions for Form 2290, Heavy Highway Vehicle Use Tax Return. Turbotax for 2010 tax year Self-employment tax deduction. Turbotax for 2010 tax year   You can deduct as an adjustment to income on Form 1040 one-half of your self-employment tax in figuring your adjusted gross income. Turbotax for 2010 tax year For more information, see chapter 12. Turbotax for 2010 tax year Insurance You generally can deduct the ordinary and necessary cost of insurance for your farm business as a business expense. Turbotax for 2010 tax year This includes premiums you pay for the following types of insurance. Turbotax for 2010 tax year Fire, storm, crop, theft, liability, and other insurance on farm business assets. Turbotax for 2010 tax year Health and accident insurance on your farm employees. Turbotax for 2010 tax year Workers' compensation insurance set by state law that covers any claims for job-related bodily injuries or diseases suffered by employees on your farm, regardless of fault. Turbotax for 2010 tax year Business interruption insurance. Turbotax for 2010 tax year State unemployment insurance on your farm employees (deductible as taxes if they are considered taxes under state law). Turbotax for 2010 tax year Insurance to secure a loan. Turbotax for 2010 tax year   If you take out a policy on your life or on the life of another person with a financial interest in your farm business to get or protect a business loan, you cannot deduct the premiums as a business expense. Turbotax for 2010 tax year In the event of death, the proceeds of the policy are not taxed as income even if they are used to liquidate the debt. Turbotax for 2010 tax year Advance premiums. Turbotax for 2010 tax year   Deduct advance payments of insurance premiums only in the year to which they apply, regardless of your accounting method. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year On June 28, 2013, you paid a premium of $3,000 for fire insurance on your barn. Turbotax for 2010 tax year The policy will cover a period of 3 years beginning on July 1, 2013. Turbotax for 2010 tax year Only the cost for the 6 months in 2013 is deductible as an insurance expense on your 2013 calendar year tax return. Turbotax for 2010 tax year Deduct $500, which is the premium for 6 months of the 36-month premium period, or 6/36 of $3,000. Turbotax for 2010 tax year In both 2014 and 2015, deduct $1,000 (12/36 of $3,000). Turbotax for 2010 tax year Deduct the remaining $500 in 2016. Turbotax for 2010 tax year Had the policy been effective on January 1, 2013, the deductible expense would have been $1,000 for each of the years 2013, 2014, and 2015, based on one-third of the premium used each year. Turbotax for 2010 tax year Business interruption insurance. Turbotax for 2010 tax year   Use and occupancy and business interruption insurance premiums are deductible as a business expense. Turbotax for 2010 tax year This insurance pays for lost profits if your business is shut down due to a fire or other cause. Turbotax for 2010 tax year Report any proceeds in full on Schedule F, Part I. Turbotax for 2010 tax year Self-employed health insurance deduction. Turbotax for 2010 tax year   If you are self-employed, you can deduct as an adjustment to income on Form 1040 your payments for medical, dental, and qualified long-term care insurance coverage for yourself, your spouse, and your dependents when figuring your adjusted gross income on your Form 1040. Turbotax for 2010 tax year Effective March 30, 2010, the insurance can also cover any child of yours under age 27 at the end of 2013, even if the child was not your dependent. Turbotax for 2010 tax year Generally, this deduction cannot be more than the net profit from the business under which the plan was established. Turbotax for 2010 tax year   If you or your spouse is also an employee of another person, you cannot take the deduction for any month in which you are eligible to participate in a subsidized health plan maintained by your employer or your spouse's employer. Turbotax for 2010 tax year   Generally, use the Self-Employed Health Insurance Deduction Worksheet in the Instructions for Form 1040 to figure your deduction. Turbotax for 2010 tax year Include the remaining part of the insurance payment in your medical expenses on Schedule A (Form 1040) if you itemize your deductions. Turbotax for 2010 tax year   For more information, see Deductible Premiums in Publication 535, chapter 6. Turbotax for 2010 tax year Rent and Leasing If you lease property for use in your farm business, you can generally deduct the rent you pay on Schedule F. Turbotax for 2010 tax year However, you cannot deduct rent you pay in crop shares if you deduct the cost of raising the crops as farm expenses. Turbotax for 2010 tax year Advance payments. Turbotax for 2010 tax year   Deduct advance payments of rent only in the year to which they apply, regardless of your accounting method. Turbotax for 2010 tax year Farm home. Turbotax for 2010 tax year   If you rent a farm, do not deduct the part of the rental expense that represents the fair rental value of the farm home in which you live. Turbotax for 2010 tax year Lease or Purchase If you lease a farm building or equipment, you must determine whether or not the agreement must be treated as a conditional sales contract rather than a lease. Turbotax for 2010 tax year If the agreement is treated as a conditional sales contract, the payments under the agreement (so far as they do not represent interest or other charges) are payments for the purchase of the property. Turbotax for 2010 tax year Do not deduct these payments as rent, but capitalize the cost of the property and recover this cost through depreciation. Turbotax for 2010 tax year Conditional sales contract. Turbotax for 2010 tax year   Whether an agreement is a conditional sales contract depends on the intent of the parties. Turbotax for 2010 tax year Determine intent based on the provisions of the agreement and the facts and circumstances that exist when you make the agreement. Turbotax for 2010 tax year No single test, or special combination of tests, always applies. Turbotax for 2010 tax year However, in general, an agreement may be considered a conditional sales contract rather than a lease if any of the following is true. Turbotax for 2010 tax year The agreement applies part of each payment toward an equity interest you will receive. Turbotax for 2010 tax year You get title to the property after you make a stated amount of required payments. Turbotax for 2010 tax year The amount you must pay to use the property for a short time is a large part of the amount you would pay to get title to the property. Turbotax for 2010 tax year You pay much more than the current fair rental value of the property. Turbotax for 2010 tax year You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. Turbotax for 2010 tax year Determine this value when you make the agreement. Turbotax for 2010 tax year You have an option to buy the property at a nominal price compared to the total amount you have to pay under the agreement. Turbotax for 2010 tax year The agreement designates part of the payments as interest, or part of the payments can be easily recognized as interest. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year You lease new farm equipment from a dealer who both sells and leases. Turbotax for 2010 tax year The agreement includes an option to purchase the equipment for a specified price. Turbotax for 2010 tax year The lease payments and the specified option price equal the sales price of the equipment plus interest. Turbotax for 2010 tax year Under the agreement, you are responsible for maintenance, repairs, and the risk of loss. Turbotax for 2010 tax year For federal income tax purposes, the agreement is a conditional sales contract. Turbotax for 2010 tax year You cannot deduct any of the lease payments as rent. Turbotax for 2010 tax year You can deduct interest, repairs, insurance, depreciation, and other expenses related to the equipment. Turbotax for 2010 tax year Motor vehicle leases. Turbotax for 2010 tax year   Special rules apply to lease agreements that have a terminal rental adjustment clause. Turbotax for 2010 tax year In general, this is a clause that provides for a rental price adjustment based on the amount the lessor is able to sell the vehicle for at the end of the lease. Turbotax for 2010 tax year If your rental agreement contains a terminal rental adjustment clause, treat the agreement as a lease if the agreement otherwise qualifies as a lease. Turbotax for 2010 tax year For more information, see Internal Revenue Code (IRC) section 7701(h). Turbotax for 2010 tax year Leveraged leases. Turbotax for 2010 tax year   Special rules apply to leveraged leases of equipment (arrangements in which the equipment is financed by a nonrecourse loan from a third party). Turbotax for 2010 tax year For more information, see Publication 535, chapter 3, and Revenue Procedure 2001-28, which begins on page 1156 of Internal Revenue Bulletin 2001-19 at www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/pub/irs-irbs/irb01-19. Turbotax for 2010 tax year pdf. Turbotax for 2010 tax year Depreciation If property you acquire to use in your farm business is expected to last more than one year, you generally cannot deduct the entire cost in the year you acquire it. Turbotax for 2010 tax year You must recover the cost over more than one year and deduct part of it each year on Schedule F as depreciation or amortization. Turbotax for 2010 tax year However, you can choose to deduct part or all of the cost of certain qualifying property, up to a limit, as a section 179 deduction in the year you place it in service. Turbotax for 2010 tax year Depreciation, amortization, and the section 179 deduction are discussed in chapter 7. Turbotax for 2010 tax year Business Use of Your Home You can deduct expenses for the business use of your home if you use part of your home exclusively and regularly: As the principal place of business for any trade or business in which you engage, As a place to meet or deal with patients, clients, or customers in the normal course of your trade or business, or In connection with your trade or business, if you are using a separate structure that is not attached to your home. Turbotax for 2010 tax year Your home office will qualify as your principal place of business for deducting expenses for its use if you meet both of the following requirements. Turbotax for 2010 tax year You use it exclusively and regularly for the administrative or management activities of your trade or business. Turbotax for 2010 tax year You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Turbotax for 2010 tax year If you use part of your home for business, you must divide the expenses of operating your home between personal and business use. Turbotax for 2010 tax year The IRS now provides a simplified method to determine your expenses for business use of your home. Turbotax for 2010 tax year For more information, see Schedule C (Form 1040), Part II, and its instructions. Turbotax for 2010 tax year Deduction limit. Turbotax for 2010 tax year   If your gross income from farming equals or exceeds your total farm expenses (including expenses for the business use of your home), you can deduct all your farm expenses. Turbotax for 2010 tax year But if your gross income from farming is less than your total farm expenses, your deduction for certain expenses for the use of your home in your farming business is limited. Turbotax for 2010 tax year   Your deduction for otherwise nondeductible expenses, such as utilities, insurance, and depreciation (with depreciation taken last), cannot be more than the gross income from farming minus the following expenses. Turbotax for 2010 tax year The business part of expenses you could deduct even if you did not use your home for business (such as deductible mortgage interest, real estate taxes, and casualty and theft losses). Turbotax for 2010 tax year Farm expenses other than expenses that relate to the use of your home. Turbotax for 2010 tax year If you are self-employed, do not include your deduction for half of your self-employment tax. Turbotax for 2010 tax year   Deductions over the current year's limit can be carried over to your next tax year. Turbotax for 2010 tax year They are subject to the deduction limit for the next tax year. Turbotax for 2010 tax year More information. Turbotax for 2010 tax year   See Publication 587 for more information on deducting expenses for the business use of your home. Turbotax for 2010 tax year Telephone expense. Turbotax for 2010 tax year   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. Turbotax for 2010 tax year However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for your farm business, are deductible business expenses. Turbotax for 2010 tax year Cell phone charges for calls relating to your farm business are deductible. Turbotax for 2010 tax year If the cell phone you use for your farm business is part of a family cell phone plan, you must allocate and deduct only the portion of the charges attributable to farm business calls. Turbotax for 2010 tax year Truck and Car Expenses You can deduct the actual cost of operating a truck or car in your farm business. Turbotax for 2010 tax year Only expenses for business use are deductible. Turbotax for 2010 tax year These include such items as gasoline, oil, repairs, license tags, insurance, and depreciation (subject to certain limits). Turbotax for 2010 tax year Standard mileage rate. Turbotax for 2010 tax year   Instead of using actual costs, under certain conditions you can use the standard mileage rate. Turbotax for 2010 tax year The standard mileage rate for each mile of business use is 56. Turbotax for 2010 tax year 5 cents in 2013. Turbotax for 2010 tax year You can use the standard mileage rate for a car or a light truck, such as a van, pickup, or panel truck, you own or lease. Turbotax for 2010 tax year   You cannot use the standard mileage rate if you operate five or more cars or light trucks at the same time. Turbotax for 2010 tax year You are not using five or more vehicles at the same time if you alternate using the vehicles (you use them at different times) for business. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year Maureen owns a car and four pickup trucks that are used in her farm business. Turbotax for 2010 tax year Her farm employees use the trucks and she uses the car for business. Turbotax for 2010 tax year Maureen cannot use the standard mileage rate for the car or the trucks. Turbotax for 2010 tax year This is because all five vehicles are used in Maureen's farm business at the same time. Turbotax for 2010 tax year She must use actual expenses for all vehicles. Turbotax for 2010 tax year Business use percentage. Turbotax for 2010 tax year   You can claim 75% of the use of a car or light truck as business use without any records if you used the vehicle during most of the normal business day directly in connection with the business of farming. Turbotax for 2010 tax year You choose this method of substantiating business use the first year the vehicle is placed in service. Turbotax for 2010 tax year Once you make this choice, you may not change to another method later. Turbotax for 2010 tax year The following are uses directly connected with the business of farming. Turbotax for 2010 tax year Cultivating land. Turbotax for 2010 tax year Raising or harvesting any agricultural or horticultural commodity. Turbotax for 2010 tax year Raising, shearing, feeding, caring for, training, and managing animals. Turbotax for 2010 tax year Driving to the feed or supply store. Turbotax for 2010 tax year   If you keep records and they show that your business use was more than 75%, you may be able to claim more. Turbotax for 2010 tax year See Recordkeeping requirements under Travel Expenses , below. Turbotax for 2010 tax year More information. Turbotax for 2010 tax year   For more information on deductible truck and car expenses, see Publication 463, chapter 4. Turbotax for 2010 tax year If you pay your employees for the use of their truck or car in your farm business, see Reimbursements to employees under Travel Expenses next. Turbotax for 2010 tax year Travel Expenses You can deduct ordinary and necessary expenses you incur while traveling away from home for your farm business. Turbotax for 2010 tax year You cannot deduct lavish or extravagant expenses. Turbotax for 2010 tax year Usually, the location of your farm business is considered your home for tax purposes. Turbotax for 2010 tax year You are traveling away from home if: Your duties require you to be absent from your farm substantially longer than an ordinary work day, and You need to get sleep or rest to meet the demands of your work while away from home. Turbotax for 2010 tax year If you meet these requirements and can prove the time, place, and business purpose of your travel, you can deduct your ordinary and necessary travel expenses. Turbotax for 2010 tax year The following are some types of deductible travel expenses. Turbotax for 2010 tax year Air, rail, bus, and car transportation; Meals and lodging; Dry cleaning and laundry; Telephone and fax; Transportation between your hotel and your temporary work or business meeting location; and Tips for any of the above expenses. Turbotax for 2010 tax year Meals. Turbotax for 2010 tax year   You ordinarily can deduct only 50% of your business-related meals expenses. Turbotax for 2010 tax year You can deduct the cost of your meals while traveling on business only if your business trip is overnight or long enough to require you to stop for sleep or rest to properly perform your duties. Turbotax for 2010 tax year You cannot deduct any of the cost of meals if it is not necessary for you to rest, unless you meet the rules for business entertainment. Turbotax for 2010 tax year For information on entertainment expenses, see Publication 463, chapter 2. Turbotax for 2010 tax year   The expense of a meal includes amounts you spend for your food, beverages, taxes, and tips relating to the meal. Turbotax for 2010 tax year You can deduct either 50% of the actual cost or 50% of a standard meal allowance that covers your daily meal and incidental expenses. Turbotax for 2010 tax year    Recordkeeping requirements. Turbotax for 2010 tax year You must be able to prove your deductions for travel by adequate records or other evidence that will support your own statement. Turbotax for 2010 tax year Estimates or approximations do not qualify as proof of an expense. Turbotax for 2010 tax year   You should keep an account book or similar record, supported by adequate documentary evidence, such as receipts, that together support each element of an expense. Turbotax for 2010 tax year Generally, it is best to record the expense and get documentation of it at the time you pay it. Turbotax for 2010 tax year   If you choose to deduct a standard meal allowance rather than the actual expense, you do not have to keep records to prove amounts spent for meals and incidental items. Turbotax for 2010 tax year However, you must still keep records to prove the actual amount of other travel expenses, and the time, place, and business purpose of your travel. Turbotax for 2010 tax year More information. Turbotax for 2010 tax year   For detailed information on travel, recordkeeping, and the standard meal allowance, see Publication 463. Turbotax for 2010 tax year Reimbursements to employees. Turbotax for 2010 tax year   You generally can deduct reimbursements you pay to your employees for travel and transportation expenses they incur in the conduct of your business. Turbotax for 2010 tax year Employees may be reimbursed under an accountable or nonaccountable plan. Turbotax for 2010 tax year Under an accountable plan, the employee must provide evidence of expenses. Turbotax for 2010 tax year Under a nonaccountable plan, no evidence of expenses is required. Turbotax for 2010 tax year If you reimburse expenses under an accountable plan, deduct them as travel and transportation expenses. Turbotax for 2010 tax year If you reimburse expenses under a nonaccountable plan, you must report the reimbursements as wages on Form W-2 and deduct them as wages. Turbotax for 2010 tax year For more information, see Publication 535, chapter 11. Turbotax for 2010 tax year Marketing Quota Penalties You can deduct as Other expenses on Schedule F penalties you pay for marketing crops in excess of farm marketing quotas. Turbotax for 2010 tax year However, if you do not pay the penalty, but instead the purchaser of your crop deducts it from the payment to you, include in gross income only the amount you received. Turbotax for 2010 tax year Do not take a separate deduction for the penalty. Turbotax for 2010 tax year Tenant House Expenses You can deduct the costs of maintaining houses and their furnishings for tenants or hired help as farm business expenses. Turbotax for 2010 tax year These costs include repairs, utilities, insurance, and depreciation. Turbotax for 2010 tax year The value of a dwelling you furnish to a tenant under the usual tenant-farmer arrangement is not taxable income to the tenant. Turbotax for 2010 tax year Items Purchased for Resale If you use the cash method of accounting, you ordinarily deduct the cost of livestock and other items purchased for resale only in the year of sale. Turbotax for 2010 tax year You deduct this cost, including freight charges for transporting the livestock to the farm, on Schedule F, Part I. Turbotax for 2010 tax year However, see Chickens, seeds, and young plants , below. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year You use the cash method of accounting. Turbotax for 2010 tax year In 2013, you buy 50 steers you will sell in 2014. Turbotax for 2010 tax year You cannot deduct the cost of the steers on your 2013 tax return. Turbotax for 2010 tax year You deduct their cost on your 2014 Schedule F, Part I. Turbotax for 2010 tax year Chickens, seeds, and young plants. Turbotax for 2010 tax year   If you are a cash method farmer, you can deduct the cost of hens and baby chicks bought for commercial egg production, or for raising and resale, as an expense on Schedule F, Part I, in the year paid if you do it consistently and it does not distort income. Turbotax for 2010 tax year You also can deduct the cost of seeds and young plants bought for further development and cultivation before sale as an expense on Schedule F, Part I, when paid if you do this consistently and you do not figure your income on the crop method. Turbotax for 2010 tax year However, see Prepaid Farm Supplies , earlier, for a rule that may limit your deduction for these items. Turbotax for 2010 tax year   If you deduct the cost of chickens, seeds, and young plants as an expense, report their entire selling price as income. Turbotax for 2010 tax year You cannot also deduct the cost from the selling price. Turbotax for 2010 tax year   You cannot deduct the cost of seeds and young plants for Christmas trees and timber as an expense. Turbotax for 2010 tax year Deduct the cost of these seeds and plants through depletion allowances. Turbotax for 2010 tax year For more information, see Depletion in chapter 7. Turbotax for 2010 tax year   The cost of chickens and plants used as food for your family is never deductible. Turbotax for 2010 tax year   Capitalize the cost of plants with a preproductive period of more than 2 years, unless you can elect out of the uniform capitalization rules. Turbotax for 2010 tax year These rules are discussed in chapter 6. Turbotax for 2010 tax year Example. Turbotax for 2010 tax year You use the cash method of accounting. Turbotax for 2010 tax year In 2013, you buy 500 baby chicks to raise for resale in 2014. Turbotax for 2010 tax year You also buy 50 bushels of winter wheat seed in 2013 that you sow in the fall. Turbotax for 2010 tax year Unless you previously adopted the method of deducting these costs in the year you sell the chickens or the harvested crops, you can deduct the cost of both the baby chicks and the seed wheat in 2013. Turbotax for 2010 tax year Election to use crop method. Turbotax for 2010 tax year   If you use the crop method, you can delay deducting the cost of seeds and young plants until you sell them. Turbotax for 2010 tax year You must get IRS approval to use the crop method. Turbotax for 2010 tax year If you follow this method, deduct the cost from the selling price to determine your profit on Schedule F, Part I. Turbotax for 2010 tax year For more information, see Crop method under Special Methods of Accounting in chapter 2. Turbotax for 2010 tax year Choosing a method. Turbotax for 2010 tax year   You can adopt either the crop method or the cash method for deducting the cost in the first year you buy egg-laying hens, pullets, chicks, or seeds and young plants. Turbotax for 2010 tax year   Although you must use the same method for egg-laying hens, pullets, and chicks, you can use a different method for seeds and young plants. Turbotax for 2010 tax year Once you use a particular method for any of these items, use it for those items until you get IRS approval to change your method. Turbotax for 2010 tax year For more information, see Change in Accounting Method in chapter 2. Turbotax for 2010 tax year Other Expenses The following list, while not all-inclusive, shows some expenses you can deduct as other farm expenses on Schedule F, Part II. Turbotax for 2010 tax year These expenses must be for business purposes and  (1) paid, if you use the cash method of accounting, or (2) incurred, if you use an accrual method of accounting. Turbotax for 2010 tax year Accounting fees. Turbotax for 2010 tax year Advertising. Turbotax for 2010 tax year Business travel and meals. Turbotax for 2010 tax year Commissions. Turbotax for 2010 tax year Consultant fees. Turbotax for 2010 tax year Crop scouting expenses. Turbotax for 2010 tax year Dues to cooperatives. Turbotax for 2010 tax year Educational expenses (to maintain and improve farming skills). Turbotax for 2010 tax year Farm-related attorney fees. Turbotax for 2010 tax year Farm magazines. Turbotax for 2010 tax year Ginning. Turbotax for 2010 tax year Insect sprays and dusts. Turbotax for 2010 tax year Litter and bedding. Turbotax for 2010 tax year Livestock fees. Turbotax for 2010 tax year Marketing fees. Turbotax for 2010 tax year Milk assessment. Turbotax for 2010 tax year Recordkeeping expenses. Turbotax for 2010 tax year Service charges. Turbotax for 2010 tax year Small tools expected to last one year or less. Turbotax for 2010 tax year Stamps and stationery. Turbotax for 2010 tax year Subscriptions to professional, technical, and trade journals that deal with farming. Turbotax for 2010 tax year Tying material and containers. Turbotax for 2010 tax year Loan expenses. Turbotax for 2010 tax year   You prorate and deduct loan expenses, such as legal fees and commissions, you pay to get a farm loan over the term of the loan. Turbotax for 2010 tax year Tax preparation fees. Turbotax for 2010 tax year   You can deduct as a farm business expense on Schedule F the cost of preparing that part of your tax return relating to your farm business. Turbotax for 2010 tax year You may be able to deduct the remaining cost on Schedule A (Form 1040) if you itemize your deductions. Turbotax for 2010 tax year   You also can deduct on Schedule F the amount you pay or incur in resolving tax issues relating to your farm business. Turbotax for 2010 tax year Domestic Production Activities Deduction Generally, you are allowed a deduction for income attributable to domestic production activities. Turbotax for 2010 tax year You can deduct 9% of the lesser of your qualified production activities income or your taxable income (adjusted gross income for individuals) for the tax year. Turbotax for 2010 tax year Your deduction is limited to 50% of the Form W-2 wages you paid for the tax year that are properly allocable to domestic production gross receipts. Turbotax for 2010 tax year For this purpose, Form W-2 wages do not include noncash wages paid for agricultural labor, such as compensation paid as commodities. Turbotax for 2010 tax year Also, excluded from Form W-2 wages are wages paid to your children under age 18 and nontaxable fringe benefits. Turbotax for 2010 tax year Income from cooperatives. Turbotax for 2010 tax year   If you receive a patronage dividend or qualified per-unit retain allocation from a cooperative which is engaged in the manufacturing, production, growth, or extraction in whole or in significant part of any agricultural or horticultural product or in the marketing of agricultural or horticultural products, your income from the cooperative can give rise to a domestic production activities deduction. Turbotax for 2010 tax year This deduction amount is reported on Form 1099-PATR, box 6. Turbotax for 2010 tax year In order for you to qualify for the deduction, the cooperative is required to send you a written notice designating your portion of the domestic production activities deduction. Turbotax for 2010 tax year More information. Turbotax for 2010 tax year   For more information on the domestic production activities deduction, see the Instructions for Form 8903. Turbotax for 2010 tax year Capital Expenses A capital expense is a payment, or a debt incurred, for the acquisition, improvement, or restoration of an asset that is expected to last more than one year. Turbotax for 2010 tax year You include the expense in the basis of the asset. Turbotax for 2010 tax year Uniform capitalization rules also require you to capitalize or include in inventory certain other expenses. Turbotax for 2010 tax year See chapters 2  and 6. Turbotax for 2010 tax year Capital expenses are generally not deductible, but they may be depreciable. Turbotax for 2010 tax year However, you can elect to deduct certain capital expenses, such as the following. Turbotax for 2010 tax year The cost of fertilizer, lime, etc. Turbotax for 2010 tax year (See Fertilizer and Lime under Deductible Expenses , earlier. Turbotax for 2010 tax year ) Soil and water conservation expenses. Turbotax for 2010 tax year (See chapter 5. Turbotax for 2010 tax year ) The cost of property that qualifies for a deduction under section 179. Turbotax for 2010 tax year (See chapter 7. Turbotax for 2010 tax year ) Business start-up costs. Turbotax for 2010 tax year (See Business start-up and organizational costs , later. Turbotax for 2010 tax year ) Forestation and reforestation costs. Turbotax for 2010 tax year (See Forestation and reforestation costs , later. Turbotax for 2010 tax year ) Generally, the costs of the following items, including the costs of material, hired labor, and installation, are capital expenses. Turbotax for 2010 tax year Land and buildings. Turbotax for 2010 tax year Additions, alterations, and improvements to buildings, etc. Turbotax for 2010 tax year Cars and trucks. Turbotax for 2010 tax year Equipment and machinery. Turbotax for 2010 tax year Fences. Turbotax for 2010 tax year Draft, breeding, sport, and dairy livestock. Turbotax for 2010 tax year Repairs to machinery, equipment, trucks, and cars that prolong their useful life, increase their value, or adapt them to different use. Turbotax for 2010 tax year Water wells, including drilling and equipping costs. Turbotax for 2010 tax year Land preparation costs, such as: Clearing land for farming, Leveling and conditioning land, Purchasing and planting trees, Building irrigation canals and ditches, Laying irrigation pipes, Installing drain tile, Modifying channels or streams, Constructing earthen, masonry, or concrete tanks, reservoirs, or dams, and Building roads. Turbotax for 2010 tax year Business start-up and organizational costs. Turbotax for 2010 tax year   You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. Turbotax for 2010 tax year The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Turbotax for 2010 tax year Any remaining costs must be amortized. Turbotax for 2010 tax year See chapter 7. Turbotax for 2010 tax year   You elect to deduct start-up or organizational costs by claiming the deduction on the income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Turbotax for 2010 tax year However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Turbotax for 2010 tax year Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Turbotax for 2010 tax year 9100-2” at the top of the amended return. Turbotax for 2010 tax year File the amended return at the same address you filed the original return. Turbotax for 2010 tax year The election applies when figuring taxable income for the current tax year and all subsequent years. Turbotax for 2010 tax year   You can choose to forgo the election by clearly electing to capitalize your start-up or organizational costs on an income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Turbotax for 2010 tax year For more information about start-up and organizational costs, see chapter 7. Turbotax for 2010 tax year Crop production expenses. Turbotax for 2010 tax year   The uniform capitalization rules generally require you to capitalize expenses incurred in producing plants. Turbotax for 2010 tax year However, except for certain taxpayers required to use an accrual method of accounting, the capitalization rules do not apply to plants with a preproductive period of 2 years or less. Turbotax for 2010 tax year For more information, see Uniform Capitalization Rules in chapter 6. Turbotax for 2010 tax year Timber. Turbotax for 2010 tax year   Capitalize the cost of acquiring timber. Turbotax for 2010 tax year Do not include the cost of land in the cost of the timber. Turbotax for 2010 tax year You must generally capitalize direct costs incurred in reforestation. Turbotax for 2010 tax year However, you can elect to deduct some forestation and reforestation costs. Turbotax for 2010 tax year See Forestation and reforestation costs next. Turbotax for 2010 tax year Reforestation costs include the following. Turbotax for 2010 tax year Site preparation costs, such as: Girdling, Applying herbicide, Baiting rodents, and Clearing and controlling brush. Turbotax for 2010 tax year The cost of seed or seedlings. Turbotax for 2010 tax year Labor and tool expenses. Turbotax for 2010 tax year Depreciation on equipment used in planting or seeding. Turbotax for 2010 tax year Costs incurred in replanting to replace lost seedlings. Turbotax for 2010 tax year You can choose to capitalize certain indirect reforestation costs. Turbotax for 2010 tax year   These capitalized amounts are your basis for the timber. Turbotax for 2010 tax year Recover your basis when you sell the timber or take depletion allowances when you cut the timber. Turbotax for 2010 tax year See Depletion in chapter 7. Turbotax for 2010 tax year Forestation and reforestation costs. Turbotax for 2010 tax year   You can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. Turbotax for 2010 tax year Any remaining costs can be amortized over an 84-month period. Turbotax for 2010 tax year See chapter 7. Turbotax for 2010 tax year If you make an election to deduct or amortize qualifying reforestation costs, you should create and maintain separate timber accounts for each qualified timber property. Turbotax for 2010 tax year The accounts should include all reforestation treatments and the dates they were applied. Turbotax for 2010 tax year Any qualified timber property that is subject to the deduction or amortization election cannot be included in any other timber account for which depletion is allowed. Turbotax for 2010 tax year The timber account should be maintained until the timber is disposed of. Turbotax for 2010 tax year For more information, see Notice 2006-47, 2006-20 I. Turbotax for 2010 tax year R. Turbotax for 2010 tax year B. Turbotax for 2010 tax year 892, available at  www. Turbotax for 2010 tax year irs. Turbotax for 2010 tax year gov/irb/2006-20_IRB/ar11. Turbotax for 2010 tax year html. Turbotax for 2010 tax year   You elect to deduct forestation and reforestation costs by claiming the deduction on the income tax return filed by the due date (including extensions) for the tax year in which the expenses were paid or incurred. Turbotax for 2010 tax year If you are filing Form T (Timber), Forest Activities Schedule, also complete Form T (Timber), Part IV. Turbotax for 2010 tax year If you are not filing Form T (Timber), attach a statement to your return with the following information. Turbotax for 2010 tax year The unique stand identification numbers. Turbotax for 2010 tax year The total number of acres reforested during the tax year. Turbotax for 2010 tax year The nature of the reforestation treatments. Turbotax for 2010 tax year The total amounts of the qualified reforestation expenditures eligible to be amortized or deducted. Turbotax for 2010 tax year   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Turbotax for 2010 tax year Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Turbotax for 2010 tax year 9100-2” at the top of the amended return. Turbotax for 2010 tax year File the amended return at the same address you filed the original return. Turbotax for 2010 tax year    For more information about forestation and reforestation costs, see chapter 7. Turbotax for 2010 tax year    For more information about timber, see Agriculture Handbook Number 731, Forest Landowners' Guide to the Federal Income Tax. Turbotax for 2010 tax year You can view this publication on the Internet at  www. Turbotax for 2010 tax year fs. Turbotax for 2010 tax year fed. Turbotax for 2010 tax year us/publications. Turbotax for 2010 tax year Christmas tree cultivation. Turbotax for 2010 tax year   If you are in the business of planting and cultivating Christmas trees to sell when they are more than 6 years old, capitalize expenses incurred for planting and stump culture and add them to the basis of the standing trees. Turbotax for 2010 tax year Recover these expenses as part of your adjusted basis when you sell the standing trees or as depletion allowances when you cut the trees. Turbotax for 2010 tax year For more information, see Timber Depletion under Depletion in chapter 7. Turbotax for 2010 tax year   You can deduct as business expenses the costs incurred for shearing and basal pruning of these trees. Turbotax for 2010 tax year Expenses incurred for silvicultural practices, such as weeding or cleaning, and noncommercial thinning are also deductible as business expenses. Turbotax for 2010 tax year   Capitalize the cost of land improvements, such as road grading, ditching, and fire breaks, that have a useful life beyond the tax year. Turbotax for 2010 tax year If the improvements do not have a determinable useful life, add their cost to the basis of the land. Turbotax for 2010 tax year The cost is recovered when you sell or otherwise dispose of it. Turbotax for 2010 tax year If the improvements have a determinable useful life, recover their cost through depreciation. Turbotax for 2010 tax year Capitalize the cost of equipment and other depreciable assets, such as culverts and fences, to the extent you do not use them in planting Christmas trees. Turbotax for 2010 tax year Recover these costs through depreciation. Turbotax for 2010 tax year Nondeductible Expenses You cannot deduct personal expenses and certain other items on your tax return even if they relate to your farm. Turbotax for 2010 tax year Personal, Living, and Family Expenses You cannot deduct certain personal, living, and family expenses as business expenses. Turbotax for 2010 tax year These include rent and insurance premiums paid on property used as your home, life insurance premiums on yourself or your family, the cost of maintaining cars, trucks, or horses for personal use, allowances to minor children, attorneys' fees and legal expenses incurred in personal matters, and household expenses. Turbotax for 2010 tax year Likewise, the cost of purchasing or raising produce or livestock consumed by you or your family is not deductible. Turbotax for 2010 tax year Other Nondeductible Items You cannot deduct the following items on your tax return. Turbotax for 2010 tax year Loss of growing plants, produce, and crops. Turbotax for 2010 tax year   Losses of plants, produce, and crops raised for sale are generally not deductible. Turbotax for 2010 tax year However, you may have a deductible loss on plants with a preproductive period of more than 2 years. Turbotax for 2010 tax year See chapter 11 for more information. Turbotax for 2010 tax year Repayment of loans. Turbotax for 2010 tax year   You cannot deduct the repayment of a loan. Turbotax for 2010 tax year However, if you use the proceeds of a loan for farm business expenses, you can deduct the interest on the loan. Turbotax for 2010 tax year See Interest , earlier. Turbotax for 2010 tax year Estate, inheritance, legacy, succession, and gift taxes. Turbotax for 2010 tax year   You cannot deduct estate, inheritance, legacy, succession, and gift taxes. Turbotax for 2010 tax year Loss of livestock. Turbotax for 2010 tax year   You cannot deduct as a loss the value of raised livestock that die if you deducted the cost of raising them as an expense. Turbotax for 2010 tax year Losses from sales or exchanges between related persons. Turbotax for 2010 tax year   You cannot deduct losses from sales or exchanges of property between you and certain related persons, including your spouse, brother, sister, ancestor, or lineal descendant. Turbotax for 2010 tax year For more information, see chapter 2 of Publication 544, Sales and Other Dispositions of Assets. Turbotax for 2010 tax year Cost of raising unharvested crops. Turbotax for 2010 tax year   You cannot deduct the cost of raising unharvested crops sold with land owned more than one year if you sell both at the same time and to the same person. Turbotax for 2010 tax year Add these costs to the basis of the land to determine the gain or loss on the sale. Turbotax for 2010 tax year For more information, see Section 1231 Gains and Losses in chapter 9. Turbotax for 2010 tax year Cost of unharvested crops bought with land. Turbotax for 2010 tax year   Capitalize the purchase price of land, including the cost allocable to unharvested crops. Turbotax for 2010 tax year You cannot deduct the cost of the crops at the time of purchase. Turbotax for 2010 tax year However, you can deduct this cost in figuring net profit or loss in the tax year you sell the crops. Turbotax for 2010 tax year Cost related to gifts. Turbotax for 2010 tax year   You cannot deduct costs related to your gifts of agricultural products or property held for sale in the ordinary course of your business. Turbotax for 2010 tax year The costs are not deductible in the year of the gift or any later year. Turbotax for 2010 tax year For example, you cannot deduct the cost of raising cattle or the cost of planting and raising unharvested wheat on parcels of land given as a gift to your children. Turbotax for 2010 tax year Club dues and membership fees. Turbotax for 2010 tax year   Generally, you cannot deduct amounts you pay or incur for membership in any club organized for business, pleasure, recreation, or any other social purpose. Turbotax for 2010 tax year This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Turbotax for 2010 tax year Exception. Turbotax for 2010 tax year   The following organizations will not be treated as a club organized for business, pleasure, recreation, or other social purposes, unless one of its main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. Turbotax for 2010 tax year Boards of trade. Turbotax for 2010 tax year Business leagues. Turbotax for 2010 tax year Chambers of commerce. Turbotax for 2010 tax year Civic or public service organizations. Turbotax for 2010 tax year Professional associations. Turbotax for 2010 tax year Trade associations. Turbotax for 2010 tax year Real estate boards. Turbotax for 2010 tax year Fines and penalties. Turbotax for 2010 tax year   You cannot deduct fines and penalties, except penalties for exceeding marketing quotas, discussed earlier. Turbotax for 2010 tax year Losses From Operating a Farm If your deductible farm expenses are more than your farm income, you have a loss from the operation of your farm. Turbotax for 2010 tax year The amount of the loss you can deduct when figuring your taxable income may be limited. Turbotax for 2010 tax year To figure your deductible loss, you must apply the following limits. Turbotax for 2010 tax year The at-risk limits. Turbotax for 2010 tax year The passive activity limits. Turbotax for 2010 tax year The following discussions explain these limits. Turbotax for 2010 tax year If your deductible loss after applying these limits is more than your other income for the year, you may have a net operating loss. Turbotax for 2010 tax year See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Turbotax for 2010 tax year If you do not carry on your farming activity to make a profit, your loss deduction may be limited by the not-for-profit rules. Turbotax for 2010 tax year See Not-for-Profit Farming, later. Turbotax for 2010 tax year At-Risk Limits The at-risk rules limit your deduction for losses from most business or income-producing activities, including farming. Turbotax for 2010 tax year These rules limit the losses you can deduct when figuring your taxable income. Turbotax for 2010 tax year The deductible loss from an activity is limited to the amount you have at risk in the activity. Turbotax for 2010 tax year You are at risk in any activity for: The money and adjusted basis of property you contribute to the activity, and Amounts you borrow for use in the activity if: You are personally liable for repayment, or You pledge property (other than property used in the activity) as security for the loan. Turbotax for 2010 tax year You are not at risk, however, for amounts you borrow for use in a farming activity from a person who has an interest in the activity (other than as a creditor) or a person related to someone (other than you) having such an interest. Turbotax for 2010 tax year For more information, see Publication 925. Turbotax for 2010 tax year Passive Activity Limits A passive activity is generally any activity involving the conduct of any trade or business in which you do not materially participate. Turbotax for 2010 tax year Generally, a rental activity is a passive activity. Turbotax for 2010 tax year If you have a passive activity, special rules limit the loss you can deduct in the tax year. Turbotax for 2010 tax year You generally can deduct losses from passive activities only up to income from passive activities. Turbotax for 2010 tax year Credits are similarly limited. Turbotax for 2010 tax year For more information, see Publication 925. Turbotax for 2010 tax year Excess Farm Loss Limit For tax years beginning after 2009, excess farm losses (defined below) are not deductible if you received certain applicable subsidies. Turbotax for 2010 tax year This limit applies to any farming businesses, other than a C corporation, that received a direct or counter-cyclical payment (or any payment in lieu of such payments) under title I of the Food, Conservation, and Energy Act of 2008, or from a Commodity Credit Corporation loan. Turbotax for 2010 tax year Your farming losses are limited to the greater of: $300,000 ($150,000 for a married person filing a separate return), or The total net farm income for the prior five tax years. Turbotax for 2010 tax year Farming losses from casualty losses or losses by reason of disease or drought are disregarded for purposes of figuring this limitation. Turbotax for 2010 tax year Also, the limitation on farm losses should be applied before the passive activity loss rules are applied. Turbotax for 2010 tax year For more details, see IRC section 461(j). Turbotax for 2010 tax year Excess farm loss. Turbotax for 2010 tax year   Generally, an excess farm loss is the amount of your farming loss that exceeds the amount of the limitation (as described above). Turbotax for 2010 tax year This loss can be determined by taking the excess of: The total deductions for the tax year from your farming businesses, over The total gross income or gain for the tax year from your farming businesses, plus the greater of: $300,000 ($150,000 for a married person filing a separate return), or The excess (if any) of the total gross income or gain from your farming businesses for the prior five tax years over the total deductions from your farming businesses for the prior five tax years. Turbotax for 2010 tax year   Excess farm losses that are disallowed can be carried forward to the next tax year and treated as a deduction from that year. Turbotax for 2010 tax year Not-for-Profit Farming If you operate a farm for profit, you can deduct all the ordinary and necessary expenses of carrying on the business of farming on Schedule F. Turbotax for 2010 tax year However, if you do not carry on your farming activity, or other activity you engage or invest in, to make a profit, you report the income from the activity on Form 1040, line 21, and you can deduct expenses of carrying on the activity only if you itemize your deductions on Schedule A (Form 1040). Turbotax for 2010 tax year Also, there is a limit on the deductions you can take. Turbotax for 2010 tax year You cannot use a loss from that activity to offset income from other activities. Turbotax for 2010 tax year Activities you do as a hobby, or mainly for sport or recreation, come under this limit. Turbotax for 2010 tax year An investment activity intended only to produce tax losses for the investors also comes under this limit. Turbotax for 2010 tax year The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. Turbotax for 2010 tax year It does not apply to corporations other than S corporations. Turbotax for 2010 tax year In determining whether you are carrying on your farming activity for profit, all the facts are taken into account. Turbotax for 2010 tax year No one factor alone is decisive. Turbotax for 2010 tax year Among the factors to consider are whether: You operate your farm in a businesslike manner; The time and effort you spend on farming indicate you intend to make it profitable; You depend on income from farming for your livelihood; Your losses are due to circumstances beyond your control or are normal in the start-up phase of farming; You change your methods of operation in an attempt to improve profitability; You, or your advisors, have the knowledge needed to carry on the farming activity as a successful business; You were successful in making a profit in similar activities in the past; You make a profit from farming in some years and the amount of profit you make; and You can expect to make a future profit from the appreciation of the assets used in the farming activity. Turbotax for 2010 tax year Presumption of profit. Turbotax for 2010 tax year   Your farming or other activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. Turbotax for 2010 tax year Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. Turbotax for 2010 tax year The activity must be substantially the same for each year within this period. Turbotax for 2010 tax year You have a profit when the gross income from an activity is more than the deductions for it. Turbotax for 2010 tax year   If a taxpayer dies before the end of the 5-year (or 7-year) period, the period ends on the date of the taxpayer's death. Turbotax for 2010 tax year   If your business or investment activity passes this 3- (or 2-) years-of-profit test, presume it is carried on for profit. Turbotax for 2010 tax year This means the limits discussed here do not apply. Turbotax for 2010 tax year You can take all your business deductions from the activity on Schedule F, even for the years that you have a loss. Turbotax for 2010 tax year You can rely on this presumption in every case, unless the IRS shows it is not valid. Turbotax for 2010 tax year   If you fail the 3- (or 2-) years-of-profit test, you still may be considered to operate your farm for profit by considering the factors listed earlier. Turbotax for 2010 tax year Using the presumption later. Turbotax for 2010 tax year   If you are starting out in farming and do not have 3 (or 2) years showing a profit, you may want to take advantage of this presumption later, after you have had the 5 (or 7) years of experience allowed by the test. Turbotax for 2010 tax year   You can choose to do this by filing Form 5213. Turbotax for 2010 tax year Filing this form postpones any determination that your farming activity is not carried on for profit until 5 (or 7) years have passed since you first started farming. Turbotax for 2010 tax year You must file Form 5213 within 3 years after the due date of your return for the year in which you first carried on the activity, or, if earlier, within 60 days after receiving a written notice from the IRS proposing to disallow deductions attributable to the activity. Turbotax for 2010 tax year   The benefit gained by making this choice is that the IRS will not immediately question whether your farming activity is engaged in for profit. Turbotax for 2010 tax year Accordingly, it will not limit your deductions. Turbotax for 2010 tax year Rather, you will gain time to earn a profit in 3 (or 2) out of the first 5 (or 7) years you carry on the farming activity. Turbotax for 2010 tax year If you show 3 (or 2) years of profit at the end of this period, your deductions are not limited under these rules. Turbotax for 2010 tax year If you do not have 3 (or 2) years of profit (and cannot otherwise show that you operated your farm for profit), the limit applies retroactively to any year in the 5-year (or 7-year) period with a loss. Turbotax for 2010 tax year   Filing Form 5213 automatically extends the period of limitations on any year