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

Vita Irs

State Tax Filing For FreeBlank Printable 1040ez FormIrs Tax Extension Forms2012 EfileFiling A 1040x Amended Tax ReturnH&r Block Free Tax File 2012Where Can I File My State Taxes For FreeHow To File Your Taxes Online For Free1040 Ez Tax Return1040nr Tax CalculatorWww Irs Gov Form1040a1040x 2011Online 1040ezIrs Tax Forms 1040ezForm 1040nr SoftwareFiling 1040 OnlineMilitary Tax Return CalculatorFiling A Tax Amendment OnlineIrs 1040ezTaxact 2011 Download FreeWww Handrblock ComFile State TaxesH And R Block Tax EstimatorH&r Block 1040ez Free 20131042nr EzTax Form 1040nrFree E File State Taxes OnlyWho Can File 1040ezH And R Block Free EditionIrs Form 1040ez 2011I Didn T File 2011 Taxes2010 Tax TablesWho Can File 1040ezDoes Turbotax Do State TaxesTax Filing Extension Deadline 2012How To File A Tax Return For 2012Free State Tax EfileForm 1040ez 20111040Filing 2011 Taxes In 2013

Vita Irs

Vita irs 12. Vita irs   Other Income Table of Contents Introduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. Vita irs Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. Vita irs Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. Vita irs Method 2. Vita irs RoyaltiesDepletion. Vita irs Coal and iron ore. Vita irs Sale of property interest. Vita irs Part of future production sold. Vita irs Unemployment BenefitsTypes of unemployment compensation. Vita irs Governmental program. Vita irs Repayment of unemployment compensation. Vita irs Tax withholding. Vita irs Repayment of benefits. Vita irs Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. Vita irs Deduction for costs involved in unlawful discrimination suits. Vita irs Energy conservation measure. Vita irs Dwelling unit. Vita irs Current income required to be distributed. Vita irs Current income not required to be distributed. Vita irs How to report. Vita irs Losses. Vita irs Grantor trust. Vita irs Nonemployee compensation. Vita irs Corporate director. Vita irs Personal representatives. Vita irs Manager of trade or business for bankruptcy estate. Vita irs Notary public. Vita irs Election precinct official. Vita irs Difficulty-of-care payments. Vita irs Maintaining space in home. Vita irs Reporting taxable payments. Vita irs Lotteries and raffles. Vita irs Form W-2G. Vita irs Reporting winnings and recordkeeping. Vita irs Inherited pension or IRA. Vita irs Employee awards or bonuses. Vita irs Pulitzer, Nobel, and similar prizes. Vita irs Payment for services. Vita irs VA payments. Vita irs Prizes. Vita irs Strike and lockout benefits. Vita irs Introduction You must include on your return all items of income you receive in the form of money, property, and services unless the tax law states that you do not include them. Vita irs Some items, however, are only partly excluded from income. Vita irs This chapter discusses many kinds of income and explains whether they are taxable or nontaxable. Vita irs Income that is taxable must be reported on your tax return and is subject to tax. Vita irs Income that is nontaxable may have to be shown on your tax return but is not taxable. Vita irs This chapter begins with discussions of the following income items. Vita irs Bartering. Vita irs Canceled debts. Vita irs Sales parties at which you are the host or hostess. Vita irs Life insurance proceeds. Vita irs Partnership income. Vita irs S Corporation income. Vita irs Recoveries (including state income tax refunds). Vita irs Rents from personal property. Vita irs Repayments. Vita irs Royalties. Vita irs Unemployment benefits. Vita irs Welfare and other public assistance benefits. Vita irs These discussions are followed by brief discussions of other income items. Vita irs Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 544 Sales and Other Dispositions of Assets 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Bartering Bartering is an exchange of property or services. Vita irs You must include in your income, at the time received, the fair market value of property or services you receive in bartering. Vita irs If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise. Vita irs Generally, you report this income on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Vita irs However, if the barter involves an exchange of something other than services, such as in Example 3 below, you may have to use another form or schedule instead. Vita irs Example 1. Vita irs You are a self-employed attorney who performs legal services for a client, a small corporation. Vita irs The corporation gives you shares of its stock as payment for your services. Vita irs You must include the fair market value of the shares in your income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) in the year you receive them. Vita irs Example 2. Vita irs You are self-employed and a member of a barter club. Vita irs The club uses “credit units” as a means of exchange. Vita irs It adds credit units to your account for goods or services you provide to members, which you can use to purchase goods or services offered by other members of the barter club. Vita irs The club subtracts credit units from your account when you receive goods or services from other members. Vita irs You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year. Vita irs Example 3. Vita irs You own a small apartment building. Vita irs In return for 6 months rent-free use of an apartment, an artist gives you a work of art she created. Vita irs You must report as rental income on Schedule E (Form 1040), Supplemental Income and Loss, the fair market value of the artwork, and the artist must report as income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) the fair rental value of the apartment. Vita irs Form 1099-B from barter exchange. Vita irs   If you exchanged property or services through a barter exchange, Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a similar statement from the barter exchange should be sent to you by February 18, 2014. Vita irs It should show the value of cash, property, services, credits, or scrip you received from exchanges during 2013. Vita irs The IRS also will receive a copy of Form 1099-B. Vita irs Canceled Debts In most cases, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. Vita irs You have no income from the canceled debt if it is intended as a gift to you. Vita irs A debt includes any indebtedness for which you are liable or which attaches to property you hold. Vita irs If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. Vita irs If it is a business debt, report the amount on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer). Vita irs Form 1099-C. Vita irs   If a Federal Government agency, financial institution, or credit union cancels or forgives a debt you owe of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. Vita irs The amount of the canceled debt is shown in box 2. Vita irs Interest included in canceled debt. Vita irs   If any interest is forgiven and included in the amount of canceled debt in box 2, the amount of interest also will be shown in box 3. Vita irs Whether or not you must include the interest portion of the canceled debt in your income depends on whether the interest would be deductible when you paid it. Vita irs See Deductible debt under Exceptions, later. Vita irs   If the interest would not be deductible (such as interest on a personal loan), include in your income the amount from Form 1099-C, box 2. Vita irs If the interest would be deductible (such as on a business loan), include in your income the net amount of the canceled debt (the amount shown in box 2 less the interest amount shown in box 3). Vita irs Discounted mortgage loan. Vita irs   If your financial institution offers a discount for the early payment of your mortgage loan, the amount of the discount is canceled debt. Vita irs You must include the canceled amount in your income. Vita irs Mortgage relief upon sale or other disposition. Vita irs   If you are personally liable for a mortgage (recourse debt), and you are relieved of the mortgage when you dispose of the property, you may realize gain or loss up to the fair market value of the property. Vita irs To the extent the mortgage discharge exceeds the fair market value of the property, it is income from discharge of indebtedness unless it qualifies for exclusion under Excluded debt , later. Vita irs Report any income from discharge of indebtedness on nonbusiness debt that does not qualify for exclusion as other income on Form 1040, line 21. Vita irs    You may be able to exclude part of the mortgage relief on your principal residence. Vita irs See Excluded debt, later. Vita irs   If you are not personally liable for a mortgage (nonrecourse debt), and you are relieved of the mortgage when you dispose of the property (such as through foreclosure), that relief is included in the amount you realize. Vita irs You may have a taxable gain if the amount you realize exceeds your adjusted basis in the property. Vita irs Report any gain on nonbusiness property as a capital gain. Vita irs   See Publication 4681 for more information. Vita irs Stockholder debt. Vita irs   If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution that is generally dividend income to you. Vita irs For more information, see Publication 542, Corporations. Vita irs   If you are a stockholder in a corporation and you cancel a debt owed to you by the corporation, you generally do not realize income. Vita irs This is because the canceled debt is considered as a contribution to the capital of the corporation equal to the amount of debt principal that you canceled. Vita irs Repayment of canceled debt. Vita irs   If you included a canceled amount in your income and later pay the debt, you may be able to file a claim for refund for the year the amount was included in income. Vita irs You can file a claim on Form 1040X if the statute of limitations for filing a claim is still open. Vita irs The statute of limitations generally does not end until 3 years after the due date of your original return. Vita irs Exceptions There are several exceptions to the inclusion of canceled debt in income. Vita irs These are explained next. Vita irs Student loans. Vita irs   Certain student loans contain a provision that all or part of the debt incurred to attend the qualified educational institution will be canceled if you work for a certain period of time in certain professions for any of a broad class of employers. Vita irs   You do not have income if your student loan is canceled after you agreed to this provision and then performed the services required. Vita irs To qualify, the loan must have been made by: The Federal Government, a state or local government, or an instrumentality, agency, or subdivision thereof, A tax-exempt public benefit corporation that has assumed control of a state, county, or municipal hospital, and whose employees are considered public employees under state law, or An educational institution: Under an agreement with an entity described in (1) or (2) that provided the funds to the institution to make the loan, or As part of a program of the institution designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or a tax-exempt organization described in section 501(c)(3). Vita irs   A loan to refinance a qualified student loan also will qualify if it was made by an educational institution or a qualified tax-exempt organization under its program designed as described in (3)(b) above. Vita irs Education loan repayment assistance. Vita irs   Education loan repayments made to you by the National Health Service Corps Loan Repayment Program (NHSC Loan Repayment Program), a state education loan repayment program eligible for funds under the Public Health Service Act, or any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health services in underserved or health professional shortage areas are not taxable. Vita irs    The provision relating to the “other state loan repayment or loan forgiveness program” was added to this exclusion for amounts received in tax years beginning after December 31, 2008. Vita irs If you included these amounts in income in 2010, 2011, or 2012, you should file an amended tax return to exclude this income. Vita irs See Form 1040X and its instructions for details on filing. Vita irs Deductible debt. Vita irs   You do not have income from the cancellation of a debt if your payment of the debt would be deductible. Vita irs This exception applies only if you use the cash method of accounting. Vita irs For more information, see chapter 5 of Publication 334, Tax Guide for Small Business. Vita irs Price reduced after purchase. Vita irs   In most cases, if the seller reduces the amount of debt you owe for property you purchased, you do not have income from the reduction. Vita irs The reduction of the debt is treated as a purchase price adjustment and reduces your basis in the property. Vita irs Excluded debt. Vita irs   Do not include a canceled debt in your gross income in the following situations. Vita irs The debt is canceled in a bankruptcy case under title 11 of the U. Vita irs S. Vita irs Code. Vita irs See Publication 908, Bankruptcy Tax Guide. Vita irs The debt is canceled when you are insolvent. Vita irs However, you cannot exclude any amount of canceled debt that is more than the amount by which you are insolvent. Vita irs See Publication 908. Vita irs The debt is qualified farm debt and is canceled by a qualified person. Vita irs See chapter 3 of Publication 225, Farmer's Tax Guide. Vita irs The debt is qualified real property business debt. Vita irs See chapter 5 of Publication 334. Vita irs The cancellation is intended as a gift. Vita irs The debt is qualified principal residence indebtedness. Vita irs See Publication 525 for additional information. Vita irs Host or Hostess If you host a party or event at which sales are made, any gift or gratuity you receive for giving the event is a payment for helping a direct seller make sales. Vita irs You must report this item as income at its fair market value. Vita irs Your out-of-pocket party expenses are subject to the 50% limit for meal and entertainment expenses. Vita irs These expenses are deductible as miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A (Form 1040), but only up to the amount of income you receive for giving the party. Vita irs For more information about the 50% limit for meal and entertainment expenses, see chapter 26. Vita irs Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Vita irs This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Vita irs However, interest income received as a result of life insurance proceeds may be taxable. Vita irs Proceeds not received in installments. Vita irs   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Vita irs If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Vita irs Proceeds received in installments. Vita irs   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Vita irs   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Vita irs Include anything over this excluded part in your income as interest. Vita irs Surviving spouse. Vita irs   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude up to $1,000 a year of the interest included in the installments. Vita irs If you remarry, you can continue to take the exclusion. Vita irs Surrender of policy for cash. Vita irs   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Vita irs In most cases, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Vita irs    You should receive a Form 1099-R showing the total proceeds and the taxable part. Vita irs Report these amounts on lines 16a and 16b of Form 1040 or lines 12a and 12b of Form 1040A. Vita irs More information. Vita irs   For more information, see Life Insurance Proceeds in Publication 525. Vita irs Endowment Contract Proceeds An endowment contract is a policy under which you are paid a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Vita irs Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Vita irs To determine your cost, subtract any amount that you previously received under the contract and excluded from your income from the total premiums (or other consideration) paid for the contract. Vita irs Include the part of the lump sum payment that is more than your cost in your income. Vita irs Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are excluded from income if the insured is terminally or chronically ill. Vita irs Viatical settlement. Vita irs   This is the sale or assignment of any part of the death benefit under a life insurance contract to a viatical settlement provider. Vita irs A viatical settlement provider is a person who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill and who meets the requirements of section 101(g)(2)(B) of the Internal Revenue Code. Vita irs Exclusion for terminal illness. Vita irs    Accelerated death benefits are fully excludable if the insured is a terminally ill individual. Vita irs This is a person who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death within 24 months from the date of the certification. Vita irs Exclusion for chronic illness. Vita irs    If the insured is a chronically ill individual who is not terminally ill, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Vita irs Accelerated death benefits paid on a per diem or other periodic basis are excludable up to a limit. Vita irs This limit applies to the total of the accelerated death benefits and any periodic payments received from long-term care insurance contracts. Vita irs For information on the limit and the definitions of chronically ill individual, qualified long-term care services, and long-term care insurance contracts, see Long-Term Care Insurance Contracts under Sickness and Injury Benefits in Publication 525. Vita irs Exception. Vita irs   The exclusion does not apply to any amount paid to a person (other than the insured) who has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the person, or Has a financial interest in the person's business. Vita irs Form 8853. Vita irs   To claim an exclusion for accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Vita irs You do not have to file Form 8853 to exclude accelerated death benefits paid on the basis of actual expenses incurred. Vita irs Public Safety Officer Killed in the Line of Duty If you are a survivor of a public safety officer who was killed in the line of duty, you may be able to exclude from income certain amounts you receive. Vita irs For this purpose, the term public safety officer includes law enforcement officers, firefighters, chaplains, and rescue squad and ambulance crew members. Vita irs For more information, see Publication 559, Survivors, Executors, and Administrators. Vita irs Partnership Income A partnership generally is not a taxable entity. Vita irs The income, gains, losses, deductions, and credits of a partnership are passed through to the partners based on each partner's distributive share of these items. Vita irs Schedule K-1 (Form 1065). Vita irs    Although a partnership generally pays no tax, it must file an information return on Form 1065, U. Vita irs S. Vita irs Return of Partnership Income, and send Schedule K-1 (Form 1065) to each partner. Vita irs In addition, the partnership will send each partner a copy of the Partner's Instructions for Schedule K-1 (Form 1065) to help each partner report his or her share of the partnership's income, deductions, credits, and tax preference items. Vita irs Keep Schedule K-1 (Form 1065) for your records. Vita irs Do not attach it to your Form 1040, unless you are specifically required to do so. Vita irs For more information on partnerships, see Publication 541, Partnerships. Vita irs Qualified joint venture. Vita irs   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Vita irs To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Vita irs For further information on how to make the election and which schedule(s) to file, see the instructions for your individual tax return. Vita irs S Corporation Income In most cases, an S corporation does not pay tax on its income. Vita irs Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder's pro rata share. Vita irs Schedule K-1 (Form 1120S). Vita irs   An S corporation must file a return on Form 1120S, U. Vita irs S. Vita irs Income Tax Return for an S Corporation, and send Schedule K-1 (Form 1120S) to each shareholder. Vita irs In addition, the S corporation will send each shareholder a copy of the Shareholder's Instructions for Schedule K-1 (Form 1120S) to help each shareholder report his or her share of the S corporation's income, losses, credits, and deductions. Vita irs Keep Schedule K-1 (Form 1120S) for your records. Vita irs Do not attach it to your Form 1040, unless you are specifically required to do so. Vita irs For more information on S corporations and their shareholders, see the Instructions for Form 1120S. Vita irs Recoveries A recovery is a return of an amount you deducted or took a credit for in an earlier year. Vita irs The most common recoveries are refunds, reimbursements, and rebates of deductions itemized on Schedule A (Form 1040). Vita irs You also may have recoveries of non-itemized deductions (such as payments on previously deducted bad debts) and recoveries of items for which you previously claimed a tax credit. Vita irs Tax benefit rule. Vita irs   You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. Vita irs For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year. Vita irs For more information, see Publication 525. Vita irs Federal income tax refund. Vita irs   Refunds of federal income taxes are not included in your income because they are never allowed as a deduction from income. Vita irs State tax refund. Vita irs   If you received a state or local income tax refund (or credit or offset) in 2013, you generally must include it in income if you deducted the tax in an earlier year. Vita irs The payer should send Form 1099-G, Certain Government Payments, to you by January 31, 2014. Vita irs The IRS also will receive a copy of the Form 1099-G. Vita irs If you file Form 1040, use the State and Local Income Tax Refund Worksheet in the 2013 Form 1040 instructions for line 10 to figure the amount (if any) to include in your income. Vita irs See Publication 525 for when you must use another worksheet. Vita irs   If you could choose to deduct for a tax year either: State and local income taxes, or State and local general sales taxes, then the maximum refund that you may have to include in income is limited to the excess of the tax you chose to deduct for that year over the tax you did not choose to deduct for that year. Vita irs For examples, see Publication 525. Vita irs Mortgage interest refund. Vita irs    If you received a refund or credit in 2013 of mortgage interest paid in an earlier year, the amount should be shown in box 3 of your Form 1098, Mortgage Interest Statement. Vita irs Do not subtract the refund amount from the interest you paid in 2013. Vita irs You may have to include it in your income under the rules explained in the following discussions. Vita irs Interest on recovery. Vita irs   Interest on any of the amounts you recover must be reported as interest income in the year received. Vita irs For example, report any interest you received on state or local income tax refunds on Form 1040, line 8a. Vita irs Recovery and expense in same year. Vita irs   If the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income. Vita irs Recovery for 2 or more years. Vita irs   If you receive a refund or other recovery that is for amounts you paid in 2 or more separate years, you must allocate, on a pro rata basis, the recovered amount between the years in which you paid it. Vita irs This allocation is necessary to determine the amount of recovery from any earlier years and to determine the amount, if any, of your allowable deduction for this item for the current year. Vita irs For information on how to compute the allocation, see Recoveries in Publication 525. Vita irs Itemized Deduction Recoveries If you recover any amount that you deducted in an earlier year on Schedule A (Form 1040), you generally must include the full amount of the recovery in your income in the year you receive it. Vita irs Where to report. Vita irs   Enter your state or local income tax refund on Form 1040, line 10, and the total of all other recoveries as other income on Form 1040, line 21. Vita irs You cannot use Form 1040A or Form 1040EZ. Vita irs Standard deduction limit. Vita irs   You generally are allowed to claim the standard deduction if you do not itemize your deductions. Vita irs Only your itemized deductions that are more than your standard deduction are subject to the recovery rule (unless you are required to itemize your deductions). Vita irs If your total deductions on the earlier year return were not more than your income for that year, include in your income this year the lesser of: Your recoveries, or The amount by which your itemized deductions exceeded the standard deduction. Vita irs Example. Vita irs For 2012, you filed a joint return. Vita irs Your taxable income was $60,000 and you were not entitled to any tax credits. Vita irs Your standard deduction was $11,900, and you had itemized deductions of $14,000. Vita irs In 2013, you received the following recoveries for amounts deducted on your 2012 return: Medical expenses $200 State and local income tax refund 400 Refund of mortgage interest 325 Total recoveries $925 None of the recoveries were more than the deductions taken for 2012. Vita irs The difference between the state and local income tax you deducted and your local general sales tax was more than $400. Vita irs Your total recoveries are less than the amount by which your itemized deductions exceeded the standard deduction ($14,000 − 11,900 = $2,100), so you must include your total recoveries in your income for 2013. Vita irs Report the state and local income tax refund of $400 on Form 1040, line 10, and the balance of your recoveries, $525, on Form 1040, line 21. Vita irs Standard deduction for earlier years. Vita irs   To determine if amounts recovered in 2013 must be included in your income, you must know the standard deduction for your filing status for the year the deduction was claimed. Vita irs Look in the instructions for your tax return from prior years to locate the standard deduction for the filing status for that prior year. Vita irs Example. Vita irs You filed a joint return on Form 1040 for 2012 with taxable income of $45,000. Vita irs Your itemized deductions were $12,350. Vita irs The standard deduction that you could have claimed was $11,900. Vita irs In 2013, you recovered $2,100 of your 2012 itemized deductions. Vita irs None of the recoveries were more than the actual deductions for 2012. Vita irs Include $450 of the recoveries in your 2013 income. Vita irs This is the smaller of your recoveries ($2,100) or the amount by which your itemized deductions were more than the standard deduction ($12,350 − $11,900 = $450). Vita irs Recovery limited to deduction. Vita irs   You do not include in your income any amount of your recovery that is more than the amount you deducted in the earlier year. Vita irs The amount you include in your income is limited to the smaller of: The amount deducted on Schedule A (Form 1040), or The amount recovered. Vita irs Example. Vita irs During 2012 you paid $1,700 for medical expenses. Vita irs From this amount you subtracted $1,500, which was 7. Vita irs 5% of your adjusted gross income. Vita irs Your actual medical expense deduction was $200. Vita irs In 2013, you received a $500 reimbursement from your medical insurance for your 2012 expenses. Vita irs The only amount of the $500 reimbursement that must be included in your income for 2013 is $200—the amount actually deducted. Vita irs Other recoveries. Vita irs   See Recoveries in Publication 525 if: You have recoveries of items other than itemized deductions, or You received a recovery for an item for which you claimed a tax credit (other than investment credit or foreign tax credit) in a prior year. Vita irs Rents from Personal Property If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is in most cases determined by: Whether or not the rental activity is a business, and Whether or not the rental activity is conducted for profit. Vita irs In most cases, if your primary purpose is income or profit and you are involved in the rental activity with continuity and regularity, your rental activity is a business. Vita irs See Publication 535, Business Expenses, for details on deducting expenses for both business and not-for-profit activities. Vita irs Reporting business income and expenses. Vita irs    If you are in the business of renting personal property, report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Vita irs The form instructions have information on how to complete them. Vita irs Reporting nonbusiness income. Vita irs   If you are not in the business of renting personal property, report your rental income on Form 1040, line 21. Vita irs List the type and amount of the income on the dotted line next to line 21. Vita irs Reporting nonbusiness expenses. Vita irs   If you rent personal property for profit, include your rental expenses in the total amount you enter on Form 1040, line 36. Vita irs Also enter the amount and “PPR” on the dotted line next to line 36. Vita irs   If you do not rent personal property for profit, your deductions are limited and you cannot report a loss to offset other income. Vita irs See Activity not for profit , under Other Income, later. Vita irs Repayments If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Vita irs Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. Vita irs Generally, you can claim a deduction or credit only if the repayment qualifies as an expense or loss incurred in your trade or business or in a for-profit transaction. Vita irs Type of deduction. Vita irs   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Vita irs You generally deduct the repayment on the same form or schedule on which you previously reported it as income. Vita irs For example, if you reported it as self-employment income, deduct it as a business expense on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Vita irs If you reported it as a capital gain, deduct it as a capital loss as explained in the Instructions for Schedule D (Form 1040). Vita irs If you reported it as wages, unemployment compensation, or other nonbusiness income, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040). Vita irs Repaid social security benefits. Vita irs   If you repaid social security benefits or equivalent railroad retirement benefits, see Repayment of benefits in chapter 11. Vita irs Repayment of $3,000 or less. Vita irs   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Vita irs If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 23. Vita irs Repayment over $3,000. Vita irs   If the amount you repaid was more than $3,000, you can deduct the repayment (as explained under Type of deduction , earlier). Vita irs However, you can choose instead to take a tax credit for the year of repayment if you included the income under a claim of right. Vita irs This means that at the time you included the income, it appeared that you had an unrestricted right to it. Vita irs If you qualify for this choice, figure your tax under both methods and compare the results. Vita irs Use the method (deduction or credit) that results in less tax. Vita irs When determining whether the amount you repaid was more or less than $3,000, consider the total amount being repaid on the return. Vita irs Each instance of repayment is not considered separately. Vita irs Method 1. Vita irs   Figure your tax for 2013 claiming a deduction for the repaid amount. Vita irs If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 28. Vita irs Method 2. Vita irs   Figure your tax for 2013 claiming a credit for the repaid amount. Vita irs Follow these steps. Vita irs Figure your tax for 2013 without deducting the repaid amount. Vita irs Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Vita irs Subtract the tax in (2) from the tax shown on your return for the earlier year. Vita irs This is the credit. Vita irs Subtract the answer in (3) from the tax for 2013 figured without the deduction (Step 1). Vita irs   If method 1 results in less tax, deduct the amount repaid. Vita irs If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 71, by adding the amount of the credit to any other credits on this line, and entering “I. Vita irs R. Vita irs C. Vita irs 1341” in the column to the right of line 71. Vita irs   An example of this computation can be found in Publication 525. Vita irs Repaid wages subject to social security and Medicare taxes. Vita irs   If you had to repay an amount that you included in your wages or compensation in an earlier year on which social security, Medicare, or tier 1 RRTA taxes were paid, ask your employer to refund the excess amount to you. Vita irs If the employer refuses to refund the taxes, ask for a statement indicating the amount of the overcollection to support your claim. Vita irs File a claim for refund using Form 843, Claim for Refund and Request for Abatement. Vita irs Repaid wages subject to Additional Medicare Tax. Vita irs   Employers cannot make an adjustment or file a claim for refund for Additional Medicare Tax withholding when there is a repayment of wages received by an employee in a prior year because the employee determines liability for Additional Medicare Tax on the employee's income tax return for the prior year. Vita irs If you had to repay an amount that you included in your wages or compensation in an earlier year, and on which Additional Medicare Tax was paid, you may be able to recover the Additional Medicare Tax paid on the amount. Vita irs To recover Additional Medicare Tax on the repaid wages or compensation, you must file Form 1040X, Amended U. Vita irs S. Vita irs Individual Income Tax Return, for the prior year in which the wages or compensation were originally received. Vita irs See the Instructions for Form 1040X. Vita irs Royalties Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. Vita irs In most cases you report royalties in Part I of Schedule E (Form 1040). Vita irs However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc. Vita irs , report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Vita irs Copyrights and patents. Vita irs   Royalties from copyrights on literary, musical, or artistic works, and similar property, or from patents on inventions, are amounts paid to you for the right to use your work over a specified period of time. Vita irs Royalties generally are based on the number of units sold, such as the number of books, tickets to a performance, or machines sold. Vita irs Oil, gas, and minerals. Vita irs   Royalty income from oil, gas, and mineral properties is the amount you receive when natural resources are extracted from your property. Vita irs The royalties are based on units, such as barrels, tons, etc. Vita irs , and are paid to you by a person or company who leases the property from you. Vita irs Depletion. Vita irs   If you are the owner of an economic interest in mineral deposits or oil and gas wells, you can recover your investment through the depletion allowance. Vita irs For information on this subject, see chapter 9 of Publication 535. Vita irs Coal and iron ore. Vita irs   Under certain circumstances, you can treat amounts you receive from the disposal of coal and iron ore as payments from the sale of a capital asset, rather than as royalty income. Vita irs For information about gain or loss from the sale of coal and iron ore, see Publication 544. Vita irs Sale of property interest. Vita irs   If you sell your complete interest in oil, gas, or mineral rights, the amount you receive is considered payment for the sale of property used in a trade or business under section 1231, not royalty income. Vita irs Under certain circumstances, the sale is subject to capital gain or loss treatment as explained in the Instructions for Schedule D (Form 1040). Vita irs For more information on selling section 1231 property, see chapter 3 of Publication 544. Vita irs   If you retain a royalty, an overriding royalty, or a net profit interest in a mineral property for the life of the property, you have made a lease or a sublease, and any cash you receive for the assignment of other interests in the property is ordinary income subject to a depletion allowance. Vita irs Part of future production sold. Vita irs   If you own mineral property but sell part of the future production, in most cases you treat the money you receive from the buyer at the time of the sale as a loan from the buyer. Vita irs Do not include it in your income or take depletion based on it. Vita irs   When production begins, you include all the proceeds in your income, deduct all the production expenses, and deduct depletion from that amount to arrive at your taxable income from the property. Vita irs Unemployment Benefits The tax treatment of unemployment benefits you receive depends on the type of program paying the benefits. Vita irs Unemployment compensation. Vita irs   You must include in income all unemployment compensation you receive. Vita irs You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you. Vita irs In most cases, you enter unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Vita irs Types of unemployment compensation. Vita irs   Unemployment compensation generally includes any amount received under an unemployment compensation law of the United States or of a state. Vita irs It includes the following benefits. Vita irs Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund. Vita irs State unemployment insurance benefits. Vita irs Railroad unemployment compensation benefits. Vita irs Disability payments from a government program paid as a substitute for unemployment compensation. Vita irs (Amounts received as workers' compensation for injuries or illness are not unemployment compensation. Vita irs See chapter 5 for more information. Vita irs ) Trade readjustment allowances under the Trade Act of 1974. Vita irs Unemployment assistance under the Disaster Relief and Emergency Assistance Act. Vita irs Unemployment assistance under the Airline Deregulation Act of 1974 Program. Vita irs Governmental program. Vita irs   If you contribute to a governmental unemployment compensation program and your contributions are not deductible, amounts you receive under the program are not included as unemployment compensation until you recover your contributions. Vita irs If you deducted all of your contributions to the program, the entire amount you receive under the program is included in your income. Vita irs Repayment of unemployment compensation. Vita irs   If you repaid in 2013 unemployment compensation you received in 2013, subtract the amount you repaid from the total amount you received and enter the difference on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Vita irs On the dotted line next to your entry enter “Repaid” and the amount you repaid. Vita irs If you repaid unemployment compensation in 2013 that you included in income in an earlier year, you can deduct the amount repaid on Schedule A (Form 1040), line 23, if you itemize deductions. Vita irs If the amount is more than $3,000, see Repayments , earlier. Vita irs Tax withholding. Vita irs   You can choose to have federal income tax withheld from your unemployment compensation. Vita irs To make this choice, complete Form W-4V, Voluntary Withholding Request, and give it to the paying office. Vita irs Tax will be withheld at 10% of your payment. Vita irs    If you do not choose to have tax withheld from your unemployment compensation, you may be liable for estimated tax. Vita irs If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Vita irs For more information on estimated tax, see chapter 4. Vita irs Supplemental unemployment benefits. Vita irs   Benefits received from an employer-financed fund (to which the employees did not contribute) are not unemployment compensation. Vita irs They are taxable as wages and are subject to withholding for income tax. Vita irs They may be subject to social security and Medicare taxes. Vita irs For more information, see Supplemental Unemployment Benefits in section 5 of Publication 15-A, Employer's Supplemental Tax Guide. Vita irs Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Vita irs Repayment of benefits. Vita irs   You may have to repay some of your supplemental unemployment benefits to qualify for trade readjustment allowances under the Trade Act of 1974. Vita irs If you repay supplemental unemployment benefits in the same year you receive them, reduce the total benefits by the amount you repay. Vita irs If you repay the benefits in a later year, you must include the full amount of the benefits received in your income for the year you received them. Vita irs   Deduct the repayment in the later year as an adjustment to gross income on Form 1040. Vita irs (You cannot use Form 1040A or Form 1040EZ. Vita irs ) Include the repayment on Form 1040, line 36, and enter “Sub-Pay TRA” and the amount on the dotted line next to line 36. Vita irs If the amount you repay in a later year is more than $3,000, you may be able to take a credit against your tax for the later year instead of deducting the amount repaid. Vita irs For more information on this, see Repayments , earlier. Vita irs Private unemployment fund. Vita irs   Unemployment benefit payments from a private (nonunion) fund to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. Vita irs Report the taxable amount on Form 1040, line 21. Vita irs Payments by a union. Vita irs   Benefits paid to you as an unemployed member of a union from regular union dues are included in your income on Form 1040, line 21. Vita irs However, if you contribute to a special union fund and your payments to the fund are not deductible, the unemployment benefits you receive from the fund are includible in your income only to the extent they are more than your contributions. Vita irs Guaranteed annual wage. Vita irs   Payments you receive from your employer during periods of unemployment, under a union agreement that guarantees you full pay during the year, are taxable as wages. Vita irs Include them on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Vita irs State employees. Vita irs   Payments similar to a state's unemployment compensation may be made by the state to its employees who are not covered by the state's unemployment compensation law. Vita irs Although the payments are fully taxable, do not report them as unemployment compensation. Vita irs Report these payments on Form 1040, line 21. Vita irs Welfare and Other Public Assistance Benefits Do not include in your income governmental benefit payments from a public welfare fund based upon need, such as payments to blind individuals under a state public assistance law. Vita irs Payments from a state fund for the victims of crime should not be included in the victims' incomes if they are in the nature of welfare payments. Vita irs Do not deduct medical expenses that are reimbursed by such a fund. Vita irs You must include in your income any welfare payments that are compensation for services or that are obtained fraudulently. Vita irs Reemployment Trade Adjustment Assistance (RTAA) payments. Vita irs   RTAA payments received from a state must be included in your income. Vita irs The state must send you Form 1099-G to advise you of the amount you should include in income. Vita irs The amount should be reported on Form 1040, line 21. Vita irs Persons with disabilities. Vita irs   If you have a disability, you must include in income compensation you receive for services you perform unless the compensation is otherwise excluded. Vita irs However, you do not include in income the value of goods, services, and cash that you receive, not in return for your services, but for your training and rehabilitation because you have a disability. Vita irs Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, and services to help individuals with an intellectual disability do their work. Vita irs Disaster relief grants. Vita irs    Do not include post-disaster grants received under the Robert T. Vita irs Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, child care, or funeral expenses. Vita irs Do not deduct casualty losses or medical expenses that are specifically reimbursed by these disaster relief grants. Vita irs If you have deducted a casualty loss for the loss of your personal residence and you later receive a disaster relief grant for the loss of the same residence, you may have to include part or all of the grant in your taxable income. Vita irs See Recoveries , earlier. Vita irs Unemployment assistance payments under the Act are taxable unemployment compensation. Vita irs See Unemployment compensation under Unemployment Benefits, earlier. Vita irs Disaster relief payments. Vita irs   You can exclude from income any amount you receive that is a qualified disaster relief payment. Vita irs A qualified disaster relief payment is an amount paid to you: To reimburse or pay reasonable and necessary personal, family, living, or funeral expenses that result from a qualified disaster; To reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of your home or repair or replacement of its contents to the extent it is due to a qualified disaster; By a person engaged in the furnishing or sale of transportation as a common carrier because of the death or personal physical injuries incurred as a result of a qualified disaster; or By a federal, state, or local government, or agency, or instrumentality in connection with a qualified disaster in order to promote the general welfare. Vita irs You can exclude this amount only to the extent any expense it pays for is not paid for by insurance or otherwise. Vita irs The exclusion does not apply if you were a participant or conspirator in a terrorist action or a representative of one. Vita irs   A qualified disaster is: A disaster which results from a terrorist or military action; A federally declared disaster; or A disaster which results from an accident involving a common carrier, or from any other event, which is determined to be catastrophic by the Secretary of the Treasury or his or her delegate. Vita irs   For amounts paid under item (4), a disaster is qualified if it is determined by an applicable federal, state, or local authority to warrant assistance from the federal, state, or local government, agency, or instrumentality. Vita irs Disaster mitigation payments. Vita irs   You also can exclude from income any amount you receive that is a qualified disaster mitigation payment. Vita irs Qualified disaster mitigation payments are also most commonly paid to you in the period immediately following damage to property as a result of a natural disaster. Vita irs However, disaster mitigation payments are used to mitigate (reduce the severity of) potential damage from future natural disasters. Vita irs They are paid to you through state and local governments based on the provisions of the Robert T. Vita irs Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act. Vita irs   You cannot increase the basis or adjusted basis of your property for improvements made with nontaxable disaster mitigation payments. Vita irs Home Affordable Modification Program (HAMP). Vita irs   If you benefit from Pay-for-Performance Success Payments under HAMP, the payments are not taxable. Vita irs Mortgage assistance payments under section 235 of the National Housing Act. Vita irs   Payments made under section 235 of the National Housing Act for mortgage assistance are not included in the homeowner's income. Vita irs Interest paid for the homeowner under the mortgage assistance program cannot be deducted. Vita irs Medicare. Vita irs   Medicare benefits received under title XVIII of the Social Security Act are not includible in the gross income of the individuals for whom they are paid. Vita irs This includes basic (part A (Hospital Insurance Benefits for the Aged)) and supplementary (part B (Supplementary Medical Insurance Benefits for the Aged)). Vita irs Old-age, survivors, and disability insurance benefits (OASDI). Vita irs   Generally, OASDI payments under section 202 of title II of the Social Security Act are not includible in the gross income of the individuals to whom they are paid. Vita irs This applies to old-age insurance benefits, and insurance benefits for wives, husbands, children, widows, widowers, mothers and fathers, and parents, as well as the lump-sum death payment. Vita irs Nutrition Program for the Elderly. Vita irs    Food benefits you receive under the Nutrition Program for the Elderly are not taxable. Vita irs If you prepare and serve free meals for the program, include in your income as wages the cash pay you receive, even if you are also eligible for food benefits. Vita irs Payments to reduce cost of winter energy. Vita irs   Payments made by a state to qualified people to reduce their cost of winter energy use are not taxable. Vita irs Other Income The following brief discussions are arranged in alphabetical order. Vita irs Other income items briefly discussed below are referenced to publications which provide more topical information. Vita irs Activity not for profit. Vita irs   You must include on your return income from an activity from which you do not expect to make a profit. Vita irs An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. Vita irs Enter this income on Form 1040, line 21. Vita irs Deductions for expenses related to the activity are limited. Vita irs They cannot total more than the income you report and can be taken only if you itemize deductions on Schedule A (Form 1040). Vita irs See Not-for-Profit Activities in chapter 1 of Publication 535 for information on whether an activity is considered carried on for a profit. Vita irs Alaska Permanent Fund dividend. Vita irs   If you received a payment from Alaska's mineral income fund (Alaska Permanent Fund dividend), report it as income on line 21 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Vita irs The state of Alaska sends each recipient a document that shows the amount of the payment with the check. Vita irs The amount also is reported to IRS. Vita irs Alimony. Vita irs   Include in your income on Form 1040, line 11, any alimony payments you receive. Vita irs Amounts you receive for child support are not income to you. Vita irs Alimony and child support payments are discussed in chapter 18. Vita irs Bribes. Vita irs   If you receive a bribe, include it in your income. Vita irs Campaign contributions. Vita irs   These contributions are not income to a candidate unless they are diverted to his or her personal use. Vita irs To be exempt from tax, the contributions must be spent for campaign purposes or kept in a fund for use in future campaigns. Vita irs However, interest earned on bank deposits, dividends received on contributed securities, and net gains realized on sales of contributed securities are taxable and must be reported on Form 1120-POL, U. Vita irs S. Vita irs Income Tax Return for Certain Political Organizations. Vita irs Excess campaign funds transferred to an office account must be included in the officeholder's income on Form 1040, line 21, in the year transferred. Vita irs Car pools. Vita irs   Do not include in your income amounts you receive from the passengers for driving a car in a car pool to and from work. Vita irs These amounts are considered reimbursement for your expenses. Vita irs However, this rule does not apply if you have developed car pool arrangements into a profit-making business of transporting workers for hire. Vita irs Cash rebates. Vita irs   A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate. Vita irs Example. Vita irs You buy a new car for $24,000 cash and receive a $2,000 rebate check from the manufacturer. Vita irs The $2,000 is not income to you. Vita irs Your basis in the car is $22,000. Vita irs This is the basis on which you figure gain or loss if you sell the car and depreciation if you use it for business. Vita irs Casualty insurance and other reimbursements. Vita irs   You generally should not report these reimbursements on your return unless you are figuring gain or loss from the casualty or theft. Vita irs See chapter 25 for more information. Vita irs Child support payments. Vita irs   You should not report these payments on your return. Vita irs See chapter 18 for more information. Vita irs Court awards and damages. Vita irs   To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. Vita irs The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. Vita irs Include the following as ordinary income. Vita irs Interest on any award. Vita irs Compensation for lost wages or lost profits in most cases. Vita irs Punitive damages, in most cases. Vita irs It does not matter if they relate to a physical injury or physical sickness. Vita irs Amounts received in settlement of pension rights (if you did not contribute to the plan). Vita irs Damages for: Patent or copyright infringement, Breach of contract, or Interference with business operations. Vita irs Back pay and damages for emotional distress received to satisfy a claim under title VII of the Civil Rights Act of 1964. Vita irs Attorney fees and costs (including contingent fees) where the underlying recovery is included in gross income. Vita irs   Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments). Vita irs Emotional distress. Vita irs   Emotional distress itself is not a physical injury or physical sickness, but damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. Vita irs Do not include them in your income. Vita irs   If the emotional distress is due to a personal injury that is not due to a physical injury or sickness (for example, employment discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Vita irs Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders. Vita irs Deduction for costs involved in unlawful discrimination suits. Vita irs   You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. Vita irs For more information, see Publication 525. Vita irs Credit card insurance. Vita irs   In most cases, if you receive benefits under a credit card disability or unemployment insurance plan, the benefits are taxable to you. Vita irs These plans make the minimum monthly payment on your credit card account if you cannot make the payment due to injury, illness, disability, or unemployment. Vita irs Report on Form 1040, line 21, the amount of benefits you received during the year that is more than the amount of the premiums you paid during the year. Vita irs Down payment assistance. Vita irs   If you purchase a home and receive assistance from a nonprofit corporation to make the down payment, that assistance is not included in your income. Vita irs If the corporation qualifies as a tax-exempt charitable organization, the assistance is treated as a gift and is included in your basis of the house. Vita irs If the corporation does not qualify, the assistance is treated as a rebate or reduction of the purchase price and is not included in your basis. Vita irs Employment agency fees. Vita irs   If you get a job through an employment agency, and the fee is paid by your employer, the fee is not includible in your income if you are not liable for it. Vita irs However, if you pay it and your employer reimburses you for it, it is includible in your income. Vita irs Energy conservation subsidies. Vita irs   You can exclude from gross income any subsidy provided, either directly or indirectly, by public utilities for the purchase or installation of an energy conservation measure for a dwelling unit. Vita irs Energy conservation measure. Vita irs   This includes installations or modifications that are primarily designed to reduce consumption of electricity or natural gas, or improve the management of energy demand. Vita irs Dwelling unit. Vita irs   This includes a house, apartment, condominium, mobile home, boat, or similar property. Vita irs If a building or structure contains both dwelling and other units, any subsidy must be properly allocated. Vita irs Estate and trust income. Vita irs    An estate or trust, unlike a partnership, may have to pay federal income tax. Vita irs If you are a beneficiary of an estate or trust, you may be taxed on your share of its income distributed or required to be distributed to you. Vita irs However, there is never a double tax. Vita irs Estates and trusts file their returns on Form 1041, U. Vita irs S. Vita irs Income Tax Return for Estates and Trusts, and your share of the income is reported to you on Schedule K-1 (Form 1041). Vita irs Current income required to be distributed. Vita irs   If you are the beneficiary of an estate or trust that must distribute all of its current income, you must report your share of the distributable net income, whether or not you actually received it. Vita irs Current income not required to be distributed. Vita irs    If you are the beneficiary of an estate or trust and the fiduciary has the choice of whether to distribute all or part of the current income, you must report: All income that is required to be distributed to you, whether or not it is actually distributed, plus All other amounts actually paid or credited to you, up to the amount of your share of distributable net income. Vita irs How to report. Vita irs   Treat each item of income the same way that the estate or trust would treat it. Vita irs For example, if a trust's dividend income is distributed to you, you report the distribution as dividend income on your return. Vita irs The same rule applies to distributions of tax-exempt interest and capital gains. Vita irs   The fiduciary of the estate or trust must tell you the type of items making up your share of the estate or trust income and any credits you are allowed on your individual income tax return. Vita irs Losses. Vita irs   Losses of estates and trusts generally are not deductible by the beneficiaries. Vita irs Grantor trust. Vita irs   Income earned by a grantor trust is taxable to the grantor, not the beneficiary, if the grantor keeps certain control over the trust. Vita irs (The grantor is the one who transferred property to the trust. Vita irs ) This rule applies if the property (or income from the property) put into the trust will or may revert (be returned) to the grantor or the grantor's spouse. Vita irs   Generally, a trust is a grantor trust if the grantor has a reversionary interest valued (at the date of transfer) at more than 5% of the value of the transferred property. Vita irs Expenses paid by another. Vita irs   If your personal expenses are paid for by another person, such as a corporation, the payment may be taxable to you depending upon your relationship with that person and the nature of the payment. Vita irs But if the payment makes up for a loss caused by that person, and only restores you to the position you were in before the loss, the payment is not includible in your income. Vita irs Fees for services. Vita irs   Include all fees for your services in your income. Vita irs Examples of these fees are amounts you receive for services you perform as: A corporate director, An executor, administrator, or personal representative of an estate, A manager of a trade or business you operated before declaring Chapter 11 bankruptcy, A notary public, or An election precinct official. Vita irs Nonemployee compensation. Vita irs   If you are not an employee and the fees for your services from the same payer total $600 or more for the year, you may receive a Form 1099-MISC. Vita irs You may need to report your fees as self-employment income. Vita irs See Self-Employed Persons , in chapter 1, for a discussion of when you are considered self-employed. Vita irs Corporate director. Vita irs   Corporate director fees are self-employment income. Vita irs Report these payments on Schedule C or Schedule C-EZ (Form 1040). Vita irs Personal representatives. Vita irs   All personal representatives must include in their gross income fees paid to them from an estate. Vita irs If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on Form 1040, line 21. Vita irs If you are in the trade or business of being an executor, report these fees as self-employment income on Schedule C or Schedule C-EZ (Form 1040). Vita irs The fee is not includible in income if it is waived. Vita irs Manager of trade or business for bankruptcy estate. Vita irs   Include in your income all payments received from your bankruptcy estate for managing or operating a trade or business that you operated before you filed for bankruptcy. Vita irs Report this income on Form 1040, line 21. Vita irs Notary public. Vita irs    Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). Vita irs These payments are not subject to self-employment tax. Vita irs See the separate instructions for Schedule SE (Form 1040) for details. Vita irs Election precinct official. Vita irs    You should receive a Form W-2 showing payments for services performed as an election official or election worker. Vita irs Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Vita irs Foster care providers. Vita irs   Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. Vita irs However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty-of-care payments. Vita irs   A qualified foster individual is a person who: Is living in a foster family home, and Was placed there by: An agency of a state or one of its political subdivisions, or A qualified foster care placement agency. Vita irs Difficulty-of-care payments. Vita irs   These are additional payments that are designated by the payer as compensation for providing the additional care that is required for physically, mentally, or emotionally handicapped qualified foster individuals. Vita irs A state must determine that the additional compensation is needed, and the care for which the payments are made must be provided in your home. Vita irs   You must include in your income difficulty-of-care payments received for more than: 10 qualified foster individuals under age 19, or 5 qualified foster individuals age 19 or older. Vita irs Maintaining space in home. Vita irs   If you are paid to maintain space in your home for emergency foster care, you must include the payment in your income. Vita irs Reporting taxable payments. Vita irs    If you receive payments that you must include in your income, you are in business as a foster care provider and you are self-employed. Vita irs Report the payments on Schedule C or Schedule C-EZ (Form 1040). Vita irs See Publication 587, Business Use of Your Home, to help you determine the amount you can deduct for the use of your home. Vita irs Found property. Vita irs   If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession. Vita irs Free tour. Vita irs   If you received a free tour from a travel agency for organizing a group of tourists, you must include its value in your income. Vita irs Report the fair market value of the tour on Form 1040, line 21, if you are not in the trade or business of organizing tours. Vita irs You cannot deduct your expenses in serving as the voluntary leader of the group at the group's request. Vita irs If you organize tours as a trade or business, report the tour's value on Schedule C or Schedule C-EZ (Form 1040). Vita irs Gambling winnings. Vita irs   You must include your gambling winnings in income on Form 1040, line 21. Vita irs If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings. Vita irs Lotteries and raffles. Vita irs   Winnings from lotteries and raffles are gambling winnings. Vita irs In addition to cash winnings, you must include in your income the fair market value of bonds, cars, houses, and other noncash prizes. Vita irs    If you win a state lottery prize payable in installments, see Publication 525 for more information. Vita irs Form W-2G. Vita irs   You may have received a Form W-2G, Certain Gambling Winnings, showing the amount of your gambling winnings and any tax taken out of them. Vita irs Include the amount from box 1 on Form 1040, line 21. Vita irs Include the amount shown in box 4 on Form 1040, line 62, as federal income tax withheld. Vita irs Reporting winnings and recordkeeping. Vita irs   For more information on reporting gam
Print - Click this link to Print this page

IRS New Media

Connect with the IRS

The IRS uses social media tools to share the latest information on tax changes, initiatives, products and services.  Connect with the IRS through the following social media tools.

IRS2Go

If you have an Apple iPhone or iTouch, you can download the free IRS2Go app by visiting the iTunes app store. If you have an Android device, you can visit the Google Play Store to download the free IRS2Go app.

YouTube

Tune in to the IRS YouTube channels. You can watch short, informative videos in English, American Sign Language and other languages.

Twitter

IRS tweets include various tax-related announcements, news for tax professionals and hiring initiatives.

Tumblr

The IRS Tumblr blog provides current tax information.

Facebook

The IRS Return Preparer Facebook page posts useful information for tax professionals.

Audio files for Podcasts

Subscribe to IRS Podcasts on iTunes or download them from the Multimedia Center.

Widgets

Post IRS widgets on your website or social media networks to help direct others to IRS.gov for complete details on a variety of topics. Get them and other tax products at IRS Marketing Express.

Subscriptions

Sign up for free e-News subscriptions on many topics. This news is delivered straight to your inbox. See which ones you want to join.

Protect Your Identity

At the IRS, privacy and security are paramount. We use these tools to share public information with you. Don’t post your social security number or other confidential information on social media sites. Always protect your identity when using any social networking site.

We will not be able to answer personal tax or account questions on any of these sites.

 

Page Last Reviewed or Updated: 12-Dec-2013

The Vita Irs

Vita irs 11. Vita irs   Departing Aliens and the Sailing or Departure Permit Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Aliens Not Required To Obtain Sailing or Departure Permits Aliens Required To Obtain Sailing or Departure PermitsGetting a Sailing or Departure Permit Forms To File Paying Taxes and Obtaining Refunds Bond To Ensure Payment Filing Annual U. Vita irs S. Vita irs Income Tax Returns Introduction Before leaving the United States, all aliens (except those listed under Aliens Not Required To Obtain Sailing or Departure Permits must obtain a certificate of compliance. Vita irs This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Vita irs You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Vita irs These forms are discussed in this chapter. Vita irs To find out if you need a sailing or departure permit, first read Aliens Not Required To Obtain Sailing or Departure Permits . Vita irs If you do not fall into one of the categories in that discussion, you must obtain a sailing or departure permit. Vita irs Read Aliens Required To Obtain Sailing or Departure Permits . Vita irs Topics - This chapter discusses: Who needs a sailing permit, How to get a sailing permit, and Forms you file to get a sailing permit. Vita irs Useful Items - You may want to see: Form (and Instructions) 1040-C U. Vita irs S. Vita irs Departing Alien Income Tax Return 2063 U. Vita irs S. Vita irs Departing Alien Income Tax Statement See chapter 12 for information about getting these forms. Vita irs Aliens Not Required To Obtain Sailing or Departure Permits If you are included in one of the following categories, you do not have to get a sailing or departure permit before leaving the United States. Vita irs If you are in one of these categories and do not have to get a sailing or departure permit, you must be able to support your claim for exemption with proper identification or give the authority for the exemption. Vita irs Category 1. Vita irs   Representatives of foreign governments with diplomatic passports, whether accredited to the United States or other countries, members of their households, and servants accompanying them. Vita irs Servants who are leaving, but not with a person with a diplomatic passport, must get a sailing or departure permit. Vita irs However, they can get a sailing or departure permit on Form 2063 without examination of their income tax liability by presenting a letter from the chief of their diplomatic mission certifying that: Their name appears on the “White List” (a list of employees of diplomatic missions), and They do not owe to the United States any income tax, and will not owe any tax up to and including the intended date of departure. Vita irs   The statement must be presented to an IRS office. Vita irs Category 2. Vita irs    Employees of international organizations and foreign governments (other than diplomatic representatives exempt under category 1) and members of their households: Whose compensation for official services is exempt from U. Vita irs S. Vita irs tax under U. Vita irs S. Vita irs tax laws (described in chapter 10), and Who receive no other income from U. Vita irs S. Vita irs sources. Vita irs If you are an alien in category (1) or (2), above, who filed the waiver under section 247(b) of the Immigration and Nationality Act, you must get a sailing or departure permit. Vita irs This is true even if your income is exempt from U. Vita irs S. Vita irs tax because of an income tax treaty, consular agreement, or international agreement. Vita irs Category 3. Vita irs   Alien students, industrial trainees, and exchange visitors, including their spouses and children, who enter on an “F-1,” “F-2,” “H-3,” “H-4,” “J-1,” “J-2,” or “Q” visa only and who receive no income from U. Vita irs S. Vita irs sources while in the United States under those visas other than: Allowances to cover expenses incident to study or training in the United States, such as expenses for travel, maintenance, and tuition, The value of any services or food and lodging connected with this study or training, Income from employment authorized by the U. Vita irs S. Vita irs Citizenship and Immigration Services (USCIS), or Interest income on deposits that is not effectively connected with a U. Vita irs S. Vita irs trade or business. Vita irs (See Interest Income in chapter 3. Vita irs ) Category 4. Vita irs   Alien students, including their spouses and children, who enter on an “M-1” or “M-2” visa only and who receive no income from U. Vita irs S. Vita irs sources while in the United States under those visas, other than: Income from employment authorized by the U. Vita irs S. Vita irs Citizenship and Immigration Services (USCIS) or Interest income on deposits that is not effectively connected with a U. Vita irs S. Vita irs trade or business. Vita irs (See Interest Income in chapter 3. Vita irs ) Category 5. Vita irs   Certain other aliens temporarily in the United States who have received no taxable income during the tax year up to and including the date of departure or during the preceding tax year. Vita irs If the IRS has reason to believe that an alien has received income subject to tax and that the collection of income tax is jeopardized by departure, it may then require the alien to obtain a sailing or departure permit. Vita irs Aliens in this category are: Alien military trainees who enter the United States for training under the sponsorship of the Department of Defense and who leave the United States on official military travel orders, Alien visitors for business on a “B-1” visa, or on both a “B-1” visa and a “B-2” visa, who do not remain in the United States or a U. Vita irs S. Vita irs possession for more than 90 days during the tax year, Alien visitors for pleasure on a “B-2” visa, Aliens in transit through the United States or any of its possessions on a “C-1” visa, or under a contract, such as a bond agreement, between a transportation line and the Attorney General, and Aliens who enter the United States on a border-crossing identification card or for whom passports, visas, and border-crossing identification cards are not required, if they are: Visitors for pleasure, Visitors for business who do not remain in the United States or a U. Vita irs S. Vita irs possession for more than 90 days during the tax year, or In transit through the United States or any of its possessions. Vita irs Category 6. Vita irs   Alien residents of Canada or Mexico who frequently commute between that country and the United States for employment, and whose wages are subject to the withholding of U. Vita irs S. Vita irs tax. Vita irs Aliens Required To Obtain Sailing or Departure Permits If you do not fall into one of the categories listed under Aliens Not Required To Obtain Sailing or Departure Permits, you must obtain a sailing or departure permit. Vita irs To obtain a permit, file Form 1040-C or Form 2063 (whichever applies) with your local IRS office before you leave the United States. Vita irs See Forms To File , later. Vita irs You must also pay all the tax shown as due on Form 1040-C and any taxes due for past years. Vita irs See Paying Taxes and Obtaining Refunds , later. Vita irs Getting a Sailing or Departure Permit The following discussion covers when and where to get your sailing permit. Vita irs Where to get a sailing or departure permit. Vita irs   If you have been working in the United States, you should get the permit from an IRS office in the area of your employment, or you may obtain one from an IRS office in the area of your departure. Vita irs When to get a sailing or departure permit. Vita irs   You should get your sailing or departure permit at least 2 weeks before you plan to leave. Vita irs You cannot apply earlier than 30 days before your planned departure date. Vita irs Do not wait until the last minute in case there are unexpected problems. Vita irs Papers to submit. Vita irs   Getting your sailing or departure permit will go faster if you bring to the IRS office papers and documents related to your income and your stay in the United States. Vita irs Bring the following records with you if they apply. Vita irs Your passport and alien registration card or visa. Vita irs Copies of your U. Vita irs S. Vita irs income tax returns filed for the past 2 years. Vita irs If you were in the United States for less than 2 years, bring the income tax returns you filed for that period. Vita irs Receipts for income taxes paid on these returns. Vita irs Receipts, bank records, canceled checks, and other documents that prove your deductions, business expenses, and dependents claimed on your returns. Vita irs A statement from each employer showing wages paid and tax withheld from January 1 of the current year to the date of departure if you were an employee. Vita irs If you were self-employed, you must bring a statement of income and expenses up to the date you plan to leave. Vita irs Proof of estimated tax payments for the past year and this year. Vita irs Documents showing any gain or loss from the sale of personal property and/or real property, including capital assets and merchandise. Vita irs Documents relating to scholarship or fellowship grants including: Verification of the grantor, source, and purpose of the grant. Vita irs Copies of the application for, and approval of, the grant. Vita irs A statement of the amount paid, and your duties and obligations under the grant. Vita irs A list of any previous grants. Vita irs Documents indicating you qualify for any special tax treaty benefits claimed. Vita irs Document verifying your date of departure from the United States, such as an airline ticket. Vita irs Document verifying your U. Vita irs S. Vita irs taxpayer identification number, such as a social security card or an IRS issued Notice CP 565 showing your individual taxpayer identification number (ITIN). Vita irs Note. Vita irs   If you are married and reside in a community property state, also bring the above-listed documents for your spouse. Vita irs This applies whether or not your spouse requires a permit. Vita irs Forms To File If you must get a sailing or departure permit, you must file Form 2063 or Form 1040-C. Vita irs Employees in the IRS office can assist in filing these forms. Vita irs Both forms have a “certificate of compliance” section. Vita irs When the certificate of compliance is signed by an agent of the Field Assistance Area Director, it certifies that your U. Vita irs S. Vita irs tax obligations have been satisfied according to available information. Vita irs Your Form 1040-C copy of the signed certificate, or the one detached from Form 2063, is your sailing or departure permit. Vita irs Form 2063 This is a short form that asks for certain information but does not include a tax computation. Vita irs The following departing aliens can get their sailing or departure permits by filing Form 2063. Vita irs Aliens, whether resident or nonresident, who have had no taxable income for the tax year up to and including the date of departure and for the preceding year, if the period for filing the income tax return for that year has not expired. Vita irs Resident aliens who have received taxable income during the tax year or preceding year and whose departure will not hinder the collection of any tax. Vita irs However, if the IRS has information indicating that the aliens are leaving to avoid paying their income tax, they must file a Form 1040-C. Vita irs Aliens in either of these categories who have not filed an income tax return or paid income tax for any tax year must file the return and pay the income tax before they can be issued a sailing or departure permit on Form 2063. Vita irs The sailing or departure permit detached from Form 2063 can be used for all departures during the current year. Vita irs However, the IRS may cancel the sailing or departure permit for any later departure if it believes the collection of income tax is jeopardized by that later departure. Vita irs Form 1040-C If you must get a sailing or departure permit and you do not qualify to file Form 2063, you must file Form 1040-C. Vita irs Ordinarily, all income received or reasonably expected to be received during the tax year up to and including the date of departure must be reported on Form 1040-C and the tax on it must be paid. Vita irs When you pay any tax shown as due on the Form 1040-C, and you file all returns and pay all tax due for previous years, you will receive a sailing or departure permit. Vita irs However, the IRS may permit you to furnish a bond guaranteeing payment instead of paying the taxes for certain years. Vita irs See Bond To Ensure Payment , discussed later. Vita irs The sailing or departure permit issued under the conditions in this paragraph is only for the specific departure for which it is issued. Vita irs Returning to the United States. Vita irs   If you furnish the IRS with information showing, to the satisfaction of the IRS, that you intend to return to the United States and that your departure does not jeopardize the collection of income tax, you can get a sailing or departure permit by filing Form 1040-C without having to pay the tax shown on it. Vita irs You must, however, file all income tax returns that have not yet been filed as required, and pay all income tax that is due on these returns. Vita irs   Your Form 1040-C must include all income received and reasonably expected to be received during the entire year of departure. Vita irs The sailing or departure permit issued with this Form 1040-C can be used for all departures during the current year. Vita irs However, the Service may cancel the sailing or departure permit for any later departure if the payment of income tax appears to be in jeopardy. Vita irs Joint return on Form 1040-C. Vita irs   Departing husbands and wives who are nonresident aliens cannot file joint returns. Vita irs However, if both spouses are resident aliens, they can file a joint return on Form 1040-C if: Both spouses can reasonably be expected to qualify to file a joint return at the normal close of their tax year, and The tax years of the spouses end at the same time. Vita irs Paying Taxes and Obtaining Refunds You must pay all tax shown as due on the Form 1040-C at the time of filing it, except when a bond is furnished, or the IRS is satisfied that your departure does not jeopardize the collection of income tax. Vita irs You must also pay any taxes due for past years. Vita irs If the tax computation on Form 1040-C results in an overpayment, there is no tax to pay at the time you file that return. Vita irs However, the IRS cannot provide a refund at the time of departure. Vita irs If you are due a refund, you must file either Form 1040NR or Form 1040NR-EZ at the end of the tax year. Vita irs Bond To Ensure Payment Usually, you must pay the tax shown as due on Form 1040-C when you file it. Vita irs However, if you pay all taxes due that you owe for prior years, you can furnish a bond guaranteeing payment instead of paying the income taxes shown as due on the Form 1040-C or the tax return for the preceding year if the period for filing that return has not expired. Vita irs The bond must equal the tax due plus interest to the date of payment as figured by the IRS. Vita irs Information about the form of bond and security on it can be obtained from your IRS office. Vita irs Filing Annual U. Vita irs S. Vita irs Income Tax Returns Form 1040-C is not an annual U. Vita irs S. Vita irs income tax return. Vita irs If an income tax return is required by law, that return must be filed even though a Form 1040-C has already been filed. Vita irs Chapters 5 and 7 discuss filing an annual U. Vita irs S. Vita irs income tax return. Vita irs The tax paid with Form 1040-C should be taken as a credit against the tax liability for the entire tax year on your annual U. Vita irs S. Vita irs income tax return. Vita irs Prev  Up  Next   Home   More Online Publications