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What Forms Do I Need To File My 2012 Taxes

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What Forms Do I Need To File My 2012 Taxes

What forms do i need to file my 2012 taxes Publication 530 - Main Content Table of Contents What You Can and Cannot DeductHardest Hit Fund and Emergency Homeowners' Loan Programs Real Estate Taxes Sales Taxes Home Mortgage Interest Mortgage Insurance Premiums Mortgage Interest CreditFiguring the Credit BasisFiguring Your Basis Adjusted Basis Keeping Records How To Get Tax HelpLow Income Taxpayer Clinics What You Can and Cannot Deduct To deduct expenses of owning a home, you must file Form 1040, U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes Individual Income Tax Return, and itemize your deductions on Schedule A (Form 1040). What forms do i need to file my 2012 taxes If you itemize, you cannot take the standard deduction. What forms do i need to file my 2012 taxes This section explains what expenses you can deduct as a homeowner. What forms do i need to file my 2012 taxes It also points out expenses that you cannot deduct. What forms do i need to file my 2012 taxes There are four primary discussions: real estate taxes, sales taxes, home mortgage interest, and mortgage insurance premiums. What forms do i need to file my 2012 taxes Generally, your real estate taxes, home mortgage interest, and mortgage insurance premiums are included in your house payment. What forms do i need to file my 2012 taxes Your house payment. What forms do i need to file my 2012 taxes   If you took out a mortgage (loan) to finance the purchase of your home, you probably have to make monthly house payments. What forms do i need to file my 2012 taxes Your house payment may include several costs of owning a home. What forms do i need to file my 2012 taxes The only costs you can deduct are real estate taxes actually paid to the taxing authority, interest that qualifies as home mortgage interest, and mortgage insurance premiums. What forms do i need to file my 2012 taxes These are discussed in more detail later. What forms do i need to file my 2012 taxes   Some nondeductible expenses that may be included in your house payment include: Fire or homeowner's insurance premiums, and The amount applied to reduce the principal of the mortgage. What forms do i need to file my 2012 taxes Minister's or military housing allowance. What forms do i need to file my 2012 taxes   If you are a minister or a member of the uniformed services and receive a housing allowance that is not taxable, you still can deduct your real estate taxes and your home mortgage interest. What forms do i need to file my 2012 taxes You do not have to reduce your deductions by your nontaxable allowance. What forms do i need to file my 2012 taxes For more information see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers, and Publication 3, Armed Forces' Tax Guide. What forms do i need to file my 2012 taxes Nondeductible payments. What forms do i need to file my 2012 taxes   You cannot deduct any of the following items. What forms do i need to file my 2012 taxes Insurance (other than mortgage insurance premiums), including fire and comprehensive coverage, and title insurance. What forms do i need to file my 2012 taxes Wages you pay for domestic help. What forms do i need to file my 2012 taxes Depreciation. What forms do i need to file my 2012 taxes The cost of utilities, such as gas, electricity, or water. What forms do i need to file my 2012 taxes Most settlement costs. What forms do i need to file my 2012 taxes See Settlement or closing costs under Cost as Basis, later, for more information. What forms do i need to file my 2012 taxes Forfeited deposits, down payments, or earnest money. What forms do i need to file my 2012 taxes Hardest Hit Fund and Emergency Homeowners' Loan Programs You can use a special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet the following two conditions. What forms do i need to file my 2012 taxes You received assistance under: A State Housing Finance Agency (State HFA) Hardest Hit Fund program in which program payments could be used to pay mortgage interest, or An Emergency Homeowners' Loan Program administered by the Department of Housing and Urban Development (HUD) or a state. What forms do i need to file my 2012 taxes You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your main home. What forms do i need to file my 2012 taxes If you meet these tests, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098-MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received), box 4 (mortgage insurance premiums) and box 5 (real property taxes). What forms do i need to file my 2012 taxes However, you are not required to use this special method to compute your deduction for mortgage interest and real estate taxes on your main home. What forms do i need to file my 2012 taxes Real Estate Taxes Most state and local governments charge an annual tax on the value of real property. What forms do i need to file my 2012 taxes This is called a real estate tax. What forms do i need to file my 2012 taxes You can deduct the tax if it is assessed uniformly at a like rate on all real property throughout the community. What forms do i need to file my 2012 taxes The proceeds must be for general community or governmental purposes and not be a payment for a special privilege granted or service rendered to you. What forms do i need to file my 2012 taxes Deductible Real Estate Taxes You can deduct real estate taxes imposed on you. What forms do i need to file my 2012 taxes You must have paid them either at settlement or closing, or to a taxing authority (either directly or through an escrow account) during the year. What forms do i need to file my 2012 taxes If you own a cooperative apartment, see Special Rules for Cooperatives , later. What forms do i need to file my 2012 taxes Where to deduct real estate taxes. What forms do i need to file my 2012 taxes   Enter the amount of your deductible real estate taxes on Schedule A (Form 1040), line 6. What forms do i need to file my 2012 taxes Real estate taxes paid at settlement or closing. What forms do i need to file my 2012 taxes   Real estate taxes are generally divided so that you and the seller each pay taxes for the part of the property tax year you owned the home. What forms do i need to file my 2012 taxes Your share of these taxes is fully deductible if you itemize your deductions. What forms do i need to file my 2012 taxes Division of real estate taxes. What forms do i need to file my 2012 taxes   For federal income tax purposes, the seller is treated as paying the property taxes up to, but not including, the date of sale. What forms do i need to file my 2012 taxes You (the buyer) are treated as paying the taxes beginning with the date of sale. What forms do i need to file my 2012 taxes This applies regardless of the lien dates under local law. What forms do i need to file my 2012 taxes Generally, this information is included on the settlement statement you get at closing. What forms do i need to file my 2012 taxes   You and the seller each are considered to have paid your own share of the taxes, even if one or the other paid the entire amount. What forms do i need to file my 2012 taxes You each can deduct your own share, if you itemize deductions, for the year the property is sold. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes You bought your home on September 1. What forms do i need to file my 2012 taxes The property tax year (the period to which the tax relates) in your area is the calendar year. What forms do i need to file my 2012 taxes The tax for the year was $730 and was due and paid by the seller on August 15. What forms do i need to file my 2012 taxes You owned your new home during the property tax year for 122 days (September 1 to December 31, including your date of purchase). What forms do i need to file my 2012 taxes You figure your deduction for real estate taxes on your home as follows. What forms do i need to file my 2012 taxes 1. What forms do i need to file my 2012 taxes Enter the total real estate taxes for the real property tax year $730 2. What forms do i need to file my 2012 taxes Enter the number of days in the property tax year that you owned the property 122 3. What forms do i need to file my 2012 taxes Divide line 2 by 365 . What forms do i need to file my 2012 taxes 3342 4. What forms do i need to file my 2012 taxes Multiply line 1 by line 3. What forms do i need to file my 2012 taxes This is your deduction. What forms do i need to file my 2012 taxes Enter it on Schedule A (Form 1040), line 6 $244   You can deduct $244 on your return for the year if you itemize your deductions. What forms do i need to file my 2012 taxes You are considered to have paid this amount and can deduct it on your return even if, under the contract, you did not have to reimburse the seller. What forms do i need to file my 2012 taxes Delinquent taxes. What forms do i need to file my 2012 taxes   Delinquent taxes are unpaid taxes that were imposed on the seller for an earlier tax year. What forms do i need to file my 2012 taxes If you agree to pay delinquent taxes when you buy your home, you cannot deduct them. What forms do i need to file my 2012 taxes You treat them as part of the cost of your home. What forms do i need to file my 2012 taxes See Real estate taxes , later, under Basis. What forms do i need to file my 2012 taxes Escrow accounts. What forms do i need to file my 2012 taxes   Many monthly house payments include an amount placed in escrow (put in the care of a third party) for real estate taxes. What forms do i need to file my 2012 taxes You may not be able to deduct the total you pay into the escrow account. What forms do i need to file my 2012 taxes You can deduct only the real estate taxes that the lender actually paid from escrow to the taxing authority. What forms do i need to file my 2012 taxes Your real estate tax bill will show this amount. What forms do i need to file my 2012 taxes Refund or rebate of real estate taxes. What forms do i need to file my 2012 taxes   If you receive a refund or rebate of real estate taxes this year for amounts you paid this year, you must reduce your real estate tax deduction by the amount refunded to you. What forms do i need to file my 2012 taxes If the refund or rebate was for real estate taxes paid for a prior year, you may have to include some or all of the refund in your income. What forms do i need to file my 2012 taxes For more information, see Recoveries in Publication 525, Taxable and Nontaxable Income. What forms do i need to file my 2012 taxes Items You Cannot Deduct as Real Estate Taxes The following items are not deductible as real estate taxes. What forms do i need to file my 2012 taxes Charges for services. What forms do i need to file my 2012 taxes   An itemized charge for services to specific property or people is not a tax, even if the charge is paid to the taxing authority. What forms do i need to file my 2012 taxes You cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged for trash collection), or A flat fee charged for a single service provided by your local government (such as a $30 charge for mowing your lawn because it had grown higher than permitted under a local ordinance). What forms do i need to file my 2012 taxes    You must look at your real estate tax bill to decide if any nondeductible itemized charges, such as those listed above, are included in the bill. What forms do i need to file my 2012 taxes If your taxing authority (or lender) does not furnish you a copy of your real estate tax bill, ask for it. What forms do i need to file my 2012 taxes Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. What forms do i need to file my 2012 taxes Assessments for local benefits. What forms do i need to file my 2012 taxes   You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. What forms do i need to file my 2012 taxes Local benefits include the construction of streets, sidewalks, or water and sewer systems. What forms do i need to file my 2012 taxes You must add these amounts to the basis of your property. What forms do i need to file my 2012 taxes   You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits. What forms do i need to file my 2012 taxes An example is a charge to repair an existing sidewalk and any interest included in that charge. What forms do i need to file my 2012 taxes   If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the amount of that part to claim the deduction. What forms do i need to file my 2012 taxes If you cannot show what part of the assessment is for maintenance, repair, or interest charges, you cannot deduct any of it. What forms do i need to file my 2012 taxes   An assessment for a local benefit may be listed as an item in your real estate tax bill. What forms do i need to file my 2012 taxes If so, use the rules in this section to find how much of it, if any, you can deduct. What forms do i need to file my 2012 taxes Transfer taxes (or stamp taxes). What forms do i need to file my 2012 taxes   You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home. What forms do i need to file my 2012 taxes If you are the buyer and you pay them, include them in the cost basis of the property. What forms do i need to file my 2012 taxes If you are the seller and you pay them, they are expenses of the sale and reduce the amount realized on the sale. What forms do i need to file my 2012 taxes Homeowners association assessments. What forms do i need to file my 2012 taxes   You cannot deduct these assessments because the homeowners association, rather than a state or local government, imposes them. What forms do i need to file my 2012 taxes Special Rules for Cooperatives If you own a cooperative apartment, some special rules apply to you, though you generally receive the same tax treatment as other homeowners. What forms do i need to file my 2012 taxes As an owner of a cooperative apartment, you own shares of stock in a corporation that owns or leases housing facilities. What forms do i need to file my 2012 taxes You can deduct your share of the corporation's deductible real estate taxes if the cooperative housing corporation meets the following conditions: The corporation has only one class of stock outstanding, Each stockholder, solely because of ownership of the stock, can live in a house, apartment, or house trailer owned or leased by the corporation, No stockholder can receive any distribution out of capital, except on a partial or complete liquidation of the corporation, and At least one of the following: At least 80% of the corporation's gross income for the tax year was paid by the tenant-stockholders. What forms do i need to file my 2012 taxes For this purpose, gross income means all income received during the entire tax year, including any received before the corporation changed to cooperative ownership. What forms do i need to file my 2012 taxes At least 80% of the total square footage of the corporation's property must be available for use by the tenant-stockholders during the entire tax year. What forms do i need to file my 2012 taxes At least 90% of the expenditures paid or incurred by the corporation were used for the acquisition, construction, management, maintenance, or care of the property for the benefit of the tenant-shareholders during the entire tax year. What forms do i need to file my 2012 taxes Tenant-stockholders. What forms do i need to file my 2012 taxes   A tenant-stockholder can be any entity (such as a corporation, trust, estate, partnership, or association) as well as an individual. What forms do i need to file my 2012 taxes The tenant-stockholder does not have to live in any of the cooperative's dwelling units. What forms do i need to file my 2012 taxes The units that the tenant-stockholder has the right to occupy can be rented to others. What forms do i need to file my 2012 taxes Deductible taxes. What forms do i need to file my 2012 taxes   You figure your share of real estate taxes in the following way. What forms do i need to file my 2012 taxes Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. What forms do i need to file my 2012 taxes Multiply the corporation's deductible real estate taxes by the number you figured in (1). What forms do i need to file my 2012 taxes This is your share of the real estate taxes. What forms do i need to file my 2012 taxes   Generally, the corporation will tell you your share of its real estate tax. What forms do i need to file my 2012 taxes This is the amount you can deduct if it reasonably reflects the cost of real estate taxes for your dwelling unit. What forms do i need to file my 2012 taxes Refund of real estate taxes. What forms do i need to file my 2012 taxes   If the corporation receives a refund of real estate taxes it paid in an earlier year, it must reduce the amount of real estate taxes paid this year when it allocates the tax expense to you. What forms do i need to file my 2012 taxes Your deduction for real estate taxes the corporation paid this year is reduced by your share of the refund the corporation received. What forms do i need to file my 2012 taxes Sales Taxes Generally, you can elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction on Schedule A (Form 1040). What forms do i need to file my 2012 taxes Deductible sales taxes may include sales taxes paid on your home (including mobile and prefabricated), or home building materials if the tax rate was the same as the general sales tax rate. What forms do i need to file my 2012 taxes For information on figuring your deduction, see the Instructions for Schedule A (Form 1040). What forms do i need to file my 2012 taxes If you elect to deduct the sales taxes paid on your home, or home building materials, you cannot include them as part of your cost basis in the home. What forms do i need to file my 2012 taxes Home Mortgage Interest This section of the publication gives you basic information about home mortgage interest, including information on interest paid at settlement, points, and Form 1098, Mortgage Interest Statement. What forms do i need to file my 2012 taxes Most home buyers take out a mortgage (loan) to buy their home. What forms do i need to file my 2012 taxes They then make monthly payments to either the mortgage holder or someone collecting the payments for the mortgage holder. What forms do i need to file my 2012 taxes Usually, you can deduct the entire part of your payment that is for mortgage interest, if you itemize your deductions on Schedule A (Form 1040). What forms do i need to file my 2012 taxes However, your deduction may be limited if: Your total mortgage balance is more than $1 million ($500,000 if married filing separately), or You took out a mortgage for reasons other than to buy, build, or improve your home. What forms do i need to file my 2012 taxes If either of these situations applies to you, see Publication 936 for more information. What forms do i need to file my 2012 taxes Also see Publication 936 if you later refinance your mortgage or buy a second home. What forms do i need to file my 2012 taxes Refund of home mortgage interest. What forms do i need to file my 2012 taxes   If you receive a refund of home mortgage interest that you deducted in an earlier year and that reduced your tax, you generally must include the refund in income in the year you receive it. What forms do i need to file my 2012 taxes For more information, see Recoveries in Publication 525. What forms do i need to file my 2012 taxes The amount of the refund will usually be shown on the mortgage interest statement you receive from your mortgage lender. What forms do i need to file my 2012 taxes See Mortgage Interest Statement , later. What forms do i need to file my 2012 taxes Deductible Mortgage Interest To be deductible, the interest you pay must be on a loan secured by your main home or a second home. What forms do i need to file my 2012 taxes The loan can be a first or second mortgage, a home improvement loan, or a home equity loan. What forms do i need to file my 2012 taxes Prepaid interest. What forms do i need to file my 2012 taxes   If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. What forms do i need to file my 2012 taxes Generally, you can deduct in each year only the interest that qualifies as home mortgage interest for that year. What forms do i need to file my 2012 taxes An exception (discussed later) applies to points. What forms do i need to file my 2012 taxes Late payment charge on mortgage payment. What forms do i need to file my 2012 taxes   You can deduct as home mortgage interest a late payment charge if it was not for a specific service in connection with your mortgage loan. What forms do i need to file my 2012 taxes Mortgage prepayment penalty. What forms do i need to file my 2012 taxes   If you pay off your home mortgage early, you may have to pay a penalty. What forms do i need to file my 2012 taxes You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. What forms do i need to file my 2012 taxes Ground rent. What forms do i need to file my 2012 taxes   In some states (such as Maryland), you may buy your home subject to a ground rent. What forms do i need to file my 2012 taxes A ground rent is an obligation you assume to pay a fixed amount per year on the property. What forms do i need to file my 2012 taxes Under this arrangement, you are leasing (rather than buying) the land on which your home is located. What forms do i need to file my 2012 taxes Redeemable ground rents. What forms do i need to file my 2012 taxes   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct the payments as mortgage interest. What forms do i need to file my 2012 taxes The ground rent is a redeemable ground rent only if all of the following are true. What forms do i need to file my 2012 taxes Your lease, including renewal periods, is for more than 15 years. What forms do i need to file my 2012 taxes You can freely assign the lease. What forms do i need to file my 2012 taxes You have a present or future right (under state or local law) to end the lease and buy the lessor's entire interest in the land by paying a specified amount. What forms do i need to file my 2012 taxes The lessor's interest in the land is primarily a security interest to protect the rental payments to which he or she is entitled. What forms do i need to file my 2012 taxes   Payments made to end the lease and buy the lessor's entire interest in the land are not redeemable ground rents. What forms do i need to file my 2012 taxes You cannot deduct them. What forms do i need to file my 2012 taxes Nonredeemable ground rents. What forms do i need to file my 2012 taxes   Payments on a nonredeemable ground rent are not mortgage interest. What forms do i need to file my 2012 taxes You can deduct them as rent only if they are a business expense or if they are for rental property. What forms do i need to file my 2012 taxes Cooperative apartment. What forms do i need to file my 2012 taxes   You can usually treat the interest on a loan you took out to buy stock in a cooperative housing corporation as home mortgage interest if you own a cooperative apartment, and the cooperative housing corporation meets the conditions described earlier under Special Rules for Cooperatives . What forms do i need to file my 2012 taxes In addition, you can treat as home mortgage interest your share of the corporation's deductible mortgage interest. What forms do i need to file my 2012 taxes Figure your share of mortgage interest the same way that is shown for figuring your share of real estate taxes in the Example under Division of real estate taxes, earlier. What forms do i need to file my 2012 taxes For more information on cooperatives, see Special Rule for Tenant-Stockholders in Cooperative Housing Corporations in Publication 936. What forms do i need to file my 2012 taxes Refund of cooperative's mortgage interest. What forms do i need to file my 2012 taxes   You must reduce your mortgage interest deduction by your share of any cash portion of a patronage dividend that the cooperative receives. What forms do i need to file my 2012 taxes The patronage dividend is a partial refund to the cooperative housing corporation of mortgage interest it paid in a prior year. What forms do i need to file my 2012 taxes   If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount you can deduct. What forms do i need to file my 2012 taxes Mortgage Interest Paid at Settlement One item that normally appears on a settlement or closing statement is home mortgage interest. What forms do i need to file my 2012 taxes You can deduct the interest that you pay at settlement if you itemize your deductions on Schedule A (Form 1040). What forms do i need to file my 2012 taxes This amount should be included in the mortgage interest statement provided by your lender. What forms do i need to file my 2012 taxes See the discussion under Mortgage Interest Statement , later. What forms do i need to file my 2012 taxes Also, if you pay interest in advance, see Prepaid interest , earlier, and Points , next. What forms do i need to file my 2012 taxes Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. What forms do i need to file my 2012 taxes Points also may be called loan origination fees, maximum loan charges, loan discount, or discount points. What forms do i need to file my 2012 taxes A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. What forms do i need to file my 2012 taxes See Points paid by the seller , later. What forms do i need to file my 2012 taxes General rule. What forms do i need to file my 2012 taxes   You cannot deduct the full amount of points in the year paid. What forms do i need to file my 2012 taxes They are prepaid interest, so you generally must deduct them over the life (term) of the mortgage. What forms do i need to file my 2012 taxes Exception. What forms do i need to file my 2012 taxes   You can deduct the full amount of points in the year paid if you meet all the following tests. What forms do i need to file my 2012 taxes Your loan is secured by your main home. What forms do i need to file my 2012 taxes (Generally, your main home is the one you live in most of the time. What forms do i need to file my 2012 taxes ) Paying points is an established business practice in the area where the loan was made. What forms do i need to file my 2012 taxes The points paid were not more than the points generally charged in that area. What forms do i need to file my 2012 taxes You use the cash method of accounting. What forms do i need to file my 2012 taxes This means you report income in the year you receive it and deduct expenses in the year you pay them. What forms do i need to file my 2012 taxes Most individuals use this method. What forms do i need to file my 2012 taxes The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. What forms do i need to file my 2012 taxes The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. What forms do i need to file my 2012 taxes The funds you provided are not required to have been applied to the points. What forms do i need to file my 2012 taxes They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. What forms do i need to file my 2012 taxes You cannot have borrowed these funds. What forms do i need to file my 2012 taxes You use your loan to buy or build your main home. What forms do i need to file my 2012 taxes The points were computed as a percentage of the principal amount of the mortgage. What forms do i need to file my 2012 taxes The amount is clearly shown on the settlement statement (such as the Uniform Settlement Statement, Form HUD-1) as points charged for the mortgage. What forms do i need to file my 2012 taxes The points may be shown as paid from either your funds or the seller's. What forms do i need to file my 2012 taxes Note. What forms do i need to file my 2012 taxes If you meet all of the tests listed above and you itemize your deductions in the year you get the loan, you can either deduct the full amount of points in the year paid or deduct them over the life of the loan, beginning in the year you get the loan. What forms do i need to file my 2012 taxes If you do not itemize your deductions in the year you get the loan, you can spread the points over the life of the loan and deduct the appropriate amount in each future year, if any, when you do itemize your deductions. What forms do i need to file my 2012 taxes Home improvement loan. What forms do i need to file my 2012 taxes   You can also fully deduct in the year paid points paid on a loan to improve your main home, if you meet the first six tests listed earlier. What forms do i need to file my 2012 taxes Refinanced loan. What forms do i need to file my 2012 taxes   If you use part of the refinanced mortgage proceeds to improve your main home and you meet the first six tests listed earlier, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. What forms do i need to file my 2012 taxes You can deduct the rest of the points over the life of the loan. What forms do i need to file my 2012 taxes Points not fully deductible in year paid. What forms do i need to file my 2012 taxes    If you do not qualify under the exception to deduct the full amount of points in the year paid (or choose not to do so), see Points in Publication 936 for the rules on when and how much you can deduct. What forms do i need to file my 2012 taxes Figure A. What forms do i need to file my 2012 taxes   You can use Figure A, next, as a quick guide to see whether your points are fully deductible in the year paid. What forms do i need to file my 2012 taxes    Please click here for the text description of the image. What forms do i need to file my 2012 taxes Figure A. What forms do i need to file my 2012 taxes Are my points fully deductible this year? Amounts charged for services. What forms do i need to file my 2012 taxes   Amounts charged by the lender for specific services connected to the loan are not interest. What forms do i need to file my 2012 taxes Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. What forms do i need to file my 2012 taxes You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. What forms do i need to file my 2012 taxes For information about the tax treatment of these amounts and other settlement fees and closing costs, see Basis , later. What forms do i need to file my 2012 taxes Points paid by the seller. What forms do i need to file my 2012 taxes   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. What forms do i need to file my 2012 taxes Treatment by seller. What forms do i need to file my 2012 taxes   The seller cannot deduct these fees as interest. What forms do i need to file my 2012 taxes However, they are a selling expense that reduces the seller's amount realized. What forms do i need to file my 2012 taxes See Publication 523 for more information. What forms do i need to file my 2012 taxes Treatment by buyer. What forms do i need to file my 2012 taxes   The buyer treats seller-paid points as if he or she had paid them. What forms do i need to file my 2012 taxes If all the tests listed earlier under Exception are met, the buyer can deduct the points in the year paid. What forms do i need to file my 2012 taxes If any of those tests are not met, the buyer must deduct the points over the life of the loan. What forms do i need to file my 2012 taxes   The buyer must also reduce the basis of the home by the amount of the seller-paid points. What forms do i need to file my 2012 taxes For more information about the basis of your home, see Basis , later. What forms do i need to file my 2012 taxes Funds provided are less than points. What forms do i need to file my 2012 taxes   If you meet all the tests listed earlier under Exception except that the funds you provided were less than the points charged to you (test 6), you can deduct the points in the year paid up to the amount of funds you provided. What forms do i need to file my 2012 taxes In addition, you can deduct any points paid by the seller. What forms do i need to file my 2012 taxes Example 1. What forms do i need to file my 2012 taxes When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). What forms do i need to file my 2012 taxes You meet all the tests for deducting points in the year paid (see Exception , earlier), except the only funds you provided were a $750 down payment. What forms do i need to file my 2012 taxes Of the $1,000 you were charged for points, you can deduct $750 in the year paid. What forms do i need to file my 2012 taxes You spread the remaining $250 over the life of the mortgage. What forms do i need to file my 2012 taxes Example 2. What forms do i need to file my 2012 taxes The facts are the same as in Example 1 , except that the person who sold you your home also paid one point ($1,000) to help you get your mortgage. What forms do i need to file my 2012 taxes In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). What forms do i need to file my 2012 taxes You spread the remaining $250 over the life of the mortgage. What forms do i need to file my 2012 taxes You must reduce the basis of your home by the $1,000 paid by the seller. What forms do i need to file my 2012 taxes Excess points. What forms do i need to file my 2012 taxes   If you meet all the tests under Exception , earlier, except that the points paid were more than are generally charged in your area (test 3), you can deduct in the year paid only the points that are generally charged. What forms do i need to file my 2012 taxes You must spread any additional points over the life of the mortgage. What forms do i need to file my 2012 taxes Mortgage ending early. What forms do i need to file my 2012 taxes   If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. What forms do i need to file my 2012 taxes A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes Dan paid $3,000 in points in 2006 that he had to spread out over the 15-year life of the mortgage. What forms do i need to file my 2012 taxes He had deducted $1,400 of these points through 2012. What forms do i need to file my 2012 taxes Dan prepaid his mortgage in full in 2013. What forms do i need to file my 2012 taxes He can deduct the remaining $1,600 of points in 2013. What forms do i need to file my 2012 taxes Exception. What forms do i need to file my 2012 taxes   If you refinance the mortgage with the same lender, you cannot deduct any remaining points for the year. What forms do i need to file my 2012 taxes Instead, deduct them over the term of the new loan. What forms do i need to file my 2012 taxes Form 1098. What forms do i need to file my 2012 taxes   The mortgage interest statement you receive should show not only the total interest paid during the year, but also your deductible points paid during the year. What forms do i need to file my 2012 taxes See Mortgage Interest Statement , later. What forms do i need to file my 2012 taxes Where To Deduct Home Mortgage Interest Enter on Schedule A (Form 1040), line 10, the home mortgage interest and points reported to you on Form 1098 (discussed next). What forms do i need to file my 2012 taxes If you did not receive a Form 1098, enter your deductible interest on line 11, and any deductible points on line 12. What forms do i need to file my 2012 taxes See Table 1 below for a summary of where to deduct home mortgage interest and real estate taxes. What forms do i need to file my 2012 taxes If you paid home mortgage interest to the person from whom you bought your home, show that person's name, address, and social security number (SSN) or employer identification number (EIN) on the dotted lines next to line 11. What forms do i need to file my 2012 taxes The seller must give you this number and you must give the seller your SSN. What forms do i need to file my 2012 taxes Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. What forms do i need to file my 2012 taxes Failure to meet either of these requirements may result in a $50 penalty for each failure. What forms do i need to file my 2012 taxes Table 1. What forms do i need to file my 2012 taxes Where To Deduct Interest and Taxes Paid on Your Home See the text for information on what expenses are eligible. What forms do i need to file my 2012 taxes IF you are eligible to deduct . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes THEN report the amount  on Schedule A (Form 1040) . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes real estate taxes line 6. What forms do i need to file my 2012 taxes home mortgage interest and points reported on Form 1098 line 10. What forms do i need to file my 2012 taxes home mortgage interest not reported on  Form 1098 line 11. What forms do i need to file my 2012 taxes points not reported on Form 1098 line 12. What forms do i need to file my 2012 taxes qualified mortgage insurance premiums line 13. What forms do i need to file my 2012 taxes Mortgage Interest Statement If you paid $600 or more of mortgage interest (including certain points and mortgage insurance premiums) during the year on any one mortgage to a mortgage holder in the course of that holder's trade or business, you should receive a Form 1098 or similar statement from the mortgage holder. What forms do i need to file my 2012 taxes The statement will show the total interest paid on your mortgage during the year. What forms do i need to file my 2012 taxes If you bought a main home during the year, it also will show the deductible points you paid and any points you can deduct that were paid by the person who sold you your home. What forms do i need to file my 2012 taxes See Points , earlier. What forms do i need to file my 2012 taxes The interest you paid at settlement should be included on the statement. What forms do i need to file my 2012 taxes If it is not, add the interest from the settlement sheet that qualifies as home mortgage interest to the total shown on Form 1098 or similar statement. What forms do i need to file my 2012 taxes Put the total on Schedule A (Form 1040), line 10, and attach a statement to your return explaining the difference. What forms do i need to file my 2012 taxes Write “See attached” to the right of line 10. What forms do i need to file my 2012 taxes A mortgage holder can be a financial institution, a governmental unit, or a cooperative housing corporation. What forms do i need to file my 2012 taxes If a statement comes from a cooperative housing corporation, it generally will show your share of interest. What forms do i need to file my 2012 taxes Your mortgage interest statement for 2013 should be provided or sent to you by January 31, 2014. What forms do i need to file my 2012 taxes If it is mailed, you should allow adequate time to receive it before contacting the mortgage holder. What forms do i need to file my 2012 taxes A copy of this form will be sent to the IRS also. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes You bought a new home on May 3. What forms do i need to file my 2012 taxes You paid no points on the purchase. What forms do i need to file my 2012 taxes During the year, you made mortgage payments which included $4,480 deductible interest on your new home. What forms do i need to file my 2012 taxes The settlement sheet for the purchase of the home included interest of $620 for 29 days in May. What forms do i need to file my 2012 taxes The mortgage statement you receive from the lender includes total interest of $5,100 ($4,480 + $620). What forms do i need to file my 2012 taxes You can deduct the $5,100 if you itemize your deductions. What forms do i need to file my 2012 taxes Refund of overpaid interest. What forms do i need to file my 2012 taxes   If you receive a refund of mortgage interest you overpaid in a prior year, you generally will receive a Form 1098 showing the refund in box 3. What forms do i need to file my 2012 taxes Generally, you must include the refund in income in the year you receive it. What forms do i need to file my 2012 taxes See Refund of home mortgage interest , earlier, under Home Mortgage Interest. What forms do i need to file my 2012 taxes More than one borrower. What forms do i need to file my 2012 taxes   If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. What forms do i need to file my 2012 taxes Show how much of the interest each of you paid, and give the name and address of the person who received the form. What forms do i need to file my 2012 taxes Deduct your share of the interest on Schedule A (Form 1040), line 11, and write “See attached” to the right of that line. What forms do i need to file my 2012 taxes Mortgage Insurance Premiums You may be able to take an itemized deduction on Schedule A (Form 1040), line 13, for premiums you pay or accrue during 2013 for qualified mortgage insurance in connection with home acquisition debt on your qualified home. What forms do i need to file my 2012 taxes Mortgage insurance premiums you paid or accrued on any mortgage insurance contract issued before January 1, 2007, are not deductible as an itemized deduction. What forms do i need to file my 2012 taxes Qualified Mortgage Insurance Qualified mortgage insurance is mortgage insurance provided by the Veterans Administration, the Federal Housing Administration, or the Rural Housing Administration, and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998 as in effect on December 20, 2006). What forms do i need to file my 2012 taxes Prepaid mortgage insurance premiums. What forms do i need to file my 2012 taxes   If you paid premiums that are allocable to periods after 2013, you must allocate them over the shorter of: The stated term of the mortgage, or 84 months, beginning with the month the insurance was obtained. What forms do i need to file my 2012 taxes The premiums are treated as paid in the year to which they were allocated. What forms do i need to file my 2012 taxes If the mortgage is satisfied before its term, no deduction is allowed for the unamortized balance. What forms do i need to file my 2012 taxes See Publication 936 for details. What forms do i need to file my 2012 taxes Exception for certain mortgage insurance. What forms do i need to file my 2012 taxes   The allocation rules, explained above, do not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or Rural Housing Service. What forms do i need to file my 2012 taxes Home Acquisition Debt Home acquisition debt is a mortgage you took out after October 13, 1987, to buy, build, or substantially improve a qualified home. What forms do i need to file my 2012 taxes It also must be secured by that home. What forms do i need to file my 2012 taxes If the amount of your mortgage is more than the cost of the home plus the cost of any substantial improvements, only the debt that is not more than the cost of the home plus improvements qualifies as home acquisition debt. What forms do i need to file my 2012 taxes Home acquisition debt limit. What forms do i need to file my 2012 taxes   The total amount you can treat as home acquisition debt at any time on your home cannot be more than $1 million ($500,000 if married filing separately). What forms do i need to file my 2012 taxes Discharges of qualified principal residence indebtedness. What forms do i need to file my 2012 taxes   You can exclude from gross income any discharges of qualified principal residence indebtedness made after 2006 and before 2014. What forms do i need to file my 2012 taxes You must reduce the basis of your principal residence (but not below zero) by the amount you exclude. What forms do i need to file my 2012 taxes Principal residence. What forms do i need to file my 2012 taxes   Your principal residence is the home where you ordinarily live most of the time. What forms do i need to file my 2012 taxes You can have only one principal residence at any one time. What forms do i need to file my 2012 taxes Qualified principal residence indebtedness. What forms do i need to file my 2012 taxes   This is a mortgage that you took out to buy, build, or substantially improve your principal residence and that is secured by that residence. What forms do i need to file my 2012 taxes If the amount of your original mortgage is more than the cost of your principal residence plus the cost of substantial improvements, qualified principal residence indebtedness cannot be more than the cost of your principal residence plus improvements. What forms do i need to file my 2012 taxes   Any debt secured by your principal residence that you use to refinance qualified principal residence indebtedness is qualified principal residence indebtedness up to the amount of your old mortgage principal just before the refinancing. What forms do i need to file my 2012 taxes Additional debt incurred to substantially improve your principal residence is also qualified principal residence indebtedness. What forms do i need to file my 2012 taxes Amount you can exclude. What forms do i need to file my 2012 taxes   You can only exclude debt discharged after 2006 and before 2014. What forms do i need to file my 2012 taxes The most you can exclude is $2 million ($1 million if married filing separately). What forms do i need to file my 2012 taxes You cannot exclude any amount that was discharged because of services performed for the lender or on account of any other factor not directly related either to a decline in the value of your residence or to your financial condition. What forms do i need to file my 2012 taxes Ordering rule. What forms do i need to file my 2012 taxes   If only a part of a loan is qualified principal residence indebtedness, you can exclude only the amount of the discharge that is more than the amount of the loan (immediately before the discharge) that is not qualified principal residence indebtedness. What forms do i need to file my 2012 taxes Qualified Home This means your main home or your second home. What forms do i need to file my 2012 taxes A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. What forms do i need to file my 2012 taxes Main home. What forms do i need to file my 2012 taxes   You can have only one main home at any one time. What forms do i need to file my 2012 taxes This is the home where you ordinarily live most of the time. What forms do i need to file my 2012 taxes Second home and other special situations. What forms do i need to file my 2012 taxes   If you have a second home, use part of your home for other than residential living (such as a home office), rent out part of your home, or are having your home constructed, see Qualified Home in Publication 936. What forms do i need to file my 2012 taxes Limit on Deduction If your adjusted gross income (AGI) on Form 1040, line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are deductible is reduced and may be eliminated. What forms do i need to file my 2012 taxes See Line 13 in the instructions for Schedule A (Form 1040) and complete the Mortgage Insurance Premiums Deduction Worksheet to figure the amount you can deduct. What forms do i need to file my 2012 taxes If your AGI is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. What forms do i need to file my 2012 taxes Form 1098. What forms do i need to file my 2012 taxes   The amount of mortgage insurance premiums you paid during 2013 should be reported in box 4. What forms do i need to file my 2012 taxes See Form 1098, Mortgage Interest Statement in Publication 936. What forms do i need to file my 2012 taxes Mortgage Interest Credit The mortgage interest credit is intended to help lower-income individuals afford home ownership. What forms do i need to file my 2012 taxes If you qualify, you can claim the credit on Form 8396 each year for part of the home mortgage interest you pay. What forms do i need to file my 2012 taxes Who qualifies. What forms do i need to file my 2012 taxes   You may be eligible for the credit if you were issued a qualified Mortgage Credit Certificate (MCC) from your state or local government. What forms do i need to file my 2012 taxes Generally, an MCC is issued only in connection with a new mortgage for the purchase of your main home. What forms do i need to file my 2012 taxes The MCC will show the certificate credit rate you will use to figure your credit. What forms do i need to file my 2012 taxes It also will show the certified indebtedness amount. What forms do i need to file my 2012 taxes Only the interest on that amount qualifies for the credit. What forms do i need to file my 2012 taxes See Figuring the Credit , later. What forms do i need to file my 2012 taxes You must contact the appropriate government agency about getting an MCC before you get a mortgage and buy your home. What forms do i need to file my 2012 taxes Contact your state or local housing finance agency for information about the availability of MCCs in your area. What forms do i need to file my 2012 taxes How to claim the credit. What forms do i need to file my 2012 taxes   To claim the credit, complete Form 8396 and attach it to your Form 1040 or Form 1040NR, U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes Nonresident Alien Income Tax Return. What forms do i need to file my 2012 taxes Include the credit in your total for Form 1040, line 53, or Form 1040NR, line 50; be sure to check box c and write “Form 8396” on that line. What forms do i need to file my 2012 taxes Reducing your home mortgage interest deduction. What forms do i need to file my 2012 taxes   If you itemize your deductions on Schedule A (Form 1040), you must reduce your home mortgage interest deduction by the amount of the mortgage interest credit shown on Form 8396, line 3. What forms do i need to file my 2012 taxes You must do this even if part of that amount is to be carried forward to 2014. What forms do i need to file my 2012 taxes Selling your home. What forms do i need to file my 2012 taxes   If you purchase a home after 1990 using an MCC, and you sell that home within 9 years, you may have to recapture (repay) all or part of the benefit you received from the MCC program. What forms do i need to file my 2012 taxes For additional information, see Recapturing (Paying Back) a Federal Mortgage Subsidy, in Publication 523. What forms do i need to file my 2012 taxes Figuring the Credit Figure your credit on Form 8396. What forms do i need to file my 2012 taxes Mortgage not more than certified indebtedness. What forms do i need to file my 2012 taxes   If your mortgage loan amount is equal to (or smaller than) the certified indebtedness amount shown on your MCC, enter on Form 8396, line 1, all the interest you paid on your mortgage during the year. What forms do i need to file my 2012 taxes Mortgage more than certified indebtedness. What forms do i need to file my 2012 taxes   If your mortgage loan amount is larger than the certified indebtedness amount shown on your MCC, you can figure the credit on only part of the interest you paid. What forms do i need to file my 2012 taxes To find the amount to enter on line 1, multiply the total interest you paid during the year on your mortgage by the following fraction. What forms do i need to file my 2012 taxes Certified indebtedness amount on your MCC Original amount of your mortgage   The fraction will not change as long as you are entitled to take the mortgage interest credit. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes Emily bought a home this year. What forms do i need to file my 2012 taxes Her mortgage loan is $125,000. What forms do i need to file my 2012 taxes The certified indebtedness amount on her MCC is $100,000. What forms do i need to file my 2012 taxes She paid $7,500 interest this year. What forms do i need to file my 2012 taxes Emily figures the interest to enter on Form 8396, line 1, as follows:   $100,000 = 80% (. What forms do i need to file my 2012 taxes 80)       $125,000       $7,500 x . What forms do i need to file my 2012 taxes 80 = $6,000   Emily enters $6,000 on Form 8396, line 1. What forms do i need to file my 2012 taxes In each later year, she will figure her credit using only 80% of the interest she pays for that year. What forms do i need to file my 2012 taxes Limits Two limits may apply to your credit. What forms do i need to file my 2012 taxes A limit based on the credit rate, and A limit based on your tax. What forms do i need to file my 2012 taxes Limit based on credit rate. What forms do i need to file my 2012 taxes   If the certificate credit rate is higher than 20%, the credit you are allowed cannot be more than $2,000. What forms do i need to file my 2012 taxes Limit based on tax. What forms do i need to file my 2012 taxes   After applying the limit based on the credit rate, your credit generally cannot be more than your tax liability. What forms do i need to file my 2012 taxes See the Credit Limit Worksheet in the Form 8396 instructions to calculate the limit based on tax. What forms do i need to file my 2012 taxes Dividing the Credit If two or more persons (other than a married couple filing a joint return) hold an interest in the home to which the MCC relates, the credit must be divided based on the interest held by each person. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes John and his brother, George, were issued an MCC. What forms do i need to file my 2012 taxes They used it to get a mortgage on their main home. What forms do i need to file my 2012 taxes John has a 60% ownership interest in the home, and George has a 40% ownership interest in the home. What forms do i need to file my 2012 taxes John paid $5,400 mortgage interest this year and George paid $3,600. What forms do i need to file my 2012 taxes The MCC shows a credit rate of 25% and a certified indebtedness amount of $130,000. What forms do i need to file my 2012 taxes The loan amount (mortgage) on their home is $120,000. What forms do i need to file my 2012 taxes The credit is limited to $2,000 because the credit rate is more than 20%. What forms do i need to file my 2012 taxes John figures the credit by multiplying the mortgage interest he paid this year ($5,400) by the certificate credit rate (25%) for a total of $1,350. What forms do i need to file my 2012 taxes His credit is limited to $1,200 ($2,000 × 60%). What forms do i need to file my 2012 taxes George figures the credit by multiplying the mortgage interest he paid this year ($3,600) by the certificate credit rate (25%) for a total of $900. What forms do i need to file my 2012 taxes His credit is limited to $800 ($2,000 × 40%). What forms do i need to file my 2012 taxes Carryforward If your allowable credit is reduced because of the limit based on your tax, you can carry forward the unused portion of the credit to the next 3 years or until used, whichever comes first. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes You receive a mortgage credit certificate from State X. What forms do i need to file my 2012 taxes This year, your regular tax liability is $1,100, you owe no alternative minimum tax, and your mortgage interest credit is $1,700. What forms do i need to file my 2012 taxes You claim no other credits. What forms do i need to file my 2012 taxes Your unused mortgage interest credit for this year is $600 ($1,700 − $1,100). What forms do i need to file my 2012 taxes You can carry forward this amount to the next 3 years or until used, whichever comes first. What forms do i need to file my 2012 taxes Credit rate more than 20%. What forms do i need to file my 2012 taxes   If you are subject to the $2,000 limit because your certificate credit rate is more than 20%, you cannot carry forward any amount more than $2,000 (or your share of the $2,000 if you must divide the credit). What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes In the earlier example under Dividing the Credit , John and George used the entire $2,000 credit. What forms do i need to file my 2012 taxes The excess   John $1,350 − $1,200 = $150     George $900 − $800 = $100   $150 for John ($1,350 − $1,200) and $100 for George ($900 − $800) cannot be carried forward to future years, despite the respective tax liabilities for John and George. What forms do i need to file my 2012 taxes Refinancing If you refinance your original mortgage loan on which you had been given an MCC, you must get a new MCC to be able to claim the credit on the new loan. What forms do i need to file my 2012 taxes The amount of credit you can claim on the new loan may change. What forms do i need to file my 2012 taxes Table 2 below summarizes how to figure your credit if you refinance your original mortgage loan. What forms do i need to file my 2012 taxes Table 2. What forms do i need to file my 2012 taxes Effect of Refinancing on Your Credit IF you get a new (reissued) MCC and the amount of your new mortgage is . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes THEN the interest you claim on Form 8396, line 1, is* . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes smaller than or equal to the certified indebtedness amount on the new MCC all the interest paid during the year on your new mortgage. What forms do i need to file my 2012 taxes larger than the certified indebtedness amount on the new MCC interest paid during the year on your new mortgage multiplied by the following fraction. What forms do i need to file my 2012 taxes         certified indebtedness  amount on your new MCC       original amount of your  mortgage   *The credit using the new MCC cannot be more than the credit using the old MCC. What forms do i need to file my 2012 taxes  See New MCC cannot increase your credit above. What forms do i need to file my 2012 taxes An issuer may reissue an MCC after you refinance your mortgage. What forms do i need to file my 2012 taxes If you did not get a new MCC, you may want to contact the state or local housing finance agency that issued your original MCC for information about whether you can get a reissued MCC. What forms do i need to file my 2012 taxes Year of refinancing. What forms do i need to file my 2012 taxes   In the year of refinancing, add the applicable amount of interest paid on the old mortgage and the applicable amount of interest paid on the new mortgage, and enter the total on Form 8396, line 1. What forms do i need to file my 2012 taxes   If your new MCC has a credit rate different from the rate on the old MCC, you must attach a statement to Form 8396. What forms do i need to file my 2012 taxes The statement must show the calculation for lines 1, 2, and 3 for the part of the year when the old MCC was in effect. What forms do i need to file my 2012 taxes It must show a separate calculation for the part of the year when the new MCC was in effect. What forms do i need to file my 2012 taxes Combine the amounts from both calculations for line 3, enter the total on line 3 of the form, and write “See attached” on the dotted line next to line 2. What forms do i need to file my 2012 taxes New MCC cannot increase your credit. What forms do i need to file my 2012 taxes   The credit that you claim with your new MCC cannot be more than the credit that you could have claimed with your old MCC. What forms do i need to file my 2012 taxes   In most cases, the agency that issues your new MCC will make sure that it does not increase your credit. What forms do i need to file my 2012 taxes However, if either your old loan or your new loan has a variable (adjustable) interest rate, you will need to check this yourself. What forms do i need to file my 2012 taxes In that case, you will need to know the amount of the credit you could have claimed using the old MCC. What forms do i need to file my 2012 taxes   There are two methods for figuring the credit you could have claimed. What forms do i need to file my 2012 taxes Under one method, you figure the actual credit that would have been allowed. What forms do i need to file my 2012 taxes This means you use the credit rate on the old MCC and the interest you would have paid on the old loan. What forms do i need to file my 2012 taxes   If your old loan was a variable rate mortgage, you can use another method to determine the credit that you could have claimed. What forms do i need to file my 2012 taxes Under this method, you figure the credit using a payment schedule of a hypothetical self-amortizing mortgage with level payments projected to the final maturity date of the old mortgage. What forms do i need to file my 2012 taxes The interest rate of the hypothetical mortgage is the annual percentage rate (APR) of the new mortgage for purposes of the Federal Truth in Lending Act. What forms do i need to file my 2012 taxes The principal of the hypothetical mortgage is the remaining outstanding balance of the certified mortgage indebtedness shown on the old MCC. What forms do i need to file my 2012 taxes    You must choose one method and use it consistently beginning with the first tax year for which you claim the credit based on the new MCC. What forms do i need to file my 2012 taxes    As part of your tax records, you should keep your old MCC and the schedule of payments for your old mortgage. What forms do i need to file my 2012 taxes Basis Basis is your starting point for figuring a gain or loss if you later sell your home, or for figuring depreciation if you later use part of your home for business purposes or for rent. What forms do i need to file my 2012 taxes While you own your home, you may add certain items to your basis. What forms do i need to file my 2012 taxes You may subtract certain other items from your basis. What forms do i need to file my 2012 taxes These items are called adjustments to basis and are explained later under Adjusted Basis . What forms do i need to file my 2012 taxes It is important that you understand these terms when you first acquire your home because you must keep track of your basis and adjusted basis during the period you own your home. What forms do i need to file my 2012 taxes You also must keep records of the events that affect basis or adjusted basis. What forms do i need to file my 2012 taxes See Keeping Records , below. What forms do i need to file my 2012 taxes Figuring Your Basis How you figure your basis depends on how you acquire your home. What forms do i need to file my 2012 taxes If you buy or build your home, your cost is your basis. What forms do i need to file my 2012 taxes If you receive your home as a gift, your basis is usually the same as the adjusted basis of the person who gave you the property. What forms do i need to file my 2012 taxes If you inherit your home from a decedent, different rules apply depending on the date of the decedent's death. What forms do i need to file my 2012 taxes Each of these topics is discussed later. What forms do i need to file my 2012 taxes Property transferred from a spouse. What forms do i need to file my 2012 taxes   If your home is transferred to you from your spouse, or from your former spouse as a result of a divorce, your basis is the same as your spouse's (or former spouse's) adjusted basis just before the transfer. What forms do i need to file my 2012 taxes Publication 504, Divorced or Separated Individuals, fully discusses transfers between spouses. What forms do i need to file my 2012 taxes Cost as Basis The cost of your home, whether you purchased it or constructed it, is the amount you paid for it, including any debt you assumed. What forms do i need to file my 2012 taxes The cost of your home includes most settlement or closing costs you paid when you bought the home. What forms do i need to file my 2012 taxes If you built your home, your cost includes most closing costs paid when you bought the land or settled on your mortgage. What forms do i need to file my 2012 taxes See Settlement or closing costs , later. What forms do i need to file my 2012 taxes If you elect to deduct the sales taxes on the purchase or construction of your home as an itemized deduction on Schedule A (Form 1040), you cannot include the sales taxes as part of your cost basis in the home. What forms do i need to file my 2012 taxes Purchase. What forms do i need to file my 2012 taxes   The basis of a home you bought is the amount you paid for it. What forms do i need to file my 2012 taxes This usually includes your down payment and any debt you assumed. What forms do i need to file my 2012 taxes The basis of a cooperative apartment is the amount you paid for your shares in the corporation that owns or controls the property. What forms do i need to file my 2012 taxes This amount includes any purchase commissions or other costs of acquiring the shares. What forms do i need to file my 2012 taxes Construction. What forms do i need to file my 2012 taxes   If you contracted to have your home built on land that you own, your basis in the home is your basis in the land plus the amount you paid to have the home built. What forms do i need to file my 2012 taxes This includes the cost of labor and materials, the amount you paid the contractor, any architect's fees, building permit charges, utility meter and connection charges, and legal fees that are directly connected with building your home. What forms do i need to file my 2012 taxes If you built all or part of your home yourself, your basis is the total amount it cost you to build it. What forms do i need to file my 2012 taxes You cannot include in basis the value of your own labor or any other labor for which you did not pay. What forms do i need to file my 2012 taxes Real estate taxes. What forms do i need to file my 2012 taxes   Real estate taxes are usually divided so that you and the seller each pay taxes for the part of the property tax year that each owned the home. What forms do i need to file my 2012 taxes See the earlier discussion of Real estate taxes paid at settlement or closing , under Real Estate Taxes, earlier, to figure the real estate taxes you paid or are considered to have paid. What forms do i need to file my 2012 taxes   If you pay any part of the seller's share of the real estate taxes (the taxes up to the date of sale), and the seller did not reimburse you, add those taxes to your basis in the home. What forms do i need to file my 2012 taxes You cannot deduct them as taxes paid. What forms do i need to file my 2012 taxes   If the seller paid any of your share of the real estate taxes (the taxes beginning with the date of sale), you can still deduct those taxes. What forms do i need to file my 2012 taxes Do not include those taxes in your basis. What forms do i need to file my 2012 taxes If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. What forms do i need to file my 2012 taxes Example 1. What forms do i need to file my 2012 taxes You bought your home on September 1. What forms do i need to file my 2012 taxes The property tax year in your area is the calendar year, and the tax is due on August 15. What forms do i need to file my 2012 taxes The real estate taxes on the home you bought were $1,275 for the year and had been paid by the seller on August 15. What forms do i need to file my 2012 taxes You did not reimburse the seller for your share of the real estate taxes from September 1 through December 31. What forms do i need to file my 2012 taxes You must reduce the basis of your home by the $426 [(122 ÷ 365) × $1,275] the seller paid for you. What forms do i need to file my 2012 taxes You can deduct your $426 share of real estate taxes on your return for the year you purchased your home. What forms do i need to file my 2012 taxes Example 2. What forms do i need to file my 2012 taxes You bought your home on May 3, 2013. What forms do i need to file my 2012 taxes The property tax year in your area is the calendar year. What forms do i need to file my 2012 taxes The taxes for the previous year are assessed on January 2 and are due on May 31 and November 30. What forms do i need to file my 2012 taxes Under state law, the taxes become a lien on May 31. What forms do i need to file my 2012 taxes You agreed to pay all taxes due after the date of sale. What forms do i need to file my 2012 taxes The taxes due in 2013 for 2012 were $1,375. What forms do i need to file my 2012 taxes The taxes due in 2014 for 2013 will be $1,425. What forms do i need to file my 2012 taxes You cannot deduct any of the taxes paid in 2013 because they relate to the 2012 property tax year and you did not own the home until 2013. What forms do i need to file my 2012 taxes Instead, you add the $1,375 to the cost (basis) of your home. What forms do i need to file my 2012 taxes You owned the home in 2013 for 243 days (May 3 to December 31), so you can take a tax deduction on your 2014 return of $949 [(243 ÷ 365) × $1,425] paid in 2014 for 2013. What forms do i need to file my 2012 taxes You add the remaining $476 ($1,425 − $949) of taxes paid in 2014 to the cost (basis) of your home. What forms do i need to file my 2012 taxes Settlement or closing costs. What forms do i need to file my 2012 taxes   If you bought your home, you probably paid settlement or closing costs in addition to the contract price. What forms do i need to file my 2012 taxes These costs are divided between you and the seller according to the sales contract, local custom, or understanding of the parties. What forms do i need to file my 2012 taxes If you built your home, you probably paid these costs when you bought the land or settled on your mortgage. What forms do i need to file my 2012 taxes   The only settlement or closing costs you can deduct are home mortgage interest and certain real estate taxes. What forms do i need to file my 2012 taxes You deduct them in the year you buy your home if you itemize your deductions. What forms do i need to file my 2012 taxes You can add certain other settlement or closing costs to the basis of your home. What forms do i need to file my 2012 taxes Items added to basis. What forms do i need to file my 2012 taxes   You can include in your basis the settlement fees and closing costs you paid for buying your home. What forms do i need to file my 2012 taxes A fee is for buying the home if you would have had to pay it even if you paid cash for the home. What forms do i need to file my 2012 taxes   The following are some of the settlement fees and closing costs that you can include in the original basis of your home. What forms do i need to file my 2012 taxes Abstract fees (abstract of title fees). What forms do i need to file my 2012 taxes Charges for installing utility services. What forms do i need to file my 2012 taxes Legal fees (including fees for the title search and preparation of the sales contract and deed). What forms do i need to file my 2012 taxes Recording fees. What forms do i need to file my 2012 taxes Surveys. What forms do i need to file my 2012 taxes Transfer or stamp taxes. What forms do i need to file my 2012 taxes Owner's title insurance. What forms do i need to file my 2012 taxes Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, cost for improvements or repairs, and sales commissions. What forms do i need to file my 2012 taxes   If the seller actually paid for any item for which you are liable and for which you can take a deduction (such as your share of the real estate taxes for the year of sale), you must reduce your basis by that amount unless you are charged for it in the settlement. What forms do i need to file my 2012 taxes Items not added to basis and not deductible. What forms do i need to file my 2012 taxes   Here are some settlement and closing costs that you cannot deduct or add to your basis. What forms do i need to file my 2012 taxes Fire insurance premiums. What forms do i need to file my 2012 taxes Charges for using utilities or other services related to occupancy of the home before closing. What forms do i need to file my 2012 taxes Rent for occupying the home before closing. What forms do i need to file my 2012 taxes Charges connected with getting or refinancing a mortgage loan, such as: Loan assumption fees, Cost of a credit report, and Fee for an appraisal required by a lender. What forms do i need to file my 2012 taxes Points paid by seller. What forms do i need to file my 2012 taxes   If you bought your home after April 3, 1994, you must reduce your basis by any points paid for your mortgage by the person who sold you your home. What forms do i need to file my 2012 taxes   If you bought your home after 1990 but before April 4, 1994, you must reduce your basis by seller-paid points only if you deducted them. What forms do i need to file my 2012 taxes See Points , earlier, for the rules on deducting points. What forms do i need to file my 2012 taxes Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined later) to the donor just before it was given to you, its fair market value (FMV) at the time it was given to you, and any gift tax paid on it. What forms do i need to file my 2012 taxes Fair market value. What forms do i need to file my 2012 taxes   Fair market value (FMV) is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and who both have a reasonable knowledge of all the necessary facts. What forms do i need to file my 2012 taxes Donor's adjusted basis is more than FMV. What forms do i need to file my 2012 taxes   If someone gave you your home and the donor's adjusted basis, when it was given to you, was more than the FMV, your basis at the time of receipt is the same as the donor's adjusted basis. What forms do i need to file my 2012 taxes Disposition basis. What forms do i need to file my 2012 taxes   If the donor's adjusted basis at the time of the gift is more than the FMV, your basis (plus or minus any required adjustments, see Adjusted Basis , later) when you dispose of the property will depend on whether you have a gain or a loss. What forms do i need to file my 2012 taxes Your basis for figuring a gain is the same as the donor's adjusted basis. What forms do i need to file my 2012 taxes Your basis for figuring a loss is the FMV when you received the gift. What forms do i need to file my 2012 taxes If you use the donor's adjusted basis to figure a gain and it results in a loss, then you must use the FMV (at the time of the gift) to refigure the loss. What forms do i need to file my 2012 taxes However, if using the FMV results in a gain, then you neither have a gain nor a loss. What forms do i need to file my 2012 taxes Example 1. What forms do i need to file my 2012 taxes Andrew received a house as a gift from Ishmael (the donor). What forms do i need to file my 2012 taxes At the time of the gift, the home had an FMV of $80,000. What forms do i need to file my 2012 taxes Ishmael's adjusted basis was $100,000. What forms do i need to file my 2012 taxes After he received the house, no events occurred to increase or decrease the basis. What forms do i need to file my 2012 taxes If Andrew sells the house for $120,000, he will have a $20,000 gain because he must use the donor's adjusted basis ($100,000) at the time of the gift as his basis to figure the gain. What forms do i need to file my 2012 taxes Example 2. What forms do i need to file my 2012 taxes Same facts as Example 1 , except this time Andrew sells the house for $70,000. What forms do i need to file my 2012 taxes He will have a loss of $10,000 because he must use the FMV ($80,000) at the time of the gift as his basis to figure the loss. What forms do i need to file my 2012 taxes Example 3. What forms do i need to file my 2012 taxes Same facts as Example 1 , except this time Andrew sells the house for $90,000. What forms do i need to file my 2012 taxes Initially, he figures the gain using Ishmael's adjusted basis ($100,000), which results in a loss of $10,000. What forms do i need to file my 2012 taxes Since it is a loss, Andrew must now recalculate the loss using the FMV ($80,000), which results in a gain of $10,000. What forms do i need to file my 2012 taxes So in this situation, Andrew will neither have a gain nor a loss. What forms do i need to file my 2012 taxes Donor's adjusted basis equal to or less than the FMV. What forms do i need to file my 2012 taxes   If someone gave you your home after 1976 and the donor's adjusted basis, when it was given to you, was equal to or less than the FMV, your basis at the time of receipt is the same as the donor's adjusted basis, plus the part of any federal gift tax paid that is due to the net increase in value of the home. What forms do i need to file my 2012 taxes Part of federal gift tax due to net increase in value. What forms do i need to file my 2012 taxes   Figure the part of the federal gift tax paid that is due to the net increase in value of the home by multiplying the total federal gift tax paid by a fraction. What forms do i need to file my 2012 taxes The numerator (top part) of the fraction is the net increase in the value of the home, and the denominator (bottom part) is the value of the home for gift tax purposes after reduction for any annual exclusion and marital or charitable deduction that applies to the gift. What forms do i need to file my 2012 taxes The net increase in the value of the home is its FMV minus the adjusted basis of the donor. What forms do i need to file my 2012 taxes Publication 551 gives more information, including examples, on figuring your basis when you receive property as a gift. What forms do i need to file my 2012 taxes Inheritance Your basis in a home you inherited is generally the fair market value of the home on the date of the decedent's death or on the alternative valuation date if the personal representative for the estate chooses to use alternative valuation. What forms do i need to file my 2012 taxes If an estate tax return was filed, your basis is generally the value of the home listed on the estate tax return. What forms do i need to file my 2012 taxes If an estate tax return was not filed, your basis is the appraised value of the home at the decedent's date of death for state inheritance or transmission taxes. What forms do i need to file my 2012 taxes Publication 551 and Publication 559, Survivors, Executors, and Administrators, have more information on the basis of inherited property. What forms do i need to file my 2012 taxes If you inherited your home from someone who died in 2010, and the executor of the decedent's estate made the election to file Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. What forms do i need to file my 2012 taxes Adjusted Basis While you own your home, various events may take place that can change the original basis of your home. What forms do i need to file my 2012 taxes These events can increase or decrease your original basis. What forms do i need to file my 2012 taxes The result is called adjusted basis. What forms do i need to file my 2012 taxes See Table 3, on this page, for a list of some of the items that can adjust your basis. What forms do i need to file my 2012 taxes Table 3. What forms do i need to file my 2012 taxes Adjusted Basis This table lists examples of some items that generally will increase or decrease your basis in your home. What forms do i need to file my 2012 taxes It is not intended to be all-inclusive. What forms do i need to file my 2012 taxes Increases to Basis Decreases to Basis Improvements: Putting an addition on your home Replacing an entire roof Paving your driveway Installing central air conditioning Rewiring your home Assessments for local improvements (see Assessments for local benefits , under What You Can and Cannot Deduct, earlier) Amounts spent to restore damaged property Insurance or other reimbursement for casualty losses Deductible casualty loss not covered by insurance Payments received for easement or right-of-way granted Depreciation allowed or allowable if home is used for business or rental purposes Value of subsidy for energy conservation measure excluded from income Improvements. What forms do i need to file my 2012 taxes   An improvement materially adds to the value of your home, considerably prolongs its useful life, or adapts it to new uses. What forms do i need to file my 2012 taxes You must add the cost of any improvements to the basis of your home. What forms do i need to file my 2012 taxes You cannot deduct these costs. What forms do i need to file my 2012 taxes   Improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, and paving your driveway. What forms do i need to file my 2012 taxes Amount added to basis. What forms do i need to file my 2012 taxes   The amount you add to your basis for improvements is your actual cost. What forms do i need to file my 2012 taxes This includes all costs for material and labor, except your own labor, and all expenses related to the improvement. What forms do i need to file my 2012 taxes For example, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. What forms do i need to file my 2012 taxes   You also must add to your basis state and local assessments for improvements such as streets and sidewalks if they increase the value of the property. What forms do i need to file my 2012 taxes These assessments are discussed earlier under Real Estate Taxes . What forms do i need to file my 2012 taxes Improvements no longer part of home. What forms do i need to file my 2012 taxes    Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes You put wall-to-wall carpeting in your home 15 years ago. What forms do i need to file my 2012 taxes Later, you replaced that carpeting with new wall-to-wall carpeting. What forms do i need to file my 2012 taxes The cost of the old carpeting you replaced is no longer part of your home's adjusted basis. What forms do i need to file my 2012 taxes Repairs versus improvements. What forms do i need to file my 2012 taxes   A repair keeps your home in an ordinary, efficient operating condition. What forms do i need to file my 2012 taxes It does not add to the value of your home or prolong its life. What forms do i need to file my 2012 taxes Repairs include repainting your home inside or outside, fixing your gutters or floors, fixing leaks or plastering, and replacing broken window panes. What forms do i need to file my 2012 taxes You cannot deduct repair costs and generally cannot add them to the basis of your home. What forms do i need to file my 2012 taxes   However, repairs that are done as part of an extensive remodeling or restoration of your home are considered improvements. What forms do i need to file my 2012 taxes You add them to the basis of your home. What forms do i need to file my 2012 taxes Records to keep. What forms do i need to file my 2012 taxes   You can use Table 4 (at the end of the publication) as a guide to help you keep track of improvements to your home. What forms do i need to file my 2012 taxes Also see Keeping Records , below. What forms do i need to file my 2012 taxes Energy conservation subsidy. What forms do i need to file my 2012 taxes   If a public utility gives you (directly or indirectly) a subsidy for the purchase or installation of an energy conservation measure for your home, do not include the value of that subsidy in your income. What forms do i need to file my 2012 taxes You must reduce the basis of your home by that value. What forms do i need to file my 2012 taxes   An energy conservation measure is an installation or modification primarily designed to reduce consumption of electricity or natural gas or to improve the management of energy demand. What forms do i need to file my 2012 taxes Keeping Records Keeping full and accurate records is vital to properly report your income and expenses, to support your deductions and credits, and to know the basis or adjusted basis of your home. What forms do i need to file my 2012 taxes These records include your purchase contract and settlement papers if you bought the property, or other objective evidence if you acquired it by gift, inheritance, or similar means. What forms do i need to file my 2012 taxes You should keep any receipts, canceled checks, and similar evidence for improvements or other additions to the basis. What forms do i need to file my 2012 taxes In addition, you should keep track of any decreases to the basis such as those listed in Table 3, earlier. What forms do i need to file my 2012 taxes How to keep records. What forms do i need to file my 2012 taxes   How you keep records is up to you, but they must be clear and accurate and must be available to the IRS. What forms do i need to file my 2012 taxes How long to keep records. What forms do i need to file my 2012 taxes   You must keep your records for as long as they are important for meeting any provision of the federal tax law. What forms do i need to file my 2012 taxes   Keep records that support an item of income, a deduction, or a credit appearing on a return until the period of limitations for the return runs out. What forms do i need to file my 2012 taxes (A period of limitations is the period of time after which no legal action can be brought. What forms do i need to file my 2012 taxes ) For assessment of tax you owe, this is generally 3 years from the date you filed the return. What forms do i need to file my 2012 taxes For filing a claim for credit or refund, this is generally 3 years from the date you filed the original return, or 2 years from the date you paid the tax, whichever is later. What forms do i need to file my 2012 taxes Returns filed before the due date are treated as filed on the due date. What forms do i need to file my 2012 taxes   You may need to keep records relating to the basis of property (discussed earlier) for longer than the period of limitations. What forms do i need to file my 2012 taxes Keep those records as long as they are important in figuring the basis of the original or replacement property. What forms do i need to file my 2012 taxes Generally, this means for as long as you own the property and, after you dispose of it, for the period of limitations that applies to you. What forms do i need to file my 2012 taxes Table 4. What forms do i need to file my 2012 taxes Record of Home Improvements Keep this for your records. What forms do i need to file my 2012 taxes Also, keep receipts or other proof of improvements. What forms do i need to file my 2012 taxes Remove from this record any improvements that are no longer part of your main home. What forms do i need to file my 2012 taxes For example, if you put wall-to-wall carpeting in your home and later replace it with new wall-to-wall carpeting, remove the cost of the first carpeting. What forms do i need to file my 2012 taxes (a) Type of Improvement (b) Date (c) Amount   (a) Type of Improvement (b) Date (c) Amount Additions:       Heating & Air  Conditioning:     Bedroom       Heating system     Bathroom       Central air conditioning     Deck       Furnace     Garage       Duct work     Porch       Central humidifier     Patio       Filtration system     Storage shed       Other     Fireplace       Electrical:     Other           Lawn & Grounds:       Lighting fixtures           Wiring upgrades     Landscaping       Other     Driveway       Plumbing:     Walkway           Fences       Water heater     Retaining wall       Soft water system     Sprinkler system       Filtration system     Swimming pool       Other     Exterior lighting       Insulation:     Other           Communications:       Attic           Walls     Satellite dish       Floors     Intercom       Pipes and duct work     Security system       Other     Other             Miscellaneous:       Interior  Improvements:     Storm windows and doors       Built-in appliances     Roof       Kitchen modernization     Central vacuum       Bathroom modernization     Other       Flooring             Wall-to-wall carpeting             Other     How To
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The What Forms Do I Need To File My 2012 Taxes

What forms do i need to file my 2012 taxes 5. What forms do i need to file my 2012 taxes   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. What forms do i need to file my 2012 taxes Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Reminder Foreign income. What forms do i need to file my 2012 taxes   If you are a U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes law. What forms do i need to file my 2012 taxes This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. What forms do i need to file my 2012 taxes This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). What forms do i need to file my 2012 taxes If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. What forms do i need to file my 2012 taxes For details, see Publication 54, Tax Guide for U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes Citizens and Resident Aliens Abroad. What forms do i need to file my 2012 taxes Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. What forms do i need to file my 2012 taxes The following topics are included. What forms do i need to file my 2012 taxes Bonuses and awards. What forms do i need to file my 2012 taxes Special rules for certain employees. What forms do i need to file my 2012 taxes Sickness and injury benefits. What forms do i need to file my 2012 taxes The chapter explains what income is included in the employee's gross income and what is not included. What forms do i need to file my 2012 taxes Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income Employee Compensation This section discusses various types of employee compensation including fringe benefits, retirement plan contributions, stock options, and restricted property. What forms do i need to file my 2012 taxes Form W-2. What forms do i need to file my 2012 taxes    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. What forms do i need to file my 2012 taxes Include your pay on line 7 of Form 1040 or Form 1040A, or on line 1 of Form 1040EZ, even if you do not receive a Form W-2. What forms do i need to file my 2012 taxes   If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. What forms do i need to file my 2012 taxes These wages must be included on line 7 of Form 1040. What forms do i need to file my 2012 taxes See Form 8919 for more information. What forms do i need to file my 2012 taxes Childcare providers. What forms do i need to file my 2012 taxes    If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. What forms do i need to file my 2012 taxes If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. What forms do i need to file my 2012 taxes You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. What forms do i need to file my 2012 taxes Babysitting. What forms do i need to file my 2012 taxes   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. What forms do i need to file my 2012 taxes Miscellaneous Compensation This section discusses different types of employee compensation. What forms do i need to file my 2012 taxes Advance commissions and other earnings. What forms do i need to file my 2012 taxes   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. What forms do i need to file my 2012 taxes    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. What forms do i need to file my 2012 taxes If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), or you may be able to take a credit for that year. What forms do i need to file my 2012 taxes See Repayments in chapter 12. What forms do i need to file my 2012 taxes Allowances and reimbursements. What forms do i need to file my 2012 taxes    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. What forms do i need to file my 2012 taxes If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. What forms do i need to file my 2012 taxes Back pay awards. What forms do i need to file my 2012 taxes    Include in income amounts you are awarded in a settlement or judgment for back pay. What forms do i need to file my 2012 taxes These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. What forms do i need to file my 2012 taxes They should be reported to you by your employer on Form W-2. What forms do i need to file my 2012 taxes Bonuses and awards. What forms do i need to file my 2012 taxes   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. What forms do i need to file my 2012 taxes These include prizes such as vacation trips for meeting sales goals. What forms do i need to file my 2012 taxes If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. What forms do i need to file my 2012 taxes However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. What forms do i need to file my 2012 taxes Employee achievement award. What forms do i need to file my 2012 taxes   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. What forms do i need to file my 2012 taxes However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. What forms do i need to file my 2012 taxes Your employer can tell you whether your award is a qualified plan award. What forms do i need to file my 2012 taxes Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. What forms do i need to file my 2012 taxes   However, the exclusion does not apply to the following awards: A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. What forms do i need to file my 2012 taxes A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. What forms do i need to file my 2012 taxes Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. What forms do i need to file my 2012 taxes However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 – $1,600) in his income. What forms do i need to file my 2012 taxes Differential wage payments. What forms do i need to file my 2012 taxes   This is any payment made to you by an employer for any period during which you are, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages you would have received from the employer during that period. What forms do i need to file my 2012 taxes These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. What forms do i need to file my 2012 taxes The payments are reported as wages on Form W-2. What forms do i need to file my 2012 taxes Government cost-of-living allowances. What forms do i need to file my 2012 taxes   Most payments received by U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes Government civilian employees for working abroad are taxable. What forms do i need to file my 2012 taxes However, certain cost-of-living allowances are tax free. What forms do i need to file my 2012 taxes Publication 516, U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. What forms do i need to file my 2012 taxes Nonqualified deferred compensation plans. What forms do i need to file my 2012 taxes   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. What forms do i need to file my 2012 taxes This amount is shown on Form W-2, box 12, using code Y. What forms do i need to file my 2012 taxes This amount is not included in your income. What forms do i need to file my 2012 taxes   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. What forms do i need to file my 2012 taxes This amount is included in your wages shown on Form W-2, box 1. What forms do i need to file my 2012 taxes It is also shown on Form W-2, box 12, using code Z. What forms do i need to file my 2012 taxes Note received for services. What forms do i need to file my 2012 taxes    If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. What forms do i need to file my 2012 taxes When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. What forms do i need to file my 2012 taxes Do not include that part again in your income. What forms do i need to file my 2012 taxes Include the rest of the payment in your income in the year of payment. What forms do i need to file my 2012 taxes   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. What forms do i need to file my 2012 taxes Severance pay. What forms do i need to file my 2012 taxes   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. What forms do i need to file my 2012 taxes Accrued leave payment. What forms do i need to file my 2012 taxes    If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. What forms do i need to file my 2012 taxes   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. What forms do i need to file my 2012 taxes You can reduce gross wages by the amount you repaid in the same tax year in which you received it. What forms do i need to file my 2012 taxes Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on the return and the wages on your Forms W-2. What forms do i need to file my 2012 taxes Outplacement services. What forms do i need to file my 2012 taxes   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. What forms do i need to file my 2012 taxes    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). What forms do i need to file my 2012 taxes Sick pay. What forms do i need to file my 2012 taxes   Pay you receive from your employer while you are sick or injured is part of your salary or wages. What forms do i need to file my 2012 taxes In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. What forms do i need to file my 2012 taxes A state sickness or disability fund. What forms do i need to file my 2012 taxes An association of employers or employees. What forms do i need to file my 2012 taxes An insurance company, if your employer paid for the plan. What forms do i need to file my 2012 taxes However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. What forms do i need to file my 2012 taxes For more information, see Publication 525. What forms do i need to file my 2012 taxes Social security and Medicare taxes paid by employer. What forms do i need to file my 2012 taxes   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. What forms do i need to file my 2012 taxes The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. What forms do i need to file my 2012 taxes However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. What forms do i need to file my 2012 taxes Stock appreciation rights. What forms do i need to file my 2012 taxes   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. What forms do i need to file my 2012 taxes When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. What forms do i need to file my 2012 taxes You include the cash payment in your income in the year you use the right. What forms do i need to file my 2012 taxes Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. What forms do i need to file my 2012 taxes Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. What forms do i need to file my 2012 taxes Accounting period. What forms do i need to file my 2012 taxes   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. What forms do i need to file my 2012 taxes Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. What forms do i need to file my 2012 taxes The general rule: benefits are reported for a full calendar year (January 1–December 31). What forms do i need to file my 2012 taxes The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. What forms do i need to file my 2012 taxes For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. What forms do i need to file my 2012 taxes  Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. What forms do i need to file my 2012 taxes   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). What forms do i need to file my 2012 taxes Form W-2. What forms do i need to file my 2012 taxes   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. What forms do i need to file my 2012 taxes Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). What forms do i need to file my 2012 taxes However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). What forms do i need to file my 2012 taxes Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. What forms do i need to file my 2012 taxes Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . What forms do i need to file my 2012 taxes For information on the items covered in this section, other than Long-term care coverage, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. What forms do i need to file my 2012 taxes Long-term care coverage. What forms do i need to file my 2012 taxes    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. What forms do i need to file my 2012 taxes However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. What forms do i need to file my 2012 taxes This amount will be reported as wages in box 1 of your Form W-2. What forms do i need to file my 2012 taxes   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. What forms do i need to file my 2012 taxes Archer MSA contributions. What forms do i need to file my 2012 taxes    Contributions by your employer to your Archer MSA generally are not included in your income. What forms do i need to file my 2012 taxes Their total will be reported in box 12 of Form W-2 with code R. What forms do i need to file my 2012 taxes You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. What forms do i need to file my 2012 taxes File the form with your return. What forms do i need to file my 2012 taxes Health flexible spending arrangement (health FSA). What forms do i need to file my 2012 taxes   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. What forms do i need to file my 2012 taxes Note. What forms do i need to file my 2012 taxes Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. What forms do i need to file my 2012 taxes The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. What forms do i need to file my 2012 taxes For more information, see Notice 2012-40, 2012-26 I. What forms do i need to file my 2012 taxes R. What forms do i need to file my 2012 taxes B. What forms do i need to file my 2012 taxes 1046, available at www. What forms do i need to file my 2012 taxes irs. What forms do i need to file my 2012 taxes gov/irb/2012-26 IRB/ar09. What forms do i need to file my 2012 taxes html. What forms do i need to file my 2012 taxes Health reimbursement arrangement (HRA). What forms do i need to file my 2012 taxes   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. What forms do i need to file my 2012 taxes Health savings accounts (HSA). What forms do i need to file my 2012 taxes   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. What forms do i need to file my 2012 taxes Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. What forms do i need to file my 2012 taxes Contributions made by your employer are not included in your income. What forms do i need to file my 2012 taxes Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. What forms do i need to file my 2012 taxes Distributions not used for qualified medical expenses are included in your income. What forms do i need to file my 2012 taxes See Publication 969 for the requirements of an HSA. What forms do i need to file my 2012 taxes   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. What forms do i need to file my 2012 taxes The contributions are treated as a distribution of money and are not included in the partner's gross income. What forms do i need to file my 2012 taxes Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. What forms do i need to file my 2012 taxes In both situations, the partner can deduct the contribution made to the partner's HSA. What forms do i need to file my 2012 taxes   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. What forms do i need to file my 2012 taxes The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. What forms do i need to file my 2012 taxes Qualified HSA funding distribution. What forms do i need to file my 2012 taxes   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. What forms do i need to file my 2012 taxes See Publication 590 for the requirements for these qualified HSA funding distributions. What forms do i need to file my 2012 taxes Failure to maintain eligibility. What forms do i need to file my 2012 taxes   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. What forms do i need to file my 2012 taxes If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. What forms do i need to file my 2012 taxes This income is also subject to an additional 10% tax. What forms do i need to file my 2012 taxes Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. What forms do i need to file my 2012 taxes See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. What forms do i need to file my 2012 taxes Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. What forms do i need to file my 2012 taxes They also are included as social security and Medicare wages in boxes 3 and 5. What forms do i need to file my 2012 taxes However, they are not included as wages in box 1. What forms do i need to file my 2012 taxes To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. What forms do i need to file my 2012 taxes File the form with your return. What forms do i need to file my 2012 taxes De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. What forms do i need to file my 2012 taxes In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. What forms do i need to file my 2012 taxes Holiday gifts. What forms do i need to file my 2012 taxes   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. What forms do i need to file my 2012 taxes However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. What forms do i need to file my 2012 taxes Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. What forms do i need to file my 2012 taxes For more information, see Publication 970, Tax Benefits for Education. What forms do i need to file my 2012 taxes Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. What forms do i need to file my 2012 taxes However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. What forms do i need to file my 2012 taxes For exceptions, see Entire cost excluded , and Entire cost taxed , later. What forms do i need to file my 2012 taxes If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. What forms do i need to file my 2012 taxes Also, it is shown separately in box 12 with code C. What forms do i need to file my 2012 taxes Group-term life insurance. What forms do i need to file my 2012 taxes   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. What forms do i need to file my 2012 taxes Permanent benefits. What forms do i need to file my 2012 taxes   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. What forms do i need to file my 2012 taxes Your employer should be able to tell you the amount to include in your income. What forms do i need to file my 2012 taxes Accidental death benefits. What forms do i need to file my 2012 taxes   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. What forms do i need to file my 2012 taxes Former employer. What forms do i need to file my 2012 taxes   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. What forms do i need to file my 2012 taxes Also, it is shown separately in box 12 with code C. What forms do i need to file my 2012 taxes Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. What forms do i need to file my 2012 taxes You must pay these taxes with your income tax return. What forms do i need to file my 2012 taxes Include them on line 60, Form 1040, and follow the instructions for line 60. What forms do i need to file my 2012 taxes For more information, see the Instructions for Form 1040. What forms do i need to file my 2012 taxes Two or more employers. What forms do i need to file my 2012 taxes   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. What forms do i need to file my 2012 taxes If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. What forms do i need to file my 2012 taxes You must figure how much to include in your income. What forms do i need to file my 2012 taxes Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. What forms do i need to file my 2012 taxes Figuring the taxable cost. What forms do i need to file my 2012 taxes   Use the following worksheet to figure the amount to include in your income. What forms do i need to file my 2012 taxes     Worksheet 5-1. What forms do i need to file my 2012 taxes Figuring the Cost of Group-Term Life Insurance To Include in Income 1. What forms do i need to file my 2012 taxes Enter the total amount of your insurance coverage from your employer(s) 1. What forms do i need to file my 2012 taxes   2. What forms do i need to file my 2012 taxes Limit on exclusion for employer-provided group-term life insurance coverage 2. What forms do i need to file my 2012 taxes 50,000 3. What forms do i need to file my 2012 taxes Subtract line 2 from line 1 3. What forms do i need to file my 2012 taxes   4. What forms do i need to file my 2012 taxes Divide line 3 by $1,000. What forms do i need to file my 2012 taxes Figure to the nearest tenth 4. What forms do i need to file my 2012 taxes   5. What forms do i need to file my 2012 taxes Go to Table 5-1. What forms do i need to file my 2012 taxes Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. What forms do i need to file my 2012 taxes   6. What forms do i need to file my 2012 taxes Multiply line 4 by line 5 6. What forms do i need to file my 2012 taxes   7. What forms do i need to file my 2012 taxes Enter the number of full months of coverage at this cost. What forms do i need to file my 2012 taxes 7. What forms do i need to file my 2012 taxes   8. What forms do i need to file my 2012 taxes Multiply line 6 by line 7 8. What forms do i need to file my 2012 taxes   9. What forms do i need to file my 2012 taxes Enter the premiums you paid per month 9. What forms do i need to file my 2012 taxes       10. What forms do i need to file my 2012 taxes Enter the number of months you paid the premiums 10. What forms do i need to file my 2012 taxes       11. What forms do i need to file my 2012 taxes Multiply line 9 by line 10. What forms do i need to file my 2012 taxes 11. What forms do i need to file my 2012 taxes   12. What forms do i need to file my 2012 taxes Subtract line 11 from line 8. What forms do i need to file my 2012 taxes Include this amount in your income as wages 12. What forms do i need to file my 2012 taxes      Table 5-1. What forms do i need to file my 2012 taxes Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. What forms do i need to file my 2012 taxes 05 25 through 29 . What forms do i need to file my 2012 taxes 06 30 through 34 . What forms do i need to file my 2012 taxes 08 35 through 39 . What forms do i need to file my 2012 taxes 09 40 through 44 . What forms do i need to file my 2012 taxes 10 45 through 49 . What forms do i need to file my 2012 taxes 15 50 through 54 . What forms do i need to file my 2012 taxes 23 55 through 59 . What forms do i need to file my 2012 taxes 43 60 through 64 . What forms do i need to file my 2012 taxes 66 65 through 69 1. What forms do i need to file my 2012 taxes 27 70 and older 2. What forms do i need to file my 2012 taxes 06 Example. What forms do i need to file my 2012 taxes You are 51 years old and work for employers A and B. What forms do i need to file my 2012 taxes Both employers provide group-term life insurance coverage for you for the entire year. What forms do i need to file my 2012 taxes Your coverage is $35,000 with employer A and $45,000 with employer B. What forms do i need to file my 2012 taxes You pay premiums of $4. What forms do i need to file my 2012 taxes 15 a month under the employer B group plan. What forms do i need to file my 2012 taxes You figure the amount to include in your income as shown in Worksheet 5-1. What forms do i need to file my 2012 taxes Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. What forms do i need to file my 2012 taxes Worksheet 5-1. What forms do i need to file my 2012 taxes Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. What forms do i need to file my 2012 taxes Enter the total amount of your insurance coverage from your employer(s) 1. What forms do i need to file my 2012 taxes 80,000 2. What forms do i need to file my 2012 taxes Limit on exclusion for employer-provided group-term life insurance coverage 2. What forms do i need to file my 2012 taxes 50,000 3. What forms do i need to file my 2012 taxes Subtract line 2 from line 1 3. What forms do i need to file my 2012 taxes 30,000 4. What forms do i need to file my 2012 taxes Divide line 3 by $1,000. What forms do i need to file my 2012 taxes Figure to the nearest tenth 4. What forms do i need to file my 2012 taxes 30. What forms do i need to file my 2012 taxes 0 5. What forms do i need to file my 2012 taxes Go to Table 5-1. What forms do i need to file my 2012 taxes Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. What forms do i need to file my 2012 taxes . What forms do i need to file my 2012 taxes 23 6. What forms do i need to file my 2012 taxes Multiply line 4 by line 5 6. What forms do i need to file my 2012 taxes 6. What forms do i need to file my 2012 taxes 90 7. What forms do i need to file my 2012 taxes Enter the number of full months of coverage at this cost. What forms do i need to file my 2012 taxes 7. What forms do i need to file my 2012 taxes 12 8. What forms do i need to file my 2012 taxes Multiply line 6 by line 7 8. What forms do i need to file my 2012 taxes 82. What forms do i need to file my 2012 taxes 80 9. What forms do i need to file my 2012 taxes Enter the premiums you paid per month 9. What forms do i need to file my 2012 taxes 4. What forms do i need to file my 2012 taxes 15     10. What forms do i need to file my 2012 taxes Enter the number of months you paid the premiums 10. What forms do i need to file my 2012 taxes 12     11. What forms do i need to file my 2012 taxes Multiply line 9 by line 10. What forms do i need to file my 2012 taxes 11. What forms do i need to file my 2012 taxes 49. What forms do i need to file my 2012 taxes 80 12. What forms do i need to file my 2012 taxes Subtract line 11 from line 8. What forms do i need to file my 2012 taxes Include this amount in your income as wages 12. What forms do i need to file my 2012 taxes 33. What forms do i need to file my 2012 taxes 00 Entire cost excluded. What forms do i need to file my 2012 taxes   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. What forms do i need to file my 2012 taxes You are permanently and totally disabled and have ended your employment. What forms do i need to file my 2012 taxes Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. What forms do i need to file my 2012 taxes A charitable organization (defined in chapter 24) to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. What forms do i need to file my 2012 taxes (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. What forms do i need to file my 2012 taxes ) The plan existed on January 1, 1984, and You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. What forms do i need to file my 2012 taxes Entire cost taxed. What forms do i need to file my 2012 taxes   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply: The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. What forms do i need to file my 2012 taxes You are a key employee and your employer's plan discriminates in favor of key employees. What forms do i need to file my 2012 taxes Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. What forms do i need to file my 2012 taxes Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. What forms do i need to file my 2012 taxes You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. What forms do i need to file my 2012 taxes Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. What forms do i need to file my 2012 taxes A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. What forms do i need to file my 2012 taxes Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. What forms do i need to file my 2012 taxes However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. What forms do i need to file my 2012 taxes Exclusion limit. What forms do i need to file my 2012 taxes   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. What forms do i need to file my 2012 taxes   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. What forms do i need to file my 2012 taxes   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. What forms do i need to file my 2012 taxes   If the benefits have a value that is more than these limits, the excess must be included in your income. What forms do i need to file my 2012 taxes You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. What forms do i need to file my 2012 taxes Commuter highway vehicle. What forms do i need to file my 2012 taxes   This is a highway vehicle that seats at least six adults (not including the driver). What forms do i need to file my 2012 taxes At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). What forms do i need to file my 2012 taxes Transit pass. What forms do i need to file my 2012 taxes   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. What forms do i need to file my 2012 taxes Qualified parking. What forms do i need to file my 2012 taxes   This is parking provided to an employee at or near the employer's place of business. What forms do i need to file my 2012 taxes It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. What forms do i need to file my 2012 taxes It does not include parking at or near the employee's home. What forms do i need to file my 2012 taxes Qualified bicycle commuting. What forms do i need to file my 2012 taxes   This is reimbursement based on the number of qualified bicycle commuting months for the year. What forms do i need to file my 2012 taxes A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. What forms do i need to file my 2012 taxes The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. What forms do i need to file my 2012 taxes Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. What forms do i need to file my 2012 taxes (Your employer can tell you whether your retirement plan is qualified. What forms do i need to file my 2012 taxes ) However, the cost of life insurance coverage included in the plan may have to be included. What forms do i need to file my 2012 taxes See Group-Term Life Insurance , earlier, under Fringe Benefits. What forms do i need to file my 2012 taxes If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. What forms do i need to file my 2012 taxes However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. What forms do i need to file my 2012 taxes For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes Civil Service Retirement Benefits, if you are a federal employee or retiree). What forms do i need to file my 2012 taxes Elective deferrals. What forms do i need to file my 2012 taxes   If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. What forms do i need to file my 2012 taxes The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. What forms do i need to file my 2012 taxes An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. What forms do i need to file my 2012 taxes However, it is included in wages subject to social security and Medicare taxes. What forms do i need to file my 2012 taxes   Elective deferrals include elective contributions to the following retirement plans. What forms do i need to file my 2012 taxes Cash or deferred arrangements (section 401(k) plans). What forms do i need to file my 2012 taxes The Thrift Savings Plan for federal employees. What forms do i need to file my 2012 taxes Salary reduction simplified employee pension plans (SARSEP). What forms do i need to file my 2012 taxes Savings incentive match plans for employees (SIMPLE plans). What forms do i need to file my 2012 taxes Tax-sheltered annuity plans (403(b) plans). What forms do i need to file my 2012 taxes Section 501(c)(18)(D) plans. What forms do i need to file my 2012 taxes Section 457 plans. What forms do i need to file my 2012 taxes Qualified automatic contribution arrangements. What forms do i need to file my 2012 taxes   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. What forms do i need to file my 2012 taxes You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. What forms do i need to file my 2012 taxes The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. What forms do i need to file my 2012 taxes   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. What forms do i need to file my 2012 taxes Overall limit on deferrals. What forms do i need to file my 2012 taxes   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3) and (5) above. What forms do i need to file my 2012 taxes The limit for SIMPLE plans is $12,000. What forms do i need to file my 2012 taxes The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. What forms do i need to file my 2012 taxes The limit for section 457 plans is the lesser of your includible compensation or $17,500. What forms do i need to file my 2012 taxes Amounts deferred under specific plan limits are part of the overall limit on deferrals. What forms do i need to file my 2012 taxes Designated Roth contributions. What forms do i need to file my 2012 taxes   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. What forms do i need to file my 2012 taxes Designated Roth contributions are treated as elective deferrals, except that they are included in income. What forms do i need to file my 2012 taxes Excess deferrals. What forms do i need to file my 2012 taxes   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. What forms do i need to file my 2012 taxes However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. What forms do i need to file my 2012 taxes   If you set aside more than the limit, the excess generally must be included in your income for that year, unless you have an excess deferral of a designated Roth contribution. What forms do i need to file my 2012 taxes See Publication 525 for a discussion of the tax treatment of excess deferrals. What forms do i need to file my 2012 taxes Catch-up contributions. What forms do i need to file my 2012 taxes   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. What forms do i need to file my 2012 taxes Stock Options If you receive a nonstatutory option to buy or sell stock or other property as payment for your services, you usually will have income when you receive the option, when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option. What forms do i need to file my 2012 taxes However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. What forms do i need to file my 2012 taxes Your employer can tell you which kind of option you hold. What forms do i need to file my 2012 taxes For more information, see Publication 525. What forms do i need to file my 2012 taxes Restricted Property In most cases, if you receive property for your services, you must include its fair market value in your income in the year you receive the property. What forms do i need to file my 2012 taxes However, if you receive stock or other property that has certain restrictions that affect its value, you do not include the value of the property in your income until it has substantially vested. What forms do i need to file my 2012 taxes (You can choose to include the value of the property in your income in the year it is transferred to you. What forms do i need to file my 2012 taxes ) For more information, see Restricted Property in Publication 525. What forms do i need to file my 2012 taxes Dividends received on restricted stock. What forms do i need to file my 2012 taxes   Dividends you receive on restricted stock are treated as compensation and not as dividend income. What forms do i need to file my 2012 taxes Your employer should include these payments on your Form W-2. What forms do i need to file my 2012 taxes Stock you chose to include in income. What forms do i need to file my 2012 taxes   Dividends you receive on restricted stock you chose to include in your income in the year transferred are treated the same as any other dividends. What forms do i need to file my 2012 taxes Report them on your return as dividends. What forms do i need to file my 2012 taxes For a discussion of dividends, see chapter 8. What forms do i need to file my 2012 taxes    For information on how to treat dividends reported on both your Form W-2 and Form 1099-DIV, see Dividends received on restricted stock in Publication 525. What forms do i need to file my 2012 taxes Special Rules for Certain Employees This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers. What forms do i need to file my 2012 taxes Clergy Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. What forms do i need to file my 2012 taxes , in addition to your salary. What forms do i need to file my 2012 taxes If the offering is made to the religious institution, it is not taxable to you. What forms do i need to file my 2012 taxes If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. What forms do i need to file my 2012 taxes However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. What forms do i need to file my 2012 taxes See chapter 24. What forms do i need to file my 2012 taxes Pension. What forms do i need to file my 2012 taxes    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. What forms do i need to file my 2012 taxes It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. What forms do i need to file my 2012 taxes Housing. What forms do i need to file my 2012 taxes    Special rules for housing apply to members of the clergy. What forms do i need to file my 2012 taxes Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. What forms do i need to file my 2012 taxes However, the exclusion cannot be more than the reasonable pay for your service. What forms do i need to file my 2012 taxes If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. What forms do i need to file my 2012 taxes The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. What forms do i need to file my 2012 taxes However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. What forms do i need to file my 2012 taxes For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. What forms do i need to file my 2012 taxes Members of Religious Orders If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order. What forms do i need to file my 2012 taxes Services performed for the order. What forms do i need to file my 2012 taxes   If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order. What forms do i need to file my 2012 taxes   If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. What forms do i need to file my 2012 taxes Any wages you earn as an agent of an order that you turn over to the order are not included in your income. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes You are a member of a church order and have taken a vow of poverty. What forms do i need to file my 2012 taxes You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. What forms do i need to file my 2012 taxes You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. What forms do i need to file my 2012 taxes However, you remain under the general direction and control of the order. What forms do i need to file my 2012 taxes You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income. What forms do i need to file my 2012 taxes Services performed outside the order. What forms do i need to file my 2012 taxes   If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: They are the kind of services that are ordinarily the duties of members of the order. What forms do i need to file my 2012 taxes They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. What forms do i need to file my 2012 taxes If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. What forms do i need to file my 2012 taxes Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes Mark Brown is a member of a religious order and has taken a vow of poverty. What forms do i need to file my 2012 taxes He renounces all claims to his earnings and turns over his earnings to the order. What forms do i need to file my 2012 taxes Mark is a schoolteacher. What forms do i need to file my 2012 taxes He was instructed by the superiors of the order to get a job with a private tax-exempt school. What forms do i need to file my 2012 taxes Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. What forms do i need to file my 2012 taxes Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. What forms do i need to file my 2012 taxes The wages Mark earns working for the school are included in his income. What forms do i need to file my 2012 taxes Foreign Employer Special rules apply if you work for a foreign employer. What forms do i need to file my 2012 taxes U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes citizen. What forms do i need to file my 2012 taxes   If you are a U. What forms do i need to file my 2012 taxes S. What forms do i need to file my 2012 taxes citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income. What forms do i need to file my 2012 taxes Social security and Medicare taxes. What forms do i need to file my 2012 taxes   You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. What forms do i need to file my 2012 taxes However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. What forms do i need to file my 2012 taxes This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. What forms do i need to file my 2012 taxes Employees of international organizations or foreign governments. What forms do i need to file my 2012 taxes   Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). What forms do i need to file my 2012 taxes   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. What forms do i need to file my 2012 taxes You are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). What forms do i need to file my 2012 taxes Your work is like the work done by employees of the United States in foreign countries. What forms do i need to file my 2012 taxes The foreign government gives an equal exemption to employees of the United States in its country. What forms do i need to file my 2012 taxes Waiver of alien status. What forms do i need to file my 2012 taxes   If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. What forms do i need to file my 2012 taxes See Foreign Employer in Publication 525. What forms do i need to file my 2012 taxes Employment abroad. What forms do i need to file my 2012 taxes   For information on the tax treatment of income earned abroad, see Publication 54. What forms do i need to file my 2012 taxes Military Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. What forms do i need to file my 2012 taxes Allowances generally are not taxed. What forms do i need to file my 2012 taxes For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. What forms do i need to file my 2012 taxes Differential wage payments. What forms do i need to file my 2012 taxes   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. What forms do i need to file my 2012 taxes These wages are subject to income tax withholding and are reported on a Form W-2. What forms do i need to file my 2012 taxes See the discussion under Miscellaneous Compensation , earlier. What forms do i need to file my 2012 taxes Military retirement pay. What forms do i need to file my 2012 taxes   If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. What forms do i need to file my 2012 taxes Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan. What forms do i need to file my 2012 taxes   For more detailed discussion of survivor annuities, see chapter 10. What forms do i need to file my 2012 taxes Disability. What forms do i need to file my 2012 taxes   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. What forms do i need to file my 2012 taxes Veterans' benefits. What forms do i need to file my 2012 taxes   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). What forms do i need to file my 2012 taxes The following amounts paid to veterans or their families are not taxable. What forms do i need to file my 2012 taxes Education, training, and subsistence allowances. What forms do i need to file my 2012 taxes Disability compensation and pension payments for disabilities paid either to veterans or their families. What forms do i need to file my 2012 taxes Grants for homes designed for wheelchair living. What forms do i need to file my 2012 taxes Grants for motor vehicles for veterans who lost their sight or the use of their limbs. What forms do i need to file my 2012 taxes Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. What forms do i need to file my 2012 taxes Interest on insurance dividends you leave on deposit with the VA. What forms do i need to file my 2012 taxes Benefits under a dependent-care assistance program. What forms do i need to file my 2012 taxes The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. What forms do i need to file my 2012 taxes Payments made under the compensated work therapy program. What forms do i need to file my 2012 taxes Any bonus payment by a state or political subdivision because of service in a combat zone. What forms do i need to file my 2012 taxes Volunteers The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions. What forms do i need to file my 2012 taxes Peace Corps. What forms do i need to file my 2012 taxes   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. What forms do i need to file my 2012 taxes Taxable allowances. What forms do i need to file my 2012 taxes   The following allowances must be included in your income and reported as wages: Allowances paid to your spouse and minor children while you are a volunteer leader training in the United States. What forms do i need to file my 2012 taxes Living allowances designated by the Director of the Peace Corps as basic compensation. What forms do i need to file my 2012 taxes These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. What forms do i need to file my 2012 taxes Leave allowances. What forms do i need to file my 2012 taxes Readjustment allowances or termination payments. What forms do i need to file my 2012 taxes These are considered received by you when credited to your account. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. What forms do i need to file my 2012 taxes Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. What forms do i need to file my 2012 taxes Volunteers in Service to America (VISTA). What forms do i need to file my 2012 taxes   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. What forms do i need to file my 2012 taxes National Senior Services Corps programs. What forms do i need to file my 2012 taxes   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. What forms do i need to file my 2012 taxes Retired Senior Volunteer Program (RSVP). What forms do i need to file my 2012 taxes Foster Grandparent Program. What forms do i need to file my 2012 taxes Senior Companion Program. What forms do i need to file my 2012 taxes Service Corps of Retired Executives (SCORE). What forms do i need to file my 2012 taxes   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. What forms do i need to file my 2012 taxes Volunteer tax counseling. What forms do i need to file my 2012 taxes   Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE). What forms do i need to file my 2012 taxes   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. What forms do i need to file my 2012 taxes See chapter 24. What forms do i need to file my 2012 taxes Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. What forms do i need to file my 2012 taxes In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. What forms do i need to file my 2012 taxes If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. What forms do i need to file my 2012 taxes However, certain payments may not be taxable to you. What forms do i need to file my 2012 taxes Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. What forms do i need to file my 2012 taxes In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. What forms do i need to file my 2012 taxes Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. What forms do i need to file my 2012 taxes Cost paid by you. What forms do i need to file my 2012 taxes   If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. What forms do i need to file my 2012 taxes If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. What forms do i need to file my 2012 taxes See Reimbursement in a later year in chapter 21. What forms do i need to file my 2012 taxes Cafeteria plans. What forms do i need to file my 2012 taxes   In most cases, if you are covered by an accident or health insurance plan through a cafeteria plan, and the amount of the insurance premiums was not included in your income, you are not considered to have paid the premiums and you must include any benefits you receive in your income. What forms do i need to file my 2012 taxes If the amount of the premiums was included in your income, you are considered to have paid the premiums, and any benefits you receive are not taxable. What forms do i need to file my 2012 taxes Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. What forms do i need to file my 2012 taxes You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. What forms do i need to file my 2012 taxes Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. What forms do i need to file my 2012 taxes You may be entitled to a tax credit if you were permanently and totally disabled when you retired. What forms do i need to file my 2012 taxes For information on this credit and the definition of permanent and total disability, see chapter 33. What forms do i need to file my 2012 taxes Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. What forms do i need to file my 2012 taxes Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. What forms do i need to file my 2012 taxes The rules for reporting pensions are explained in How To Report in chapter 10. What forms do i need to file my 2012 taxes For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. What forms do i need to file my 2012 taxes Retirement and profit-sharing plans. What forms do i need to file my 2012 taxes   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. What forms do i need to file my 2012 taxes The payments must be reported as a pension or annuity. What forms do i need to file my 2012 taxes For more information on pensions, see chapter 10. What forms do i need to file my 2012 taxes Accrued leave payment. What forms do i need to file my 2012 taxes   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. What forms do i need to file my 2012 taxes The payment is not a disability payment. What forms do i need to file my 2012 taxes Include it in your income in the tax year you receive it. What forms do i need to file my 2012 taxes Military and Government Disability Pensions Certain military and government disability pensions are not taxable. What forms do i need to file my 2012 taxes Service-connected disability. What forms do i need to file my 2012 taxes   You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services. What forms do i need to file my 2012 taxes The armed forces of any country. What forms do i need to file my 2012 taxes The National Oceanic and Atmospheric Administration. What forms do i need to file my 2012 taxes The Public Health Service. What forms do i need to file my 2012 taxes The Foreign Service. What forms do i need to file my 2012 taxes Conditions for exclusion. What forms do i need to file my 2012 taxes   Do not include the disability payments in your income if any of the following conditions apply. What forms do i need to file my 2012 taxes You were entitled to receive a disability payment before September 25, 1975. What forms do i need to file my 2012 taxes You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975. What forms do i need to file my 2012 taxes You receive the disability payments for a combat-related injury. What forms do i need to file my 2012 taxes This is a personal injury or sickness that Results directly from armed conflict, Takes place while you are engaged in extra-hazardous service, Takes place under conditions simulating war, including training exercises such as maneuvers, or Is caused by an instrumentality of war. What forms do i need to file my 2012 taxes You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. What forms do i need to file my 2012 taxes Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. What forms do i need to file my 2012 taxes Pension based on years of service. What forms do i need to file my 2012 taxes   If you receive a disability pension based on years of service, in most cases you must include it in your income. What forms do i need to file my 2012 taxes However, if the pension qualifies for the exclusion for a service-connected disability (discussed earlier), do not include in income the part of your pension that you would have received if the pension had been based on a percentage of disability. What forms do i need to file my 2012 taxes You must include the rest of your pension in your income. What forms do i need to file my 2012 taxes Retroactive VA determination. What forms do i need to file my 2012 taxes   If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. What forms do i need to file my 2012 taxes You can claim a refund of any tax paid on the excludable amount (subject to the statute of limitations) by filing an amended return on Form 1040X for each previous year during the retroactive period. What forms do i need to file my 2012 taxes You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. What forms do i need to file my 2012 taxes The letter must show the amount withheld and the effective date of the benefit. What forms do i need to file my 2012 taxes   If you receive a lump-sum disability severance payment and are later awarded VA disability benefits, exclude 100% of the severance benefit from your income. What forms do i need to file my 2012 taxes However, you must include in your income any lump-sum readjustment or other nondisability severance payment you received on release from active duty, even if you are later given a retroactive disability rating by the VA. What forms do i need to file my 2012 taxes Special statute of limitations. What forms do i need to file my 2012 taxes   In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. What forms do i need to file my 2012 taxes However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended by a 1-year period beginning on the date of the determination. What forms do i need to file my 2012 taxes This 1-year extended period applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination. What forms do i need to file my 2012 taxes Example. What forms do i need to file my 2012 taxes You retired in 2007 and receive a pension based on your years of service. What forms do i need to file my 2012 taxes On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. What forms do i need to file my 2012 taxes Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. What forms do i need to file my 2012 taxes However, under the special limitation period, you can also file a claim for 2009 as long as you file the claim by August 1, 2014. What forms do i need to file my 2012 taxes You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. What forms do i need to file my 2012 taxes Terrorist attack or military action. What forms do i need to file my 2012 taxes   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. What forms do i need to file my 2012 taxes Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. What forms do i need to file my 2012 taxes Amounts you receive from them (other than policyholder dividends or premium refunds) in most cases are excludable from income as amounts received for personal injury or sickness. What forms do i need to file my 2012 taxes To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return. What forms do i need to file my 2012 taxes A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. What forms do i need to file my 2012 taxes The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits, and In most cases, not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. What forms do i need to file my 2012 taxes Qualified long-term care services. What forms do i need to file my 2012 taxes   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services, and Required by a chronically ill individual and provided pursuant to a plan of care as prescribed by a licensed health care practitioner. What forms do i need to file my 2012 taxes Chronically ill individual. What forms do i need to file my 2012 taxes   A chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as one of the following: An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. What forms do i need to file my 2012 taxes Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. What forms do i need to file my 2012 taxes An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. What forms do i need to file my 2012 taxes Limit on exclusion. What forms do i need to file my 2012 taxes   You generally can exclude from gross income up to $320 a day for 2013. What forms do i need to file my 2012 taxes See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. What forms do i need to file my 2012 taxes Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. What forms do i need to file my 2012 taxes The exemption also applies to your survivors. What forms do i need to file my 2012 taxes The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. What forms do i need to file my 2012 taxes If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. What forms do i need to file my 2012 taxes For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. What forms do i need to file my 2012 taxes Return to work. What forms do i need to file my 2012 taxes    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. What forms do i need to file my 2012 taxes Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. What forms do i need to file my 2012 taxes Railroad sick pay. What forms do i need to file my 2012 taxes    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. What forms do i need to file my 2012 taxes However, do not include them in your income if they are for an on-the-job injury. What forms do i need to file my 2012 taxes   If you received income because of a disability, see Disability Pensions , earlier. What forms do i need to file my 2012 taxes Federal Employees' Compensation Act (FECA). What forms do i need to file my 2012 taxes   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. What forms do i need to file my 2012 taxes However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. What forms do i need to file my 2012 taxes Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. What forms do i need to file my 2012 taxes Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. What forms do i need to file my 2012 taxes    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. What forms do i need to file my 2012 taxes For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. What forms do i need to file my 2012 taxes    You can deduct the amount you spend to buy back sick leave for an earlier year to be eligible for nontaxable FECA benefits for that period. What forms do i need to file my 2012 taxes It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). What forms do i need to file my 2012 taxes If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. What forms do i need to file my 2012 taxes Do not deduct it separately. What forms do i need to file my 2012 taxes Other compensation. What forms do i need to file my 2012 taxes   Many other amounts you receive as compensation for sickness or injury are not taxable. What forms do i need to file my 2012 taxes These include the following amounts. What forms do i need to file my 2012 taxes Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. What forms do i need to file my 2012 taxes Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. What forms do i need to file my 2012 taxes Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. What forms do i need to file my 2012 taxes Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. What forms do i need to file my 2012 taxes This compensation must be based only on the injury and not on the period of your absence from work. What forms do i need to file my 2012 taxes These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. What forms do i need to file my 2012 taxes Reimbursement for medical care. What forms do i need to file my 2012 taxes    A reimbursement for medical care is generally not taxable. What forms do i need to file my 2012 taxes However, it may reduce your medical expense deduction. What forms do i need to file my 2012 taxes For more information, see chapter 21. What forms do i need to file my 2012 taxes Prev  Up  Next   Home   More Online Publications