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Where Can I File My Taxes Electronically For Free

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Where Can I File My Taxes Electronically For Free

Where can i file my taxes electronically for free 1. Where can i file my taxes electronically for free   Investment Income Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: General InformationSSN for joint account. Where can i file my taxes electronically for free Custodian account for your child. Where can i file my taxes electronically for free Penalty for failure to supply SSN. Where can i file my taxes electronically for free Certification. Where can i file my taxes electronically for free Underreported interest and dividends. Where can i file my taxes electronically for free How to stop backup withholding due to underreporting. Where can i file my taxes electronically for free How to stop backup withholding due to an incorrect identification number. Where can i file my taxes electronically for free Reporting backup withholding. Where can i file my taxes electronically for free Nonresident aliens. Where can i file my taxes electronically for free Penalties. Where can i file my taxes electronically for free Savings account with parent as trustee. Where can i file my taxes electronically for free Interest IncomeInterest not reported on Form 1099-INT. Where can i file my taxes electronically for free Nominees. Where can i file my taxes electronically for free Incorrect amount. Where can i file my taxes electronically for free Information reporting requirement. Where can i file my taxes electronically for free Taxable Interest — General Below-Market Loans U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Savings Bonds U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Discount on Debt InstrumentsOriginal Issue Discount (OID) Market Discount Bonds Discount on Short-Term Obligations Election To Report All Interest as OID When To Report Interest IncomeConstructive receipt. Where can i file my taxes electronically for free How To Report Interest IncomeSchedule B (Form 1040A or 1040). Where can i file my taxes electronically for free Worksheet for savings bonds distributed from a retirement or profit-sharing plan. Where can i file my taxes electronically for free File Form 1099-INT with the IRS. Where can i file my taxes electronically for free Dividends and Other DistributionsDividends not reported on Form 1099-DIV. Where can i file my taxes electronically for free Nominees. Where can i file my taxes electronically for free Ordinary Dividends Capital Gain Distributions Nondividend Distributions Liquidating Distributions Distributions of Stock and Stock Rights Other Distributions How To Report Dividend IncomeElection. Where can i file my taxes electronically for free Independent contractor. Where can i file my taxes electronically for free Investment interest deducted. Where can i file my taxes electronically for free Exception 1. Where can i file my taxes electronically for free Exception 2. Where can i file my taxes electronically for free Undistributed capital gains. Where can i file my taxes electronically for free File Form 1099-DIV with the IRS. Where can i file my taxes electronically for free Stripped Preferred Stock REMICs, FASITs, and Other CDOsREMICs Collateralized Debt Obligations (CDOs) FASITs S CorporationsLimit on losses and deductions. Where can i file my taxes electronically for free Passive activity losses. Where can i file my taxes electronically for free Form 8582. Where can i file my taxes electronically for free Investment ClubsInvestments in name of member. Where can i file my taxes electronically for free Tax Treatment of the Club Topics - This chapter discusses: Interest Income , Discount on Debt Instruments , When To Report Interest Income , How To Report Interest Income , Dividends and Other Distributions , How To Report Dividend Income , Stripped Preferred Stock , Real estate mortgage investment conduits (REMICs), financial asset securitization investment trusts (FASITs), and other collateralized debt obligations (CDOs) , S Corporations , and Investment Clubs . Where can i file my taxes electronically for free Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 537 Installment Sales 590 Individual Retirement Arrangements (IRAs) 925 Passive Activity and At-Risk Rules 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses 1040 U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Individual Income Tax Return 1040A U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1099 General Instructions for Certain Information Returns 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 3115 Application for Change in Accounting Method 6251 Alternative Minimum Tax — Individuals 8582 Passive Activity Loss Limitations 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends 8815 Exclusion of Interest From Series EE and I U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Savings Bonds Issued After 1989 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets 8960 Net Investment Income Tax—Individuals, Estates, and Trusts See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Where can i file my taxes electronically for free General Information A few items of general interest are covered here. Where can i file my taxes electronically for free Recordkeeping. Where can i file my taxes electronically for free You should keep a list showing sources and investment income amounts you receive during the year. Where can i file my taxes electronically for free Also keep the forms you receive showing your investment income (Forms 1099-INT, Interest Income, and 1099-DIV, Dividends and Distributions, for example) as an important part of your records. Where can i file my taxes electronically for free Net investment income tax (NIIT). Where can i file my taxes electronically for free   Beginning in 2013, you may be subject to the NIIT. Where can i file my taxes electronically for free The NIIT is a 3. Where can i file my taxes electronically for free 8% tax on the lesser of your net investment income or the amount of your modified adjusted gross income (MAGI) that is over a threshold amount based on your filing status. Where can i file my taxes electronically for free    Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household (with qualifying person) $200,000 Qualifying Widow(er) with dependent child $250,000    For more information, see Form 8960 and Instructions for Form 8960. Where can i file my taxes electronically for free Tax on unearned income of certain children. Where can i file my taxes electronically for free   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Where can i file my taxes electronically for free This may happen if all of the following are true. Where can i file my taxes electronically for free The child had more than $2,000 of unearned income. Where can i file my taxes electronically for free The child is required to file a tax return. Where can i file my taxes electronically for free The child was: Under age 18 at the end of 2013, Age 18 at the end of 2013 and did not have earned income that was more than half of the child's support, or A full-time student over age 18 and under age 24 at the end of 2013 and did not have earned income that was more than half of the child's support. Where can i file my taxes electronically for free At least one of the child's parents was alive at the end of 2013. Where can i file my taxes electronically for free The child does not file a joint return for 2013. Where can i file my taxes electronically for free A child born on January 1, 1996, is considered to be age 18 at the end of 2013; a child born on January 1, 1995, is considered to be age 19 at the end of 2013; a child born on January 1, 1990, is considered to be age 24 at the end of 2013. Where can i file my taxes electronically for free   If all of these statements are true, Form 8615 must be completed and attached to the child's tax return. Where can i file my taxes electronically for free If any of these statements is not true, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Where can i file my taxes electronically for free    However, the parent can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Where can i file my taxes electronically for free Use Form 8814 for this purpose. Where can i file my taxes electronically for free   For more information about the tax on unearned income of children and the parents' election, see Publication 929, Tax Rules for Children and Dependents. Where can i file my taxes electronically for free Beneficiary of an estate or trust. Where can i file my taxes electronically for free   Interest, dividends, and other investment income you receive as a beneficiary of an estate or trust is generally taxable income. Where can i file my taxes electronically for free You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Where can i file my taxes electronically for free , from the fiduciary. Where can i file my taxes electronically for free Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Where can i file my taxes electronically for free Social security number (SSN). Where can i file my taxes electronically for free   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. Where can i file my taxes electronically for free This includes payers of interest and dividends. Where can i file my taxes electronically for free If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. Where can i file my taxes electronically for free SSN for joint account. Where can i file my taxes electronically for free   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. Where can i file my taxes electronically for free (For information on who owns the funds in a joint account, see Joint accounts , later. Where can i file my taxes electronically for free ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. Where can i file my taxes electronically for free This is because only one name and SSN can be shown on Form 1099. Where can i file my taxes electronically for free   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. Where can i file my taxes electronically for free For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. Where can i file my taxes electronically for free Custodian account for your child. Where can i file my taxes electronically for free   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. Where can i file my taxes electronically for free For example, you must give your child's SSN to the payer of dividends on stock owned by your child, even though the dividends are paid to you as custodian. Where can i file my taxes electronically for free Penalty for failure to supply SSN. Where can i file my taxes electronically for free   You will be subject to a penalty if, when required, you fail to: Include your SSN on any return, statement, or other document, Give your SSN to another person who must include it on any return, statement, or other document, or Include the SSN of another person on any return, statement, or other document. Where can i file my taxes electronically for free The penalty is $50 for each failure up to a maximum penalty of $100,000 for any calendar year. Where can i file my taxes electronically for free   You will not be subject to this penalty if you can show that your failure to provide the SSN was due to reasonable cause and not to willful neglect. Where can i file my taxes electronically for free   If you fail to supply an SSN, you may also be subject to backup withholding. Where can i file my taxes electronically for free Backup withholding. Where can i file my taxes electronically for free   Your investment income is generally not subject to regular withholding. Where can i file my taxes electronically for free However, it may be subject to backup withholding to ensure that income tax is collected on the income. Where can i file my taxes electronically for free Under backup withholding, the bank, broker, or other payer of interest, original issue discount (OID), dividends, cash patronage dividends, or royalties must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Where can i file my taxes electronically for free   Backup withholding applies if: You do not give the payer your identification number (either a social security number or an employer identification number) in the required manner, The IRS notifies the payer that you gave an incorrect identification number, The IRS notifies the payer that you are subject to backup withholding on interest or dividends because you have underreported interest or dividends on your income tax return, or You are required, but fail, to certify that you are not subject to backup withholding for the reason described in (3). Where can i file my taxes electronically for free Certification. Where can i file my taxes electronically for free   For new accounts paying interest or dividends, you must certify under penalties of perjury that your SSN is correct and that you are not subject to backup withholding. Where can i file my taxes electronically for free Your payer will give you a Form W-9, Request for Taxpayer Identification Number and Certification, or similar form, to make this certification. Where can i file my taxes electronically for free If you fail to make this certification, backup withholding may begin immediately on your new account or investment. Where can i file my taxes electronically for free Underreported interest and dividends. Where can i file my taxes electronically for free   You will be considered to have underreported your interest and dividends if the IRS has determined for a tax year that: You failed to include any part of a reportable interest or dividend payment required to be shown on your return, or You were required to file a return and to include a reportable interest or dividend payment on that return, but you failed to file the return. Where can i file my taxes electronically for free How to stop backup withholding due to underreporting. Where can i file my taxes electronically for free   If you have been notified that you underreported interest or dividends, you can request a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. Where can i file my taxes electronically for free You must show that at least one of the following situations applies. Where can i file my taxes electronically for free No underreporting occurred. Where can i file my taxes electronically for free You have a bona fide dispute with the IRS about whether underreporting occurred. Where can i file my taxes electronically for free Backup withholding will cause or is causing an undue hardship, and it is unlikely that you will underreport interest and dividends in the future. Where can i file my taxes electronically for free You have corrected the underreporting by filing a return if you did not previously file one and by paying all taxes, penalties, and interest due for any underreported interest or dividend payments. Where can i file my taxes electronically for free   If the IRS determines that backup withholding should stop, it will provide you with a certification and will notify the payers who were sent notices earlier. Where can i file my taxes electronically for free How to stop backup withholding due to an incorrect identification number. Where can i file my taxes electronically for free   If you have been notified by a payer that you are subject to backup withholding because you have provided an incorrect SSN or employer identification number, you can stop it by following the instructions the payer gives you. Where can i file my taxes electronically for free Reporting backup withholding. Where can i file my taxes electronically for free   If backup withholding is deducted from your interest or dividend income or other reportable payment, the bank or other business must give you an information return for the year (for example, a Form 1099-INT) indicating the amount withheld. Where can i file my taxes electronically for free The information return will show any backup withholding as “Federal income tax withheld. Where can i file my taxes electronically for free ” Nonresident aliens. Where can i file my taxes electronically for free    Generally, payments made to nonresident aliens are not subject to backup withholding. Where can i file my taxes electronically for free You can use Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to certify exempt status. Where can i file my taxes electronically for free However, this does not exempt you from the 30% (or lower treaty) withholding rate that may apply to your investment income. Where can i file my taxes electronically for free For information on the 30% rate, see Publication 519, U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Tax Guide for Aliens. Where can i file my taxes electronically for free Penalties. Where can i file my taxes electronically for free   There are civil and criminal penalties for giving false information to avoid backup withholding. Where can i file my taxes electronically for free The civil penalty is $500. Where can i file my taxes electronically for free The criminal penalty, upon conviction, is a fine of up to $1,000, or imprisonment of up to 1 year, or both. Where can i file my taxes electronically for free Where to report investment income. Where can i file my taxes electronically for free   Table 1-1 gives an overview of the forms and schedules to use to report some common types of investment income. Where can i file my taxes electronically for free But see the rest of this publication for detailed information about reporting investment income. Where can i file my taxes electronically for free Joint accounts. Where can i file my taxes electronically for free   If two or more persons hold property (such as a savings account, bond, or stock) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest or dividends from the property is determined by local law. Where can i file my taxes electronically for free Community property states. Where can i file my taxes electronically for free   If you are married and receive a distribution that is community income, one-half of the distribution is generally considered to be received by each spouse. Where can i file my taxes electronically for free If you file separate returns, you must each report one-half of any taxable distribution. Where can i file my taxes electronically for free See Publication 555, Community Property, for more information on community income. Where can i file my taxes electronically for free   If the distribution is not considered community property and you and your spouse file separate returns, each of you must report your separate taxable distributions. Where can i file my taxes electronically for free Example. Where can i file my taxes electronically for free You and your spouse have a joint money market account. Where can i file my taxes electronically for free Under state law, half the income from the account belongs to you, and half belongs to your spouse. Where can i file my taxes electronically for free If you file separate returns, you each report half the income. Where can i file my taxes electronically for free Income from property given to a child. Where can i file my taxes electronically for free   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. Where can i file my taxes electronically for free   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. Where can i file my taxes electronically for free Savings account with parent as trustee. Where can i file my taxes electronically for free   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. Where can i file my taxes electronically for free The savings account legally belongs to the child. Where can i file my taxes electronically for free The parents are not legally permitted to use any of the funds to support the child. Where can i file my taxes electronically for free Table 1-1. Where can i file my taxes electronically for free Where To Report Common Types of Investment Income (For detailed information about reporting investment income, see the rest of this publication, especially How To Report Interest Income and How To Report Dividend Income in chapter 1. Where can i file my taxes electronically for free ) Type of Income If you file Form 1040, report on . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free If you can file Form 1040A, report on . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free If you can file Form 1040EZ, report on . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free Tax-exempt interest (Form 1099-INT, box 8) Line 8b Line 8b Space to the left of line 2 (enter “TEI” and the amount) Taxable interest that totals $1,500 or less Line 8a (You may need to file Schedule B as well. Where can i file my taxes electronically for free ) Line 8a (You may need to file Schedule B as well. Where can i file my taxes electronically for free ) Line 2 Taxable interest that totals more than $1,500 Line 8a; also use Schedule B, line 1 Line 8a; also use Schedule B, line 1   Savings bond interest you will exclude because of higher education expenses Schedule B; also use Form 8815 Schedule B; also use Form 8815   Ordinary dividends that total $1,500 or less Line 9a (You may need to file Schedule B as well. Where can i file my taxes electronically for free ) Line 9a (You may need to file Schedule B as well. Where can i file my taxes electronically for free )   Ordinary dividends that total more than $1,500 Line 9a; also use Schedule B, line 5 Line 9a; also use Schedule B, line 5   Qualified dividends (if you do not have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2 Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2   Qualified dividends (if you have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, line 2 You cannot use Form 1040A    You cannot use Form 1040EZ Capital gain distributions (if you do not have to file Schedule D) Line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3 Line 10; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3   Capital gain distributions (if you have to file Schedule D) Schedule D, line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     Section 1250, 1202, or collectibles gain (Form 1099-DIV, box 2b, 2c, or 2d) Form 8949 and Schedule D     Nondividend distributions (Form 1099-DIV, box 3) Generally not reported*     Undistributed capital gains (Form 2439, boxes 1a - 1d) Schedule D     Gain or loss from sales of stocks or bonds Line 13; also use Form 8949, Schedule D, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet You cannot use Form 1040A   Gain or loss from exchanges of like-kind investment property Line 13; also use Schedule D, Form 8824, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     *Report any amounts in excess of your basis in your mutual fund shares on Form 8949. Where can i file my taxes electronically for free Use Part II if you held the shares more than 1 year. Where can i file my taxes electronically for free Use Part I if you held your mutual fund shares 1 year or less. Where can i file my taxes electronically for free For details on Form 8949, see Reporting Capital Gains and Losses in chapter 4, and the Instructions for Form 8949. Where can i file my taxes electronically for free Accuracy-related penalty. Where can i file my taxes electronically for free   An accuracy-related penalty of 20% can be charged for underpayments of tax due to negligence or disregard of rules or regulations or substantial understatement of tax. Where can i file my taxes electronically for free For information on the penalty and any interest that applies, see Penalties in chapter 2. Where can i file my taxes electronically for free Interest Income This section discusses the tax treatment of different types of interest income. Where can i file my taxes electronically for free In general, any interest that you receive or that is credited to your account and can be withdrawn is taxable income. Where can i file my taxes electronically for free (It does not have to be entered in your passbook. Where can i file my taxes electronically for free ) Exceptions to this rule are discussed later. Where can i file my taxes electronically for free Form 1099-INT. Where can i file my taxes electronically for free   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. Where can i file my taxes electronically for free This form shows you the interest you received during the year. Where can i file my taxes electronically for free Keep this form for your records. Where can i file my taxes electronically for free You do not have to attach it to your tax return. Where can i file my taxes electronically for free   Report on your tax return the total interest income you receive for the tax year. Where can i file my taxes electronically for free Interest not reported on Form 1099-INT. Where can i file my taxes electronically for free   Even if you do not receive Form 1099-INT, you must still report all of your interest income. Where can i file my taxes electronically for free For example, you may receive distributive shares of interest from partnerships or S corporations. Where can i file my taxes electronically for free This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Where can i file my taxes electronically for free , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Where can i file my taxes electronically for free Nominees. Where can i file my taxes electronically for free   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. Where can i file my taxes electronically for free   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on Nominee distributions , later, under How To Report Interest Income. Where can i file my taxes electronically for free Incorrect amount. Where can i file my taxes electronically for free   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Where can i file my taxes electronically for free The new Form 1099-INT you receive will be marked “Corrected. Where can i file my taxes electronically for free ” Form 1099-OID. Where can i file my taxes electronically for free   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. Where can i file my taxes electronically for free For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. Where can i file my taxes electronically for free Exempt-interest dividends. Where can i file my taxes electronically for free   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Where can i file my taxes electronically for free (However, see Information reporting requirement , next. Where can i file my taxes electronically for free ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Where can i file my taxes electronically for free You do not reduce your basis for distributions that are exempt-interest dividends. Where can i file my taxes electronically for free Information reporting requirement. Where can i file my taxes electronically for free   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. Where can i file my taxes electronically for free This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. Where can i file my taxes electronically for free See How To Report Interest Income , later. Where can i file my taxes electronically for free Note. Where can i file my taxes electronically for free Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Where can i file my taxes electronically for free The exempt-interest dividends subject to the alternative minimum tax are shown in box 11 of Form 1099-DIV. Where can i file my taxes electronically for free See Form 6251 and its instructions for more information about this tax. Where can i file my taxes electronically for free Private activity bonds are discussed later under State or Local Government Obligations. Where can i file my taxes electronically for free Interest on VA dividends. Where can i file my taxes electronically for free   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. Where can i file my taxes electronically for free This includes interest paid on dividends on converted United States Government Life Insurance policies and on National Service Life Insurance policies. Where can i file my taxes electronically for free Individual retirement arrangements (IRAs). Where can i file my taxes electronically for free   Interest on a Roth IRA generally is not taxable. Where can i file my taxes electronically for free Interest on a traditional IRA is tax deferred. Where can i file my taxes electronically for free You generally do not include it in your income until you make withdrawals from the IRA. Where can i file my taxes electronically for free See Publication 590 for more information. Where can i file my taxes electronically for free Taxable Interest — General Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. Where can i file my taxes electronically for free The following are some sources of taxable interest. Where can i file my taxes electronically for free Dividends that are actually interest. Where can i file my taxes electronically for free   Certain distributions commonly called dividends are actually interest. Where can i file my taxes electronically for free You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. Where can i file my taxes electronically for free  The “dividends” will be shown as interest income on Form 1099-INT. Where can i file my taxes electronically for free Money market funds. Where can i file my taxes electronically for free   Money market funds are offered by nonbank financial institutions such as mutual funds and stock brokerage houses, and pay dividends. Where can i file my taxes electronically for free Generally, amounts you receive from money market funds should be reported as dividends, not as interest. Where can i file my taxes electronically for free Certificates of deposit and other deferred interest accounts. Where can i file my taxes electronically for free   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. Where can i file my taxes electronically for free You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. Where can i file my taxes electronically for free The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. Where can i file my taxes electronically for free If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. Where can i file my taxes electronically for free Interest subject to penalty for early withdrawal. Where can i file my taxes electronically for free   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. Where can i file my taxes electronically for free You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. Where can i file my taxes electronically for free See Penalty on early withdrawal of savings under How To Report Interest Income, later, for more information on how to report the interest and deduct the penalty. Where can i file my taxes electronically for free Money borrowed to invest in certificate of deposit. Where can i file my taxes electronically for free   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. Where can i file my taxes electronically for free You must report the total interest you earn on the certificate in your income. Where can i file my taxes electronically for free If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. Where can i file my taxes electronically for free See Interest Expenses in chapter 3. Where can i file my taxes electronically for free Example. Where can i file my taxes electronically for free You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. Where can i file my taxes electronically for free The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. Where can i file my taxes electronically for free The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. Where can i file my taxes electronically for free The bank also gives you a statement showing that you paid $310 interest for 2013. Where can i file my taxes electronically for free You must include the $575 in your income. Where can i file my taxes electronically for free If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you can deduct $310, subject to the net investment income limit. Where can i file my taxes electronically for free Gift for opening account. Where can i file my taxes electronically for free   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. Where can i file my taxes electronically for free   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. Where can i file my taxes electronically for free For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. Where can i file my taxes electronically for free The value is determined by the cost to the financial institution. Where can i file my taxes electronically for free Example. Where can i file my taxes electronically for free You open a savings account at your local bank and deposit $800. Where can i file my taxes electronically for free The account earns $20 interest. Where can i file my taxes electronically for free You also receive a $15 calculator. Where can i file my taxes electronically for free If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. Where can i file my taxes electronically for free You must report $35 interest income on your tax return. Where can i file my taxes electronically for free Interest on insurance dividends. Where can i file my taxes electronically for free   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. Where can i file my taxes electronically for free However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. Where can i file my taxes electronically for free Prepaid insurance premiums. Where can i file my taxes electronically for free   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. Where can i file my taxes electronically for free U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free obligations. Where can i file my taxes electronically for free   Interest on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free obligations, such as U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. Where can i file my taxes electronically for free Interest on tax refunds. Where can i file my taxes electronically for free   Interest you receive on tax refunds is taxable income. Where can i file my taxes electronically for free Interest on condemnation award. Where can i file my taxes electronically for free   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. Where can i file my taxes electronically for free Installment sale payments. Where can i file my taxes electronically for free   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. Where can i file my taxes electronically for free That interest is taxable when you receive it. Where can i file my taxes electronically for free If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. Where can i file my taxes electronically for free See Unstated Interest and Original Issue Discount (OID) in Publication 537. Where can i file my taxes electronically for free Interest on annuity contract. Where can i file my taxes electronically for free   Accumulated interest on an annuity contract you sell before its maturity date is taxable. Where can i file my taxes electronically for free Usurious interest. Where can i file my taxes electronically for free   Usurious interest is interest charged at an illegal rate. Where can i file my taxes electronically for free This is taxable as interest unless state law automatically changes it to a payment on the principal. Where can i file my taxes electronically for free Interest income on frozen deposits. Where can i file my taxes electronically for free   Exclude from your gross income interest on frozen deposits. Where can i file my taxes electronically for free A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state in which the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. Where can i file my taxes electronically for free   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). Where can i file my taxes electronically for free If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income for information about reporting this interest income exclusion on your tax return. Where can i file my taxes electronically for free   The interest you exclude is treated as credited to your account in the following year. Where can i file my taxes electronically for free You must include it in income in the year you can withdraw it. Where can i file my taxes electronically for free Example. Where can i file my taxes electronically for free $100 of interest was credited on your frozen deposit during the year. Where can i file my taxes electronically for free You withdrew $80 but could not withdraw any more as of the end of the year. Where can i file my taxes electronically for free You must include $80 in your income and exclude $20 from your income for the year. Where can i file my taxes electronically for free You must include the $20 in your income for the year you can withdraw it. Where can i file my taxes electronically for free Bonds traded flat. Where can i file my taxes electronically for free    If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. Where can i file my taxes electronically for free The defaulted or unpaid interest is not income and is not taxable as interest if paid later. Where can i file my taxes electronically for free When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. Where can i file my taxes electronically for free Interest that accrues after the date of purchase, however, is taxable interest income for the year received or accrued. Where can i file my taxes electronically for free See Bonds Sold Between Interest Dates , later in this chapter. Where can i file my taxes electronically for free Below-Market Loans If you make a below-market gift or demand loan, you must report as interest income any forgone interest (defined later) from that loan. Where can i file my taxes electronically for free The below-market loan rules and exceptions are described in this section. Where can i file my taxes electronically for free For more information, see section 7872 of the Internal Revenue Code and its regulations. Where can i file my taxes electronically for free If you receive a below-market loan, you may be able to deduct the forgone interest as well as any interest you actually paid, but not if it is personal interest. Where can i file my taxes electronically for free Loans subject to the rules. Where can i file my taxes electronically for free   The rules for below-market loans apply to: Gift loans, Pay-related loans, Corporation-shareholder loans, Tax avoidance loans, and Certain loans made to qualified continuing care facilities under a continuing care contract. Where can i file my taxes electronically for free A pay-related loan is any below-market loan between an employer and an employee or between an independent contractor and a person for whom the contractor provides services. Where can i file my taxes electronically for free A tax avoidance loan is any below-market loan where the avoidance of federal tax is one of the main purposes of the interest arrangement. Where can i file my taxes electronically for free Forgone interest. Where can i file my taxes electronically for free   For any period, forgone interest is: The amount of interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. Where can i file my taxes electronically for free Applicable federal rate. Where can i file my taxes electronically for free   Applicable federal rates are published by the IRS each month in the Internal Revenue Bulletin. Where can i file my taxes electronically for free Some IRS offices have these bulletins available for research. Where can i file my taxes electronically for free See chapter 5, How To Get Tax Help , for other ways to get this information. Where can i file my taxes electronically for free Rules for below-market loans. Where can i file my taxes electronically for free   The rules that apply to a below-market loan depend on whether the loan is a gift loan, demand loan, or term loan. Where can i file my taxes electronically for free Gift and demand loans. Where can i file my taxes electronically for free   A gift loan is any below-market loan where the forgone interest is in the nature of a gift. Where can i file my taxes electronically for free   A demand loan is a loan payable in full at any time upon demand by the lender. Where can i file my taxes electronically for free A demand loan is a below-market loan if no interest is charged or if interest is charged at a rate below the applicable federal rate. Where can i file my taxes electronically for free   A demand loan or gift loan that is a below-market loan is generally treated as an arm's-length transaction in which the lender is treated as having made: A loan to the borrower in exchange for a note that requires the payment of interest at the applicable federal rate, and An additional payment to the borrower in an amount equal to the forgone interest. Where can i file my taxes electronically for free The borrower is generally treated as transferring the additional payment back to the lender as interest. Where can i file my taxes electronically for free The lender must report that amount as interest income. Where can i file my taxes electronically for free   The lender's additional payment to the borrower is treated as a gift, dividend, contribution to capital, pay for services, or other payment, depending on the substance of the transaction. Where can i file my taxes electronically for free The borrower may have to report this payment as taxable income, depending on its classification. Where can i file my taxes electronically for free These transfers are considered to occur annually, generally on December 31. Where can i file my taxes electronically for free Term loans. Where can i file my taxes electronically for free   A term loan is any loan that is not a demand loan. Where can i file my taxes electronically for free A term loan is a below-market loan if the amount of the loan is more than the present value of all payments due under the loan. Where can i file my taxes electronically for free   A lender who makes a below-market term loan other than a gift loan is treated as transferring an additional lump-sum cash payment to the borrower (as a dividend, contribution to capital, etc. Where can i file my taxes electronically for free ) on the date the loan is made. Where can i file my taxes electronically for free The amount of this payment is the amount of the loan minus the present value, at the applicable federal rate, of all payments due under the loan. Where can i file my taxes electronically for free An equal amount is treated as original issue discount (OID). Where can i file my taxes electronically for free The lender must report the annual part of the OID as interest income. Where can i file my taxes electronically for free The borrower may be able to deduct the OID as interest expense. Where can i file my taxes electronically for free See Original Issue Discount (OID) , later. Where can i file my taxes electronically for free Exceptions to the below-market loan rules. Where can i file my taxes electronically for free   Exceptions to the below-market loan rules are discussed here. Where can i file my taxes electronically for free Exception for loans of $10,000 or less. Where can i file my taxes electronically for free   The rules for below-market loans do not apply to any day on which the total outstanding amount of loans between the borrower and lender is $10,000 or less. Where can i file my taxes electronically for free This exception applies only to: Gift loans between individuals if the gift loan is not directly used to buy or carry income-producing assets, and Pay-related loans or corporation-shareholder loans if the avoidance of federal tax is not a principal purpose of the interest arrangement. Where can i file my taxes electronically for free This exception does not apply to a term loan described in (2) earlier that previously has been subject to the below-market loan rules. Where can i file my taxes electronically for free Those rules will continue to apply even if the outstanding balance is reduced to $10,000 or less. Where can i file my taxes electronically for free Exception for loans to continuing care facilities. Where can i file my taxes electronically for free   Loans to qualified continuing care facilities under continuing care contracts are not subject to the rules for below-market loans for the calendar year if the lender or the lender's spouse is age 62 or older at the end of the year. Where can i file my taxes electronically for free For the definitions of qualified continuing care facility and continuing care contract, see Internal Revenue Code section 7872(h). Where can i file my taxes electronically for free Exception for loans without significant tax effect. Where can i file my taxes electronically for free   Loans are excluded from the below-market loan rules if their interest arrangements do not have a significant effect on the federal tax liability of the borrower or the lender. Where can i file my taxes electronically for free These loans include: Loans made available by the lender to the general public on the same terms and conditions that are consistent with the lender's customary business practice; Loans subsidized by a federal, state, or municipal government that are made available under a program of general application to the public; Certain employee-relocation loans; Certain loans from a foreign person, unless the interest income would be effectively connected with the conduct of a U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free trade or business and would not be exempt from U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free tax under an income tax treaty; Gift loans to a charitable organization, contributions to which are deductible, if the total outstanding amount of loans between the organization and lender is $250,000 or less at all times during the tax year; and Other loans on which the interest arrangement can be shown to have no significant effect on the federal tax liability of the lender or the borrower. Where can i file my taxes electronically for free For a loan described in (6) above, all the facts and circumstances are used to determine if the interest arrangement has a significant effect on the federal tax liability of the lender or borrower. Where can i file my taxes electronically for free Some factors to be considered are: Whether items of income and deduction generated by the loan offset each other; The amount of these items; The cost to you of complying with the below-market loan rules, if they were to apply; and Any reasons other than taxes for structuring the transaction as a below-market loan. Where can i file my taxes electronically for free If you structure a transaction to meet this exception and one of the principal purposes of that structure is the avoidance of federal tax, the loan will be considered a tax-avoidance loan, and this exception will not apply. Where can i file my taxes electronically for free Limit on forgone interest for gift loans of $100,000 or less. Where can i file my taxes electronically for free   For gift loans between individuals, if the outstanding loans between the lender and borrower total $100,000 or less, the forgone interest to be included in income by the lender and deducted by the borrower is limited to the amount of the borrower's net investment income for the year. Where can i file my taxes electronically for free If the borrower's net investment income is $1,000 or less, it is treated as zero. Where can i file my taxes electronically for free This limit does not apply to a loan if the avoidance of federal tax is one of the main purposes of the interest arrangement. Where can i file my taxes electronically for free Effective dates. Where can i file my taxes electronically for free    These rules apply to term loans made after June 6, 1984, and to demand loans outstanding after that date. Where can i file my taxes electronically for free U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Savings Bonds This section provides tax information on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds. Where can i file my taxes electronically for free It explains how to report the interest income on these bonds and how to treat transfers of these bonds. Where can i file my taxes electronically for free U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds currently offered to individuals include Series EE bonds and Series I bonds. Where can i file my taxes electronically for free For other information on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds, write to:  For Series HH/H: Bureau of the Fiscal Service Division of Customer Assistance P. Where can i file my taxes electronically for free O. Where can i file my taxes electronically for free Box 2186 Parkersburg, WV 26106-2186  For Series EE and I paper savings bonds: Bureau of the Fiscal Service Division of Customer Assistance P. Where can i file my taxes electronically for free O. Where can i file my taxes electronically for free Box 7012 Parkersburg, WV 26106-7012  For Series EE and I electronic bonds: Bureau of the Fiscal Service  Division of Customer Assistance P. Where can i file my taxes electronically for free O. Where can i file my taxes electronically for free Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. Where can i file my taxes electronically for free treasurydirect. Where can i file my taxes electronically for free gov/indiv/indiv. Where can i file my taxes electronically for free htm. Where can i file my taxes electronically for free Accrual method taxpayers. Where can i file my taxes electronically for free   If you use an accrual method of accounting, you must report interest on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds each year as it accrues. Where can i file my taxes electronically for free You cannot postpone reporting interest until you receive it or until the bonds mature. Where can i file my taxes electronically for free Cash method taxpayers. Where can i file my taxes electronically for free   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds when you receive it. Where can i file my taxes electronically for free But see Reporting options for cash method taxpayers , later. Where can i file my taxes electronically for free Series HH bonds. Where can i file my taxes electronically for free   These bonds were issued at face value. Where can i file my taxes electronically for free Interest is paid twice a year by direct deposit to your bank account. Where can i file my taxes electronically for free If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. Where can i file my taxes electronically for free   Series HH bonds were first offered in 1980 and last offered in August 2004. Where can i file my taxes electronically for free Before 1980, series H bonds were issued. Where can i file my taxes electronically for free Series H bonds are treated the same as series HH bonds. Where can i file my taxes electronically for free If you are a cash method taxpayer, you must report the interest when you receive it. Where can i file my taxes electronically for free   Series H bonds have a maturity period of 30 years. Where can i file my taxes electronically for free Series HH bonds mature in 20 years. Where can i file my taxes electronically for free The last series H bonds matured in 2009. Where can i file my taxes electronically for free The last series HH bonds will mature in 2024. Where can i file my taxes electronically for free Series EE and series I bonds. Where can i file my taxes electronically for free   Interest on these bonds is payable when you redeem the bonds. Where can i file my taxes electronically for free The difference between the purchase price and the redemption value is taxable interest. Where can i file my taxes electronically for free Series EE bonds. Where can i file my taxes electronically for free   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. Where can i file my taxes electronically for free Before July 1980, series E bonds were issued. Where can i file my taxes electronically for free The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. Where can i file my taxes electronically for free Paper series EE and series E bonds are issued at a discount. Where can i file my taxes electronically for free The face value is payable to you at maturity. Where can i file my taxes electronically for free Electronic series EE bonds are issued at their face value. Where can i file my taxes electronically for free The face value plus accrued interest is payable to you at maturity. Where can i file my taxes electronically for free As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. Where can i file my taxes electronically for free    Owners of paper series EE bonds can convert them to electronic bonds. Where can i file my taxes electronically for free These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). Where can i file my taxes electronically for free Series I bonds. Where can i file my taxes electronically for free   Series I bonds were first offered in 1998. Where can i file my taxes electronically for free These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. Where can i file my taxes electronically for free The face value plus all accrued interest is payable to you at maturity. Where can i file my taxes electronically for free Reporting options for cash method taxpayers. Where can i file my taxes electronically for free   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. Where can i file my taxes electronically for free Method 1. Where can i file my taxes electronically for free Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature. Where can i file my taxes electronically for free (However, see Savings bonds traded , later. Where can i file my taxes electronically for free )  Note. Where can i file my taxes electronically for free Series EE bonds issued in 1983 matured in 2013. Where can i file my taxes electronically for free If you have used method 1, you generally must report the interest on these bonds on your 2013 return. Where can i file my taxes electronically for free The last series E bonds were issued in 1980 and matured in 2010. Where can i file my taxes electronically for free If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. Where can i file my taxes electronically for free Method 2. Where can i file my taxes electronically for free Choose to report the increase in redemption value as interest each year. Where can i file my taxes electronically for free  You must use the same method for all series EE, series E, and series I bonds you own. Where can i file my taxes electronically for free If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. Where can i file my taxes electronically for free If you plan to cash your bonds in the same year you will pay for higher educational expenses, you may want to use method 1 because you may be able to exclude the interest from your income. Where can i file my taxes electronically for free To learn how, see Education Savings Bond Program, later. Where can i file my taxes electronically for free Change from method 1. Where can i file my taxes electronically for free   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. Where can i file my taxes electronically for free In the year of change, you must report all interest accrued to date and not previously reported for all your bonds. Where can i file my taxes electronically for free   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. Where can i file my taxes electronically for free Change from method 2. Where can i file my taxes electronically for free   To change from method 2 to method 1, you must request permission from the IRS. Where can i file my taxes electronically for free Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. Where can i file my taxes electronically for free You have typed or printed the following number at the top: “131. Where can i file my taxes electronically for free ” It includes your name and social security number under “131. Where can i file my taxes electronically for free ” It includes the year of change (both the beginning and ending dates). Where can i file my taxes electronically for free It identifies the savings bonds for which you are requesting this change. Where can i file my taxes electronically for free It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest; and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. Where can i file my taxes electronically for free   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). Where can i file my taxes electronically for free   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. Where can i file my taxes electronically for free On the statement, type or print “Filed pursuant to section 301. Where can i file my taxes electronically for free 9100-2. Where can i file my taxes electronically for free ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). Where can i file my taxes electronically for free    By the date you file the original statement with your return, you must also send a signed copy to the address below. Where can i file my taxes electronically for free    Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. Where can i file my taxes electronically for free O. Where can i file my taxes electronically for free Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. Where can i file my taxes electronically for free Internal Revenue Service Attention: CC:IT&A  (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW Washington, DC 20224    Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115. Where can i file my taxes electronically for free In that case, follow the form instructions for an automatic change. Where can i file my taxes electronically for free No user fee is required. Where can i file my taxes electronically for free Co-owners. Where can i file my taxes electronically for free   If a U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. Where can i file my taxes electronically for free One co-owner's funds used. Where can i file my taxes electronically for free   If you used your funds to buy the bond, you must pay the tax on the interest. Where can i file my taxes electronically for free This is true even if you let the other co-owner redeem the bond and keep all the proceeds. Where can i file my taxes electronically for free Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. Where can i file my taxes electronically for free The co-owner who redeemed the bond is a “nominee. Where can i file my taxes electronically for free ” See Nominee distributions under How To Report Interest Income, later, for more information about how a person who is a nominee reports interest income belonging to another person. Where can i file my taxes electronically for free Both co-owners' funds used. Where can i file my taxes electronically for free   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. Where can i file my taxes electronically for free Community property. Where can i file my taxes electronically for free   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. Where can i file my taxes electronically for free If you file separate returns, each of you generally must report one-half of the bond interest. Where can i file my taxes electronically for free For more information about community property, see Publication 555. Where can i file my taxes electronically for free Table 1-2. Where can i file my taxes electronically for free   These rules are also shown in Table 1-2. Where can i file my taxes electronically for free Child as only owner. Where can i file my taxes electronically for free   Interest on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds bought for and registered only in the name of your child is income to your child, even if you paid for the bonds and are named as beneficiary. Where can i file my taxes electronically for free If the bonds are series EE, series E, or series I bonds, the interest on the bonds is income to your child in the earlier of the year the bonds are cashed or disposed of or the year the bonds mature, unless your child chooses to report the interest income each year. Where can i file my taxes electronically for free Choice to report interest each year. Where can i file my taxes electronically for free   The choice to report the accrued interest each year can be made either by your child or by you for your child. Where can i file my taxes electronically for free This choice is made by filing an income tax return that shows all the interest earned to date, and by stating on the return that your child chooses to report the interest each year. Where can i file my taxes electronically for free Either you or your child should keep a copy of this return. Where can i file my taxes electronically for free   Unless your child is otherwise required to file a tax return for any year after making this choice, your child does not have to file a return only to report the annual accrual of U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bond interest under this choice. Where can i file my taxes electronically for free However, see Tax on unearned income of certain children , earlier, under General Information. Where can i file my taxes electronically for free Neither you nor your child can change the way you report the interest unless you request permission from the IRS, as discussed earlier under Change from method 2 . Where can i file my taxes electronically for free Ownership transferred. Where can i file my taxes electronically for free   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. Where can i file my taxes electronically for free But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. Where can i file my taxes electronically for free   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. Where can i file my taxes electronically for free Example. Where can i file my taxes electronically for free You bought series EE bonds entirely with your own funds. Where can i file my taxes electronically for free You did not choose to report the accrued interest each year. Where can i file my taxes electronically for free Later, you transfer the bonds to your former spouse under a divorce agreement. Where can i file my taxes electronically for free You must include the deferred accrued interest, from the date of the original issue of the bonds to the date of transfer, in your income in the year of transfer. Where can i file my taxes electronically for free Your former spouse includes in income the interest on the bonds from the date of transfer to the date of redemption. Where can i file my taxes electronically for free Table 1-2. Where can i file my taxes electronically for free Who Pays the Tax on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free Savings Bond Interest IF . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free THEN the interest must be reported by . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free . Where can i file my taxes electronically for free you buy a bond in your name and the name of another person as co-owners, using only your own funds you. Where can i file my taxes electronically for free you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. Where can i file my taxes electronically for free you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. Where can i file my taxes electronically for free you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. Where can i file my taxes electronically for free If you file separate returns, both you and your spouse generally report one-half of the interest. Where can i file my taxes electronically for free Purchased jointly. Where can i file my taxes electronically for free   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. Where can i file my taxes electronically for free The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. Where can i file my taxes electronically for free This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. Where can i file my taxes electronically for free   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. Where can i file my taxes electronically for free But the new co-owner will report only his or her share of the interest earned after the transfer. Where can i file my taxes electronically for free   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. Where can i file my taxes electronically for free Example 1. Where can i file my taxes electronically for free You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. Where can i file my taxes electronically for free The bond was issued to you and your spouse as co-owners. Where can i file my taxes electronically for free You both postpone reporting interest on the bond. Where can i file my taxes electronically for free You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Where can i file my taxes electronically for free At that time neither you nor your spouse has to report the interest earned to the date of reissue. Where can i file my taxes electronically for free Example 2. Where can i file my taxes electronically for free You bought a $1,000 series EE savings bond entirely with your own funds. Where can i file my taxes electronically for free The bond was issued to you and your spouse as co-owners. Where can i file my taxes electronically for free You both postponed reporting interest on the bond. Where can i file my taxes electronically for free You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Where can i file my taxes electronically for free You must report half the interest earned to the date of reissue. Where can i file my taxes electronically for free Transfer to a trust. Where can i file my taxes electronically for free   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. Where can i file my taxes electronically for free However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. Where can i file my taxes electronically for free You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. Where can i file my taxes electronically for free   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. Where can i file my taxes electronically for free See Savings bonds traded , later. Where can i file my taxes electronically for free Decedents. Where can i file my taxes electronically for free   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. Where can i file my taxes electronically for free Decedent who reported interest each year. Where can i file my taxes electronically for free   If the bonds transferred because of death were owned by a person who used an accrual method, or who used the cash method and had chosen to report the interest each year, the interest earned in the year of death up to the date of death must be reported on that person's final return. Where can i file my taxes electronically for free The person who acquires the bonds includes in income only interest earned after the date of death. Where can i file my taxes electronically for free Decedent who postponed reporting interest. Where can i file my taxes electronically for free   If the transferred bonds were owned by a decedent who had used the cash method and had not chosen to report the interest each year, and who had bought the bonds entirely with his or her own funds, all interest earned before death must be reported in one of the following ways. Where can i file my taxes electronically for free The surviving spouse or personal representative (executor, administrator, etc. Where can i file my taxes electronically for free ) who files the final income tax return of the decedent can choose to include on that return all interest earned on the bonds before the decedent's death. Where can i file my taxes electronically for free The person who acquires the bonds then includes in income only interest earned after the date of death. Where can i file my taxes electronically for free If the choice in (1) is not made, the interest earned up to the date of death is income in respect of the decedent and should not be included in the decedent's final return. Where can i file my taxes electronically for free All interest earned both before and after the decedent's death (except any part reported by the estate on its income tax return) is income to the person who acquires the bonds. Where can i file my taxes electronically for free If that person uses the cash method and does not choose to report the interest each year, he or she can postpone reporting it until the year the bonds are cashed or disposed of or the year they mature, whichever is earlier. Where can i file my taxes electronically for free In the year that person reports the interest, he or she can claim a deduction for any federal estate tax paid on the part of the interest included in the decedent's estate. Where can i file my taxes electronically for free For more information on income in respect of a decedent, see Publication 559, Survivors, Executors, and Administrators. Where can i file my taxes electronically for free Example 1. Where can i file my taxes electronically for free Your uncle, a cash method taxpayer, died and left you a $1,000 series EE bond. Where can i file my taxes electronically for free He had bought the bond for $500 and had not chosen to report the interest each year. Where can i file my taxes electronically for free At the date of death, interest of $200 had accrued on the bond, and its value of $700 was included in your uncle's estate. Where can i file my taxes electronically for free Your uncle's executor chose not to include the $200 accrued interest in your uncle's final income tax return. Where can i file my taxes electronically for free The $200 is income in respect of the decedent. Where can i file my taxes electronically for free You are a cash method taxpayer and do not choose to report the interest each year as it is earned. Where can i file my taxes electronically for free If you cash the bond when it reaches maturity value of $1,000, you report $500 interest income—the difference between maturity value of $1,000 and the original cost of $500. Where can i file my taxes electronically for free For that year, you can deduct (as a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit) any federal estate tax paid because the $200 interest was included in your uncle's estate. Where can i file my taxes electronically for free Example 2. Where can i file my taxes electronically for free If, in Example 1 , the executor had chosen to include the $200 accrued interest in your uncle's final return, you would report only $300 as interest when you cashed the bond at maturity. Where can i file my taxes electronically for free $300 is the interest earned after your uncle's death. Where can i file my taxes electronically for free Example 3. Where can i file my taxes electronically for free If, in Example 1 , you make or have made the choice to report the increase in redemption value as interest each year, you include in gross income for the year you acquire the bond all of the unreported increase in value of all series E, series EE, and series I bonds you hold, including the $200 on the bond you inherited from your uncle. Where can i file my taxes electronically for free Example 4. Where can i file my taxes electronically for free When your aunt died, she owned series HH bonds that she had acquired in a trade for series EE bonds. Where can i file my taxes electronically for free You were the beneficiary of these bonds. Where can i file my taxes electronically for free Your aunt used the cash method and did not choose to report the interest on the series EE bonds each year as it accrued. Where can i file my taxes electronically for free Your aunt's executor chose not to include any interest earned before your aunt's death on her final return. Where can i file my taxes electronically for free The income in respect of the decedent is the sum of the unreported interest on the series EE bonds and the interest, if any, payable on the series HH bonds but not received as of the date of your aunt's death. Where can i file my taxes electronically for free You must report any interest received during the year as income on your return. Where can i file my taxes electronically for free The part of the interest payable but not received before your aunt's death is income in respect of the decedent and may qualify for the estate tax deduction. Where can i file my taxes electronically for free For information on when to report the interest on the series EE bonds traded, see Savings bonds traded , later. Where can i file my taxes electronically for free Savings bonds distributed from a retirement or profit-sharing plan. Where can i file my taxes electronically for free   If you acquire a U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bond in a taxable distribution from a retirement or profit-sharing plan, your income for the year of distribution includes the bond's redemption value (its cost plus the interest accrued before the distribution). Where can i file my taxes electronically for free When you redeem the bond (whether in the year of distribution or later), your interest income includes only the interest accrued after the bond was distributed. Where can i file my taxes electronically for free To figure the interest reported as a taxable distribution and your interest income when you redeem the bond, see Worksheet for savings bonds distributed from a retirement or profit-sharing plan under How To Report Interest Income, later. Where can i file my taxes electronically for free Savings bonds traded. Where can i file my taxes electronically for free   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. Where can i file my taxes electronically for free (You cannot trade series I bonds for series HH bonds. Where can i file my taxes electronically for free After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. Where can i file my taxes electronically for free ) Any cash you received is income up to the amount of the interest earned on the bonds traded. Where can i file my taxes electronically for free When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. Where can i file my taxes electronically for free Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. Where can i file my taxes electronically for free Example. Where can i file my taxes electronically for free You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. Where can i file my taxes electronically for free You reported the $223 as taxable income on your tax return. Where can i file my taxes electronically for free At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. Where can i file my taxes electronically for free You hold the series HH bonds until maturity, when you receive $2,500. Where can i file my taxes electronically for free You must report $300 as interest income in the year of maturity. Where can i file my taxes electronically for free This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). Where can i file my taxes electronically for free (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. Where can i file my taxes electronically for free ) Choice to report interest in year of trade. Where can i file my taxes electronically for free   You could have chosen to treat all of the previously unreported accrued interest on series EE or series E bonds traded for series HH bonds as income in the year of the trade. Where can i file my taxes electronically for free If you made this choice, it is treated as a change from method 1. Where can i file my taxes electronically for free See Change from method 1 under Series EE and series I bonds, earlier. Where can i file my taxes electronically for free Form 1099-INT for U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bond interest. Where can i file my taxes electronically for free   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. Where can i file my taxes electronically for free Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. Where can i file my taxes electronically for free However, your Form 1099-INT may show more interest than you have to include on your income tax return. Where can i file my taxes electronically for free For example, this may happen if any of the following are true. Where can i file my taxes electronically for free You chose to report the increase in the redemption value of the bond each year. Where can i file my taxes electronically for free The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. Where can i file my taxes electronically for free You received the bond from a decedent. Where can i file my taxes electronically for free The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. Where can i file my taxes electronically for free Ownership of the bond was transferred. Where can i file my taxes electronically for free The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. Where can i file my taxes electronically for free You were named as a co-owner, and the other co-owner contributed funds to buy the bond. Where can i file my taxes electronically for free The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. Where can i file my taxes electronically for free (See Co-owners , earlier in this section, for more information about the reporting requirements. Where can i file my taxes electronically for free ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. Where can i file my taxes electronically for free The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. Where can i file my taxes electronically for free (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Where can i file my taxes electronically for free , for the year of distribution. Where can i file my taxes electronically for free )   For more information on including the correct amount of interest on your return, see U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bond interest previously reported or Nominee distributions under How To Report Interest Income, later. Where can i file my taxes electronically for free    Interest on U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds is exempt from state and local taxes. Where can i file my taxes electronically for free The Form 1099-INT you receive will indicate the amount that is for U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds interest in box 3. Where can i file my taxes electronically for free Do not include this income on your state or local income tax return. Where can i file my taxes electronically for free Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds during the year if you pay qualified higher educational expenses during the same year. Where can i file my taxes electronically for free This exclusion is known as the Education Savings Bond Program. Where can i file my taxes electronically for free You do not qualify for this exclusion if your filing status is married filing separately. Where can i file my taxes electronically for free Form 8815. Where can i file my taxes electronically for free   Use Form 8815 to figure your exclusion. Where can i file my taxes electronically for free Attach the form to your Form 1040 or Form 1040A. Where can i file my taxes electronically for free Qualified U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds. Where can i file my taxes electronically for free   A qualified U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bond is a series EE bond issued after 1989 or a series I bond. Where can i file my taxes electronically for free The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). Where can i file my taxes electronically for free You must be at least 24 years old before the bond's issue date. Where can i file my taxes electronically for free For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. Where can i file my taxes electronically for free    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. Where can i file my taxes electronically for free Beneficiary. Where can i file my taxes electronically for free   You can designate any individual (including a child) as a beneficiary of the bond. Where can i file my taxes electronically for free Verification by IRS. Where can i file my taxes electronically for free   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of Treasury. Where can i file my taxes electronically for free Qualified expenses. Where can i file my taxes electronically for free   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. Where can i file my taxes electronically for free   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. Where can i file my taxes electronically for free For information about these programs, see Publication 970, Tax Benefits for Education. Where can i file my taxes electronically for free   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Where can i file my taxes electronically for free Eligible educational institutions. Where can i file my taxes electronically for free   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the Department of Education. Where can i file my taxes electronically for free Reduction for certain benefits. Where can i file my taxes electronically for free   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. Where can i file my taxes electronically for free Tax-free part of scholarships and fellowships. Where can i file my taxes electronically for free Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. Where can i file my taxes electronically for free Expenses used to figure the tax-free portion of distributions from a qualified tuition program. Where can i file my taxes electronically for free Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. Where can i file my taxes electronically for free Any expense used in figuring the American Opportunity and lifetime learning credits. Where can i file my taxes electronically for free For information about these benefits, see Publication 970. Where can i file my taxes electronically for free Amount excludable. Where can i file my taxes electronically for free   If the total proceeds (interest and principal) from the qualified U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. Where can i file my taxes electronically for free If the proceeds are more than the expenses, you may be able to exclude only part of the interest. Where can i file my taxes electronically for free   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. Where can i file my taxes electronically for free The numer
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Where can i file my taxes electronically for free 1. Where can i file my taxes electronically for free   Definitions You Need To Know Table of Contents Other options. Where can i file my taxes electronically for free Exception. Where can i file my taxes electronically for free Certain terms used in this publication are defined below. Where can i file my taxes electronically for free The same term used in another publication may have a slightly different meaning. Where can i file my taxes electronically for free Annual additions. Where can i file my taxes electronically for free   Annual additions are the total of all your contributions in a year, employee contributions (not including rollovers), and forfeitures allocated to a participant's account. Where can i file my taxes electronically for free Annual benefits. Where can i file my taxes electronically for free   Annual benefits are the benefits to be paid yearly in the form of a straight life annuity (with no extra benefits) under a plan to which employees do not contribute and under which no rollover contributions are made. Where can i file my taxes electronically for free Business. Where can i file my taxes electronically for free   A business is an activity in which a profit motive is present and economic activity is involved. Where can i file my taxes electronically for free Service as a newspaper carrier under age 18 or as a public official is not a business. Where can i file my taxes electronically for free Common-law employee. Where can i file my taxes electronically for free   A common-law employee is any individual who, under common law, would have the status of an employee. Where can i file my taxes electronically for free A leased employee can also be a common-law employee. Where can i file my taxes electronically for free   A common-law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way in which it is done. Where can i file my taxes electronically for free For example, the employer: Provides the employee's tools, materials, and workplace, and Can fire the employee. Where can i file my taxes electronically for free   Common-law employees are not self-employed and cannot set up retirement plans for income from their work, even if that income is self-employment income for social security tax purposes. Where can i file my taxes electronically for free For example, common-law employees who are ministers, members of religious orders, full-time insurance salespeople, and U. Where can i file my taxes electronically for free S. Where can i file my taxes electronically for free citizens employed in the United States by foreign governments cannot set up retirement plans for their earnings from those employments, even though their earnings are treated as self-employment income. Where can i file my taxes electronically for free   However, an individual may be a common-law employee and a self-employed person as well. Where can i file my taxes electronically for free For example, an attorney can be a corporate common-law employee during regular working hours and also practice law in the evening as a self-employed person. Where can i file my taxes electronically for free In another example, a minister employed by a congregation for a salary is a common-law employee even though the salary is treated as self-employment income for social security tax purposes. Where can i file my taxes electronically for free However, fees reported on Schedule C (Form 1040), Profit or Loss From Business, for performing marriages, baptisms, and other personal services are self-employment earnings for qualified plan purposes. Where can i file my taxes electronically for free Compensation. Where can i file my taxes electronically for free   Compensation for plan allocations is the pay a participant received from you for personal services for a year. Where can i file my taxes electronically for free You can generally define compensation as including all the following payments. Where can i file my taxes electronically for free Wages and salaries. Where can i file my taxes electronically for free Fees for professional services. Where can i file my taxes electronically for free Other amounts received (cash or noncash) for personal services actually rendered by an employee, including, but not limited to, the following items. Where can i file my taxes electronically for free Commissions and tips. Where can i file my taxes electronically for free Fringe benefits. Where can i file my taxes electronically for free Bonuses. Where can i file my taxes electronically for free   For a self-employed individual, compensation means the earned income, discussed later, of that individual. Where can i file my taxes electronically for free   Compensation generally includes amounts deferred in the following employee benefit plans. Where can i file my taxes electronically for free These amounts are elective deferrals. Where can i file my taxes electronically for free Qualified cash or deferred arrangement (section 401(k) plan). Where can i file my taxes electronically for free Salary reduction agreement to contribute to a tax-sheltered annuity (section 403(b) plan), a SIMPLE IRA plan, or a SARSEP. Where can i file my taxes electronically for free Section 457 nonqualified deferred compensation plan. Where can i file my taxes electronically for free Section 125 cafeteria plan. Where can i file my taxes electronically for free   However, an employer can choose to exclude elective deferrals under the above plans from the definition of compensation. Where can i file my taxes electronically for free The limit on elective deferrals is discussed in chapter 2 under Salary Reduction Simplified Employee Pension (SARSEP) and in chapter 4. Where can i file my taxes electronically for free Other options. Where can i file my taxes electronically for free   In figuring the compensation of a participant, you can treat any of the following amounts as the employee's compensation. Where can i file my taxes electronically for free The employee's wages as defined for income tax withholding purposes. Where can i file my taxes electronically for free The employee's wages you report in box 1 of Form W-2, Wage and Tax Statement. Where can i file my taxes electronically for free The employee's social security wages (including elective deferrals). Where can i file my taxes electronically for free   Compensation generally cannot include either of the following items. Where can i file my taxes electronically for free Nontaxable reimbursements or other expense allowances. Where can i file my taxes electronically for free Deferred compensation (other than elective deferrals). Where can i file my taxes electronically for free SIMPLE plans. Where can i file my taxes electronically for free   A special definition of compensation applies for SIMPLE plans. Where can i file my taxes electronically for free See chapter 3. Where can i file my taxes electronically for free Contribution. Where can i file my taxes electronically for free   A contribution is an amount you pay into a plan for all those participating in the plan, including self-employed individuals. Where can i file my taxes electronically for free Limits apply to how much, under the contribution formula of the plan, can be contributed each year for a participant. Where can i file my taxes electronically for free Deduction. Where can i file my taxes electronically for free   A deduction is the plan contributions you can subtract from gross income on your federal income tax return. Where can i file my taxes electronically for free Limits apply to the amount deductible. Where can i file my taxes electronically for free Earned income. Where can i file my taxes electronically for free   Earned income is net earnings from self-employment, discussed later, from a business in which your services materially helped to produce the income. Where can i file my taxes electronically for free   You can also have earned income from property your personal efforts helped create, such as royalties from your books or inventions. Where can i file my taxes electronically for free Earned income includes net earnings from selling or otherwise disposing of the property, but it does not include capital gains. Where can i file my taxes electronically for free It includes income from licensing the use of property other than goodwill. Where can i file my taxes electronically for free   Earned income includes amounts received for services by self-employed members of recognized religious sects opposed to social security benefits who are exempt from self-employment tax. Where can i file my taxes electronically for free   If you have more than one business, but only one has a retirement plan, only the earned income from that business is considered for that plan. Where can i file my taxes electronically for free Employer. Where can i file my taxes electronically for free   An employer is generally any person for whom an individual performs or did perform any service, of whatever nature, as an employee. Where can i file my taxes electronically for free A sole proprietor is treated as his or her own employer for retirement plan purposes. Where can i file my taxes electronically for free However, a partner is not an employer for retirement plan purposes. Where can i file my taxes electronically for free Instead, the partnership is treated as the employer of each partner. Where can i file my taxes electronically for free Highly compensated employee. Where can i file my taxes electronically for free   A highly compensated employee is an individual who: Owned more than 5% of the interest in your business at any time during the year or the preceding year, regardless of how much compensation that person earned or received, or For the preceding year, received compensation from you of more than $115,000 (if the preceding year is 2012, 2013, or 2014) and, if you so choose, was in the top 20% of employees when ranked by compensation. Where can i file my taxes electronically for free Leased employee. Where can i file my taxes electronically for free   A leased employee who is not your common-law employee must generally be treated as your employee for retirement plan purposes if he or she does all the following. Where can i file my taxes electronically for free Provides services to you under an agreement between you and a leasing organization. Where can i file my taxes electronically for free Has performed services for you (or for you and related persons) substantially full time for at least 1 year. Where can i file my taxes electronically for free Performs services under your primary direction or control. Where can i file my taxes electronically for free Exception. Where can i file my taxes electronically for free   A leased employee is not treated as your employee if all the following conditions are met. Where can i file my taxes electronically for free Leased employees are not more than 20% of your non-highly compensated work force. Where can i file my taxes electronically for free The employee is covered under the leasing organization's qualified pension plan. Where can i file my taxes electronically for free The leasing organization's plan is a money purchase pension plan that has all the following provisions. Where can i file my taxes electronically for free Immediate participation. Where can i file my taxes electronically for free (This requirement does not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000. Where can i file my taxes electronically for free ) Full and immediate vesting. Where can i file my taxes electronically for free A nonintegrated employer contribution rate of at least 10% of compensation for each participant. Where can i file my taxes electronically for free However, if the leased employee is your common-law employee, that employee will be your employee for all purposes, regardless of any pension plan of the leasing organization. Where can i file my taxes electronically for free Net earnings from self-employment. Where can i file my taxes electronically for free   For SEP and qualified plans, net earnings from self-employment is your gross income from your trade or business (provided your personal services are a material income-producing factor) minus allowable business deductions. Where can i file my taxes electronically for free Allowable deductions include contributions to SEP and qualified plans for common-law employees and the deduction allowed for the deductible part of your self-employment tax. Where can i file my taxes electronically for free   Net earnings from self-employment does not include items excluded from gross income (or their related deductions) other than foreign earned income and foreign housing cost amounts. Where can i file my taxes electronically for free   For the deduction limits, earned income is net earnings for personal services actually rendered to the business. Where can i file my taxes electronically for free You take into account the income tax deduction for the deductible part of self-employment tax and the deduction for contributions to the plan made on your behalf when figuring net earnings. Where can i file my taxes electronically for free   Net earnings include a partner's distributive share of partnership income or loss (other than separately stated items, such as capital gains and losses). Where can i file my taxes electronically for free It does not include income passed through to shareholders of S corporations. Where can i file my taxes electronically for free Guaranteed payments to limited partners are net earnings from self-employment if they are paid for services to or for the partnership. Where can i file my taxes electronically for free Distributions of other income or loss to limited partners are not net earnings from self-employment. Where can i file my taxes electronically for free   For SIMPLE plans, net earnings from self-employment is the amount on line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040), Self-Employment Tax, before subtracting any contributions made to the SIMPLE plan for yourself. Where can i file my taxes electronically for free Qualified plan. Where can i file my taxes electronically for free   A qualified plan is a retirement plan that offers a tax-favored way to save for retirement. Where can i file my taxes electronically for free You can deduct contributions made to the plan for your employees. Where can i file my taxes electronically for free Earnings on these contributions are generally tax free until distributed at retirement. Where can i file my taxes electronically for free Profit-sharing, money purchase, and defined benefit plans are qualified plans. Where can i file my taxes electronically for free A 401(k) plan is also a qualified plan. Where can i file my taxes electronically for free Participant. Where can i file my taxes electronically for free   A participant is an eligible employee who is covered by your retirement plan. Where can i file my taxes electronically for free See the discussions of the different types of plans for the definition of an employee eligible to participate in each type of plan. Where can i file my taxes electronically for free Partner. Where can i file my taxes electronically for free   A partner is an individual who shares ownership of an unincorporated trade or business with one or more persons. Where can i file my taxes electronically for free For retirement plans, a partner is treated as an employee of the partnership. Where can i file my taxes electronically for free Self-employed individual. Where can i file my taxes electronically for free   An individual in business for himself or herself, and whose business is not incorporated, is self-employed. Where can i file my taxes electronically for free Sole proprietors and partners are self-employed. Where can i file my taxes electronically for free Self-employment can include part-time work. Where can i file my taxes electronically for free   Not everyone who has net earnings from self-employment for social security tax purposes is self-employed for qualified plan purposes. Where can i file my taxes electronically for free See Common-law employee and Net earnings from self-employment , earlier. Where can i file my taxes electronically for free   In addition, certain fishermen may be considered self-employed for setting up a qualified plan. Where can i file my taxes electronically for free See Publication 595, Capital Construction Fund for Commercial Fishermen, for the special rules used to determine whether fishermen are self-employed. Where can i file my taxes electronically for free Sole proprietor. Where can i file my taxes electronically for free   A sole proprietor is an individual who owns an unincorporated business by himself or herself, including a single member limited liability company that is treated as a disregarded entity for tax purposes. Where can i file my taxes electronically for free For retirement plans, a sole proprietor is treated as both an employer and an employee. Where can i file my taxes electronically for free Prev  Up  Next   Home   More Online Publications