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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

Where File Amended 1040x

Amend Tax FormsFiling 1040x InstructionsFile Amended Tax Return 2009State Income TaxH&r Block Tax CutHow To Fill Out A 1040x Tax Amendment FormPrintable 1040 FormFreetaxusa 2012How To File A Tax Return For 2012Tax Software 2012State Tax Forms 2013Free E File State Taxes OnlyFederal Income Tax FormFree State Income Tax E FileTaxes 2008Federal Income Tax ReturnE File 2011 Taxes LateState Franchise Tax FormsWhat Is Form 1040xAmend Taxes For 2010H&r Block Onlinetaxes Hrblock ComIrs Ez Form 20122014 Federal Tax Forms 1040ezFree Turbotax For StudentsFile AmendmentMilitary Onesource TaxTax Forms 1040xHow To Amend Taxes Online2010 1040 Tax FormIrs FreefileWww Irs Gov FreefileHow To File 2012 Taxes Late OnlineTax Filing For 2012EfileDownload 1040ez Federal Tax FormHow To File An Amended Tax Return For 2012Can You File A 1040x OnlineIrs Website For For 1040ezHow To File An Amended Tax Return For 2010Form 1040ez 2012

Where File Amended 1040x

Where file amended 1040x 6. Where file amended 1040x   How To Get Tax Help Table of Contents Low Income Taxpayer Clinics (LITCs). Where file amended 1040x Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Where file amended 1040x Free help with your tax return. Where file amended 1040x   You can get free help preparing your return nationwide from IRS-certified volunteers. Where file amended 1040x The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Where file amended 1040x The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Where file amended 1040x Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Where file amended 1040x In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Where file amended 1040x To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Where file amended 1040x gov, download the IRS2Go app, or call 1-800-906-9887. Where file amended 1040x   As part of the TCE program, AARP offers the Tax-Aide counseling program. Where file amended 1040x To find the nearest AARP Tax-Aide site, visit AARP's website at www. Where file amended 1040x aarp. Where file amended 1040x org/money/taxaide or call 1-888-227-7669. Where file amended 1040x For more information on these programs, go to IRS. Where file amended 1040x gov and enter “VITA” in the search box. Where file amended 1040x Internet. Where file amended 1040x    IRS. Where file amended 1040x gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Where file amended 1040x Download the free IRS2Go app from the iTunes app store or from Google Play. Where file amended 1040x Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Where file amended 1040x Check the status of your 2013 refund with the Where's My Refund? application on IRS. Where file amended 1040x gov or download the IRS2Go app and select the Refund Status option. Where file amended 1040x The IRS issues more than 9 out of 10 refunds in less than 21 days. Where file amended 1040x Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Where file amended 1040x You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Where file amended 1040x The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Where file amended 1040x Use the Interactive Tax Assistant (ITA) to research your tax questions. Where file amended 1040x No need to wait on the phone or stand in line. Where file amended 1040x The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Where file amended 1040x When you reach the response screen, you can print the entire interview and the final response for your records. Where file amended 1040x New subject areas are added on a regular basis. Where file amended 1040x  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Where file amended 1040x gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Where file amended 1040x You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Where file amended 1040x The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Where file amended 1040x When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Where file amended 1040x Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Where file amended 1040x You can also ask the IRS to mail a return or an account transcript to you. Where file amended 1040x Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Where file amended 1040x gov or by calling 1-800-908-9946. Where file amended 1040x Tax return and tax account transcripts are generally available for the current year and the past three years. Where file amended 1040x Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Where file amended 1040x Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Where file amended 1040x If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Where file amended 1040x Check the status of your amended return using Where's My Amended Return? Go to IRS. Where file amended 1040x gov and enter Where's My Amended Return? in the search box. Where file amended 1040x You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Where file amended 1040x It can take up to 3 weeks from the date you mailed it to show up in our system. Where file amended 1040x Make a payment using one of several safe and convenient electronic payment options available on IRS. Where file amended 1040x gov. Where file amended 1040x Select the Payment tab on the front page of IRS. Where file amended 1040x gov for more information. Where file amended 1040x Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Where file amended 1040x Figure your income tax withholding with the IRS Withholding Calculator on IRS. Where file amended 1040x gov. Where file amended 1040x Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Where file amended 1040x Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Where file amended 1040x gov. Where file amended 1040x Request an Electronic Filing PIN by going to IRS. Where file amended 1040x gov and entering Electronic Filing PIN in the search box. Where file amended 1040x Download forms, instructions and publications, including accessible versions for people with disabilities. Where file amended 1040x Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Where file amended 1040x gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Where file amended 1040x An employee can answer questions about your tax account or help you set up a payment plan. Where file amended 1040x Before you visit, check the Office Locator on IRS. Where file amended 1040x gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Where file amended 1040x If you have a special need, such as a disability, you can request an appointment. Where file amended 1040x Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Where file amended 1040x Apply for an Employer Identification Number (EIN). Where file amended 1040x Go to IRS. Where file amended 1040x gov and enter Apply for an EIN in the search box. Where file amended 1040x Read the Internal Revenue Code, regulations, or other official guidance. Where file amended 1040x Read Internal Revenue Bulletins. Where file amended 1040x Sign up to receive local and national tax news and more by email. Where file amended 1040x Just click on “subscriptions” above the search box on IRS. Where file amended 1040x gov and choose from a variety of options. Where file amended 1040x    Phone. Where file amended 1040x You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Where file amended 1040x Download the free IRS2Go app from the iTunes app store or from Google Play. Where file amended 1040x Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Where file amended 1040x gov, or download the IRS2Go app. Where file amended 1040x Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Where file amended 1040x The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Where file amended 1040x Most VITA and TCE sites offer free electronic filing. Where file amended 1040x Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Where file amended 1040x Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Where file amended 1040x Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Where file amended 1040x If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Where file amended 1040x The IRS issues more than 9 out of 10 refunds in less than 21 days. Where file amended 1040x Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Where file amended 1040x Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Where file amended 1040x The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Where file amended 1040x Note, the above information is for our automated hotline. Where file amended 1040x Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Where file amended 1040x Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Where file amended 1040x You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Where file amended 1040x It can take up to 3 weeks from the date you mailed it to show up in our system. Where file amended 1040x Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Where file amended 1040x You should receive your order within 10 business days. Where file amended 1040x Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Where file amended 1040x If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Where file amended 1040x Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Where file amended 1040x The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Where file amended 1040x These individuals can also contact the IRS through relay services such as the Federal Relay Service. Where file amended 1040x    Walk-in. Where file amended 1040x You can find a selection of forms, publications and services — in-person. Where file amended 1040x Products. Where file amended 1040x You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Where file amended 1040x Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Where file amended 1040x Services. Where file amended 1040x You can walk in to your local TAC for face-to-face tax help. Where file amended 1040x An employee can answer questions about your tax account or help you set up a payment plan. Where file amended 1040x Before visiting, use the Office Locator tool on IRS. Where file amended 1040x gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Where file amended 1040x    Mail. Where file amended 1040x You can send your order for forms, instructions, and publications to the address below. Where file amended 1040x You should receive a response within 10 business days after your request is received. Where file amended 1040x Internal Revenue Service 1201 N. Where file amended 1040x Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Where file amended 1040x The Taxpayer Advocate Service (TAS) is your voice at the IRS. Where file amended 1040x Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Where file amended 1040x   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Where file amended 1040x We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Where file amended 1040x You face (or your business is facing) an immediate threat of adverse action. Where file amended 1040x You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Where file amended 1040x   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Where file amended 1040x Here's why we can help: TAS is an independent organization within the IRS. Where file amended 1040x Our advocates know how to work with the IRS. Where file amended 1040x Our services are free and tailored to meet your needs. Where file amended 1040x We have offices in every state, the District of Columbia, and Puerto Rico. Where file amended 1040x   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Where file amended 1040x   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Where file amended 1040x If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Where file amended 1040x Low Income Taxpayer Clinics (LITCs). Where file amended 1040x   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Where file amended 1040x Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Where file amended 1040x Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Where file amended 1040x Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Disaster Assistance and Emergency Relief for Individuals and Businesses

Overview

Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Both individuals and businesses in a federally declared disaster area can get a faster refund by claiming losses related to the disaster on the tax return for the previous year, usually by filing an amended return.

The IRS also offers audio presentations on Planning for Disaster. These presentations discuss business continuity planning, insurance coverage, recording keeping and other tips to stay in business after a major disaster.

Get the Latest Tax Relief Guidance in Disaster Situations
Recent special tax law provisions may help taxpayers recover financially from the impact of a major disaster in their location.

Preparing for Disasters
Are your home and/or business ready if a disaster strikes? Get information and suggestions on paperless recordkeeping, documenting assets and valuables, and emergency planning.

Help for Disaster Victims
This podcast provides information on what to do and who to contact if you have been affected by a disaster this year.

Help During Disasters
We know that major disasters and emergencies in your area will affect many families and businesses. While we hope you are spared any loss, we realize this may not be true for everyone, and we want to let you know how the IRS can help.

Around the Nation
This section of our Web site provides IRS news specific to local areas, primarily disaster relief or tax provisions that affect certain states.

Tax Topic 515 - Casualty, Disaster, and Theft Losses
Casualty losses can result from the destruction of or damage to your property from any sudden, unexpected, and unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption.

Disaster Assistance Self-Study
The Disaster Assistance Self-Study provides the basic information needed to assist taxpayers in a disaster. It provides the volunteer practitioner disaster representative member with information on distributing Disaster Kits, computing gains/losses as the result of a disaster, information about administrative tax relief and information about the psychological effects of a disaster on its victims.

For Individuals

FAQs for Disaster Victims
This section provides current information on disaster relief and frequently asked questions. The Hurricane Katrina FAQs are now listed separately from the general FAQs, which are applicable to any disaster.

Gulf Oil Spill: Questions and Answers
The existing law dictates whether payments received from BP for losses, damage and injuries are taxable. Refer to the Gulf Oil Spill technical questions and answers for more information.

Reconstructing Your Records
Reconstructing records after a disaster may be essential for tax purposes, getting federal assistance or insurance reimbursement. Records that you need to prove your loss may have been damaged or destroyed in a casualty. While it may not be easy, reconstructing your records may be essential.

Publication 2194, Disaster Resource Guide for Individuals and Businesses (PDF)
Publication 2194 is a Disaster Losses Kit to help individuals claim casualty losses on property that was destroyed by a natural disaster. The kit contains tax forms needed to claim a casualty loss. It also answers common questions like how to extend the time you need to file, how you can receive free tax services and how to identify which disaster losses to claim.

Help for Hurricane Victims: Information on Tax Relief, Charitable Issues
The Internal Revenue Service is working to provide appropriate relief and assistance to victims of Hurricanes Katrina, Rita and Wilma.

For Businesses

Publication 2194, Disaster Resource Guide for Individuals and Businesses (PDF)
Publication 2194 is a Disaster Losses Kit to help businesses claim casualty losses on property that has been destroyed by a natural disaster. The kit contains tax forms needed to claim a casualty loss.

Crop Insurance and Crop Disaster Payments - Agriculture Tax Tips
This section offers helpful tax tips including whether crop insurance and crop disaster payments are taxable.

Disaster Planning Video Presentations:

For Tax Professionals

Disaster Relief Resource Center for Tax Professionals
Through this resource center we address many of the questions received from tax professionals. We've included information published by the IRS, along with links to IRS partners who may offer additional assistance. Many of our partners have developed Web pages that highlight the efforts they've made to help their fellow practitioners to recover and get re-established.

For Charitable Organizations

Disaster Relief - Resources for Charities and Contributors
After a disaster or in another emergency hardship situation, people may be interested in using a charitable organization to help victims. The IRS provides a number of resources to help them accomplish this goal.

Publication 3833, Disaster Relief, Providing Assistance Through Charitable Organizations (PDF)
This publication describes how members of the public can use charitable organizations to provide assistance to victims of disasters or other emergency hardship situations.

Talk With the IRS

Contact My Local Office
IRS Taxpayer Assistance Centers are your one-stop resource for face-to-face tax help and solutions to tax problems, every business day.

Taxpayer Advocate Service
The Taxpayer Advocate is an independent organization within the IRS. They help taxpayers resolve problems with the IRS and recommend changes that will prevent the problems.

Other Government Agency Disaster Information

DisasterAssistance.gov
This is a one stop web portal that consolidates information from 17 US Government Agencies where taxpayers can apply for Small Business Administration loans through online applications, receive referral information on forms of assistance that do not have online applications, or check the progress and status of their applications online.

Federal Emergency Management Agency (FEMA)
Federal disaster aid programs provided by the Federal Emergency Management Agency (FEMA) are available to citizens affected by major disasters.

Small Business Administration (SBA)
The U. S. Small Business Administration (SBA) is responsible for providing affordable, timely and accessible financial assistance to homeowners, renters and businesses of all sizes located in a declared disaster area. Financial assistance is available in the form of low-interest, long-term loans for losses that are not fully covered by insurance or other recoveries.

READY.gov
Learn how individuals and business can prepare for and respond to all kinds of disasters and emergencies.

GovBenefits.gov
GovBenefits.gov wants to let survivors and disaster relief workers know about the many disaster relief programs available. Perhaps you have suffered damage to a home or business, lost your job, or experienced crop damage due to a natural disaster. GovBenefits.gov has a variety of national benefit and assistance programs geared toward disaster recovery

IRS Forms and Publications

Publication 547 – Casualties, Disasters and Thefts
Publication 547 explains how to treat casualties, thefts, and losses on deposits. It discusses definitions, how to figure gain or loss, how to treat reimbursements, and how to report them.

Form 1040X (PDF).

Publication 584 (PDF). Also available in HTML.

Publication 584B (PDF). Also available in HTML.

Publication 2194 (PDF).

Publication 3067 (EN/SP) (PDF).

Publication 3067 (EN/CN) (PDF)

Publication 3067 (EN/DE) (PDF)

Publication 3067 (EN/KR) (PDF)

Publication 3067 (EN/RU) (PDF)

Publication 3067 (EN/VN) (PDF)

Publication 3833 (PDF).

Page Last Reviewed or Updated: 21-Jan-2014

The Where File Amended 1040x

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