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Federal Tax Forms 2012 1040

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Federal Tax Forms 2012 1040

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

The Mine Safety and Health Administration works to prevent mining related deaths, injuries, and illnesses through mine regulations, inspections, and training programs.

Contact the Agency or Department

Website: Mine Safety and Health Administration

Address: 1100 Wilson Boulevard
21st Floor

Arlington, VA 22209-3939

Phone Number: (202) 693-9400

Toll-free: (800) 746-1553 (Hazardous Condition Complaints)

The Federal Tax Forms 2012 1040

Federal tax forms 2012 1040 4. Federal tax forms 2012 1040   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. Federal tax forms 2012 1040  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. Federal tax forms 2012 1040 For more information, see Publication 505. Federal tax forms 2012 1040 Reminders Estimated tax safe harbor for higher income taxpayers. Federal tax forms 2012 1040  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. Federal tax forms 2012 1040 Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. Federal tax forms 2012 1040 In general, the federal income tax is a pay-as-you-go tax. Federal tax forms 2012 1040 There are two ways to pay as you go. Federal tax forms 2012 1040 Withholding. Federal tax forms 2012 1040 If you are an employee, your employer probably withholds income tax from your pay. Federal tax forms 2012 1040 Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. Federal tax forms 2012 1040 The amount withheld is paid to the IRS in your name. Federal tax forms 2012 1040 Estimated tax. Federal tax forms 2012 1040 If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. Federal tax forms 2012 1040 People who are in business for themselves generally will have to pay their tax this way. Federal tax forms 2012 1040 Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. Federal tax forms 2012 1040 Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Federal tax forms 2012 1040 This chapter explains these methods. Federal tax forms 2012 1040 In addition, it also explains the following. Federal tax forms 2012 1040 Credit for withholding and estimated tax. Federal tax forms 2012 1040 When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. Federal tax forms 2012 1040 , and for the estimated tax you paid for 2013. Federal tax forms 2012 1040 Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). Federal tax forms 2012 1040 Underpayment penalty. Federal tax forms 2012 1040 If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. Federal tax forms 2012 1040 In most cases, the IRS can figure this penalty for you. Federal tax forms 2012 1040 See Underpayment Penalty for 2013 at the end of this chapter. Federal tax forms 2012 1040 Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. Federal tax forms 2012 1040 This section explains the rules for withholding tax from each of these types of income. Federal tax forms 2012 1040 This section also covers backup withholding on interest, dividends, and other payments. Federal tax forms 2012 1040 Salaries and Wages Income tax is withheld from the pay of most employees. Federal tax forms 2012 1040 Your pay includes your regular pay, bonuses, commissions, and vacation allowances. Federal tax forms 2012 1040 It also includes reimbursements and other expense allowances paid under a nonaccountable plan. Federal tax forms 2012 1040 See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. Federal tax forms 2012 1040 If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. Federal tax forms 2012 1040 This is explained under Exemption From Withholding , later. Federal tax forms 2012 1040 You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. Federal tax forms 2012 1040 If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Federal tax forms 2012 1040 Military retirees. Federal tax forms 2012 1040   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. Federal tax forms 2012 1040 Household workers. Federal tax forms 2012 1040   If you are a household worker, you can ask your employer to withhold income tax from your pay. Federal tax forms 2012 1040 A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. Federal tax forms 2012 1040   Tax is withheld only if you want it withheld and your employer agrees to withhold it. Federal tax forms 2012 1040 If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Federal tax forms 2012 1040 Farmworkers. Federal tax forms 2012 1040   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. Federal tax forms 2012 1040 Differential wage payments. Federal tax forms 2012 1040    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Federal tax forms 2012 1040 Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. Federal tax forms 2012 1040 The wages and withholding will be reported on Form W-2, Wage and Tax Statement. Federal tax forms 2012 1040   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. Federal tax forms 2012 1040 Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. Federal tax forms 2012 1040 The amount you earn in each payroll period. Federal tax forms 2012 1040 The information you give your employer on Form W-4. Federal tax forms 2012 1040 Form W-4 includes four types of information that your employer will use to figure your withholding. Federal tax forms 2012 1040 Whether to withhold at the single rate or at the lower married rate. Federal tax forms 2012 1040 How many withholding allowances you claim (each allowance reduces the amount withheld). Federal tax forms 2012 1040 Whether you want an additional amount withheld. Federal tax forms 2012 1040 Whether you are claiming an exemption from withholding in 2014. Federal tax forms 2012 1040 See Exemption From Withholding , later. Federal tax forms 2012 1040 Note. Federal tax forms 2012 1040 You must specify a filing status and a number of withholding allowances on Form W-4. Federal tax forms 2012 1040 You cannot specify only a dollar amount of withholding. Federal tax forms 2012 1040 New Job When you start a new job, you must fill out Form W-4 and give it to your employer. Federal tax forms 2012 1040 Your employer should have copies of the form. Federal tax forms 2012 1040 If you need to change the information later, you must fill out a new form. Federal tax forms 2012 1040 If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. Federal tax forms 2012 1040 You may be able to avoid overwithholding if your employer agrees to use the part-year method. Federal tax forms 2012 1040 See Part-Year Method in chapter 1 of Publication 505 for more information. Federal tax forms 2012 1040 Employee also receiving pension income. Federal tax forms 2012 1040   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. Federal tax forms 2012 1040 However, you can choose to split your withholding allowances between your pension and job in any manner. Federal tax forms 2012 1040 Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. Federal tax forms 2012 1040 When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. Federal tax forms 2012 1040 If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. Federal tax forms 2012 1040 Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. Federal tax forms 2012 1040 Changing your withholding for 2015. Federal tax forms 2012 1040   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. Federal tax forms 2012 1040 If the event occurs in December 2014, submit a new Form W-4 within 10 days. Federal tax forms 2012 1040 Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. Federal tax forms 2012 1040 If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. Federal tax forms 2012 1040 You should try to have your withholding match your actual tax liability. Federal tax forms 2012 1040 If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. Federal tax forms 2012 1040 If too much tax is withheld, you will lose the use of that money until you get your refund. Federal tax forms 2012 1040 Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. Federal tax forms 2012 1040 Note. Federal tax forms 2012 1040 You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. Federal tax forms 2012 1040 Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. Federal tax forms 2012 1040 The worksheets are for your own records. Federal tax forms 2012 1040 Do not give them to your employer. Federal tax forms 2012 1040 Multiple jobs. Federal tax forms 2012 1040   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Federal tax forms 2012 1040 Then split your allowances between the Forms W-4 for each job. Federal tax forms 2012 1040 You cannot claim the same allowances with more than one employer at the same time. Federal tax forms 2012 1040 You can claim all your allowances with one employer and none with the other(s), or divide them any other way. Federal tax forms 2012 1040 Married individuals. Federal tax forms 2012 1040   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Federal tax forms 2012 1040 Use only one set of worksheets. Federal tax forms 2012 1040 You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. Federal tax forms 2012 1040   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. Federal tax forms 2012 1040 Alternative method of figuring withholding allowances. Federal tax forms 2012 1040   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. Federal tax forms 2012 1040 For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. Federal tax forms 2012 1040 Personal Allowances Worksheet. Federal tax forms 2012 1040   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. Federal tax forms 2012 1040 Deduction and Adjustments Worksheet. Federal tax forms 2012 1040   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. Federal tax forms 2012 1040 Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. Federal tax forms 2012 1040 Two-Earners/Multiple Jobs Worksheet. Federal tax forms 2012 1040   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. Federal tax forms 2012 1040 Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. Federal tax forms 2012 1040 Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. Federal tax forms 2012 1040 You accurately complete all the Form W-4 worksheets that apply to you. Federal tax forms 2012 1040 You give your employer a new Form W-4 when changes occur. Federal tax forms 2012 1040 But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. Federal tax forms 2012 1040 This is most likely to happen in the following situations. Federal tax forms 2012 1040 You are married and both you and your spouse work. Federal tax forms 2012 1040 You have more than one job at a time. Federal tax forms 2012 1040 You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. Federal tax forms 2012 1040 You will owe additional amounts with your return, such as self-employment tax. Federal tax forms 2012 1040 Your withholding is based on obsolete Form W-4 information for a substantial part of the year. Federal tax forms 2012 1040 Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. Federal tax forms 2012 1040 You work only part of the year. Federal tax forms 2012 1040 You change the number of your withholding allowances during the year. Federal tax forms 2012 1040 Cumulative wage method. Federal tax forms 2012 1040   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. Federal tax forms 2012 1040 You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. Federal tax forms 2012 1040 You must ask your employer in writing to use this method. Federal tax forms 2012 1040   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. Federal tax forms 2012 1040 ) since the beginning of the year. Federal tax forms 2012 1040 Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. Federal tax forms 2012 1040 It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. Federal tax forms 2012 1040 It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. Federal tax forms 2012 1040 If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. Federal tax forms 2012 1040 You can use the IRS Withholding Calculator at www. Federal tax forms 2012 1040 irs. Federal tax forms 2012 1040 gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. Federal tax forms 2012 1040 Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. Federal tax forms 2012 1040 These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. Federal tax forms 2012 1040 New Form W-4. Federal tax forms 2012 1040   When you start a new job, your employer should have you complete a Form W-4. Federal tax forms 2012 1040 Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. Federal tax forms 2012 1040   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. Federal tax forms 2012 1040 The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. Federal tax forms 2012 1040 No Form W-4. Federal tax forms 2012 1040   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. Federal tax forms 2012 1040 Repaying withheld tax. Federal tax forms 2012 1040   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Federal tax forms 2012 1040 Your employer cannot repay any of the tax previously withheld. Federal tax forms 2012 1040 Instead, claim the full amount withheld when you file your tax return. Federal tax forms 2012 1040   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Federal tax forms 2012 1040 Your employer can repay the amount that was withheld incorrectly. Federal tax forms 2012 1040 If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. Federal tax forms 2012 1040 Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. Federal tax forms 2012 1040 The exemption applies only to income tax, not to social security or Medicare tax. Federal tax forms 2012 1040 You can claim exemption from withholding for 2014 only if both of the following situations apply. Federal tax forms 2012 1040 For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. Federal tax forms 2012 1040 For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. Federal tax forms 2012 1040 Students. Federal tax forms 2012 1040   If you are a student, you are not automatically exempt. Federal tax forms 2012 1040 See chapter 1 to find out if you must file a return. Federal tax forms 2012 1040 If you work only part time or only during the summer, you may qualify for exemption from withholding. Federal tax forms 2012 1040 Age 65 or older or blind. Federal tax forms 2012 1040   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. Federal tax forms 2012 1040 Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. Federal tax forms 2012 1040 Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. Federal tax forms 2012 1040 Claiming exemption from withholding. Federal tax forms 2012 1040   To claim exemption, you must give your employer a Form W-4. Federal tax forms 2012 1040 Do not complete lines 5 and 6. Federal tax forms 2012 1040 Enter “Exempt” on line 7. Federal tax forms 2012 1040   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. Federal tax forms 2012 1040 If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. Federal tax forms 2012 1040   Your claim of exempt status may be reviewed by the IRS. Federal tax forms 2012 1040 An exemption is good for only 1 year. Federal tax forms 2012 1040   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. Federal tax forms 2012 1040 Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. Federal tax forms 2012 1040 The payer can figure withholding on supplemental wages using the same method used for your regular wages. Federal tax forms 2012 1040 However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. Federal tax forms 2012 1040 Expense allowances. Federal tax forms 2012 1040   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. Federal tax forms 2012 1040   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. Federal tax forms 2012 1040   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. Federal tax forms 2012 1040 Penalties You may have to pay a penalty of $500 if both of the following apply. Federal tax forms 2012 1040 You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. Federal tax forms 2012 1040 You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. Federal tax forms 2012 1040 There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. Federal tax forms 2012 1040 The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. Federal tax forms 2012 1040 These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. Federal tax forms 2012 1040 A simple error or an honest mistake will not result in one of these penalties. Federal tax forms 2012 1040 For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. Federal tax forms 2012 1040 Tips The tips you receive while working on your job are considered part of your pay. Federal tax forms 2012 1040 You must include your tips on your tax return on the same line as your regular pay. Federal tax forms 2012 1040 However, tax is not withheld directly from tip income, as it is from your regular pay. Federal tax forms 2012 1040 Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Federal tax forms 2012 1040 See chapter 6 for information on reporting your tips to your employer. Federal tax forms 2012 1040 For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. Federal tax forms 2012 1040 How employer figures amount to withhold. Federal tax forms 2012 1040   The tips you report to your employer are counted as part of your income for the month you report them. Federal tax forms 2012 1040 Your employer can figure your withholding in either of two ways. Federal tax forms 2012 1040 By withholding at the regular rate on the sum of your pay plus your reported tips. Federal tax forms 2012 1040 By withholding at the regular rate on your pay plus a percentage of your reported tips. Federal tax forms 2012 1040 Not enough pay to cover taxes. Federal tax forms 2012 1040   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. Federal tax forms 2012 1040 See Giving your employer money for taxes in chapter 6. Federal tax forms 2012 1040 Allocated tips. Federal tax forms 2012 1040   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. Federal tax forms 2012 1040 Withholding is based only on your pay plus your reported tips. Federal tax forms 2012 1040 Your employer should refund to you any incorrectly withheld tax. Federal tax forms 2012 1040 See Allocated Tips in chapter 6 for more information. Federal tax forms 2012 1040 Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Federal tax forms 2012 1040 Your employer generally must withhold income tax on these benefits from your regular pay. Federal tax forms 2012 1040 For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. Federal tax forms 2012 1040 Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Federal tax forms 2012 1040 Your employer must notify you if this choice is made. Federal tax forms 2012 1040 For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. Federal tax forms 2012 1040 Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. Federal tax forms 2012 1040 To qualify as sick pay, it must be paid under a plan to which your employer is a party. Federal tax forms 2012 1040 If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. Federal tax forms 2012 1040 An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. Federal tax forms 2012 1040 However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. Federal tax forms 2012 1040 See Form W-4S , later. Federal tax forms 2012 1040 If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. Federal tax forms 2012 1040 Union agreements. Federal tax forms 2012 1040   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. Federal tax forms 2012 1040 See your union representative or your employer for more information. Federal tax forms 2012 1040 Form W-4S. Federal tax forms 2012 1040   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Federal tax forms 2012 1040 Its instructions contain a worksheet you can use to figure the amount you want withheld. Federal tax forms 2012 1040 They also explain restrictions that may apply. Federal tax forms 2012 1040   Give the completed form to the payer of your sick pay. Federal tax forms 2012 1040 The payer must withhold according to your directions on the form. Federal tax forms 2012 1040 Estimated tax. Federal tax forms 2012 1040   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. Federal tax forms 2012 1040 If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. Federal tax forms 2012 1040 See Underpayment Penalty for 2013 at the end of this chapter. Federal tax forms 2012 1040 Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. Federal tax forms 2012 1040 This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. Federal tax forms 2012 1040 The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). Federal tax forms 2012 1040 Income tax withholding from an ERD is mandatory. Federal tax forms 2012 1040 More information. Federal tax forms 2012 1040   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. Federal tax forms 2012 1040 For information on IRAs, see chapter 17. Federal tax forms 2012 1040 For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. Federal tax forms 2012 1040 Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. Federal tax forms 2012 1040 Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. Federal tax forms 2012 1040 Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. Federal tax forms 2012 1040 Any other wager, if the proceeds are at least 300 times the amount of the bet. Federal tax forms 2012 1040 It does not matter whether your winnings are paid in cash, in property, or as an annuity. Federal tax forms 2012 1040 Winnings not paid in cash are taken into account at their fair market value. Federal tax forms 2012 1040 Exception. Federal tax forms 2012 1040   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. Federal tax forms 2012 1040 However, you may need to provide the payer with a social security number to avoid withholding. Federal tax forms 2012 1040 See Backup withholding on gambling winnings in chapter 1 of Publication 505. Federal tax forms 2012 1040 If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. Federal tax forms 2012 1040 See Estimated Tax for 2014 , later. Federal tax forms 2012 1040 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Federal tax forms 2012 1040 See Underpayment Penalty for 2013 at the end of this chapter. Federal tax forms 2012 1040 Form W-2G. Federal tax forms 2012 1040   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Federal tax forms 2012 1040 Report the tax withheld on line 62 of Form 1040. Federal tax forms 2012 1040 Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. Federal tax forms 2012 1040 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Federal tax forms 2012 1040 All unemployment compensation is taxable. Federal tax forms 2012 1040 So, if you do not have income tax withheld, you may have to pay estimated tax. Federal tax forms 2012 1040 See Estimated Tax for 2014 , later. Federal tax forms 2012 1040 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Federal tax forms 2012 1040 For information, see Underpayment Penalty for 2013 at the end of this chapter. Federal tax forms 2012 1040 Federal Payments You can choose to have income tax withheld from certain federal payments you receive. Federal tax forms 2012 1040 These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. Federal tax forms 2012 1040 S. Federal tax forms 2012 1040 C. Federal tax forms 2012 1040 1421 et. Federal tax forms 2012 1040 seq. Federal tax forms 2012 1040 ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. Federal tax forms 2012 1040 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Federal tax forms 2012 1040 If you do not choose to have income tax withheld, you may have to pay estimated tax. Federal tax forms 2012 1040 See Estimated Tax for 2014 , later. Federal tax forms 2012 1040 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Federal tax forms 2012 1040 For information, see Underpayment Penalty for 2013 at the end of this chapter. Federal tax forms 2012 1040 More information. Federal tax forms 2012 1040   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. Federal tax forms 2012 1040 Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. Federal tax forms 2012 1040 Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. Federal tax forms 2012 1040 The information return shows how much you were paid during the year. Federal tax forms 2012 1040 It also includes your name and taxpayer identification number (TIN). Federal tax forms 2012 1040 TINs are explained in chapter 1 under Social Security Number (SSN) . Federal tax forms 2012 1040 These payments generally are not subject to withholding. Federal tax forms 2012 1040 However, “backup” withholding is required in certain situations. Federal tax forms 2012 1040 Backup withholding can apply to most kinds of payments that are reported on Form 1099. Federal tax forms 2012 1040 The payer must withhold at a flat 28% rate in the following situations. Federal tax forms 2012 1040 You do not give the payer your TIN in the required manner. Federal tax forms 2012 1040 The IRS notifies the payer that the TIN you gave is incorrect. Federal tax forms 2012 1040 You are required, but fail, to certify that you are not subject to backup withholding. Federal tax forms 2012 1040 The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. Federal tax forms 2012 1040 The IRS will do this only after it has mailed you four notices over at least a 210-day period. Federal tax forms 2012 1040 See Backup Withholding in chapter 1 of Publication 505 for more information. Federal tax forms 2012 1040 Penalties. Federal tax forms 2012 1040   There are civil and criminal penalties for giving false information to avoid backup withholding. Federal tax forms 2012 1040 The civil penalty is $500. Federal tax forms 2012 1040 The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. Federal tax forms 2012 1040 Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. Federal tax forms 2012 1040 This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Federal tax forms 2012 1040 You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Federal tax forms 2012 1040 Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Federal tax forms 2012 1040 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Federal tax forms 2012 1040 If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Federal tax forms 2012 1040 For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. Federal tax forms 2012 1040 Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. Federal tax forms 2012 1040 To do this, give a new Form W-4 to your employer. Federal tax forms 2012 1040 See chapter 1 of Publication 505. Federal tax forms 2012 1040 Estimated tax not required. Federal tax forms 2012 1040   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Federal tax forms 2012 1040 You had no tax liability for 2013. Federal tax forms 2012 1040 You were a U. Federal tax forms 2012 1040 S. Federal tax forms 2012 1040 citizen or resident alien for the whole year. Federal tax forms 2012 1040 Your 2013 tax year covered a 12-month period. Federal tax forms 2012 1040   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. Federal tax forms 2012 1040 For the definition of “total tax” for 2013, see Publication 505, chapter 2. Federal tax forms 2012 1040 Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. Federal tax forms 2012 1040 You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. Federal tax forms 2012 1040 General rule. Federal tax forms 2012 1040   In most cases, you must pay estimated tax for 2014 if both of the following apply. Federal tax forms 2012 1040 You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Federal tax forms 2012 1040 You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). Federal tax forms 2012 1040 Your 2013 tax return must cover all 12 months. Federal tax forms 2012 1040    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. Federal tax forms 2012 1040 Special rules for farmers, fishermen, and higher income taxpayers. Federal tax forms 2012 1040   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. Federal tax forms 2012 1040 If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. Federal tax forms 2012 1040 See Figure 4-A and Publication 505, chapter 2 for more information. Federal tax forms 2012 1040 Figure 4-A. Federal tax forms 2012 1040 Do You Have To Pay Estimated Tax? Please click here for the text description of the image. Federal tax forms 2012 1040 Figure 4-A Do You Have To Pay Estimated Tax? Aliens. Federal tax forms 2012 1040   Resident and nonresident aliens also may have to pay estimated tax. Federal tax forms 2012 1040 Resident aliens should follow the rules in this chapter unless noted otherwise. Federal tax forms 2012 1040 Nonresident aliens should get Form 1040-ES (NR), U. Federal tax forms 2012 1040 S. Federal tax forms 2012 1040 Estimated Tax for Nonresident Alien Individuals. Federal tax forms 2012 1040   You are an alien if you are not a citizen or national of the United States. Federal tax forms 2012 1040 You are a resident alien if you either have a green card or meet the substantial presence test. Federal tax forms 2012 1040 For more information about the substantial presence test, see Publication 519, U. Federal tax forms 2012 1040 S. Federal tax forms 2012 1040 Tax Guide for Aliens. Federal tax forms 2012 1040 Married taxpayers. Federal tax forms 2012 1040   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Federal tax forms 2012 1040   You and your spouse can make joint estimated tax payments even if you are not living together. Federal tax forms 2012 1040   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). Federal tax forms 2012 1040   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. Federal tax forms 2012 1040 Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Federal tax forms 2012 1040 2013 separate returns and 2014 joint return. Federal tax forms 2012 1040   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Federal tax forms 2012 1040 You filed a separate return if you filed as single, head of household, or married filing separately. Federal tax forms 2012 1040 2013 joint return and 2014 separate returns. Federal tax forms 2012 1040   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Federal tax forms 2012 1040 You file a separate return if you file as single, head of household, or married filing separately. Federal tax forms 2012 1040   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. Federal tax forms 2012 1040 Then multiply the tax on the joint return by the following fraction. Federal tax forms 2012 1040     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Federal tax forms 2012 1040 Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Federal tax forms 2012 1040 Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Federal tax forms 2012 1040 For 2014, they plan to file married filing separately. Federal tax forms 2012 1040 Joe figures his share of the tax on the 2013 joint return as follows. Federal tax forms 2012 1040   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. Federal tax forms 2012 1040 6%     Joe's share of tax on joint return  ($6,386 × 87. Federal tax forms 2012 1040 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. Federal tax forms 2012 1040 When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Federal tax forms 2012 1040 Use your 2013 federal tax return as a guide. Federal tax forms 2012 1040 You can use Form 1040-ES and Publication 505 to figure your estimated tax. Federal tax forms 2012 1040 Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). Federal tax forms 2012 1040 You must make adjustments both for changes in your own situation and for recent changes in the tax law. Federal tax forms 2012 1040 For a discussion of these changes, visit IRS. Federal tax forms 2012 1040 gov. Federal tax forms 2012 1040 For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. Federal tax forms 2012 1040 When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. Federal tax forms 2012 1040 Each period has a specific payment due date. Federal tax forms 2012 1040 If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. Federal tax forms 2012 1040 The payment periods and due dates for estimated tax payments are shown next. Federal tax forms 2012 1040   For the period: Due date:*     Jan. Federal tax forms 2012 1040 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. Federal tax forms 2012 1040 15     Sept. Federal tax forms 2012 1040 1– Dec. Federal tax forms 2012 1040 31 Jan. Federal tax forms 2012 1040 15, next year     *See Saturday, Sunday, holiday rule and January payment . Federal tax forms 2012 1040 Saturday, Sunday, holiday rule. Federal tax forms 2012 1040   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. Federal tax forms 2012 1040 January payment. Federal tax forms 2012 1040   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Federal tax forms 2012 1040 Fiscal year taxpayers. Federal tax forms 2012 1040   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. Federal tax forms 2012 1040 When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Federal tax forms 2012 1040 If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Federal tax forms 2012 1040 You can pay all your estimated tax at that time, or you can pay it in installments. Federal tax forms 2012 1040 If you choose to pay in installments, make your first payment by the due date for the first payment period. Federal tax forms 2012 1040 Make your remaining installment payments by the due dates for the later periods. Federal tax forms 2012 1040 No income subject to estimated tax during first period. Federal tax forms 2012 1040    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Federal tax forms 2012 1040 You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Federal tax forms 2012 1040 The following chart shows when to make installment payments. Federal tax forms 2012 1040 If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. Federal tax forms 2012 1040 15 Jan. Federal tax forms 2012 1040 15 next year April 1–May 31 June 16 Sept. Federal tax forms 2012 1040 15 Jan. Federal tax forms 2012 1040 15 next year June 1–Aug. Federal tax forms 2012 1040 31 Sept. Federal tax forms 2012 1040 15 Jan. Federal tax forms 2012 1040 15 next year After Aug. Federal tax forms 2012 1040 31 Jan. Federal tax forms 2012 1040 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . Federal tax forms 2012 1040 How much to pay to avoid a penalty. Federal tax forms 2012 1040   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. Federal tax forms 2012 1040 How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. Federal tax forms 2012 1040 You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. Federal tax forms 2012 1040 These methods are described in chapter 2 of Publication 505. Federal tax forms 2012 1040 If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Federal tax forms 2012 1040 If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. Federal tax forms 2012 1040 Underpayment penalty. Federal tax forms 2012 1040   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. Federal tax forms 2012 1040 Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. Federal tax forms 2012 1040 See chapter 4 of Publication 505 for more information. Federal tax forms 2012 1040 Change in estimated tax. Federal tax forms 2012 1040   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Federal tax forms 2012 1040 Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Federal tax forms 2012 1040 Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Federal tax forms 2012 1040 You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. Federal tax forms 2012 1040 How To Pay Estimated Tax There are several ways to pay estimated tax. Federal tax forms 2012 1040 Credit an overpayment on your 2013 return to your 2014 estimated tax. Federal tax forms 2012 1040 Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Federal tax forms 2012 1040 Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Federal tax forms 2012 1040 Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Federal tax forms 2012 1040 On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Federal tax forms 2012 1040 Take the amount you have credited into account when figuring your estimated tax payments. Federal tax forms 2012 1040 You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. Federal tax forms 2012 1040 You also cannot use that overpayment in any other way. Federal tax forms 2012 1040 Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Federal tax forms 2012 1040 You can pay using either of the following electronic payment methods. Federal tax forms 2012 1040 Direct transfer from your bank account. Federal tax forms 2012 1040 Credit or debit card. Federal tax forms 2012 1040 To pay your taxes online or for more information, go to www. Federal tax forms 2012 1040 irs. Federal tax forms 2012 1040 gov/e-pay. Federal tax forms 2012 1040 Pay by Phone Paying by phone is another safe and secure method of paying electronically. Federal tax forms 2012 1040 Use one of the following methods. Federal tax forms 2012 1040 Direct transfer from your bank account. Federal tax forms 2012 1040 Credit or debit card. Federal tax forms 2012 1040 To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). Federal tax forms 2012 1040 People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. Federal tax forms 2012 1040 To pay using a credit or debit card, you can call one of the following service providers. Federal tax forms 2012 1040 There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Federal tax forms 2012 1040 WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. Federal tax forms 2012 1040 payUSAtax. Federal tax forms 2012 1040 com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Federal tax forms 2012 1040 officialpayments. Federal tax forms 2012 1040 com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Federal tax forms 2012 1040 PAY1040. Federal tax forms 2012 1040 com For the latest details on how to pay by phone, go to www. Federal tax forms 2012 1040 irs. Federal tax forms 2012 1040 gov/e-pay. Federal tax forms 2012 1040 Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Federal tax forms 2012 1040 During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. Federal tax forms 2012 1040 The enclosed payment vouchers will be preprinted with your name, address, and social security number. Federal tax forms 2012 1040 Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. Federal tax forms 2012 1040 Use the window envelopes that came with your Form 1040-ES package. Federal tax forms 2012 1040 If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Federal tax forms 2012 1040 Note. Federal tax forms 2012 1040 These criteria can change without notice. Federal tax forms 2012 1040 If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. Federal tax forms 2012 1040 irs. Federal tax forms 2012 1040 gov and print a copy of Form 1040-ES which includes four blank payment vouchers. Federal tax forms 2012 1040 Complete one of these and make your payment timely to avoid penalties for paying late. Federal tax forms 2012 1040 Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. Federal tax forms 2012 1040 If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. Federal tax forms 2012 1040 gov. Federal tax forms 2012 1040 Follow the instructions to make sure you use the vouchers correctly. Federal tax forms 2012 1040 Joint estimated tax payments. Federal tax forms 2012 1040   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Federal tax forms 2012 1040 Change of address. Federal tax forms 2012 1040   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Federal tax forms 2012 1040 Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Federal tax forms 2012 1040 Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Federal tax forms 2012 1040 Also take credit for the estimated tax you paid for 2013. Federal tax forms 2012 1040 These credits are subtracted from your total tax. Federal tax forms 2012 1040 Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. Federal tax forms 2012 1040 Two or more employers. Federal tax forms 2012 1040   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. Federal tax forms 2012 1040 You may be able to claim the excess as a credit against your income tax when you file your return. Federal tax forms 2012 1040 See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. Federal tax forms 2012 1040 Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. Federal tax forms 2012 1040 Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. Federal tax forms 2012 1040 Forms W-2 and W-2G. Federal tax forms 2012 1040   If you file a paper return, always file Form W-2 with your income tax return. Federal tax forms 2012 1040 File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. Federal tax forms 2012 1040   You should get at least two copies of each form. Federal tax forms 2012 1040 If you file a paper return, attach one copy to the front of your federal income tax return. Federal tax forms 2012 1040 Keep one copy for your records. Federal tax forms 2012 1040 You also should receive copies to file with your state and local returns. Federal tax forms 2012 1040 Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Federal tax forms 2012 1040 You should receive a separate Form W-2 from each employer you worked for. Federal tax forms 2012 1040 If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. Federal tax forms 2012 1040 However, your employer must provide or send it to you by January 31, 2014. Federal tax forms 2012 1040 If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. Federal tax forms 2012 1040 If you have not received your Form W-2 by January 31, you should ask your employer for it. Federal tax forms 2012 1040 If you do not receive it by February 15, call the IRS. Federal tax forms 2012 1040 Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Federal tax forms 2012 1040 Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. Federal tax forms 2012 1040 In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Federal tax forms 2012 1040 Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. Federal tax forms 2012 1040 If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Federal tax forms 2012 1040 Report the amounts you won on line 21 of Form 1040. Federal tax forms 2012 1040 Take credit for the tax withheld on line 62 of Form 1040. Federal tax forms 2012 1040 If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. Federal tax forms 2012 1040 The 1099 Series Most forms in the 1099 series are not filed with your return. Federal tax forms 2012 1040 These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). Federal tax forms 2012 1040 Unless instructed to file any of these forms with your return, keep them for your records. Federal tax forms 2012 1040 There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Federal tax forms 2012 1040 ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. Federal tax forms 2012 1040 If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. Federal tax forms 2012 1040 See the instructions to these forms for details. Federal tax forms 2012 1040 Form 1099-R. Federal tax forms 2012 1040   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. Federal tax forms 2012 1040 Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. Federal tax forms 2012 1040 You cannot use Form 1040EZ if you received payments reported on Form 1099-R. Federal tax forms 2012 1040 Backup withholding. Federal tax forms 2012 1040   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. Federal tax forms 2012 1040 Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Federal tax forms 2012 1040 Call the telephone number or write to the address given for the payer on the form. Federal tax forms 2012 1040 The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. Federal tax forms 2012 1040 A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. Federal tax forms 2012 1040 In certain situations, you will receive two forms in place of the original incorrect form. Federal tax forms 2012 1040 This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). Federal tax forms 2012 1040 One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. Federal tax forms 2012 1040 This form will have an “X” in the “CORRECTED” box at the top of the form. Federal tax forms 2012 1040 The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). Federal tax forms 2012 1040 Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. Federal tax forms 2012 1040 S. Federal tax forms 2012 1040 Individual Income Tax Return. Federal tax forms 2012 1040 Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Federal tax forms 2012 1040 Do not include any amount withheld from your spouse's income. Federal tax forms 2012 1040 However, different rules may apply if you live in a community property state. Federal tax forms 2012 1040 Community property states are listed in chapter 2. Federal tax forms 2012 1040 For more information on these rules, and some exceptions, see Publication 555, Community Property. Federal tax forms 2012 1040 Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. Federal tax forms 2012 1040 For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. Federal tax forms 2012 1040 Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. Federal tax forms 2012 1040 Include any overpayment from 2012 that you had credited to your 2013 estimated tax. Federal tax forms 2012 1040 You must use Form 1040 or Form 1040A if you paid estimated tax. Federal tax forms 2012 1040 You cannot use Form 1040EZ. Federal tax forms 2012 1040 Name changed. Federal tax forms 2012 1040   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. Federal tax forms 2012 1040 The statement should cover payments you made jointly with your spouse as well as any you made separately. Federal tax forms 2012 1040   Be sure to report the change to the Social Security Administration. Federal tax forms 2012 1040 This prevents delays in processing your return and issuing any refunds. Federal tax forms 2012 1040 Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. Federal tax forms 2012 1040 If you made joint estimated tax payments, you must decide how to divide the payments between your returns. Federal tax forms 2012 1040 One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. Federal tax forms 2012 1040 If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. Federal tax forms 2012 1040 Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. Federal tax forms 2012 1040 If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. Federal tax forms 2012 1040 If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. Federal tax forms 2012 1040 If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. Federal tax forms 2012 1040 Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. Federal tax forms 2012 1040 Generally, you will not have to pay a penalty for 2013 if any of the following apply. Federal tax forms 2012 1040 The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. Federal tax forms 2012 1040 The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Federal tax forms 2012 1040 Your total 2013 tax minus your withholding and refundable credits is less than $1,000. Federal tax forms 2012 1040 You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. Federal tax forms 2012 1040 See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. Federal tax forms 2012 1040 Farmers and fishermen. Federal tax forms 2012 1040   Special rules apply if you are a farmer or fisherman. Federal tax forms 2012 1040 See Farmers and Fishermen in chapter 4 of Publication 505 for more information. Federal tax forms 2012 1040 IRS can figure the penalty for you. Federal tax forms 2012 1040   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. Federal tax forms 2012 1040 Generally, the IRS will figure the penalty for you and send you a bill. Federal tax forms 2012 1040 However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. Federal tax forms 2012 1040 See chapter 4 of Publication 505. Federal tax forms 2012 1040 Prev  Up  Next   Home   More Online Publications