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Free State E File Taxes

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Free State E File Taxes

Free state e file taxes 7. Free state e file taxes   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. Free state e file taxes Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. Free state e file taxes Useful Items - You may want to see: Forms (and Instructions) 1040 U. Free state e file taxes S. Free state e file taxes Individual Income Tax Return 1040A U. Free state e file taxes S. Free state e file taxes Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Free state e file taxes S. Free state e file taxes Nonresident Alien Income Tax Return 1040NR-EZ U. Free state e file taxes S. Free state e file taxes Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. Free state e file taxes What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. Free state e file taxes Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. Free state e file taxes The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). Free state e file taxes Under U. Free state e file taxes S. Free state e file taxes immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. Free state e file taxes Extensions of time to file. Free state e file taxes   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. Free state e file taxes You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). Free state e file taxes Use Form 4868 to get the extension to October 15. Free state e file taxes In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Free state e file taxes To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Free state e file taxes Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Free state e file taxes   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. Free state e file taxes S. Free state e file taxes citizens and resident aliens abroad who expect to qualify for special tax treatment). Free state e file taxes    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. Free state e file taxes You may be able to file your return electronically. Free state e file taxes See IRS e-file in your form instructions. Free state e file taxes Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. Free state e file taxes If you are any of the following, you must file a return. Free state e file taxes A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. Free state e file taxes (But see Exceptions , later. Free state e file taxes ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. Free state e file taxes S. Free state e file taxes sources, or Your income is exempt from income tax. Free state e file taxes A nonresident alien individual not engaged in a trade or business in the United States with U. Free state e file taxes S. Free state e file taxes income on which the tax liability was not satisfied by the withholding of tax at the source. Free state e file taxes A representative or agent responsible for filing the return of an individual described in (1) or (2). Free state e file taxes A fiduciary for a nonresident alien estate or trust. Free state e file taxes You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. Free state e file taxes For example, if you have no U. Free state e file taxes S. Free state e file taxes business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. Free state e file taxes For information on what is timely, see When to file for deductions and credits under When To File, later. Free state e file taxes Exceptions. Free state e file taxes   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. Free state e file taxes Your only U. Free state e file taxes S. Free state e file taxes trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. Free state e file taxes You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. Free state e file taxes Even if you have left the United States and filed a Form 1040-C, U. Free state e file taxes S. Free state e file taxes Departing Alien Income Tax Return, on departure, you still must file an annual U. Free state e file taxes S. Free state e file taxes income tax return. Free state e file taxes If you are married and both you and your spouse are required to file, you must each file a separate return. Free state e file taxes Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. Free state e file taxes You do not claim any dependents. Free state e file taxes You cannot be claimed as a dependent on someone else's U. Free state e file taxes S. Free state e file taxes tax return. Free state e file taxes If you were married, you do not claim an exemption for your spouse. Free state e file taxes Your taxable income is less than $100,000. Free state e file taxes The only itemized deduction you can claim is for state and local income taxes. Free state e file taxes Note. Free state e file taxes Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. Free state e file taxes See chapter 5. Free state e file taxes Your only U. Free state e file taxes S. Free state e file taxes source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. Free state e file taxes (If you had taxable interest or dividend income, you cannot use this form. Free state e file taxes ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. Free state e file taxes You are not claiming any tax credits. Free state e file taxes This is not an “expatriation return. Free state e file taxes ” See Expatriation Tax in chapter 4. Free state e file taxes The only taxes you owe are: The income tax from the Tax Table. Free state e file taxes The social security and Medicare tax from Form 4137 or Form 8919. Free state e file taxes You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. Free state e file taxes You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. Free state e file taxes If you do not meet all of the above conditions, you must file Form 1040NR. Free state e file taxes When To File If you are an employee and you receive wages subject to U. Free state e file taxes S. Free state e file taxes income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. Free state e file taxes For the 2013 calendar year, file your return by April 15, 2014. Free state e file taxes If you are not an employee who receives wages subject to U. Free state e file taxes S. Free state e file taxes income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Free state e file taxes For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. Free state e file taxes ) Extensions of time to file. Free state e file taxes   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. Free state e file taxes For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). Free state e file taxes You must file the extension by the regular due date of your return. Free state e file taxes   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). Free state e file taxes To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Free state e file taxes Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Free state e file taxes When to file for deductions and credits. Free state e file taxes   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. Free state e file taxes For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. Free state e file taxes However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. Free state e file taxes The allowance of the following credits is not affected by this time requirement. Free state e file taxes Credit for withheld taxes. Free state e file taxes Credit for excise tax on certain uses of gasoline and special fuels. Free state e file taxes Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. Free state e file taxes Protective return. Free state e file taxes   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. Free state e file taxes S. Free state e file taxes trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. Free state e file taxes By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. Free state e file taxes You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. Free state e file taxes   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. Free state e file taxes To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. Free state e file taxes   You can follow the same procedure if you believe you have no U. Free state e file taxes S. Free state e file taxes tax liability because of a U. Free state e file taxes S. Free state e file taxes tax treaty. Free state e file taxes Be sure to also complete item L on page 5 of Form 1040NR. Free state e file taxes Waiver of filing deadline. Free state e file taxes   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. Free state e file taxes S. Free state e file taxes income tax return (including a protective return) and you cooperate with the IRS in determining your U. Free state e file taxes S. Free state e file taxes income tax liability for the tax year for which you did not file a return. Free state e file taxes Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. Free state e file taxes  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. Free state e file taxes O. Free state e file taxes Box 1303 Charlotte, NC 28201-1303 Aliens from the U. Free state e file taxes S. Free state e file taxes Virgin Islands. Free state e file taxes    If you are a bona fide resident of the U. Free state e file taxes S. Free state e file taxes Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. Free state e file taxes S. Free state e file taxes Virgin Islands and file your income tax returns at the following address. Free state e file taxes Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. Free state e file taxes Thomas, VI 00802   Report all income from U. Free state e file taxes S. Free state e file taxes sources, as well as income from other sources, on your return. Free state e file taxes For information on filing U. Free state e file taxes S. Free state e file taxes Virgin Islands returns, contact the U. Free state e file taxes S. Free state e file taxes Virgin Islands Bureau of Internal Revenue. Free state e file taxes   Chapter 8 discusses withholding from U. Free state e file taxes S. Free state e file taxes wages of U. Free state e file taxes S. Free state e file taxes Virgin Islanders. Free state e file taxes Aliens from Guam or the Commonwealth of the Northern Mariana Islands. Free state e file taxes   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. Free state e file taxes Report all income, including income from U. Free state e file taxes S. Free state e file taxes sources, on your return. Free state e file taxes It is not necessary to file a separate U. Free state e file taxes S. Free state e file taxes income tax return. Free state e file taxes    Bona fide residents of Guam should file their Guam returns at the following address. Free state e file taxes   Department of Revenue and Taxation Government of Guam P. Free state e file taxes O. Free state e file taxes Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. Free state e file taxes   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Free state e file taxes O. Free state e file taxes Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. Free state e file taxes 570, Tax Guide for Individuals With Income From U. Free state e file taxes S. Free state e file taxes Possessions, for information on where to file your return. Free state e file taxes Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. Free state e file taxes S. Free state e file taxes Individual Income Tax Return. Free state e file taxes Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. Free state e file taxes If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. Free state e file taxes ) to Form 1040X. Free state e file taxes Print “Amended” across the top. Free state e file taxes Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. Free state e file taxes A return filed before the final due date is considered to have been filed on the due date. Free state e file taxes Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. Free state e file taxes FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. Free state e file taxes The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. Free state e file taxes The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. Free state e file taxes However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. Free state e file taxes A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. Free state e file taxes Filing requirements. Free state e file taxes   FinCEN Form 105 filing requirements follow. Free state e file taxes Recipients. Free state e file taxes   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. Free state e file taxes Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. Free state e file taxes   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. Free state e file taxes Travelers. Free state e file taxes   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. Free state e file taxes Penalties. Free state e file taxes   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. Free state e file taxes Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. Free state e file taxes More information. Free state e file taxes   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. Free state e file taxes Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. Free state e file taxes A resident alien of the United States for any part of the tax year. Free state e file taxes A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. Free state e file taxes S. Free state e file taxes income tax treaty. Free state e file taxes See Effect of Tax Treaties in chapter 1. Free state e file taxes A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. Free state e file taxes See chapter 1 for information about this election. Free state e file taxes A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. Free state e file taxes See Publication 570, Tax Guide for Individuals With Income From U. Free state e file taxes S. Free state e file taxes Possessions, for a definition of bona fide resident. Free state e file taxes You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). Free state e file taxes The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. Free state e file taxes Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. Free state e file taxes S. Free state e file taxes person. Free state e file taxes You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. Free state e file taxes More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. Free state e file taxes Penalties The law provides penalties for failure to file returns or pay taxes as required. Free state e file taxes Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. Free state e file taxes You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. Free state e file taxes If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. Free state e file taxes Filing late. Free state e file taxes   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. Free state e file taxes The penalty is based on the tax not paid by the due date (without regard to extensions). Free state e file taxes The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. Free state e file taxes Fraud. Free state e file taxes   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. Free state e file taxes Return over 60 days late. Free state e file taxes   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Free state e file taxes Exception. Free state e file taxes   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. Free state e file taxes Paying tax late. Free state e file taxes   You will have to pay a failure-to-pay penalty of ½ of 1% (. Free state e file taxes 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. Free state e file taxes This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. Free state e file taxes   The monthly rate of the failure-to-pay penalty is half the usual rate (. Free state e file taxes 25% instead of . Free state e file taxes 50%) if an installment agreement is in effect for that month. Free state e file taxes You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. Free state e file taxes   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. Free state e file taxes If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. Free state e file taxes   This penalty cannot be more than 25% of your unpaid tax. Free state e file taxes You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. Free state e file taxes Combined penalties. Free state e file taxes   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. Free state e file taxes However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Free state e file taxes Accuracy-related penalty. Free state e file taxes   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. Free state e file taxes The penalty is equal to 20% of the underpayment. Free state e file taxes The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. Free state e file taxes The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. Free state e file taxes Negligence or disregard. Free state e file taxes   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. Free state e file taxes Negligence also includes failure to keep adequate books and records. Free state e file taxes You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. Free state e file taxes   The term “disregard” includes any careless, reckless, or intentional disregard. Free state e file taxes Adequate disclosure. Free state e file taxes   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. Free state e file taxes See Disclosure statement , later. Free state e file taxes   This exception will not apply to an item that is attributable to a tax shelter. Free state e file taxes In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. Free state e file taxes Substantial understatement of income tax. Free state e file taxes   You understate your tax if the tax shown on your return is less than the correct tax. Free state e file taxes The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. Free state e file taxes However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. Free state e file taxes   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. Free state e file taxes However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. Free state e file taxes Substantial authority. Free state e file taxes   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. Free state e file taxes Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. Free state e file taxes Disclosure statement. Free state e file taxes   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. Free state e file taxes You must also have a reasonable basis for treating the item the way you did. Free state e file taxes   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. Free state e file taxes   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. Free state e file taxes Transaction lacking economic substance. Free state e file taxes   For more information on economic substance, see section 7701(o). Free state e file taxes Foreign financial asset. Free state e file taxes   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. Free state e file taxes Reasonable cause. Free state e file taxes   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. Free state e file taxes You must also show that you acted in good faith. Free state e file taxes This does not apply to a transaction that lacks economic substance. Free state e file taxes Filing erroneous claim for refund or credit. Free state e file taxes   You may have to pay a penalty if you file an erroneous claim for refund or credit. Free state e file taxes The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. Free state e file taxes However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. Free state e file taxes The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged. Free state e file taxes Frivolous tax submission. Free state e file taxes   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. Free state e file taxes A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. Free state e file taxes For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 IRB 609 available at www. Free state e file taxes irs. Free state e file taxes gov/irb/2010-17_irb/ar13. Free state e file taxes html. Free state e file taxes   You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. Free state e file taxes This includes altering or striking out the preprinted language above the space provided for your signature. Free state e file taxes   This penalty is added to any other penalty provided by law. Free state e file taxes Fraud. Free state e file taxes   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax. Free state e file taxes Failure to supply taxpayer identification number. Free state e file taxes   If you do not include your social security number (SSN) or individual taxpayer identification number (ITIN) or the SSN or ITIN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. Free state e file taxes You will also be subject to a penalty of $50 if you do not give your SSN or ITIN to another person when it is required on a return, statement, or other document. Free state e file taxes   For example, if you have a bank account that earns interest, you must give your SSN or ITIN to the bank. Free state e file taxes The number must be shown on the Form 1099-INT or other statement the bank sends you. Free state e file taxes If you do not give the bank your SSN or ITIN, you will be subject to the $50 penalty. Free state e file taxes (You also may be subject to “backup” withholding of income tax. Free state e file taxes )   You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect. Free state e file taxes Criminal Penalties You may be subject to criminal prosecution (brought to trial) for actions such as: Tax evasion, Willful failure to file a return, supply information, or pay any tax due, Fraud and false statements, or Preparing and filing a fraudulent return. Free state e file taxes Prev  Up  Next   Home   More Online Publications
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The Free State E File Taxes

Free state e file taxes 7. Free state e file taxes   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. Free state e file taxes Costs not included. Free state e file taxes Intangible Drilling Costs Exploration CostsPartnerships and S corporations. Free state e file taxes Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. Free state e file taxes Film and Television Production Costs What's New Film and television productions costs. Free state e file taxes  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. Free state e file taxes See Film and Television Production Costs , later. Free state e file taxes Introduction This chapter discusses costs you can elect to deduct or capitalize. Free state e file taxes You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. Free state e file taxes If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. Free state e file taxes When you capitalize a cost, you add it to the basis of property to which it relates. Free state e file taxes A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. Free state e file taxes Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. Free state e file taxes You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. Free state e file taxes For more information on the alternative minimum tax, see the instructions for the following forms. Free state e file taxes Form 6251, Alternative Minimum Tax—Individuals. Free state e file taxes Form 4626, Alternative Minimum Tax—Corporations. Free state e file taxes Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. Free state e file taxes Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. Free state e file taxes Certain carrying charges must be capitalized under the uniform capitalization rules. Free state e file taxes (For information on capitalization of interest, see chapter 4 . Free state e file taxes ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. Free state e file taxes You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. Free state e file taxes For unimproved and unproductive real property, your election is good for only 1 year. Free state e file taxes You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. Free state e file taxes For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. Free state e file taxes For personal property, your election is effective until the date you install or first use it, whichever is later. Free state e file taxes How to make the election. Free state e file taxes   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. Free state e file taxes However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Free state e file taxes Attach the statement to the amended return and write “Filed pursuant to section 301. Free state e file taxes 9100-2” on the statement. Free state e file taxes File the amended return at the same address you filed the original return. Free state e file taxes Research and Experimental Costs The costs of research and experimentation are generally capital expenses. Free state e file taxes However, you can elect to deduct these costs as a current business expense. Free state e file taxes Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. Free state e file taxes If you meet certain requirements, you may elect to defer and amortize research and experimental costs. Free state e file taxes For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. Free state e file taxes Research and experimental costs defined. Free state e file taxes   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. Free state e file taxes Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. Free state e file taxes Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. Free state e file taxes      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. Free state e file taxes However, costs paid or incurred to obtain another's patent are not research and experimental costs. Free state e file taxes Product. Free state e file taxes   The term “product” includes any of the following items. Free state e file taxes Formula. Free state e file taxes Invention. Free state e file taxes Patent. Free state e file taxes Pilot model. Free state e file taxes Process. Free state e file taxes Technique. Free state e file taxes Property similar to the items listed above. Free state e file taxes It also includes products used by you in your trade or business or held for sale, lease, or license. Free state e file taxes Costs not included. Free state e file taxes   Research and experimental costs do not include expenses for any of the following activities. Free state e file taxes Advertising or promotions. Free state e file taxes Consumer surveys. Free state e file taxes Efficiency surveys. Free state e file taxes Management studies. Free state e file taxes Quality control testing. Free state e file taxes Research in connection with literary, historical, or similar projects. Free state e file taxes The acquisition of another's patent, model, production, or process. Free state e file taxes When and how to elect. Free state e file taxes   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. Free state e file taxes If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. Free state e file taxes Deducting or Amortizing Research and Experimentation Costs IF you . Free state e file taxes . Free state e file taxes . Free state e file taxes THEN . Free state e file taxes . Free state e file taxes . Free state e file taxes Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. Free state e file taxes Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. Free state e file taxes See Research and Experimental Costs in chapter 8. Free state e file taxes Research credit. Free state e file taxes   If you pay or incur qualified research expenses, you may be able to take the research credit. Free state e file taxes For more information see Form 6765, Credit for Increasing Research Activities and its instructions. Free state e file taxes Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. Free state e file taxes You can usually recover them through depreciation or depletion. Free state e file taxes However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. Free state e file taxes These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. Free state e file taxes You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. Free state e file taxes You can elect to deduct only the costs of items with no salvage value. Free state e file taxes These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. Free state e file taxes Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. Free state e file taxes However, see Amounts paid to contractor that must be capitalized , later. Free state e file taxes You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. Free state e file taxes It does not matter whether there is any intent to produce hydrocarbons. Free state e file taxes If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. Free state e file taxes Amounts paid to contractor that must be capitalized. Free state e file taxes   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. Free state e file taxes How to make the election. Free state e file taxes   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. Free state e file taxes No formal statement is required. Free state e file taxes If you file Schedule C (Form 1040), enter these costs under “Other expenses. Free state e file taxes ”   For oil and gas wells, your election is binding for the year it is made and for all later years. Free state e file taxes For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. Free state e file taxes You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. Free state e file taxes Energy credit for costs of geothermal wells. Free state e file taxes   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. Free state e file taxes See the Instructions for Form 3468 for more information. Free state e file taxes Nonproductive well. Free state e file taxes   If you capitalize your IDCs, you have another option if the well is nonproductive. Free state e file taxes You can deduct the IDCs of the nonproductive well as an ordinary loss. Free state e file taxes You must indicate and clearly state your election on your tax return for the year the well is completed. Free state e file taxes Once made, the election for oil and gas wells is binding for all later years. Free state e file taxes You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. Free state e file taxes Costs incurred outside the United States. Free state e file taxes   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. Free state e file taxes However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. Free state e file taxes If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. Free state e file taxes These rules do not apply to a nonproductive well. Free state e file taxes Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. Free state e file taxes You recover these costs through depletion as the mineral is removed from the ground. Free state e file taxes However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). Free state e file taxes How to make the election. Free state e file taxes   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. Free state e file taxes Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. Free state e file taxes The election applies to the tax year you make this election and all later tax years. Free state e file taxes Partnerships and S corporations. Free state e file taxes   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. Free state e file taxes Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. Free state e file taxes Reduced corporate deductions for exploration costs. Free state e file taxes   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. Free state e file taxes It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. Free state e file taxes A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. Free state e file taxes For more information on this method of amortization, see Internal Revenue Code section 59(e). Free state e file taxes   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. Free state e file taxes However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. Free state e file taxes See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. Free state e file taxes   These rules also apply to the deduction of development costs by corporations. Free state e file taxes See Development Costs , later. Free state e file taxes Recapture of exploration expenses. Free state e file taxes   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. Free state e file taxes Use either of the following methods. Free state e file taxes Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. Free state e file taxes Your election must be clearly indicated on the return. Free state e file taxes Increase your adjusted basis in the mine by the amount included in income. Free state e file taxes Generally, you must elect this recapture method by the due date (including extensions) of your return. Free state e file taxes However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Free state e file taxes Make the election on your amended return and write “Filed pursuant to section 301. Free state e file taxes 9100-2” on the form where you are including the income. Free state e file taxes File the amended return at the same address you filed the original return. Free state e file taxes Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Free state e file taxes   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. Free state e file taxes Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Free state e file taxes   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. Free state e file taxes Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. Free state e file taxes If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. Free state e file taxes Foreign exploration costs. Free state e file taxes   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. Free state e file taxes You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. Free state e file taxes (Cost depletion is discussed in chapter 9 . Free state e file taxes ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. Free state e file taxes These rules also apply to foreign development costs. Free state e file taxes Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. Free state e file taxes These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. Free state e file taxes Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. Free state e file taxes Development costs do not include the costs for the acquisition or improvement of depreciable property. Free state e file taxes Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. Free state e file taxes This election applies each tax year to expenses paid or incurred in that year. Free state e file taxes Once made, the election is binding for the year and cannot be revoked for any reason. Free state e file taxes How to make the election. Free state e file taxes   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. Free state e file taxes Generally, you must make the election by the due date of the return (including extensions). Free state e file taxes However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Free state e file taxes Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free state e file taxes 9100-2. Free state e file taxes ” File the amended return at the same address you filed the original return. Free state e file taxes Foreign development costs. Free state e file taxes   The rules discussed earlier for foreign exploration costs apply to foreign development costs. Free state e file taxes Reduced corporate deductions for development costs. Free state e file taxes   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. Free state e file taxes Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. Free state e file taxes For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. Free state e file taxes Circulation costs are deductible even if they normally would be capitalized. Free state e file taxes This rule does not apply to the following costs that must be capitalized. Free state e file taxes The purchase of land or depreciable property. Free state e file taxes The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. Free state e file taxes Other treatment of circulation costs. Free state e file taxes   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. Free state e file taxes Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). Free state e file taxes Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. Free state e file taxes How to make the election. Free state e file taxes   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. Free state e file taxes Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. Free state e file taxes Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. Free state e file taxes However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. Free state e file taxes The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Free state e file taxes Any remaining costs must be amortized. Free state e file taxes For information about amortizing start-up and organizational costs, see chapter 8 . Free state e file taxes Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Free state e file taxes Organizational costs include the costs of creating a corporation. Free state e file taxes For more information on start-up and organizational costs, see chapter 8 . Free state e file taxes How to make the election. Free state e file taxes   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. Free state e file taxes However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Free state e file taxes Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free state e file taxes 9100-2. Free state e file taxes ” File the amended return at the same address you filed the original return. Free state e file taxes The election applies when computing taxable income for the current tax year and all subsequent years. Free state e file taxes Reforestation Costs Reforestation costs are generally capital expenditures. Free state e file taxes However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. Free state e file taxes The remaining costs can be amortized over an 84-month period. Free state e file taxes For information about amortizing reforestation costs, see chapter 8 . Free state e file taxes Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Free state e file taxes Qualified timber property is property that contains trees in significant commercial quantities. Free state e file taxes See chapter 8 for more information on qualifying reforestation costs and qualified timber property. Free state e file taxes If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. Free state e file taxes Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. Free state e file taxes How to make the election. Free state e file taxes   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. Free state e file taxes If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. Free state e file taxes If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. Free state e file taxes The unique stand identification numbers. Free state e file taxes The total number of acres reforested during the tax year. Free state e file taxes The nature of the reforestation treatments. Free state e file taxes The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. Free state e file taxes   If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Free state e file taxes Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free state e file taxes 9100-2. Free state e file taxes ” File the amended return at the same address you filed the original return. Free state e file taxes The election applies when computing taxable income for the current tax year and all subsequent years. Free state e file taxes   For additional information on reforestation costs, see chapter 8 . Free state e file taxes Recapture. Free state e file taxes   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. Free state e file taxes For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. Free state e file taxes Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. Free state e file taxes However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. Free state e file taxes Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. Free state e file taxes However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. Free state e file taxes You must own or lease the facility or vehicle for use in connection with your trade or business. Free state e file taxes A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. Free state e file taxes A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). Free state e file taxes You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. Free state e file taxes Deduction limit. Free state e file taxes   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. Free state e file taxes However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. Free state e file taxes Partners and partnerships. Free state e file taxes   The $15,000 limit applies to a partnership and also to each partner in the partnership. Free state e file taxes A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. Free state e file taxes If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. Free state e file taxes   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). Free state e file taxes If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. Free state e file taxes Example. Free state e file taxes Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. Free state e file taxes Emilio had $12,000 of similar expenses in his sole proprietorship. Free state e file taxes He elected to deduct $7,000 of them. Free state e file taxes Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. Free state e file taxes Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. Free state e file taxes Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. Free state e file taxes Qualification standards. Free state e file taxes   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. Free state e file taxes You can view the Americans with Disabilities Act at www. Free state e file taxes ada. Free state e file taxes gov/pubs/ada. Free state e file taxes htm. Free state e file taxes   The following is a list of some architectural barrier removal costs that can be deducted. Free state e file taxes Ground and floor surfaces. Free state e file taxes Walks. Free state e file taxes Parking lots. Free state e file taxes Ramps. Free state e file taxes Entrances. Free state e file taxes Doors and doorways. Free state e file taxes Stairs. Free state e file taxes Floors. Free state e file taxes Toilet rooms. Free state e file taxes Water fountains. Free state e file taxes Public telephones. Free state e file taxes Elevators. Free state e file taxes Controls. Free state e file taxes Signage. Free state e file taxes Alarms. Free state e file taxes Protruding objects. Free state e file taxes Symbols of accessibility. Free state e file taxes You can find the ADA guidelines and requirements for architectural barrier removal at www. Free state e file taxes usdoj. Free state e file taxes gov/crt/ada/reg3a. Free state e file taxes html. Free state e file taxes   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. Free state e file taxes You can find the guidelines and requirements for transportation barrier removal at www. Free state e file taxes fta. Free state e file taxes dot. Free state e file taxes gov. Free state e file taxes   Also, you can access the ADA website at www. Free state e file taxes ada. Free state e file taxes gov for additional information. Free state e file taxes Other barrier removals. Free state e file taxes   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. Free state e file taxes The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. Free state e file taxes The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). Free state e file taxes The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. Free state e file taxes How to make the election. Free state e file taxes   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. Free state e file taxes Identify the deduction as a separate item. Free state e file taxes The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. Free state e file taxes If you make this election, you must maintain adequate records to support your deduction. Free state e file taxes   For your election to be valid, you generally must file your return by its due date, including extensions. Free state e file taxes However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Free state e file taxes Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free state e file taxes 9100-2. Free state e file taxes ” File the amended return at the same address you filed the original return. Free state e file taxes Your election is irrevocable after the due date, including extensions, of your return. Free state e file taxes Disabled access credit. Free state e file taxes   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. Free state e file taxes If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. Free state e file taxes   For more information, see Form 8826, Disabled Access Credit. Free state e file taxes Film and Television Production Costs Film and television production costs are generally capital expenses. Free state e file taxes However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. Free state e file taxes For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. Free state e file taxes Prev  Up  Next   Home   More Online Publications