Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Turbotax 1040ez

File Free Federal And State TaxesTaxes On Unemployment1040 Amended Tax FormCan I Still File Taxes For 2012H & R Block OnlineTax ReturnHow To Amend Federal TaxesFile Amended Tax ReturnMilitary H&r BlockMy Free TaxesState Taxes FormsTurbotax Amended Return 20131040x Amended Tax FormH&r Block Tax1040x 2010Freetaxusa2010Free Online Tax PreparationPrint 1040ezHow Do I Amend A Tax ReturnE File State Tax FreePrintable 1040 FormHow To Amend A Tax Return2013 Tax Form 1040ez540ez2012 Tax FilingI Need To Print A Free 1040x FormH&r Block Taxcut 2011Irs 1040ez Form 2012Www Irs Gov Freefile2010 Federal Tax FormsHow To Fill Out An Amended Tax FormDeadline For Filing 2010 Taxes1040ezformHow To Amend My 2011 Tax Return2011 Tax Tables FederalWhere To Send 2011 Tax ReturnHow To File Amended Tax Return TurbotaxH&rblockFree Tax H&r BlockFree Tax Return

Turbotax 1040ez

Turbotax 1040ez 16. Turbotax 1040ez   Reporting Gains and Losses Table of Contents What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. Turbotax 1040ez Exception 2. Turbotax 1040ez File Form 1099-B or Form 1099-S with the IRS. Turbotax 1040ez Capital Losses Capital Gain Tax Rates What's New Maximum capital gain rates. Turbotax 1040ez . Turbotax 1040ez  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Turbotax 1040ez Introduction This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Form 8949 and Schedule D (Form 1040). Turbotax 1040ez The discussion includes the following topics. Turbotax 1040ez How to report short-term gains and losses. Turbotax 1040ez How to report long-term gains and losses. Turbotax 1040ez How to figure capital loss carryovers. Turbotax 1040ez How to figure your tax on a net capital gain. Turbotax 1040ez If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D (Form 1040). Turbotax 1040ez Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income 8582 Passive Activity Loss Limitations 8949 Sales and Other Dispositions of Capital Assets Schedule D (Form 1040) Capital Gains and Losses Reporting Capital Gains and Losses Generally, report capital gains and losses on Form 8949. Turbotax 1040ez Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D (Form 1040). Turbotax 1040ez Use Form 8949 to report: The sale or exchange of a capital asset not reported on another form or schedule; Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit; and Nonbusiness bad debts. Turbotax 1040ez Use Schedule D (Form 1040): To figure the overall gain or loss from transactions reported on Form 8949; To report a gain from Form 6252 or Part I of Form 4797; To report a gain or loss from Form 4684, 6781, or 8824; To report capital gain distributions not reported directly on Form 1040 or Form 1040A; To report a capital loss carryover from the previous tax year to the current tax year; To report your share of a gain or (loss) from a partnership, S corporation, estate, or trust; To report transactions reported to you on a Form 1099-B (or substitute statement) showing basis was reported to the IRS and to which none of the Form 8949 adjustments or codes apply; and To report undistributed long-term capital gains from Form 2439. Turbotax 1040ez On Form 8949, enter all sales and exchanges of capital assets, including stocks, bonds, etc. Turbotax 1040ez , and real estate (if not reported on Form 4684, 4797, 6252, 6781, 8824, or line 1a or 8a of Schedule D). Turbotax 1040ez Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. Turbotax 1040ez Report short-term gains or losses in Part I. Turbotax 1040ez Report long-term gains or losses in Part II. Turbotax 1040ez Use as many Forms 8949 as you need. Turbotax 1040ez Exceptions to filing Form 8949 and Schedule D (Form 1040). Turbotax 1040ez   There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040). Turbotax 1040ez Exception 1. Turbotax 1040ez   You do not have to file Form 8949 or Schedule D (Form 1040) if you have no capital losses and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements). Turbotax 1040ez (If any Form(s) 1099-DIV (or substitute statements) you receive have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain), you do not qualify for this exception. Turbotax 1040ez ) If you qualify for this exception, report your capital gain distributions directly on line 13 of Form 1040 (and check the box on line 13). Turbotax 1040ez Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax. Turbotax 1040ez You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if none of the Forms 1099-DIV (or substitute statements) you received have an amount in box 2b, 2c, or 2d, and you do not have to file Form 1040. Turbotax 1040ez Exception 2. Turbotax 1040ez   You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are: Capital gain distributions; A capital loss carryover; A gain from Form 2439 or 6252 or Part I of Form 4797; A gain or loss from Form 4684, 6781, or 8824; A gain or loss from a partnership, S corporation, estate, or trust; or Gains and losses from transactions for which you received a Form 1099-B (or substitute statement) that shows the basis was reported to the IRS and for which you do not need to make any adjustments in column (g) of Form 8949 or enter any codes in column (f) of Form 8949. Turbotax 1040ez Installment sales. Turbotax 1040ez   You cannot use the installment method to report a gain from the sale of stock or securities traded on an established securities market. Turbotax 1040ez You must report the entire gain in the year of sale (the year in which the trade date occurs). Turbotax 1040ez Passive activity gains and losses. Turbotax 1040ez    If you have gains or losses from a passive activity, you may also have to report them on Form 8582. Turbotax 1040ez In some cases, the loss may be limited under the passive activity rules. Turbotax 1040ez Refer to Form 8582 and its instructions for more information about reporting capital gains and losses from a passive activity. Turbotax 1040ez Form 1099-B transactions. Turbotax 1040ez   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B or substitute statement from the broker. Turbotax 1040ez Use the Form 1099-B or the substitute statement to complete Form 8949. Turbotax 1040ez If you sold a covered security in 2013, your broker should send you a Form 1099-B (or substitute statement) that shows your basis. Turbotax 1040ez This will help you complete Form 8949. Turbotax 1040ez Generally, a covered security is a security you acquired after 2010. Turbotax 1040ez   Report the gross proceeds shown in box 2a of Form 1099-B as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Turbotax 1040ez However, if the broker advises you, in box 2a of Form 1099-B, that gross proceeds (sales price) less commissions and option premiums were reported to the IRS, enter that net sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Turbotax 1040ez    Include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Turbotax 1040ez If you include an expense of sale in column (g), enter “E” in column (f). Turbotax 1040ez Form 1099-CAP transactions. Turbotax 1040ez   If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP or a substitute statement from the corporation. Turbotax 1040ez Use the Form 1099-CAP or substitute statement to fill in Form 8949. Turbotax 1040ez If your computations show that you would have a loss because of the change, do not enter any amounts on Form 8949 or Schedule D (Form 1040). Turbotax 1040ez You cannot claim a loss on Schedule D (Form 1040) as a result of this transaction. Turbotax 1040ez   Report the aggregate amount received shown in box 2 of Form 1099-CAP as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Turbotax 1040ez Form 1099-S transactions. Turbotax 1040ez   If you sold or traded reportable real estate, you generally should receive from the real estate reporting person a Form 1099-S showing the gross proceeds. Turbotax 1040ez    “Reportable real estate” is defined as any present or future ownership interest in any of the following: Improved or unimproved land, including air space; Inherently permanent structures, including any residential, commercial, or industrial building; A condominium unit and its accessory fixtures and common elements, including land; and Stock in a cooperative housing corporation (as defined in section 216 of the Internal Revenue Code). Turbotax 1040ez   A “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. Turbotax 1040ez   Your Form 1099-S will show the gross proceeds from the sale or exchange in box 2. Turbotax 1040ez See the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040) for how to report these transactions and include them in Part I or Part II of Form 8949 as appropriate. Turbotax 1040ez However, report like-kind exchanges on Form 8824 instead. Turbotax 1040ez   It is unlawful for any real estate reporting person to separately charge you for complying with the requirement to file Form 1099-S. Turbotax 1040ez Nominees. Turbotax 1040ez   If you receive gross proceeds as a nominee (that is, the gross proceeds are in your name but actually belong to someone else), see the Instructions for Form 8949 for how to report these amounts on Form 8949. Turbotax 1040ez File Form 1099-B or Form 1099-S with the IRS. Turbotax 1040ez   If you received gross proceeds as a nominee in 2013, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. Turbotax 1040ez Send the Form 1099-B or Form 1099-S with a Form 1096, Annual Summary and Transmittal of U. Turbotax 1040ez S. Turbotax 1040ez Information Returns, to your Internal Revenue Service Center by February 28, 2014 (March 31, 2014, if you file Form 1099-B or Form 1099-S electronically). Turbotax 1040ez Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 18, 2014. Turbotax 1040ez On Form 1099-B, you should be listed as the “Payer. Turbotax 1040ez ” The other owner should be listed as the “Recipient. Turbotax 1040ez ” On Form 1099-S, you should be listed as the “Filer. Turbotax 1040ez ” The other owner should be listed as the “Transferor. Turbotax 1040ez ” You do not have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. Turbotax 1040ez For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns. Turbotax 1040ez If you are filing electronically see Publication 1220. Turbotax 1040ez Sale of property bought at various times. Turbotax 1040ez   If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on one row in Part I of Form 8949, and the long-term gain or loss on one row in Part II of Form 8949. Turbotax 1040ez Write “Various” in column (b) for the “Date acquired. Turbotax 1040ez ” Sale expenses. Turbotax 1040ez    On Form 8949, include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Turbotax 1040ez If you include an expense of sale in column (g), enter “E” in column (f). Turbotax 1040ez   For more information about adjustments to basis, see chapter 13. Turbotax 1040ez Short-term gains and losses. Turbotax 1040ez   Capital gain or loss on the sale or trade of investment property held 1 year or less is a short-term capital gain or loss. Turbotax 1040ez You report it in Part I of Form 8949. Turbotax 1040ez   You combine your share of short-term capital gain or loss from partnerships, S corporations, estates, and trusts, and any short-term capital loss carryover, with your other short-term capital gains and losses to figure your net short-term capital gain or loss on line 7 of Schedule D (Form 1040). Turbotax 1040ez Long-term gains and losses. Turbotax 1040ez    A capital gain or loss on the sale or trade of investment property held more than 1 year is a long-term capital gain or loss. Turbotax 1040ez You report it in Part II of Form 8949. Turbotax 1040ez   You report the following in Part II of Schedule D (Form 1040): Undistributed long-term capital gains from a mutual fund (or other regulated investment company) or real estate investment trust (REIT); Your share of long-term capital gains or losses from partnerships, S corporations, estates, and trusts; All capital gain distributions from mutual funds and REITs not reported directly on line 10 of Form 1040A or line 13 of Form 1040; and Long-term capital loss carryovers. Turbotax 1040ez    The result after combining these items with your other long-term capital gains and losses is your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Turbotax 1040ez Total net gain or loss. Turbotax 1040ez   To figure your total net gain or loss, combine your net short-term capital gain or loss (Schedule D (Form 1040), line 7) with your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Turbotax 1040ez Enter the result on Schedule D (Form 1040), Part III, line 16. Turbotax 1040ez If your losses are more than your gains, see Capital Losses , next. Turbotax 1040ez If both lines 15 and 16 of your Schedule D (Form 1040) are gains and your taxable income on your Form 1040 is more than zero, see Capital Gain Tax Rates , later. Turbotax 1040ez Capital Losses If your capital losses are more than your capital gains, you can claim a capital loss deduction. Turbotax 1040ez Report the amount of the deduction on line 13 of Form 1040, in parentheses. Turbotax 1040ez Limit on deduction. Turbotax 1040ez   Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of: $3,000 ($1,500 if you are married and file a separate return); or Your total net loss as shown on line 16 of Schedule D (Form 1040). Turbotax 1040ez   You can use your total net loss to reduce your income dollar for dollar, up to the $3,000 limit. Turbotax 1040ez Capital loss carryover. Turbotax 1040ez   If you have a total net loss on line 16 of Schedule D (Form 1040) that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. Turbotax 1040ez If part of the loss is still unused, you can carry it over to later years until it is completely used up. Turbotax 1040ez   When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. Turbotax 1040ez   When you carry over a loss, it remains long term or short term. Turbotax 1040ez A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains. Turbotax 1040ez Figuring your carryover. Turbotax 1040ez   The amount of your capital loss carryover is the amount of your total net loss that is more than the lesser of: Your allowable capital loss deduction for the year; or Your taxable income increased by your allowable capital loss deduction for the year and your deduction for personal exemptions. Turbotax 1040ez   If your deductions are more than your gross income for the tax year, use your negative taxable income in computing the amount in item (2). Turbotax 1040ez    Complete the Capital Loss Carryover Worksheet in the Instructions for Schedule D or Publication 550 to determine the part of your capital loss that you can carry over. Turbotax 1040ez Example. Turbotax 1040ez Bob and Gloria sold securities in 2013. Turbotax 1040ez The sales resulted in a capital loss of $7,000. Turbotax 1040ez They had no other capital transactions. Turbotax 1040ez Their taxable income was $26,000. Turbotax 1040ez On their joint 2013 return, they can deduct $3,000. Turbotax 1040ez The unused part of the loss, $4,000 ($7,000 − $3,000), can be carried over to 2014. Turbotax 1040ez If their capital loss had been $2,000, their capital loss deduction would have been $2,000. Turbotax 1040ez They would have no carryover. Turbotax 1040ez Use short-term losses first. Turbotax 1040ez   When you figure your capital loss carryover, use your short-term capital losses first, even if you incurred them after a long-term capital loss. Turbotax 1040ez If you have not reached the limit on the capital loss deduction after using the short-term capital losses, use the long-term capital losses until you reach the limit. Turbotax 1040ez Decedent's capital loss. Turbotax 1040ez    A capital loss sustained by a decedent during his or her last tax year (or carried over to that year from an earlier year) can be deducted only on the final income tax return filed for the decedent. Turbotax 1040ez The capital loss limits discussed earlier still apply in this situation. Turbotax 1040ez The decedent's estate cannot deduct any of the loss or carry it over to following years. Turbotax 1040ez Joint and separate returns. Turbotax 1040ez   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. Turbotax 1040ez However, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. Turbotax 1040ez Capital Gain Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Turbotax 1040ez These lower rates are called the maximum capital gain rates. Turbotax 1040ez The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Turbotax 1040ez For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Turbotax 1040ez See Table 16-1 for details. Turbotax 1040ez If you figure your tax using the maximum capital gain rate and the regular tax computation results in a lower tax, the regular tax computation applies. Turbotax 1040ez Example. Turbotax 1040ez All of your net capital gain is from selling collectibles, so the capital gain rate would be 28%. Turbotax 1040ez If you are otherwise subject to a rate lower than 28%, the 28% rate does not apply. Turbotax 1040ez Investment interest deducted. Turbotax 1040ez   If you claim a deduction for investment interest, you may have to reduce the amount of your net capital gain that is eligible for the capital gain tax rates. Turbotax 1040ez Reduce it by the amount of the net capital gain you choose to include in investment income when figuring the limit on your investment interest deduction. Turbotax 1040ez This is done on the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet. Turbotax 1040ez For more information about the limit on investment interest, see Interest Expenses in chapter 3 of Publication 550. Turbotax 1040ez Table 16-1. Turbotax 1040ez What Is Your Maximum Capital Gain Rate? IF your net capital gain is from . Turbotax 1040ez . Turbotax 1040ez . Turbotax 1040ez THEN your  maximum capital gain rate is . Turbotax 1040ez . Turbotax 1040ez . Turbotax 1040ez a collectibles gain 28% an eligible gain on qualified small business stock minus the section 1202 exclusion 28% an unrecaptured section 1250 gain 25% other gain1 and the regular tax rate that would apply is 39. Turbotax 1040ez 6% 20% other gain1 and the regular tax rate that would apply is 25%, 28%, 33%, or 35% 15% other gain1 and the regular tax rate that would apply is 10% or 15% 0% 1 Other gain means any gain that is not collectibles gain, gain on qualified small business stock, or unrecaptured section 1250 gain. Turbotax 1040ez     Collectibles gain or loss. Turbotax 1040ez   This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year. Turbotax 1040ez   Collectibles gain includes gain from sale of an interest in a partnership, S corporation, or trust due to unrealized appreciation of collectibles. Turbotax 1040ez Gain on qualified small business stock. Turbotax 1040ez    If you realized a gain from qualified small business stock that you held more than 5 years, you generally can exclude some or all of your gain under section 1202. Turbotax 1040ez The eligible gain minus your section 1202 exclusion is a 28% rate gain. Turbotax 1040ez See Gains on Qualified Small Business Stock in chapter 4 of Publication 550. Turbotax 1040ez Unrecaptured section 1250 gain. Turbotax 1040ez    Generally, this is any part of your capital gain from selling section 1250 property (real property) that is due to depreciation (but not more than your net section 1231 gain), reduced by any net loss in the 28% group. Turbotax 1040ez Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D (Form 1040) instructions to figure your unrecaptured section 1250 gain. Turbotax 1040ez For more information about section 1250 property and section 1231 gain, see chapter 3 of Publication 544. Turbotax 1040ez Tax computation using maximum capital gain rates. Turbotax 1040ez   Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet (whichever applies) to figure your tax if you have qualified dividends or net capital gain. Turbotax 1040ez You have net capital gain if Schedule D (Form 1040), lines 15 and 16, are both gains. Turbotax 1040ez Schedule D Tax Worksheet. Turbotax 1040ez   Use the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions to figure your tax if: You have to file Schedule D (Form 1040); and Schedule D (Form 1040), line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain), is more than zero. Turbotax 1040ez Qualified Dividends and Capital Gain Tax Worksheet. Turbotax 1040ez   If you do not have to use the Schedule D Tax Worksheet (as explained above) and any of the following apply, use the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040 or Form 1040A (whichever you file) to figure your tax. Turbotax 1040ez You received qualified dividends. Turbotax 1040ez (See Qualified Dividends in chapter 8. Turbotax 1040ez ) You do not have to file Schedule D (Form 1040) and you received capital gain distributions. Turbotax 1040ez (See Exceptions to filing Form 8949 and Schedule D (Form 1040) , earlier. Turbotax 1040ez ) Schedule D (Form 1040), lines 15 and 16, are both more than zero. Turbotax 1040ez Alternative minimum tax. Turbotax 1040ez   These capital gain rates are also used in figuring alternative minimum tax. Turbotax 1040ez Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Income

Are My Social Security or Railroad Retirement Tier I Benefits Taxable?
Determine whether any of your benefits (and those of your spouse if you are married filing a joint tax return) are taxable.

Do I Have Cancellation of Debt Income on My Personal Residence?
Determine if you have to include in income any of the debt that was cancelled on your principal residence.

Is My Pension or Annuity Payment Taxable?
Determine if your pension or annuity payment is taxable.

Do I Need To Claim My Gambling Winnings and Can I Deduct My Gambling Losses?
Determine who will need to claim gambling winnings and deduct gamling losses.

Is My Residential Rental Income Taxable and/or Are My Expenses Deductible?
Determine if your residential rental income is taxable and/or if your expenses associated with the rental property are deductible.

Page Last Reviewed or Updated: 14-Feb-2014

The Turbotax 1040ez

Turbotax 1040ez 1. Turbotax 1040ez   Importance of Records Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Benefits of Recordkeeping Kinds of Records To Keep How Long To Keep Records Introduction A farmer, like other taxpayers, must keep records to prepare an accurate income tax return and determine the correct amount of tax. Turbotax 1040ez This chapter explains the benefits of keeping records, what kinds of records you must keep, and how long you must keep them for federal tax purposes. Turbotax 1040ez Tax records are not the only type of records you need to keep for your farming business. Turbotax 1040ez You should also keep records that measure your farm's financial performance. Turbotax 1040ez This publication only discusses tax records. Turbotax 1040ez The Farm Financial Standards Council has produced a publication that provides a detailed explanation of the recommendations of the Council for financial reporting and analysis. Turbotax 1040ez For information on recordkeeping, you can purchase and download Financial Guidelines for Agricultural Producers at www. Turbotax 1040ez ffsc. Turbotax 1040ez org. Turbotax 1040ez For more information, contact Countryside Marketing, Inc. Turbotax 1040ez in the following manner. Turbotax 1040ez Call 262-253-6902. Turbotax 1040ez Send a fax to 262-253-6903. Turbotax 1040ez Write to: Farm Financial Standards Council N78 W14573 Appleton Ave. Turbotax 1040ez , #287 Menomonee Falls, WI 53051. Turbotax 1040ez Topics - This chapter discusses: Benefits of recordkeeping Kinds of records to keep How long to keep records Useful Items - You may want to see: Publication 51 (Circular A), Agricultural Employer's Tax Guide 463 Travel, Entertainment, Gift, and Car Expenses See chapter 16 for information about getting publications. Turbotax 1040ez Benefits of Recordkeeping Everyone in business, including farmers, must keep appropriate records. Turbotax 1040ez Recordkeeping will help you do the following. Turbotax 1040ez Monitor the progress of your farming business. Turbotax 1040ez   You need records to monitor the progress of your farming business. Turbotax 1040ez Records can show whether your business is improving, which items are selling, or what changes you need to make. Turbotax 1040ez Records can help you make better decisions that may increase the likelihood of business success. Turbotax 1040ez Prepare your financial statements. Turbotax 1040ez   You need records to prepare accurate financial statements. Turbotax 1040ez These include income (profit and loss) statements and balance sheets. Turbotax 1040ez These statements can help you in dealing with your bank or creditors and help you to manage your farm business. Turbotax 1040ez Identify source of receipts. Turbotax 1040ez   You will receive money or property from many sources. Turbotax 1040ez Your records can identify the source of your receipts. Turbotax 1040ez You need this information to separate farm from nonfarm receipts and taxable from nontaxable income. Turbotax 1040ez Keep track of deductible expenses. Turbotax 1040ez   You may forget expenses when you prepare your tax return unless you record them when they occur. Turbotax 1040ez Prepare your tax returns. Turbotax 1040ez   You need records to prepare your tax return. Turbotax 1040ez For example, your records must support the income, expenses, and credits you report. Turbotax 1040ez Generally, these are the same records you use to monitor your farming business and prepare your financial statements. Turbotax 1040ez Support items reported on tax returns. Turbotax 1040ez   You must keep your business records available at all times for inspection by the IRS. Turbotax 1040ez If the IRS examines any of your tax returns, you may be asked to explain the items reported. Turbotax 1040ez A complete set of records will speed up the examination. Turbotax 1040ez Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. Turbotax 1040ez You can choose any recordkeeping system suited to your farming business that clearly shows, for example, your income and expenses. Turbotax 1040ez You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. Turbotax 1040ez See  chapter 2. Turbotax 1040ez If you are in more than one business, you should keep a complete and separate set of records for each business. Turbotax 1040ez A corporation should keep minutes of board of directors' meetings. Turbotax 1040ez Your recordkeeping system should include a summary of your business transactions. Turbotax 1040ez This summary is ordinarily made in accounting journals and ledgers. Turbotax 1040ez For example, they must show your gross income, as well as your deductions and credits. Turbotax 1040ez In addition, you must keep supporting documents. Turbotax 1040ez Purchases, sales, payroll, and other transactions you have in your business generate supporting documents such as invoices and receipts. Turbotax 1040ez These documents contain the information you need to record in your journals and ledgers. Turbotax 1040ez It is important to keep these documents because they support the entries in your journals and ledgers and on your tax return. Turbotax 1040ez Keep them in an orderly fashion and in a safe place. Turbotax 1040ez For instance, organize them by year and type of income or expense. Turbotax 1040ez Electronic records. Turbotax 1040ez   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Turbotax 1040ez When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Turbotax 1040ez An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. Turbotax 1040ez The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. Turbotax 1040ez All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Turbotax 1040ez Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. Turbotax 1040ez The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. Turbotax 1040ez You still have the responsibility of retaining any other books and records that are required to be retained. Turbotax 1040ez The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. Turbotax 1040ez This test is not considered an examination and the results must be shared with you. Turbotax 1040ez If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. Turbotax 1040ez If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copybooks and records in a manner that allows you and the IRS to determine your correct tax. Turbotax 1040ez For details on electronic storage system requirements, see Rev. Turbotax 1040ez Proc. Turbotax 1040ez 97-22. Turbotax 1040ez You can find Rev. Turbotax 1040ez Proc. Turbotax 1040ez 97-22 on page 9 of Internal Revenue Bulletin 1997-13 at  www. Turbotax 1040ez irs. Turbotax 1040ez gov/pub/irs-irbs/irb97-13. Turbotax 1040ez pdf. Turbotax 1040ez Travel, transportation, entertainment, and gift expenses. Turbotax 1040ez   Specific recordkeeping rules apply to these expenses. Turbotax 1040ez For more information, see Publication 463. Turbotax 1040ez Employment taxes. Turbotax 1040ez   There are specific employment tax records you must keep. Turbotax 1040ez For a list, see Publication 51 (Circular A). Turbotax 1040ez Excise taxes. Turbotax 1040ez   See How To Claim a Credit or Refund in chapter 14 for the specific records you must keep to verify your claim for credit or refund of excise taxes on certain fuels. Turbotax 1040ez Assets. Turbotax 1040ez   Assets are the property, such as machinery and equipment, you own and use in your business. Turbotax 1040ez You must keep records to verify certain information about your business assets. Turbotax 1040ez You need records to figure your annual depreciation deduction and the gain or (loss) when you sell the assets. Turbotax 1040ez Your records should show all the following. Turbotax 1040ez When and how you acquired the asset. Turbotax 1040ez Purchase price. Turbotax 1040ez Cost of any improvements. Turbotax 1040ez Section 179 deduction taken. Turbotax 1040ez Deductions taken for depreciation. Turbotax 1040ez Deductions taken for casualty losses, such as losses resulting from fires or storms. Turbotax 1040ez How you used the asset. Turbotax 1040ez When and how you disposed of the asset. Turbotax 1040ez Selling price. Turbotax 1040ez Expenses of sale. Turbotax 1040ez   The following are examples of records that may show this information. Turbotax 1040ez Purchase and sales invoices. Turbotax 1040ez Real estate closing statements. Turbotax 1040ez Canceled checks. Turbotax 1040ez Bank statements. Turbotax 1040ez Financial account statements as proof of payment. Turbotax 1040ez   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. Turbotax 1040ez These include account statements prepared for the financial institution by a third party. Turbotax 1040ez These account statements must be legible. Turbotax 1040ez The following table lists acceptable account statements. Turbotax 1040ez IF payment is by. Turbotax 1040ez . Turbotax 1040ez . Turbotax 1040ez THEN the statement must show the. Turbotax 1040ez . Turbotax 1040ez . Turbotax 1040ez Check Check number. Turbotax 1040ez Amount. Turbotax 1040ez Payee's name. Turbotax 1040ez Date the check amount was posted to the account by the financial institution. Turbotax 1040ez Electronic funds  transfer Amount transferred. Turbotax 1040ez Payee's name. Turbotax 1040ez Date the transfer was posted to the account by the financial institution. Turbotax 1040ez Credit card Amount charged. Turbotax 1040ez Payee's name. Turbotax 1040ez Transaction date. Turbotax 1040ez    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. Turbotax 1040ez You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. Turbotax 1040ez Tax returns. Turbotax 1040ez   Keep copies of your filed tax returns. Turbotax 1040ez They help in preparing future tax returns and making computations if you file an amended return. Turbotax 1040ez Keep copies of your information returns such as Form 1099, Schedule K-1, and Form W-2. Turbotax 1040ez How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Turbotax 1040ez Keep records that support an item of income or a deduction appearing on a return until the period of limitations for the return runs out. Turbotax 1040ez A period of limitations is the period of time after which no legal action can be brought. Turbotax 1040ez Generally, that means you must keep your records for at least 3 years from when your tax return was due or filed or within 2 years of the date the tax was paid, whichever is later. Turbotax 1040ez However, certain records must be kept for a longer period of time, as discussed below. Turbotax 1040ez Employment taxes. Turbotax 1040ez   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. Turbotax 1040ez Assets. Turbotax 1040ez   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. Turbotax 1040ez You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure your basis for computing gain or (loss) when you sell or otherwise dispose of the property. Turbotax 1040ez   You may need to keep records relating to the basis of property longer than the period of limitation. Turbotax 1040ez Keep those records as long as they are important in figuring the basis of the original or replacement property. Turbotax 1040ez Generally, this means as long as you own the property and, after you dispose of it, for the period of limitations that applies to you. Turbotax 1040ez For example, if you received property in a nontaxable exchange, you must keep the records for the old property, as well as for the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. Turbotax 1040ez For more information on basis, see chapter 6. Turbotax 1040ez Records for nontax purposes. Turbotax 1040ez   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. Turbotax 1040ez For example, your insurance company or creditors may require you to keep them longer than the IRS does. Turbotax 1040ez Prev  Up  Next   Home   More Online Publications