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1040ez 2009 Tax Form

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1040ez 2009 Tax Form

1040ez 2009 tax form Publication 15 - Main Content Table of Contents 1. 1040ez 2009 tax form Employer Identification Number (EIN) 2. 1040ez 2009 tax form Who Are Employees?Relief provisions. 1040ez 2009 tax form Business Owned and Operated by Spouses 3. 1040ez 2009 tax form Family Employees 4. 1040ez 2009 tax form Employee's Social Security Number (SSN)Registering for SSNVS. 1040ez 2009 tax form 5. 1040ez 2009 tax form Wages and Other CompensationAccountable plan. 1040ez 2009 tax form Nonaccountable plan. 1040ez 2009 tax form Per diem or other fixed allowance. 1040ez 2009 tax form 50% test. 1040ez 2009 tax form Health Savings Accounts and medical savings accounts. 1040ez 2009 tax form Nontaxable fringe benefits. 1040ez 2009 tax form When fringe benefits are treated as paid. 1040ez 2009 tax form Valuation of fringe benefits. 1040ez 2009 tax form Withholding on fringe benefits. 1040ez 2009 tax form Depositing taxes on fringe benefits. 1040ez 2009 tax form 6. 1040ez 2009 tax form TipsOrdering rule. 1040ez 2009 tax form 7. 1040ez 2009 tax form Supplemental Wages 8. 1040ez 2009 tax form Payroll Period 9. 1040ez 2009 tax form Withholding From Employees' WagesIncome Tax Withholding Social Security and Medicare Taxes Part-Time Workers 10. 1040ez 2009 tax form Required Notice to Employees About the Earned Income Credit (EIC) 11. 1040ez 2009 tax form Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties 12. 1040ez 2009 tax form Filing Form 941 or Form 944 13. 1040ez 2009 tax form Reporting Adjustments to Form 941 or Form 944Current Period Adjustments Prior Period Adjustments Wage Repayments 14. 1040ez 2009 tax form Federal Unemployment (FUTA) TaxSuccessor employer. 1040ez 2009 tax form Household employees. 1040ez 2009 tax form When to deposit. 1040ez 2009 tax form Household employees. 1040ez 2009 tax form Electronic filing by reporting agents. 1040ez 2009 tax form 16. 1040ez 2009 tax form How To Use the Income Tax Withholding TablesWage Bracket Method Percentage Method Alternative Methods of Income Tax Withholding How To Get Tax Help 1. 1040ez 2009 tax form Employer Identification Number (EIN) If you are required to report employment taxes or give tax statements to employees or annuitants, you need an EIN. 1040ez 2009 tax form The EIN is a nine-digit number the IRS issues. 1040ez 2009 tax form The digits are arranged as follows: 00-0000000. 1040ez 2009 tax form It is used to identify the tax accounts of employers and certain others who have no employees. 1040ez 2009 tax form Use your EIN on all of the items you send to the IRS and SSA. 1040ez 2009 tax form For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN. 1040ez 2009 tax form If you do not have an EIN, you may apply for one online. 1040ez 2009 tax form Go to the IRS. 1040ez 2009 tax form gov and click on the Apply for an EIN Online link under Tools. 1040ez 2009 tax form You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. 1040ez 2009 tax form Do not use an SSN in place of an EIN. 1040ez 2009 tax form You should have only one EIN. 1040ez 2009 tax form If you have more than one and are not sure which one to use, call 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). 1040ez 2009 tax form Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. 1040ez 2009 tax form The IRS will tell you which number to use. 1040ez 2009 tax form If you took over another employer's business (see Successor employer in section 9), do not use that employer's EIN. 1040ez 2009 tax form If you have applied for an EIN but do not have your EIN by the time a return is due, file a paper return and write “Applied For” and the date you applied for it in the space shown for the number. 1040ez 2009 tax form 2. 1040ez 2009 tax form Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. 1040ez 2009 tax form See Publication 15-A for details on statutory employees and nonemployees. 1040ez 2009 tax form Employee status under common law. 1040ez 2009 tax form   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. 1040ez 2009 tax form This is so even when you give the employee freedom of action. 1040ez 2009 tax form What matters is that you have the right to control the details of how the services are performed. 1040ez 2009 tax form See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. 1040ez 2009 tax form   Generally, people in business for themselves are not employees. 1040ez 2009 tax form For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. 1040ez 2009 tax form However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. 1040ez 2009 tax form   If an employer-employee relationship exists, it does not matter what it is called. 1040ez 2009 tax form The employee may be called an agent or independent contractor. 1040ez 2009 tax form It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. 1040ez 2009 tax form Statutory employees. 1040ez 2009 tax form   If someone who works for you is not an employee under the common law rules discussed earlier, do not withhold federal income tax from his or her pay, unless backup withholding applies. 1040ez 2009 tax form Although the following persons may not be common law employees, they are considered employees by statute for social security, Medicare, and FUTA tax purposes under certain conditions. 1040ez 2009 tax form An agent (or commission) driver who delivers food, beverages (other than milk), laundry, or dry cleaning for someone else. 1040ez 2009 tax form A full-time life insurance salesperson who sells primarily for one company. 1040ez 2009 tax form A homeworker who works by guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. 1040ez 2009 tax form A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. 1040ez 2009 tax form The orders must be for merchandise for resale or supplies for use in the customer's business. 1040ez 2009 tax form The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. 1040ez 2009 tax form    Statutory nonemployees. 1040ez 2009 tax form   Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. 1040ez 2009 tax form They are generally treated as self-employed for all federal tax purposes, including income and employment taxes. 1040ez 2009 tax form H-2A agricultural workers. 1040ez 2009 tax form   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. 1040ez 2009 tax form Treating employees as nonemployees. 1040ez 2009 tax form   You will generally be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold these taxes because you treated an employee as a nonemployee. 1040ez 2009 tax form You may be able to calculate your liability using special section 3509 rates for the employee share of social security and Medicare taxes and the federal income tax withholding. 1040ez 2009 tax form The applicable rates depend on whether you filed required Forms 1099. 1040ez 2009 tax form You cannot recover the employee share of social security, or Medicare tax, or income tax withholding from the employee if the tax is paid under section 3509. 1040ez 2009 tax form You are liable for the income tax withholding regardless of whether the employee paid income tax on the wages. 1040ez 2009 tax form You continue to owe the full employer share of social security and Medicare taxes. 1040ez 2009 tax form The employee remains liable for the employee share of social security and Medicare taxes. 1040ez 2009 tax form See Internal Revenue Code section 3509 for details. 1040ez 2009 tax form Also see the Instructions for Form 941-X. 1040ez 2009 tax form   Section 3509 rates are not available if you intentionally disregard the requirement to withhold taxes from the employee or if you withheld income taxes but not social security or Medicare taxes. 1040ez 2009 tax form Section 3509 is not available for reclassifying statutory employees. 1040ez 2009 tax form See Statutory employees , earlier in this section. 1040ez 2009 tax form   If the employer issued required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. 1040ez 2009 tax form 2% plus 20% of the employee rate (see the Instructions for Form 941-X). 1040ez 2009 tax form For Medicare taxes; employer rate of 1. 1040ez 2009 tax form 45% plus 20% of the employee rate of 1. 1040ez 2009 tax form 45%, for a total rate of 1. 1040ez 2009 tax form 74% of wages. 1040ez 2009 tax form For Additional Medicare Tax; 0. 1040ez 2009 tax form 18% (20% of the employee rate of 0. 1040ez 2009 tax form 9%) of wages subject to Additional Medicare Tax. 1040ez 2009 tax form For income tax withholding, the rate is 1. 1040ez 2009 tax form 5% of wages. 1040ez 2009 tax form   If the employer did not issue required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. 1040ez 2009 tax form 2% plus 40% of the employee rate (see the Instructions for Form 941-X). 1040ez 2009 tax form For Medicare taxes; employer rate of 1. 1040ez 2009 tax form 45% plus 40% of the employee rate of 1. 1040ez 2009 tax form 45%, for a total rate of 2. 1040ez 2009 tax form 03% of wages. 1040ez 2009 tax form For Additional Medicare Tax; 0. 1040ez 2009 tax form 36% (40% of the employee rate of 0. 1040ez 2009 tax form 9%) of wages subject to Additional Medicare Tax. 1040ez 2009 tax form For income tax withholding, the rate is 3. 1040ez 2009 tax form 0% of wages. 1040ez 2009 tax form Relief provisions. 1040ez 2009 tax form   If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. 1040ez 2009 tax form To get this relief, you must file all required federal tax returns, including information returns, on a basis consistent with your treatment of the worker. 1040ez 2009 tax form You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. 1040ez 2009 tax form See Publication 1976, Do You Qualify for Relief Under Section 530. 1040ez 2009 tax form IRS help. 1040ez 2009 tax form   If you want the IRS to determine whether a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. 1040ez 2009 tax form Voluntary Classification Settlement Program (VCSP). 1040ez 2009 tax form   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. 1040ez 2009 tax form To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). 1040ez 2009 tax form For more information visit IRS. 1040ez 2009 tax form gov and enter “VCSP” in the search box. 1040ez 2009 tax form Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. 1040ez 2009 tax form See Publication 541, Partnerships, for more details. 1040ez 2009 tax form The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. 1040ez 2009 tax form Exception—Qualified joint venture. 1040ez 2009 tax form   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. 1040ez 2009 tax form A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). 1040ez 2009 tax form   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. 1040ez 2009 tax form Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. 1040ez 2009 tax form   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. 1040ez 2009 tax form If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. 1040ez 2009 tax form Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. 1040ez 2009 tax form However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. 1040ez 2009 tax form    Note. 1040ez 2009 tax form If your spouse is your employee, not your partner, see One spouse employed by another in section 3. 1040ez 2009 tax form   For more information on qualified joint ventures, visit IRS. 1040ez 2009 tax form gov and enter “qualified joint venture” in the search box. 1040ez 2009 tax form Exception—Community income. 1040ez 2009 tax form   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. 1040ez 2009 tax form S. 1040ez 2009 tax form possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. 1040ez 2009 tax form You may still make an election to be taxed as a qualified joint venture instead of a partnership. 1040ez 2009 tax form See Exception—Qualified joint venture , earlier. 1040ez 2009 tax form 3. 1040ez 2009 tax form Family Employees Child employed by parents. 1040ez 2009 tax form   Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. 1040ez 2009 tax form If these payments are for work other than in a trade or business, such as domestic work in the parent's private home, they are not subject to social security and Medicare taxes until the child reaches age 21. 1040ez 2009 tax form However, see Covered services of a child or spouse , later in this section. 1040ez 2009 tax form Payments for the services of a child under age 21 who works for his or her parent, whether or not in a trade or business, are not subject to FUTA tax. 1040ez 2009 tax form Payments for the services of a child of any age who works for his or her parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or business and are less than $50 in the quarter or the child is not regularly employed to do such work. 1040ez 2009 tax form One spouse employed by another. 1040ez 2009 tax form   The wages for the services of an individual who works for his or her spouse in a trade or business are subject to income tax withholding and social security and Medicare taxes, but not to FUTA tax. 1040ez 2009 tax form However, the payments for services of one spouse employed by another in other than a trade or business, such as domestic service in a private home, are not subject to social security, Medicare, and FUTA taxes. 1040ez 2009 tax form Covered services of a child or spouse. 1040ez 2009 tax form   The wages for the services of a child or spouse are subject to income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for: A corporation, even if it is controlled by the child's parent or the individual's spouse; A partnership, even if the child's parent is a partner, unless each partner is a parent of the child; A partnership, even if the individual's spouse is a partner; or An estate, even if it is the estate of a deceased parent. 1040ez 2009 tax form Parent employed by son or daughter. 1040ez 2009 tax form   When the employer is a son or daughter employing his or her parent the following rules apply. 1040ez 2009 tax form Payments for the services of a parent in the son’s or daughter’s (the employer’s) trade or business are subject to income tax withholding and social security and Medicare taxes. 1040ez 2009 tax form Payments for the services of a parent not in the son’s or daughter’s (the employer’s) trade or business are generally not subject to social security and Medicare taxes. 1040ez 2009 tax form    Social security and Medicare taxes do apply to payments made to a parent for domestic services if all of the following apply: The parent is employed by his or her son or daughter; The son or daughter (the employer) has a child or stepchild living in the home; The son or daughter (the employer) is a widow or widower, divorced, or living with a spouse who, because of a mental or physical condition, cannot care for the child or stepchild for at least 4 continuous weeks in a calendar quarter; and The child or stepchild is either under age 18 or requires the personal care of an adult for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition. 1040ez 2009 tax form   Payments made to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. 1040ez 2009 tax form 4. 1040ez 2009 tax form Employee's Social Security Number (SSN) You are required to get each employee's name and SSN and to enter them on Form W-2. 1040ez 2009 tax form This requirement also applies to resident and nonresident alien employees. 1040ez 2009 tax form You should ask your employee to show you his or her social security card. 1040ez 2009 tax form The employee may show the card if it is available. 1040ez 2009 tax form Do not accept a social security card that says “Not valid for employment. 1040ez 2009 tax form ” A social security number issued with this legend does not permit employment. 1040ez 2009 tax form You may, but are not required to, photocopy the social security card if the employee provides it. 1040ez 2009 tax form If you do not provide the correct employee name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. 1040ez 2009 tax form See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. 1040ez 2009 tax form Applying for a social security card. 1040ez 2009 tax form   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation. 1040ez 2009 tax form You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at www. 1040ez 2009 tax form socialsecurity. 1040ez 2009 tax form gov/online/ss-5. 1040ez 2009 tax form html. 1040ez 2009 tax form The employee must complete and sign Form SS-5; it cannot be filed by the employer. 1040ez 2009 tax form You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. 1040ez 2009 tax form Applying for a social security number. 1040ez 2009 tax form   If you file Form W-2 on paper and your employee applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. 1040ez 2009 tax form If you are filing electronically, enter all zeros (000-00-000) in the social security number field. 1040ez 2009 tax form When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. 1040ez 2009 tax form Furnish copies B, C, and 2 of Form W-2c to the employee. 1040ez 2009 tax form Up to 25 Forms W-2c for each Form W-3c, Transmittal of Corrected Wage and Tax Statements, may now be filed per session over the Internet, with no limit on the number of sessions. 1040ez 2009 tax form For more information, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. 1040ez 2009 tax form socialsecurity. 1040ez 2009 tax form gov/employer. 1040ez 2009 tax form Advise your employee to correct the SSN on his or her original Form W-2. 1040ez 2009 tax form Correctly record the employee's name and SSN. 1040ez 2009 tax form   Record the name and number of each employee as they are shown on the employee's social security card. 1040ez 2009 tax form If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. 1040ez 2009 tax form Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. 1040ez 2009 tax form If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported for the most recently filed Form W-2. 1040ez 2009 tax form It is not necessary to correct other years if the previous name and number were used for years before the most recent Form W-2. 1040ez 2009 tax form IRS individual taxpayer identification numbers (ITINs) for aliens. 1040ez 2009 tax form   Do not accept an ITIN in place of an SSN for employee identification or for work. 1040ez 2009 tax form An ITIN is only available to resident and nonresident aliens who are not eligible for U. 1040ez 2009 tax form S. 1040ez 2009 tax form employment and need identification for other tax purposes. 1040ez 2009 tax form You can identify an ITIN because it is a nine-digit number, beginning with the number “9” with either a “7” or “8” as the fourth digit and is formatted like an SSN (for example, 9NN-7N-NNNN). 1040ez 2009 tax form    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. 1040ez 2009 tax form If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier. 1040ez 2009 tax form Do not use an ITIN in place of an SSN on Form W-2. 1040ez 2009 tax form Verification of social security numbers. 1040ez 2009 tax form   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. 1040ez 2009 tax form Visit www. 1040ez 2009 tax form socialsecurity. 1040ez 2009 tax form gov/employer/ssnv. 1040ez 2009 tax form htm for more information. 1040ez 2009 tax form Registering for SSNVS. 1040ez 2009 tax form   You must register online and receive authorization from your employer to use SSNVS. 1040ez 2009 tax form To register, visit SSA's website at www. 1040ez 2009 tax form ssa. 1040ez 2009 tax form gov/employer and click on the Business Services Online link. 1040ez 2009 tax form Follow the registration instructions to obtain a user identification (ID) and password. 1040ez 2009 tax form You will need to provide the following information about yourself and your company. 1040ez 2009 tax form Name. 1040ez 2009 tax form SSN. 1040ez 2009 tax form Date of birth. 1040ez 2009 tax form Type of employer. 1040ez 2009 tax form EIN. 1040ez 2009 tax form Company name, address, and telephone number. 1040ez 2009 tax form Email address. 1040ez 2009 tax form   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. 1040ez 2009 tax form You must enter the activation code online to use SSNVS. 1040ez 2009 tax form 5. 1040ez 2009 tax form Wages and Other Compensation Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. 1040ez 2009 tax form The pay may be in cash or in other forms. 1040ez 2009 tax form It includes salaries, vacation allowances, bonuses, commissions, and fringe benefits. 1040ez 2009 tax form It does not matter how you measure or make the payments. 1040ez 2009 tax form Amounts an employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee relationship and an amount paid to an employee for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax withholding. 1040ez 2009 tax form Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes. 1040ez 2009 tax form More information. 1040ez 2009 tax form   See section 6 for a discussion of tips and section 7 for a discussion of supplemental wages. 1040ez 2009 tax form Also, see section 15 for exceptions to the general rules for wages. 1040ez 2009 tax form Publication 15-A provides additional information on wages, including nonqualified deferred compensation, and other compensation. 1040ez 2009 tax form Publication 15-B provides information on other forms of compensation, including: Accident and health benefits, Achievement awards, Adoption assistance, Athletic facilities, De minimis (minimal) benefits, Dependent care assistance, Educational assistance, Employee discounts, Employee stock options, Employer-provided cell phones, Group-term life insurance coverage, Health Savings Accounts, Lodging on your business premises, Meals, Moving expense reimbursements, No-additional-cost services, Retirement planning services, Transportation (commuting) benefits, Tuition reduction, and Working condition benefits. 1040ez 2009 tax form Employee business expense reimbursements. 1040ez 2009 tax form   A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees' business expenses. 1040ez 2009 tax form How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. 1040ez 2009 tax form If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement. 1040ez 2009 tax form   These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee. 1040ez 2009 tax form Accountable plan. 1040ez 2009 tax form   To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules. 1040ez 2009 tax form They must have paid or incurred deductible expenses while performing services as your employees. 1040ez 2009 tax form The reimbursement or advance must be paid for the expense and must not be an amount that would have otherwise been paid by the employee. 1040ez 2009 tax form They must substantiate these expenses to you within a reasonable period of time. 1040ez 2009 tax form They must return any amounts in excess of substantiated expenses within a reasonable period of time. 1040ez 2009 tax form   Amounts paid under an accountable plan are not wages and are not subject to income, social security, Medicare, and FUTA taxes. 1040ez 2009 tax form   If the expenses covered by this arrangement are not substantiated (or amounts in excess of substantiated expenses are not returned within a reasonable period of time), the amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a nonaccountable plan. 1040ez 2009 tax form This amount is subject to income, social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time. 1040ez 2009 tax form   A reasonable period of time depends on the facts and circumstances. 1040ez 2009 tax form Generally, it is considered reasonable if your employees receive their advance within 30 days of the time they incur the expenses, adequately account for the expenses within 60 days after the expenses were paid or incurred, and return any amounts in excess of expenses within 120 days after the expenses were paid or incurred. 1040ez 2009 tax form Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days. 1040ez 2009 tax form Nonaccountable plan. 1040ez 2009 tax form   Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. 1040ez 2009 tax form Your payments are treated as paid under a nonaccountable plan if: Your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, You advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount he or she does not use for business expenses, You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business, or You pay an amount as a reimbursement you would have otherwise paid as wages. 1040ez 2009 tax form   See section 7 for more information on supplemental wages. 1040ez 2009 tax form Per diem or other fixed allowance. 1040ez 2009 tax form   You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. 1040ez 2009 tax form In these cases, your employee is considered to have accounted to you if your reimbursement does not exceed rates established by the Federal Government. 1040ez 2009 tax form The 2013 standard mileage rate for auto expenses was 56. 1040ez 2009 tax form 5 cents per mile. 1040ez 2009 tax form The rate for 2014 is 56 cents per mile. 1040ez 2009 tax form   The government per diem rates for meals and lodging in the continental United States are listed in Publication 1542, Per Diem Rates. 1040ez 2009 tax form Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). 1040ez 2009 tax form   If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. 1040ez 2009 tax form This excess amount is subject to income tax withholding and payment of social security, Medicare, and FUTA taxes. 1040ez 2009 tax form Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L. 1040ez 2009 tax form ” Wages not paid in money. 1040ez 2009 tax form   If in the course of your trade or business you pay your employees in a medium that is neither cash nor a readily negotiable instrument, such as a check, you are said to pay them “in kind. 1040ez 2009 tax form ” Payments in kind may be in the form of goods, lodging, food, clothing, or services. 1040ez 2009 tax form Generally, the fair market value of such payments at the time they are provided is subject to federal income tax withholding and social security, Medicare, and FUTA taxes. 1040ez 2009 tax form   However, noncash payments for household work, agricultural labor, and service not in the employer's trade or business are exempt from social security, Medicare, and FUTA taxes. 1040ez 2009 tax form Withhold income tax on these payments only if you and the employee agree to do so. 1040ez 2009 tax form Nonetheless, noncash payments for agricultural labor, such as commodity wages, are treated as cash payments subject to employment taxes if the substance of the transaction is a cash payment. 1040ez 2009 tax form Moving expenses. 1040ez 2009 tax form   Reimbursed and employer-paid qualified moving expenses (those that would otherwise be deductible by the employee) paid under an accountable plan are not includible in an employee's income unless you have knowledge the employee deducted the expenses in a prior year. 1040ez 2009 tax form Reimbursed and employer-paid nonqualified moving expenses are includible in income and are subject to employment taxes and income tax withholding. 1040ez 2009 tax form For more information on moving expenses, see Publication 521, Moving Expenses. 1040ez 2009 tax form Meals and lodging. 1040ez 2009 tax form   The value of meals is not taxable income and is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the meals are furnished for the employer's convenience and on the employer's premises. 1040ez 2009 tax form The value of lodging is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the lodging is furnished for the employer's convenience, on the employer's premises, and as a condition of employment. 1040ez 2009 tax form    “For the convenience of the employer” means you have a substantial business reason for providing the meals and lodging other than to provide additional compensation to the employee. 1040ez 2009 tax form For example, meals you provide at the place of work so that an employee is available for emergencies during his or her lunch period are generally considered to be for your convenience. 1040ez 2009 tax form   However, whether meals or lodging are provided for the convenience of the employer depends on all of the facts and circumstances. 1040ez 2009 tax form A written statement that the meals or lodging are for your convenience is not sufficient. 1040ez 2009 tax form 50% test. 1040ez 2009 tax form   If over 50% of the employees who are provided meals on an employer's business premises receive these meals for the convenience of the employer, all meals provided on the premises are treated as furnished for the convenience of the employer. 1040ez 2009 tax form If this 50% test is met, the value of the meals is excludable from income for all employees and is not subject to federal income tax withholding or employment taxes. 1040ez 2009 tax form For more information, see Publication 15-B. 1040ez 2009 tax form Health insurance plans. 1040ez 2009 tax form   If you pay the cost of an accident or health insurance plan for your employees, including an employee's spouse and dependents, your payments are not wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. 1040ez 2009 tax form Generally, this exclusion also applies to qualified long-term care insurance contracts. 1040ez 2009 tax form However, for income tax withholding, the value of health insurance benefits must be included in the wages of S corporation employees who own more than 2% of the S corporation (2% shareholders). 1040ez 2009 tax form For social security, Medicare, and FUTA taxes, the health insurance benefits are excluded from the wages only for employees and their dependents or for a class or classes of employees and their dependents. 1040ez 2009 tax form See Announcement 92-16 for more information. 1040ez 2009 tax form You can find Announcement 92-16 on page 53 of Internal Revenue Bulletin 1992-5. 1040ez 2009 tax form Health Savings Accounts and medical savings accounts. 1040ez 2009 tax form   Your contributions to an employee's Health Savings Account (HSA) or Archer medical savings account (MSA) are not subject to social security, Medicare, or FUTA taxes, or federal income tax withholding if it is reasonable to believe at the time of payment of the contributions they will be excludable from the income of the employee. 1040ez 2009 tax form To the extent it is not reasonable to believe they will be excludable, your contributions are subject to these taxes. 1040ez 2009 tax form Employee contributions to their HSAs or MSAs through a payroll deduction plan must be included in wages and are subject to social security, Medicare, and FUTA taxes and income tax withholding. 1040ez 2009 tax form However, HSA contributions made under a salary reduction arrangement in a section 125 cafeteria plan are not wages and are not subject to employment taxes or withholding. 1040ez 2009 tax form For more information, see the Instructions for Form 8889, Health Savings Accounts (HSAs). 1040ez 2009 tax form Medical care reimbursements. 1040ez 2009 tax form   Generally, medical care reimbursements paid for an employee under an employer's self-insured medical reimbursement plan are not wages and are not subject to social security, Medicare, and FUTA taxes, or income tax withholding. 1040ez 2009 tax form See Publication 15-B for an exception for highly compensated employees. 1040ez 2009 tax form Differential wage payments. 1040ez 2009 tax form   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represent all or a portion of the wages the individual would have received from the employer if the individual were performing services for the employer. 1040ez 2009 tax form   Differential wage payments are wages for income tax withholding, but are not subject to social security, Medicare, or FUTA taxes. 1040ez 2009 tax form Employers should report differential wage payments in box 1 of Form W-2. 1040ez 2009 tax form For more information about the tax treatment of differential wage payments, visit IRS. 1040ez 2009 tax form gov and enter “employees in a combat zone” in the search box. 1040ez 2009 tax form Fringe benefits. 1040ez 2009 tax form   You generally must include fringe benefits in an employee's gross income (but see Nontaxable fringe benefits next). 1040ez 2009 tax form The benefits are subject to income tax withholding and employment taxes. 1040ez 2009 tax form Fringe benefits include cars you provide, flights on aircraft you provide, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. 1040ez 2009 tax form In general, the amount you must include is the amount by which the fair market value of the benefits is more than the sum of what the employee paid for it plus any amount the law excludes. 1040ez 2009 tax form There are other special rules you and your employees may use to value certain fringe benefits. 1040ez 2009 tax form See Publication 15-B for more information. 1040ez 2009 tax form Nontaxable fringe benefits. 1040ez 2009 tax form   Some fringe benefits are not taxable (or are minimally taxable) if certain conditions are met. 1040ez 2009 tax form See Publication 15-B for details. 1040ez 2009 tax form The following are some examples of nontaxable fringe benefits. 1040ez 2009 tax form Services provided to your employees at no additional cost to you. 1040ez 2009 tax form Qualified employee discounts. 1040ez 2009 tax form Working condition fringes that are property or services the employee could deduct as a business expense if he or she had paid for it. 1040ez 2009 tax form Examples include a company car for business use and subscriptions to business magazines. 1040ez 2009 tax form Certain minimal value fringes (including an occasional cab ride when an employee must work overtime and meals you provide at eating places you run for your employees if the meals are not furnished at below cost). 1040ez 2009 tax form Qualified transportation fringes subject to specified conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass, and qualified parking). 1040ez 2009 tax form Qualified moving expense reimbursement. 1040ez 2009 tax form See Moving expenses , earlier in this section, for details. 1040ez 2009 tax form The use of on-premises athletic facilities, if substantially all of the use is by employees, their spouses, and their dependent children. 1040ez 2009 tax form Qualified tuition reduction an educational organization provides to its employees for education. 1040ez 2009 tax form For more information, see Publication 970, Tax Benefits for Education. 1040ez 2009 tax form Employer-provided cell phones provided primarily for a noncompensatory business reason. 1040ez 2009 tax form   However, do not exclude the following fringe benefits from the income of highly compensated employees unless the benefit is available to other employees on a nondiscriminatory basis. 1040ez 2009 tax form No-additional-cost services. 1040ez 2009 tax form Qualified employee discounts. 1040ez 2009 tax form Meals provided at an employer operated eating facility. 1040ez 2009 tax form Reduced tuition for education. 1040ez 2009 tax form  For more information, including the definition of a highly compensated employee, see Publication 15-B. 1040ez 2009 tax form When fringe benefits are treated as paid. 1040ez 2009 tax form   You may choose to treat certain noncash fringe benefits as paid by the pay period, by the quarter, or on any other basis you choose as long as you treat the benefits as paid at least once a year. 1040ez 2009 tax form You do not have to make a formal choice of payment dates or notify the IRS of the dates you choose. 1040ez 2009 tax form You do not have to make this choice for all employees. 1040ez 2009 tax form You may change methods as often as you like, as long as you treat all benefits provided in a calendar year as paid by December 31 of the calendar year. 1040ez 2009 tax form See Publication 15-B for more information, including a discussion of the special accounting rule for fringe benefits provided during November and December. 1040ez 2009 tax form Valuation of fringe benefits. 1040ez 2009 tax form   Generally, you must determine the value of fringe benefits no later than January 31 of the next year. 1040ez 2009 tax form Before January 31, you may reasonably estimate the value of the fringe benefits for purposes of withholding and depositing on time. 1040ez 2009 tax form Withholding on fringe benefits. 1040ez 2009 tax form   You may add the value of fringe benefits to regular wages for a payroll period and figure withholding taxes on the total, or you may withhold federal income tax on the value of the fringe benefits at the optional flat 25% supplemental wage rate. 1040ez 2009 tax form However, see Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages during the calendar year in section 7. 1040ez 2009 tax form   You may choose not to withhold income tax on the value of an employee's personal use of a vehicle you provide. 1040ez 2009 tax form You must, however, withhold social security and Medicare taxes on the use of the vehicle. 1040ez 2009 tax form See Publication 15-B for more information on this election. 1040ez 2009 tax form Depositing taxes on fringe benefits. 1040ez 2009 tax form   Once you choose when fringe benefits are paid, you must deposit taxes in the same deposit period you treat the fringe benefits as paid. 1040ez 2009 tax form To avoid a penalty, deposit the taxes following the general deposit rules for that deposit period. 1040ez 2009 tax form   If you determine by January 31 you overestimated the value of a fringe benefit at the time you withheld and deposited for it, you may claim a refund for the overpayment or have it applied to your next employment tax return. 1040ez 2009 tax form See Valuation of fringe benefits , earlier. 1040ez 2009 tax form If you underestimated the value and deposited too little, you may be subject to a failure-to-deposit penalty. 1040ez 2009 tax form See section 11 for information on deposit penalties. 1040ez 2009 tax form   If you deposited the required amount of taxes but withheld a lesser amount from the employee, you can recover from the employee the social security, Medicare, or income taxes you deposited on his or her behalf, and included in the employee's Form W-2. 1040ez 2009 tax form However, you must recover the income taxes before April 1 of the following year. 1040ez 2009 tax form Sick pay. 1040ez 2009 tax form   In general, sick pay is any amount you pay under a plan to an employee who is unable to work because of sickness or injury. 1040ez 2009 tax form These amounts are sometimes paid by a third party, such as an insurance company or an employees' trust. 1040ez 2009 tax form In either case, these payments are subject to social security, Medicare, and FUTA taxes. 1040ez 2009 tax form Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. 1040ez 2009 tax form The payments are always subject to federal income tax. 1040ez 2009 tax form See Publication 15-A for more information. 1040ez 2009 tax form 6. 1040ez 2009 tax form Tips Tips your employee receives from customers are generally subject to withholding. 1040ez 2009 tax form Your employee must report cash tips to you by the 10th of the month after the month the tips are received. 1040ez 2009 tax form The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. 1040ez 2009 tax form Both directly and indirectly tipped employees must report tips to you. 1040ez 2009 tax form No report is required for months when tips are less than $20. 1040ez 2009 tax form Your employee reports the tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. 1040ez 2009 tax form The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period the report covers, and The total of tips received during the month or period. 1040ez 2009 tax form Both Forms 4070 and 4070-A, Employee's Daily Record of Tips, are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer. 1040ez 2009 tax form You are permitted to establish a system for electronic tip reporting by employees. 1040ez 2009 tax form See Regulations section 31. 1040ez 2009 tax form 6053-1(d). 1040ez 2009 tax form Collecting taxes on tips. 1040ez 2009 tax form   You must collect income tax, employee social security tax, and employee Medicare tax on the employee's tips. 1040ez 2009 tax form The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. 1040ez 2009 tax form If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject to FUTA tax. 1040ez 2009 tax form   You can collect these taxes from the employee's wages or from other funds he or she makes available. 1040ez 2009 tax form See Tips treated as supplemental wages in section 7 for more information. 1040ez 2009 tax form Stop collecting the employee social security tax when his or her wages and tips for tax year 2014 reach $117,000; collect the income and employee Medicare taxes for the whole year on all wages and tips. 1040ez 2009 tax form You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the limit. 1040ez 2009 tax form You are responsible for the employer Medicare tax for the whole year on all wages and tips. 1040ez 2009 tax form File Form 941 or Form 944 to report withholding and employment taxes on tips. 1040ez 2009 tax form Ordering rule. 1040ez 2009 tax form   If, by the 10th of the month after the month for which you received an employee's report on tips, you do not have enough employee funds available to deduct the employee tax, you no longer have to collect it. 1040ez 2009 tax form If there are not enough funds available, withhold taxes in the following order. 1040ez 2009 tax form Withhold on regular wages and other compensation. 1040ez 2009 tax form Withhold social security and Medicare taxes on tips. 1040ez 2009 tax form Withhold income tax on tips. 1040ez 2009 tax form Reporting tips. 1040ez 2009 tax form   Report tips and any collected and uncollected social security and Medicare taxes on Form W-2 and on Form 941, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). 1040ez 2009 tax form Report an adjustment on Form 941, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. 1040ez 2009 tax form Enter the amount of uncollected social security tax and Medicare tax on Form W-2, box 12, with codes “A” and “B. 1040ez 2009 tax form ” Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. 1040ez 2009 tax form See section 13 and the General Instructions for Forms W-2 and W-3. 1040ez 2009 tax form   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. 1040ez 2009 tax form See Revenue Ruling 2012-18, 2012-26 I. 1040ez 2009 tax form R. 1040ez 2009 tax form B. 1040ez 2009 tax form 1032, available at www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/irb/2012-26_IRB/ar07. 1040ez 2009 tax form html. 1040ez 2009 tax form Allocated tips. 1040ez 2009 tax form   If you operate a large food or beverage establishment, you must report allocated tips under certain circumstances. 1040ez 2009 tax form However, do not withhold income, social security, or Medicare taxes on allocated tips. 1040ez 2009 tax form   A large food or beverage establishment is one that provides food or beverages for consumption on the premises, where tipping is customary, and where there were normally more than 10 employees on a typical business day during the preceding year. 1040ez 2009 tax form   The tips may be allocated by one of three methods—hours worked, gross receipts, or good faith agreement. 1040ez 2009 tax form For information about these allocation methods, including the requirement to file Forms 8027 electronically if 250 or more forms are filed, see the Instructions for Form 8027. 1040ez 2009 tax form For information on filing Form 8027 electronically with the IRS, see Publication 1239. 1040ez 2009 tax form Tip Rate Determination and Education Program. 1040ez 2009 tax form   Employers may participate in the Tip Rate Determination and Education Program. 1040ez 2009 tax form The program primarily consists of two voluntary agreements developed to improve tip income reporting by helping taxpayers to understand and meet their tip reporting responsibilities. 1040ez 2009 tax form The two agreements are the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). 1040ez 2009 tax form A tip agreement, the Gaming Industry Tip Compliance Agreement (GITCA), is available for the gaming (casino) industry. 1040ez 2009 tax form To get more information about TRDA and TRAC agreements, see Publication 3144, Tips on Tips. 1040ez 2009 tax form Additionally, visit IRS. 1040ez 2009 tax form gov and enter “MSU tips” in the search box to get more information about GITCA, TRDA, or TRAC agreements. 1040ez 2009 tax form 7. 1040ez 2009 tax form Supplemental Wages Supplemental wages are wage payments to an employee that are not regular wages. 1040ez 2009 tax form They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay increases, and payments for nondeductible moving expenses. 1040ez 2009 tax form Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. 1040ez 2009 tax form How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages. 1040ez 2009 tax form See Regulations section 31. 1040ez 2009 tax form 3402(g)-1 for additional guidance for wages paid after January 1, 2007. 1040ez 2009 tax form Also see Revenue Ruling 2008-29, 2008-24 I. 1040ez 2009 tax form R. 1040ez 2009 tax form B. 1040ez 2009 tax form 1149, available at www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/irb/2008-24_IRB/ar08. 1040ez 2009 tax form html. 1040ez 2009 tax form Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. 1040ez 2009 tax form   Special rules apply to the extent supplemental wages paid to any one employee during the calendar year exceed $1 million. 1040ez 2009 tax form If a supplemental wage payment, together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess is subject to withholding at 39. 1040ez 2009 tax form 6% (or the highest rate of income tax for the year). 1040ez 2009 tax form Withhold using the 39. 1040ez 2009 tax form 6% rate without regard to the employee's Form W-4. 1040ez 2009 tax form In determining supplemental wages paid to the employee during the year, include payments from all businesses under common control. 1040ez 2009 tax form For more information, see Treasury Decision 9276, 2006-37 I. 1040ez 2009 tax form R. 1040ez 2009 tax form B. 1040ez 2009 tax form 423, available at www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/irb/2006-37_IRB/ar09. 1040ez 2009 tax form html. 1040ez 2009 tax form Withholding on supplemental wage payments to an employee who does not receive $1 million of supplemental wages during the calendar year. 1040ez 2009 tax form   If the supplemental wages paid to the employee during the calendar year are less than or equal to $1 million, the following rules apply in determining the amount of income tax to be withheld. 1040ez 2009 tax form Supplemental wages combined with regular wages. 1040ez 2009 tax form   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period. 1040ez 2009 tax form Supplemental wages identified separately from regular wages. 1040ez 2009 tax form   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages. 1040ez 2009 tax form If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. 1040ez 2009 tax form Withhold a flat 25% (no other percentage allowed). 1040ez 2009 tax form If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. 1040ez 2009 tax form If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. 1040ez 2009 tax form Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. 1040ez 2009 tax form Subtract the tax withheld from the regular wages. 1040ez 2009 tax form Withhold the remaining tax from the supplemental wages. 1040ez 2009 tax form If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, and withhold the remaining tax. 1040ez 2009 tax form If you did not withhold income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b. 1040ez 2009 tax form This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. 1040ez 2009 tax form Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes. 1040ez 2009 tax form Example 1. 1040ez 2009 tax form You pay John Peters a base salary on the 1st of each month. 1040ez 2009 tax form He is single and claims one withholding allowance. 1040ez 2009 tax form In January he is paid $1,000. 1040ez 2009 tax form Using the wage bracket tables, you withhold $50 from this amount. 1040ez 2009 tax form In February, he receives salary of $1,000 plus a commission of $2,000, which you combine with regular wages and do not separately identify. 1040ez 2009 tax form You figure the withholding based on the total of $3,000. 1040ez 2009 tax form The correct withholding from the tables is $338. 1040ez 2009 tax form Example 2. 1040ez 2009 tax form You pay Sharon Warren a base salary on the 1st of each month. 1040ez 2009 tax form She is single and claims one allowance. 1040ez 2009 tax form Her May 1 pay is $2,000. 1040ez 2009 tax form Using the wage bracket tables, you withhold $188. 1040ez 2009 tax form On May 14 she receives a bonus of $1,000. 1040ez 2009 tax form Electing to use supplemental wage withholding method 1-b, you: Add the bonus amount to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 = $3,000). 1040ez 2009 tax form Determine the amount of withholding on the combined $3,000 amount to be $338 using the wage bracket tables. 1040ez 2009 tax form Subtract the amount withheld from wages on the most recent base salary pay date (May 1) from the combined withholding amount ($338 – $188 = $150). 1040ez 2009 tax form Withhold $150 from the bonus payment. 1040ez 2009 tax form Example 3. 1040ez 2009 tax form The facts are the same as in Example 2, except you elect to use the flat rate method of withholding on the bonus. 1040ez 2009 tax form You withhold 25% of $1,000, or $250, from Sharon's bonus payment. 1040ez 2009 tax form Example 4. 1040ez 2009 tax form The facts are the same as in Example 2, except you elect to pay Sharon a second bonus of $2,000 on May 28. 1040ez 2009 tax form Using supplemental wage withholding method 1-b, you: Add the first and second bonus amounts to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 + $2,000 = $5,000). 1040ez 2009 tax form Determine the amount of withholding on the combined $5,000 amount to be $781 using the wage bracket tables. 1040ez 2009 tax form Subtract the amounts withheld from wages on the most recent base salary pay date (May 1) and the amounts withheld from the first bonus payment from the combined withholding amount ($781 – $188 – $150 = $443). 1040ez 2009 tax form Withhold $443 from the second bonus payment. 1040ez 2009 tax form Tips treated as supplemental wages. 1040ez 2009 tax form   Withhold income tax on tips from wages earned by the employee or from other funds the employee makes available. 1040ez 2009 tax form If an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. 1040ez 2009 tax form If you have not withheld income tax from the regular wages, add the tips to the regular wages. 1040ez 2009 tax form Then withhold income tax on the total. 1040ez 2009 tax form If you withheld income tax from the regular wages, you can withhold on the tips by method 1-a or 1-b discussed earlier in this section under Supplemental wages identified separately from regular wages. 1040ez 2009 tax form Vacation pay. 1040ez 2009 tax form   Vacation pay is subject to withholding as if it were a regular wage payment. 1040ez 2009 tax form When vacation pay is in addition to regular wages for the vacation period, treat it as a supplemental wage payment. 1040ez 2009 tax form If the vacation pay is for a time longer than your usual payroll period, spread it over the pay periods for which you pay it. 1040ez 2009 tax form 8. 1040ez 2009 tax form Payroll Period Your payroll period is a period of service for which you usually pay wages. 1040ez 2009 tax form When you have a regular payroll period, withhold income tax for that time period even if your employee does not work the full period. 1040ez 2009 tax form No regular payroll period. 1040ez 2009 tax form   When you do not have a regular payroll period, withhold the tax as if you paid wages for a daily or miscellaneous payroll period. 1040ez 2009 tax form Figure the number of days (including Sundays and holidays) in the period covered by the wage payment. 1040ez 2009 tax form If the wages are unrelated to a specific length of time (for example, commissions paid on completion of a sale), count back the number of days from the payment period to the latest of: The last wage payment made during the same calendar year, The date employment began, if during the same calendar year, or January 1 of the same year. 1040ez 2009 tax form Employee paid for period less than 1 week. 1040ez 2009 tax form   When you pay an employee for a period of less than one week, and the employee signs a statement under penalties of perjury indicating he or she is not working for any other employer during the same week for wages subject to withholding, figure withholding based on a weekly payroll period. 1040ez 2009 tax form If the employee later begins to work for another employer for wages subject to withholding, the employee must notify you within 10 days. 1040ez 2009 tax form You then figure withholding based on the daily or miscellaneous period. 1040ez 2009 tax form 9. 1040ez 2009 tax form Withholding From Employees' Wages Income Tax Withholding Using Form W-4 to figure withholding. 1040ez 2009 tax form   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. 1040ez 2009 tax form Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. 1040ez 2009 tax form Advise your employees to use the IRS Withholding Calculator on the IRS website at www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/individuals for help in determining how many withholding allowances to claim on their Forms W-4. 1040ez 2009 tax form   Ask all new employees to give you a signed Form W-4 when they start work. 1040ez 2009 tax form Make the form effective with the first wage payment. 1040ez 2009 tax form If a new employee does not give you a completed Form W-4, withhold income tax as if he or she is single, with no withholding allowances. 1040ez 2009 tax form Form in Spanish. 1040ez 2009 tax form   You can provide Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, in place of Form W-4, to your Spanish-speaking employees. 1040ez 2009 tax form For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). 1040ez 2009 tax form The rules discussed in this section that apply to Form W-4 also apply to Formulario W-4(SP). 1040ez 2009 tax form Electronic system to receive Form W-4. 1040ez 2009 tax form   You may establish a system to electronically receive Forms W-4 from your employees. 1040ez 2009 tax form See Regulations section 31. 1040ez 2009 tax form 3402(f)(5)-1(c) for more information. 1040ez 2009 tax form Effective date of Form W-4. 1040ez 2009 tax form   A Form W-4 remains in effect until the employee gives you a new one. 1040ez 2009 tax form When you receive a new Form W-4 from an employee, do not adjust withholding for pay periods before the effective date of the new form. 1040ez 2009 tax form If an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. 1040ez 2009 tax form For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. 1040ez 2009 tax form A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. 1040ez 2009 tax form Successor employer. 1040ez 2009 tax form   If you are a successor employer (see Successor employer , later in this section), secure new Forms W-4 from the transferred employees unless the “Alternative Procedure” in section 5 of Revenue Procedure 2004-53 applies. 1040ez 2009 tax form See Revenue Procedure 2004-53, 2004-34 I. 1040ez 2009 tax form R. 1040ez 2009 tax form B. 1040ez 2009 tax form 320, available at www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/irb/2004-34_IRB/ar13. 1040ez 2009 tax form html. 1040ez 2009 tax form Completing Form W-4. 1040ez 2009 tax form   The amount of any federal income tax withholding must be based on marital status and withholding allowances. 1040ez 2009 tax form Your employees may not base their withholding amounts on a fixed dollar amount or percentage. 1040ez 2009 tax form However, an employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. 1040ez 2009 tax form Employees may claim fewer withholding allowances than they are entitled to claim. 1040ez 2009 tax form They may wish to claim fewer allowances to ensure they have enough withholding or to offset the tax on other sources of taxable income not subject to withholding. 1040ez 2009 tax form See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. 1040ez 2009 tax form Along with Form W-4, you may wish to order Publication 505 for use by your employees. 1040ez 2009 tax form Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. 1040ez 2009 tax form If they require additional withholding, they should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. 1040ez 2009 tax form Exemption from federal income tax withholding. 1040ez 2009 tax form   Generally, an employee may claim exemption from federal income tax withholding because he or she had no income tax liability last year and expects none this year. 1040ez 2009 tax form See the Form W-4 instructions for more information. 1040ez 2009 tax form However, the wages are still subject to social security and Medicare taxes. 1040ez 2009 tax form See also Invalid Forms W-4 , later in this section. 1040ez 2009 tax form   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. 1040ez 2009 tax form To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. 1040ez 2009 tax form If the employee does not give you a new Form W-4 by February 15, begin withholding based on the last Form W-4 for the employee that did not claim an exemption from withholding or, if one was not filed, then withhold tax as if he or she is single with zero withholding allowances. 1040ez 2009 tax form If the employee provides a new Form W-4 claiming exemption from withholding on February 16 or later, you may apply it to future wages but do not refund any taxes already withheld. 1040ez 2009 tax form Withholding income taxes on the wages of nonresident alien employees. 1040ez 2009 tax form   In general, you must withhold federal income taxes on the wages of nonresident alien employees. 1040ez 2009 tax form However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. 1040ez 2009 tax form Also see section 3 of Publication 51 (Circular A), Agricultural Employer's Tax Guide, for guidance on H-2A visa workers. 1040ez 2009 tax form Withholding adjustment for nonresident alien employees. 1040ez 2009 tax form   For 2014, apply the procedure discussed next to figure the amount of income tax to withhold from the wages of nonresident alien employees performing services within the United States. 1040ez 2009 tax form Nonresident alien students from India and business apprentices from India are not subject to this procedure. 1040ez 2009 tax form Instructions. 1040ez 2009 tax form   To figure how much income tax to withhold from the wages paid to a nonresident alien employee performing services in the United States, use the following steps. 1040ez 2009 tax form Step 1. 1040ez 2009 tax form   Add to the wages paid to the nonresident alien employee for the payroll period the amount shown in the chart below for the applicable payroll period. 1040ez 2009 tax form    Amount to Add to Nonresident Alien Employee's Wages for Calculating Income Tax Withholding Only   Payroll Period Add Additional     Weekly $ 43. 1040ez 2009 tax form 30     Biweekly 86. 1040ez 2009 tax form 50     Semimonthly 93. 1040ez 2009 tax form 80     Monthly 187. 1040ez 2009 tax form 50     Quarterly 562. 1040ez 2009 tax form 50     Semiannually 1,125. 1040ez 2009 tax form 00     Annually 2,250. 1040ez 2009 tax form 00     Daily or Miscellaneous (each day of the payroll period) 8. 1040ez 2009 tax form 70   Step 2. 1040ez 2009 tax form   Use the amount figured in Step 1 and the number of withholding allowances claimed (generally limited to one allowance) to figure income tax withholding. 1040ez 2009 tax form Determine the value of withholding allowances by multiplying the number of withholding allowances claimed by the appropriate amount from Table 5. 1040ez 2009 tax form Percentage Method—2014 Amount for One Withholding Allowance shown on page 41. 1040ez 2009 tax form If you are using the Percentage Method Tables for Income Tax Withholding, provided on pages 43–44, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure the income tax withholding. 1040ez 2009 tax form If you are using the Wage Bracket Method for Income Tax Withholding, provided on pages 45–64, use the amount figured in Step 1 and the number of withholding allowances to figure income tax withholding. 1040ez 2009 tax form The amounts from the chart above are added to wages solely for calculating income tax withholding on the wages of the nonresident alien employee. 1040ez 2009 tax form The amounts from the chart should not be included in any box on the employee's Form W-2 and do not increase the income tax liability of the employee. 1040ez 2009 tax form Also, the amounts from the chart do not increase the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. 1040ez 2009 tax form This procedure only applies to nonresident alien employees who have wages subject to income tax withholding. 1040ez 2009 tax form Example. 1040ez 2009 tax form An employer using the percentage method of withholding pays wages of $500 for a biweekly payroll period to a married nonresident alien employee. 1040ez 2009 tax form The nonresident alien has properly completed Form W-4, entering marital status as “single” with one withholding allowance and indicating status as a nonresident alien on Form W-4, line 6 (see Nonresident alien employee's Form W-4 , later in this section). 1040ez 2009 tax form The employer determines the wages to be used in the withholding tables by adding to the $500 amount of wages paid the amount of $86. 1040ez 2009 tax form 50 from the chart under Step 1 ($586. 1040ez 2009 tax form 50 total). 1040ez 2009 tax form The employer then applies the applicable tables to determine the income tax withholding for nonresident aliens (see Step 2 ). 1040ez 2009 tax form Reminder: If you use the Percentage Method Tables for Income Tax Withholding, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure income tax withholding. 1040ez 2009 tax form The $86. 1040ez 2009 tax form 50 added to wages for calculating income tax withholding is not reported on Form W-2, and does not increase the income tax liability of the employee. 1040ez 2009 tax form Also, the $86. 1040ez 2009 tax form 50 added to wages does not affect the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. 1040ez 2009 tax form Supplemental wage payment. 1040ez 2009 tax form   This procedure for determining the amount of income tax withholding does not apply to a supplemental wage payment (see section 7) if the 39. 1040ez 2009 tax form 6% mandatory flat rate withholding applies or if the 25% optional flat rate withholding is being used to calculate income tax withholding on the supplemental wage payment. 1040ez 2009 tax form Nonresident alien employee's Form W-4. 1040ez 2009 tax form   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding, Request withholding as if they are single, regardless of their actual marital status, Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or South Korea, or a student or business apprentice from India, he or she may claim more than one allowance), and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. 1040ez 2009 tax form   If you maintain an electronic Form W-4 system, you should provide a field for nonresident aliens to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. 1040ez 2009 tax form A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. 1040ez 2009 tax form Form 8233. 1040ez 2009 tax form   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. 1040ez 2009 tax form See Publication 515 for details. 1040ez 2009 tax form IRS review of requested Forms W-4. 1040ez 2009 tax form   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. 1040ez 2009 tax form You may also be directed to send certain Forms W-4 to the IRS. 1040ez 2009 tax form You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. 1040ez 2009 tax form Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. 1040ez 2009 tax form The IRS may also require you to submit copies of Form W-4 to the IRS as directed by Treasury Decision 9337, 2007-35 I. 1040ez 2009 tax form R. 1040ez 2009 tax form B. 1040ez 2009 tax form 455, which is available at www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/irb/2007-35_IRB/ar10. 1040ez 2009 tax form html. 1040ez 2009 tax form When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. 1040ez 2009 tax form After submitting a copy of a requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). 1040ez 2009 tax form However, if the IRS later notifies you in writing the employee is not entitled to claim exemption from withholding or a claimed number of withholding allowances, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the IRS notice (commonly referred to as a "lock-in letter
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National Indian Gaming Commission

The National Indian Gaming Commission is a regulatory body that oversees some aspects of gaming on Indian lands, often complementing the work of Indian regulators.

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Website: National Indian Gaming Commission

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Address: 1441 L St NW
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Phone Number: (202) 632-7003

The 1040ez 2009 Tax Form

1040ez 2009 tax form 11. 1040ez 2009 tax form   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. 1040ez 2009 tax form Nondeductible losses. 1040ez 2009 tax form Family pet. 1040ez 2009 tax form Progressive deterioration. 1040ez 2009 tax form Decline in market value of stock. 1040ez 2009 tax form Mislaid or lost property. 1040ez 2009 tax form Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. 1040ez 2009 tax form Related persons. 1040ez 2009 tax form Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. 1040ez 2009 tax form Covered disaster area. 1040ez 2009 tax form Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. 1040ez 2009 tax form A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. 1040ez 2009 tax form A theft occurs when property is stolen. 1040ez 2009 tax form A condemnation occurs when private property is legally taken for public use without the owner's consent. 1040ez 2009 tax form A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. 1040ez 2009 tax form You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. 1040ez 2009 tax form An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. 1040ez 2009 tax form If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. 1040ez 2009 tax form For more information, see Postponing Gain , later. 1040ez 2009 tax form Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. 1040ez 2009 tax form Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. 1040ez 2009 tax form If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. 1040ez 2009 tax form Casualty. 1040ez 2009 tax form   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. 1040ez 2009 tax form A sudden event is one that is swift, not gradual or progressive. 1040ez 2009 tax form An unexpected event is one that is ordinarily unanticipated and unintended. 1040ez 2009 tax form An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. 1040ez 2009 tax form Deductible losses. 1040ez 2009 tax form   Deductible casualty losses can result from a number of different causes, including the following. 1040ez 2009 tax form Airplane crashes. 1040ez 2009 tax form Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. 1040ez 2009 tax form Earthquakes. 1040ez 2009 tax form Fires (but see Nondeductible losses next for exceptions). 1040ez 2009 tax form Floods. 1040ez 2009 tax form Freezing. 1040ez 2009 tax form Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, in Publication 547. 1040ez 2009 tax form Lightning. 1040ez 2009 tax form Storms, including hurricanes and tornadoes. 1040ez 2009 tax form Terrorist attacks. 1040ez 2009 tax form Vandalism. 1040ez 2009 tax form Volcanic eruptions. 1040ez 2009 tax form Nondeductible losses. 1040ez 2009 tax form   A casualty loss is not deductible if the damage or destruction is caused by the following. 1040ez 2009 tax form Accidentally breaking articles such as glassware or china under normal conditions. 1040ez 2009 tax form A family pet (explained below). 1040ez 2009 tax form A fire if you willfully set it, or pay someone else to set it. 1040ez 2009 tax form A car, truck, or farm equipment accident if your willful negligence or willful act caused it. 1040ez 2009 tax form The same is true if the willful act or willful negligence of someone acting for you caused the accident. 1040ez 2009 tax form Progressive deterioration (explained below). 1040ez 2009 tax form Family pet. 1040ez 2009 tax form   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. 1040ez 2009 tax form Example. 1040ez 2009 tax form You keep your horse in your yard. 1040ez 2009 tax form The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. 1040ez 2009 tax form Some of the trees were completely girdled and died. 1040ez 2009 tax form Because the damage was not unexpected or unusual, the loss is not deductible. 1040ez 2009 tax form Progressive deterioration. 1040ez 2009 tax form   Loss of property due to progressive deterioration is not deductible as a casualty loss. 1040ez 2009 tax form This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. 1040ez 2009 tax form Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. 1040ez 2009 tax form However, weather-related conditions or disease may cause another type of involuntary conversion. 1040ez 2009 tax form See Other Involuntary Conversions , later. 1040ez 2009 tax form Theft. 1040ez 2009 tax form   A theft is the taking and removing of money or property with the intent to deprive the owner of it. 1040ez 2009 tax form The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. 1040ez 2009 tax form You do not need to show a conviction for theft. 1040ez 2009 tax form   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. 1040ez 2009 tax form The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. 1040ez 2009 tax form Decline in market value of stock. 1040ez 2009 tax form   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. 1040ez 2009 tax form However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. 1040ez 2009 tax form You report a capital loss on Schedule D (Form 1040). 1040ez 2009 tax form For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. 1040ez 2009 tax form Mislaid or lost property. 1040ez 2009 tax form   The simple disappearance of money or property is not a theft. 1040ez 2009 tax form However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. 1040ez 2009 tax form Example. 1040ez 2009 tax form A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. 1040ez 2009 tax form The diamond falls from the ring and is never found. 1040ez 2009 tax form The loss of the diamond is a casualty. 1040ez 2009 tax form Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. 1040ez 2009 tax form The following is a discussion of some losses you can deduct and some you cannot deduct. 1040ez 2009 tax form Livestock or produce bought for resale. 1040ez 2009 tax form   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. 1040ez 2009 tax form If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. 1040ez 2009 tax form You cannot take a separate deduction. 1040ez 2009 tax form Livestock, plants, produce, and crops raised for sale. 1040ez 2009 tax form   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. 1040ez 2009 tax form You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. 1040ez 2009 tax form   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. 1040ez 2009 tax form You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. 1040ez 2009 tax form The uniform capitalization rules are discussed in chapter 6. 1040ez 2009 tax form   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. 1040ez 2009 tax form You get the deduction by omitting the item from your inventory at the close of your tax year. 1040ez 2009 tax form You cannot take a separate casualty or theft deduction. 1040ez 2009 tax form Income loss. 1040ez 2009 tax form   A loss of future income is not deductible. 1040ez 2009 tax form Example. 1040ez 2009 tax form A severe flood destroyed your crops. 1040ez 2009 tax form Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . 1040ez 2009 tax form You estimate that the crop loss will reduce your farm income by $25,000. 1040ez 2009 tax form This loss of future income is also not deductible. 1040ez 2009 tax form Loss of timber. 1040ez 2009 tax form   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. 1040ez 2009 tax form If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. 1040ez 2009 tax form See Postponing Gain , later. 1040ez 2009 tax form Property used in farming. 1040ez 2009 tax form   Casualty and theft losses of property used in your farm business usually result in deductible losses. 1040ez 2009 tax form If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. 1040ez 2009 tax form See How To Figure a Loss , later. 1040ez 2009 tax form Raised draft, breeding, dairy, or sporting animals. 1040ez 2009 tax form   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. 1040ez 2009 tax form However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. 1040ez 2009 tax form You use inventories to determine your income and you included the animals in your inventory. 1040ez 2009 tax form You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. 1040ez 2009 tax form When you include livestock in inventory, its last inventory value is its basis. 1040ez 2009 tax form When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. 1040ez 2009 tax form You cannot take a separate deduction. 1040ez 2009 tax form How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. 1040ez 2009 tax form Farm property. 1040ez 2009 tax form   Farm property is the property you use in your farming business. 1040ez 2009 tax form If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. 1040ez 2009 tax form   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. 1040ez 2009 tax form However, the deduction limits, discussed later, do not apply to farm property. 1040ez 2009 tax form Personal-use property. 1040ez 2009 tax form   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. 1040ez 2009 tax form The following items are examples of personal-use property: Your main home. 1040ez 2009 tax form Furniture and electronics used in your main home and not used in a home office or for business purposes. 1040ez 2009 tax form Clothing and jewelry. 1040ez 2009 tax form An automobile used for nonbusiness purposes. 1040ez 2009 tax form You figure the casualty or theft loss on this property by taking the following steps. 1040ez 2009 tax form Determine your adjusted basis in the property before the casualty or theft. 1040ez 2009 tax form Determine the decrease in fair market value of the property as a result of the casualty or theft. 1040ez 2009 tax form From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. 1040ez 2009 tax form You must apply the deduction limits, discussed later, to determine your deductible loss. 1040ez 2009 tax form    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. 1040ez 2009 tax form It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. 1040ez 2009 tax form Adjusted basis. 1040ez 2009 tax form   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. 1040ez 2009 tax form For more information about adjusted basis, see chapter 6. 1040ez 2009 tax form Decrease in fair market value (FMV). 1040ez 2009 tax form   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. 1040ez 2009 tax form FMV is defined in chapter 10 under Payments Received or Considered Received . 1040ez 2009 tax form Appraisal. 1040ez 2009 tax form   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. 1040ez 2009 tax form But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. 1040ez 2009 tax form   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. 1040ez 2009 tax form The appraiser must recognize the effects of any general market decline that may occur along with the casualty. 1040ez 2009 tax form This information is needed to limit any deduction to the actual loss resulting from damage to the property. 1040ez 2009 tax form Cost of cleaning up or making repairs. 1040ez 2009 tax form   The cost of cleaning up after a casualty is not part of a casualty loss. 1040ez 2009 tax form Neither is the cost of repairing damaged property after a casualty. 1040ez 2009 tax form But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. 1040ez 2009 tax form The repairs are actually made. 1040ez 2009 tax form The repairs are necessary to bring the property back to its condition before the casualty. 1040ez 2009 tax form The amount spent for repairs is not excessive. 1040ez 2009 tax form The repairs fix the damage only. 1040ez 2009 tax form The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. 1040ez 2009 tax form Related expenses. 1040ez 2009 tax form   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. 1040ez 2009 tax form However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. 1040ez 2009 tax form Separate computations for more than one item of property. 1040ez 2009 tax form   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. 1040ez 2009 tax form Then combine the losses to determine your total loss. 1040ez 2009 tax form    There is an exception to this rule for personal-use real property. 1040ez 2009 tax form See Exception for personal-use real property, later. 1040ez 2009 tax form Example. 1040ez 2009 tax form A fire on your farm damaged a tractor and the barn in which it was stored. 1040ez 2009 tax form The tractor had an adjusted basis of $3,300. 1040ez 2009 tax form Its FMV was $28,000 just before the fire and $10,000 immediately afterward. 1040ez 2009 tax form The barn had an adjusted basis of $28,000. 1040ez 2009 tax form Its FMV was $55,000 just before the fire and $25,000 immediately afterward. 1040ez 2009 tax form You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. 1040ez 2009 tax form Figure your deductible casualty loss separately for the two items of property. 1040ez 2009 tax form     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. 1040ez 2009 tax form   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. 1040ez 2009 tax form Figure the loss using the smaller of the following. 1040ez 2009 tax form The decrease in FMV of the entire property. 1040ez 2009 tax form The adjusted basis of the entire property. 1040ez 2009 tax form Example. 1040ez 2009 tax form You bought a farm in 1990 for $160,000. 1040ez 2009 tax form The adjusted basis of the residential part is now $128,000. 1040ez 2009 tax form In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. 1040ez 2009 tax form The adjusted basis of the residential part includes the $7,500. 1040ez 2009 tax form The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. 1040ez 2009 tax form The trees were not covered by insurance. 1040ez 2009 tax form 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. 1040ez 2009 tax form   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. 1040ez 2009 tax form You do not have a casualty or theft loss to the extent you are reimbursed. 1040ez 2009 tax form   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. 1040ez 2009 tax form You must reduce your loss even if you do not receive payment until a later tax year. 1040ez 2009 tax form    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. 1040ez 2009 tax form You may have to include a portion of these payments in your income. 1040ez 2009 tax form See Insurance payments for living expenses in Publication 547 for details. 1040ez 2009 tax form Disaster relief. 1040ez 2009 tax form   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. 1040ez 2009 tax form Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. 1040ez 2009 tax form   Generally, disaster relief grants received under the Robert T. 1040ez 2009 tax form Stafford Disaster Relief and Emergency Assistance Act are not included in your income. 1040ez 2009 tax form See Federal disaster relief grants , later, under Disaster Area Losses . 1040ez 2009 tax form   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. 1040ez 2009 tax form See Qualified disaster relief payments , later, under Disaster Area Losses . 1040ez 2009 tax form Reimbursement received after deducting loss. 1040ez 2009 tax form   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. 1040ez 2009 tax form Actual reimbursement less than expected. 1040ez 2009 tax form   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. 1040ez 2009 tax form Actual reimbursement more than expected. 1040ez 2009 tax form   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. 1040ez 2009 tax form However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. 1040ez 2009 tax form Do not refigure your tax for the year you claimed the deduction. 1040ez 2009 tax form See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. 1040ez 2009 tax form If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. 1040ez 2009 tax form See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. 1040ez 2009 tax form Actual reimbursement same as expected. 1040ez 2009 tax form   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. 1040ez 2009 tax form Lump-sum reimbursement. 1040ez 2009 tax form   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. 1040ez 2009 tax form Figure the gain or loss separately for each asset that has a separate basis. 1040ez 2009 tax form Adjustments to basis. 1040ez 2009 tax form   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. 1040ez 2009 tax form The result is your adjusted basis in the property. 1040ez 2009 tax form Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. 1040ez 2009 tax form See Adjusted Basis in chapter 6 for more information. 1040ez 2009 tax form Example. 1040ez 2009 tax form You built a new silo for $25,000. 1040ez 2009 tax form This is the basis in your silo because that is the total cost you incurred to build it. 1040ez 2009 tax form During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. 1040ez 2009 tax form In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. 1040ez 2009 tax form Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). 1040ez 2009 tax form Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). 1040ez 2009 tax form There are two limits on the deduction for casualty or theft loss of personal-use property. 1040ez 2009 tax form You figure these limits on Form 4684. 1040ez 2009 tax form $100 rule. 1040ez 2009 tax form   You must reduce each casualty or theft loss on personal-use property by $100. 1040ez 2009 tax form This rule applies after you have subtracted any reimbursement. 1040ez 2009 tax form 10% rule. 1040ez 2009 tax form   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. 1040ez 2009 tax form Apply this rule after you reduce each loss by $100. 1040ez 2009 tax form Adjusted gross income is on line 38 of Form 1040. 1040ez 2009 tax form Example. 1040ez 2009 tax form In June, you discovered that your house had been burglarized. 1040ez 2009 tax form Your loss after insurance reimbursement was $2,000. 1040ez 2009 tax form Your adjusted gross income for the year you discovered the burglary is $57,000. 1040ez 2009 tax form Figure your theft loss deduction as follows: 1. 1040ez 2009 tax form Loss after insurance $2,000 2. 1040ez 2009 tax form Subtract $100 100 3. 1040ez 2009 tax form Loss after $100 rule $1,900 4. 1040ez 2009 tax form Subtract 10% (. 1040ez 2009 tax form 10) × $57,000 AGI $5,700 5. 1040ez 2009 tax form Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). 1040ez 2009 tax form    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. 1040ez 2009 tax form See 10% Rule in Publication 547. 1040ez 2009 tax form When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. 1040ez 2009 tax form You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. 1040ez 2009 tax form However, losses in federally declared disaster areas are subject to different rules. 1040ez 2009 tax form See Disaster Area Losses , later, for an exception. 1040ez 2009 tax form If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. 1040ez 2009 tax form Leased property. 1040ez 2009 tax form   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. 1040ez 2009 tax form This is true even if the loss occurred or the liability was paid in a different year. 1040ez 2009 tax form You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. 1040ez 2009 tax form Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. 1040ez 2009 tax form Example. 1040ez 2009 tax form Robert leased a tractor from First Implement, Inc. 1040ez 2009 tax form , for use in his farm business. 1040ez 2009 tax form The tractor was destroyed by a tornado in June 2012. 1040ez 2009 tax form The loss was not insured. 1040ez 2009 tax form First Implement billed Robert for the fair market value of the tractor on the date of the loss. 1040ez 2009 tax form Robert disagreed with the bill and refused to pay it. 1040ez 2009 tax form First Implement later filed suit in court against Robert. 1040ez 2009 tax form In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. 1040ez 2009 tax form Robert paid $20,000 in June 2013. 1040ez 2009 tax form He can claim the $20,000 as a loss on his 2013 tax return. 1040ez 2009 tax form Net operating loss (NOL). 1040ez 2009 tax form   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. 1040ez 2009 tax form An NOL can be carried back or carried forward and deducted from income in other years. 1040ez 2009 tax form See Publication 536 for more information on NOLs. 1040ez 2009 tax form Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. 1040ez 2009 tax form You must have records to support the amount you claim for the loss. 1040ez 2009 tax form Casualty loss proof. 1040ez 2009 tax form   For a casualty loss, your records should show all the following information. 1040ez 2009 tax form The type of casualty (car accident, fire, storm, etc. 1040ez 2009 tax form ) and when it occurred. 1040ez 2009 tax form That the loss was a direct result of the casualty. 1040ez 2009 tax form That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. 1040ez 2009 tax form Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. 1040ez 2009 tax form Theft loss proof. 1040ez 2009 tax form   For a theft loss, your records should show all the following information. 1040ez 2009 tax form When you discovered your property was missing. 1040ez 2009 tax form That your property was stolen. 1040ez 2009 tax form That you were the owner of the property. 1040ez 2009 tax form Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. 1040ez 2009 tax form Figuring a Gain A casualty or theft may result in a taxable gain. 1040ez 2009 tax form If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. 1040ez 2009 tax form You generally report your gain as income in the year you receive the reimbursement. 1040ez 2009 tax form However, depending on the type of property you receive, you may not have to report your gain. 1040ez 2009 tax form See Postponing Gain , later. 1040ez 2009 tax form Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. 1040ez 2009 tax form Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. 1040ez 2009 tax form Amount you receive. 1040ez 2009 tax form   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. 1040ez 2009 tax form It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. 1040ez 2009 tax form Example. 1040ez 2009 tax form A tornado severely damaged your barn. 1040ez 2009 tax form The adjusted basis of the barn was $25,000. 1040ez 2009 tax form Your insurance company reimbursed you $40,000 for the damaged barn. 1040ez 2009 tax form However, you had legal expenses of $2,000 to collect that insurance. 1040ez 2009 tax form Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. 1040ez 2009 tax form 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. 1040ez 2009 tax form Some of these are discussed in the following paragraphs. 1040ez 2009 tax form Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. 1040ez 2009 tax form You report the gain or deduct the loss on your tax return for the year you realize it. 1040ez 2009 tax form However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. 1040ez 2009 tax form See Postponing Gain , later. 1040ez 2009 tax form Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. 1040ez 2009 tax form The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. 1040ez 2009 tax form The owner receives a condemnation award (money or property) in exchange for the property taken. 1040ez 2009 tax form A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. 1040ez 2009 tax form Threat of condemnation. 1040ez 2009 tax form   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. 1040ez 2009 tax form Main home condemned. 1040ez 2009 tax form   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. 1040ez 2009 tax form For information on this exclusion, see Publication 523. 1040ez 2009 tax form If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. 1040ez 2009 tax form See Postponing Gain , later. 1040ez 2009 tax form (You cannot deduct a loss from the condemnation of your main home. 1040ez 2009 tax form ) More information. 1040ez 2009 tax form   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. 1040ez 2009 tax form Also see Postponing Gain , later, to find out if you can postpone reporting the gain. 1040ez 2009 tax form Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. 1040ez 2009 tax form Livestock Losses Diseased livestock. 1040ez 2009 tax form   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. 1040ez 2009 tax form If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . 1040ez 2009 tax form Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. 1040ez 2009 tax form If you replace the livestock, you may be able to postpone reporting the gain. 1040ez 2009 tax form See Postponing Gain below. 1040ez 2009 tax form Reporting dispositions of diseased livestock. 1040ez 2009 tax form   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. 1040ez 2009 tax form You must also include other information on this statement. 1040ez 2009 tax form See How To Postpone Gain , later, under Postponing Gain . 1040ez 2009 tax form Weather-related sales of livestock. 1040ez 2009 tax form   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. 1040ez 2009 tax form Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. 1040ez 2009 tax form Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. 1040ez 2009 tax form If you replace the livestock, you may be able to postpone reporting the gain. 1040ez 2009 tax form See Postponing Gain below. 1040ez 2009 tax form Example. 1040ez 2009 tax form It is your usual business practice to sell five of your dairy animals during the year. 1040ez 2009 tax form This year you sold 20 dairy animals because of drought. 1040ez 2009 tax form The sale of 15 animals is treated as an involuntary conversion. 1040ez 2009 tax form    If you do not replace the livestock, you may be able to report the gain in the following year's income. 1040ez 2009 tax form This rule also applies to other livestock (including poultry). 1040ez 2009 tax form See Sales Caused by Weather-Related Conditions in chapter 3. 1040ez 2009 tax form Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. 1040ez 2009 tax form Treat the loss as a loss from an involuntary conversion. 1040ez 2009 tax form The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. 1040ez 2009 tax form You deduct the loss on the return for the year the seedlings died. 1040ez 2009 tax form Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. 1040ez 2009 tax form Your basis in the new property is generally the same as your adjusted basis in the property it replaces. 1040ez 2009 tax form You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. 1040ez 2009 tax form However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. 1040ez 2009 tax form If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. 1040ez 2009 tax form To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. 1040ez 2009 tax form If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. 1040ez 2009 tax form Example 1. 1040ez 2009 tax form In 1985, you constructed a barn to store farm equipment at a cost of $20,000. 1040ez 2009 tax form In 1987, you added a silo to the barn at a cost of $15,000 to store grain. 1040ez 2009 tax form In May of this year, the property was worth $100,000. 1040ez 2009 tax form In June the barn and silo were destroyed by a tornado. 1040ez 2009 tax form At the time of the tornado, you had an adjusted basis of $0 in the property. 1040ez 2009 tax form You received $85,000 from the insurance company. 1040ez 2009 tax form You had a gain of $85,000 ($85,000 – $0). 1040ez 2009 tax form You spent $80,000 to rebuild the barn and silo. 1040ez 2009 tax form Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. 1040ez 2009 tax form Example 2. 1040ez 2009 tax form In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. 1040ez 2009 tax form You made no further improvements or additions to it. 1040ez 2009 tax form When a storm destroyed the cabin this January, the cabin was worth $250,000. 1040ez 2009 tax form You received $146,000 from the insurance company in March. 1040ez 2009 tax form You had a gain of $128,000 ($146,000 − $18,000). 1040ez 2009 tax form You spent $144,000 to rebuild the cabin. 1040ez 2009 tax form Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. 1040ez 2009 tax form Buying replacement property from a related person. 1040ez 2009 tax form   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). 1040ez 2009 tax form This rule applies to the following taxpayers. 1040ez 2009 tax form C corporations. 1040ez 2009 tax form Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. 1040ez 2009 tax form Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. 1040ez 2009 tax form For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. 1040ez 2009 tax form If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. 1040ez 2009 tax form If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. 1040ez 2009 tax form Exception. 1040ez 2009 tax form   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. 1040ez 2009 tax form Related persons. 1040ez 2009 tax form   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. 1040ez 2009 tax form For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. 1040ez 2009 tax form Death of a taxpayer. 1040ez 2009 tax form   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. 1040ez 2009 tax form The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. 1040ez 2009 tax form Replacement Property You must buy replacement property for the specific purpose of replacing your property. 1040ez 2009 tax form Your replacement property must be similar or related in service or use to the property it replaces. 1040ez 2009 tax form You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. 1040ez 2009 tax form If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. 1040ez 2009 tax form Property you acquire by gift or inheritance does not qualify as replacement property. 1040ez 2009 tax form Owner-user. 1040ez 2009 tax form   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. 1040ez 2009 tax form Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. 1040ez 2009 tax form A grinding mill that replaces a tractor does not qualify. 1040ez 2009 tax form Neither does a breeding or draft animal that replaces a dairy cow. 1040ez 2009 tax form Soil or other environmental contamination. 1040ez 2009 tax form   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. 1040ez 2009 tax form Weather-related conditions. 1040ez 2009 tax form   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. 1040ez 2009 tax form Example. 1040ez 2009 tax form Each year you normally sell 25 cows from your beef herd. 1040ez 2009 tax form However, this year you had to sell 50 cows. 1040ez 2009 tax form This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. 1040ez 2009 tax form Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. 1040ez 2009 tax form Standing crop destroyed by casualty. 1040ez 2009 tax form   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. 1040ez 2009 tax form The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). 1040ez 2009 tax form In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. 1040ez 2009 tax form Timber loss. 1040ez 2009 tax form   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. 1040ez 2009 tax form If you bought the standing timber within the replacement period, you can postpone reporting the gain. 1040ez 2009 tax form Business or income-producing property located in a federally declared disaster area. 1040ez 2009 tax form   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. 1040ez 2009 tax form For more information, see Disaster Area Losses in Publication 547. 1040ez 2009 tax form Substituting replacement property. 1040ez 2009 tax form   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. 1040ez 2009 tax form This is true even if you acquire the other property within the replacement period. 1040ez 2009 tax form However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. 1040ez 2009 tax form Basis of replacement property. 1040ez 2009 tax form   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. 1040ez 2009 tax form In this way, tax on the gain is postponed until you dispose of the replacement property. 1040ez 2009 tax form Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. 1040ez 2009 tax form This is the replacement period. 1040ez 2009 tax form The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. 1040ez 2009 tax form The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. 1040ez 2009 tax form Example. 1040ez 2009 tax form You are a calendar year taxpayer. 1040ez 2009 tax form While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. 1040ez 2009 tax form You discovered the theft when you returned to your farm on November 11, 2012. 1040ez 2009 tax form Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. 1040ez 2009 tax form You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. 1040ez 2009 tax form Main home in disaster area. 1040ez 2009 tax form   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. 1040ez 2009 tax form See Disaster Area Losses , later. 1040ez 2009 tax form Property in the Midwestern disaster areas. 1040ez 2009 tax form   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. 1040ez 2009 tax form This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. 1040ez 2009 tax form Property in the Kansas disaster area. 1040ez 2009 tax form   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. 1040ez 2009 tax form This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. 1040ez 2009 tax form Property in the Hurricane Katrina disaster area. 1040ez 2009 tax form   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. 1040ez 2009 tax form This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. 1040ez 2009 tax form Weather-related sales of livestock in an area eligible for federal assistance. 1040ez 2009 tax form   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. 1040ez 2009 tax form The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. 1040ez 2009 tax form   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. 1040ez 2009 tax form R. 1040ez 2009 tax form B. 1040ez 2009 tax form 529, available at  www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/irb/2006-39_IRB/ar11. 1040ez 2009 tax form html. 1040ez 2009 tax form For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. 1040ez 2009 tax form gov. 1040ez 2009 tax form Condemnation. 1040ez 2009 tax form   The replacement period for a condemnation begins on the earlier of the following dates. 1040ez 2009 tax form The date on which you disposed of the condemned property. 1040ez 2009 tax form The date on which the threat of condemnation began. 1040ez 2009 tax form The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. 1040ez 2009 tax form But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. 1040ez 2009 tax form Business or investment real property. 1040ez 2009 tax form   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. 1040ez 2009 tax form Extension. 1040ez 2009 tax form   You can apply for an extension of the replacement period. 1040ez 2009 tax form Send your written application to the Internal Revenue Service Center where you file your tax return. 1040ez 2009 tax form See your tax return instructions for the address. 1040ez 2009 tax form Include all the details about your need for an extension. 1040ez 2009 tax form Make your application before the end of the replacement period. 1040ez 2009 tax form However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. 1040ez 2009 tax form You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. 1040ez 2009 tax form How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. 1040ez 2009 tax form You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. 1040ez 2009 tax form Required statement. 1040ez 2009 tax form   You should attach a statement to your return for the year you have the gain. 1040ez 2009 tax form This statement should include all the following information. 1040ez 2009 tax form The date and details of the casualty, theft, or other involuntary conversion. 1040ez 2009 tax form The insurance or other reimbursement you received. 1040ez 2009 tax form How you figured the gain. 1040ez 2009 tax form Replacement property acquired before return filed. 1040ez 2009 tax form   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. 1040ez 2009 tax form The replacement property. 1040ez 2009 tax form The postponed gain. 1040ez 2009 tax form The basis adjustment that reflects the postponed gain. 1040ez 2009 tax form Any gain you are reporting as income. 1040ez 2009 tax form Replacement property acquired after return filed. 1040ez 2009 tax form   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. 1040ez 2009 tax form   You should then attach another statement to your return for the year in which you buy the replacement property. 1040ez 2009 tax form This statement should contain detailed information on the replacement property. 1040ez 2009 tax form If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. 1040ez 2009 tax form Include in the statement detailed information on the replacement property bought in that year. 1040ez 2009 tax form Reporting weather-related sales of livestock. 1040ez 2009 tax form   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. 1040ez 2009 tax form Evidence of the weather-related conditions that forced the sale or exchange of the livestock. 1040ez 2009 tax form The gain realized on the sale or exchange. 1040ez 2009 tax form The number and kind of livestock sold or exchanged. 1040ez 2009 tax form The number of livestock of each kind you would have sold or exchanged under your usual business practice. 1040ez 2009 tax form   Show all the following information and the preceding information on the return for the year in which you replace the livestock. 1040ez 2009 tax form The dates you bought the replacement property. 1040ez 2009 tax form The cost of the replacement property. 1040ez 2009 tax form Description of the replacement property (for example, the number and kind of the replacement livestock). 1040ez 2009 tax form Amended return. 1040ez 2009 tax form   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. 1040ez 2009 tax form You do not acquire replacement property within the replacement period, plus extensions. 1040ez 2009 tax form On this amended return, you must report the gain and pay any additional tax due. 1040ez 2009 tax form You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. 1040ez 2009 tax form On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. 1040ez 2009 tax form Disaster Area Losses Special rules apply to federally declared disaster area losses. 1040ez 2009 tax form A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. 1040ez 2009 tax form Stafford Disaster Relief and Emergency Assistance Act. 1040ez 2009 tax form It includes a major disaster or emergency declaration under the act. 1040ez 2009 tax form A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. 1040ez 2009 tax form fema. 1040ez 2009 tax form gov. 1040ez 2009 tax form This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. 1040ez 2009 tax form For other special rules, see Disaster Area Losses in Publication 547. 1040ez 2009 tax form When to deduct the loss. 1040ez 2009 tax form   You generally must deduct a casualty loss in the year it occurred. 1040ez 2009 tax form However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. 1040ez 2009 tax form If you make this choice, the loss is treated as having occurred in the preceding year. 1040ez 2009 tax form    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. 1040ez 2009 tax form   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. 1040ez 2009 tax form The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. 1040ez 2009 tax form The due date (with extensions) for the return for the preceding tax year. 1040ez 2009 tax form Federal disaster relief grants. 1040ez 2009 tax form   Do not include post-disaster relief grants received under the Robert T. 1040ez 2009 tax form Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. 1040ez 2009 tax form Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. 1040ez 2009 tax form If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. 1040ez 2009 tax form Unemployment assistance payments under the Act are taxable unemployment compensation. 1040ez 2009 tax form Qualified disaster relief payments. 1040ez 2009 tax form   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. 1040ez 2009 tax form These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). 1040ez 2009 tax form No withholding applies to these payments. 1040ez 2009 tax form   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. 1040ez 2009 tax form Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. 1040ez 2009 tax form Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. 1040ez 2009 tax form (A personal residence can be a rented residence or one you own. 1040ez 2009 tax form ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. 1040ez 2009 tax form   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. 1040ez 2009 tax form    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. 1040ez 2009 tax form Qualified disaster mitigation payments. 1040ez 2009 tax form   Qualified disaster mitigation payments made under the Robert T. 1040ez 2009 tax form Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. 1040ez 2009 tax form These are payments you, as a property owner, receive to reduce the risk of future damage to your property. 1040ez 2009 tax form You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. 1040ez 2009 tax form Sale of property under hazard mitigation program. 1040ez 2009 tax form   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. 1040ez 2009 tax form You report the gain or deduct the loss on your tax return for the year you realize it. 1040ez 2009 tax form (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. 1040ez 2009 tax form ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. 1040ez 2009 tax form See Postponing Gain , earlier, for the rules that apply. 1040ez 2009 tax form Other federal assistance programs. 1040ez 2009 tax form    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. 1040ez 2009 tax form Postponed tax deadlines. 1040ez 2009 tax form   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. 1040ez 2009 tax form The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. 1040ez 2009 tax form   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). 1040ez 2009 tax form Go to http://www. 1040ez 2009 tax form irs. 1040ez 2009 tax form gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. 1040ez 2009 tax form Who is eligible. 1040ez 2009 tax form   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. 1040ez 2009 tax form Any individual whose main home is located in a covered disaster area (defined next). 1040ez 2009 tax form Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. 1040ez 2009 tax form Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. 1040ez 2009 tax form Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. 1040ez 2009 tax form The main home or principal place of business does not have to be located in the covered disaster area. 1040ez 2009 tax form Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. 1040ez 2009 tax form The spouse on a joint return with a taxpayer who is eligible for postponements. 1040ez 2009 tax form Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. 1040ez 2009 tax form Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. 1040ez 2009 tax form Any other person determined by the IRS to be affected by a federally declared disaster. 1040ez 2009 tax form Covered disaster area. 1040ez 2009 tax form   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. 1040ez 2009 tax form Abatement of interest and penalties. 1040ez 2009 tax form   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. 1040ez 2009 tax form Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. 1040ez 2009 tax form Form 4684. 1040ez 2009 tax form   Use this form to report your gains and losses from casualties and thefts. 1040ez 2009 tax form Form 4797. 1040ez 2009 tax form   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. 1040ez 2009 tax form Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. 1040ez 2009 tax form Form 8949. 1040ez 2009 tax form   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. 1040ez 2009 tax form Schedule A (Form 1040). 1040ez 2009 tax form   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. 1040ez 2009 tax form Schedule D (Form 1040). 1040ez 2009 tax form   Use this form to carry over the following gains. 1040ez 2009 tax form Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. 1040ez 2009 tax form Net gain shown on Form 4684 from the casualty or theft of personal-use property. 1040ez 2009 tax form    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. 1040ez 2009 tax form Schedule F (Form 1040). 1040ez 2009 tax form   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. 1040ez 2009 tax form Prev  Up  Next   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