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2011 Taxes Turbotax

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2011 Taxes Turbotax

2011 taxes turbotax Index A Abroad, citizens living, filing requirements, U. 2011 taxes turbotax S. 2011 taxes turbotax Citizens or Resident Aliens Living Abroad Absence, temporary, Temporary absences. 2011 taxes turbotax , Temporary absences. 2011 taxes turbotax , Temporary absences. 2011 taxes turbotax Accounting periods, joint returns, Accounting period. 2011 taxes turbotax Adopted child, Exception for adopted child. 2011 taxes turbotax , Adopted child. 2011 taxes turbotax , Adopted child. 2011 taxes turbotax Taxpayer identification number, Taxpayer identification numbers for adoptees. 2011 taxes turbotax Age Filing status determination, Age. 2011 taxes turbotax Gross income and filing requirements (Table 1), Table 1. 2011 taxes turbotax 2013 Filing Requirements Chart for Most Taxpayers Standard deduction for age 65 or older, Higher Standard Deduction for Age (65 or Older) Test, Age Test Aliens Dual-status (see Dual-status taxpayers) Nonresident (see Nonresident aliens) Alimony, Alimony. 2011 taxes turbotax Alternative minimum tax (AMT), effect on filing requirements (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Amended returns, Joint Return After Separate Returns, Changing your mind. 2011 taxes turbotax (see also Form 1040X) Change from itemized to standard deduction (or vice versa), Electing to itemize for state tax or other purposes. 2011 taxes turbotax American citizens abroad, U. 2011 taxes turbotax S. 2011 taxes turbotax Citizens or Resident Aliens Living Abroad Annulled marriages, filing status, Annulled marriages. 2011 taxes turbotax Armed forces Combat zone, signing return for spouse, Spouse in combat zone. 2011 taxes turbotax Dependency allotments, Armed Forces dependency allotments. 2011 taxes turbotax GI Bill benefits, Tuition payments and allowances under the GI Bill. 2011 taxes turbotax Military quarters allotments, Tax-exempt military quarters allowances. 2011 taxes turbotax Assistance (see Tax help) ATINs (Adoption taxpayer identification numbers), Taxpayer identification numbers for adoptees. 2011 taxes turbotax B Birth of child, Death or birth. 2011 taxes turbotax Blind persons, standard deduction, Higher Standard Deduction for Blindness C Canada, resident of, U. 2011 taxes turbotax S. 2011 taxes turbotax citizen or resident alien. 2011 taxes turbotax , Citizen or Resident Test, Child in Canada or Mexico. 2011 taxes turbotax Capital expenses, Capital expenses. 2011 taxes turbotax Child born alive, Child born alive. 2011 taxes turbotax Child care expenses, Child care expenses. 2011 taxes turbotax Child custody, Custodial parent and noncustodial parent. 2011 taxes turbotax Child support under pre-1985 agreement, Child support under pre-1985 agreement. 2011 taxes turbotax Child tax credit, Child tax credit. 2011 taxes turbotax Child, qualifying, Qualifying Child Children Adopted child (see Adoption) Adoption (see Adopted child) Birth of child, Death or birth. 2011 taxes turbotax , Death or birth. 2011 taxes turbotax Claiming parent, when child is head of household, Special rule for parent. 2011 taxes turbotax Custody of, Custodial parent and noncustodial parent. 2011 taxes turbotax Death of child, Death or birth. 2011 taxes turbotax , Death or birth. 2011 taxes turbotax Dividends of, Unearned income. 2011 taxes turbotax Filing requirements as dependents (Table 2), Table 2. 2011 taxes turbotax 2013 Filing Requirements for Dependents Investment income of child under age 18, Table 2. 2011 taxes turbotax 2013 Filing Requirements for Dependents , Unearned income. 2011 taxes turbotax Kidnapped, Kidnapped child. 2011 taxes turbotax , Kidnapped child. 2011 taxes turbotax Social security number, Social Security Numbers for Dependents Stillborn, Stillborn child. 2011 taxes turbotax Church employees, filing requirements (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Citizen or resident test, Citizen or Resident Test Citizens outside U. 2011 taxes turbotax S. 2011 taxes turbotax , filing requirements, U. 2011 taxes turbotax S. 2011 taxes turbotax Citizens or Resident Aliens Living Abroad Common law marriage, Considered married. 2011 taxes turbotax Community property states, Community property states. 2011 taxes turbotax Cousin, Cousin. 2011 taxes turbotax Custody of child, Custodial parent and noncustodial parent. 2011 taxes turbotax D Death Of child, Death or birth of child. 2011 taxes turbotax Of dependent, Death or birth. 2011 taxes turbotax , Death or birth. 2011 taxes turbotax Of spouse, Spouse died during the year. 2011 taxes turbotax , Spouse died. 2011 taxes turbotax , Spouse died before signing. 2011 taxes turbotax , Death of spouse. 2011 taxes turbotax Decedents, Spouse died during the year. 2011 taxes turbotax , Decedent's final return. 2011 taxes turbotax (see also Death of spouse) Filing requirements, Deceased Persons Deductions Personal exemption, Personal Exemptions Standard deduction, Standard Deduction Dependent taxpayer test, Dependent Taxpayer Test Dependents Birth of, Death or birth. 2011 taxes turbotax Born and died within year, Born and died in 2013. 2011 taxes turbotax Child's earnings, Child's earnings. 2011 taxes turbotax Death of, Death or birth. 2011 taxes turbotax Earned income, Earned income. 2011 taxes turbotax Exemption for, Exemptions for Dependents Filing requirements, Table 2. 2011 taxes turbotax 2013 Filing Requirements for Dependents , Dependents Married, filing joint return, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Not allowed to claim dependents, Dependent Taxpayer Test Qualifying child, Qualifying Child Qualifying relative, Qualifying Relative Social security number, Social Security Numbers for Dependents, Taxpayer identification numbers for adoptees. 2011 taxes turbotax Standard deduction for, Standard Deduction for Dependents Unearned income, Unearned income. 2011 taxes turbotax Disabled Child, Permanently and totally disabled. 2011 taxes turbotax Dependent, Disabled dependent working at sheltered workshop. 2011 taxes turbotax Divorced parents, Children of divorced or separated parents (or parents who live apart). 2011 taxes turbotax Divorced taxpayers Child custody, Custodial parent and noncustodial parent. 2011 taxes turbotax Filing status, Divorced persons. 2011 taxes turbotax , Divorce and remarriage. 2011 taxes turbotax , Divorced persons. 2011 taxes turbotax Joint returns, responsibility for, Divorced taxpayer. 2011 taxes turbotax Personal exemption, Divorced or separated spouse. 2011 taxes turbotax Domestic help, no exemption for, Housekeepers, maids, or servants. 2011 taxes turbotax Dual-status taxpayers Exemptions, Dual-status taxpayers. 2011 taxes turbotax Joint returns not available, Nonresident alien or dual-status alien. 2011 taxes turbotax E Earned income Defined for purposes of standard deduction, Earned income defined. 2011 taxes turbotax Dependent filing requirements (Table 2), Table 2. 2011 taxes turbotax 2013 Filing Requirements for Dependents Earned income credit Two persons with same qualifying child, Special Rule for Qualifying Child of More Than One Person Elderly persons Home for the aged, Home for the aged. 2011 taxes turbotax Standard deduction for age 65 or older, Higher Standard Deduction for Age (65 or Older) Equitable relief, Innocent spouse, Relief from joint responsibility. 2011 taxes turbotax Exemptions, Exemptions, Taxpayer identification numbers for adoptees. 2011 taxes turbotax Dependents, Exemptions for Dependents Personal (see Personal exemption) F Fair rental value, Fair rental value defined. 2011 taxes turbotax Figures (see Tables and figures) Filing requirements, Who Must File, Filing Status Filing status, Filing Status, Qualifying Widow(er) With Dependent Child Annulled marriages, Annulled marriages. 2011 taxes turbotax Change to Joint return after separate returns, Joint Return After Separate Returns Separate returns after joint return, Separate Returns After Joint Return, Kidnapped child. 2011 taxes turbotax Determination of, Filing status. 2011 taxes turbotax , Filing Status Head of household, Head of household or qualifying widow(er) with dependent child. 2011 taxes turbotax , Head of Household Marital status, determination of, Marital Status Married filing jointly (see Joint returns) Married filing separately (see Married filing separately) Unmarried persons (see Single taxpayers) Food benefits, Support provided by the state (welfare, food benefits, housing, etc. 2011 taxes turbotax ). 2011 taxes turbotax Foreign employment, filing requirements, U. 2011 taxes turbotax S. 2011 taxes turbotax Citizens or Resident Aliens Living Abroad Foreign students, Foreign students' place of residence. 2011 taxes turbotax Form 1040 Personal exemption, Form 1040 filers. 2011 taxes turbotax Social security numbers, Social Security Numbers for Dependents Use of, How to file. 2011 taxes turbotax , How to file. 2011 taxes turbotax , How to file. 2011 taxes turbotax Form 1040A Personal exemption, Form 1040A filers. 2011 taxes turbotax Social security numbers, Social Security Numbers for Dependents Use of, How to file. 2011 taxes turbotax , How to file. 2011 taxes turbotax , How to file. 2011 taxes turbotax Form 1040EZ Personal exemption, Form 1040EZ filers. 2011 taxes turbotax Use of, How to file. 2011 taxes turbotax , How to file. 2011 taxes turbotax Form 1040X Change of filing status, Joint Return After Separate Returns Itemized deductions, change to standard deduction, Changing your mind. 2011 taxes turbotax Standard deduction, change to itemized deductions, Changing your mind. 2011 taxes turbotax Form 1099-B, Form 1099-B received. 2011 taxes turbotax Form 8814, parents' election to report child's interest and dividends, Election to report child's unearned income on parent's return. 2011 taxes turbotax Form 8857, innocent spouse relief, Relief from joint responsibility. 2011 taxes turbotax Form SS-5, social security number request, No SSN. 2011 taxes turbotax Form W-7, individual taxpayer identification number request, Taxpayer identification numbers for aliens. 2011 taxes turbotax Form W-7A, adoption taxpayer identification number request, Taxpayer identification numbers for adoptees. 2011 taxes turbotax Foster care payments and expenses, Foster care payments and expenses. 2011 taxes turbotax , Foster care. 2011 taxes turbotax Foster child, Foster child. 2011 taxes turbotax , Foster care payments and expenses. 2011 taxes turbotax , Foster child. 2011 taxes turbotax , Foster care. 2011 taxes turbotax Free tax services, Free help with your tax return. 2011 taxes turbotax Funeral expenses, Do Not Include in Total Support G GI Bill benefits, Tuition payments and allowances under the GI Bill. 2011 taxes turbotax Gross income Defined, Gross income. 2011 taxes turbotax Filing requirements (Table 1), Table 1. 2011 taxes turbotax 2013 Filing Requirements Chart for Most Taxpayers Dependent filing requirements (Table 2), Table 2. 2011 taxes turbotax 2013 Filing Requirements for Dependents Test, Gross Income Test Group-term life insurance, Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return H Head of household, Head of Household, Kidnapped child. 2011 taxes turbotax Exemption for spouse, Head of household. 2011 taxes turbotax Filing requirements (Table 1), Table 1. 2011 taxes turbotax 2013 Filing Requirements Chart for Most Taxpayers Health insurance premiums, Medical insurance premiums. 2011 taxes turbotax Help (see Tax help) Home Aged, home for, Home for the aged. 2011 taxes turbotax Cost of keeping up, Keeping Up a Home Household workers, no exemption for, Housekeepers, maids, or servants. 2011 taxes turbotax I Income Gross, Gross Income Test Tax exempt, Tax-exempt income. 2011 taxes turbotax Individual retirement arrangements (IRAs) Filing requirements (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Married filing separately, Individual retirement arrangements (IRAs). 2011 taxes turbotax Individual taxpayer identification numbers (ITINs), Reminders, Taxpayer identification numbers for aliens. 2011 taxes turbotax Innocent spouse relief, Relief from joint responsibility. 2011 taxes turbotax Insurance premiums Life, Do Not Include in Total Support Medical, Medical insurance premiums. 2011 taxes turbotax IRAs (see Individual retirement arrangements (IRAs)) Itemized deductions Changing from standard to itemized deduction (or vice versa), Changing your mind. 2011 taxes turbotax Choosing to itemize, Who Should Itemize Married filing separately, Married persons who filed separate returns. 2011 taxes turbotax When to itemize, When to itemize. 2011 taxes turbotax ITINs (Individual taxpayer identification numbers), Taxpayer identification numbers for aliens. 2011 taxes turbotax J Joint return test, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Joint returns, Married Filing Jointly, Nonresident alien or dual-status alien. 2011 taxes turbotax Dependents on, Joint return. 2011 taxes turbotax Personal exemption, Joint return. 2011 taxes turbotax K Kidnapped children Qualifying child, Kidnapped child. 2011 taxes turbotax Qualifying relative, Kidnapped child. 2011 taxes turbotax Widow(er) with dependent child, Death or birth. 2011 taxes turbotax L Life insurance premiums, Do Not Include in Total Support Local income taxes, itemized deductions, Electing to itemize for state tax or other purposes. 2011 taxes turbotax Local law violated, Local law violated. 2011 taxes turbotax Lodging, Lodging. 2011 taxes turbotax Losses, rental real estate, Rental activity losses. 2011 taxes turbotax M Marital status, determination of, Marital Status Married dependents, filing joint return, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Married filing jointly (see Joint returns) Married filing separately, Married Filing Separately Changing method from or to itemized deductions, Changing your mind. 2011 taxes turbotax Exemption for spouse, Separate return. 2011 taxes turbotax Itemized deductions, Married persons who filed separate returns. 2011 taxes turbotax Married taxpayers, Married Filing Jointly (see also Joint returns) Age 65 or older spouse, standard deduction, Higher Standard Deduction for Age (65 or Older), Spouse 65 or Older or Blind Blind spouse, standard deduction, Higher Standard Deduction for Blindness, Spouse 65 or Older or Blind Dual-status alien spouse, Nonresident alien or dual-status alien. 2011 taxes turbotax Filing status, Married persons. 2011 taxes turbotax Medical insurance premiums, Medical insurance premiums. 2011 taxes turbotax Medical savings accounts (MSAs, effect on filing requirements (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Medicare taxes, not support, Do Not Include in Total Support Member of household or relationship test, Member of Household or Relationship Test Mexico, resident of, U. 2011 taxes turbotax S. 2011 taxes turbotax citizen or resident alien. 2011 taxes turbotax , Citizen or Resident Test, Child in Canada or Mexico. 2011 taxes turbotax Military (see Armed forces) Missing children, photographs of in IRS publications, Reminders Multiple support agreement, Multiple Support Agreement N National of the United States, U. 2011 taxes turbotax S. 2011 taxes turbotax national. 2011 taxes turbotax Nonresident aliens, Nonresident aliens. 2011 taxes turbotax Dependents, Taxpayer identification numbers for aliens. 2011 taxes turbotax Exemptions, Nonresident aliens. 2011 taxes turbotax Joint return, Nonresident alien or dual-status alien. 2011 taxes turbotax Spouse, Nonresident alien spouse. 2011 taxes turbotax Taxpayer identification number, Taxpayer identification numbers for aliens. 2011 taxes turbotax O Overseas taxpayers, U. 2011 taxes turbotax S. 2011 taxes turbotax Citizens or Resident Aliens Living Abroad P Parent, claiming head of household for, Special rule for parent. 2011 taxes turbotax Parents who never married, Parents who never married. 2011 taxes turbotax Parents, divorced or separated, Children of divorced or separated parents (or parents who live apart). 2011 taxes turbotax Penalty, failure to file, Who Must File Personal exemption, Personal Exemptions Photographs of missing children in IRS publications, Reminders Publications (see Tax help) Puerto Rico, residents of, Residents of Puerto Rico Q Qualifying Child, Qualifying Child Relative, Qualifying Relative Surviving spouse, Qualifying Widow(er) With Dependent Child Widow/widower, Qualifying Widow(er) With Dependent Child R Recapture taxes, Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Relationship test, Relationship Test, Member of Household or Relationship Test Relative, qualifying, Qualifying Relative Remarriage after divorce, Divorce and remarriage. 2011 taxes turbotax Rental losses, Rental activity losses. 2011 taxes turbotax Residency test, Residency Test S Same-sex marriage Filing status, Same-sex marriage. 2011 taxes turbotax Scholarships, Earned income. 2011 taxes turbotax , Scholarships. 2011 taxes turbotax , Gross income defined. 2011 taxes turbotax , Do Not Include in Total Support , Earned income defined. 2011 taxes turbotax Self-employed persons Filing requirements (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Gross income, Self-employed persons. 2011 taxes turbotax Separate returns (see Married filing separately) Separated parents, Children of divorced or separated parents (or parents who live apart). 2011 taxes turbotax Separated taxpayers Filing status, Considered married. 2011 taxes turbotax , Married persons living apart. 2011 taxes turbotax Living apart but not legally separated, Considered married. 2011 taxes turbotax Personal exemption, Divorced or separated spouse. 2011 taxes turbotax Signatures, joint returns, Signing a joint return. 2011 taxes turbotax Single taxpayers Filing status, Unmarried persons. 2011 taxes turbotax , Single Gross income filing requirements (Table 1), Table 1. 2011 taxes turbotax 2013 Filing Requirements Chart for Most Taxpayers How to file and forms, How to file. 2011 taxes turbotax Personal exemption, Your Own Exemption Social security and Medicare taxes Reporting of (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Support, not included in, Do Not Include in Total Support Social security benefits, Social security benefits. 2011 taxes turbotax Social security numbers (SSNs) for dependents, Social Security Numbers for Dependents Spouse Deceased, Spouse died. 2011 taxes turbotax , Spouse died before signing. 2011 taxes turbotax , Death of spouse. 2011 taxes turbotax Dual-status alien spouse, Nonresident alien or dual-status alien. 2011 taxes turbotax Exemption for, Your Spouse's Exemption Innocent spouse relief, Relief from joint responsibility. 2011 taxes turbotax Nonresident alien, Nonresident alien spouse. 2011 taxes turbotax Signing joint returns, Signing a joint return. 2011 taxes turbotax Surviving (see Surviving spouse) SSNs (see Social security numbers (SSNs) for dependents) Standard deduction, What's New, Standard Deduction, Married persons who filed separate returns. 2011 taxes turbotax Married filing jointly, Married Filing Jointly State or local income taxes, Electing to itemize for state tax or other purposes. 2011 taxes turbotax Stillborn child, Stillborn child. 2011 taxes turbotax Students Defined, Student defined. 2011 taxes turbotax Foreign, Foreign students' place of residence. 2011 taxes turbotax Support test Qualifying child, Support Test (To Be a Qualifying Child) Qualifying relative, Support Test (To Be a Qualifying Relative) Surviving spouse Death of spouse (see Death of spouse) Gross income filing requirements (Table 1), Table 1. 2011 taxes turbotax 2013 Filing Requirements Chart for Most Taxpayers Single filing status, Widow(er). 2011 taxes turbotax Widow(er) with dependent child, Qualifying Widow(er) With Dependent Child, How to file. 2011 taxes turbotax , Death or birth. 2011 taxes turbotax T Tables and figures, Keeping Up a Home, Worksheet 2. 2011 taxes turbotax Worksheet for Determining Support (see also Worksheets) Filing requirements Dependents (Table 2), Table 2. 2011 taxes turbotax 2013 Filing Requirements for Dependents Gross income levels (Table 1), Table 1. 2011 taxes turbotax 2013 Filing Requirements Chart for Most Taxpayers Other situations requiring filing (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Tax help, How To Get Tax Help Tax returns Amended (see Form 1040X) Filing of (see Filing requirements) Joint returns (see Joint returns) Who must file, What's New, Who Must File, Filing Requirements for Most Taxpayers, Who Should File Tax-exempt income, Tax-exempt income. 2011 taxes turbotax Taxes, not support, Do Not Include in Total Support Temporary absences, Temporary absences. 2011 taxes turbotax , Temporary absences. 2011 taxes turbotax Tiebreaker rules, Tiebreaker rules. 2011 taxes turbotax Tips, reporting of (Table 3), Table 3. 2011 taxes turbotax Other Situations When You Must File a 2013 Return Total support, Total Support Tuition, benefits under GI Bill, Tuition payments and allowances under the GI Bill. 2011 taxes turbotax U U. 2011 taxes turbotax S. 2011 taxes turbotax citizen or resident, Citizen or Resident Test U. 2011 taxes turbotax S. 2011 taxes turbotax citizens filing abroad, filing requirements Filing requirements, U. 2011 taxes turbotax S. 2011 taxes turbotax Citizens or Resident Aliens Living Abroad U. 2011 taxes turbotax S. 2011 taxes turbotax national, U. 2011 taxes turbotax S. 2011 taxes turbotax national. 2011 taxes turbotax U. 2011 taxes turbotax S. 2011 taxes turbotax possessions, income from, Individuals With Income From U. 2011 taxes turbotax S. 2011 taxes turbotax Possessions Unmarried persons (see Single taxpayers) W Welfare benefits, Support provided by the state (welfare, food benefits, housing, etc. 2011 taxes turbotax ). 2011 taxes turbotax What's New, What's New Widow/widower (see Surviving spouse) Worksheets Exemption Phaseout, Worksheet 3. 2011 taxes turbotax Worksheet for Determining the Deduction for Exemptions Head of household status and cost of keeping up home, Keeping Up a Home Support test, Worksheet 2. 2011 taxes turbotax Worksheet for Determining Support Prev  Up     Home   More Online Publications
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The 2011 Taxes Turbotax

2011 taxes turbotax Other Methods of Depreciation Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: How To Figure the DeductionBasis Useful Life Salvage Value Methods To UseStraight Line Method Declining Balance Method Income Forecast Method How To Change Methods DispositionsSale or exchange. 2011 taxes turbotax Property not disposed of or abandoned. 2011 taxes turbotax Special rule for normal retirements from item accounts. 2011 taxes turbotax Abandoned property. 2011 taxes turbotax Single item accounts. 2011 taxes turbotax Multiple property account. 2011 taxes turbotax Topics - This chapter discusses: How to figure the deduction Methods to use How to change methods Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records 946 How To Depreciate Property Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization Schedule C (Form 1040) Profit or Loss From Business If your property is being depreciated under ACRS, you must continue to use rules for depreciation that applied when you placed the property in service. 2011 taxes turbotax If your property qualified for MACRS, you must depreciate it under MACRS. 2011 taxes turbotax See Publication 946. 2011 taxes turbotax However, you cannot use MACRS for certain property because of special rules that exclude it from MACRS. 2011 taxes turbotax Also, you can elect to exclude certain property from being depreciated under MACRS. 2011 taxes turbotax Property that you cannot depreciate using MACRS includes: Intangible property, Property you can elect to exclude from MACRS that you properly depreciate under a method that is not based on a term of years, Certain public utility property, Any motion picture film or video tape, Any sound recording, and Certain real and personal property placed in service before 1987. 2011 taxes turbotax Intangible property. 2011 taxes turbotax   You cannot depreciate intangible property under ACRS or MACRS. 2011 taxes turbotax You depreciate intangible property using any other reasonable method, usually, the straight line method. 2011 taxes turbotax Note. 2011 taxes turbotax The cost of certain intangible property that you acquire after August 10, 1993, must be amortized over a 15-year period. 2011 taxes turbotax For more information, see chapter 12 of Publication 535. 2011 taxes turbotax Public utility property. 2011 taxes turbotax   The law excludes from MACRS any public utility property for which the taxpayer does not use a normalization method of accounting. 2011 taxes turbotax This type of property is subject to depreciation under a special rule. 2011 taxes turbotax Videocassettes. 2011 taxes turbotax   If you are in the videocassette rental business, you can depreciate those videocassettes purchased for rental. 2011 taxes turbotax You can depreciate the cost less salvage value of those videocassettes that have a useful life over one year using either: The straight line method, or The income forecast method. 2011 taxes turbotax The straight line method, salvage value, and useful life are discussed later under Methods To Use. 2011 taxes turbotax You can deduct in the year of purchase as a business expense the cost of any cassette that has a useful life of one year or less. 2011 taxes turbotax How To Figure the Deduction Two other reasonable methods can be used to figure your deduction for property not covered under ACRS or MACRS. 2011 taxes turbotax These methods are straight line and declining balance. 2011 taxes turbotax To figure depreciation using these methods, you must generally determine three things about the property you intend to depreciate. 2011 taxes turbotax They are: The basis, The useful life, and The estimated salvage value at the end of its useful life. 2011 taxes turbotax The amount of the deduction in any year also depends on which method of depreciation you choose. 2011 taxes turbotax Basis To deduct the proper amount of depreciation each year, first determine your basis in the property you intend to depreciate. 2011 taxes turbotax The basis used for figuring depreciation is the same as the basis that would be used for figuring the gain on a sale. 2011 taxes turbotax Your original basis is usually the purchase price. 2011 taxes turbotax However, if you acquire property in some other way, such as inheriting it, getting it as a gift, or building it yourself, you have to figure your original basis in a different way. 2011 taxes turbotax Adjusted basis. 2011 taxes turbotax   Events will often change the basis of property. 2011 taxes turbotax When this occurs, the changed basis is called the adjusted basis. 2011 taxes turbotax Some events, such as improvements you make, increase basis. 2011 taxes turbotax Events such as deducting casualty losses and depreciation decrease basis. 2011 taxes turbotax If basis is adjusted, the depreciation deduction may also have to be changed, depending on the reason for the adjustment and the method of depreciation you are using. 2011 taxes turbotax   Publication 551 explains how to figure basis for property acquired in different ways. 2011 taxes turbotax It also discusses what items increase and decrease basis, how to figure adjusted basis, and how to allocate cost if you buy several pieces of property at one time. 2011 taxes turbotax Useful Life The useful life of a piece of property is an estimate of how long you can expect to use it in your trade or business, or to produce income. 2011 taxes turbotax It is the length of time over which you will make yearly depreciation deductions of your basis in the property. 2011 taxes turbotax It is how long it will continue to be useful to you, not how long the property will last. 2011 taxes turbotax Many things affect the useful life of property, such as: Frequency of use, Age when acquired, Your repair policy, and Environmental conditions. 2011 taxes turbotax The useful life can also be affected by technological improvements, progress in the arts, reasonably foreseeable economic changes, shifting of business centers, prohibitory laws, and other causes. 2011 taxes turbotax Consider all these factors before you arrive at a useful life for your property. 2011 taxes turbotax The useful life of the same type of property varies from user to user. 2011 taxes turbotax When you determine the useful life of your property, keep in mind your own experience with similar property. 2011 taxes turbotax You can use the general experience of the industry you are in until you are able to determine a useful life of your property from your own experience. 2011 taxes turbotax Change in useful life. 2011 taxes turbotax   You base your estimate of useful life on certain facts. 2011 taxes turbotax If these facts change significantly, you can adjust your estimate of the remaining useful life. 2011 taxes turbotax However, you redetermine the estimated useful life only when the change is substantial and there is a clear reason for making the change. 2011 taxes turbotax Salvage Value It is important for you to accurately determine the correct salvage value of the property you want to depreciate. 2011 taxes turbotax You generally cannot depreciate property below a reasonable salvage value. 2011 taxes turbotax Determining salvage value. 2011 taxes turbotax   Salvage value is the estimated value of property at the end of its useful life. 2011 taxes turbotax It is what you expect to get for the property if you sell it after you can no longer use it productively. 2011 taxes turbotax You must estimate the salvage value of a piece of property when you first acquire it. 2011 taxes turbotax   Salvage value is affected both by how you use the property and how long you use it. 2011 taxes turbotax If it is your policy to dispose of property that is still in good operating condition, the salvage value can be relatively large. 2011 taxes turbotax However, if your policy is to use property until it is no longer usable, its salvage value can be its junk value. 2011 taxes turbotax Changing salvage value. 2011 taxes turbotax   Once you determine the salvage value for property, you should not change it merely because prices have changed. 2011 taxes turbotax However, if you redetermine the useful life of property, as discussed earlier under Change in useful life, you can also redetermine the salvage value. 2011 taxes turbotax When you redetermine the salvage value, take into account the facts that exist at the time. 2011 taxes turbotax Net salvage. 2011 taxes turbotax   Net salvage is the salvage value of property minus what it costs to remove it when you dispose of it. 2011 taxes turbotax You can choose either salvage value or net salvage when you figure depreciation. 2011 taxes turbotax You must consistently use the one you choose and the treatment of the costs of removal must be consistent with the practice adopted. 2011 taxes turbotax However, if the cost to remove the property is more than the estimated salvage value, then net salvage is zero. 2011 taxes turbotax Your salvage value can never be less than zero. 2011 taxes turbotax Ten percent rule. 2011 taxes turbotax   If you acquire personal property that has a useful life of 3 years or more, you can use an amount for salvage value that is less than your actual estimate. 2011 taxes turbotax You can subtract from your estimate of salvage value an amount equal to 10% of your basis in the property. 2011 taxes turbotax If salvage value is less than 10% of basis, you can ignore salvage value when you figure depreciation. 2011 taxes turbotax Methods To Use Two methods of depreciation are the straight line and declining balance methods. 2011 taxes turbotax If ACRS or MACRS does not apply, you can use one of these methods. 2011 taxes turbotax The straight line and declining balance methods discussed in this section are not figured in the same way as straight line or declining balance methods under MACRS. 2011 taxes turbotax Straight Line Method Before 1981, you could use any reasonable method for every kind of depreciable property. 2011 taxes turbotax One of these methods was the straight line method. 2011 taxes turbotax This method was also used for intangible property. 2011 taxes turbotax It lets you deduct the same amount of depreciation each year. 2011 taxes turbotax To figure your deduction, determine the adjusted basis of your property, its salvage value, and its estimated useful life. 2011 taxes turbotax Subtract the salvage value, if any, from the adjusted basis. 2011 taxes turbotax The balance is the total amount of depreciation you can take over the useful life of the property. 2011 taxes turbotax Divide the balance by the number of years remaining in the useful life. 2011 taxes turbotax This gives you the amount of your yearly depreciation deduction. 2011 taxes turbotax Unless there is a big change in adjusted basis, or useful life, this amount will stay the same throughout the time you depreciate the property. 2011 taxes turbotax If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. 2011 taxes turbotax Example. 2011 taxes turbotax In April 1994, Frank bought a franchise for $5,600. 2011 taxes turbotax It expires in 10 years. 2011 taxes turbotax This property is intangible property that cannot be depreciated under MACRS. 2011 taxes turbotax Frank depreciates the franchise under the straight line method, using a 10-year useful life and no salvage value. 2011 taxes turbotax He takes the $5,600 basis and divides that amount by 10 years ($5,600 ÷ 10 = $560, a full year's use). 2011 taxes turbotax He must prorate the $560 for his 9 months of use in 1994. 2011 taxes turbotax This gives him a deduction of $420 ($560 ÷ 9/12). 2011 taxes turbotax In 1995, Frank can deduct $560 for the full year. 2011 taxes turbotax Declining Balance Method The declining balance method allows you to recover a larger amount of the cost of the property in the early years of your use of the property. 2011 taxes turbotax The rate cannot be more than twice the straight line rate. 2011 taxes turbotax Rate of depreciation. 2011 taxes turbotax   Under this method, you must determine your declining balance rate of depreciation. 2011 taxes turbotax The initial step is to: Divide the number 1 by the useful life of your property to get a straight line rate. 2011 taxes turbotax (For example, if property has a useful life of 5 years, its normal straight line rate of depreciation is ⅕, or 20%. 2011 taxes turbotax ) Multiply this straight line rate by a number that is more than 1 but not more than 2 to determine the declining balance rate. 2011 taxes turbotax Unless there is a change in the useful life during the time you depreciate the property, the rate of depreciation generally will not change. 2011 taxes turbotax Depreciation deductions. 2011 taxes turbotax   After you determine the rate of depreciation, multiply the adjusted basis of the property by it. 2011 taxes turbotax This gives you the amount of your deduction. 2011 taxes turbotax For example, if your adjusted basis at the beginning of the first year is $10,000, and your declining balance rate is 20%, your depreciation deduction for the first year is $2,000 ($10,000 ÷ 20%). 2011 taxes turbotax To figure your depreciation deduction in the second year, you must first adjust the basis for the amount of depreciation you deducted in the first year. 2011 taxes turbotax Subtract the previous year's depreciation from your basis ($10,000 - $2,000 = $8,000). 2011 taxes turbotax Multiply this amount by the rate of depreciation ($8,000 ÷ 20% = $1,600). 2011 taxes turbotax Your depreciation deduction for the second year is $1,600. 2011 taxes turbotax   As you can see from this example, your adjusted basis in the property gets smaller each year. 2011 taxes turbotax Also, under this method, deductions are larger in the earlier years and smaller in the later years. 2011 taxes turbotax You can make a change to the straight line method without consent. 2011 taxes turbotax Salvage value. 2011 taxes turbotax   Do not subtract salvage value when you figure your yearly depreciation deductions under the declining balance method. 2011 taxes turbotax However, you cannot depreciate the property below its reasonable salvage value. 2011 taxes turbotax Determine salvage value using the rules discussed earlier, including the special 10% rule. 2011 taxes turbotax Example. 2011 taxes turbotax If your adjusted basis has been decreased to $1,000 and the rate of depreciation is 20%, your depreciation deduction should be $200. 2011 taxes turbotax But if your estimate of salvage value was $900, you can only deduct $100. 2011 taxes turbotax This is because $100 is the amount that would lower your adjusted basis to equal salvage value. 2011 taxes turbotax Income Forecast Method The income forecast method requires income projections for each videocassette or group of videocassettes. 2011 taxes turbotax You can group the videocassettes by title for making this projection. 2011 taxes turbotax You determine the depreciation by applying a fraction to the cost less salvage value of the cassette. 2011 taxes turbotax The numerator is the income from the videocassette for the tax year and the denominator is the total projected income for the cassette. 2011 taxes turbotax For more information on the income forecast method, see Revenue Ruling 60-358 in Cumulative Bulletin 1960, Volume 2, on page 68. 2011 taxes turbotax How To Change Methods In some cases, you may change your method of depreciation for property depreciated under a reasonable method. 2011 taxes turbotax If you change your method of depreciation, it is generally a change in your method of accounting. 2011 taxes turbotax You must get IRS consent before making the change. 2011 taxes turbotax However, you do not need permission for certain changes in your method of depreciation. 2011 taxes turbotax The rules discussed in this section do not apply to property depreciated under ACRS or MACRS. 2011 taxes turbotax For information on ACRS elections,see Revocation of election, in chapter 1 under Alternate ACRS Method. 2011 taxes turbotax Change to the straight line method. 2011 taxes turbotax   You can change from the declining balance method to the straight line method at any time during the useful life of your property without IRS consent. 2011 taxes turbotax However, if you have a written agreement with the IRS that prohibits a change, you must first get IRS permission. 2011 taxes turbotax When the change is made, figure depreciation based on your adjusted basis in the property at that time. 2011 taxes turbotax Your adjusted basis takes into account all previous depreciation deductions. 2011 taxes turbotax Use the estimated remaining useful life of your property at the time of change and its estimated salvage value. 2011 taxes turbotax   You can change from the declining balance method to straight line only on the original tax return for the year you first use the straight line method. 2011 taxes turbotax You cannot make the change on an amended return filed after the due date of the original return (including extensions). 2011 taxes turbotax   When you make the change, attach a statement to your tax return showing: When you acquired the property, Its original cost or other original basis, The total amount claimed for depreciation and other allowances since you acquired it, Its salvage value and remaining useful life, and A description of the property and its use. 2011 taxes turbotax   After you change to straight line, you cannot change back to the declining balance method or to any other method for a period of 10 years without written permission from the IRS. 2011 taxes turbotax Changes that require permission. 2011 taxes turbotax   For most other changes in method of depreciation, you must get permission from the IRS. 2011 taxes turbotax To request a change in method of depreciation, file Form 3115. 2011 taxes turbotax File the application within the first 180 days of the tax year the change is to become effective. 2011 taxes turbotax In most cases, there is a user fee that must accompany Form 3115. 2011 taxes turbotax See the instructions for Form 3115 to determine if a fee is required. 2011 taxes turbotax Changes granted automatically. 2011 taxes turbotax   The IRS automatically approves certain changes of a method of depreciation. 2011 taxes turbotax But, you must file Form 3115 for these automatic changes. 2011 taxes turbotax   However, IRS can deny permission if Form 3115 is not filed on time. 2011 taxes turbotax For more information on automatic changes, see Revenue Procedure 74-11, 1974-1 C. 2011 taxes turbotax B. 2011 taxes turbotax 420. 2011 taxes turbotax Changes for which approval is not automatic. 2011 taxes turbotax   The automatic change procedures do not apply to: Property or an account where you made a change in depreciation within the last 10 tax years (unless the change was made under the Class Life System), Class Life Asset Depreciation Range System, and Public utility property. 2011 taxes turbotax   You must request and receive permission for these changes. 2011 taxes turbotax To make the request, file Form 3115 during the first 180 days of the tax year for which you want the change to be effective. 2011 taxes turbotax Change from an improper method. 2011 taxes turbotax   If the IRS disallows the method you are using, you do not need permission to change to a proper method. 2011 taxes turbotax You can adopt the straight line method, or any other method that would have been permitted if you had used it from the beginning. 2011 taxes turbotax If you file your tax return using an improper method, but later file an amended return, you can use a proper method on the amended return without getting IRS permission. 2011 taxes turbotax However, you must file the amended return before the filing date for the next tax year. 2011 taxes turbotax Dispositions Retirement is the permanent withdrawal of depreciable property from use in your trade or business or for the production of income. 2011 taxes turbotax You can do this by selling, exchanging, or abandoning the item of property. 2011 taxes turbotax You can also withdraw it from use without disposing of it. 2011 taxes turbotax For example, you could place it in a supplies or scrap account. 2011 taxes turbotax Retirements can be either normal or abnormal depending on all facts and circumstances. 2011 taxes turbotax The rules discussed next do not apply to MACRS and ACRS property. 2011 taxes turbotax Normal retirement. 2011 taxes turbotax   A normal retirement is a permanent withdrawal of depreciable property from use if the following apply: The retirement is made within the useful life you estimated originally, and The property has reached a condition at which you customarily retire or would retire similar property from use. 2011 taxes turbotax A retirement is generally considered normal unless you can show that you retired the property because of a reason you did not consider when you originally estimated the useful life of the property. 2011 taxes turbotax Abnormal retirement. 2011 taxes turbotax   A retirement can be abnormal if you withdraw the property early or under other circumstances. 2011 taxes turbotax For example, if the property is damaged by a fire or suddenly becomes obsolete and is now useless. 2011 taxes turbotax Gain or loss on retirement. 2011 taxes turbotax   There are special rules for figuring the gain or loss on retirement of property. 2011 taxes turbotax The gain or loss will depend on several factors. 2011 taxes turbotax These include the type of withdrawal, if the withdrawal was from a single property or multiple property account, and if the retirement was normal or abnormal. 2011 taxes turbotax A single property account contains only one item of property. 2011 taxes turbotax A multiple property account is one in which several items have been combined with a single rate of depreciation assigned to the entire account. 2011 taxes turbotax Sale or exchange. 2011 taxes turbotax   If property is retired by sale or exchange, you figure gain or loss by the usual rules that apply to sales or other dispositions of property. 2011 taxes turbotax See Publication 544. 2011 taxes turbotax Property not disposed of or abandoned. 2011 taxes turbotax   If property is retired permanently, but not disposed of or physically abandoned, you do not recognize gain. 2011 taxes turbotax You are allowed a loss in such a case, but only if the retirement is: An abnormal retirement, A normal retirement from a single property account in which you determined the life of each item of property separately, or A normal retirement from a multiple property account in which the depreciation rate is based on the maximum expected life of the longest lived item of property and the loss occurs before the expiration of the full useful life. 2011 taxes turbotax However, you are not allowed a loss if the depreciation rate is based on the average useful life of the items of property in the account. 2011 taxes turbotax   To figure your loss, subtract the estimated salvage or fair market value of the property at the date of retirement, whichever is more, from its adjusted basis. 2011 taxes turbotax Special rule for normal retirements from item accounts. 2011 taxes turbotax   You can generally deduct losses upon retirement of a few depreciable items of property with similar useful lives, if: You account for each one in a separate account, and You use the average useful life to figure depreciation. 2011 taxes turbotax However, you cannot deduct losses if you use the average useful life to figure depreciation and they have a wide range of useful lives. 2011 taxes turbotax   If you have a large number of depreciable property items and use average useful lives to figure depreciation, you cannot deduct the losses upon normal retirements from these accounts. 2011 taxes turbotax Abandoned property. 2011 taxes turbotax   If you physically abandon property, you can deduct as a loss the adjusted basis of the property at the time of its abandonment. 2011 taxes turbotax However, your intent must be to discard the property so that you will not use it again or retrieve it for sale, exchange, or other disposition. 2011 taxes turbotax Basis of property retired. 2011 taxes turbotax   The basis for figuring gain or loss on the retirement of property is its adjusted basis at the time of retirement, as determined in the following discussions. 2011 taxes turbotax Single item accounts. 2011 taxes turbotax   If an item of property is accounted for in a single item account, the adjusted basis is the basis you would use to figure gain or loss for a sale or exchange of the property. 2011 taxes turbotax This is generally the cost or other basis of the item of property less depreciation. 2011 taxes turbotax See Publication 551. 2011 taxes turbotax Multiple property account. 2011 taxes turbotax   For a normal retirement from a multiple property account, if you figured depreciation using the average expected useful life, the adjusted basis is the salvage value estimated for the item of property when it was originally acquired. 2011 taxes turbotax If you figured depreciation using the maximum expected useful life of the longest lived item of property in the account, you must use the depreciation method used for the multiple property account and a rate based on the maximum expected useful life of the item of property retired. 2011 taxes turbotax   You make the adjustment for depreciation for an abnormal retirement from a multiple property account at the rate that would be proper if the item of property was depreciated in a single property account. 2011 taxes turbotax The method of depreciation used for the multiple property account is used. 2011 taxes turbotax You base the rate on either the average expected useful life or the maximum expected useful life of the retired item of property, depending on the method used to determine the depreciation rate for the multiple property account. 2011 taxes turbotax Prev  Up  Next   Home   More Online Publications