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

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

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

3. E-File for FREE

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

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

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

Efile State Taxes For Free

1040ex Form1040nr-ez2011 Income Tax Forms 1040ezE File Taxes1040 Us Individual Income Tax ReturnFree H&r Block TaxH&r Block Key Code For Free State FilingFree Tax PreparationIrs 1040 Form2012 Amended 1040xAmended Tax Returns More:label_amended_20tax_20returns More:taxesIrs EfileTaxes Due 2012E File Form 1040xHow Do I Complete A 1040x FormsCan You Amend A Tax ReturnE File 2011 Taxes OnlineFree Tax Filing 2011 State And FederalIrs 1040x Instructions1040ez 2011Filing 2012 Tax ReturnFiling For 2012 TaxesIrs Form 1040xH&r Block AdvantageFile State Taxes1040x FillableFile My 2011 Taxes For FreeStudents Filing Taxes 2013Free Online Tax Filing For 2012How To File An Amendment2012 Federal Tax Forms 1040 InstructionsCan I Efile 2012 Taxes1040x TurbotaxIrs Form 1040nrE File State Taxes Free OnlineFree State Tax Preparation And FilingSearch Free Tax UsaTax Filing 2011How To Do 1040ez Tax FormHow Do I File My Taxes From 2012

Efile State Taxes For Free

Efile state taxes for free Some employees may be able to deduct certain work-related expenses. The following facts from the IRS can help you determine which expenses are deductible as an employee business expense. You must be itemizing deductions on IRS Schedule A to qualify. Efile state taxes for free Expenses that qualify for an itemized deduction generally include: Efile state taxes for free Business travel away from home Efile state taxes for free Business use of your car Efile state taxes for free Business meals and entertainment Efile state taxes for free Travel Efile state taxes for free Use of your home Efile state taxes for free Education Efile state taxes for free Supplies Efile state taxes for free Tools Efile state taxes for free Miscellaneous expenses Efile state taxes for free You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on this website, or by calling 1-800-TAX-FORM (800-829-3676). Efile state taxes for free If your employer reimburses you under an accountable plan, you should not include the payments in your gross income, and you may not deduct any of the reimbursed amounts. Efile state taxes for free An accountable plan must meet three requirements: Efile state taxes for free You must have paid or incurred expenses that are deductible while performing services as an employee. Efile state taxes for free Efile state taxes for free You must adequately account to your employer for these expenses within a reasonable time period. Efile state taxes for free Efile state taxes for free You must return any excess reimbursement or allowance within a reasonable time period. Efile state taxes for free If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses. Efile state taxes for free Generally, you report unreimbursed expenses on IRS Form 2106 or IRS Form 2106-EZ and attach it to Form 1040. Deductible expenses are then reported on IRS Schedule A, as a miscellaneous itemized deduction subject to a rule that limits your employee business expenses deduction to the amount that exceeds 2 percent of your adjusted gross income. Efile state taxes for free For more information see IRS Publication 529, Miscellaneous Deductions, which is available on this website, or by calling 1-800-TAX-FORM (800-829-3676). Efile state taxes for free
Español

Japan 2011 Earthquake/Tsunami – U.S. Government Information


In the United States

Environmental Monitoring

The EPA has its radiation air monitoring (RadNet) data, frequently asked questions, and other resources on http://www.epa.gov/japan2011/. Here you can:

Food Safety

The U.S. Food and Drug Administration (FDA) has deemed that based on current information, there is no risk to the U.S. food supply.

In response to the ongoing situation in Japan, the EPA has taken steps to increase the level of nationwide monitoring of milk, precipitation, drinking water, and other potential exposure routes.

  • EPA conducts radiological monitoring of milk under its RADNET program
  • The U.S. Food and Drug Administration has jurisdiction over the safety, labeling and identity of milk and milk products in interstate commerce.
  • States have jurisdiction over those facilities located within their territory.

Results from a screening sample taken March 25 from Spokane, WA detected 0.8 pCi/L of iodine-131, which is more than 5,000 times lower than the Derived Intervention Level set by the U.S. Food and Drug Administration.

  • These types of findings are to be expected in the coming days and are far below levels of public health concern, including for infants and children.
  • Iodine-131 has a very short half-life of approximately eight days, and the level detected in milk and milk products is therefore expected to drop relatively quickly.

Radiation is all around us in our daily lives, and these findings are a miniscule amount compared to what people experience every day. For example, people are exposed to low levels of radiation on round trip cross country flights, watching television, and even from construction materials.

  • The U.S. Food and Drug Administration has jurisdiction over 80 percent of the food supply, including seafood, dairy, and produce. The U.S. Department of Agriculture regulates meat, poultry, and processed egg products, while FDA regulates all other food products.
  • The U.S. Department of Agriculture has stated that Japan has not exported any beef products to the United States for nearly a year.
  • The U.S. Department of Agriculture has stated that Japan is not currently eligible to export any poultry or processed egg products to the U.S.
  • The U.S. Food and Drug Administration and Customs and Border Protection carefully screen all food products for unsafe substances, including radiological material at Ports of Entry.
  • Learn more about keeping food safe during an emergency.

Potassium Iodide (KI)

The Centers for Disease Control (CDC) does not recommend that people in the United States take potassium iodide supplements (also called KI) in response to the damaged nuclear reactors in Japan.

  • Only take KI on the advice of emergency management officials, public health officials, or your doctor.
  • There are health risks associated with taking KI.

Food, Mail, Ships, and Cargo from Japan

The U.S. Customs and Border Protection (CBP) is monitoring developments in Japan carefully and uses several types of radiation detection equipment in air and sea ports, mail facilities, and elsewhere to ensure safety.

  • CBP and the U.S. Food and Drug Administration carefully screen all food products for unsafe substances, including radiological material, at Ports of Entry.
  • All inbound travelers, baggage, and cargo are screened for radiological materials.
  • CBP employs radiation monitors at international mail facilities.

American Citizens in Japan

American Embassy in Japan

All U.S. citizens in Japan should continue to carefully monitor the situation and follow the guidance of the U.S. and Japanese governments.

Authorized Departures

The U.S. government has authorized the voluntary departure from Japan of eligible family members of U.S. government personnel assigned to the U.S. Embassy in Tokyo, the U.S. Consulate in Nagoya, the Foreign Service Institute Field School in Yokohama, and U.S. Forces Japan.

Evacuations

Travel to and from Japan

Disaster Preparedness

The tragic events in Japan remind us that disasters can strike at any time. The best way to make sure your family is taken care of when disaster strikes is to be prepared.

Additional Information

  • Earthquake in Japan – See facts from the U.S. Geological Survey about the 9.0 earthquake.
  • Earthquake Preparedness and Response – The U.S. Centers for Disease Control and Prevention provides helpful tips on how to prepare for an earthquake and what to do during a quake.
  • Earthquakes, Flooding, and Radiation – The National Institutes of Health provides information and resources about natural disasters and their effects.
  • Tsunami Health Effects – The U.S. Centers for Disease Control and Prevention describes the immediate, secondary, and long-term health effects of a tsunami.
  • Tsunami Preparedness – The Federal Emergency Management Agency explains what a tsunami is and provides guidance on what to do during a tsunami watch or warning.
  • Radiation – Read about the assistance and expertise that the U.S. Department of Energy is providing to Japanese response and recovery efforts.

The Efile State Taxes For Free

Efile state taxes for free Publication 583 - Main Content Table of Contents What New Business Owners Need To Know Forms of BusinessMore information. Efile state taxes for free More information. Efile state taxes for free Exception—Community Income. Efile state taxes for free Exception—Qualified joint venture. Efile state taxes for free More information. Efile state taxes for free More information. Efile state taxes for free Identification NumbersEmployer Identification Number (EIN) Payee's Identification Number Tax Year Accounting Method Business TaxesIncome Tax Self-Employment Tax Employment Taxes Excise Taxes Depositing Taxes Information Returns PenaltiesWaiver of penalty. Efile state taxes for free Business ExpensesBusiness Start-Up Costs Depreciation Business Use of Your Home Car and Truck Expenses RecordkeepingWhy Keep Records? Kinds of Records To Keep How Long To Keep Records Sample Record System How to Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What New Business Owners Need To Know As a new business owner, you need to know your federal tax responsibilities. Efile state taxes for free Table 1 can help you learn what those responsibilities are. Efile state taxes for free Ask yourself each question listed in the table, then see the related discussion to find the answer. Efile state taxes for free In addition to knowing about federal taxes, you need to make some basic business decisions. Efile state taxes for free Ask yourself: What are my financial resources? What products and services will I sell? How will I market my products and services? How will I develop a strategic business plan? How will I manage my business on a day-to-day basis? How will I recruit employees? The Small Business Administration (SBA) is a federal agency that can help you answer these types of questions. Efile state taxes for free For information on how to contact the SBA, see How to Get More Information, later. Efile state taxes for free Forms of Business The most common forms of business are the sole proprietorship, partnership, and corporation. Efile state taxes for free When beginning a business, you must decide which form of business to use. Efile state taxes for free Legal and tax considerations enter into this decision. Efile state taxes for free Only tax considerations are discussed in this publication. Efile state taxes for free Your form of business determines which income tax return form you have to file. Efile state taxes for free See Table 2 to find out which form you have to file. Efile state taxes for free Sole proprietorships. Efile state taxes for free   A sole proprietorship is an unincorporated business that is owned by one individual. Efile state taxes for free It is the simplest form of business organization to start and maintain. Efile state taxes for free The business has no existence apart from you, the owner. Efile state taxes for free Its liabilities are your personal liabilities. Efile state taxes for free You undertake the risks of the business for all assets owned, whether or not used in the business. Efile state taxes for free You include the income and expenses of the business on your personal tax return. Efile state taxes for free More information. Efile state taxes for free   For more information on sole proprietorships, see Publication 334, Tax Guide for Small Business. Efile state taxes for free If you are a farmer, see Publication 225, Farmer's Tax Guide. Efile state taxes for free Partnerships. Efile state taxes for free   A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Efile state taxes for free Each person contributes money, property, labor, or skill, and expects to share in the profits and losses of the business. Efile state taxes for free   A partnership must file an annual information return to report the income, deductions, gains, losses, etc. Efile state taxes for free , from its operations, but it does not pay income tax. Efile state taxes for free Instead, it “passes through” any profits or losses to its partners. Efile state taxes for free Each partner includes his or her share of the partnership's items on his or her tax return. Efile state taxes for free More information. Efile state taxes for free   For more information on partnerships, see Publication 541, Partnerships. Efile state taxes for free Husband and wife business. Efile state taxes for free   If you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Efile state taxes for free Do not use Schedule C or C-EZ. Efile state taxes for free Instead, file Form 1065, U. Efile state taxes for free S. Efile state taxes for free Return of Partnership Income. Efile state taxes for free For more information, see Publication 541, Partnerships. Efile state taxes for free Exception—Community Income. Efile state taxes for free   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. Efile state taxes for free S. Efile state taxes for free possession, you can treat the business either as a sole proprietorship or a partnership. Efile state taxes for free The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Efile state taxes for free A change in your reporting position will be treated as a conversion of the entity. Efile state taxes for free Exception—Qualified joint venture. Efile state taxes for free   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. Efile state taxes for free Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. Efile state taxes for free For an explanation of "material participation," see the Instructions for Schedule C, line G. Efile state taxes for free   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Efile state taxes for free Each of you must file a separate Schedule C or C-EZ and a separate Schedule SE. Efile state taxes for free For more information, see Qualified Joint Venture in the Instructions for Schedule SE. Efile state taxes for free Corporations. Efile state taxes for free   In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. Efile state taxes for free A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. Efile state taxes for free A corporation can also take special deductions. Efile state taxes for free   The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. Efile state taxes for free However, shareholders cannot deduct any loss of the corporation. Efile state taxes for free More information. Efile state taxes for free   For more information on corporations, see Publication 542, Corporations. Efile state taxes for free S corporations. Efile state taxes for free   An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. Efile state taxes for free Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. Efile state taxes for free On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of nonseparately stated income or loss. Efile state taxes for free More information. Efile state taxes for free   For more information on S corporations, see the instructions for Form 2553, Election by a Small Business Corporation, and Form 1120S, U. Efile state taxes for free S. Efile state taxes for free Income Tax Return for an S Corporation. Efile state taxes for free Limited liability company. Efile state taxes for free   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Efile state taxes for free The members of an LLC are not personally liable for its debts. Efile state taxes for free An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in regulations section 301. Efile state taxes for free 7701-3. Efile state taxes for free For more information, see the instructions for Form 8832, Entity Classification Election. Efile state taxes for free Identification Numbers You must have a taxpayer identification number so the IRS can process your returns. Efile state taxes for free The two most common kinds of taxpayer identification numbers are the social security number (SSN) and the employer identification number (EIN). Efile state taxes for free An SSN is issued to individuals by the Social Security Administration (SSA) and is in the following format: 000–00–0000. Efile state taxes for free An EIN is issued to individuals (sole proprietors), partnerships, corporations, and other entities by the IRS and is in the following format: 00–0000000. Efile state taxes for free You must include your taxpayer identification number (SSN or EIN) on all returns and other documents you send to the IRS. Efile state taxes for free You must also furnish your number to other persons who use your identification number on any returns or documents they send to the IRS. Efile state taxes for free This includes returns or documents filed to report the following information. Efile state taxes for free Interest, dividends, royalties, etc. Efile state taxes for free , paid to you. Efile state taxes for free Any amount paid to you as a dependent care provider. Efile state taxes for free Certain other amounts paid to you that total $600 or more for the year. Efile state taxes for free If you do not furnish your identification number as required, you may be subject to penalties. Efile state taxes for free See Penalties, later. Efile state taxes for free Employer Identification Number (EIN) EINs are used to identify the tax accounts of employers, certain sole proprietors, corporations, partnerships, estates, trusts, and other entities. Efile state taxes for free If you don't already have an EIN, you need to get one if you: Have employees, Have a qualified retirement plan, Operate your business as a corporation or partnership, or File returns for: Employment taxes, or Excise taxes. Efile state taxes for free Applying for an EIN. Efile state taxes for free   You may apply for an EIN: Online—Click on the EIN link at www. Efile state taxes for free irs. Efile state taxes for free gov/businesses/small. Efile state taxes for free The EIN is issued immediately once the application information is validated. Efile state taxes for free By telephone at 1-800-829-4933. Efile state taxes for free By mailing or faxing Form SS-4, Application for Employer Identification Number. Efile state taxes for free When to apply. Efile state taxes for free   You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. Efile state taxes for free If you apply by mail, file Form SS-4 at least 4 weeks before you need an EIN. Efile state taxes for free If you apply by telephone or through the IRS website, you can get an EIN immediately. Efile state taxes for free If you apply by fax, you can get an EIN within 4 business days. Efile state taxes for free   If you do not receive your EIN by the time a return is due, file your return anyway. Efile state taxes for free Write “Applied for” and the date you applied for the number in the space for the EIN. Efile state taxes for free Do not use your social security number as a substitute for an EIN on your tax returns. Efile state taxes for free More than one EIN. Efile state taxes for free   You should have only one EIN. Efile state taxes for free If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. Efile state taxes for free Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Efile state taxes for free The IRS will tell you which number to use. Efile state taxes for free More information. Efile state taxes for free   For more information about EINs, see Publication 1635, Understanding Your EIN. Efile state taxes for free Payee's Identification Number In the operation of a business, you will probably make certain payments you must report on information returns (discussed later under Information Returns). Efile state taxes for free The forms used to report these payments must include the payee's identification number. Efile state taxes for free Employee. Efile state taxes for free   If you have employees, you must get an SSN from each of them. Efile state taxes for free Record the name and SSN of each employee exactly as they are shown on the employee's social security card. Efile state taxes for free If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. Efile state taxes for free This may occur, for example, if the employee's name has changed due to marriage or divorce. Efile state taxes for free   If your employee does not have an SSN, he or she should file Form SS-5, Application for a Social Security Card, with the SSA. Efile state taxes for free This form is available at SSA offices or by calling 1-800-772-1213. Efile state taxes for free It is also available from the SSA website at www. Efile state taxes for free ssa. Efile state taxes for free gov. Efile state taxes for free Other payee. Efile state taxes for free   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. Efile state taxes for free If you make reportable payments to an organization, such as a corporation or partnership, you must get its EIN. Efile state taxes for free   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. Efile state taxes for free This form is available from IRS offices or by calling 1-800-829-3676. Efile state taxes for free It is also available from the IRS website at IRS. Efile state taxes for free gov. Efile state taxes for free    If the payee does not provide you with an identification number, you may have to withhold part of the payments as backup withholding. Efile state taxes for free For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. Efile state taxes for free Tax Year You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. Efile state taxes for free A tax year is usually 12 consecutive months. Efile state taxes for free There are two kinds of tax years. Efile state taxes for free Calendar tax year. Efile state taxes for free A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. Efile state taxes for free Fiscal tax year. Efile state taxes for free A fiscal tax year is 12 consecutive months ending on the last day of any month except December. Efile state taxes for free A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Efile state taxes for free If you file your first tax return using the calendar tax year and you later begin business as a sole proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you must continue to use the calendar year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. Efile state taxes for free You must use a calendar tax year if: You keep no books. Efile state taxes for free You have no annual accounting period. Efile state taxes for free Your present tax year does not qualify as a fiscal year. Efile state taxes for free You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations. Efile state taxes for free For more information, see Publication 538, Accounting Periods and Methods. Efile state taxes for free First-time filer. Efile state taxes for free   If you have never filed an income tax return, you can adopt either a calendar tax year or a fiscal tax year. Efile state taxes for free You adopt a tax year by filing your first income tax return using that tax year. Efile state taxes for free You have not adopted a tax year if you merely did any of the following. Efile state taxes for free Filed an application for an extension of time to file an income tax return. Efile state taxes for free Filed an application for an employer identification number. Efile state taxes for free Paid estimated taxes for that tax year. Efile state taxes for free Changing your tax year. Efile state taxes for free   Once you have adopted your tax year, you may have to get IRS approval to change it. Efile state taxes for free To get approval, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year. Efile state taxes for free You may have to pay a fee. Efile state taxes for free For more information, see Publication 538. Efile state taxes for free Accounting Method An accounting method is a set of rules used to determine when and how income and expenses are reported. Efile state taxes for free You choose an accounting method for your business when you file your first income tax return. Efile state taxes for free There are two basic accounting methods. Efile state taxes for free Cash method. Efile state taxes for free Under the cash method, you report income in the tax year you receive it. Efile state taxes for free You usually deduct or capitalize expenses in the tax year you pay them. Efile state taxes for free Accrual method. Efile state taxes for free Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. Efile state taxes for free You deduct or capitalize expenses in the tax year you incur them, whether or not you pay them that year. Efile state taxes for free For other methods, see Publication 538. Efile state taxes for free If you need inventories to show income correctly, you must generally use an accrual method of accounting for purchases and sales. Efile state taxes for free Inventories include goods held for sale in the normal course of business. Efile state taxes for free They also include raw materials and supplies that will physically become a part of merchandise intended for sale. Efile state taxes for free Inventories are explained in Publication 538. Efile state taxes for free Certain small business taxpayers can use the cash method of accounting and can also account for inventoriable items as materials and supplies that are not incidental. Efile state taxes for free For more information, see Publication 538. Efile state taxes for free You must use the same accounting method to figure your taxable income and to keep your books. Efile state taxes for free Also, you must use an accounting method that clearly shows your income. Efile state taxes for free In general, any accounting method that consistently uses accounting principles suitable for your trade or business clearly shows income. Efile state taxes for free An accounting method clearly shows income only if it treats all items of gross income and expense the same from year to year. Efile state taxes for free More than one business. Efile state taxes for free   When you own more than one business, you can use a different accounting method for each business if the method you use for each clearly shows your income. Efile state taxes for free You must keep a complete and separate set of books and records for each business. Efile state taxes for free Changing your method of accounting. Efile state taxes for free   Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. Efile state taxes for free A change in accounting method not only includes a change in your overall system of accounting, but also a change in the treatment of any material item. Efile state taxes for free For examples of changes that require approval and information on how to get approval for the change, see Publication 538. Efile state taxes for free Business Taxes The form of business you operate determines what taxes you must pay and how you pay them. Efile state taxes for free The following are the four general kinds of business taxes. Efile state taxes for free Income tax. Efile state taxes for free Self-employment tax. Efile state taxes for free Employment taxes. Efile state taxes for free Excise taxes. Efile state taxes for free See Table 2 for the forms you file to report these taxes. Efile state taxes for free You may want to get Publication 509. Efile state taxes for free It has tax calendars that tell you when to file returns and make tax payments. Efile state taxes for free Income Tax All businesses except partnerships must file an annual income tax return. Efile state taxes for free Partnerships file an information return. Efile state taxes for free Which form you use depends on how your business is organized. Efile state taxes for free See Table 2 to find out which return you have to file. Efile state taxes for free The federal income tax is a pay-as-you-go tax. Efile state taxes for free You must pay the tax as you earn or receive income during the year. Efile state taxes for free An employee usually has income tax withheld from his or her pay. Efile state taxes for free If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Efile state taxes for free If you are not required to make estimated tax payments, you may pay any tax due when you file your return. Efile state taxes for free Table 2. Efile state taxes for free Which Forms Must I File? IF you are a. Efile state taxes for free . Efile state taxes for free . Efile state taxes for free   THEN you may be liable for. Efile state taxes for free . Efile state taxes for free . Efile state taxes for free   Use Form. Efile state taxes for free . Efile state taxes for free . Efile state taxes for free Sole proprietor   Income tax   1040 and Schedule C 1 or C-EZ (Schedule F 1 for farm business)     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES     Employment taxes:         • Social security and Medicare   taxes and income tax   withholding   941 or 944 (943 for farm employees)     • Federal unemployment (FUTA)   tax   940     Excise taxes   See Excise Taxes Partnership   Annual return of income   1065     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes Partner in a partnership (individual)   Income tax   1040 and Schedule E 2     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES Corporation or S corporation   Income tax   1120 (corporation) 2  1120S (S corporation) 2     Estimated tax   1120-W (corporation only)     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes S corporation shareholder   Income tax   1040 and Schedule E 2     Estimated tax   1040-ES 1 File a separate schedule for each business. Efile state taxes for free 2 Various other schedules may be needed. Efile state taxes for free Estimated tax. Efile state taxes for free   Generally, you must pay taxes on income, including self-employment tax (discussed next), by making regular payments of estimated tax during the year. Efile state taxes for free Sole proprietors, partners, and S corporation shareholders. Efile state taxes for free   You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Efile state taxes for free Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. Efile state taxes for free For more information, see Publication 505, Tax Withholding and Estimated Tax. Efile state taxes for free Corporations. Efile state taxes for free   You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Efile state taxes for free Use Form 1120-W, Estimated Tax for Corporations, to figure the estimated tax. Efile state taxes for free You must deposit the payments as explained later under Depositing Taxes. Efile state taxes for free For more information, see Publication 542. Efile state taxes for free Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Efile state taxes for free Your payments of SE tax contribute to your coverage under the social security system. Efile state taxes for free Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Efile state taxes for free You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. Efile state taxes for free Your net earnings from self-employment were $400 or more. Efile state taxes for free You had church employee income of $108. Efile state taxes for free 28 or more. Efile state taxes for free Use Schedule SE (Form 1040) to figure your SE tax. Efile state taxes for free For more information, see Publication 334, Tax Guide for Small Business. Efile state taxes for free You can deduct a portion of your SE tax as an adjustment to income on your Form 1040. Efile state taxes for free The Social Security Administration (SSA) time limit for posting self-employment income. Efile state taxes for free   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Efile state taxes for free If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. Efile state taxes for free The SSA will not change its records to increase your self-employment income. Efile state taxes for free Employment Taxes This section briefly discusses the employment taxes you must pay, the forms you must file to report them, and other forms that must be filed when you have employees. Efile state taxes for free Employment taxes include the following. Efile state taxes for free Social security and Medicare taxes. Efile state taxes for free Federal income tax withholding. Efile state taxes for free Federal unemployment (FUTA) tax. Efile state taxes for free If you have employees, you will need to get Publication 15, Circular E, Employer's Tax Guide. Efile state taxes for free If you have agricultural employees, get Publication 51, Circular A, Agricultural Employer's Tax Guide. Efile state taxes for free These publications explain your tax responsibilities as an employer. Efile state taxes for free If you are not sure whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. Efile state taxes for free That publication has information to help you determine whether an individual is an employee or an independent contractor. Efile state taxes for free If you classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty. Efile state taxes for free An independent contractor is someone who is self-employed. Efile state taxes for free Generally, you do not have to withhold or pay any taxes on payments to an independent contractor. Efile state taxes for free Federal Income, Social Security, and Medicare Taxes You generally must withhold federal income tax from your employee's wages. Efile state taxes for free To figure how much federal income tax to withhold from each wage payment, use the employee's Form W-4 (discussed later under Hiring Employees) and the methods described in Publication 15. Efile state taxes for free Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Efile state taxes for free Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Efile state taxes for free Medicare tax pays for benefits under the hospital insurance part of FICA. Efile state taxes for free You withhold part of these taxes from your employee's wages and you pay a part yourself. Efile state taxes for free To find out how much social security and Medicare tax to withhold and to pay, see Publication 15. Efile state taxes for free Which form do I file?   Report these taxes on Form 941, Employer's QUARTERLY Federal Tax Return, or Form 944, Employer's ANNUAL Federal Tax Return. Efile state taxes for free (Farm employers use Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Efile state taxes for free ) Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. Efile state taxes for free You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. Efile state taxes for free You pay FUTA tax only from your own funds. Efile state taxes for free Employees do not pay this tax or have it withheld from their pay. Efile state taxes for free Which form do I file?   Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Efile state taxes for free See Publication 15 to find out if you can use this form. Efile state taxes for free Hiring Employees Have the employees you hire fill out Form I-9 and Form W-4. Efile state taxes for free Form I-9. Efile state taxes for free   You must verify that each new employee is legally eligible to work in the United States. Efile state taxes for free Both you and the employee must complete the U. Efile state taxes for free S. Efile state taxes for free Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. Efile state taxes for free You can get the form from USCIS offices or from the USCIS website at www. Efile state taxes for free uscis. Efile state taxes for free gov. Efile state taxes for free Call the USCIS at 1-800-375-5283 for more information about your responsibilities. Efile state taxes for free Form W-4. Efile state taxes for free   Each employee must fill out Form W-4, Employee's Withholding Allowance Certificate. Efile state taxes for free You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages. Efile state taxes for free For more information, see Publication 15. Efile state taxes for free Employees claiming more than 10 withholding allowances. Efile state taxes for free   An employer of an employee who claims more than 10 withholding allowances for wages paid can use several methods of withholding. Efile state taxes for free See section 16 of Publication 15. Efile state taxes for free Form W-2 Wage Reporting After the calendar year is over, you must furnish copies of Form W-2, Wage and Tax Statement, to each employee to whom you paid wages during the year. Efile state taxes for free You must also send copies to the Social Security Administration. Efile state taxes for free See Information Returns, later, for more information on Form W-2. Efile state taxes for free Excise Taxes This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following. Efile state taxes for free Manufacture or sell certain products. Efile state taxes for free Operate certain kinds of businesses. Efile state taxes for free Use various kinds of equipment, facilities, or products. Efile state taxes for free Receive payment for certain services. Efile state taxes for free For more information on excise taxes, see Publication 510, Excise Taxes. Efile state taxes for free Form 720. Efile state taxes for free   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. Efile state taxes for free Environmental taxes. Efile state taxes for free Communications and air transportation taxes. Efile state taxes for free Fuel taxes. Efile state taxes for free Tax on the first retail sale of heavy trucks, trailers, and tractors. Efile state taxes for free Manufacturers taxes on the sale or use of a variety of different articles. Efile state taxes for free Form 2290. Efile state taxes for free   There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. Efile state taxes for free The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Efile state taxes for free Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. Efile state taxes for free For more information, see the instructions for Form 2290. Efile state taxes for free Form 730. Efile state taxes for free   If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering. Efile state taxes for free Use Form 730, Monthly Tax Return for Wagers, to figure the tax on the wagers you receive. Efile state taxes for free Form 11-C. Efile state taxes for free   Use Form 11-C, Occupational Tax and Registration Return for Wagering, to register for any wagering activity and to pay the federal occupational tax on wagering. Efile state taxes for free Depositing Taxes You generally have to deposit employment taxes, certain excise taxes, corporate income tax, and S corporation taxes before you file your return. Efile state taxes for free Generally, taxpayers are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS). Efile state taxes for free Any business that has a federal tax obligation and requests a new EIN will automatically be enrolled in EFTPS. Efile state taxes for free Through the mail, the business will receive an EFTPS PIN package that contains instructions for activating its EFTPS enrollment. Efile state taxes for free Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. Efile state taxes for free The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. Efile state taxes for free You must give a copy of each information return you are required to file to the recipient or payer. Efile state taxes for free In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. Efile state taxes for free For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. Efile state taxes for free Form 1099-MISC. Efile state taxes for free   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your trade or business. Efile state taxes for free These payments include the following items. Efile state taxes for free Payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, or directors. Efile state taxes for free Rent payments of $600 or more, other than rents paid to real estate agents. Efile state taxes for free Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. Efile state taxes for free Royalty payments of $10 or more. Efile state taxes for free Payments to certain crew members by operators of fishing boats. Efile state taxes for free You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. Efile state taxes for free Form W-2. Efile state taxes for free   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. Efile state taxes for free For more information on what to report on Form W-2, see the Instructions for Forms W-2 and W-3. Efile state taxes for free Form 8300. Efile state taxes for free   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction or two or more related business transactions. Efile state taxes for free Cash includes U. Efile state taxes for free S. Efile state taxes for free and foreign coin and currency. Efile state taxes for free It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. Efile state taxes for free For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). Efile state taxes for free Penalties The law provides penalties for not filing returns or paying taxes as required. Efile state taxes for free Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. Efile state taxes for free Failure to file tax returns. Efile state taxes for free   If you do not file your tax return by the due date, you may have to pay a penalty. Efile state taxes for free The penalty is based on the tax not paid by the due date. Efile state taxes for free See your tax return instructions for more information about this penalty. Efile state taxes for free Failure to pay tax. Efile state taxes for free   If you do not pay your taxes by the due date, you will have to pay a penalty for each month, or part of a month, that your taxes are not paid. Efile state taxes for free For more information, see your tax return instructions. Efile state taxes for free Failure to withhold, deposit, or pay taxes. Efile state taxes for free   If you do not withhold income, social security, or Medicare taxes from employees, or if you withhold taxes but do not deposit them or pay them to the IRS, you may be subject to a penalty of the unpaid tax, plus interest. Efile state taxes for free You may also be subject to penalties if you deposit the taxes late. Efile state taxes for free For more information, see Publication 15. Efile state taxes for free Failure to follow information reporting requirements. Efile state taxes for free   The following penalties apply if you are required to file information returns. Efile state taxes for free For more information, see the General Instructions for Certain Information Returns. Efile state taxes for free Failure to file information returns. Efile state taxes for free A penalty applies if you do not file information returns by the due date, if you do not include all required information, or if you report incorrect information. Efile state taxes for free Failure to furnish correct payee statements. Efile state taxes for free A penalty applies if you do not furnish a required statement to a payee by the due date, if you do not include all required information, or if you report incorrect information. Efile state taxes for free Waiver of penalty. Efile state taxes for free   These penalties will not apply if you can show that the failures were due to reasonable cause and not willful neglect. Efile state taxes for free   In addition, there is no penalty for failure to include all the required information, or for including incorrect information, on a de minimis number of information returns if you correct the errors by August 1 of the year the returns are due. Efile state taxes for free (To be considered de minimis, the number of returns cannot exceed the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. Efile state taxes for free ) Failure to supply taxpayer identification number. Efile state taxes for free   If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer identification number of another person where required on a return, statement, or other document, you may be subject to a penalty of $50 for each failure. Efile state taxes for free You may also be subject to the $50 penalty if you do not give your taxpayer identification number to another person when it is required on a return, statement, or other document. Efile state taxes for free Business Expenses You can deduct business expenses on your income tax return. Efile state taxes for free These are the current operating costs of running your business. Efile state taxes for free To be deductible, a business expense must be both ordinary and necessary. Efile state taxes for free An ordinary expense is one that is common and accepted in your field of business, trade, or profession. Efile state taxes for free A necessary expense is one that is helpful and appropriate for your business, trade, or profession. Efile state taxes for free An expense does not have to be indispensable to be considered necessary. Efile state taxes for free The following are brief explanations of some expenses that are of interest to people starting a business. Efile state taxes for free There are many other expenses that you may be able to deduct. Efile state taxes for free See your form instructions and Publication 535, Business Expenses. Efile state taxes for free Business Start-Up Costs Business start-up costs are the expenses you incur before you actually begin business operations. Efile state taxes for free Your business start-up costs will depend on the type of business you are starting. Efile state taxes for free They may include costs for advertising, travel, surveys, and training. Efile state taxes for free These costs are generally capital expenses. Efile state taxes for free You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (discussed next). Efile state taxes for free You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. Efile state taxes for free The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Efile state taxes for free Any remaining cost must be amortized. Efile state taxes for free For more information about amortizing start-up and organizational costs, see chapter 7 in Publication 535. Efile state taxes for free Depreciation If property you acquire to use in your business has a useful life that extends substantially beyond the year it is placed in service, you generally cannot deduct the entire cost as a business expense in the year you acquire it. Efile state taxes for free You must spread the cost over more than one tax year and deduct part of it each year. Efile state taxes for free This method of deducting the cost of business property is called depreciation. Efile state taxes for free Business property you must depreciate includes the following items. Efile state taxes for free Office furniture. Efile state taxes for free Buildings. Efile state taxes for free Machinery and equipment. Efile state taxes for free You can choose to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. Efile state taxes for free This deduction is known as the “section 179 deduction. Efile state taxes for free ” For more information about depreciation and the section 179 deduction, see Publication 946, How To Depreciate Property. Efile state taxes for free Depreciation must be taken in the year it is allowable. Efile state taxes for free Allowable depreciation not taken in a prior year cannot be taken in the current year. Efile state taxes for free If you do not deduct the correct depreciation, you may be able to make a correction by filing Form 1040X, Amended U. Efile state taxes for free S. Efile state taxes for free Individual Income Tax Return, or by changing your accounting method. Efile state taxes for free For more information on how to correct depreciation deductions, see chapter 1 in Publication 946. Efile state taxes for free Business Use of Your Home To deduct expenses related to the business use of part of your home, you must meet specific requirements. Efile state taxes for free Even then, your deduction may be limited. Efile state taxes for free To qualify to claim expenses for business use of your home, you must meet both the following tests. Efile state taxes for free Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use, later), Regular, For your trade or business, AND The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) you use in connection with your trade or business. Efile state taxes for free Exclusive use. Efile state taxes for free   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Efile state taxes for free The area used for business can be a room or other separately identifiable space. Efile state taxes for free The space does not need to be marked off by a permanent partition. Efile state taxes for free   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Efile state taxes for free Exceptions to exclusive use. Efile state taxes for free   You do not have to meet the exclusive use test if either of the following applies. Efile state taxes for free You use part of your home for the storage of inventory or product samples. Efile state taxes for free You use part of your home as a daycare facility. Efile state taxes for free For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Efile state taxes for free Principal place of business. Efile state taxes for free   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. Efile state taxes for free You use it exclusively and regularly for administrative or management activities of your trade or business. Efile state taxes for free You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Efile state taxes for free   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. Efile state taxes for free The relative importance of the activities performed at each location. Efile state taxes for free If the relative importance factor does not determine your principal place of business, the time spent at each location. Efile state taxes for free    If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Efile state taxes for free However, for other ways to qualify to deduct home office expenses, see Publication 587. Efile state taxes for free Which form do I file?   If you file Schedule C (Form 1040), use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. Efile state taxes for free If you file Schedule F (Form 1040) or you are a partner, you can use the worksheet in Publication 587. Efile state taxes for free More information. Efile state taxes for free   For more information about business use of your home, see Publication 587. Efile state taxes for free Car and Truck Expenses If you use your car or truck in your business, you can deduct the costs of operating and maintaining it. Efile state taxes for free You generally can deduct either your actual expenses or the standard mileage rate. Efile state taxes for free Actual expenses. Efile state taxes for free   If you deduct actual expenses, you can deduct the cost of the following items: Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. Efile state taxes for free You can divide your expenses based on the miles driven for each purpose. Efile state taxes for free Example. Efile state taxes for free You are the sole proprietor of a flower shop. Efile state taxes for free You drove your van 20,000 miles during the year. Efile state taxes for free 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use. Efile state taxes for free You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. Efile state taxes for free Standard mileage rate. Efile state taxes for free   Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. Efile state taxes for free You can use the standard mileage rate for a vehicle you own or lease. Efile state taxes for free The standard mileage rate is a specified amount of money you can deduct for each business mile you drive. Efile state taxes for free It is announced annually by the IRS. Efile state taxes for free To figure your deduction, multiply your business miles by the standard mileage rate for the year. Efile state taxes for free    Generally, if you use the standard mileage rate, you cannot deduct your actual expenses. Efile state taxes for free However, you may be able to deduct business-related parking fees, tolls, interest on your car loan, and certain state and local taxes. Efile state taxes for free Choosing the standard mileage rate. Efile state taxes for free   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Efile state taxes for free In later years, you can choose to use either the standard mileage rate or actual expenses. Efile state taxes for free   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). Efile state taxes for free Additional information. Efile state taxes for free   For more information about the rules for claiming car and truck expenses, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. Efile state taxes for free Recordkeeping This part explains why you must keep records, what kinds of records you must keep, and how to keep them. Efile state taxes for free It also explains how long you must keep your records for federal tax purposes. Efile state taxes for free A sample recordkeeping system is illustrated at the end of this part. Efile state taxes for free Why Keep Records? Everyone in business must keep records. Efile state taxes for free Good records will help you do the following. Efile state taxes for free Monitor the progress of your business. Efile state taxes for free   You need good records to monitor the progress of your business. Efile state taxes for free Records can show whether your business is improving, which items are selling, or what changes you need to make. Efile state taxes for free Good records can increase the likelihood of business success. Efile state taxes for free Prepare your financial statements. Efile state taxes for free   You need good records to prepare accurate financial statements. Efile state taxes for free These include income (profit and loss) statements and balance sheets. Efile state taxes for free These statements can help you in dealing with your bank or creditors and help you manage your business. Efile state taxes for free An income statement shows the income and expenses of the business for a given period of time. Efile state taxes for free A balance sheet shows the assets, liabilities, and your equity in the business on a given date. Efile state taxes for free Identify source of receipts. Efile state taxes for free   You will receive money or property from many sources. Efile state taxes for free Your records can identify the source of your receipts. Efile state taxes for free You need this information to separate business from nonbusiness receipts and taxable from nontaxable income. Efile state taxes for free Keep track of deductible expenses. Efile state taxes for free   You may forget expenses when you prepare your tax return unless you record them when they occur. Efile state taxes for free Prepare your tax returns. Efile state taxes for free   You need good records to prepare your tax returns. Efile state taxes for free These records must support the income, expenses, and credits you report. Efile state taxes for free Generally, these are the same records you use to monitor your business and prepare your financial statements. Efile state taxes for free Support items reported on tax returns. Efile state taxes for free   You must keep your business records available at all times for inspection by the IRS. Efile state taxes for free If the IRS examines any of your tax returns, you may be asked to explain the items reported. Efile state taxes for free A complete set of records will speed up the examination. Efile state taxes for free Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. Efile state taxes for free You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. Efile state taxes for free The business you are in affects the type of records you need to keep for federal tax purposes. Efile state taxes for free You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. Efile state taxes for free See Accounting Method, earlier. Efile state taxes for free If you are in more than one business, you should keep a complete and separate set of records for each business. Efile state taxes for free A corporation should keep minutes of board of directors' meetings. Efile state taxes for free Your recordkeeping system should include a summary of your business transactions. Efile state taxes for free This summary is ordinarily made in your books (for example, accounting journals and ledgers). Efile state taxes for free Your books must show your gross income, as well as your deductions and credits. Efile state taxes for free For most small businesses, the business checkbook (discussed later) is the main source for entries in the business books. Efile state taxes for free In addition, you must keep supporting documents, explained later. Efile state taxes for free Electronic records. Efile state taxes for free   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Efile state taxes for free When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Efile state taxes for free An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. Efile state taxes for free The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. Efile state taxes for free All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Efile state taxes for free Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. Efile state taxes for free   The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. Efile state taxes for free You still have the responsibility of retaining any other books and records that are required to be retained. Efile state taxes for free   The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. Efile state taxes for free This test is not considered an examination and the results must be shared with you. Efile state taxes for free If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. Efile state taxes for free If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copy books and records in a manner that allows you and the IRS to determine your correct tax. Efile state taxes for free For details on electronic storage system requirements, see Revenue Procedure 97-22, available in Internal Revenue Bulletin 1997-13. Efile state taxes for free Supporting Documents Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. Efile state taxes for free Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Efile state taxes for free These documents contain information you need to record in your books. Efile state taxes for free It is important to keep these documents because they support the entries in your books and on your tax return. Efile state taxes for free Keep them in an orderly fashion and in a safe place. Efile state taxes for free For instance, organize them by year and type of income or expense. Efile state taxes for free Gross receipts. Efile state taxes for free   Gross receipts are the income you receive from your business. Efile state taxes for free You should keep supporting documents that show the amounts and sources of your gross receipts. Efile state taxes for free Documents that show gross receipts include the following. Efile state taxes for free Cash register tapes. Efile state taxes for free Bank deposit slips. Efile state taxes for free Receipt books. Efile state taxes for free Invoices. Efile state taxes for free Credit card charge slips. Efile state taxes for free Forms 1099-MISC. Efile state taxes for free Purchases. Efile state taxes for free   Purchases are the items you buy and resell to customers. Efile state taxes for free If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Efile state taxes for free Your supporting documents should show the amount paid and that the amount was for purchases. Efile state taxes for free Documents for purchases include the following. Efile state taxes for free Canceled checks. Efile state taxes for free Cash register tape receipts. Efile state taxes for free Credit card sales slips. Efile state taxes for free Invoices. Efile state taxes for free These records will help you determine the value of your inventory at the end of the year. Efile state taxes for free See Publication 538 for information on methods for valuing inventory. Efile state taxes for free Expenses. Efile state taxes for free   Expenses are the costs you incur (other than purchases) to carry on your business. Efile state taxes for free Your supporting documents should show the amount paid and that the amount was for a business expense. Efile state taxes for free Documents for expenses include the following. Efile state taxes for free Canceled checks. Efile state taxes for free Cash register tapes. Efile state taxes for free Account statements. Efile state taxes for free Credit card sales slips. Efile state taxes for free Invoices. Efile state taxes for free Petty cash slips for small cash payments. Efile state taxes for free    A petty cash fund allows you to make small payments without having to write checks for small amounts. Efile state taxes for free Each time you make a payment from this fund, you should make out a petty cash slip and attach it to your receipt as proof of payment. Efile state taxes for free Travel, transportation, entertainment, and gift expenses. Efile state taxes for free   Specific recordkeeping rules apply to these expenses. Efile state taxes for free For more information, see Publication 463. Efile state taxes for free Employment taxes. Efile state taxes for free   There are specific employment tax records you must keep. Efile state taxes for free For a list, see Publication 15. Efile state taxes for free Assets. Efile state taxes for free   Assets are the property, such as machinery and furniture you own and use in your business. Efile state taxes for free You must keep records to verify certain information about your business assets. Efile state taxes for free You need records to figure the annual depreciation and the gain or loss when you sell the assets. Efile state taxes for free Your records should show the following information. Efile state taxes for free When and how you acquired the asset. Efile state taxes for free Purchase price. Efile state taxes for free Cost of any improvements. Efile state taxes for free Section 179 deduction taken. Efile state taxes for free Deductions taken for depreciation. Efile state taxes for free Deductions taken for casualty losses, such as losses resulting from fires or storms. Efile state taxes for free How you used the asset. Efile state taxes for free When and how you disposed of the asset. Efile state taxes for free Selling price. Efile state taxes for free Expenses of sale. Efile state taxes for free   The following documents may show this information. Efile state taxes for free Purchase and sales invoices. Efile state taxes for free Real estate closing statements. Efile state taxes for free Canceled checks. Efile state taxes for free What if I don't have a canceled check?   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. Efile state taxes for free These include account statements prepared for the financial institution by a third party. Efile state taxes for free These account statements must be highly legible. Efile state taxes for free The following table lists acceptable account statements. Efile state taxes for free  IF payment is by. Efile state taxes for free . Efile state taxes for free . Efile state taxes for free THEN the statement must show the. Efile state taxes for free . Efile state taxes for free . Efile state taxes for free Check Check number. Efile state taxes for free Amount. Efile state taxes for free Payee's name. Efile state taxes for free Date the check amount was posted to the account by the financial institution. Efile state taxes for free Electronic funds transfer Amount transferred. Efile state taxes for free Payee's name. Efile state taxes for free Date the transfer was posted to the account by the financial institution. Efile state taxes for free Credit card Amount charged. Efile state taxes for free Payee's name. Efile state taxes for free Transaction date. Efile state taxes for free    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. Efile state taxes for free You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. Efile state taxes for free Recording Business Transactions A good recordkeeping system includes a summary of your business transactions. Efile state taxes for free (Your business transactions are shown on the supporting documents just discussed. Efile state taxes for free ) Business transactions are ordinarily summarized in books called journals and ledgers. Efile state taxes for free You can buy them at your local stationery or office supply store. Efile state taxes for free A journal is a book where you record each business transaction shown on your supporting documents. Efile state taxes for free You may have to keep separate journals for transactions that occur frequently. Efile state taxes for free A ledger is a book that contains the totals from all of your journals. Efile state taxes for free It is organized into different accounts. Efile state taxes for free Whether you keep journals and ledgers and how you keep them depends on the type of business you are in. Efile state taxes for free For example, a recordkeeping system for a small business might include the following items. Efile state taxes for free Business checkbook. Efile state taxes for free Daily summary of cash receipts. Efile state taxes for free Monthly summary of cash receipts. Efile state taxes for free Check disbursements journal. Efile state taxes for free Depreciation worksheet. Efile state taxes for free Employee compensation record. Efile state taxes for free The business checkbook is explained next. Efile state taxes for free The other items are illustrated later under Sample Record System. Efile state taxes for free The system you use to record business transactions will be more effective if you follow good recordkeeping practices. Efile state taxes for free For example, record expenses when they occur, and identify the source of recorded receipts. Efile state taxes for free Generally, it is best to record transactions on a daily basis. Efile state taxes for free Business checkbook. Efile state taxes for free   One of the first things you should do when you start a business is open a business checking account. Efile state taxes for free You should keep your business account separate from your personal checking account. Efile state taxes for free   The business checkbook is your basic source of information for recording your business expenses. Efile state taxes for free You should deposit all daily receipts in your business checking account. Efile state taxes for free You should check your account for errors by reconciling it. Efile state taxes for free See Reconciling the checking account, later. Efile state taxes for free   Consider using a checkbook that allows enough space to identify the source of deposits as business income, personal funds, or loans. Efile state taxes for free You should also note on the deposit slip the source of the deposit and keep copies of all slips. Efile state taxes for free   You should make all payments by check to document business expenses. Efile state taxes for free Write checks payable to yourself only when making withdrawals from your business for personal use. Efile state taxes for free Avoid writing checks payable to cash. Efile state taxes for free If you must write a check for cash to pay a business expense, include the receipt for the cash payment in your records. Efile state taxes for free If you cannot get a receipt for a cash payment, you should make an adequate explanation in your records at the time of payment. Efile state taxes for free    Use the business account for business purposes only. Efile state taxes for free Indicate the source of deposits and the type of expense in the checkbook. Efile state taxes for free Reconciling the checking account. Efile state taxes for free   When you receive your bank statement, make sure the statement, your checkbook, and your books agree. Efile state taxes for free The statement balance may not agree with the balance in your checkbook and books if the statement: Includes bank charges you did not enter in your books and subtract from your checkbook balance, or Does not include deposits made after the statement date or checks that did not clear your account before the statement date. Efile state taxes for free   By reconciling your checking account, you will: Verify how much money you have in the account, Make sure that your checkbook and books reflect all bank charges and the correct balance in the checking account, and Correct any errors in your bank statement, checkbook, and books. Efile state taxes for free    You should reconcile your checking account each month. Efile state taxes for free     Before you reconcile your monthly bank statement, check your own figures. Efile state taxes for free Begin with the balance shown in your checkbook at the end of the previous month. Efile state taxes for free To this balance, add the total cash deposited during the month and subtract the total cash disbursements. Efile state taxes for free   After checking your figures, the result should agree with your checkbook balance at the end of the month. Efile state taxes for free If the result does not agree, you may have made an error in recording a check or deposit. Efile state taxes for free You can find the error by doing the following. Efile state taxes for free Adding the amounts on your check stubs and comparing that total with the total in the “amount of check” column in your check disbursements journal. Efile state taxes for free If the totals do not agree, check the individual amounts to see if an error was made in your check stub record or in the related entry in your check disbursements journal. Efile state taxes for free Adding the deposit amounts in your checkbook. Efile state taxes for free Compare that total with the monthly total in your cash receipt book, if you have one. Efile state taxes for free If the totals do not agree, check the individual amounts to find any errors. Efile state taxes for free   If your checkbook and journal entries still disagree, then refigure the running balance in your checkbook to make sure additions and subtractions are correct. Efile state taxes for free   When your checkbook balance agrees with the balance figured from the journal entries, you may begin reconciling your checkbook with the bank statement. Efile state taxes for free Many banks print a reconciliation worksheet on the back of the statement. Efile state taxes for free   To reconcile your account, follow these steps. Efile state taxes for free Compare the deposits listed on the bank statement with the deposits shown in your checkbook. Efile state taxes for free Note all differences in the dollar amounts. Efile state taxes for free Compare each canceled check, including both check number and dollar amount, with the entry in your checkbook. Efile state taxes for free Note all differences in the dollar amounts. Efile state taxes for free Mark the check number in the checkbook as having cleared the bank. Efile state taxes for free After accounting for all checks returned by the bank, those not marked in your checkbook are your outstanding checks. Efile state taxes for free Prepare a bank reconciliation. Efile state taxes for free One is illustrated later under Sample Record System. Efile state taxes for free Update your checkbook and journals for items shown on the reconciliation as not recorded (such as service charges) or recorded incorrectly. Efile state taxes for free At this point, the adjusted bank statement balance should equal your adjusted checkbook balance. Efile state taxes for free If you still have differences, check the previous steps to find the errors. Efile state taxes for free   Table 3. Efile state taxes for free Period of Limitations IF you. Efile state taxes for free . Efile state taxes for free . Efile state taxes for free   THEN the period is. Efile state taxes for free . Efile state taxes for free . Efile state taxes for free 1. Efile state taxes for free Owe additional tax and situations (2), (3), and (4), below, do not apply to you   3 years 2. Efile state taxes for free Do not report income that you should report and it is more than 25% of the gross income shown on the return   6 years 3. Efile state taxes for free File a fraudulent return   Not limited 4. Efile state taxes for free Do not file a return   Not limited 5. Efile state taxes for free File a claim for credit or refund after you filed your return   Later of: 3 years or  2 years after tax   was paid 6. Efile state taxes for free File a claim for a loss from worthless securities or a bad debt deduction   7 years Bookkeeping System You must decide whether to use a single-entry or a double-entry bookkeeping system. Efile state taxes for free The single-entry system of bookkeeping is the simplest to maintain, but it may not be suitable for everyone. Efile state taxes for free You may find the double-entry system better because it has built-in checks and balances to assure accuracy and control. Efile state taxes for free Single-entry. Efile state taxes for free   A single-entry system is based on the income statement (profit or loss statement). Efile state taxes for free It can be a simple and practical system if you are starting a small business. Efile state taxes for free The system records the flow of income and expenses through the use of: A daily summary of cash receipts, and Monthly summaries of cash receipts and disbursements. Efile state taxes for free Double-entry. Efile state taxes for free   A double-entry bookkeeping system uses journals and ledgers. Efile state taxes for free Transactions are first entered in a journal and then posted to ledger accounts. Efile state taxes for free These accounts show income, expenses, assets (property a business owns), liabilities (debts of a business), and net worth (excess of assets over liabilities). Efile state taxes for free You close income and expense accounts at the end of each tax year. Efile state taxes for free You keep asset, liability, and net worth accounts open on a permanent basis. Efile state taxes for free   In the double-entry system, each account has a left side for debits and a right side for credits. Efile state taxes for free It is self-balancing because you record every transaction as a debit entry in one account and as a credit entry in another. Efile state taxes for free   Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. Efile state taxes for free If the amounts do not balance, you have made an error and you must find and correct it. Efile state taxes for free   An example of a journal entry exhibiting a payment of rent in October is shown next. Efile state taxes for free General Journal Date Description of Entry Debit  Credit Oct. Efile state taxes for free 5 Rent expense 780. Efile state taxes for free 00     Cash   780. Efile state taxes for free 00                 Computerized System There are computer software packages you can use for recordkeeping. Efile state taxes for free They can be purchased in many retail stores. Efile state taxes for free These packages are very helpful and relatively easy to use; they require very little knowledge of bookkeeping and accounting. Efile state taxes for free If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. Efile state taxes for free To meet this qualification, the machine-sensible records must reconcile with your books and return. Efile state taxes for free These records must provide enough detail to identify the underlying source documents. Efile state taxes for free You must also keep all machine-sensible records and a complete description of the computerized portion of your recordkeeping system. Efile state taxes for free This documentation must be sufficiently detailed to show all of the following items. Efile state taxes for free Functions being performed as the data flows through the system. Efile state taxes for free Controls used to ensure accurate and reliable processing. Efile state taxes for free Controls used to prevent the unauthorized addition, alteration, or deletion of retained records. Efile state taxes for free Charts of accounts and detailed account descriptions. Efile state taxes for free See Revenue Procedure 98-25 in Cumulative Bulletin 1998-1 for more information. Efile state taxes for free How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Efile state taxes for free Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out. Efile state taxes for free The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. Efile state taxes for free Table 3 contains the periods of limitations that apply to income tax returns. Efile state taxes for free Unless otherwise stated, the years refer to the period after the return was filed. Efile state taxes for free Returns filed before the due date are treated as filed on the due date. Efile state taxes for free Keep copies of your filed tax returns. Efile state taxes for free They help in preparing future tax returns and making computations if you file an amended return. Efile state taxes for free Employment taxes. Efile state taxes for free   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. Efile state taxes for free For more information about recordkeeping for employment taxes, see Publication 15. Efile state taxes for free Assets. Efile state taxes for free   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. Efile state taxes for free You must keep these records to figure any depreciation, amortization, or depletion deduction, and to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. Efile state taxes for free   Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. Efile state taxes for free You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. Efile state taxes for free Records for nontax purposes. Efile state taxes for free   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. Efile state taxes for free For example, your insurance company or creditors may require you to keep them longer than the IRS does. Efile state taxes for free Sample Record System This example illustrates a single-entry system used by Henry Brown, who is the sole proprietor of a small automobile body shop. Efile state taxes for free Henry uses part-time help, has no inventory of items held for sale, and uses the cash method of accounting. Efile state taxes for free These sample records should not be viewed as a recommendation of how to keep your records. Efile state taxes for free They are intended only to show how one business keeps its records. Efile state taxes for free 1. Efile state taxes for free Daily Summary of Cash Receipts This summary is a record of cash sales for the day. Efile state taxes for free It accounts for cash at the end of the day over the amount in the Change and Petty Cash Fund at the beginning of the day. Efile state taxes for free Henry takes the cash sales entry from his cash register tape. Efile state taxes for free If he had no cash register, he would simply total his cash sale slips and any other cash received that day. Efile state taxes for free He carries the total receipts shown in this summary for January 3 ($267. Efile state taxes for free 80), including cash sales ($263. Efile state taxes for free 60) and sales tax ($4. Efile state taxes for free 20), to the Monthly Summary of Cash Receipts. Efile state taxes for free Petty cash fund. Efile state taxes for free   Henry uses a petty cash fund to make small payments without having to write checks for small amounts. Efile state taxes for free Each time he makes a payment from this fund, he makes out a petty cash slip and attaches it to his receipt as proof of payment. Efile state taxes for free He sets up a fixed amount ($50) in his petty cash fund. Efile state taxes for free The total of the unspent petty cash and the amounts on the petty cash slips should equal the fixed amount of the fund. Efile state taxes for free When the totals on the petty cash slips approach the fixed amount, he brings the cash in the fund back to the fixed amount by writing a check to “Petty Cash” for the total of the outstanding slips. Efile state taxes for free (See the Check Disbursements Journal entry for check number 92. Efile state taxes for free ) This restores the fund to its fixed amount of $50. Efile state taxes for free He then summarizes the slips and enters them in the proper columns in the monthly check disbursements journal. Efile state taxes for free 2. Efile state taxes for free Monthly Summary of Cash Receipts This shows the income activity for the month. Efile state taxes for free Henry carries the total monthly net sales shown in this summary for January ($4,865. Efile state taxes for free 05) to his Annual Summary. Efile state taxes for free To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. Efile state taxes for free He cannot take a deduction for sales tax turned over to the state because he only collected the tax. Efile state taxes for free He does not include the tax in his income. Efile state taxes for free 3. Efile state taxes for free Check Disbursements Journal Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. Efile state taxes for free All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal. Efile state taxes for free Frequent expenses have their own headings across the sheet. Efile state taxes for free He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. Efile state taxes for free Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage. Efile state taxes for free Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. Efile state taxes for free If he did, he would record them in the journal, even though he could not deduct them as business expenses. Efile state taxes for free Henry carries the January total of expenses for materials ($1,083. Efile state taxes for free 50) to the Annual Summary. Efile state taxes for free Similarly, he enters the monthly total of expenses for telephone, truck/auto, etc. Efile state taxes for free , in the appropriate columns of that summary. Efile state taxes for free 4. Efile state taxes for free Employee Compensation Record This record shows the following information. Efile state taxes for free The number of hours Henry's employee worked in a pay period. Efile state taxes for free The employee's total pay for the period. Efile state taxes for free The deductions Henry withheld in figuring the employee's net pay. Efile state taxes for free The monthly gross payroll. Efile state taxes for free Henry carries the January gross payroll ($520) to the Annual Summary. Efile state taxes for free 5. Efile state taxes for free Annual Summary This annual summary of monthly cash receipts and expense totals provides the final amounts to enter on Henry's tax return. Efile state taxes for free He figures the cash receipts total from the total of monthly cash receipts shown in the Monthly Summary of Cash Receipts. Efile state taxes for free He figures the expense totals from the totals of monthly expense items shown in the Check Disbursements Journal. Efile state taxes for free As in the journal, he keeps each major expense in a separate column. Efile state taxes for free Henry carries the cash receipts total shown in the annual summary ($47,440. Efile state taxes for free 9