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

Federal1040x Amendment

Free State Taxes Filing1040x Electronically FileHow To Fill Out An Amended Tax ReturnFree Filing For State TaxesHandrblock FreeAmend 2011 Tax Return Free1040ez Tax FormFederal Taxes 2011Free E File Taxes 2012How To File Amended Tax ReturnTurbotax LoginIrs Gov 2012 Tax ReturnWww Irs Gov 1040x FormState Income Tax Form 500ezHow To Amend A Tax Return Using Turbotax1040nr Ez 2012Federal Tax Form 1040ezTax Return FormsFree State Tax Extension2012 Tax Forms IrsIrs State Tax FormsVisit Www Irs Gov FreefilePrint Free 2010 1040ez Tax FormFree Military Tax FilingE-file State TaxesHow Can I File My 2012 Taxes Online2010 1040 EzFreestatetaxreturnsAmended 2009 Tax ReturnHow Do You File An Amended Federal Tax Return1040-xEz File Tax ReturnHow Do You Amend Tax Returns1040nr EfileIncome Tax For SeniorsIncome Tax Deductions 2012Www Myfreetaxes Com UnitedwaymhcState Income Tax FormsFree State Taxes FilingTurbotax 2011 Sign

Federal1040x Amendment

Federal1040x amendment Publication 938 - Main Content Table of Contents Who May Request Information How To Request Information Who May Request Information The persons listed below, or their agent or representative, should follow the procedures in this publication to request tax information from the representative of the REMIC or the issuer of the CDO. Federal1040x amendment Any broker who holds a REMIC regular interest or CDO for itself or as a nominee for an actual holder. Federal1040x amendment A middleman who holds a REMIC regular interest or CDO as a nominee for an actual holder and who is required to file an information return with respect to the regular interest or CDO. Federal1040x amendment The following persons, if they hold their REMIC regular interest or CDO directly and not through a nominee. Federal1040x amendment A corporation. Federal1040x amendment A fiscal year taxpayer. Federal1040x amendment A dealer in securities or commodities required to register as such under the laws of the United States or a state. Federal1040x amendment A real estate investment trust (as defined in section 856). Federal1040x amendment An entity registered at all times during the tax year under the Investment Company Act of 1940. Federal1040x amendment A common trust fund (as defined in section 584(a)). Federal1040x amendment A financial institution such as a mutual savings bank, savings and loan association, building and loan association, cooperative bank, homestead association, credit union, industrial loan association or bank, or other similar organization. Federal1040x amendment Any trust that is exempt from tax under section 664(c) (a charitable remainder annuity trust or a charitable remainder unitrust). Federal1040x amendment A REMIC. Federal1040x amendment Note. Federal1040x amendment A person listed in (3) above who holds an interest through a nominee (instead of directly from the REMIC or the issuer of the CDO) should request the information from the nominee instead of from the REMIC or the issuer of the CDO. Federal1040x amendment The request should be made of the nominee in the same manner as specified below for requesting information from the representative. Federal1040x amendment How To Request Information Use the directory to find the representative of the REMIC or issuer of the CDO. Federal1040x amendment You can request information from the representative or issuer by telephone or mail. Federal1040x amendment If only an address is listed in the directory, you must request the information in writing. Federal1040x amendment Your request must specify the calendar quarters and the classes of REMIC regular interests or CDOs for which you need the information. Federal1040x amendment The representative or issuer must provide the information to you by the later of: The 30th day after the close of the calendar quarter for which you request the information, or The 14th day after the receipt of your request. Federal1040x amendment The representative or issuer can provide the information to you by telephone, by written statement sent by first class mail, by printing the information in a publication that is generally read by and available to persons who may request the information (for example, a webpage), or by any other method agreed to by both parties. Federal1040x amendment If the information is published, the representative or issuer must notify you by telephone or in writing of the publication in which the information will appear, the date of its appearance, and, if possible, the page number. Federal1040x amendment Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

IRS VITA Grant Program

The Volunteer Income Tax Assistance (VITA) Grant Program is an IRS initiative designed to promote and support free tax preparation service for the underserved, in both urban and non-urban locations. Service is targeted to low-to-moderate income individuals, persons with disabilities, the elderly, and limited English speaking. IRS awards matching grants each year to organizations that offer free tax preparation services during the tax filing season at locations in all 50 states and the District of Columbia. Congress appropriates this funding to support the Volunteer Income Tax Assistance Program.

This Grant Program is intended to provide direct funds to organizations to:

  • Enable VITA Programs to extend services to underserved populations in hardest-to-reach areas, both urban and non-urban;
  • Increase the capacity to file returns electronically;
  • Heighten quality control;
  • Enhance volunteer training; and
  • Significantly improve the accuracy rate of returns prepared at volunteer sites.

This webpage serves as a resource for organizations interested in applying for a VITA Grant as well as for organizations who have been awarded a grant.

Select from the following categories to get started:

 

Contact the VITA Grant Program at Grant.Program.Office@irs.gov.

Page Last Reviewed or Updated: 07-Nov-2013

The Federal1040x Amendment

Federal1040x amendment 6. Federal1040x amendment   Insurance Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Deductible PremiumsSelf-Employed Health Insurance Deduction Nondeductible Premiums Capitalized Premiums When To Deduct Premiums What's New Retiree drug subsidy. Federal1040x amendment  Beginning in 2013, sponsors of certain qualified retiree prescription drug plans must account for the subsidy received by reducing the amount of qualified retiree prescription drug plans expense by the subsidy received (taking into account the taxpayer's accounting method). Federal1040x amendment For more information, see the retiree drug subsidy frequently asked questions on IRS. Federal1040x amendment gov. Federal1040x amendment Introduction You generally can deduct the ordinary and necessary cost of insurance as a business expense if it is for your trade, business, or profession. Federal1040x amendment However, you may have to capitalize certain insurance costs under the uniform capitalization rules. Federal1040x amendment For more information, see Capitalized Premiums , later. Federal1040x amendment Topics - This chapter discusses: Deductible premiums Nondeductible premiums Capitalized premiums When to deduct premiums Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 538 Accounting Periods and Methods 547 Casualties, Disasters, and Thefts Form (and Instructions) 1040 U. Federal1040x amendment S. Federal1040x amendment Individual Income Tax Return See chapter 12 for information about getting publications and forms. Federal1040x amendment Deductible Premiums You generally can deduct premiums you pay for the following kinds of insurance related to your trade or business. Federal1040x amendment Insurance that covers fire, storm, theft, accident, or similar losses. Federal1040x amendment Credit insurance that covers losses from business bad debts. Federal1040x amendment Group hospitalization and medical insurance for employees, including long-term care insurance. Federal1040x amendment If a partnership pays accident and health insurance premiums for its partners, it generally can deduct them as guaranteed payments to partners. Federal1040x amendment If an S corporation pays accident and health insurance premiums for its more-than-2% shareholder-employees, it generally can deduct them, but must also include them in the shareholder's wages subject to federal income tax withholding. Federal1040x amendment See Publication 15-B. Federal1040x amendment Liability insurance. Federal1040x amendment Malpractice insurance that covers your personal liability for professional negligence resulting in injury or damage to patients or clients. Federal1040x amendment Workers' compensation insurance set by state law that covers any claims for bodily injuries or job-related diseases suffered by employees in your business, regardless of fault. Federal1040x amendment If a partnership pays workers' compensation premiums for its partners, it generally can deduct them as guaranteed payments to partners. Federal1040x amendment If an S corporation pays workers' compensation premiums for its more-than-2% shareholder-employees, it generally can deduct them, but must also include them in the shareholder's wages. Federal1040x amendment Contributions to a state unemployment insurance fund are deductible as taxes if they are considered taxes under state law. Federal1040x amendment Overhead insurance that pays for business overhead expenses you have during long periods of disability caused by your injury or sickness. Federal1040x amendment Car and other vehicle insurance that covers vehicles used in your business for liability, damages, and other losses. Federal1040x amendment If you operate a vehicle partly for personal use, deduct only the part of the insurance premium that applies to the business use of the vehicle. Federal1040x amendment If you use the standard mileage rate to figure your car expenses, you cannot deduct any car insurance premiums. Federal1040x amendment Life insurance covering your officers and employees if you are not directly or indirectly a beneficiary under the contract. Federal1040x amendment Business interruption insurance that pays for lost profits if your business is shut down due to a fire or other cause. Federal1040x amendment Self-Employed Health Insurance Deduction You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. Federal1040x amendment The insurance can also cover your child who was under age 27 at the end of 2013, even if the child was not your dependent. Federal1040x amendment A child includes your son, daughter, stepchild, adopted child, or foster child. Federal1040x amendment A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Federal1040x amendment One of the following statements must be true. Federal1040x amendment You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. Federal1040x amendment You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Federal1040x amendment , box 14, code A. Federal1040x amendment You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. Federal1040x amendment You received wages in 2013 from an S corporation in which you were a more-than-2% shareholder. Federal1040x amendment Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. Federal1040x amendment The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. Federal1040x amendment For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. Federal1040x amendment For partners, a policy can be either in the name of the partnership or in the name of the partner. Federal1040x amendment You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Federal1040x amendment However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Federal1040x amendment Otherwise, the insurance plan will not be considered to be established under your business. Federal1040x amendment For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. Federal1040x amendment You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. Federal1040x amendment However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Federal1040x amendment Otherwise, the insurance plan will not be considered to be established under your business. Federal1040x amendment Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. Federal1040x amendment If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. Federal1040x amendment For more information, see Form 1040X, Amended U. Federal1040x amendment S. Federal1040x amendment Individual Income Tax Return. Federal1040x amendment Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Federal1040x amendment Take the deduction on Form 1040, line 29. Federal1040x amendment Qualified long-term care insurance. Federal1040x amendment   You can include premiums paid on a qualified long-term care insurance contract when figuring your deduction. Federal1040x amendment But, for each person covered, you can include only the smaller of the following amounts. Federal1040x amendment The amount paid for that person. Federal1040x amendment The amount shown below. Federal1040x amendment Use the person's age at the end of the tax year. Federal1040x amendment Age 40 or younger–$360 Age 41 to 50–$680 Age 51 to 60–$1,360 Age 61 to 70–$3,640 Age 71 or older–$4,550 Qualified long-term care insurance contract. Federal1040x amendment   A qualified long-term care insurance contract is an insurance contract that only provides coverage of qualified long-term care services. Federal1040x amendment The contract must meet all the following requirements. Federal1040x amendment It must be guaranteed renewable. Federal1040x amendment It must provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits. Federal1040x amendment It must not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed. Federal1040x amendment It generally must not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. Federal1040x amendment Qualified long-term care services. Federal1040x amendment   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and Maintenance or personal care services. Federal1040x amendment The services must be required by a chronically ill individual and prescribed by a licensed health care practitioner. Federal1040x amendment Worksheet 6-A. Federal1040x amendment Self-Employed Health Insurance Deduction Worksheet Note. Federal1040x amendment Use a separate worksheet for each trade or business under which an insurance plan is established. Federal1040x amendment 1. Federal1040x amendment Enter the total amount paid in 2013 for health insurance coverage established under your business for 2013 for you, your spouse, and your dependents. Federal1040x amendment Your insurance can also cover your child who was under age 27 at the end of 2013, even if the child was not your dependent. Federal1040x amendment But do not include the following. Federal1040x amendment   Amounts for any month you were eligible to participate in a health plan subsidized by your or your spouse's employer or the employer of either your dependent or your child who was under the age of 27 at the end of 2013. Federal1040x amendment Any amounts paid from retirement plan distributions that were nontaxable because you are a retired public safety officer. Federal1040x amendment Any amounts you included on Form 8885, line 4. Federal1040x amendment Any qualified health insurance premiums you paid to “U. Federal1040x amendment S. Federal1040x amendment Treasury-HCTC. Federal1040x amendment ” Any health coverage tax credit advance payments shown in box 1 of Form 1099-H. Federal1040x amendment Any payments for qualified long-term care insurance (see line 2) 1. Federal1040x amendment   2. Federal1040x amendment For coverage under a qualified long-term care insurance contract, enter for each person covered the smaller of the following amounts. Federal1040x amendment       a) Total payments made for that person during the year. Federal1040x amendment       b) The amount shown below. Federal1040x amendment Use the person's age at the end of the tax year. Federal1040x amendment         $360— if that person is age 40 or younger          $680— if age 41 to 50         $1,360— if age 51 to 60         $3,640— if age 61 to 70         $4,550— if age 71 or older         Do not include payments for any month you were eligible to participate in a long-term care insurance plan subsidized by your or your spouse’s employer or the employer of either your dependent or your child who was under the age of 27 at the end of 2013. Federal1040x amendment If more than one person is covered, figure separately the amount to enter for each person. Federal1040x amendment Then enter the total of those amounts 2. Federal1040x amendment   3. Federal1040x amendment Add lines 1 and 2 3. Federal1040x amendment   4. Federal1040x amendment Enter your net profit* and any other earned income** from the trade or business under which the insurance plan is established. Federal1040x amendment Do not include Conservation Reserve Program payments exempt from self-employment tax. Federal1040x amendment If the business is an S corporation, skip to line 11 4. Federal1040x amendment   5. Federal1040x amendment Enter the total of all net profits* from: Schedule C (Form 1040), line 31; Schedule C-EZ (Form 1040), line 3; Schedule F (Form 1040), line 34; or Schedule K-1 (Form 1065), box 14, code A; plus any other income allocable to the profitable businesses. Federal1040x amendment Do not include Conservation Reserve Program payments exempt from self-employment tax. Federal1040x amendment See the Instructions for Schedule SE (Form 1040). Federal1040x amendment Do not include any net losses shown on these schedules. Federal1040x amendment 5. Federal1040x amendment   6. Federal1040x amendment Divide line 4 by line 5 6. Federal1040x amendment   7. Federal1040x amendment Multiply Form 1040, line 27, by the percentage on line 6 7. Federal1040x amendment   8. Federal1040x amendment Subtract line 7 from line 4 8. Federal1040x amendment   9. Federal1040x amendment Enter the amount, if any, from Form 1040, line 28, attributable to the same trade or business in which the insurance plan is established 9. Federal1040x amendment   10. Federal1040x amendment Subtract line 9 from line 8 10. Federal1040x amendment   11. Federal1040x amendment Enter your Medicare wages (Form W-2, box 5) from an S corporation in which you are a more-than-2% shareholder and in which the insurance plan is established 11. Federal1040x amendment   12. Federal1040x amendment Enter any amount from Form 2555, line 45, attributable to the amount entered on line 4 or 11 above, or any amount from Form 2555-EZ, line 18, attributable to the amount entered on line 11 above 12. Federal1040x amendment   13. Federal1040x amendment Subtract line 12 from line 10 or 11, whichever applies 13. Federal1040x amendment   14. Federal1040x amendment Enter the smaller of line 3 or line 13 here and on Form 1040, line 29. Federal1040x amendment Do not include this amount when figuring any medical expense deduction on Schedule A (Form 1040). Federal1040x amendment 14. Federal1040x amendment   * If you used either optional method to figure your net earnings from self-employment from any business, do not enter your net profit from the business. Federal1040x amendment Instead, enter the amount attributable to that business from Schedule SE (Form 1040), Section B, line 4b. Federal1040x amendment * *Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. Federal1040x amendment However, it does not include capital gain income. Federal1040x amendment Chronically ill individual. Federal1040x amendment   A chronically ill individual is a person who has been certified as one of the following. Federal1040x amendment An individual who has been unable, due to loss of functional capacity for at least 90 days, to perform at least two activities of daily living without substantial assistance from another individual. Federal1040x amendment Activities of daily living are eating, toileting, transferring (general mobility), bathing, dressing, and continence. Federal1040x amendment An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Federal1040x amendment The certification must have been made by a licensed health care practitioner within the previous 12 months. Federal1040x amendment Benefits received. Federal1040x amendment   For information on excluding benefits you receive from a long-term care contract from gross income, see Publication 525. Federal1040x amendment Other coverage. Federal1040x amendment   You cannot take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month, even if you did not actually participate. Federal1040x amendment In addition, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2013, do not use amounts paid for coverage for that month to figure the deduction. Federal1040x amendment   These rules are applied separately to plans that provide long-term care insurance and plans that do not provide long-term care insurance. Federal1040x amendment However, any medical insurance payments not deductible on Form 1040, line 29, can be included as medical expenses on Schedule A (Form 1040), Itemized Deductions, if you itemize deductions. Federal1040x amendment Effect on itemized deductions. Federal1040x amendment   Subtract the health insurance deduction from your medical insurance when figuring medical expenses on Schedule A (Form 1040) if you itemize deductions. Federal1040x amendment Effect on self-employment tax. Federal1040x amendment   For tax years beginning before or after 2010, you cannot subtract the self-employed health insurance deduction when figuring net earnings for your self-employment tax from the business under which the insurance plan is established, or considered to be established as discussed earlier. Federal1040x amendment For more information, see Schedule SE (Form 1040). Federal1040x amendment How to figure the deduction. Federal1040x amendment   Generally, you can use the worksheet in the Form 1040 instructions to figure your deduction. Federal1040x amendment However, if any of the following apply, you must use Worksheet 6-A in this chapter. Federal1040x amendment You had more than one source of income subject to self-employment tax. Federal1040x amendment You file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Federal1040x amendment You are using amounts paid for qualified long-term care insurance to figure the deduction. Federal1040x amendment If you are claiming the health coverage tax credit, complete Form 8885, Health Coverage Tax Credit, before you figure this deduction. Federal1040x amendment Health coverage tax credit. Federal1040x amendment   You may be able to take this credit only if you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment trade adjustment assistance (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient. Federal1040x amendment Use Form 8885 to figure the amount, if any, of this credit. Federal1040x amendment   When figuring the amount to enter on line 1 of Worksheet 6-A, do not include the following. Federal1040x amendment Any amounts you included on Form 8885, line 4. Federal1040x amendment Any qualified health insurance premiums you paid to “U. Federal1040x amendment S. Federal1040x amendment Treasury-HCTC. Federal1040x amendment ” Any health coverage tax credit advance payments shown in box 1 of Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. Federal1040x amendment More than one health plan and business. Federal1040x amendment   If you have more than one health plan during the year and each plan is established under a different business, you must use separate worksheets (Worksheet 6-A) to figure each plan's net earnings limit. Federal1040x amendment Include the premium you paid under each plan on line 1 or line 2 of that separate worksheet and your net profit (or wages) from that business on line 4 (or line 11). Federal1040x amendment For a plan that provides long-term care insurance, the total of the amounts entered for each person on line 2 of all worksheets cannot be more than the appropriate limit shown on line 2 for that person. Federal1040x amendment Nondeductible Premiums You cannot deduct premiums on the following kinds of insurance. Federal1040x amendment Self-insurance reserve funds. Federal1040x amendment You cannot deduct amounts credited to a reserve set up for self-insurance. Federal1040x amendment This applies even if you cannot get business insurance coverage for certain business risks. Federal1040x amendment However, your actual losses may be deductible. Federal1040x amendment See Publication 547. Federal1040x amendment Loss of earnings. Federal1040x amendment You cannot deduct premiums for a policy that pays for lost earnings due to sickness or disability. Federal1040x amendment However, see the discussion on overhead insurance, item (8), under Deductible Premiums , earlier. Federal1040x amendment Certain life insurance and annuities. Federal1040x amendment For contracts issued before June 9, 1997, you cannot deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. Federal1040x amendment You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. Federal1040x amendment A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business. Federal1040x amendment For contracts issued after June 8, 1997, you generally cannot deduct the premiums on any life insurance policy, endowment contract, or annuity contract if you are directly or indirectly a beneficiary. Federal1040x amendment The disallowance applies without regard to whom the policy covers. Federal1040x amendment Partners. Federal1040x amendment If, as a partner in a partnership, you take out an insurance policy on your own life and name your partners as beneficiaries to induce them to retain their investments in the partnership, you are considered a beneficiary. Federal1040x amendment You cannot deduct the insurance premiums. Federal1040x amendment Insurance to secure a loan. Federal1040x amendment If you take out a policy on your life or on the life of another person with a financial interest in your business to get or protect a business loan, you cannot deduct the premiums as a business expense. Federal1040x amendment Nor can you deduct the premiums as interest on business loans or as an expense of financing loans. Federal1040x amendment In the event of death, the proceeds of the policy are generally not taxed as income even if they are used to liquidate the debt. Federal1040x amendment Capitalized Premiums Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Federal1040x amendment Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. Federal1040x amendment You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Federal1040x amendment Indirect costs include premiums for insurance on your plant or facility, machinery, equipment, materials, property produced, or property acquired for resale. Federal1040x amendment Uniform capitalization rules. Federal1040x amendment   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. Federal1040x amendment Produce real property or tangible personal property. Federal1040x amendment For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. Federal1040x amendment Acquire property for resale. Federal1040x amendment However, these rules do not apply to the following property. Federal1040x amendment Personal property you acquire for resale if your average annual gross receipts are $10 million or less for the 3 prior tax years. Federal1040x amendment Property you produce if you meet either of the following conditions. Federal1040x amendment Your indirect costs of producing the property are $200,000 or less. Federal1040x amendment You use the cash method of accounting and do not account for inventories. Federal1040x amendment More information. Federal1040x amendment   For more information on these rules, see Uniform Capitalization Rules in Publication 538 and the regulations under Internal Revenue Code section 263A. Federal1040x amendment When To Deduct Premiums You can usually deduct insurance premiums in the tax year to which they apply. Federal1040x amendment Cash method. Federal1040x amendment   If you use the cash method of accounting, you generally deduct insurance premiums in the tax year you actually paid them, even if you incurred them in an earlier year. Federal1040x amendment However, see Prepayment , later. Federal1040x amendment Accrual method. Federal1040x amendment   If you use an accrual method of accounting, you cannot deduct insurance premiums before the tax year in which you incur a liability for them. Federal1040x amendment In addition, you cannot deduct insurance premiums before the tax year in which you actually pay them (unless the exception for recurring items applies). Federal1040x amendment For more information about the accrual method of accounting, see chapter 1. Federal1040x amendment For information about the exception for recurring items, see Publication 538. Federal1040x amendment Prepayment. Federal1040x amendment   You cannot deduct expenses in advance, even if you pay them in advance. Federal1040x amendment This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Federal1040x amendment   Expenses such as insurance are generally allocable to a period of time. Federal1040x amendment You can deduct insurance expenses for the year to which they are allocable. Federal1040x amendment Example. Federal1040x amendment In 2013, you signed a 3-year insurance contract. Federal1040x amendment Even though you paid the premiums for 2013, 2014, and 2015 when you signed the contract, you can only deduct the premium for 2013 on your 2013 tax return. Federal1040x amendment You can deduct in 2014 and 2015 the premium allocable to those years. Federal1040x amendment Dividends received. Federal1040x amendment   If you receive dividends from business insurance and you deducted the premiums in prior years, at least part of the dividends generally are income. Federal1040x amendment For more information, see Recovery of amount deducted (tax benefit rule) in chapter 1 under How Much Can I Deduct. Federal1040x amendment Prev  Up  Next   Home   More Online Publications