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File 2007 Fed Income Tax

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File 2007 Fed Income Tax

File 2007 fed income tax Publication 521 - Main Content Table of Contents Who Can Deduct Moving ExpensesMove Related to Start of Work Distance Test Time Test Retirees or Survivors Who Move to the United States Deductible Moving ExpensesMoves to Locations in the United States Moves to Locations Outside the United States Nondeductible Expenses ReimbursementsTypes of Reimbursement Plans Tax Withholding and Estimated Tax How and When To ReportForm 3903 When To Deduct Expenses Illustrated Example Members of the Armed Forces How To Get Tax Help Who Can Deduct Moving Expenses You can deduct your moving expenses if you meet all three of the following requirements. File 2007 fed income tax Your move is closely related to the start of work. File 2007 fed income tax You meet the distance test. File 2007 fed income tax You meet the time test. File 2007 fed income tax After you have read these rules, you may want to use Figure B to help you decide if you can deduct your moving expenses. File 2007 fed income tax Retirees, survivors, and Armed Forces members. File 2007 fed income tax   Different rules may apply if you are a member of the Armed Forces or a retiree or survivor moving to the United States. File 2007 fed income tax These rules are discussed later in this publication. File 2007 fed income tax Move Related to Start of Work Your move must be closely related, both in time and in place, to the start of work at your new job location. File 2007 fed income tax Closely related in time. File 2007 fed income tax   In most cases, you can consider moving expenses incurred within 1 year from the date you first reported to work at the new location as closely related in time to the start of work. File 2007 fed income tax It is not necessary that you arrange to work before moving to a new location, as long as you actually go to work in that location. File 2007 fed income tax    Figure A. File 2007 fed income tax Illustration of Distance Test Please click here for the text description of the image. File 2007 fed income tax Figure A   If you do not move within 1 year of the date you begin work, you ordinarily cannot deduct the expenses unless you can show that circumstances existed that prevented the move within that time. File 2007 fed income tax Example. File 2007 fed income tax Your family moved more than a year after you started work at a new location. File 2007 fed income tax You delayed the move for 18 months to allow your child to complete high school. File 2007 fed income tax You can deduct your moving expenses. File 2007 fed income tax Closely related in place. File 2007 fed income tax   You can generally consider your move closely related in place to the start of work if the distance from your new home to the new job location is not more than the distance from your former home to the new job location. File 2007 fed income tax If your move does not meet this requirement, you may still be able to deduct moving expenses if you can show that: You are required to live at your new home as a condition of your employment, or You will spend less time or money commuting from your new home to your new job location. File 2007 fed income tax Home defined. File 2007 fed income tax   Your home means your main home (residence). File 2007 fed income tax It can be a house, apartment, condominium, houseboat, house trailer, or similar dwelling. File 2007 fed income tax It does not include other homes owned or kept up by you or members of your family. File 2007 fed income tax It also does not include a seasonal home, such as a summer beach cottage. File 2007 fed income tax Your former home means your home before you left for your new job location. File 2007 fed income tax Your new home means your home within the area of your new job location. File 2007 fed income tax Retirees or survivors. File 2007 fed income tax   You may be able to deduct the expenses of moving to the United States or its possessions even though the move is not related to the start of work at a new job location. File 2007 fed income tax You must have worked outside the United States or be a survivor of someone who did. File 2007 fed income tax See Retirees or Survivors Who Move to the United States, later. File 2007 fed income tax Distance Test Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home. File 2007 fed income tax For example, if your old main job location was 3 miles from your former home, your new main job location must be at least 53 miles from that former home. File 2007 fed income tax You can use Worksheet 1 to see if you meet this test. File 2007 fed income tax Worksheet 1. File 2007 fed income tax Distance Test   Note. File 2007 fed income tax Members of the Armed Forces may not have to meet this test. File 2007 fed income tax See Members of the Armed Forces. File 2007 fed income tax     1. File 2007 fed income tax Enter the number of miles from your old home to your new workplace 1. File 2007 fed income tax miles 2. File 2007 fed income tax Enter the number of miles from your old home to your old workplace 2. File 2007 fed income tax miles 3. File 2007 fed income tax Subtract line 2 from line 1. File 2007 fed income tax If zero or less, enter -0- 3. File 2007 fed income tax miles 4. File 2007 fed income tax Is line 3 at least 50 miles? □ Yes. File 2007 fed income tax You meet this test. File 2007 fed income tax  □ No. File 2007 fed income tax You do not meet this test. File 2007 fed income tax You cannot deduct your moving expenses. File 2007 fed income tax The distance between a job location and your home is the shortest of the more commonly traveled routes between them. File 2007 fed income tax The distance test considers only the location of your former home. File 2007 fed income tax It does not take into account the location of your new home. File 2007 fed income tax See Figure A, earlier. File 2007 fed income tax Example. File 2007 fed income tax You moved to a new home less than 50 miles from your former home because you changed main job locations. File 2007 fed income tax Your old main job location was 3 miles from your former home. File 2007 fed income tax Your new main job location is 60 miles from that home. File 2007 fed income tax Because your new main job location is 57 miles farther from your former home than the distance from your former home to your old main job location, you meet the distance test. File 2007 fed income tax First job or return to full-time work. File 2007 fed income tax   If you go to work full time for the first time, your place of work must be at least 50 miles from your former home to meet the distance test. File 2007 fed income tax   If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work also must be at least 50 miles from your former home. File 2007 fed income tax Armed Forces. File 2007 fed income tax   If you are in the Armed Forces and you moved because of a permanent change of station, you do not have to meet the distance test. File 2007 fed income tax See Members of the Armed Forces, later. File 2007 fed income tax Main job location. File 2007 fed income tax   Your main job location is usually the place where you spend most of your working time. File 2007 fed income tax This could be your office, plant, store, shop, or other location. File 2007 fed income tax If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. File 2007 fed income tax Union members. File 2007 fed income tax   If you work for several employers on a short-term basis and you get work under a union hall system (such as a construction or building trades worker), your main job location is the union hall. File 2007 fed income tax More than one job. File 2007 fed income tax   If you have more than one job at any time, your main job location depends on the facts in each case. File 2007 fed income tax The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. File 2007 fed income tax    Table 1. File 2007 fed income tax Satisfying the Time Test for Employees and Self-Employed Persons IF you are. File 2007 fed income tax . File 2007 fed income tax . File 2007 fed income tax THEN you satisfy the time test by meeting the. File 2007 fed income tax . File 2007 fed income tax . File 2007 fed income tax an employee 39-week test for employees. File 2007 fed income tax self-employed 78-week test for self-employed persons. File 2007 fed income tax both self-employed and an employee at the same time 78-week test for a self-employed person or the 39-week  test for an employee. File 2007 fed income tax Your principal place of work  determines which test applies. File 2007 fed income tax both self-employed and an employee, but unable to satisfy the 39-week test for employees 78-week test for self-employed persons. File 2007 fed income tax Time Test To deduct your moving expenses, you also must meet one of the following two time tests. File 2007 fed income tax The time test for employees. File 2007 fed income tax The time test for self-employed persons. File 2007 fed income tax Both of these tests are explained below. File 2007 fed income tax See Table 1, below, for a summary of these tests. File 2007 fed income tax You can deduct your moving expenses before you meet either of the time tests. File 2007 fed income tax See Time Test Not Yet Met, later. File 2007 fed income tax Time Test for Employees If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location (39-week test). File 2007 fed income tax Full-time employment depends on what is usual for your type of work in your area. File 2007 fed income tax For purposes of this test, the following four rules apply. File 2007 fed income tax You count only your full-time work as an employee, not any work you do as a self-employed person. File 2007 fed income tax You do not have to work for the same employer for all 39 weeks. File 2007 fed income tax You do not have to work 39 weeks in a row. File 2007 fed income tax You must work full time within the same general commuting area for all 39 weeks. File 2007 fed income tax Temporary absence from work. File 2007 fed income tax   You are considered to have worked full time during any week you are temporarily absent from work because of illness, strikes, lockouts, layoffs, natural disasters, or similar causes. File 2007 fed income tax You are also considered to have worked full time during any week you are absent from work for leave or vacation provided for in your work contract or agreement. File 2007 fed income tax Seasonal work. File 2007 fed income tax   If your work is seasonal, you are considered to be working full time during the off-season only if your work contract or agreement covers an off-season period of less than 6 months. File 2007 fed income tax For example, a school teacher on a 12-month contract who teaches on a full-time basis for more than 6 months is considered to have worked full time for the entire 12 months. File 2007 fed income tax    Figure B. File 2007 fed income tax Can You Deduct Expenses for a Non-Military Move Within the United States? Please click here for the text description of the image. File 2007 fed income tax Figure B Time Test for Self-Employed Persons If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location (78-week test). File 2007 fed income tax For purposes of the time test for self-employed persons, the following three rules apply. File 2007 fed income tax You count any full-time work you do either as an employee or as a self-employed person. File 2007 fed income tax You do not have to work for the same employer or be self-employed in the same trade or business for the 78 weeks. File 2007 fed income tax You must work within the same general commuting area for all 78 weeks. File 2007 fed income tax Example. File 2007 fed income tax You are a self-employed accountant who moves from Atlanta to New York City, and begin to work there on December 1, 2013. File 2007 fed income tax You pay moving expenses in 2013 and 2014 in connection with this move. File 2007 fed income tax On April 15, 2014, when you file your income tax return for the year 2013, you have been performing services as a self-employed individual on a full-time basis in New York City for approximately 20 weeks. File 2007 fed income tax Although you have not satisfied the 78-week employment condition at this time, you can deduct your 2013 moving expenses on your 2013 income tax return as there is still sufficient time remaining before December 1, 2015, to satisfy such condition. File 2007 fed income tax You can deduct any moving expenses you pay in 2014 on your 2014 income tax return even if you have not met the 78-week test. File 2007 fed income tax You have until December 1, 2015, to satisfy this requirement. File 2007 fed income tax Self-employment. File 2007 fed income tax   You are self-employed if you work as the sole owner of an unincorporated business or as a partner in a partnership carrying on a business. File 2007 fed income tax You are not considered self-employed if you are semi-retired, are a part-time student, or work only a few hours each week. File 2007 fed income tax Full-time work. File 2007 fed income tax   You can count only those weeks during which you work full time as a week of work. File 2007 fed income tax Whether you work full time during any week depends on what is usual for your type of work in your area. File 2007 fed income tax For example, you are a self-employed dentist and maintain office hours 4 days a week. File 2007 fed income tax You are considered to perform services full time if maintaining office hours 4 days a week is not unusual for other self-employed dentists in your area. File 2007 fed income tax Temporary absence from work. File 2007 fed income tax   You are considered to be self-employed on a full-time basis during any week you are temporarily absent from work because of illness, strikes, natural disasters, or similar causes. File 2007 fed income tax Seasonal trade or business. File 2007 fed income tax   If your trade or business is seasonal, the off-season weeks when no work is required or available may be counted as weeks during which you worked full time. File 2007 fed income tax The off-season must be less than 6 months and you must work full time before and after the off-season. File 2007 fed income tax Example. File 2007 fed income tax You own and operate a motel at a beach resort. File 2007 fed income tax The motel is closed for 5 months during the off-season. File 2007 fed income tax You work full time as the operator of the motel before and after the off-season. File 2007 fed income tax You are considered self-employed on a full-time basis during the weeks of the off-season. File 2007 fed income tax   If you were both an employee and self-employed, see Table 1 earlier, for the requirements. File 2007 fed income tax Example. File 2007 fed income tax Justin quit his job and moved from the east coast to the west coast to begin a full-time job as a cabinet-maker for C and L Cabinet Shop. File 2007 fed income tax He generally worked at the shop about 40 hours each week. File 2007 fed income tax Shortly after the move, Justin also began operating a cabinet-installation business from his home for several hours each afternoon and all day on weekends. File 2007 fed income tax Because Justin's principal place of business is the cabinet shop, he can satisfy the time test by meeting the 39-week test. File 2007 fed income tax    If Justin is unable to satisfy the requirements of the 39-week test during the 12-month period immediately following his arrival in the general location of his new principal place of work, he can satisfy the 78-week test. File 2007 fed income tax Joint Return If you are married, file a joint return, and both you and your spouse work full-time, either of you can satisfy the full-time work test. File 2007 fed income tax However, you cannot add the weeks your spouse worked to the weeks you worked to satisfy that test. File 2007 fed income tax Time Test Not Yet Met You can deduct your moving expenses on your 2013 tax return even though you have not met the time test by the date your 2013 return is due. File 2007 fed income tax You can do this if you expect to meet the 39-week test in 2014 or the 78-week test in 2014 or 2015. File 2007 fed income tax If you do not deduct your moving expenses on your 2013 return, and you later meet the time test, you can file an amended return for 2013 to take the deduction. File 2007 fed income tax See When To Deduct Expenses later, for more details. File 2007 fed income tax Failure to meet the time test. File 2007 fed income tax    If you deduct moving expenses but do not meet the time test in 2014 or 2015, you must either: Report your moving expense deduction as other income on your Form 1040 for the year you cannot meet the test, or Use Form 1040X to amend your 2013 return, figuring your tax without the moving expense deduction. File 2007 fed income tax Example. File 2007 fed income tax You arrive in the general area of your new job location, as an employee, on September 15, 2013. File 2007 fed income tax You deduct your moving expenses on your 2013 return, the year of the move, even though you have not yet met the time test by the date your return is due. File 2007 fed income tax If you do not meet the 39-week test during the 12-month period following your arrival in the general area of your new job location, you must either: Report your moving expense deduction as other income on your Form 1040 for 2014, or Use Form 1040X to amend your 2013 return, figuring your tax without the moving expense deduction. File 2007 fed income tax Exceptions to the Time Test You do not have to meet the time test if one of the following applies. File 2007 fed income tax You are in the Armed Forces and you moved because of a permanent change of station. File 2007 fed income tax See Members of the Armed Forces , later. File 2007 fed income tax Your main job location was outside the United States and you moved to the United States because you retired. File 2007 fed income tax See Retirees or Survivors Who Move to the United States, later. File 2007 fed income tax You are the survivor of a person whose main job location at the time of death was outside the United States. File 2007 fed income tax See Retirees or Survivors Who Move to the United States, later. File 2007 fed income tax Your job at the new location ends because of death or disability. File 2007 fed income tax You are transferred for your employer's benefit or laid off for a reason other than willful misconduct. File 2007 fed income tax For this exception, you must have obtained full-time employment and you must have expected to meet the test at the time you started the job. File 2007 fed income tax Retirees or Survivors Who Move to the United States If you are a retiree who was working abroad or a survivor of a decedent who was working abroad and you move to the United States or one of its possessions, you do not have to meet the time test, discussed earlier. File 2007 fed income tax However, you must meet the requirements discussed below under Retirees who were working abroad or Survivors of decedents who were working abroad. File 2007 fed income tax If you are living in the United States, retire, and then move and remain retired, you cannot claim a moving expense deduction for that move. File 2007 fed income tax United States defined. File 2007 fed income tax   For this section of this publication, the term “United States” includes the possessions of the United States. File 2007 fed income tax Retirees who were working abroad. File 2007 fed income tax   You can deduct moving expenses for a move to a new home in the United States when you permanently retire. File 2007 fed income tax However, both your former main job location and your former home must have been outside the United States. File 2007 fed income tax Permanently retired. File 2007 fed income tax   You are considered permanently retired when you cease gainful full-time employment or self-employment. File 2007 fed income tax If, at the time you retire, you intend your retirement to be permanent, you will be considered retired even though you later return to work. File 2007 fed income tax Your intention to retire permanently may be determined by: Your age and health, The customary retirement age for people who do similar work, Whether you receive retirement payments from a pension or retirement fund, and The length of time before you return to full-time work. File 2007 fed income tax Decedents. File 2007 fed income tax   Qualified deductible moving expenses are allowed on a final return (Form 1040 or 1040NR) when a taxpayer has moved and dies within the same calendar year. File 2007 fed income tax The personal representative filing on behalf of that taxpayer should complete and attach Form 3903 to the final return. File 2007 fed income tax   A personal representative can be an executor, administrator, or anyone who is in charge of the deceased person's property. File 2007 fed income tax For more information, see Publication 559, Survivors, Executors, and Administrators. File 2007 fed income tax Survivors of decedents who were working abroad. File 2007 fed income tax   If you are the spouse or the dependent of a person whose main job location at the time of death was outside the United States, you can deduct moving expenses if the following five requirements are met. File 2007 fed income tax The move is to a home in the United States. File 2007 fed income tax The move begins within 6 months after the decedent's death. File 2007 fed income tax (When a move begins is described below. File 2007 fed income tax ) The move is from the decedent's former home. File 2007 fed income tax The decedent's former home was outside the United States. File 2007 fed income tax The decedent's former home was also your home. File 2007 fed income tax When a move begins. File 2007 fed income tax   A move begins when one of the following events occurs. File 2007 fed income tax You contract for your household goods and personal effects to be moved to your home in the United States, but only if the move is completed within a reasonable time. File 2007 fed income tax Your household goods and personal effects are packed and on the way to your home in the United States. File 2007 fed income tax You leave your former home to travel to your new home in the United States. File 2007 fed income tax Deductible Moving Expenses If you meet the requirements discussed earlier under Who Can Deduct Moving Expenses, you can deduct the reasonable expenses of: Moving your household goods and personal effects (including in-transit or foreign-move storage expenses), and Traveling (including lodging but not meals) to your new home. File 2007 fed income tax You cannot deduct any expenses for meals. File 2007 fed income tax Reasonable expenses. File 2007 fed income tax   You can deduct only those expenses that are reasonable for the circumstances of your move. File 2007 fed income tax For example, the cost of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. File 2007 fed income tax If during your trip to your new home, you stop over, or make side trips for sightseeing, the additional expenses for your stopover or side trips are not deductible as moving expenses. File 2007 fed income tax Example. File 2007 fed income tax Beth's employer transferred her from Boston, Massachusetts, to Buffalo, New York. File 2007 fed income tax On her way to Buffalo, Beth drove into Canada to visit the Toronto Zoo. File 2007 fed income tax Since Beth's excursion into Canada was away from the usual Boston-Buffalo route, the expenses paid or incurred for the excursion are not deductible. File 2007 fed income tax Beth can only deduct what it would have cost to drive directly from Boston to Buffalo. File 2007 fed income tax Likewise, Beth cannot deduct any expenses, such as the cost of a hotel room, caused by the delay for sightseeing. File 2007 fed income tax Travel by car. File 2007 fed income tax   If you use your car to take yourself, members of your household, or your personal effects to your new home, you can figure your expenses by deducting either: Your actual expenses, such as the amount you pay for gas and oil for your car, if you keep an accurate record of each expense, or The standard mileage rate of 24 cents per mile. File 2007 fed income tax Whether you use actual expenses or the standard mileage rate to figure your expenses, you can deduct the parking fees and tolls you pay to move. File 2007 fed income tax You cannot deduct any part of general repairs, general maintenance, insurance, or depreciation for your car. File 2007 fed income tax Member of your household. File 2007 fed income tax   You can deduct moving expenses you pay for yourself and members of your household. File 2007 fed income tax A member of your household is anyone who has both your former and new home as his or her home. File 2007 fed income tax It does not include a tenant or employee, unless that person is your dependent. File 2007 fed income tax Moves to Locations in the United States If you meet the requirements under Who Can Deduct Moving Expenses, earlier, you can deduct expenses for a move to the area of a new main job location within the United States or its possessions. File 2007 fed income tax Your move may be from one U. File 2007 fed income tax S. File 2007 fed income tax location to another or from a foreign country to the United States. File 2007 fed income tax Household goods and personal effects. File 2007 fed income tax   You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. File 2007 fed income tax For purposes of moving expenses, the term “personal effects” includes, but is not limited to, movable personal property that the taxpayer owns and frequently uses. File 2007 fed income tax   If you use your own car to move your things, see Travel by car, earlier. File 2007 fed income tax   You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects. File 2007 fed income tax   You can deduct the cost of shipping your car and your household pets to your new home. File 2007 fed income tax   You can deduct the cost of moving your household goods and personal effects from a place other than your former home. File 2007 fed income tax Your deduction is limited to the amount it would have cost to move them from your former home. File 2007 fed income tax Example. File 2007 fed income tax Paul Brown has been living and working in North Carolina for the last 4 years. File 2007 fed income tax Because he has been renting a small apartment, he stored some furniture at his parents' home in Georgia. File 2007 fed income tax Paul got a job in Washington, DC. File 2007 fed income tax It cost him $900 to move the furniture from his North Carolina apartment to Washington and $3,000 to move the stored furniture from Georgia to Washington. File 2007 fed income tax It would have cost $1,800 to ship the stored furniture from North Carolina to Washington. File 2007 fed income tax He can deduct only $1,800 of the $3,000 he paid. File 2007 fed income tax The amount he can deduct for moving his furniture is $2,700 ($900 + $1,800). File 2007 fed income tax You cannot deduct the cost of moving furniture you buy on the way to your new home. File 2007 fed income tax   Storage expenses. File 2007 fed income tax   You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home. File 2007 fed income tax Travel expenses. File 2007 fed income tax   You can deduct the cost of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. File 2007 fed income tax This includes expenses for the day you arrive. File 2007 fed income tax    The day of arrival is the day you secure lodging at the new place of residence, even if the lodging is on a temporary basis. File 2007 fed income tax   You can include any lodging expenses you had in the area of your former home within one day after you could no longer live in your former home because your furniture had been moved. File 2007 fed income tax   The members of your household do not have to travel together or at the same time. File 2007 fed income tax However, you can only deduct expenses for one trip per person. File 2007 fed income tax If you use your own car, see Travel by car, earlier. File 2007 fed income tax Example. File 2007 fed income tax   In February 2013, Josh and Robyn Black moved from Minneapolis to Washington, DC, where Josh was starting a new job. File 2007 fed income tax Josh drove the family car to Washington, DC, a trip of 1,100 miles. File 2007 fed income tax His expenses were $264. File 2007 fed income tax 00 for mileage (1,100 miles x 24 cents per mile) plus $40 for tolls and $150 for lodging, for a total of $454. File 2007 fed income tax 00. File 2007 fed income tax One week later, Robyn flew from Minneapolis to Washington, DC. File 2007 fed income tax Her only expense was her $400 plane ticket. File 2007 fed income tax The Blacks' deduction is $854. File 2007 fed income tax 00 (Josh's $454. File 2007 fed income tax 00 + Robyn's $400). File 2007 fed income tax Moves to Locations Outside the United States To deduct expenses for a move outside the United States, you must move to the area of a new place of work outside the United States and its possessions. File 2007 fed income tax You must meet the requirements under Who Can Deduct Moving Expenses , earlier. File 2007 fed income tax Deductible expenses. File 2007 fed income tax   If your move is to a location outside the United States and its possessions, you can deduct the following expenses. File 2007 fed income tax The cost of moving household goods and personal effects from your former home to your new home. File 2007 fed income tax The cost of traveling (including lodging) from your former home to your new home. File 2007 fed income tax The cost of moving household goods and personal effects to and from storage. File 2007 fed income tax The cost of storing household goods and personal effects while you are at the new job location. File 2007 fed income tax The first two items were explained earlier under Moves to Locations in the United States . File 2007 fed income tax The last two items are discussed, later. File 2007 fed income tax Moving goods and effects to and from storage. File 2007 fed income tax   You can deduct the reasonable expenses of moving your personal effects to and from storage. File 2007 fed income tax Storage expenses. File 2007 fed income tax   You can deduct the reasonable expenses of storing your household goods and personal effects for all or part of the time the new job location remains your main job location. File 2007 fed income tax Moving expenses allocable to excluded foreign income. File 2007 fed income tax   If you live and work outside the United States, you may be able to exclude from income part or all of the income you earn in the foreign country. File 2007 fed income tax You may also be able to claim a foreign housing exclusion or deduction. File 2007 fed income tax If you claim the foreign earned income or foreign housing exclusion, you cannot deduct the part of your moving expenses that relates to the excluded income. File 2007 fed income tax    Publication 54, Tax Guide for U. File 2007 fed income tax S. File 2007 fed income tax Citizens and Resident Aliens Abroad, explains how to figure the part of your moving expenses that relates to excluded income. File 2007 fed income tax You can get the publication from most U. File 2007 fed income tax S. File 2007 fed income tax embassies and consulates, or see How To Get Tax Help at the end of this publication. File 2007 fed income tax Nondeductible Expenses You cannot deduct the following items as moving expenses. File 2007 fed income tax Any part of the purchase price of your new home. File 2007 fed income tax Car tags. File 2007 fed income tax Driver's license. File 2007 fed income tax Expenses of buying or selling a home (including closing costs, mortgage fees, and points). File 2007 fed income tax Expenses of entering into or breaking a lease. File 2007 fed income tax Home improvements to help sell your home. File 2007 fed income tax Loss on the sale of your home. File 2007 fed income tax Losses from disposing of memberships in clubs. File 2007 fed income tax Mortgage penalties. File 2007 fed income tax Pre-move househunting expenses. File 2007 fed income tax Real estate taxes. File 2007 fed income tax Refitting of carpet and draperies. File 2007 fed income tax Return trips to your former residence. File 2007 fed income tax Security deposits (including any given up due to the move). File 2007 fed income tax Storage charges except those incurred in transit and for foreign moves. File 2007 fed income tax No double deduction. File 2007 fed income tax   You cannot take a moving expense deduction and a business expense deduction for the same expenses. File 2007 fed income tax You must decide if your expenses are deductible as moving expenses or as business expenses. File 2007 fed income tax For example, expenses you have for travel, meals, and lodging while temporarily working at a place away from your regular place of work may be deductible as business expenses if you are considered away from home on business. File 2007 fed income tax In most cases, your work at a single location is considered temporary if it is realistically expected to last (and does in fact last) for one year or less. File 2007 fed income tax   See Publication 463, Travel, Entertainment, Gift, and Car Expenses, for information on deducting your business expenses. File 2007 fed income tax Reimbursements This section explains how to report a reimbursement (including advances and allowances) on your tax return. File 2007 fed income tax It covers reimbursements for any of your moving expenses discussed in this publication. File 2007 fed income tax It also explains the types of reimbursements on which your employer must withhold income, social security, and Medicare taxes. File 2007 fed income tax Types of Reimbursement Plans If you receive a reimbursement for your moving expenses, how you report this amount and your expenses depends on whether the reimbursement is paid to you under an accountable plan or a nonaccountable plan. File 2007 fed income tax For a quick overview of how to report your reimbursement and moving expenses, see Table 2 in the section on How and When To Report, later. File 2007 fed income tax Your employer should tell you what method of reimbursement is used and what records are required. File 2007 fed income tax Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. File 2007 fed income tax Your expenses must have a business connection – that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. File 2007 fed income tax Two examples of this are the reasonable expenses of moving your possessions from your former home to your new home, and traveling from your former home to your new home. File 2007 fed income tax You must adequately account to your employer for these expenses within a reasonable period of time. File 2007 fed income tax You must return any excess reimbursement or allowance within a reasonable period of time. File 2007 fed income tax Adequate accounting. File 2007 fed income tax   You adequately account for your moving expenses by giving your employer documentation of those expenses, such as a statement of expense, an account book, a diary, or a similar record in which you entered each expense at or near the time you had it. File 2007 fed income tax Documentation includes receipts, canceled checks, and bills. File 2007 fed income tax Reasonable period of time. File 2007 fed income tax   What constitutes a “reasonable period of time” depends on the facts and circumstances of your situation. File 2007 fed income tax However, regardless of the facts and circumstances, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. File 2007 fed income tax You receive an advance within 30 days of the time you have an expense. File 2007 fed income tax You adequately account for your expenses within 60 days after they were paid or incurred. File 2007 fed income tax You return any excess reimbursement within 120 days after the expense was paid or incurred. File 2007 fed income tax You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. File 2007 fed income tax Excess reimbursement. File 2007 fed income tax   This includes any amount you are paid (including advances and allowances) that is more than the moving expenses that you adequately accounted for to your employer within a reasonable period of time. File 2007 fed income tax Returning excess reimbursements. File 2007 fed income tax   You must be required to return any excess reimbursement for your moving expenses to the person paying the reimbursement. File 2007 fed income tax Excess reimbursement includes any amount for which you did not adequately account within a reasonable period of time. File 2007 fed income tax For example, if you received an advance and you did not spend all the money on deductible moving expenses, or you do not have proof of all your expenses, you have an excess reimbursement. File 2007 fed income tax You meet accountable plan rules. File 2007 fed income tax   If for all reimbursements you meet the three rules for an accountable plan (listed earlier), your employer should not include any reimbursements of expenses in your income in box 1 of your Form W-2, Wage and Tax Statement. File 2007 fed income tax Instead, your employer should include the reimbursements in box 12 of your Form W-2. File 2007 fed income tax Example. File 2007 fed income tax You lived in Boston and accepted a job in Atlanta. File 2007 fed income tax Under an accountable plan, your employer reimbursed you for your actual traveling expenses from Boston to Atlanta and the cost of moving your furniture to Atlanta. File 2007 fed income tax Your employer will include the reimbursement on your Form W-2, box 12, with Code P. File 2007 fed income tax If your moving expenses are more than your reimbursement, you may be able to deduct your additional expenses (see How and When To Report, later). File 2007 fed income tax You do not meet accountable plan rules. File 2007 fed income tax   You may be reimbursed by your employer, but you may not meet all three rules for part of your expenses. File 2007 fed income tax   If your deductible expenses are reimbursed under an otherwise accountable plan but you do not return, within a reasonable period, any reimbursement of expenses for which you did not adequately account, then only the amount for which you did adequately account is considered as paid under an accountable plan. File 2007 fed income tax The remaining expenses are treated as having been reimbursed under a nonaccountable plan (discussed below). File 2007 fed income tax Reimbursement of nondeductible expenses. File 2007 fed income tax   You may be reimbursed by your employer for moving expenses, some of which are deductible expenses and some of which are not deductible. File 2007 fed income tax The reimbursements you receive for the nondeductible expenses and any allowances for miscellaneous or unspecified expenses are treated as paid under a nonaccountable plan (see below) and are included in your income. File 2007 fed income tax If you are reimbursed by your employer for the taxes you must pay (including social security and Medicare taxes) because you have received taxable moving expense reimbursements, you must pay tax on this reimbursement as well, and it is treated as paid under a nonaccountable plan. File 2007 fed income tax Nonaccountable Plans A nonaccountable plan is a reimbursement arrangement that does not meet the three rules listed earlier under Accountable Plans. File 2007 fed income tax In addition, the following payments will be treated as paid under a nonaccountable plan. File 2007 fed income tax Excess reimbursements you fail to return to your employer. File 2007 fed income tax Reimbursements of nondeductible expenses. File 2007 fed income tax See Reimbursement of nondeductible expenses, earlier. File 2007 fed income tax If an arrangement pays for your moving expenses by reducing your wages, salary, or other pay, the amount of the reduction will be treated as a payment made under a nonaccountable plan. File 2007 fed income tax This is because you are entitled to receive the full amount of your pay regardless of whether you had any moving expenses. File 2007 fed income tax If you are not sure if the moving expense reimbursement arrangement is an accountable or nonaccountable plan, ask your employer. File 2007 fed income tax Your employer will add the amount of any reimbursement paid to you under a nonaccountable plan to your wages, salary, or other pay. File 2007 fed income tax Your employer will report the total in box 1 of your Form W-2. File 2007 fed income tax Example. File 2007 fed income tax To get you to work in another city, your new employer reimburses you under an accountable plan for the $7,500 loss on the sale of your home. File 2007 fed income tax Because this is a reimbursement of a nondeductible expense, it is treated as paid under a nonaccountable plan and must be included as income in box 1 of your Form W-2. File 2007 fed income tax Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Do not include in income any moving expense payment you received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. File 2007 fed income tax These payments are made to persons displaced from their homes, businesses, or farms by federal projects. File 2007 fed income tax Tax Withholding and Estimated Tax Your employer must withhold income, social security, and Medicare taxes from reimbursements and allowances paid to you that are included in your income. File 2007 fed income tax See Reimbursements included in income, later. File 2007 fed income tax Reimbursements excluded from income. File 2007 fed income tax   Your employer should not include in your wages reimbursements paid under an accountable plan (explained earlier) for moving expenses that you: Could deduct if you had paid or incurred them, and Did not deduct in an earlier year. File 2007 fed income tax These reimbursements are fringe benefits excludable from your income as qualified moving expense reimbursements. File 2007 fed income tax Your employer should report these reimbursements on your Form W-2, box 12, with Code P. File 2007 fed income tax    You cannot claim a moving expense deduction for expenses covered by reimbursements excluded from income (see Accountable Plans under Types of Reimbursement Plans, earlier). File 2007 fed income tax Expenses deducted in earlier year. File 2007 fed income tax   If you receive a reimbursement this year for moving expenses deducted in an earlier year, and the reimbursement is not included as wages in box 1 of your Form W-2, you must include the reimbursement in income on Form 1040, line 21. File 2007 fed income tax Your employer should show the amount of your reimbursement in box 12 of your Form W-2. File 2007 fed income tax Reimbursements included in income. File 2007 fed income tax   Your employer must include in your income any reimbursements made (or treated as made) under a nonaccountable plan, even though they are for deductible moving expenses. File 2007 fed income tax See Nonaccountable Plans under Types of Reimbursement Plans, earlier. File 2007 fed income tax Your employer also must include in your gross income as wages any reimbursements of, or payments for, nondeductible moving expenses. File 2007 fed income tax This includes amounts your employer reimbursed you under an accountable plan (explained earlier) for meals, househunting trips, and real estate expenses. File 2007 fed income tax It also includes reimbursements that exceed your deductible expenses and that you do not return to your employer. File 2007 fed income tax Reimbursement for deductible and nondeductible expenses. File 2007 fed income tax    If your employer reimburses you for both deductible and nondeductible moving expenses, your employer must determine the amount of the reimbursement that is not taxable and not subject to withholding. File 2007 fed income tax Your employer must treat any remaining amount as taxable wages and withhold income, social security, and Medicare taxes. File 2007 fed income tax Amount of income tax withheld. File 2007 fed income tax   If the reimbursements or allowances you receive are taxable, the amount of income tax your employer will withhold depends on several factors. File 2007 fed income tax It depends in part on whether income tax is withheld from your regular wages, on whether the reimbursements and allowances are added to your regular wages, and on any information you have given to your employer on Form W-4, Employee's Withholding Allowance Certificate. File 2007 fed income tax   Your employer can treat your reimbursements as supplemental wages and not include the reimbursements and allowances in your regular wages. File 2007 fed income tax The employer can withhold income tax on supplemental wages at a flat rate which may be different from your regular tax rate. File 2007 fed income tax Estimated tax. File 2007 fed income tax    If you must make estimated tax payments, you need to take into account any taxable reimbursements and deductible moving expenses in figuring your estimated tax. File 2007 fed income tax For details about estimated taxes, see Publication 505, Tax Withholding and Estimated Tax. File 2007 fed income tax How and When To Report This section explains how and when to report your moving expenses and any reimbursements or allowances you received for your move. File 2007 fed income tax For a quick overview, see Table 2, later. File 2007 fed income tax Form 3903 Use Form 3903 to figure your moving expense deduction. File 2007 fed income tax Use a separate Form 3903 for each move for which you are deducting expenses. File 2007 fed income tax Do not file Form 3903 if all of the following apply. File 2007 fed income tax You moved to a location outside the United States in an earlier year. File 2007 fed income tax You are claiming only storage fees while you were away from the United States. File 2007 fed income tax Any amount your employer paid for the storage fees is included as wages in box 1 of your Form W-2. File 2007 fed income tax Instead, enter the storage fees (after the reduction for the part that is allocable to excluded income) on Form 1040, line 26, and enter “Storage” on the dotted line next to the amount. File 2007 fed income tax If you meet the special rules for members of the Armed Forces, see How to complete Form 3903 for members of the Armed Forces under Members of the Armed Forces, later. File 2007 fed income tax Completing Form 3903. File 2007 fed income tax   Complete Worksheet 1, earlier, or the Distance Test Worksheet in the instructions for Form 3903 to see whether you meet the distance test. File 2007 fed income tax If so, complete lines 1 through 3 of the form using your actual expenses (except, if you use your own car, you can figure expenses based on the standard mileage rate, instead of actual amounts for gas and oil). File 2007 fed income tax Enter on line 4 the total amount of your moving expense reimbursement that was excluded from your wages. File 2007 fed income tax This excluded amount should be identified on Form W-2, box 12, with code P. File 2007 fed income tax Expenses greater than reimbursement. File 2007 fed income tax   If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 26. File 2007 fed income tax This is your moving expense deduction. File 2007 fed income tax Expenses equal to or less than reimbursement. File 2007 fed income tax    If line 3 is equal to or less than line 4, you have no moving expense deduction. File 2007 fed income tax Subtract line 3 from line 4 and, if the result is more than zero, include it as income on Form 1040, line 7. File 2007 fed income tax Table 2. File 2007 fed income tax Reporting Your Moving Expenses and Reimbursements IF your Form W-2 shows. File 2007 fed income tax . File 2007 fed income tax . File 2007 fed income tax AND you have. File 2007 fed income tax . File 2007 fed income tax . File 2007 fed income tax THEN. File 2007 fed income tax . File 2007 fed income tax . File 2007 fed income tax your reimbursement reported only  in box 12 with code P moving expenses greater than the  amount in box 12 file Form 3903 showing all allowable  expenses* and reimbursements. File 2007 fed income tax your reimbursement reported only  in box 12 with code P moving expenses equal to the amount  in box 12 do not file Form 3903. File 2007 fed income tax your reimbursement divided  between box 12 and box 1 moving expenses greater than the  amount in box 12 file Form 3903 showing all allowable  expenses,* but only the  reimbursements reported in box 12 of  Form W-2. File 2007 fed income tax your entire reimbursement reported  as wages in box 1 moving expenses file Form 3903 showing all allowable  expenses,* but do not show any  reimbursements. File 2007 fed income tax no reimbursement moving expenses file Form 3903 showing all allowable  expenses. File 2007 fed income tax * * See Deductible Moving Expenses, earlier, for allowable expenses. File 2007 fed income tax    Where to deduct. File 2007 fed income tax   Deduct your moving expenses on Form 1040, line 26. File 2007 fed income tax The amount of moving expenses you can deduct is shown on Form 3903, line 5. File 2007 fed income tax    You cannot deduct moving expenses on Form 1040EZ or Form 1040A. File 2007 fed income tax   When To Deduct Expenses You may have a choice of when to deduct your moving expenses. File 2007 fed income tax Expenses not reimbursed. File 2007 fed income tax   If you were not reimbursed, deduct your moving expenses in the year you paid or incurred the expenses. File 2007 fed income tax Example. File 2007 fed income tax In December 2012, your employer transferred you to another city in the United States, where you still work. File 2007 fed income tax You are single and were not reimbursed for your moving expenses. File 2007 fed income tax In 2012, you paid for moving your furniture and deducted these expenses on your 2012 tax return. File 2007 fed income tax In January 2013, you paid for travel to the new city. File 2007 fed income tax You can deduct these additional expenses on your 2013 tax return. File 2007 fed income tax Expenses reimbursed. File 2007 fed income tax   If you are reimbursed for your expenses and you use the cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement. File 2007 fed income tax If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. File 2007 fed income tax See Choosing when to deduct, next. File 2007 fed income tax   If you deduct your expenses and you receive the reimbursement in a later year, you must include the reimbursement in your income on Form 1040, line 21. File 2007 fed income tax Choosing when to deduct. File 2007 fed income tax   If you use the cash method of accounting, which is used by most individuals, you can choose to deduct moving expenses in the year your employer reimburses you if: You paid the expenses in a year before the year of reimbursement, or You paid the expenses in the year immediately after the year of reimbursement but by the due date, including extensions, for filing your return for the reimbursement year. File 2007 fed income tax How to make the choice. File 2007 fed income tax   You choose to deduct moving expenses in the year you received reimbursement by taking the deduction on your return, or amended return, for that year. File 2007 fed income tax    You cannot deduct any moving expenses for which you received a reimbursement that was not included in your income. File 2007 fed income tax Illustrated Example Tom and Peggy Smith are married and have two children. File 2007 fed income tax They owned a home in Detroit where Tom worked. File 2007 fed income tax On February 8, 2013, Tom's employer told him that he would be transferred to San Diego as of April 10 that year. File 2007 fed income tax Peggy flew to San Diego on March 1 to look for a new home. File 2007 fed income tax She put a down payment of $25,000 on a house being built and returned to Detroit on March 4. File 2007 fed income tax The Smiths sold their Detroit home for $1,500 less than they paid for it. File 2007 fed income tax They contracted to have their personal effects moved to San Diego on April 3. File 2007 fed income tax The family drove to San Diego where they found that their new home was not finished. File 2007 fed income tax They stayed in a nearby motel until the house was ready on May 1. File 2007 fed income tax On April 10, Tom went to work in the San Diego plant where he still works. File 2007 fed income tax Their records for the move show: 1) Peggy's pre-move househunting  trip:       Travel and lodging   $ 449       Meals   75   $ 524 2) Down payment on San Diego  home 25,000 3) Real estate commission paid on  sale of Detroit home 3,500 4) Loss on sale of Detroit home (not  including real estate commission) 1,500 5) Amount paid for moving personal  effects (furniture, other household  goods, etc. File 2007 fed income tax ) 8,000 6) Expenses of driving to San Diego:       Mileage (Start 14,278;  End 16,478) 2,200 miles at 24 cents a mile   $ 528       Lodging   180       Meals   320   1,028 7) Cost of temporary living  expenses in San Diego:       Motel rooms   $1,450       Meals   2,280   3,730 Total $43,282   Tom was reimbursed $10,907 under an accountable plan. File 2007 fed income tax His employer gave him the following breakdown of the reimbursement that was allowed under the employer's plan. File 2007 fed income tax Moving personal effects   $6,800 Travel (and lodging) to San Diego   708 Travel (and lodging) for househunting trip   449 Lodging for temporary quarters   1,450 Loss on sale of home   1,500 Total reimbursement   $10,907 The employer included this reimbursement on Tom's Form W-2 for the year. File 2007 fed income tax The reimbursement of allowable expenses, $7,508 for moving household goods and travel to San Diego, was included in box 12 of Form W-2. File 2007 fed income tax His employer identified this amount with code P. File 2007 fed income tax The employer included the balance, $3,399 reimbursement of nonallowable expenses, in box 1 of Form W-2 with Tom's other wages. File 2007 fed income tax Tom must include this amount on Form 1040, line 7. File 2007 fed income tax The employer withholds taxes from the $3,399, as discussed under Reimbursement for deductible and nondeductible expenses under Tax Withholding and Estimated Tax, earlier. File 2007 fed income tax Also, Tom's employer could have given him a separate Form W-2 for his moving expense reimbursement. File 2007 fed income tax To figure his tax deduction for moving expenses, Tom enters the following amounts on Form 3903. File 2007 fed income tax Item 5 — moving personal effects (line 1)   $8,000 Item 6 — driving to San Diego ($528 + $180)  (line 2)   708 Total tax deductible moving expenses (line 3)   $8,708 Minus: Reimbursement included in box 12  of Form W-2 (line 4)   7,508 Tax deduction for moving expenses (line 5)   $1,200   Tom's Form 3903 is shown, later. File 2007 fed income tax He also enters his deduction, $1,200, on Form 1040, line 26. File 2007 fed income tax Nondeductible expenses. File 2007 fed income tax   Of the $43,282 expenses that Tom and Peggy incurred, the following items totaling $34,574 ($43,282 – $8,708) cannot be deducted. File 2007 fed income tax Item 1 — pre-move househunting expenses of $524. File 2007 fed income tax Item 2 — the $25,000 down payment on the San Diego home. File 2007 fed income tax If any part of it were for payment of deductible taxes or interest on the mortgage on the house, that part would be deductible as an itemized deduction. File 2007 fed income tax Item 3 — the $3,500 real estate commission paid on the sale of the Detroit home. File 2007 fed income tax The commission is used to figure the gain or loss on the sale. File 2007 fed income tax Item 4 — the $1,500 loss on the sale of the Detroit home. File 2007 fed income tax Item 6 — the $320 expense for meals while driving to San Diego. File 2007 fed income tax (However, the lodging and car expenses are deductible. File 2007 fed income tax ) Item 7 — temporary living expenses of $3,730. File 2007 fed income tax    This image is too large to be displayed in the current screen. File 2007 fed income tax Please click the link to view the image. File 2007 fed income tax 2012 Form 3903 Moving Expenses Members of the Armed Forces If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet the distance and time tests, discussed earlier. File 2007 fed income tax You can deduct your unreimbursed moving expenses. File 2007 fed income tax A permanent change of station includes: A move from your home to your first post of active duty, A move from one permanent post of duty to another, and A move from your last post of duty to your home or to a nearer point in the United States. File 2007 fed income tax The move must occur within one year of ending your active duty or within the period allowed under the Joint Travel Regulations. File 2007 fed income tax Spouse and dependents. File 2007 fed income tax   If a member of the Armed Forces dies, is imprisoned, or deserts, a permanent change of station for the spouse or dependent includes a move to: The place of enlistment, The member's, spouse's, or dependent's home of record, or A nearer point in the United States. File 2007 fed income tax   If the military moves you, your spouse, and dependents, to or from separate locations, the moves are treated as a single move to your new main job location. File 2007 fed income tax Services or reimbursements provided by government. File 2007 fed income tax   Do not include in income the value of moving and storage services provided by the government because of a permanent change of station. File 2007 fed income tax In general, if the total reimbursements or allowances you receive from the government because of the move are more than your actual moving expenses, the government must include the excess in your wages on Form W-2. File 2007 fed income tax However, the excess portion of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance is not included in income and should not be included in box 1 of Form W-2. File 2007 fed income tax   If your reimbursements or allowances are less than your actual moving expenses, do not include the reimbursements or allowances in income. File 2007 fed income tax You can deduct the expenses that are more than your reimbursements. File 2007 fed income tax See Deductible Moving Expenses, earlier. File 2007 fed income tax How to complete Form 3903 for members of the Armed Forces. File 2007 fed income tax    Take the following steps. File 2007 fed income tax Complete lines 1 through 3 of the form, using your actual expenses. File 2007 fed income tax Do not include any expenses for moving services provided by the government. File 2007 fed income tax Also, do not include any expenses that were reimbursed by an allowance you do not have to include in your income. File 2007 fed income tax Enter on line 4 the total reimbursements and allowances you received from the government for the expenses claimed on lines 1 and 2. File 2007 fed income tax Do not include the value of moving or storage services provided by the government. File 2007 fed income tax Also, do not include any part of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance. File 2007 fed income tax Complete line 5. File 2007 fed income tax If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 26. File 2007 fed income tax This is your moving expense deduction. File 2007 fed income tax If line 3 is equal to or less than line 4, you do not have a moving expense deduction. File 2007 fed income tax Subtract line 3 from line 4 and, if the result is more than zero, enter it on Form 1040, line 7. File 2007 fed income tax If the military moves you, your spouse and dependents, to or from different locations, treat these moves as a single move. File 2007 fed income tax    Do not deduct any expenses for moving or storage services provided by the government. File 2007 fed income tax How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. File 2007 fed income tax Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. File 2007 fed income tax Free help with your tax return. File 2007 fed income tax   Free help in preparing your return is available nationwide from IRS-certified volunteers. File 2007 fed income tax The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. File 2007 fed income tax The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. File 2007 fed income tax Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. File 2007 fed income tax Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. File 2007 fed income tax To find the nearest VITA or TCE site, visit IRS. File 2007 fed income tax gov or call 1-800-906-9887. File 2007 fed income tax   As part of the TCE program, AARP offers the Tax-Aide counseling program. File 2007 fed income tax To find the nearest AARP Tax-Aide site, visit AARP's website at www. File 2007 fed income tax aarp. File 2007 fed income tax org/money/taxaide or call 1-888-227-7669. File 2007 fed income tax   For more information on these programs, go to IRS. File 2007 fed income tax gov and enter “VITA” in the search box. File 2007 fed income tax Internet. File 2007 fed income tax IRS. File 2007 fed income tax gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. File 2007 fed income tax Apply for an Employer Identification Number (EIN). File 2007 fed income tax Go to IRS. File 2007 fed income tax gov and enter Apply for an EIN in the search box. File 2007 fed income tax Request an Electronic Filing PIN by going to IRS. File 2007 fed income tax gov and entering Electronic Filing PIN in the search box. File 2007 fed income tax Check the status of your 2013 refund with Where's My Refund? Go to IRS. File 2007 fed income tax gov or the IRS2Go app, and click on Where's My Refund? 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File 2007 fed income tax gov. File 2007 fed income tax Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. File 2007 fed income tax Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. File 2007 fed income tax gov. File 2007 fed income tax Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. File 2007 fed income tax gov or IRS2Go. File 2007 fed income tax Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. File 2007 fed income tax An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. File 2007 fed income tax Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. 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File 2007 fed income tax AARP offers the Tax-Aide counseling program as part of the TCE program. File 2007 fed income tax Visit AARP's website to find the nearest Tax-Aide location. File 2007 fed income tax Research your tax questions. File 2007 fed income tax Search publications and instructions by topic or keyword. File 2007 fed income tax Read the Internal Revenue Code, regulations, or other official guidance. File 2007 fed income tax Read Internal Revenue Bulletins. File 2007 fed income tax Sign up to receive local and national tax news by email. File 2007 fed income tax Phone. File 2007 fed income tax You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. File 2007 fed income tax Download the free IRS2Go mobile app from the iTunes app store or from Google Play. 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File 2007 fed income tax Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. File 2007 fed income tax Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. File 2007 fed income tax Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. File 2007 fed income tax The automated Where's My Refund? information is available 24 hours a day, 7 days a week. File 2007 fed income tax If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. File 2007 fed income tax Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. File 2007 fed income tax Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. File 2007 fed income tax Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. File 2007 fed income tax Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. File 2007 fed income tax Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). File 2007 fed income tax You should receive your order within 10 business days. File 2007 fed income tax Call to order transcripts of your tax returns or tax account, 1-800-908-9946. File 2007 fed income tax Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. File 2007 fed income tax Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. File 2007 fed income tax Call to ask tax questions, 1-800-829-1040. File 2007 fed income tax Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. File 2007 fed income tax The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. File 2007 fed income tax These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. File 2007 fed income tax gsa. File 2007 fed income tax gov/fedrelay. File 2007 fed income tax Walk-in. File 2007 fed income tax You can find a selection of forms, publications and services — in-person, face-to-face. File 2007 fed income tax Products. File 2007 fed income tax You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. File 2007 fed income tax Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. File 2007 fed income tax Services. File 2007 fed income tax You can walk in to your local TAC most business days for personal, face-to-face tax help. File 2007 fed income tax An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. File 2007 fed income tax If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. File 2007 fed income tax No appointment is necessary—just walk in. File 2007 fed income tax Before visiting, check www. File 2007 fed income tax irs. File 2007 fed income tax gov/localcontacts for hours of operation and services provided. File 2007 fed income tax Mail. File 2007 fed income tax You can send your order for forms, instructions, and publications to the address below. File 2007 fed income tax You should receive a response within 10 business days after your request is received. File 2007 fed income tax  Internal Revenue Service 1201 N. File 2007 fed income tax Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. File 2007 fed income tax   The Taxpayer Advocate Service (TAS) is your voice at the IRS. File 2007 fed income tax Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. File 2007 fed income tax What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. File 2007 fed income tax We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. File 2007 fed income tax You face (or your business is facing) an immediate threat of adverse action. File 2007 fed income tax You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. File 2007 fed income tax   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. File 2007 fed income tax Here's why we can help: TAS is an independent organization within the IRS. File 2007 fed income tax Our advocates know how to work with the IRS. File 2007 fed income tax Our services are free and tailored to meet your needs. File 2007 fed income tax We have offices in every state, the District of Columbia, and Puerto Rico. File 2007 fed income tax How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. File 2007 fed income tax irs. File 2007 fed income tax gov/advocate, or call us toll-free at 1-877-777-4778. File 2007 fed income tax How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. File 2007 fed income tax If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. File 2007 fed income tax irs. File 2007 fed income tax gov/sams. File 2007 fed income tax Low Income Taxpayer Clinics. File 2007 fed income tax   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. File 2007 fed income tax Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. File 2007 fed income tax Visit www. File 2007 fed income tax TaxpayerAdvocate. File 2007 fed income tax irs. File 2007 fed income tax gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. File 2007 fed income tax Prev  Up  Next   Home   More Online Publications
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The File 2007 Fed Income Tax

File 2007 fed income tax Publication 929 - Main Content Table of Contents Part 1. File 2007 fed income tax Rules for All Dependents Filing RequirementsEarned Income Only Unearned Income Only Both Earned and Unearned Income Other Filing Requirements Should a Return Be Filed Even If Not Required? Responsibility for Child's ReturnThird party designee. File 2007 fed income tax Designated as representative. File 2007 fed income tax IRS notice. File 2007 fed income tax Standard DeductionStandard Deduction of Zero Dependent's Own Exemption Withholding From WagesExceptions. File 2007 fed income tax Part 2. File 2007 fed income tax Tax on Unearned Income of Certain ChildrenWhich Parent's Return To Use Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, Lines A–C) Step 1. File 2007 fed income tax Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. File 2007 fed income tax Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. File 2007 fed income tax Figuring the Child's Tax (Form 8615, Part III) Alternative Minimum Tax Illustrated Example Part 1. File 2007 fed income tax Rules for All Dependents This part of the publication discusses the filing requirements for dependents, who is responsible for a child's return, how to figure a dependent's standard deduction and exemption (if any), and whether a dependent can claim exemption from federal income tax withholding. File 2007 fed income tax Filing Requirements Whether a dependent has to file a return generally depends on the amount of the dependent's earned and unearned income and whether the dependent is married, is age 65 or older, or is blind. File 2007 fed income tax A dependent may have to file a return even if his or her income is less than the amount that would normally require a return. File 2007 fed income tax See Other Filing Requirements, later. File 2007 fed income tax The following sections apply to dependents with: Earned income only, Unearned income only, and Both earned and unearned income. File 2007 fed income tax  To find out whether a dependent must file, read the section that applies, or use Table 1. File 2007 fed income tax Earned Income Only A dependent whose gross income is only earned income must file a return if the gross income is more than the amount listed in the following table. File 2007 fed income tax Marital Status Amount Single   Under 65 and not blind $6,100 Either 65 or older or blind $7,600 65 or older and blind $9,100 Married*   Under 65 and not blind $6,100 Either 65 or older or blind $7,300 65 or older and blind $8,500 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). File 2007 fed income tax Example. File 2007 fed income tax William is 16. File 2007 fed income tax His mother claims an exemption for him on her income tax return. File 2007 fed income tax He worked part time on weekends during the school year and full time during the summer. File 2007 fed income tax He earned $7,000 in wages. File 2007 fed income tax He did not have any unearned income. File 2007 fed income tax He must file a tax return because he has earned income only and his gross income is more than $6,100. File 2007 fed income tax If he is blind, he does not have to file a return because his gross income is not more than $7,600. File 2007 fed income tax Unearned Income Only A dependent whose gross income is only unearned income must file a return if the gross income is more than the amount listed in the following table. File 2007 fed income tax Marital Status Amount Single   Under 65 and not blind $1,000 Either 65 or older or blind $2,500 65 or older and blind $4,000 Married*   Under 65 and not blind $1,000 Either 65 or older or blind $2,200 65 or older and blind $3,400 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). File 2007 fed income tax Example. File 2007 fed income tax Sarah is 18 and single. File 2007 fed income tax Her parents can claim an exemption for her on their income tax return. File 2007 fed income tax She received $1,970 of taxable interest and dividend income. File 2007 fed income tax She did not work during the year. File 2007 fed income tax She must file a tax return because she has unearned income only and her gross income is more than $1,000. File 2007 fed income tax If she is blind, she does not have to file a return because she has unearned income only and her gross income is not more than $2,500. File 2007 fed income tax Election to report child's unearned income on parent's return. File 2007 fed income tax   A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. File 2007 fed income tax See Parent's Election To Report Child's Interest and Dividends in Part 2. File 2007 fed income tax If the parent makes this election, the child does not have to file a return. File 2007 fed income tax Both Earned and Unearned Income A dependent who has both earned and unearned income generally must file a return if the dependent's gross income is more than line 5 of the following worksheet. File 2007 fed income tax Filing Requirement Worksheet for Most Dependents 1. File 2007 fed income tax Enter dependent's earned income plus $350     2. File 2007 fed income tax Minimum amount   $1,000 3. File 2007 fed income tax Compare lines 1 and 2. File 2007 fed income tax Enter the larger amount     4. File 2007 fed income tax Maximum amount   6,100 5. File 2007 fed income tax Compare lines 3 and 4. File 2007 fed income tax Enter the smaller amount     6. File 2007 fed income tax Enter the dependent's gross income. File 2007 fed income tax If line 6 is more than line 5, the dependent must file an income tax return. File 2007 fed income tax If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. File 2007 fed income tax       Table 1. File 2007 fed income tax 2013 Filing Requirements for Dependents If your parent (or someone else) can claim you as a dependent, use this table to see if you must file a return. File 2007 fed income tax   See the definitions of “dependent,”“earned income,”“unearned income,” and “gross income” in the Glossary. File 2007 fed income tax   Single dependents—Were you either age 65 or older or blind?     No. File 2007 fed income tax You must file a return if any of the following apply. File 2007 fed income tax       Your unearned income was over $1,000. File 2007 fed income tax Your earned income was over $6,100. File 2007 fed income tax Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. File 2007 fed income tax         Yes. File 2007 fed income tax You must file a return if any of the following apply. File 2007 fed income tax     Your unearned income was over $2,500 ($4,000 if 65 or older and blind), Your earned income was over $7,600 ($9,100 if 65 or older and blind), Your gross income was more than the larger of—       $2,500 ($4,000 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind). File 2007 fed income tax       Married dependents—Were you either age 65 or older or blind?     No. File 2007 fed income tax You must file a return if any of the following apply. File 2007 fed income tax       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. File 2007 fed income tax Your unearned income was over $1,000. File 2007 fed income tax Your earned income was over $6,100. File 2007 fed income tax Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. File 2007 fed income tax       Yes. File 2007 fed income tax You must file a return if any of the following apply. File 2007 fed income tax       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. File 2007 fed income tax Your unearned income was over $2,200 ($3,400 if 65 or older and blind), Your earned income was over $7,300 ($8,500 if 65 or older and blind), Your gross income was more than the larger of—       $2,200 ($3,400 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind). File 2007 fed income tax       Example 1. File 2007 fed income tax Joe is 20, single, not blind, and a full-time college student. File 2007 fed income tax He does not provide more than half of his own support, and his parents claim an exemption for him on their income tax return. File 2007 fed income tax He received $200 taxable interest income and earned $2,750 from a part-time job. File 2007 fed income tax He does not have to file a tax return because his gross income of $2,950 ($200 interest plus $2,750 in wages) is not more than $3,100, the amount on line 5 of his filled-in Filing Requirement Worksheet for Most Dependents (shown next). File 2007 fed income tax Filled-in Example 1 Filing Requirement Worksheet  for Most Dependents 1. File 2007 fed income tax Enter dependent's earned income plus $350   $ 3,100 2. File 2007 fed income tax Minimum amount   1,000 3. File 2007 fed income tax Compare lines 1 and 2. File 2007 fed income tax Enter the larger amount   3,100 4. File 2007 fed income tax Maximum amount   6,100 5. File 2007 fed income tax Compare lines 3 and 4. File 2007 fed income tax Enter the smaller amount   3,100 6. File 2007 fed income tax Enter the dependent's gross income. File 2007 fed income tax If line 6 is more than line 5, the dependent must file an income tax return. File 2007 fed income tax If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. File 2007 fed income tax   $ 2,950   Example 2. File 2007 fed income tax The facts are the same as in Example 1 except that Joe had $600 taxable interest income. File 2007 fed income tax He must file a tax return because his gross income of $3,350 ($600 interest plus $2,750 wages) is more than $3,100, the amount on line 5 of his filled-in worksheet (shown next). File 2007 fed income tax Filled-in Example 2 Filing Requirement Worksheet for Most Dependents 1. File 2007 fed income tax Enter dependent's earned income plus $350   $ 3,100 2. File 2007 fed income tax Minimum amount   1,000 3. File 2007 fed income tax Compare lines 1 and 2. File 2007 fed income tax Enter the larger amount   3,100 4. File 2007 fed income tax Maximum amount   6,100 5. File 2007 fed income tax Compare lines 3 and 4. File 2007 fed income tax Enter the smaller amount   3,100 6. File 2007 fed income tax Enter the dependent's gross income. File 2007 fed income tax If line 6 is more than line 5, the dependent must file an income tax return. File 2007 fed income tax If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. File 2007 fed income tax   $ 3,350   Age 65 or older or blind. File 2007 fed income tax A dependent who is age 65 or older or blind must file a return if his or her gross income is more than line 7 of the following worksheet. File 2007 fed income tax Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. File 2007 fed income tax Enter dependent's earned income plus $350     2. File 2007 fed income tax Minimum amount   $1,000 3. File 2007 fed income tax Compare lines 1 and 2. File 2007 fed income tax Enter the larger amount     4. File 2007 fed income tax Maximum amount   6,100 5. File 2007 fed income tax Compare lines 3 and 4. File 2007 fed income tax Enter the smaller amount     6. File 2007 fed income tax Enter the amount from the following table that applies to the dependent       Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. File 2007 fed income tax Add lines 5 and 6. File 2007 fed income tax Enter the total     8. File 2007 fed income tax Enter the dependent's gross income. File 2007 fed income tax If line 8 is more than line 7, the dependent must file an income tax return. File 2007 fed income tax If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more     Example 3. File 2007 fed income tax The facts are the same as in Example 2 except that Joe is also blind. File 2007 fed income tax He does not have to file a return because his gross income of $3,350 is not more than $4,600, the amount on line 7 of his filled-in Filing Requirement Worksheet for Dependents Who Are Age 65 or Older or Blind (shown next). File 2007 fed income tax   Filled-in Example 3 Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. File 2007 fed income tax Enter dependent's earned income plus $350   $3,100 2. File 2007 fed income tax Minimum amount   1,000 3. File 2007 fed income tax Compare lines 1 and 2. File 2007 fed income tax Enter the larger amount   3,100 4. File 2007 fed income tax Maximum amount   6,100 5. File 2007 fed income tax Compare lines 3 and 4. File 2007 fed income tax Enter the smaller amount   3,100 6. File 2007 fed income tax Enter the amount from the following table that applies to the dependent   1,500   Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. File 2007 fed income tax Add lines 5 and 6. File 2007 fed income tax Enter the total   4,600 8. File 2007 fed income tax Enter the dependent's gross income. File 2007 fed income tax If line 8 is more than line 7, the dependent must file an income tax return. File 2007 fed income tax If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more   $3,350 Other Filing Requirements Some dependents may have to file a tax return even if their income is less than the amount that would normally require them to file a return. File 2007 fed income tax A dependent must file a tax return if he or she owes any other taxes, such as: Social security and Medicare taxes on tips not reported to his or her employer or on wages received from an employer who did not withhold these taxes, Uncollected social security and Medicare or railroad retirement taxes on tips reported to his or her employer or on group-term life insurance, Alternative minimum tax, Additional tax on a health savings account from Form 8889, Part III, Recapture taxes, such as the tax from recapture of an education credit, or Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. File 2007 fed income tax But if the dependent is filing a return only because of this tax, the dependent can file Form 5329 by itself. File 2007 fed income tax A dependent must also file a tax return if he or she: Had wages of $108. File 2007 fed income tax 28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes, or Had net earnings from self-employment of at least $400. File 2007 fed income tax Spouse itemizes. File 2007 fed income tax   A dependent must file a return if the dependent's spouse itemizes deductions on a separate return and the dependent has $5 or more of gross income (earned and/or unearned). File 2007 fed income tax Should a Return Be Filed Even If Not Required? Even if a dependent does not meet any of the filing requirements discussed earlier, he or she should file a tax return if either of the following applies. File 2007 fed income tax Income tax was withheld from his or her income. File 2007 fed income tax He or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, or refundable American opportunity education credit. File 2007 fed income tax See the tax return instructions to find out who qualifies for these credits. File 2007 fed income tax  By filing a return, the dependent can get a refund. File 2007 fed income tax Responsibility for Child's Return Generally, a child is responsible for filing his or her own tax return and for paying any tax, penalties, or interest on that return. File 2007 fed income tax If a child cannot file his or her own return for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child. File 2007 fed income tax Signing the child's return. File 2007 fed income tax   If the child cannot sign his or her return, a parent or guardian must sign the child's name followed by the words “By (signature), parent (or guardian) for minor child. File 2007 fed income tax ” Authority of parent or guardian. File 2007 fed income tax   A parent or guardian who signs a return on a child's behalf can deal with the IRS on all matters connected with the return. File 2007 fed income tax   In general, a parent or guardian who does not sign the child's return can only provide information concerning the child's return and pay the child's tax. File 2007 fed income tax That parent or guardian is not entitled to receive information from the IRS or legally bind the child to a tax liability arising from the return. File 2007 fed income tax Third party designee. File 2007 fed income tax   A child's parent or guardian who does not sign the child's return may be authorized, as a third party designee, to discuss the processing of the return with the IRS as well as provide information concerning the return. File 2007 fed income tax The child or the person signing the return on the child's behalf must check the “Yes” box in the “Third Party Designee” area of the return and name the parent or guardian as the designee. File 2007 fed income tax   If designated, a parent or guardian can respond to certain IRS notices and receive information about the processing of the return and the status of a refund or payment. File 2007 fed income tax This designation does not authorize the parent or guardian to receive any refund check, bind the child to any tax liability, or otherwise represent the child before the IRS. File 2007 fed income tax See the return instructions for more information. File 2007 fed income tax Designated as representative. File 2007 fed income tax   A parent or guardian who does not sign the child's return may be designated as the child's representative by the child or the person signing the return on the child's behalf. File 2007 fed income tax Form 2848, Power of Attorney and Declaration of Representative, is used to designate a child's representative. File 2007 fed income tax See Publication 947, Practice Before the IRS and Power of Attorney, for more information. File 2007 fed income tax   If designated, a parent or guardian can receive information about the child's return but cannot legally bind the child to a tax liability unless authorized to do so by the law of the state in which the child lives. File 2007 fed income tax IRS notice. File 2007 fed income tax   If you or the child receives a notice from the IRS concerning the child's return or tax liability, you should immediately inform the IRS that the notice concerns a child. File 2007 fed income tax The notice will show who to contact. File 2007 fed income tax The IRS will try to resolve the matter with the parent(s) or guardian(s) of the child consistent with their authority. File 2007 fed income tax Child's earnings. File 2007 fed income tax   For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. File 2007 fed income tax This is true even if, under state law, the parent has the right to the earnings and may actually have received them. File 2007 fed income tax If the child does not pay the tax due on this income, the parent may be liable for the tax. File 2007 fed income tax Child's expenses. File 2007 fed income tax   Deductions for payments that are made out of a child's earnings are the child's, even if the payments are made by the parent. File 2007 fed income tax Example. File 2007 fed income tax You made payments on your child's behalf that are deductible as a business expense and a charitable contribution. File 2007 fed income tax You made the payments out of your child's earnings. File 2007 fed income tax These items can be deducted only on the child's return. File 2007 fed income tax Standard Deduction The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of: $1,000, or The individual's earned income plus $350, but not more than the regular standard deduction (generally $6,100). File 2007 fed income tax However, the standard deduction may be higher for a dependent who: Is 65 or older, or Is blind. File 2007 fed income tax Certain dependents cannot claim any standard deduction. File 2007 fed income tax See Standard Deduction of Zero , later. File 2007 fed income tax Worksheet 1. File 2007 fed income tax   Use Worksheet 1 to figure the dependent's standard deduction. File 2007 fed income tax Worksheet 1. File 2007 fed income tax Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent. File 2007 fed income tax If you were 65 or older and/or blind, check the correct number of boxes below. File 2007 fed income tax Put the total number of boxes checked in box c and go to line 1. File 2007 fed income tax a. File 2007 fed income tax You 65 or older   Blind   b. File 2007 fed income tax Your spouse, if claiming  spouse's exemption 65 or older   Blind   c. File 2007 fed income tax Total boxes checked         1. File 2007 fed income tax Enter your earned income (defined below) plus $350. File 2007 fed income tax If none, enter -0-. File 2007 fed income tax 1. File 2007 fed income tax     2. File 2007 fed income tax Minimum amount. File 2007 fed income tax   2. File 2007 fed income tax $1,000   3. File 2007 fed income tax Compare lines 1 and 2. File 2007 fed income tax Enter the larger of the two amounts here. File 2007 fed income tax 3. File 2007 fed income tax     4. File 2007 fed income tax Enter on line 4 the amount shown below for your filing status. File 2007 fed income tax       Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 4. File 2007 fed income tax     5. File 2007 fed income tax Standard deduction. File 2007 fed income tax         a. File 2007 fed income tax Compare lines 3 and 4. File 2007 fed income tax Enter the smaller amount here. File 2007 fed income tax If under 65 and not blind, stop here. File 2007 fed income tax This is your standard deduction. File 2007 fed income tax Otherwise, go on to line 5b. File 2007 fed income tax 5a. File 2007 fed income tax     b. File 2007 fed income tax If 65 or older or blind, multiply $1,500 ($1,200 if married) by the number in box c above. File 2007 fed income tax Enter the result here. File 2007 fed income tax 5b. File 2007 fed income tax     c. File 2007 fed income tax Add lines 5a and 5b. File 2007 fed income tax This is your standard deduction for 2013. File 2007 fed income tax 5c. File 2007 fed income tax     Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. File 2007 fed income tax It also includes any amount received as a scholarship that you must include in income. File 2007 fed income tax   Example 1. File 2007 fed income tax Michael is single, age 15, and not blind. File 2007 fed income tax His parents can claim him as a dependent on their tax return. File 2007 fed income tax He has taxable interest income of $800 and wages of $150. File 2007 fed income tax He enters $500 (his earned income plus $350) on line 1 of Worksheet 1. File 2007 fed income tax On line 3, he enters $1,000, the larger of $500 or $1,000. File 2007 fed income tax Michael enters $6,100 on line 4. File 2007 fed income tax On line 5a, he enters $1,000, the smaller of $1,000 or $6,100. File 2007 fed income tax His standard deduction is $1,000. File 2007 fed income tax Example 2. File 2007 fed income tax Judy, a full-time student, is single, age 22, and not blind. File 2007 fed income tax Her parents can claim her as a dependent on their tax return. File 2007 fed income tax She has dividend income of $275 and wages of $2,500. File 2007 fed income tax She enters $2,850 (her earned income plus $350) on line 1 of Worksheet 1. File 2007 fed income tax On line 3, she enters $2,850, the larger of $2,850 or $1,000. File 2007 fed income tax She enters $6,100 on line 4. File 2007 fed income tax On line 5a, she enters $2,850 (the smaller of $2,850 or $6,100) as her standard deduction. File 2007 fed income tax Example 3. File 2007 fed income tax Amy, who is single, is claimed as a dependent on her parents' tax return. File 2007 fed income tax She is 18 years old and blind. File 2007 fed income tax She has taxable interest income of $1,000 and wages of $2,000. File 2007 fed income tax She enters $2,350 (her earned income plus $350) on line 1 of Worksheet 1. File 2007 fed income tax She enters $2,350 (the larger of $2,350 or $1,000) on line 3, $6,100 on line 4, and $2,350 (the smaller of $2,350 or $6,100) on line 5a. File 2007 fed income tax Because Amy is blind, she checks the box for blindness and enters “1” in box c at the top of Worksheet 1. File 2007 fed income tax She enters $1,500 (the number in box c times $1,500) on line 5b. File 2007 fed income tax Her standard deduction on line 5c is $3,850 ($2,350 + $1,500). File 2007 fed income tax Standard Deduction of Zero The standard deduction for the following dependents is zero. File 2007 fed income tax A married dependent filing a separate return whose spouse itemizes deductions. File 2007 fed income tax A dependent who files a return for a period of less than 12 months due to a change in his or her annual accounting period. File 2007 fed income tax A nonresident or dual-status alien dependent, unless the dependent is married to a U. File 2007 fed income tax S. File 2007 fed income tax citizen or resident alien at the end of the year and chooses to be treated as a U. File 2007 fed income tax S. File 2007 fed income tax resident for the year. File 2007 fed income tax See Publication 519, U. File 2007 fed income tax S. File 2007 fed income tax Tax Guide for Aliens, for information on making this choice. File 2007 fed income tax Example. File 2007 fed income tax Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. File 2007 fed income tax However, her husband elects to file a separate return and itemize his deductions. File 2007 fed income tax Because he itemizes, Jennifer's standard deduction on her return is zero. File 2007 fed income tax She can, however, itemize any of her allowable deductions. File 2007 fed income tax Dependent's Own Exemption A person who can be claimed as a dependent on another taxpayer's return cannot claim his or her own exemption. File 2007 fed income tax This is true even if the other taxpayer does not actually claim the exemption. File 2007 fed income tax Example. File 2007 fed income tax James and Barbara can claim their child, Ben, as a dependent on their return. File 2007 fed income tax Ben is a college student who works during the summer and must file a tax return. File 2007 fed income tax Ben cannot claim his own exemption on his return. File 2007 fed income tax This is true even if James and Barbara do not claim him as a dependent on their return. File 2007 fed income tax Withholding From Wages Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. File 2007 fed income tax If the employee claims exemption from withholding on Form W-4, the employer will not withhold federal income tax. File 2007 fed income tax The exemption from withholding does not apply to social security and Medicare taxes. File 2007 fed income tax Conditions for exemption from withholding. File 2007 fed income tax   An employee can claim exemption from withholding for 2014 only if he or she meets both of the following conditions. File 2007 fed income tax For 2013, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability. File 2007 fed income tax For 2014, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability. File 2007 fed income tax Dependents. File 2007 fed income tax   An employee who is a dependent ordinarily cannot claim exemption from withholding if both of the following are true. File 2007 fed income tax The employee's gross income will be more than $1,000, the minimum standard deduction for 2014. File 2007 fed income tax The employee's unearned income will be more than $350. File 2007 fed income tax Exceptions. File 2007 fed income tax   An employee may be able to claim exemption from withholding even if the employee is a dependent, if the employee: Is age 65 or older, Is blind, or Will claim on his or her 2014 tax return: Adjustments to income, Tax credits, or Itemized deductions. File 2007 fed income tax The above exceptions do not apply to supplemental wages greater than $1,000,000. File 2007 fed income tax For more information, see Exemption From Withholding in chapter 1 of Publication 505. File 2007 fed income tax Example. File 2007 fed income tax Guy is 17 and a student. File 2007 fed income tax During the summer he works part time at a grocery store. File 2007 fed income tax He expects to earn about $1,200 this year. File 2007 fed income tax He also worked at the store last summer and received a refund of all his withheld income tax because he did not have a tax liability. File 2007 fed income tax The only other income he expects during the year is $375 interest on a savings account. File 2007 fed income tax He expects that his parents will be able to claim him as a dependent on their tax return. File 2007 fed income tax He is not blind and will not claim adjustments to income, itemized deductions, a higher standard deduction, or tax credits on his return. File 2007 fed income tax Guy cannot claim exemption from withholding when he fills out Form W-4 because his parents will be able to claim him as a dependent, his gross income will be more than $1,000 (the minimum standard deduction amount) and his unearned income will be more than $350. File 2007 fed income tax Claiming exemption from withholding. File 2007 fed income tax    To claim exemption from withholding, an employee must enter “Exempt” in the space provided on Form W-4, line 7. File 2007 fed income tax The employee must complete the rest of the form, as explained in the form instructions, and give it to his or her employer. File 2007 fed income tax Renewing an exemption from withholding. File 2007 fed income tax   An exemption from withholding is good for only one year. File 2007 fed income tax An employee must file a new Form W-4 by February 15 each year to continue the exemption. File 2007 fed income tax Part 2. File 2007 fed income tax Tax on Unearned Income of Certain Children The two rules that follow may affect the tax on the unearned income of certain children. File 2007 fed income tax If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. File 2007 fed income tax (See Parent's Election To Report Child's Interest and Dividends , later. File 2007 fed income tax ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. File 2007 fed income tax (See Tax for Certain Children Who Have Unearned Income , later. File 2007 fed income tax ) For these rules, the term “child” includes a legally adopted child and a stepchild. File 2007 fed income tax These rules apply whether or not the child is a dependent. File 2007 fed income tax These rules do not apply if neither of the child's parents were living at the end of the year. File 2007 fed income tax Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. File 2007 fed income tax The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . File 2007 fed income tax Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. File 2007 fed income tax Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . File 2007 fed income tax Parents are married. File 2007 fed income tax   If the child's parents file separate returns, use the return of the parent with the greater taxable income. File 2007 fed income tax Parents not living together. File 2007 fed income tax   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. File 2007 fed income tax If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. File 2007 fed income tax   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in Publication 501. File 2007 fed income tax Parents are divorced. File 2007 fed income tax   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. File 2007 fed income tax Custodial parent remarried. File 2007 fed income tax   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. File 2007 fed income tax Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. File 2007 fed income tax Do not use the return of the noncustodial parent. File 2007 fed income tax   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. File 2007 fed income tax If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. File 2007 fed income tax Parents never married. File 2007 fed income tax   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. File 2007 fed income tax If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. File 2007 fed income tax Widowed parent remarried. File 2007 fed income tax   If a widow or widower remarries, the new spouse is treated as the child's other parent. File 2007 fed income tax The rules explained earlier under Custodial parent remarried apply. File 2007 fed income tax Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. File 2007 fed income tax If you do, your child will not have to file a return. File 2007 fed income tax You can make this election only if all the following conditions are met. File 2007 fed income tax Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. File 2007 fed income tax Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). File 2007 fed income tax The child's gross income was less than $10,000. File 2007 fed income tax The child is required to file a return unless you make this election. File 2007 fed income tax The child does not file a joint return for the year. File 2007 fed income tax No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. File 2007 fed income tax No federal income tax was withheld from your child's income under the backup withholding rules. File 2007 fed income tax You are the parent whose return must be used when applying the special tax rules for children. File 2007 fed income tax (See Which Parent's Return To Use , earlier. File 2007 fed income tax ) These conditions are also shown in Figure 1. File 2007 fed income tax Certain January 1 birthdays. File 2007 fed income tax   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. File 2007 fed income tax You cannot make this election for such a child unless the child was a full-time student. File 2007 fed income tax   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. File 2007 fed income tax You cannot make this election for such a child. File 2007 fed income tax How to make the election. File 2007 fed income tax    Make the election by attaching Form 8814 to your Form 1040 or Form 1040NR. File 2007 fed income tax (If you make this election, you cannot file Form 1040A or Form 1040EZ. File 2007 fed income tax ) Attach a separate Form 8814 for each child for whom you make the election. File 2007 fed income tax You can make the election for one or more children and not for others. File 2007 fed income tax Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. File 2007 fed income tax Rate may be higher. File 2007 fed income tax   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. File 2007 fed income tax This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. File 2007 fed income tax However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. File 2007 fed income tax Deductions you cannot take. File 2007 fed income tax   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. File 2007 fed income tax The additional standard deduction if the child is blind. File 2007 fed income tax The deduction for a penalty on an early withdrawal of your child's savings. File 2007 fed income tax Itemized deductions (such as your child's investment expenses or charitable contributions). File 2007 fed income tax Figure 1. File 2007 fed income tax Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. File 2007 fed income tax Figure 1. File 2007 fed income tax Can You Include Your Child's Income On Your Tax Return? Deductible investment interest. File 2007 fed income tax   If you use Form 8814, your child's unearned income is considered your unearned income. File 2007 fed income tax To figure the limit on your deductible investment interest, add the child's unearned income to yours. File 2007 fed income tax However, if your child received qualified dividends, capital gain distributions, or Alaska Permanent Fund dividends, see chapter 3 of Publication 550 for information about how to figure the limit. File 2007 fed income tax Alternative minimum tax. File 2007 fed income tax    If your child received tax-exempt interest (or exempt-interest dividends paid by a regulated investment company) from certain private activity bonds, you must determine if that interest is a tax preference item for alternative minimum tax (AMT) purposes. File 2007 fed income tax If it is, you must include it with your own tax preference items when figuring your AMT. File 2007 fed income tax See Form 6251, Alternative Minimum Tax—Individuals, and its instructions for details. File 2007 fed income tax Reduced deductions or credits. File 2007 fed income tax   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following. File 2007 fed income tax Deduction for contributions to a traditional individual retirement arrangement (IRA). File 2007 fed income tax Deduction for student loan interest. File 2007 fed income tax Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. File 2007 fed income tax Credit for child and dependent care expenses. File 2007 fed income tax Child tax credit. File 2007 fed income tax Education tax credits. File 2007 fed income tax Earned income credit. File 2007 fed income tax Penalty for underpayment of estimated tax. File 2007 fed income tax   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. File 2007 fed income tax If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. File 2007 fed income tax Get Publication 505 for more information. File 2007 fed income tax Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. File 2007 fed income tax Only the amount over $2,000 is added to your income. File 2007 fed income tax The amount over $2,000 is shown on Form 8814, line 6. File 2007 fed income tax Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. File 2007 fed income tax Include the amount from Form 8814, line 12, on Form 1040 or Form 1040NR, line 21. File 2007 fed income tax If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040 or Form 1040NR, line 21. File 2007 fed income tax On the dotted line next to line 21, enter “Form 8814” and the total of the Form 8814, line 12 amounts. File 2007 fed income tax Note. File 2007 fed income tax The tax on the first $2,000 is figured on Form 8814, Part II. File 2007 fed income tax See Figuring Additional Tax , later. File 2007 fed income tax Qualified dividends. File 2007 fed income tax   Enter on Form 8814, line 2a, any ordinary dividends your child received. File 2007 fed income tax This amount may include qualified dividends. File 2007 fed income tax Qualified dividends are those dividends reported on Form 1040, line 9b, or Form 1040NR, line 10b, and are eligible for lower tax rates that apply to a net capital gain. File 2007 fed income tax For detailed information about qualified dividends, see Publication 550. File 2007 fed income tax   If your child received qualified dividends, the amount of these dividends that is added to your income must be reported on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. File 2007 fed income tax You do not include these dividends on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. File 2007 fed income tax   Enter the child's qualified dividends on Form 8814, line 2b. File 2007 fed income tax But do not include this amount on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. File 2007 fed income tax Instead, include the amount from Form 8814, line 9, on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. File 2007 fed income tax (The amount on Form 8814, line 9, may be less than the amount on Form 8814, line 2b, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. File 2007 fed income tax ) Capital gain distributions. File 2007 fed income tax   Enter on Form 8814, line 3, any capital gain distributions your child received. File 2007 fed income tax The amount of these distributions that is added to your income must be reported on Schedule D (Form 1040), line 13, or, if you are not required to file Schedule D, on Form 1040, line 13, or Form 1040NR, line 14. File 2007 fed income tax You do not include it on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. File 2007 fed income tax   Include the amount from Form 8814, line 10, on Schedule D, line 13; Form 1040, line 13; or Form 1040NR, line 14, whichever applies. File 2007 fed income tax (The amount on Form 8814, line 10, may be less than the amount on Form 8814, line 3, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. File 2007 fed income tax ) Collectibles (28% rate) gain. File 2007 fed income tax    If any of the child's capital gain distributions are reported on Form 1099-DIV as collectibles (28% rate) gain, you must determine how much to also include on line 4 of the 28% Rate Gain Worksheet, in the instructions for Schedule D, line 18. File 2007 fed income tax Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. File 2007 fed income tax The numerator is the part of the child's total capital gain distribution that is collectibles (28% rate) gain. File 2007 fed income tax The denominator is the child's total capital gain distribution. File 2007 fed income tax Enter the result on line 4 of the 28% Rate Gain Worksheet. File 2007 fed income tax Unrecaptured section 1250 gain. File 2007 fed income tax   If any of the child's capital gain distributions are reported on Form 1099-DIV as unrecaptured section 1250 gain, you must determine how much to include on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the instructions for Schedule D, line 19. File 2007 fed income tax Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. File 2007 fed income tax The numerator is the part of the child's total capital gain distribution that is unrecaptured section 1250 gain. File 2007 fed income tax The denominator is the child's total capital gain distribution. File 2007 fed income tax Enter the result on the Unrecaptured Section 1250 Gain Worksheet, line 11. File 2007 fed income tax Section 1202 gain. File 2007 fed income tax   If any of the child's capital gain distributions are reported as section 1202 gain (gain on qualified small business stock) on Form 1099-DIV, part or all of that gain may be eligible for the section 1202 exclusion. File 2007 fed income tax (For information about the exclusion, see chapter 4 of Publication 550. File 2007 fed income tax ) To figure that part, multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. File 2007 fed income tax The numerator is the part of the child's total capital gain distribution that is section 1202 gain. File 2007 fed income tax The denominator is the child's total capital gain distribution. File 2007 fed income tax Your section 1202 exclusion is generally 50% of the result, but may be subject to a limit. File 2007 fed income tax In some cases, the exclusion is more than 50%. File 2007 fed income tax See the instructions for Schedule D for details and information on how to report the exclusion amount. File 2007 fed income tax Example. File 2007 fed income tax Fred is 6 years old. File 2007 fed income tax In 2013, he received dividend income of $2,100, which included $1,575 of ordinary dividends and a $525 capital gain distribution from a mutual fund. File 2007 fed income tax (None of the distributions were reported on Form 1099-DIV as unrecaptured section 1250 gain, section 1202 gain, or collectibles (28% rate) gain. File 2007 fed income tax ) All of the ordinary dividends are qualified dividends. File 2007 fed income tax He has no other income and is not subject to backup withholding. File 2007 fed income tax No estimated tax payments were made under his name and social security number. File 2007 fed income tax Fred's parents elect to include Fred's income on their tax return instead of filing a return for him. File 2007 fed income tax They figure the amount to report on Form 1040, lines 9a and 9b, the amount to report on their Schedule D, line 13, and the amount to report on Form 1040, line 21, as follows. File 2007 fed income tax They leave lines 1a and 1b of Form 8814 blank because Fred does not have any interest income. File 2007 fed income tax They enter his ordinary dividends of $1,575 on lines 2a and 2b because all of Fred's ordinary dividends are qualified dividends. File 2007 fed income tax They enter the amount of Fred's capital gain distributions, $525, on line 3. File 2007 fed income tax Next, they add the amounts on lines 1a, 2a, and 3 and enter the result, $2,100, on line 4. File 2007 fed income tax They subtract the base amount on line 5, $2,000, from the amount on line 4, $2,100, and enter the result, $100, on line 6. File 2007 fed income tax This is the total amount from Form 8814 to be reported on their return. File 2007 fed income tax Next, they figure how much of this amount is qualified dividends and how much is capital gain distributions. File 2007 fed income tax They divide the amount on line 2b, $1,575, by the amount on line 4, $2,100. File 2007 fed income tax They enter the result, . File 2007 fed income tax 75, on line 7. File 2007 fed income tax They divide the amount on line 3, $525, by the amount on line 4, $2,100. File 2007 fed income tax They enter the result, . File 2007 fed income tax 25, on line 8. File 2007 fed income tax They multiply the amount on line 6, $100, by the decimal on line 7, . File 2007 fed income tax 75, and enter the result, $75, on line 9. File 2007 fed income tax They multiply the amount on line 6, $100, by the decimal on line 8, . File 2007 fed income tax 25, and enter the result, $25, on line 10. File 2007 fed income tax They include the amount from line 9, $75, on lines 9a and 9b of their Form 1040 and enter “Form 8814 – $75” on the dotted lines next to lines 9a and 9b. File 2007 fed income tax They include the amount from line 10, $25, on line 13 of their Schedule D (Form 1040) and enter “Form 8814 – $25” on the dotted line next to Schedule D, line 13. File 2007 fed income tax They enter $100 ($75 + $25) on line 11 and -0- ($100 – $100) on line 12. File 2007 fed income tax Because the amount on line 12 is -0-, they do not include any amount from Form 8814 on their Form 1040, line 21. File 2007 fed income tax Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. File 2007 fed income tax This tax is added to the tax figured on your income. File 2007 fed income tax This additional tax is the smaller of: 10% x (your child's gross income − $1,000), or $100. File 2007 fed income tax Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44, or Form 1040NR, line 42. File 2007 fed income tax Check box a on Form 1040, line 44, or Form 1040NR, line 42. File 2007 fed income tax Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. File 2007 fed income tax If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. File 2007 fed income tax Attach the completed form to the child's Form 1040, Form 1040A, or Form 1040NR. File 2007 fed income tax When Form 8615 must be filed. File 2007 fed income tax   Form 8615 must be filed for a child if all of the following statements are true. File 2007 fed income tax The child's unearned income was more than $2,000. File 2007 fed income tax The child is required to file a return for 2013. File 2007 fed income tax The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. File 2007 fed income tax At least one of the child's parents was alive at the end of 2013. File 2007 fed income tax The child does not file a joint return for 2013. File 2007 fed income tax These conditions are also shown in Figure 2. File 2007 fed income tax Certain January 1 birthdays. File 2007 fed income tax   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. File 2007 fed income tax IF a child was born on. File 2007 fed income tax . File 2007 fed income tax . File 2007 fed income tax THEN, at the end of 2013, the child is considered to be. File 2007 fed income tax . File 2007 fed income tax . File 2007 fed income tax January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. File 2007 fed income tax The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. File 2007 fed income tax  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. File 2007 fed income tax  ***Do not use Form 8615 for this child. File 2007 fed income tax Figure 2. File 2007 fed income tax Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. File 2007 fed income tax Figure 2. File 2007 fed income tax Do You Have To Use Form 8615 To Figure Your Child's Tax? Providing Parental Information (Form 8615, Lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. File 2007 fed income tax (If the parents filed a joint return, enter the name and social security number listed first on the joint return. File 2007 fed income tax ) On line C, check the box for the parent's filing status. File 2007 fed income tax See Which Parent's Return To Use, earlier, for information on which parent's return information must be used on Form 8615. File 2007 fed income tax Parent with different tax year. File 2007 fed income tax   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. File 2007 fed income tax Example. File 2007 fed income tax Kimberly must use her mother's tax and taxable income to complete her Form 8615 for calendar year 2013 (January 1 – December 31). File 2007 fed income tax Kimberly's mother files her tax return on a fiscal year basis (July 1 – June 30). File 2007 fed income tax Kimberly must use the information on her mother's return for the tax year ending June 30, 2013, to complete her 2013 Form 8615. File 2007 fed income tax Parent's return information not known timely. File 2007 fed income tax   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. File 2007 fed income tax   You can use any reasonable estimate. File 2007 fed income tax This includes using information from last year's return. File 2007 fed income tax If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. File 2007 fed income tax   When you get the correct information, file an amended return on Form 1040X, Amended U. File 2007 fed income tax S. File 2007 fed income tax Individual Income Tax Return. File 2007 fed income tax Extension of time to file. File 2007 fed income tax   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. File 2007 fed income tax S. File 2007 fed income tax Individual Income Tax Return. File 2007 fed income tax See the instructions for Form 4868 for details. File 2007 fed income tax    An extension of time to file is not an extension of time to pay. File 2007 fed income tax You must make an accurate estimate of the tax for 2013. File 2007 fed income tax If you do not pay the full amount due by the regular due date, the child will owe interest and may also be charged penalties. File 2007 fed income tax See Form 4868 and its instructions. File 2007 fed income tax Parent's return information not available. File 2007 fed income tax   If a child cannot get the required information about his or her parent's tax return, the child (or the child's legal representative) can request the necessary information from the Internal Revenue Service (IRS). File 2007 fed income tax How to request. File 2007 fed income tax   After the end of the tax year, send a signed, written request for the information to the Internal Revenue Service Center where the parent's return will be filed. File 2007 fed income tax (The IRS cannot process a request received before the end of the tax year. File 2007 fed income tax )    You should also consider getting an extension of time to file the child's return, because there may be a delay in getting the requested information. File 2007 fed income tax   The request must contain all of the following. File 2007 fed income tax A statement that you are making the request to comply with section 1(g) of the Internal Revenue Code and that you have tried to get the information from the parent. File 2007 fed income tax Proof of the child's age (for example, a copy of the child's birth certificate). File 2007 fed income tax Evidence the child has more than $2,000 of unearned income (for example, a copy of the child's prior year tax return or copies of Forms 1099 for the current year). File 2007 fed income tax The name, address, social security number (if known), and filing status (if known) of the parent whose information is to be shown on Form 8615. File 2007 fed income tax    A child's legal representative making the request should include a copy of his or her Power of Attorney, such as Form 2848, or proof of legal guardianship. File 2007 fed income tax Step 1. File 2007 fed income tax Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. File 2007 fed income tax To do that, use Form 8615, Part I. File 2007 fed income tax Line 1 (Unearned Income) If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. File 2007 fed income tax Adjusted gross income is shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. File 2007 fed income tax Form 1040EZ and Form 1040NR-EZ cannot be used if Form 8615 must be filed. File 2007 fed income tax If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. File 2007 fed income tax However, use the following worksheet if: the child has excluded any foreign earned income, deducted a loss from self-employment, or has a net operating loss from another year. File 2007 fed income tax Alternate Worksheet for Form 8615, Line 1 A. File 2007 fed income tax Enter the amount from the child's Form 1040, line 22, or Form 1040NR, line 23   B. File 2007 fed income tax Enter the total of any net loss  from self-employment, any net operating loss deduction, any foreign earned income exclusion, and any foreign housing exclusion from the child's Form 1040 or Form 1040NR. File 2007 fed income tax Enter this total as a positive number (greater than zero)   C. File 2007 fed income tax Add line A and line B and  enter the total   D. File 2007 fed income tax Enter the child's earned income plus any amount from the child's Form 1040, line 30, or the child's Form 1040NR, line 30     Generally, the child's earned income is the total of the amounts reported on Form 1040, lines 7, 12, and 18 (if line 12 or 18 is a loss, use zero) or Form 1040NR, lines 8, 13, and 19 (if line 13 or 19 is a loss, use zero)   E. File 2007 fed income tax Subtract line D from line C. File 2007 fed income tax Enter the result here and on Form 8615, line 1   Unearned income defined. File 2007 fed income tax   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. File 2007 fed income tax It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. File 2007 fed income tax Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). File 2007 fed income tax Nontaxable income. File 2007 fed income tax   For this purpose, unearned income includes only amounts the child must include in gross income. File 2007 fed income tax Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. File 2007 fed income tax Capital loss. File 2007 fed income tax   A child's capital losses are taken into account in figuring the child's unearned income. File 2007 fed income tax Capital losses are first applied against capital gains. File 2007 fed income tax If the capital losses are more than the capital gains, the difference (up to $3,000) is subtracted from the child's interest, dividends, and other unearned income. File 2007 fed income tax Any difference over $3,000 is carried to the next year. File 2007 fed income tax Income from property received as a gift. File 2007 fed income tax   A child's unearned income includes all income produced by property belonging to the child. File 2007 fed income tax This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. File 2007 fed income tax   A child's unearned income includes income produced by property given as a gift to the child. File 2007 fed income tax This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. File 2007 fed income tax Example. File 2007 fed income tax Amanda Black, age 13, received the following income. File 2007 fed income tax Dividends—$800 Wages—$2,100 Taxable interest—$1,200 Tax-exempt interest—$100 Capital gains—$300 Capital losses—($200) The dividends were qualified dividends on stock given to her by her grandparents. File 2007 fed income tax Amanda's unearned income is $2,100. File 2007 fed income tax This is the total of the dividends ($800), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). File 2007 fed income tax Her wages are earned (not unearned) income because they are received for work actually performed. File 2007 fed income tax Her tax-exempt interest is not included because it is nontaxable. File 2007 fed income tax Trust income. File 2007 fed income tax   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. File 2007 fed income tax   However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. File 2007 fed income tax See the Form 8615 instructions for details. File 2007 fed income tax Adjustment to income. File 2007 fed income tax   In figuring the amount to enter on line 1, the child's unearned income is reduced by any penalty on the early withdrawal of savings. File 2007 fed income tax Line 2 (Deductions) If the child does not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter $2,000 on line 2. File 2007 fed income tax If the child itemizes deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29 (or Schedule A (Form 1040NR), line 15), that are directly connected with the production of the unearned income entered on line 1, or $2,000. File 2007 fed income tax Directly connected. File 2007 fed income tax   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. File 2007 fed income tax These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. File 2007 fed income tax    These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). File 2007 fed income tax Only the amount greater than 2% of the child's adjusted gross income can be deducted. File 2007 fed income tax See Publication 529, Miscellaneous Deductions, for more information. File 2007 fed income tax Example 1. File 2007 fed income tax Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with his unearned income. File 2007 fed income tax His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. File 2007 fed income tax Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly-connected itemized deductions of $300. File 2007 fed income tax Example 2. File 2007 fed income tax Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. File 2007 fed income tax She has no other income. File 2007 fed income tax She has itemized deductions of $1,050 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with the production of her unearned income. File 2007 fed income tax Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). File 2007 fed income tax The amount on line 2 is $2,050. File 2007 fed income tax This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. File 2007 fed income tax Line 3 Subtract line 2 from line 1 and enter the result on this line. File 2007 fed income tax If zero or less, do not complete the rest of the form. File 2007 fed income tax However, you must still attach Form 8615 to the child's tax return. File 2007 fed income tax Figure the tax on the child's taxable income in the normal manner. File 2007 fed income tax Line 4 (Child's Taxable Income) Enter on line 4 the child's taxable income from Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. File 2007 fed income tax Child files Form 2555 or 2555-EZ. File 2007 fed income tax   If the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) is used to figure the child's tax. File 2007 fed income tax Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the child's taxable income on Form 8615, line 4. File 2007 fed income tax Line 5 (Net Unearned Income) A child's net unearned income cannot be more than his or her taxable income. File 2007 fed income tax Enter on Form 8615, line 5, the smaller of line 3 or line 4. File 2007 fed income tax This is the child's net unearned income. File 2007 fed income tax If zero or less, do not complete the rest of the form. File 2007 fed income tax However, you must still attach Form 8615 to the child's tax return. File 2007 fed income tax Figure the tax on the child's taxable income in the normal manner. File 2007 fed income tax Step 2. File 2007 fed income tax Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. File 2007 fed income tax The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. File 2007 fed income tax When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. File 2007 fed income tax For example, do not refigure the medical expense deduction. File 2007 fed income tax Figure the tentative tax on Form 8615, lines 6 through 13. File 2007 fed income tax Line 6 (Parent's Taxable Income) Enter on line 6 the amount from the parent's Form 1040, line 43; Form 1040A, line 27; Form 1040EZ, line 6; Form 1040NR, line 41; or Form 1040NR-EZ, line 14. File 2007 fed income tax If the parent's taxable income is zero or less, enter zero on line 6. File 2007 fed income tax Parent files Form 2555 or 2555-EZ. File 2007 fed income tax   If the parent files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet in the Form 1040 instructions is used to figure the parent's tax. File 2007 fed income tax Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the parent's taxable income, on line 6 of Form 8615. File 2007 fed income tax Line 7 (Net Unearned Income of Other Children) If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. File 2007 fed income tax Do not include the amount from line 5 of the Form 8615 being completed. File 2007 fed income tax (The term “other child” means any other child whose Form 8615 uses the tax information of the parent identified on Lines A and B of Form 8615. File 2007 fed income tax ) Example. File 2007 fed income tax Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. File 2007 fed income tax The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon—$800 Jerry—$600 Mike—$1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. File 2007 fed income tax Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). File 2007 fed income tax Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). File 2007 fed income tax Other children's information not available. File 2007 fed income tax   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. File 2007 fed income tax Estimates and extensions are discussed earlier under Providing Parental Information (Form 8615, Lines A–C) . File 2007 fed income tax Line 8 (Parent's Taxable Income Plus Children's Net Unearned Income) Enter on this line the total of lines 5, 6, and 7. File 2007 fed income tax You must determine the amount of net capital gain and qualified dividends included on this line before completing Form 8615, line 9. File 2007 fed income tax Net capital gain. File 2007 fed income tax   Net capital gain is the smaller of the gain, if any, on Schedule D (Form 1040), line 15, or the gain, if any, on Schedule D, line 16. File 2007 fed income tax If Schedule D is not required, it is the amount on Form 1040, line 13; Form 1040A, line 10; or Form 1040NR, line 14. File 2007 fed income tax Qualified dividends. File 2007 fed income tax   Qualified dividends are those dividends reported on line 9b of Form 1040 or Form 1040A, or line 10b of Form 1040NR. File 2007 fed income tax Net capital gain and qualified dividends on line 8. File 2007 fed income tax   If neither the child, nor the parent, nor any other child has net capital gain, the net capital gain on line 8 is zero. File 2007 fed income tax   If neither the child, nor the parent, nor any other child has qualified dividends, the amount of qualified dividends on line 8 is zero. File 2007 fed income tax   If the child, parent, or any other child has net capital gain, figure the amount of net capital gain included on line 8 by adding together the net capital gain amounts included on lines 5, 6, and 7 of Form 8615. File 2007 fed income tax   If the child, parent, or any other child has qualified dividends, figure the amount of qualified dividends included on line 8 by adding together the qualified dividend amounts included on lines 5, 6, and 7. File 2007 fed income tax   Use the instructions for Form 8615, line 8, including the appropriate Line 5 Worksheet, to find these amounts. File 2007 fed income tax See the instructions for Form 8615 for more details. File 2007 fed income tax Note. File 2007 fed income tax The amount of any net capital gain or qualified dividends is not separately reported on line 8. File 2007 fed income tax It is  needed, however, when figuring the tax on line 9. File 2007 fed income tax Line 9 (Tax on Parent's Taxable Income Plus Children's Net Unearned Income) Figure the tax on the amount on line 8 using the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet (in the Form 1040, 1040A, or 1040NR instructions), the Schedule D Tax Worksheet (in the Schedule D instructions), or Schedule J (Form 1040), as follows. File 2007 fed income tax If line 8 does not include any net capital gain or qualified dividends, use the Tax Table or Tax Computation Worksheet to figure this tax. File 2007 fed income tax But if Schedule J, Income Averaging for Farmers and Fishermen, is used to figure the tax on the parent's return, use it to figure this tax. File 2007 fed income tax If line 8 includes any net capital gain or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet to figure this tax. File 2007 fed income tax For details, see the instructions for Form 8615, line 9. File 2007 fed income tax However, if the child, parent, or any other child has 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. File 2007 fed income tax But if Schedule J is used to figure the tax on the parent's return, use it to figure this tax. File 2007 fed income tax Child files Form 2555 or 2555-EZ. File 2007 fed income tax   If line 8 includes any net capital gain or qualified dividends and the child, or any other child filing Form 8615, also files Form 2555 or 2555-EZ, use Using the Schedule D Tax Worksheet for line 9 tax, next, to figure the line 9 tax. File 2007 fed income tax Using the Schedule D Tax Worksheet for line 9 tax. File 2007 fed income tax    Use the Schedule D Tax Worksheet (in the Schedule D instructions) to figure the line 9 tax on Form 8615 if the child, parent, or any other child has unrecaptured section 1250 gain or 28% rate gain. File 2007 fed income tax If you must use the Schedule D Tax Worksheet, first complete any Schedule D and any actual Schedule D Tax Worksheet required for the child, parent, or any other child. File 2007 fed income tax Then figure the line 9 tax using another Schedule D Tax Worksheet. File 2007 fed income tax (Do not attach this Schedule D Tax Worksheet to the child's return. File 2007 fed income tax )   Complete this Schedule D Tax Worksheet as follows. File 2007 fed income tax On line 1, enter the amount from Form 8615, line 8. File 2007 fed income tax On line 2, enter the qualified dividends included on Form 8615, line 8. File 2007 fed income tax (See the earlier discussion for line 8. File 2007 fed income tax ) On line 3, enter the total of the amounts, if any, on line 4g of all Forms 4952 filed by the child, parent, or any other child. File 2007 fed income tax On line 4, enter the total of the amounts, if any, on line 4e of all Forms 4952 filed by the child, parent, or any other child. File 2007 fed income tax If applicable, include instead the smaller amount entered on the dotted line next to line 4e. File 2007 fed income tax On lines 5 and 6, follow the worksheet instructions. File 2007 fed income tax On line 7, enter the net capital gain included on Form 8615, line 8. File 2007 fed income tax (See the earlier discussion for line 8. File 2007 fed income tax ) On lines 8 through 10, follow the worksheet instructions. File 2007 fed income tax On line 11, enter zero if neither the child, nor the parent, nor any other child has unrecaptured section 1250 gain (Schedule D, line 19) or 28% rate gain (Schedule D, line 18). File 2007 fed income tax Otherwise, enter the amount of unrecaptured section 1250 gain and 28% rate gain included in the net capital gain on line 8 of Form 8615. File 2007 fed income tax Figure these amounts as explained later under Figuring unrecaptured section 1250 gain (line 11) and Figuring 28% rate gain (line 11). File 2007 fed income tax If the Foreign Earned Income Tax Worksheet was used to figure the parent's tax or the tax of any child, go to step 10 below. File 2007 fed income tax Otherwise, skip steps 10, 11, and 12 below, and go to step 13. File 2007 fed income tax Determine whether there is a line 8 capital gain excess as follows. File 2007 fed income tax Add the amounts on line 2 of all Foreign Earned Income Tax Worksheets completed by the parent or any child for whom Form 8615 is filed. File 2007 fed income tax (But for each child do not add more than the excess, if any, of the amount on line 5 of the child's Form 8615 over the child's taxable income on Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. File 2007 fed income tax ) Subtract (a) from the amount on line 1 of this Schedule D Tax Worksheet. File 2007 fed income tax Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. File 2007 fed income tax If the result is more than zero, that amount is the line 8 capital gain excess. File 2007 fed income tax If the result is zero or less, there is no line 8 capital gain excess. File 2007 fed income tax If there is no line 8 capital gain excess, skip step 12 below and go to step 13. File 2007 fed income tax If there is a line 8 capital gain excess, complete a second Schedule D Tax Worksheet as instructed above and in step 13, but in its entirety and with the following additional modifications. File 2007 fed income tax (These modifications are to be made only for purposes of filling out this additional Schedule D Tax Worksheet. File 2007 fed income tax ) Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 8 capital gain excess. File 2007 fed income tax Reduce the amount you would otherwise enter on line 6 (but not below zero) by any of the line 8 capital gain excess not used in (a) above. File 2007 fed income tax If the child, parent, or any other child has 28% rate gain, reduce the amount you would otherwise enter on line 8 of Worksheet 1 for Line 11 of the Schedule D Tax Worksheet – 28% Rate Gain (Line 9 Tax), shown later, (but not below zero) by the line 8 capital gain excess, and refigure the amount on line 11 of this Schedule D Tax Worksheet. File 2007 fed income tax If the child, parent, or any other child has unrecaptured section 1250 gain, reduce the amount you would otherwise enter on line 8 of Worksheet 2 for Line 11 of the Schedule D Tax Worksheet – Unrecaptured Section 1250 Gain (Line 9 Tax) (but not below zero) by the line 8 capital gain excess not used in 12(c), and refigure the amount on line 11 of this Schedule D Tax Worksheet. File 2007 fed income tax Complete lines 12 through 45 following the worksheet instructions. File 2007 fed income tax Use the parent's filing status to complete lines 15, 42, and 44. File 2007 fed income tax Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 9, and check the box on that line