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File 2007 Tax Return Free

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File 2007 Tax Return Free

File 2007 tax return free 11. File 2007 tax return free   Other Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Reimbursement of Travel, Meals, and EntertainmentReimbursements Miscellaneous ExpensesMeaning of generally enforced. File 2007 tax return free Kickbacks. File 2007 tax return free Form 1099-MISC. File 2007 tax return free Exception. File 2007 tax return free Tax preparation fees. File 2007 tax return free Covered executive branch official. File 2007 tax return free Exceptions to denial of deduction. File 2007 tax return free Indirect political contributions. File 2007 tax return free Type of deduction. File 2007 tax return free Repayment—$3,000 or less. File 2007 tax return free Repayment—over $3,000. File 2007 tax return free Method 1. File 2007 tax return free Method 2. File 2007 tax return free Repayment does not apply. File 2007 tax return free Year of deduction (or credit). File 2007 tax return free Telephone. File 2007 tax return free What's New Standard mileage rate. File 2007 tax return free  Beginning in 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for business use is 56. File 2007 tax return free 5 cents per mile. File 2007 tax return free For more information, see Car and truck expenses under Miscellaneous Expenses. File 2007 tax return free Introduction This chapter covers business expenses that may not have been explained to you, as a business owner, in previous chapters of this publication. File 2007 tax return free Topics - This chapter discusses: Travel, meals, and entertainment Bribes and kickbacks Charitable contributions Education expenses Lobbying expenses Penalties and fines Repayments (claim of right) Other miscellaneous expenses Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 463 Travel, Entertainment, Gift, and Car Expenses 526 Charitable Contributions 529 Miscellaneous Deductions 544 Sales and Other Dispositions of Assets 970 Tax Benefits for Education 1542 Per Diem Rates See chapter 12 for information about getting publications and forms. File 2007 tax return free Reimbursement of Travel, Meals, and Entertainment The following discussion explains how to handle any reimbursements or allowances you may provide to your employees under a reimbursement or allowance arrangement for travel, meals, and entertainment expenses. File 2007 tax return free If you are self-employed and report your income and expenses on Schedule C or C-EZ (Form 1040), see Publication 463. File 2007 tax return free To be deductible for tax purposes, expenses incurred for travel, meals, and entertainment must be ordinary and necessary expenses incurred while carrying on your trade or business. File 2007 tax return free Generally, you also must show that entertainment expenses (including meals) are directly related to, or associated with, the conduct of your trade or business. File 2007 tax return free For more information on travel, meals, and entertainment, including deductibility, see Publication 463. File 2007 tax return free Reimbursements A “reimbursement or allowance arrangement” provides for payment of advances, reimbursements, and allowances for travel, meals, and entertainment expenses incurred by your employees during the ordinary course of business. File 2007 tax return free If the expenses are substantiated, you can deduct the allowable amount on your tax return. File 2007 tax return free Because of differences between accounting methods and tax law, the amount you can deduct for tax purposes may not be the same as the amount you deduct on your business books and records. File 2007 tax return free For example, you can deduct 100% of the cost of meals on your business books and records. File 2007 tax return free However, only 50% of these costs are allowed by law as a tax deduction. File 2007 tax return free How you deduct a business expense under a reimbursement or allowance arrangement depends on whether you have: An accountable plan, or A nonaccountable plan. File 2007 tax return free If you reimburse these expenses under an accountable plan, deduct them as travel, meals, or entertainment expenses. File 2007 tax return free If you reimburse these expenses under a nonaccountable plan, report the reimbursements as wages on Form W-2, Wage and Tax Statement, and deduct them as wages on the appropriate line of your tax return. File 2007 tax return free If you make a single payment to your employees and it includes both wages and an expense reimbursement, you must specify the amount of the reimbursement and report it accordingly. File 2007 tax return free See Table 11-1 , Reporting Reimbursements. File 2007 tax return free Accountable Plans An accountable plan requires your employees to meet all of the following requirements. File 2007 tax return free Each employee must: Have paid or incurred deductible expenses while performing services as your employee, Adequately account to you for these expenses within a reasonable period of time, and Return any excess reimbursement or allowance within a reasonable period of time. File 2007 tax return free An arrangement under which you advance money to employees is treated as meeting (3) above only if the following requirements are also met. File 2007 tax return free The advance is reasonably calculated not to exceed the amount of anticipated expenses. File 2007 tax return free You make the advance within a reasonable period of time of your employee paying or incurring the expense. File 2007 tax return free If any expenses reimbursed under this arrangement are not substantiated, or an excess reimbursement is not returned within a reasonable period of time by an employee, you cannot treat these expenses as reimbursed under an accountable plan. File 2007 tax return free Instead, treat the reimbursed expenses as paid under a nonaccountable plan, discussed later. File 2007 tax return free Adequate accounting. File 2007 tax return free   Your employees must adequately account to you for their travel, meals, and entertainment expenses. File 2007 tax return free They must give you documentary evidence of their travel, mileage, and other employee business expenses. File 2007 tax return free This evidence should include items such as receipts, along with either a statement of expenses, an account book, a day-planner, or similar record in which the employee entered each expense at or near the time the expense was incurred. File 2007 tax return free Excess reimbursement or allowance. File 2007 tax return free   An excess reimbursement or allowance is any amount you pay to an employee that is more than the business-related expenses for which the employee adequately accounted. File 2007 tax return free The employee must return any excess reimbursement or other expense allowance to you within a reasonable period of time. File 2007 tax return free Reasonable period of time. File 2007 tax return free   A reasonable period of time depends on the facts and circumstances. File 2007 tax return free Generally, 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 tax return free You give an advance within 30 days of the time the employee pays or incurs the expense. File 2007 tax return free Your employees adequately account for their expenses within 60 days after the expenses were paid or incurred. File 2007 tax return free Your employees return any excess reimbursement within 120 days after the expenses were paid or incurred. File 2007 tax return free You give a periodic statement (at least quarterly) to your employees that asks them to either return or adequately account for outstanding advances and they comply within 120 days of the date of the statement. File 2007 tax return free How to deduct. File 2007 tax return free   You can claim a deduction for travel, meals, and entertainment expenses if you reimburse your employees for these expenses under an accountable plan. File 2007 tax return free Generally, the amount you can deduct for meals and entertainment is subject to a 50% limit, discussed later. File 2007 tax return free If you are a sole proprietor, or are filing as a single member limited liability company, deduct the travel reimbursement on line 24a and the deductible part of the meals and entertainment reimbursement on line 24b, Schedule C (Form 1040) or line 2, Schedule C-EZ (Form 1040). File 2007 tax return free   If you are filing an income tax return for a corporation, include the reimbursement on the Other deductions line of Form 1120, U. File 2007 tax return free S. File 2007 tax return free Corporation Income Tax Return. File 2007 tax return free If you are filing any other business income tax return, such as a partnership or S corporation return, deduct the reimbursement on the appropriate line of the return as provided in the instructions for that return. File 2007 tax return free Table 11-1. File 2007 tax return free Reporting Reimbursements IF the type of reimbursement (or other expense allowance) arrangement is under THEN the employer reports on Form W-2 An accountable plan with: Actual expense reimbursement:  Adequate accounting made and excess returned No amount. File 2007 tax return free Actual expense reimbursement:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. File 2007 tax return free Per diem or mileage allowance up to the federal rate:  Adequate accounting made and excess returned No amount. File 2007 tax return free Per diem or mileage allowance up to the federal rate:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. File 2007 tax return free The amount up to the federal rate is reported only in box 12—it is not reported in box 1. File 2007 tax return free Per diem or mileage allowance exceeds the federal rate:  Adequate accounting made up to the federal rate only and excess not returned The excess amount as wages in box 1. File 2007 tax return free The amount up to the federal rate is reported only in box 12—it is not reported in box 1. File 2007 tax return free A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan The entire amount as wages in box 1. File 2007 tax return free No reimbursement plan The entire amount as wages in box 1. File 2007 tax return free Per Diem and Car Allowances You can reimburse your employees under an accountable plan based on travel days, miles, or some other fixed allowance. File 2007 tax return free In these cases, your employee is considered to have accounted to you for the amount of the expense that does not exceed the rates established by the federal government. File 2007 tax return free Your employee must actually substantiate to you the other elements of the expense, such as time, place, and business purpose. File 2007 tax return free Federal rate. File 2007 tax return free   The federal rate can be figured using any one of the following methods. File 2007 tax return free For car expenses: The standard mileage rate. File 2007 tax return free A fixed and variable rate (FAVR). File 2007 tax return free For per diem amounts: The regular federal per diem rate. File 2007 tax return free The standard meal allowance. File 2007 tax return free The high-low rate. File 2007 tax return free Car allowance. File 2007 tax return free   Your employee is considered to have accounted to you for car expenses that do not exceed the standard mileage rate. File 2007 tax return free Beginning in 2013, the standard business mileage rate is 56. File 2007 tax return free 5 cents per mile. File 2007 tax return free   You can choose to reimburse your employees using a fixed and variable rate (FAVR) allowance. File 2007 tax return free This is an allowance that includes a combination of payments covering fixed and variable costs, such as a cents-per-mile rate to cover your employees' variable operating costs (such as gas, oil, etc. File 2007 tax return free ) plus a flat amount to cover your employees' fixed costs (such as depreciation, insurance, etc. File 2007 tax return free ). File 2007 tax return free For information on using a FAVR allowance, see Revenue Procedure 2010-51, available at www. File 2007 tax return free irs. File 2007 tax return free gov/irb/2010-51_IRB/ar14. File 2007 tax return free html and Notice 2012-72, available at www. File 2007 tax return free irs. File 2007 tax return free gov/irb/2012-50_IRB/ar10. File 2007 tax return free html. File 2007 tax return free Per diem allowance. File 2007 tax return free   If your employee actually substantiates to you the other elements (discussed earlier) of the expenses reimbursed using the per diem allowance, how you report and deduct the allowance depends on whether the allowance is for lodging and meal expenses or for meal expenses only and whether the allowance is more than the federal rate. File 2007 tax return free Regular federal per diem rate. File 2007 tax return free   The regular federal per diem rate is the highest amount the federal government will pay to its employees while away from home on travel. File 2007 tax return free It has two components: Lodging expense, and Meal and incidental expense (M&IE). File 2007 tax return free The rates are different for different locations. File 2007 tax return free Publication 1542 lists the rates in the continental United States. File 2007 tax return free Standard meal allowance. File 2007 tax return free   The federal rate for meal and incidental expenses (M&IE) is the standard meal allowance. File 2007 tax return free You can pay only an M&IE allowance to employees who travel away from home if: You pay the employee for actual expenses for lodging based on receipts submitted to you, You provide for the lodging, You pay for the actual expense of the lodging directly to the provider, You do not have a reasonable belief that lodging expenses were incurred by the employee, or The allowance is computed on a basis similar to that used in computing the employee's wages (that is, number of hours worked or miles traveled). File 2007 tax return free Internet access. File 2007 tax return free    Per diem rates are available on the Internet. File 2007 tax return free You can access per diem rates at www. File 2007 tax return free gsa. File 2007 tax return free gov/perdiemrates. File 2007 tax return free High-low method. File 2007 tax return free   This is a simplified method of computing the federal per diem rate for travel within the continental United States. File 2007 tax return free It eliminates the need to keep a current list of the per diem rate for each city. File 2007 tax return free   Under the high-low method, the per diem amount for travel during January through September of 2013 is $242 ($65 for M&IE) for certain high-cost locations. File 2007 tax return free All other areas have a per diem amount of $163 ($52 for M&IE). File 2007 tax return free The high-cost locations eligible for the higher per diem amount under the high-low method are listed in Publication 1542. File 2007 tax return free   Effective October 1, 2013, the per diem rate for high-cost locations increased to $251 ($65 for M&IE). File 2007 tax return free The rate for all other locations increased to $170 ($52 for M&IE). File 2007 tax return free For October, November, and December 2013, you can either continue to use the rates described in the preceding paragraph or change to the new rates. File 2007 tax return free However, you must use the same rate for all employees reimbursed under the high-low method. File 2007 tax return free   For more information about the high-low method, see Notice 2013-65, available at www. File 2007 tax return free irs. File 2007 tax return free gov/irb/2013-44_IRB/ar13. File 2007 tax return free html. File 2007 tax return free See Publication 1542 (available on the Internet at IRS. File 2007 tax return free gov) for the current per diem rates for all locations. File 2007 tax return free Reporting per diem and car allowances. File 2007 tax return free   The following discussion explains how to report per diem and car allowances. File 2007 tax return free The manner in which you report them depends on how the allowance compares to the federal rate. File 2007 tax return free See Table 11-1. File 2007 tax return free Allowance less than or equal to the federal rate. File 2007 tax return free   If your allowance for the employee is less than or equal to the appropriate federal rate, that allowance is not included as part of the employee's pay in box 1 of the employee's Form W-2. File 2007 tax return free Deduct the allowance as travel expenses (including meals that may be subject to the 50% limit, discussed later). File 2007 tax return free See How to deduct under Accountable Plans, earlier. File 2007 tax return free Allowance more than the federal rate. File 2007 tax return free   If your employee's allowance is more than the appropriate federal rate, you must report the allowance as two separate items. File 2007 tax return free   Include the allowance amount up to the federal rate in box 12 (code L) of the employee's Form W-2. File 2007 tax return free Deduct it as travel expenses (as explained above). File 2007 tax return free This part of the allowance is treated as reimbursed under an accountable plan. File 2007 tax return free   Include the amount that is more than the federal rate in box 1 (and in boxes 3 and 5 if they apply) of the employee's Form W-2. File 2007 tax return free Deduct it as wages subject to income tax withholding, social security, Medicare, and federal unemployment taxes. File 2007 tax return free This part of the allowance is treated as reimbursed under a nonaccountable plan as explained later under Nonaccountable Plans. File 2007 tax return free Meals and Entertainment Under an accountable plan, you can generally deduct only 50% of any otherwise deductible business-related meal and entertainment expenses you reimburse your employees. File 2007 tax return free The deduction limit applies even if you reimburse them for 100% of the expenses. File 2007 tax return free Application of the 50% limit. File 2007 tax return free   The 50% deduction limit applies to reimbursements you make to your employees for expenses they incur for meals while traveling away from home on business and for entertaining business customers at your place of business, a restaurant, or another location. File 2007 tax return free It applies to expenses incurred at a business convention or reception, business meeting, or business luncheon at a club. File 2007 tax return free The deduction limit may also apply to meals you furnish on your premises to your employees. File 2007 tax return free Related expenses. File 2007 tax return free   Taxes and tips relating to a meal or entertainment activity you reimburse to your employee under an accountable plan are included in the amount subject to the 50% limit. File 2007 tax return free Reimbursements you make for expenses, such as cover charges for admission to a nightclub, rent paid for a room to hold a dinner or cocktail party, or the amount you pay for parking at a sports arena, are all subject to the 50% limit. File 2007 tax return free However, the cost of transportation to and from an otherwise allowable business meal or a business-related entertainment activity is not subject to the 50% limit. File 2007 tax return free Amount subject to 50% limit. File 2007 tax return free   If you provide your employees with a per diem allowance only for meal and incidental expenses, the amount treated as an expense for food and beverages is the lesser of the following. File 2007 tax return free The per diem allowance. File 2007 tax return free The federal rate for M&IE. File 2007 tax return free   If you provide your employees with a per diem allowance that covers lodging, meals, and incidental expenses, you must treat an amount equal to the federal M&IE rate for the area of travel as an expense for food and beverages. File 2007 tax return free If the per diem allowance you provide is less than the federal per diem rate for the area of travel, you can treat 40% of the per diem allowance as the amount for food and beverages. File 2007 tax return free Meal expenses when subject to “hours of service” limits. File 2007 tax return free   You can deduct 80% of the cost of reimbursed meals your employees consume while away from their tax home on business during, or incident to, any period subject to the Department of Transportation's “hours of service” limits. File 2007 tax return free   See Publication 463 for a detailed discussion of individuals subject to the Department of Transportation's “hours of service” limits. File 2007 tax return free De minimis (minimal) fringe benefit. File 2007 tax return free   The 50% limit does not apply to an expense for food or beverage that is excluded from the gross income of an employee because it is a de minimis fringe benefit. File 2007 tax return free See Publication 15-B for additional information on de minimis fringe benefits. File 2007 tax return free Company cafeteria or executive dining room. File 2007 tax return free   The cost of food and beverages you provide primarily to your employees on your business premises is deductible. File 2007 tax return free This includes the cost of maintaining the facilities for providing the food and beverages. File 2007 tax return free These expenses are subject to the 50% limit unless they qualify as a de minimis fringe benefit, as just discussed, or unless they are compensation to your employees (explained later). File 2007 tax return free Employee activities. File 2007 tax return free   The expense of providing recreational, social, or similar activities (including the use of a facility) for your employees is deductible and is not subject to the 50% limit. File 2007 tax return free The benefit must be primarily for your employees who are not highly compensated. File 2007 tax return free   For this purpose, a highly compensated employee is an employee who meets either of the following requirements. File 2007 tax return free Owned a 10% or more interest in the business during the year or the preceding year. File 2007 tax return free An employee is treated as owning any interest owned by his or her brother, sister, spouse, ancestors, and lineal descendants. File 2007 tax return free Received more than $115,000 in pay for the preceding year. File 2007 tax return free You can choose to include only employees who were also in the top 20% of employees when ranked by pay for the preceding year. File 2007 tax return free   For example, the expenses for food, beverages, and entertainment for a company-wide picnic are not subject to the 50% limit. File 2007 tax return free Meals or entertainment treated as compensation. File 2007 tax return free   The 50% limit does not apply to either of the following. File 2007 tax return free Expenses for meals or entertainment that you treat as: Compensation to an employee who was the recipient of the meals or entertainment, and Wages subject to withholding of federal income tax. File 2007 tax return free Expenses for meals or entertainment if: A recipient of the meals or entertainment who is not your employee has to include the expenses in gross income as compensation for services or as a prize or award, and You include that amount on a Form 1099 issued to the recipient, if a Form 1099 is required. File 2007 tax return free Sales of meals or entertainment. File 2007 tax return free   You can deduct the cost of meals or entertainment (including the use of facilities) you sell to the public. File 2007 tax return free For example, if you run a nightclub, your expense for the entertainment you furnish to your customers, such as a floor show, is a business expense that is fully deductible. File 2007 tax return free The 50% limit does not apply to this expense. File 2007 tax return free Providing meals or entertainment to general public to promote goodwill. File 2007 tax return free   You can deduct the cost of providing meals, entertainment, or recreational facilities to the general public as a means of advertising or promoting goodwill in the community. File 2007 tax return free The 50% limit does not apply to this expense. File 2007 tax return free Director, stockholder, or employee meetings. File 2007 tax return free   You can deduct entertainment expenses directly related to business meetings of your employees, partners, stockholders, agents, or directors. File 2007 tax return free You can provide some minor social activities, but the main purpose of the meeting must be your company's business. File 2007 tax return free These expenses are subject to the 50% limit. File 2007 tax return free Trade association meetings. File 2007 tax return free   You can deduct expenses directly related to and necessary for attending business meetings or conventions of certain tax-exempt organizations. File 2007 tax return free These organizations include business leagues, chambers of commerce, real estate boards, and trade and professional associations. File 2007 tax return free Nonaccountable Plans A nonaccountable plan is an arrangement that does not meet the requirements for an accountable plan. File 2007 tax return free All amounts paid, or treated as paid, under a nonaccountable plan are reported as wages on Form W-2. File 2007 tax return free The payments are subject to income tax withholding, social security, Medicare, and federal unemployment taxes. File 2007 tax return free You can deduct the reimbursement as compensation or wages only to the extent it meets the deductibility tests for employees' pay in chapter 2. File 2007 tax return free Deduct the allowable amount as compensation or wages on the appropriate line of your income tax return, as provided in its instructions. File 2007 tax return free Miscellaneous Expenses In addition to travel, meal, and entertainment expenses, there are other expenses you can deduct. File 2007 tax return free Advertising expenses. File 2007 tax return free   You generally can deduct reasonable advertising expenses that are directly related to your business activities. File 2007 tax return free Generally, you cannot deduct amounts paid to influence legislation (i. File 2007 tax return free e. File 2007 tax return free , lobbying). File 2007 tax return free See Lobbying expenses , later. File 2007 tax return free   You can usually deduct as a business expense the cost of institutional or goodwill advertising to keep your name before the public if it relates to business you reasonably expect to gain in the future. File 2007 tax return free For example, the cost of advertising that encourages people to contribute to the Red Cross, to buy U. File 2007 tax return free S. File 2007 tax return free Savings Bonds, or to participate in similar causes is usually deductible. File 2007 tax return free Anticipated liabilities. File 2007 tax return free   Anticipated liabilities or reserves for anticipated liabilities are not deductible. File 2007 tax return free For example, assume you sold 1-year TV service contracts this year totaling $50,000. File 2007 tax return free From experience, you know you will have expenses of about $15,000 in the coming year for these contracts. File 2007 tax return free You cannot deduct any of the $15,000 this year by charging expenses to a reserve or liability account. File 2007 tax return free You can deduct your expenses only when you actually pay or accrue them, depending on your accounting method. File 2007 tax return free Bribes and kickbacks. File 2007 tax return free   Engaging in the payment of bribes or kickbacks is a serious criminal matter. File 2007 tax return free Such activity could result in criminal prosecution. File 2007 tax return free Any payments that appear to have been made, either directly or indirectly, to an official or employee of any government or an agency or instrumentality of any government are not deductible for tax purposes and are in violation of the law. File 2007 tax return free   Payments paid directly or indirectly to a person in violation of any federal or state law (but only if that state law is generally enforced, defined below) that provides for a criminal penalty or for the loss of a license or privilege to engage in a trade or business are also not allowed as a deduction for tax purposes. File 2007 tax return free Meaning of “generally enforced. File 2007 tax return free ”   A state law is considered generally enforced unless it is never enforced or enforced only for infamous persons or persons whose violations are extraordinarily flagrant. File 2007 tax return free For example, a state law is generally enforced unless proper reporting of a violation of the law results in enforcement only under unusual circumstances. File 2007 tax return free Kickbacks. File 2007 tax return free   A kickback is a payment for referring a client, patient, or customer. File 2007 tax return free The common kickback situation occurs when money or property is given to someone as payment for influencing a third party to purchase from, use the services of, or otherwise deal with the person who pays the kickback. File 2007 tax return free In many cases, the person whose business is being sought or enjoyed by the person who pays the kickback is not aware of the payment. File 2007 tax return free   For example, the Yard Corporation is in the business of repairing ships. File 2007 tax return free It returns 10% of the repair bills as kickbacks to the captains and chief officers of the vessels it repairs. File 2007 tax return free Although this practice is considered an ordinary and necessary expense of getting business, it is clearly a violation of a state law that is generally enforced. File 2007 tax return free These expenditures are not deductible for tax purposes, whether or not the owners of the shipyard are subsequently prosecuted. File 2007 tax return free Form 1099-MISC. File 2007 tax return free   It does not matter whether any kickbacks paid during the tax year are deductible on your income tax return in regards to information reporting. File 2007 tax return free See Form 1099-MISC for more information. File 2007 tax return free Car and truck expenses. File 2007 tax return free   The costs of operating a car, truck, or other vehicle in your business are deductible. File 2007 tax return free For more information on how to figure your deduction, see Publication 463. File 2007 tax return free Charitable contributions. File 2007 tax return free   Cash payments to an organization, charitable or otherwise, may be deductible as business expenses if the payments are not charitable contributions or gifts and are directly related to your business. File 2007 tax return free If the payments are charitable contributions or gifts, you cannot deduct them as business expenses. File 2007 tax return free However, corporations (other than S corporations) can deduct charitable contributions on their income tax returns, subject to limitations. File 2007 tax return free See the Instructions for Form 1120 for more information. File 2007 tax return free Sole proprietors, partners in a partnership, or shareholders in an S corporation may be able to deduct charitable contributions made by their business on Schedule A (Form 1040). File 2007 tax return free Example. File 2007 tax return free You paid $15 to a local church for a half-page ad in a program for a concert it is sponsoring. File 2007 tax return free The purpose of the ad was to encourage readers to buy your products. File 2007 tax return free Your payment is not a charitable contribution. File 2007 tax return free You can deduct it as an advertising expense. File 2007 tax return free Example. File 2007 tax return free You made a $100,000 donation to a committee organized by the local Chamber of Commerce to bring a convention to your city, intended to increase business activity, including yours. File 2007 tax return free Your payment is not a charitable contribution. File 2007 tax return free You can deduct it as a business expense. File 2007 tax return free See Publication 526 for a discussion of donated inventory, including capital gain property. File 2007 tax return free Club dues and membership fees. File 2007 tax return free   Generally, you cannot deduct amounts paid or incurred for membership in any club organized for business, pleasure, recreation, or any other social purpose. File 2007 tax return free This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. File 2007 tax return free Exception. File 2007 tax return free   The following organizations are not treated as clubs organized for business, pleasure, recreation, or other social purpose unless one of the main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. File 2007 tax return free Boards of trade. File 2007 tax return free Business leagues. File 2007 tax return free Chambers of commerce. File 2007 tax return free Civic or public service organizations. File 2007 tax return free Professional organizations such as bar associations and medical associations. File 2007 tax return free Real estate boards. File 2007 tax return free Trade associations. File 2007 tax return free Credit card convenience fees. File 2007 tax return free   Credit card companies charge a fee to businesses who accept their cards. File 2007 tax return free This fee when paid or incurred by the business can be deducted as a business expense. File 2007 tax return free Damages recovered. File 2007 tax return free   Special rules apply to compensation you receive for damages sustained as a result of patent infringement, breach of contract or fiduciary duty, or antitrust violations. File 2007 tax return free You must include this compensation in your income. File 2007 tax return free However, you may be able to take a special deduction. File 2007 tax return free The deduction applies only to amounts recovered for actual economic injury, not any additional amount. File 2007 tax return free The deduction is the smaller of the following. File 2007 tax return free The amount you received or accrued for damages in the tax year reduced by the amount you paid or incurred in the year to recover that amount. File 2007 tax return free Your losses from the injury you have not deducted. File 2007 tax return free Demolition expenses or losses. File 2007 tax return free   Amounts paid or incurred to demolish a structure are not deductible. File 2007 tax return free These amounts are added to the basis of the land where the demolished structure was located. File 2007 tax return free Any loss for the remaining undepreciated basis of a demolished structure would not be recognized until the property is disposed of. File 2007 tax return free Education expenses. File 2007 tax return free   Ordinary and necessary expenses paid for the cost of the education and training of your employees are deductible. File 2007 tax return free See Education Expenses in chapter 2. File 2007 tax return free   You can also deduct the cost of your own education (including certain related travel) related to your trade or business. File 2007 tax return free You must be able to show the education maintains or improves skills required in your trade or business, or that it is required by law or regulations, for keeping your license to practice, status, or job. File 2007 tax return free For example, an attorney can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain his or her license to practice law. File 2007 tax return free   Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. File 2007 tax return free This is true even if the education maintains or improves skills presently required in your business. File 2007 tax return free For more information on education expenses, see Publication 970. File 2007 tax return free Franchise, trademark, trade name. File 2007 tax return free   If you buy a franchise, trademark, or trade name, you can deduct the amount you pay or incur as a business expense only if your payments are part of a series of payments that are: Contingent on productivity, use, or disposition of the item, Payable at least annually for the entire term of the transfer agreement, and Substantially equal in amount (or payable under a fixed formula). File 2007 tax return free   When determining the term of the transfer agreement, include all renewal options and any other period for which you and the transferrer reasonably expect the agreement to be renewed. File 2007 tax return free   A franchise includes an agreement that gives one of the parties to the agreement the right to distribute, sell, or provide goods, services, or facilities within a specified area. File 2007 tax return free Impairment-related expenses. File 2007 tax return free   If you are disabled, you can deduct expenses necessary for you to be able to work (impairment-related expenses) as a business expense, rather than as a medical expense. File 2007 tax return free   You are disabled if you have either of the following. File 2007 tax return free A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed. File 2007 tax return free A physical or mental impairment that substantially limits one or more of your major life activities. File 2007 tax return free   The expense qualifies as a business expense if all the following apply. File 2007 tax return free Your work clearly requires the expense for you to satisfactorily perform that work. File 2007 tax return free The goods or services purchased are clearly not needed or used, other than incidentally, in your personal activities. File 2007 tax return free Their treatment is not specifically provided for under other tax law provisions. File 2007 tax return free Example. File 2007 tax return free You are blind. File 2007 tax return free You must use a reader to do your work, both at and away from your place of work. File 2007 tax return free The reader's services are only for your work. File 2007 tax return free You can deduct your expenses for the reader as a business expense. File 2007 tax return free Internet-related expenses. File 2007 tax return free   Generally, you can deduct internet-related expenses including domain registrations fees and webmaster consulting costs. File 2007 tax return free If you are starting a business you may have to amortize these expenses as start-up costs. File 2007 tax return free For more information about amortizing start-up and organizational costs, see chapter 8. File 2007 tax return free Interview expense allowances. File 2007 tax return free   Reimbursements you make to job candidates for transportation or other expenses related to interviews for possible employment are not wages. File 2007 tax return free You can deduct the reimbursements as a business expense. File 2007 tax return free However, expenses for food, beverages, and entertainment are subject to the 50% limit discussed earlier under Meals and Entertainment. File 2007 tax return free Legal and professional fees. File 2007 tax return free   Fees charged by accountants and attorneys that are ordinary and necessary expenses directly related to operating your business are deductible as business expenses. File 2007 tax return free However, usually legal fees you pay to acquire business assets are not deductible. File 2007 tax return free These costs are added to the basis of the property. File 2007 tax return free   Fees that include payments for work of a personal nature (such as drafting a will, or damages arising from a personal injury) are not allowed as a business deduction on Schedule C or C-EZ. File 2007 tax return free If the invoice includes both business and personal charges, compute the business portion as follows: multiply the total amount of the bill by a fraction, the numerator of which is the amount attributable to business matters, the denominator of which is the total amount paid. File 2007 tax return free The result is the portion of the invoice attributable to business expenses. File 2007 tax return free The portion attributable to personal matters is the difference between the total amount and the business portion (computed above). File 2007 tax return free   Legal fees relating to personal tax advice may be deductible on Schedule A (Form 1040), if you itemize deductions. File 2007 tax return free However, the deduction is subject to the 2% limitation on miscellaneous itemized deductions. File 2007 tax return free See Publication 529, Miscellaneous Deductions. File 2007 tax return free Tax preparation fees. File 2007 tax return free   The cost of hiring a tax professional, such as a C. File 2007 tax return free P. File 2007 tax return free A. File 2007 tax return free , to prepare that part of your tax return relating to your business as a sole proprietor is deductible on Schedule C or Schedule C-EZ. File 2007 tax return free Any remaining cost may be deductible on Schedule A (Form 1040) if you itemize deductions. File 2007 tax return free   You can also claim a business deduction for amounts paid or incurred in resolving asserted tax deficiencies for your business operated as a sole proprietor. File 2007 tax return free Licenses and regulatory fees. File 2007 tax return free   Licenses and regulatory fees for your trade or business paid annually to state or local governments generally are deductible. File 2007 tax return free Some licenses and fees may have to be amortized. File 2007 tax return free See chapter 8 for more information. File 2007 tax return free Lobbying expenses. File 2007 tax return free   Generally, lobbying expenses are not deductible. File 2007 tax return free Lobbying expenses include amounts paid or incurred for any of the following activities. File 2007 tax return free Influencing legislation. File 2007 tax return free Participating in or intervening in any political campaign for, or against, any candidate for public office. File 2007 tax return free Attempting to influence the general public, or segments of the public, about elections, legislative matters, or referendums. File 2007 tax return free Communicating directly with covered executive branch officials (defined later) in any attempt to influence the official actions or positions of those officials. File 2007 tax return free Researching, preparing, planning, or coordinating any of the preceding activities. File 2007 tax return free   Your expenses for influencing legislation and communicating directly with a covered executive branch official include a portion of your labor costs and general and administrative costs of your business. File 2007 tax return free For information on making this allocation, see section 1. File 2007 tax return free 162-28 of the regulations. File 2007 tax return free   You cannot claim a charitable or business expense deduction for amounts paid to an organization if both of the following apply. File 2007 tax return free The organization conducts lobbying activities on matters of direct financial interest to your business. File 2007 tax return free A principal purpose of your contribution is to avoid the rules discussed earlier that prohibit a business deduction for lobbying expenses. File 2007 tax return free   If a tax-exempt organization, other than a section 501(c)(3) organization, provides you with a notice on the part of dues that is allocable to nondeductible lobbying and political expenses, you cannot deduct that part of the dues. File 2007 tax return free Covered executive branch official. File 2007 tax return free   For purposes of this discussion, a covered executive branch official is any of the following. File 2007 tax return free The President. File 2007 tax return free The Vice President. File 2007 tax return free Any officer or employee of the White House Office of the Executive Office of the President and the two most senior level officers of each of the other agencies in the Executive Office. File 2007 tax return free Any individual who: Is serving in a position in Level I of the Executive Schedule under section 5312 of title 5, United States Code, Has been designated by the President as having Cabinet-level status, or Is an immediate deputy of an individual listed in item (a) or (b). File 2007 tax return free Exceptions to denial of deduction. File 2007 tax return free   The general denial of the deduction does not apply to the following. File 2007 tax return free Expenses of appearing before, or communicating with, any committee or member of any local council or similar governing body concerning its legislation (local legislation) if the legislation is of direct interest to you or to you and an organization of which you are a member. File 2007 tax return free An Indian tribal government is treated as a local council or similar governing body. File 2007 tax return free Any in-house expenses for influencing legislation and communicating directly with a covered executive branch official if those expenses for the tax year do not exceed $2,000 (excluding overhead expenses). File 2007 tax return free Expenses incurred by taxpayers engaged in the trade or business of lobbying (professional lobbyists) on behalf of another person (but does apply to payments by the other person to the lobbyist for lobbying activities). File 2007 tax return free Moving machinery. File 2007 tax return free   Generally, the cost of moving machinery from one city to another is a deductible expense. File 2007 tax return free So is the cost of moving machinery from one plant to another, or from one part of your plant to another. File 2007 tax return free You can deduct the cost of installing the machinery in the new location. File 2007 tax return free However, you must capitalize the costs of installing or moving newly purchased machinery. File 2007 tax return free Outplacement services. File 2007 tax return free   The costs of outplacement services you provide to your employees to help them find new employment, such as career counseling, résumé assistance, skills assessment, etc. File 2007 tax return free are deductible. File 2007 tax return free   The costs of outplacement services may cover more than one deduction category. File 2007 tax return free For example, deduct as a utilities expense the cost of telephone calls made under this service and deduct as rental expense the cost of renting machinery and equipment for this service. File 2007 tax return free   For information on whether the value of outplacement services is includable in your employees' income, see Publication 15-B. File 2007 tax return free Penalties and fines. File 2007 tax return free   Penalties paid for late performance or nonperformance of a contract are generally deductible. File 2007 tax return free For instance, you own and operate a construction company. File 2007 tax return free Under a contract, you are to finish construction of a building by a certain date. File 2007 tax return free Due to construction delays, the building is not completed and ready for occupancy on the date stipulated in the contract. File 2007 tax return free You are now required to pay an additional amount for each day that completion is delayed beyond the completion date stipulated in the contract. File 2007 tax return free These additional costs are deductible business expenses. File 2007 tax return free   On the other hand, penalties or fines paid to any government agency or instrumentality because of a violation of any law are not deductible. File 2007 tax return free These fines or penalties include the following amounts. File 2007 tax return free Paid because of a conviction for a crime or after a plea of guilty or no contest in a criminal proceeding. File 2007 tax return free Paid as a penalty imposed by federal, state, or local law in a civil action, including certain additions to tax and additional amounts and assessable penalties imposed by the Internal Revenue Code. File 2007 tax return free Paid in settlement of actual or possible liability for a fine or penalty, whether civil or criminal. File 2007 tax return free Forfeited as collateral posted for a proceeding that could result in a fine or penalty. File 2007 tax return free   Examples of nondeductible penalties and fines include the following. File 2007 tax return free Fines for violating city housing codes. File 2007 tax return free Fines paid by truckers for violating state maximum highway weight laws. File 2007 tax return free Fines for violating air quality laws. File 2007 tax return free Civil penalties for violating federal laws regarding mining safety standards and discharges into navigable waters. File 2007 tax return free   A fine or penalty does not include any of the following. File 2007 tax return free Legal fees and related expenses to defend yourself in a prosecution or civil action for a violation of the law imposing the fine or civil penalty. File 2007 tax return free Court costs or stenographic and printing charges. File 2007 tax return free Compensatory damages paid to a government. File 2007 tax return free Political contributions. File 2007 tax return free   Contributions or gifts paid to political parties or candidates are not deductible. File 2007 tax return free In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible. File 2007 tax return free Indirect political contributions. File 2007 tax return free   You cannot deduct indirect political contributions and costs of taking part in political activities as business expenses. File 2007 tax return free Examples of nondeductible expenses include the following. File 2007 tax return free Advertising in a convention program of a political party, or in any other publication if any of the proceeds from the publication are for, or intended for, the use of a political party or candidate. File 2007 tax return free Admission to a dinner or program (including, but not limited to, galas, dances, film presentations, parties, and sporting events) if any of the proceeds from the function are for, or intended for, the use of a political party or candidate. File 2007 tax return free Admission to an inaugural ball, gala, parade, concert, or similar event if identified with a political party or candidate. File 2007 tax return free Repairs. File 2007 tax return free   The cost of repairing or improving property used in your trade or business is either a deductible or capital expense. File 2007 tax return free Routine maintenance that keeps your property in a normal efficient operating condition, but that does not materially increase the value or substantially prolong the useful life of the property, is deductible in the year that it is incurred. File 2007 tax return free Otherwise, the cost must be capitalized and depreciated. File 2007 tax return free See Form 4562 and its instructions for how to compute and claim the depreciation deduction. File 2007 tax return free   The cost of repairs includes the costs of labor, supplies, and certain other items. File 2007 tax return free The value of your own labor is not deductible. File 2007 tax return free Examples of repairs include: Reconditioning floors (but not replacement), Repainting the interior and exterior walls of a building, Cleaning and repairing roofs and gutters, and Fixing plumbing leaks (but not replacement of fixtures). File 2007 tax return free Repayments. File 2007 tax return free   If you had to repay an amount you included in your income in an earlier year, you may be able to deduct the amount repaid for the year in which you repaid it. File 2007 tax return free Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. File 2007 tax return free Type of deduction. File 2007 tax return free   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. File 2007 tax return free For instance, if you repay an amount you previously reported as a capital gain, deduct the repayment as a capital loss on Form 8949. File 2007 tax return free If you reported it as self-employment income, deduct it as a business deduction on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). File 2007 tax return free   If you reported the amount as wages, unemployment compensation, or other nonbusiness ordinary income, enter it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is subject to the 2% limitation. File 2007 tax return free However, if the repayment is over $3,000 and Method 1 (discussed later) applies, deduct it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is not subject to the 2% limitation. File 2007 tax return free Repayment—$3,000 or less. File 2007 tax return free   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. File 2007 tax return free Repayment—over $3,000. File 2007 tax return free   If the amount you repaid was more than $3,000, you can deduct the repayment, as described earlier. File 2007 tax return free However, you can instead choose to take a tax credit for the year of repayment if you included the income under a “claim of right. File 2007 tax return free ” This means that at the time you included the income, it appeared that you had an unrestricted right to it. File 2007 tax return free If you qualify for this choice, figure your tax under both methods and use the method that results in less tax. File 2007 tax return free Method 1. File 2007 tax return free   Figure your tax for 2013 claiming a deduction for the repaid amount. File 2007 tax return free Method 2. File 2007 tax return free   Figure your tax for 2013 claiming a credit for the repaid amount. File 2007 tax return free Follow these steps. File 2007 tax return free Figure your tax for 2013 without deducting the repaid amount. File 2007 tax return free Refigure your tax from the earlier year without including in income the amount you repaid in 2013. File 2007 tax return free Subtract the tax in (2) from the tax shown on your return for the earlier year. File 2007 tax return free This is the amount of your credit. File 2007 tax return free Subtract the answer in (3) from the tax for 2013 figured without the deduction (step 1). File 2007 tax return free   If Method 1 results in less tax, deduct the amount repaid as discussed earlier under Type of deduction. File 2007 tax return free   If Method 2 results in less tax, claim the credit on line 71 of Form 1040, and write “I. File 2007 tax return free R. File 2007 tax return free C. File 2007 tax return free 1341” next to line 71. File 2007 tax return free Example. File 2007 tax return free For 2012, you filed a return and reported your income on the cash method. File 2007 tax return free In 2013, you repaid $5,000 included in your 2012 gross income under a claim of right. File 2007 tax return free Your filing status in 2013 and 2012 is single. File 2007 tax return free Your income and tax for both years are as follows:   2012  With Income 2012  Without Income Taxable Income $15,000 $10,000 Tax $ 1,819 $ 1,069   2013  Without Deduction 2013  With Deduction Taxable Income $49,950 $44,950 Tax $8,423 $7,173 Your tax under Method 1 is $7,173. File 2007 tax return free Your tax under Method 2 is $7,673, figured as follows: Tax previously determined for 2012 $ 1,819 Less: Tax as refigured − 1,069 Decrease in 2012 tax $ 750 Regular tax liability for 2013 $8,423 Less: Decrease in 2012 tax − 750 Refigured tax for 2013 $ 7,673 Because you pay less tax under Method 1, you should take a deduction for the repayment in 2013. File 2007 tax return free Repayment does not apply. File 2007 tax return free   This discussion does not apply to the following. File 2007 tax return free Deductions for bad debts. File 2007 tax return free Deductions from sales to customers, such as returns and allowances, and similar items. File 2007 tax return free Deductions for legal and other expenses of contesting the repayment. File 2007 tax return free Year of deduction (or credit). File 2007 tax return free   If you use the cash method of accounting, you can take the deduction (or credit, if applicable) for the tax year in which you actually make the repayment. File 2007 tax return free If you use any other accounting method, you can deduct the repayment or claim a credit for it only for the tax year in which it is a proper deduction under your accounting method. File 2007 tax return free For example, if you use the accrual method, you are entitled to the deduction or credit in the tax year in which the obligation for the repayment accrues. File 2007 tax return free Subscriptions. File 2007 tax return free   Subscriptions to professional, technical, and trade journals that deal with your business field are deductible. File 2007 tax return free Supplies and materials. File 2007 tax return free   Unless you have deducted the cost in any earlier year, you generally can deduct the cost of materials and supplies actually consumed and used during the tax year. File 2007 tax return free   If you keep incidental materials and supplies on hand, you can deduct the cost of the incidental materials and supplies you bought during the tax year if all the following requirements are met. File 2007 tax return free You do not keep a record of when they are used. File 2007 tax return free You do not take an inventory of the amount on hand at the beginning and end of the tax year. File 2007 tax return free This method does not distort your income. File 2007 tax return free   You can also deduct the cost of books, professional instruments, equipment, etc. File 2007 tax return free , if you normally use them within a year. File 2007 tax return free However, if the usefulness of these items extends substantially beyond the year they are placed in service, you generally must recover their costs through depreciation. File 2007 tax return free For more information regarding depreciation see Publication 946, How To Depreciate Property. File 2007 tax return free Utilities. File 2007 tax return free   Business expenses for heat, lights, power, telephone service, and water and sewerage are deductible. File 2007 tax return free However, any part due to personal use is not deductible. File 2007 tax return free Telephone. File 2007 tax return free   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. File 2007 tax return free However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. File 2007 tax return free Prev  Up  Next   Home   More Online Publications
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The File 2007 Tax Return Free

File 2007 tax return free 4. File 2007 tax return free   Underpayment Penalty for 2013 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: General RuleFarmers and fishermen. File 2007 tax return free Higher income taxpayers. File 2007 tax return free Minimum required for higher income taxpayers. File 2007 tax return free Estate or trust payments of estimated tax. File 2007 tax return free Lowering or eliminating the penalty. File 2007 tax return free ExceptionsLess Than $1,000 Due No Tax Liability Last Year Figuring Your Required Annual Payment (Part I) Short Method for Figuring the Penalty (Part III) Regular Method for Figuring the Penalty (Part IV)Figuring Your Underpayment (Part IV, Section A) Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Annualized Income Installment Method (Schedule AI) Farmers and Fishermen Waiver of PenaltyFarmers and fishermen. File 2007 tax return free Introduction If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty. File 2007 tax return free You may understand this chapter better if you can refer to a copy of your latest federal income tax return. File 2007 tax return free No penalty. File 2007 tax return free   Generally, you will not have to pay a penalty for 2013 if any of the following apply. File 2007 tax return free The total of your withholding and timely estimated tax payments was at least as much as your 2012 tax. File 2007 tax return free (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen. File 2007 tax return free ) The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. File 2007 tax return free Your total tax for 2013 (defined later) minus your withholding is less than $1,000. File 2007 tax return free You did not have a tax liability for 2012. File 2007 tax return free You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. File 2007 tax return free IRS can figure the penalty for you. File 2007 tax return free   If you think you owe the penalty, but you do not want to figure it yourself when you file your tax return, you may not have to. File 2007 tax return free Generally, the IRS will figure the penalty for you and send you a bill. File 2007 tax return free   You only need to figure your penalty in the following three situations. File 2007 tax return free You are requesting a waiver of part, but not all, of the penalty. File 2007 tax return free You are using the annualized income installment method to figure the penalty. File 2007 tax return free You are treating the federal income tax withheld from your income as paid on the dates actually withheld. File 2007 tax return free However, if these situations do not apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. File 2007 tax return free See Form 2210 , later. File 2007 tax return free Topics - This chapter discusses: The general rule for the underpayment penalty, Special rules for certain individuals, Exceptions to the underpayment penalty, How to figure your underpayment and the amount of your penalty on Form 2210, and How to ask the IRS to waive the penalty. File 2007 tax return free Useful Items - You may want to see: Form (and Instructions) 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 5 for information about getting these forms. File 2007 tax return free General Rule In general, you may owe a penalty for 2013 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2013 tax, or 100% of your 2012 tax. File 2007 tax return free (Your 2012 tax return must cover a 12-month period. File 2007 tax return free ) Your 2013 tax, for this purpose, is defined under Total tax for 2013 , later. File 2007 tax return free Special rules for certain individuals. File 2007 tax return free   There are special rules for farmers and fishermen and certain higher income taxpayers. File 2007 tax return free Farmers and fishermen. File 2007 tax return free   If at least two-thirds of your gross income for 2012 or 2013 is from farming or fishing, substitute  662/3% for 90% in (1) above. File 2007 tax return free   See Farmers and Fishermen , later. File 2007 tax return free Higher income taxpayers. File 2007 tax return free   If your AGI for 2012 was more than $150,000 ($75,000 if your 2013 filing status is married filing a separate return), substitute 110% for 100% in (2) under General Rule . File 2007 tax return free This rule does not apply to farmers or fishermen. File 2007 tax return free   For 2012, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. File 2007 tax return free Penalty figured separately for each period. File 2007 tax return free   Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. File 2007 tax return free This is true even if you are due a refund when you file your income tax return. File 2007 tax return free Example. File 2007 tax return free You did not make estimated tax payments for 2013 because you thought you had enough tax withheld from your wages. File 2007 tax return free Early in January 2014, you made an estimate of your total 2013 tax. File 2007 tax return free Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax. File 2007 tax return free On January 10, you made an estimated tax payment of $3,000, which is the difference between your withholding and your estimate of your total tax. File 2007 tax return free Your final return shows your total tax to be $50 less than your estimate, so you are due a refund. File 2007 tax return free You do not owe a penalty for your payment due January 15, 2014. File 2007 tax return free However, you may owe a penalty through January 10, 2014, the day you made the $3,000 payment, for your underpayments for the earlier payment periods. File 2007 tax return free Minimum required each period. File 2007 tax return free   You will owe a penalty for any 2013 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of: 22. File 2007 tax return free 5% of your 2013 tax, or 25% of your 2012 tax. File 2007 tax return free (Your 2012 tax return must cover a 12-month period. File 2007 tax return free ) Minimum required for higher income taxpayers. File 2007 tax return free   If you are subject to the rule for higher income taxpayers, discussed above, substitute 27. File 2007 tax return free 5% for 25% in (2) under General Rule . File 2007 tax return free When penalty is charged. File 2007 tax return free   If you miss a payment or you paid less than the minimum required in a period, you may be charged an underpayment penalty from the date the amount was due to the date the payment is made. File 2007 tax return free If a payment is mailed, the date of the U. File 2007 tax return free S. File 2007 tax return free postmark is considered the date of payment. File 2007 tax return free   If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc. File 2007 tax return free ) is considered to be the date of payment. File 2007 tax return free Estate or trust payments of estimated tax. File 2007 tax return free   If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2014. File 2007 tax return free Amended returns. File 2007 tax return free    If you file an amended return by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. File 2007 tax return free If you file an amended return after the due date of the original return, use the tax shown on the original return. File 2007 tax return free   However, if you and your spouse file a joint return after the due date to replace separate returns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. File 2007 tax return free This rule applies only if both original separate returns were filed on time. File 2007 tax return free 2012 separate returns and 2013 joint return. File 2007 tax return free    If you file a joint return with your spouse for 2013, but you filed separate returns for 2012, your 2012 tax is the total of the tax shown on your separate returns. File 2007 tax return free You filed a separate return if you filed as single, head of household, or married filing separately. File 2007 tax return free 2012 joint return and 2013 separate returns. File 2007 tax return free    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, your 2012 tax is your share of the tax on the joint return. File 2007 tax return free You are filing a separate return if you file as single, head of household, or married filing separately. File 2007 tax return free   To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2012 using the same filing status as for 2013. File 2007 tax return free Then multiply the tax on the joint return by the following fraction. File 2007 tax return free   The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. File 2007 tax return free Lisa and Paul filed a joint return for 2012 showing taxable income of $49,000 and a tax of $6,484. File 2007 tax return free Of the $49,000 taxable income, $41,000 was Lisa's and the rest was Paul's. File 2007 tax return free For 2013, they file married filing separately. File 2007 tax return free Lisa figures her share of the tax on the 2012 joint return as follows. File 2007 tax return free 2012 tax on $41,000 based on a separate return $ 6,286 2012 tax on $8,000 based on a  separate return 803 Total $ 7,089 Lisa's percentage of total tax  ($6,286 ÷ $ 7,089) 88. File 2007 tax return free 67% Lisa's part of tax on joint return ($6,484 × 88. File 2007 tax return free 67%) $ 5,749 Form 2210. File 2007 tax return free   In most cases, you do not need to file Form 2210. File 2007 tax return free The IRS will figure the penalty for you and send you a bill. File 2007 tax return free If you want us to figure the penalty for you, leave the penalty line on your return blank. File 2007 tax return free Do not file Form 2210. File 2007 tax return free   To determine if you should file Form 2210, see Part II of Form 2210. File 2007 tax return free If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210. File 2007 tax return free If you use Form 2210, you cannot file Form 1040EZ. File 2007 tax return free   On Form 1040, enter the amount of your penalty on line 77. File 2007 tax return free If you owe tax on line 76, add the penalty to your tax due and show your total payment on line 76. File 2007 tax return free If you are due a refund, subtract the penalty from the overpayment and enter the result on line 73. File 2007 tax return free   On Form 1040A, enter the amount of your penalty on line 46. File 2007 tax return free If you owe tax on line 45, add the penalty to your tax due and show your total payment on line 45. File 2007 tax return free If you are due a refund, subtract the penalty from the overpayment and enter the result on line 42. File 2007 tax return free Lowering or eliminating the penalty. File 2007 tax return free    You may be able to lower or eliminate your penalty if you file Form 2210. File 2007 tax return free You must file Form 2210 with your return if any of the following applies. File 2007 tax return free You request a waiver. File 2007 tax return free See Waiver of Penalty , later. File 2007 tax return free You use the annualized income installment method. File 2007 tax return free See the explanation of this method under Annualized Income Installment Method (Schedule AI) . File 2007 tax return free You use your actual withholding for each payment period for estimated tax purposes. File 2007 tax return free See Actual withholding method under Figuring Your Underpayment (Part IV, Section A). File 2007 tax return free You base any of your required installments on the tax shown on your 2012 return and you filed or are filing a joint return for either 2012 or 2013, but not for both years. File 2007 tax return free Exceptions Generally, you do not have to pay an underpayment penalty if either: Your total tax is less than $1,000, or You had no tax liability last year. File 2007 tax return free Less Than $1,000 Due You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000. File 2007 tax return free Total tax for 2013. File 2007 tax return free   For 2013, your total tax on Form 1040 is the amount on line 61 reduced by the following. File 2007 tax return free    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). File 2007 tax return free Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. File 2007 tax return free The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. File 2007 tax return free Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line 71. File 2007 tax return free   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. File 2007 tax return free   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. File 2007 tax return free Note. File 2007 tax return free When figuring the amount on line 60, include household employment taxes only if you had federal income tax withheld from your income or you would owe the penalty even if you did not include those taxes. File 2007 tax return free Paid through withholding. File 2007 tax return free    For 2013, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 69. File 2007 tax return free Add to that any write-in amount on line 72 identified as “Form 8689. File 2007 tax return free ” On Form 1040A, the amount you paid through withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included on line 41. File 2007 tax return free On Form 1040EZ, it is the amount on line 7. File 2007 tax return free No Tax Liability Last Year You do not owe a penalty if you had no tax liability last year and you were a U. File 2007 tax return free S. File 2007 tax return free citizen or resident for the whole year. File 2007 tax return free For this rule to apply, your tax year must have included all 12 months of the year. File 2007 tax return free You had no tax liability for 2012 if your total tax was zero or you were not required to file an income tax return. File 2007 tax return free Example. File 2007 tax return free Ray, who is single and 22 years old, was unemployed for a few months during 2012. File 2007 tax return free He earned $6,700 in wages before he was laid off, and he received $1,400 in unemployment compensation afterwards. File 2007 tax return free He had no other income. File 2007 tax return free Even though he had gross income of $8,100, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($9,750 for 2012). File 2007 tax return free He filed a return only to have his withheld income tax refunded to him. File 2007 tax return free In 2013, Ray began regular work as an independent contractor. File 2007 tax return free Ray made no estimated tax payments in 2013. File 2007 tax return free Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2013 because he had no tax liability in 2012. File 2007 tax return free Total tax for 2012. File 2007 tax return free   For 2012, your total tax on Form 1040 is the amount on line 61 reduced by the following. File 2007 tax return free    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). File 2007 tax return free Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. File 2007 tax return free The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. File 2007 tax return free Any refundable credit amounts listed on lines 64a, 65, 66, 70, and credits from Forms 8801 (line 27 only), and 8885 included on line 71. File 2007 tax return free   If you filed Form 1040A, your 2012 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. File 2007 tax return free   If you filed Form 1040EZ, your 2012 total tax is the amount on line 11 reduced by the amount on line 8a. File 2007 tax return free Figuring Your Required Annual Payment (Part I) Figure your required annual payment in Part I of Form 2210, following the line-by-line instructions. File 2007 tax return free If you rounded the entries on your tax return to whole dollars, you can round on Form 2210. File 2007 tax return free Example. File 2007 tax return free The tax on Lori Lane's 2012 return was $12,400. File 2007 tax return free Her AGI was not more than $150,000 for either 2012 or 2013. File 2007 tax return free The tax on her 2013 return (Form 1040, line 55) is $13,044. File 2007 tax return free Line 56 (self-employment tax) is $8,902. File 2007 tax return free Her 2013 total tax is $21,946. File 2007 tax return free For 2013, Lori had $1,600 income tax withheld and made four equal estimated tax payments ($1,000 each). File 2007 tax return free 90% of her 2013 tax is $19,751. File 2007 tax return free Because she paid less than her 2012 tax ($12,400) and less than 90% of her 2013 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for underpayment of estimated tax. File 2007 tax return free The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return. File 2007 tax return free Lori's required annual payment is $12,400 (100% of 2012 tax) because that is smaller than 90% of her 2013 tax. File 2007 tax return free Different 2012 filing status. File 2007 tax return free    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, see 2012 joint return and 2013 separate returns , earlier, to figure the amount to enter as your 2012 tax on line 8 of Form 2210. File 2007 tax return free Short Method for Figuring the Penalty (Part III) You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. File 2007 tax return free If you qualify to use this method, it will result in the same penalty amount as the regular method. File 2007 tax return free However, either the annualized income installment method or the actual withholding method, explained later, may result in a smaller penalty. File 2007 tax return free You can use the short method only if you meet one of the following requirements. File 2007 tax return free You made no estimated tax payments for 2013 (it does not matter whether you had income tax withholding). File 2007 tax return free You paid the same amount of estimated tax on each of the four payment due dates. File 2007 tax return free If you do not meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions. File 2007 tax return free Note. File 2007 tax return free If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. File 2007 tax return free However, if the payment was only a few days early, the difference is likely to be small. File 2007 tax return free You cannot use the short method if any of the following apply. File 2007 tax return free You made any estimated tax payments late. File 2007 tax return free You checked box C or D in Part II of Form 2210. File 2007 tax return free You are filing Form 1040NR or 1040NR-EZ and you did not receive wages as an employee subject to U. File 2007 tax return free S. File 2007 tax return free income tax withholding. File 2007 tax return free If you use the short method, you cannot use the annualized income installment method to figure your underpayment for each payment period. File 2007 tax return free Also, you cannot use your actual withholding during each period to figure your payments for each period. File 2007 tax return free These methods, which may give you a smaller penalty amount, are explained under Figuring Your Underpayment (Part IV, Section A). File 2007 tax return free Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210. File 2007 tax return free Regular Method for Figuring the Penalty (Part IV) You can use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date. File 2007 tax return free You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you. File 2007 tax return free You paid one or more estimated tax payments on a date after the due date. File 2007 tax return free You paid at least one, but less than four, installments of estimated tax. File 2007 tax return free You paid estimated tax payments in un- equal amounts. File 2007 tax return free You use the annualized income installment method to figure your underpayment for each payment period. File 2007 tax return free You use your actual withholding during each payment period to figure your payments. File 2007 tax return free Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. File 2007 tax return free Enter the results on line 27 of Section B. File 2007 tax return free Figuring Your Underpayment (Part IV, Section A) Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. File 2007 tax return free Complete lines 20 through 26 of the first column before going to line 20 of the next column. File 2007 tax return free Required installments—line 18. File 2007 tax return free   Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). File 2007 tax return free This method—the regular method—is the one to use if you received your income evenly throughout the year. File 2007 tax return free   However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. File 2007 tax return free First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. File 2007 tax return free See Annualized Income Installment Method (Schedule AI), later. File 2007 tax return free Payments made—line 19. File 2007 tax return free   Enter in each column the total of: Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and One-fourth of your withholding. File 2007 tax return free For special rules for figuring your payments, see Form 2210 instructions for line 19. File 2007 tax return free   If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 69. File 2007 tax return free If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line 41. File 2007 tax return free Actual withholding method. File 2007 tax return free    Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. File 2007 tax return free You can make this choice separately for the tax withheld from your wages and for all other withholding. File 2007 tax return free This includes any excess social security and tier 1 RRTA tax withheld. File 2007 tax return free   Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year. File 2007 tax return free   If you use your actual withholding, you must check box D in Form 2210, Part II. File 2007 tax return free Then complete Form 2210 using the regular method (Part IV) and file it with your return. File 2007 tax return free Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. File 2007 tax return free The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid. File 2007 tax return free For 2013, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2014 through April 15, 2014. File 2007 tax return free A 3% rate applies to all four periods. File 2007 tax return free Payments. File 2007 tax return free    Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. File 2007 tax return free For example, if you had an underpayment for the first payment period, list your payments after April 15, 2013. File 2007 tax return free You can use the table in the Form 2210 instructions to make your list. File 2007 tax return free Follow those instructions for listing income tax withheld and payments made with your return. File 2007 tax return free Use the list to determine when each underpayment was paid. File 2007 tax return free   If you mail your estimated tax payments, use the date of the U. File 2007 tax return free S. File 2007 tax return free postmark as the date of payment. File 2007 tax return free Line 1b. File 2007 tax return free   Apply the payments listed to underpayment balance in the first column until it is fully paid. File 2007 tax return free Apply payments in the order made. File 2007 tax return free Figuring the penalty. File 2007 tax return free   If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. File 2007 tax return free On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. File 2007 tax return free On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. File 2007 tax return free If no payments are applied, figure the penalty on the amount on line 1a. File 2007 tax return free Aid for counting days. File 2007 tax return free    Table 4-1 provides a simple method for counting the number of days between a due date and a payment date. File 2007 tax return free Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date. File 2007 tax return free In the same manner, find the number for the date the payment was made. File 2007 tax return free Subtract the due date “number” from the payment date “number. File 2007 tax return free ”   For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late. File 2007 tax return free Table 4-1. File 2007 tax return free Calendar To Determine the Number of Days a Payment Is Late Instructions. File 2007 tax return free Use this table with Form 2210 if you are completing Part IV, Section B. File 2007 tax return free First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. File 2007 tax return free Then, in the same manner, find the number for the date the payment was made. File 2007 tax return free Finally, subtract the due date number from the payment date number. File 2007 tax return free The result is the number of days the payment is late. File 2007 tax return free Example. File 2007 tax return free The payment due date is June 15 (61). File 2007 tax return free The payment was made on November 4 (203). File 2007 tax return free The payment is 142 days late (203 – 61). File 2007 tax return free Tax Year 2013 Day of 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Month April May June July Aug. File 2007 tax return free Sept. File 2007 tax return free Oct. File 2007 tax return free Nov. File 2007 tax return free Dec. File 2007 tax return free Jan. File 2007 tax return free Feb. File 2007 tax return free Mar. File 2007 tax return free Apr. File 2007 tax return free 1   16 47 77 108 139 169 200 230 261 292 320 351 2   17 48 78 109 140 170 201 231 262 293 321 352 3   18 49 79 110 141 171 202 232 263 294 322 353 4   19 50 80 111 142 172 203 233 264 295 323 354 5   20 51 81 112 143 173 204 234 265 296 324 355 6   21 52 82 113 144 174 205 235 266 297 325 356 7   22 53 83 114 145 175 206 236 267 298 326 357 8   23 54 84 115 146 176 207 237 268 299 327 358 9   24 55 85 116 147 177 208 238 269 300 328 359 10   25 56 86 117 148 178 209 239 270 301 329 360 11   26 57 87 118 149 179 210 240 271 302 330 361 12   27 58 88 119 150 180 211 241 272 303 331 362 13   28 59 89 120 151 181 212 242 273 304 332 363 14   29 60 90 121 152 182 213 243 274 305 333 364 15 0 30 61 91 122 153 183 214 244 275 306 334 365 16 1 31 62 92 123 154 184 215 245 276 307 335   17 2 32 63 93 124 155 185 216 246 277 308 336   18 3 33 64 94 125 156 186 217 247 278 309 337   19 4 34 65 95 126 157 187 218 248 279 310 338   20 5 35 66 96 127 158 188 219 249 280 311 339   21 6 36 67 97 128 159 189 220 250 281 312 340   22 7 37 68 98 129 160 190 221 251 282 313 341   23 8 38 69 99 130 161 191 222 252 283 314 342   24 9 39 70 100 131 162 192 223 253 284 315 343   25 10 40 71 101 132 163 193 224 254 285 316 344   26 11 41 72 102 133 164 194 225 255 286 317 345   27 12 42 73 103 134 165 195 226 256 287 318 346   28 13 43 74 104 135 166 196 227 257 288 319 347   29 14 44 75 105 136 167 197 228 258 289   348   30 15 45 76 106 137 168 198 229 259 290   349   31   46   107 138   199   260 291   350   Annualized Income Installment Method (Schedule AI) If you did not receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. File 2007 tax return free Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment. File 2007 tax return free To figure your underpayment using this method, complete Form 2210, Schedule AI. File 2007 tax return free Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. File 2007 tax return free If you use the annualized income installment method, you must check box C in Part II of Form 2210. File 2007 tax return free Also, you must attach Form 2210 and Schedule AI to your return. File 2007 tax return free If you use Schedule AI for any payment due date, you must use it for all payment due dates. File 2007 tax return free Completing Schedule AI. File 2007 tax return free   Follow the Form 2210 instructions to complete Schedule AI. File 2007 tax return free For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. File 2007 tax return free If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period. File 2007 tax return free Note. File 2007 tax return free Each period includes amounts from the previous period(s). File 2007 tax return free Period (a) includes items for January 1 through March 31. File 2007 tax return free Period (b) includes items for January 1 through May 31. File 2007 tax return free Period (c) includes items for January 1 through August 31. File 2007 tax return free Period (d) includes items for the entire year. File 2007 tax return free Farmers and Fishermen If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you. File 2007 tax return free The penalty for underpaying your 2013 estimated tax will not apply if you file your return and pay all the tax due by March 3, 2014. File 2007 tax return free If you are a fiscal year taxpayer, the penalty will not apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year. File 2007 tax return free Any penalty you owe for underpaying your 2013 estimated tax will be figured from one payment due date, January 15, 2014. File 2007 tax return free The underpayment penalty for 2013 is figured on the difference between the amount of 2013 withholding plus estimated tax paid by the due date and the smaller of: 662/3% (rather than 90%) of your 2013 tax, or 100% of the tax shown on your 2012 return. File 2007 tax return free Even if these special rules apply to you, you will not owe the penalty if you meet either of the two conditions discussed under Exceptions . File 2007 tax return free See Who Must Pay Estimated Tax in chapter 2 for the definition of a farmer or fisherman who is eligible for these special rules. File 2007 tax return free Form 2210-F. File 2007 tax return free   Use Form 2210-F to figure any underpayment penalty. File 2007 tax return free Do not attach it to your return unless you check a box in Part I. File 2007 tax return free However, if none of the boxes apply to you and you owe a penalty, you do not need to attach Form 2210-F. File 2007 tax return free Enter the amount from line 16 on Form 1040, line 77 and add the penalty to any balance due on your return or subtract it from your refund. File 2007 tax return free Keep your filled-in Form 2210-F for your records. File 2007 tax return free    If none of the boxes on Form 2210-F apply to you and you owe a penalty, the IRS can figure your penalty and send you a bill. File 2007 tax return free Waiver of Penalty The IRS can waive the penalty for underpayment if either of the following applies. File 2007 tax return free You did not make a payment because of a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty. File 2007 tax return free You retired (after reaching age 62) or became disabled in 2012 or 2013 and both the following requirements are met. File 2007 tax return free You had a reasonable cause for not making the payment. File 2007 tax return free Your underpayment was not due to willful neglect. File 2007 tax return free How to request a waiver. File 2007 tax return free   To request a waiver, see the Instructions for Form 2210. File 2007 tax return free Farmers and fishermen. File 2007 tax return free   To request a waiver, see the Instructions for Form 2210-F. File 2007 tax return free Federally declared disaster. File 2007 tax return free   Certain estimated tax payment deadlines for taxpayers who reside or have a business in a federally declared disaster area are postponed for a period during and after the disaster. File 2007 tax return free During the processing of your tax return, the IRS automatically identifies taxpayers located in a covered disaster area (by county or parish) and applies the appropriate penalty relief. File 2007 tax return free Do not file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. File 2007 tax return free If you still owe a penalty after the automatic waiver is applied, we will send you a bill. File 2007 tax return free   Individuals, estates, and trusts not in a covered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. File 2007 tax return free Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. File 2007 tax return free If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 1-866-562-5227 and identify yourself as eligible for this relief. File 2007 tax return free   Details on the applicable disaster postponement period can be found at IRS. File 2007 tax return free gov. File 2007 tax return free Enter Tax Relief in Disaster Situations. File 2007 tax return free Select the federally declared disaster that affected you. File 2007 tax return free    Worksheet 4-1. File 2007 tax return free 2013 Form 2210, Schedule AI—Line 12 Qualified Dividends and Capital Gain Tax Worksheet Note. File 2007 tax return free To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the  annualization amount on line 2 of Schedule AI for the same period. File 2007 tax return free                   1. File 2007 tax return free Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 1. File 2007 tax return free       2. File 2007 tax return free Enter your annualized qualified dividends for the period 2. File 2007 tax return free           3. File 2007 tax return free Are you filing Schedule D?               □ Yes. File 2007 tax return free Enter the smaller of your annualized amount from line 15 or line 16 of Schedule D. File 2007 tax return free If either line 15 or line 16 is blank or a loss, enter -0-. File 2007 tax return free 3. File 2007 tax return free             □ No. File 2007 tax return free Enter your annualized capital gain distributions from Form 1040, line 13             4. File 2007 tax return free Add lines 2 and 3   4. File 2007 tax return free           5. File 2007 tax return free If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. File 2007 tax return free Otherwise, enter -0-   5. File 2007 tax return free           6. File 2007 tax return free Subtract line 5 from line 4. File 2007 tax return free If zero or less, enter -0- 6. File 2007 tax return free       7. File 2007 tax return free Subtract line 6 from line 1. File 2007 tax return free If zero or less, enter -0- 7. File 2007 tax return free       8. File 2007 tax return free Enter: $36,900 if single or married filing separately, $73,800 if married filing jointly or qualifying widow(er), $49,400 if head of household. File 2007 tax return free 8. File 2007 tax return free       9. File 2007 tax return free Enter the smaller of line 1 or line 8 9. File 2007 tax return free       10. File 2007 tax return free Enter the smaller of line 7 or line 9 10. File 2007 tax return free       11. File 2007 tax return free Subtract line 10 from line 9. File 2007 tax return free This amount is taxed at 0% 11. File 2007 tax return free       12. File 2007 tax return free Enter the smaller of line 1 or line 6 12. File 2007 tax return free       13. File 2007 tax return free Enter the amount from line 11 13. File 2007 tax return free       14. File 2007 tax return free Subtract line 13 from line 12 14. File 2007 tax return free       15. File 2007 tax return free Multiply line 14 by 15% (. File 2007 tax return free 15) 15. File 2007 tax return free   16. File 2007 tax return free Figure the tax on the amount on line 7. File 2007 tax return free If the amount on line 7 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. File 2007 tax return free If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 16. File 2007 tax return free   17. File 2007 tax return free Add lines 15 and 16 17. File 2007 tax return free   18. File 2007 tax return free Figure the tax on the amount on line 1. File 2007 tax return free If the amount on line 1 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. File 2007 tax return free If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 18. File 2007 tax return free   19. File 2007 tax return free Tax on all taxable income. File 2007 tax return free Enter the smaller of line 17 or line 18. File 2007 tax return free Also enter this amount on line 12 of Schedule AI in the appropriate column. File 2007 tax return free However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2, line 4 19. File 2007 tax return free   Worksheet 4-2. File 2007 tax return free 2013 Form 2210, Schedule AI—Line 12 Foreign Earned Income Tax Worksheet Before you begin:If Schedule AI, line 11, is zero for the period, do not complete this worksheet. File 2007 tax return free             1. File 2007 tax return free Enter the amount from line 11 of Schedule AI for the period 1. File 2007 tax return free   2. File 2007 tax return free Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from  Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1  of Schedule AI 2. File 2007 tax return free   3. File 2007 tax return free Add lines 1 and 2 3. File 2007 tax return free   4. File 2007 tax return free Tax on the amount on line 3. File 2007 tax return free Use the Tax Table, Tax Computation Worksheet, Form 8615**, Qualified Dividends and Capital Gain Tax Worksheet***, or Schedule D Tax Worksheet***, whichever applies. File 2007 tax return free See the 2013 Instructions for Form 1040, line 44, to find out which tax computation method to use. File 2007 tax return free (Note. File 2007 tax return free You do not have to use the same method for each period on Schedule AI. File 2007 tax return free ) 4. File 2007 tax return free   5. File 2007 tax return free Tax on the amount on line 2. File 2007 tax return free If the amount on line 2 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. File 2007 tax return free If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 5. File 2007 tax return free   6. File 2007 tax return free Subtract line 5 from line 4. File 2007 tax return free Enter the result here and on line 12 of Schedule AI. File 2007 tax return free If zero or less,  enter -0- 6. File 2007 tax return free             * To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period. File 2007 tax return free     ** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. File 2007 tax return free If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. File 2007 tax return free Complete the rest of Form 8615 according to its instructions. File 2007 tax return free Then complete lines 5 and 6 above. File 2007 tax return free     *** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. File 2007 tax return free Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). File 2007 tax return free Next, determine if you have a capital gain excess. File 2007 tax return free     Figuring capital gain excess. File 2007 tax return free To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). File 2007 tax return free If the result is more than zero, that amount is your capital gain excess. File 2007 tax return free     No capital gain excess. File 2007 tax return free If you do not have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. File 2007 tax return free Then complete lines 5 and 6 above. File 2007 tax return free     Capital gain excess. File 2007 tax return free If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. File 2007 tax return free Then complete lines 5 and 6 above. File 2007 tax return free     Make the modifications below only for purposes of filling out Worksheet 4-2 above. File 2007 tax return free     a. File 2007 tax return free Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess. File 2007 tax return free     b. File 2007 tax return free Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above. File 2007 tax return free     c. File 2007 tax return free Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess. File 2007 tax return free     d. File 2007 tax return free Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2013 Instructions for Schedule D (Form 1040). 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