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File 2012 And 2013 Taxes

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File 2012 And 2013 Taxes

File 2012 and 2013 taxes 2. File 2012 and 2013 taxes   Accounting Methods Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Accounting MethodsCash Method Accrual Method Farm Inventory Cash Versus Accrual Method Special Methods of Accounting Combination Method Changes in Methods of Accounting Introduction You must use an accounting method that clearly shows your income and expenses. File 2012 and 2013 taxes You must also figure your taxable income and file an income tax return for an annual accounting period called a tax year. File 2012 and 2013 taxes This chapter discusses accounting methods. File 2012 and 2013 taxes For information on accounting periods, see Publication 538, Accounting Periods and Methods, and the Instructions for Form 1128, Application To Adopt, Change, or Retain a Tax Year. File 2012 and 2013 taxes Topics - This chapter discusses: Cash method Accrual method Farm inventory Special methods of accounting Changes in methods of accounting Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 535 Business Expenses Form (and Instructions) 1128 Application To Adopt, Change, or Retain a Tax Year 3115 Application for Change in Accounting Method See chapter 16 for information about getting publications and forms. File 2012 and 2013 taxes Accounting Methods An accounting method is a set of rules used to determine when and how your income and expenses are reported on your tax return. File 2012 and 2013 taxes Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item. File 2012 and 2013 taxes A material item is one that affects the proper time for inclusion of income or allowance of a deduction. File 2012 and 2013 taxes An item considered material for financial statement purposes is generally also considered material for income tax purposes. File 2012 and 2013 taxes See Publication 538 for more information. File 2012 and 2013 taxes You generally choose an accounting method for your farm business when you file your first income tax return that includes a Schedule F (Form 1040), Profit or Loss From Farming. File 2012 and 2013 taxes If you later want to change your accounting method, you generally must get IRS approval. File 2012 and 2013 taxes How to obtain IRS approval is discussed later under Changes in Methods of Accounting . File 2012 and 2013 taxes Types of accounting methods. File 2012 and 2013 taxes   Generally, you can use any of the following accounting methods. File 2012 and 2013 taxes Each method is discussed in detail below. File 2012 and 2013 taxes Cash method. File 2012 and 2013 taxes Accrual method. File 2012 and 2013 taxes Special methods of accounting for certain items of income and expenses. File 2012 and 2013 taxes Combination (hybrid) method using elements of two or more of the above. File 2012 and 2013 taxes Business and other items. File 2012 and 2013 taxes   You can account for business and personal items using different accounting methods. File 2012 and 2013 taxes For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. File 2012 and 2013 taxes Two or more businesses. File 2012 and 2013 taxes   If you operate two or more separate and distinct businesses, you can use a different accounting method for each business. File 2012 and 2013 taxes Generally, no business is separate and distinct unless a complete and separate set of books and records is maintained for each business. File 2012 and 2013 taxes Cash Method Most farmers use the cash method because they find it easier to keep records using the cash method. File 2012 and 2013 taxes However, certain farm corporations and partnerships and all tax shelters must use an accrual method of accounting. File 2012 and 2013 taxes See Accrual Method Required , later. File 2012 and 2013 taxes Income Under the cash method, include in your gross income all items of income you actually or constructively received during the tax year. File 2012 and 2013 taxes Items of income include money received as well as property or services received. File 2012 and 2013 taxes If you receive property or services, you must include the fair market value (FMV) of the property or services in income. File 2012 and 2013 taxes See chapter 3 for information on how to report farm income on your income tax return. File 2012 and 2013 taxes Constructive receipt. File 2012 and 2013 taxes   Income is constructively received when an amount is credited to your account or made available to you without restriction. File 2012 and 2013 taxes You do not need to have possession of the income for it to be treated as income for the tax year. File 2012 and 2013 taxes If you authorize someone to be your agent and receive income for you, you are considered to have received the income when your agent receives it. File 2012 and 2013 taxes Income is not constructively received if your receipt of the income is subject to substantial restrictions or limitations. File 2012 and 2013 taxes Direct payments and counter-cyclical payments. File 2012 and 2013 taxes   If you received direct payments or counter-cyclical payments under Subtitle A or C of the Farm Security and Rural Investment Act of 2002, you will not be considered to have constructively received a payment merely because you had the option to receive it in the year before it is required to be paid. File 2012 and 2013 taxes Delaying receipt of income. File 2012 and 2013 taxes   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. File 2012 and 2013 taxes You must report the income in the year the money or property is received or made available to you without restriction. File 2012 and 2013 taxes Example. File 2012 and 2013 taxes Frances Jones, a farmer, was entitled to receive a $10,000 payment on a grain contract in December 2013. File 2012 and 2013 taxes She was told in December that her payment was available. File 2012 and 2013 taxes She requested not to be paid until January 2014. File 2012 and 2013 taxes However, she must still include this payment in her 2013 income because it was made available to her in 2013. File 2012 and 2013 taxes Debts paid by another person or canceled. File 2012 and 2013 taxes   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. File 2012 and 2013 taxes If you receive income in this way, you constructively receive the income when the debt is canceled or paid. File 2012 and 2013 taxes See Cancellation of Debt in chapter 3. File 2012 and 2013 taxes Deferred payment contract. File 2012 and 2013 taxes   If you sell an item under a deferred payment contract that calls for payment in a future year, there is no constructive receipt in the year of sale. File 2012 and 2013 taxes However, if the sales contract states that you have the right to the proceeds of the sale from the buyer at any time after delivery of the item, then you must include the sales price in income in the year of the sale, regardless of when you actually receive payment. File 2012 and 2013 taxes Example. File 2012 and 2013 taxes You are a farmer who uses the cash method and a calendar tax year. File 2012 and 2013 taxes You sell grain in December 2013 under a bona fide arm's-length contract that calls for payment in 2014. File 2012 and 2013 taxes You include the proceeds from the sale in your 2014 gross income since that is the year payment is received. File 2012 and 2013 taxes However, if the contract states that you have the right to the proceeds from the buyer at any time after the grain is delivered, you must include the sales price in your 2013 income, regardless of when you actually receive payment. File 2012 and 2013 taxes Repayment of income. File 2012 and 2013 taxes   If you include an amount in income and in a later year you have to repay all or part of it, then you can usually deduct the repayment in the year repaid. File 2012 and 2013 taxes If the repayment is more than $3,000, a special rule applies. File 2012 and 2013 taxes For details, see Repayments in chapter 11 of Publication 535, Business Expenses. File 2012 and 2013 taxes Expenses Under the cash method, generally you deduct expenses in the tax year you pay them. File 2012 and 2013 taxes This includes business expenses for which you contest liability. File 2012 and 2013 taxes However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained under Uniform Capitalization Rules in chapter 6. File 2012 and 2013 taxes See chapter 4 for information on how to deduct farm business expenses on your income tax return. File 2012 and 2013 taxes Prepayment. File 2012 and 2013 taxes   Generally, you cannot deduct expenses paid in advance. File 2012 and 2013 taxes This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. File 2012 and 2013 taxes Example. File 2012 and 2013 taxes On November 1, 2013, you signed and paid $3,600 for a 3-year (36-month) insurance contract for equipment. File 2012 and 2013 taxes In 2013, you are allowed to deduct only $200 (2/36 x $3,600) of the cost of the policy that is attributable to 2013. File 2012 and 2013 taxes In 2014, you'll be able to deduct $1,200 (12/36 x $3,600); in 2015, you'll be able to deduct $1,200 (12/36 x $3,600); and in 2016 you'll be able to deduct the remaining balance of $1,000. File 2012 and 2013 taxes An exception applies if the expense qualifies for the 12-month rule. File 2012 and 2013 taxes See Publication 538 for more information and examples. File 2012 and 2013 taxes See chapter 4 for special rules for prepaid farm supplies and prepaid livestock feed. File 2012 and 2013 taxes Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. File 2012 and 2013 taxes The purpose of an accrual method of accounting is to correctly match income and expenses. File 2012 and 2013 taxes Certain businesses engaged in farming must use an accrual method of accounting for its farm business and for sales and purchases of inventory items. File 2012 and 2013 taxes See Accrual Method Required and Farm Inventory , later. File 2012 and 2013 taxes Income Generally, you include an amount in income for the tax year in which all events that fix your right to receive the income have occurred, and you can determine the amount with reasonable accuracy. File 2012 and 2013 taxes Under this rule, include an amount in income on the earliest of the following dates. File 2012 and 2013 taxes When you receive payment. File 2012 and 2013 taxes When the income amount is due to you. File 2012 and 2013 taxes When you earn the income. File 2012 and 2013 taxes When title passes. File 2012 and 2013 taxes If you use an accrual method of accounting, complete Part III of Schedule F (Form 1040) to report your income. File 2012 and 2013 taxes Inventory. File 2012 and 2013 taxes   If you keep an inventory, generally you must use an accrual method of accounting to determine your gross income. File 2012 and 2013 taxes An inventory is necessary to clearly show income when the production, purchase, or sale of merchandise is an income-producing factor. File 2012 and 2013 taxes See Publication 538 for more information. File 2012 and 2013 taxes Also see Farm Inventory , later, for more information on items that must be included in inventory by farmers and inventory valuation methods for farmers. File 2012 and 2013 taxes Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both of the following apply. File 2012 and 2013 taxes The all-events test has been met. File 2012 and 2013 taxes This test is met when: All events have occurred that fix the fact that you have a liability, and The amount of the liability can be determined with reasonable accuracy. File 2012 and 2013 taxes Economic performance has occurred. File 2012 and 2013 taxes Economic performance. File 2012 and 2013 taxes   Generally, you cannot deduct or capitalize a business expense until economic performance occurs. File 2012 and 2013 taxes If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. File 2012 and 2013 taxes If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. File 2012 and 2013 taxes Example. File 2012 and 2013 taxes Jane, who is a farmer, uses a calendar tax year and an accrual method of accounting. File 2012 and 2013 taxes She entered into a contract with ABC Farm Consulting in 2012. File 2012 and 2013 taxes The contract stated that Jane pay ABC Farm Consulting $2,000 in December 2012. File 2012 and 2013 taxes It further stipulates that ABC Farm Consulting will develop a plan for integrating her farm with a larger farm operation based in a neighboring state by March 1, 2013. File 2012 and 2013 taxes Jane paid ABC Farm Consulting $2,000 in December 2012. File 2012 and 2013 taxes Integration of operations according to the plan began in May 2013 and they completed the integration in December 2013. File 2012 and 2013 taxes Economic performance for Jane's liability in the contract occurs as the services are provided. File 2012 and 2013 taxes Jane incurs the $2,000 cost in 2013. File 2012 and 2013 taxes An exception to the economic performance rule allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. File 2012 and 2013 taxes For more information, see Economic Performance in Publication 538. File 2012 and 2013 taxes Special rule for related persons. File 2012 and 2013 taxes   Business expenses and interest owed to a related person who uses the cash method of accounting are not deductible until you make the payment and the corresponding amount is includible in the related person's gross income. File 2012 and 2013 taxes Determine the relationship for this rule as of the end of the tax year for which the expense or interest would otherwise be deductible. File 2012 and 2013 taxes For more information, see Internal Revenue Code section 267. File 2012 and 2013 taxes Accrual Method Required Generally, the following businesses, if engaged in farming, must use an accrual method of accounting. File 2012 and 2013 taxes A corporation (other than a family corporation) that had gross receipts of more than $1,000,000 for any tax year beginning after 1975. File 2012 and 2013 taxes A family corporation that had gross receipts of more than $25,000,000 for any tax year beginning after 1985. File 2012 and 2013 taxes A partnership with a corporation as a partner, if that corporation meets the requirements of (1) or (2) above. File 2012 and 2013 taxes A tax shelter. File 2012 and 2013 taxes Note. File 2012 and 2013 taxes Items (1), (2), and (3) above do not apply to an S corporation or a business operating a nursery or sod farm, or the raising or harvesting of trees (other than fruit and nut trees). File 2012 and 2013 taxes Family corporation. File 2012 and 2013 taxes   A family corporation is generally a corporation that meets one of the following ownership requirements. File 2012 and 2013 taxes Members of the same family own at least 50% of the total combined voting power of all classes of stock entitled to vote and at least 50% of the total shares of all other classes of stock of the corporation. File 2012 and 2013 taxes Members of two families have owned, directly or indirectly, since October 4, 1976, at least 65% of the total combined voting power of all classes of voting stock and at least 65% of the total shares of all other classes of the corporation's stock. File 2012 and 2013 taxes Members of three families have owned, directly or indirectly, since October 4, 1976, at least 50% of the total combined voting power of all classes of voting stock and at least 50% of the total shares of all other classes of the corporation's stock. File 2012 and 2013 taxes For more information on family corporations, see Internal Revenue Code section 447. File 2012 and 2013 taxes Tax shelter. File 2012 and 2013 taxes   A tax shelter is a partnership, noncorporate enterprise, or S corporation that meets either of the following tests. File 2012 and 2013 taxes Its principal purpose is the avoidance or evasion of federal income tax. File 2012 and 2013 taxes It is a farming syndicate. File 2012 and 2013 taxes A farming syndicate is an entity that meets either of the following tests. File 2012 and 2013 taxes Interests in the activity have been offered for sale in an offering required to be registered with a federal or state agency with the authority to regulate the offering of securities for sale. File 2012 and 2013 taxes More than 35% of the losses during the tax year are allocable to limited partners or limited entrepreneurs. File 2012 and 2013 taxes   A “limited partner” is one whose personal liability for partnership debts is limited to the money or other property the partner contributed or is required to contribute to the partnership. File 2012 and 2013 taxes   A “limited entrepreneur” is one who has an interest in an enterprise other than as a limited partner and does not actively participate in the management of the enterprise. File 2012 and 2013 taxes Farm Inventory If you are required to keep an inventory, you should keep a complete record of your inventory as part of your farm records. File 2012 and 2013 taxes This record should show the actual count or measurement of the inventory. File 2012 and 2013 taxes It should also show all factors that enter into its valuation, including quality and weight, if applicable. File 2012 and 2013 taxes Hatchery business. File 2012 and 2013 taxes   If you are in the hatchery business, and use an accrual method of accounting, you must include in inventory eggs in the process of incubation. File 2012 and 2013 taxes Products held for sale. File 2012 and 2013 taxes   All harvested and purchased farm products held for sale or for feed or seed, such as grain, hay, silage, concentrates, cotton, tobacco, etc. File 2012 and 2013 taxes , must be included in inventory. File 2012 and 2013 taxes Supplies. File 2012 and 2013 taxes   Supplies acquired for sale or that become a physical part of items held for sale must be included in inventory. File 2012 and 2013 taxes Deduct the cost of supplies in the year used or consumed in operations. File 2012 and 2013 taxes Do not include incidental supplies in inventory as these are deductible in the year of purchase. File 2012 and 2013 taxes Livestock. File 2012 and 2013 taxes   Livestock held primarily for sale must be included in inventory. File 2012 and 2013 taxes Livestock held for draft, breeding, or dairy purposes can either be depreciated or included in inventory. File 2012 and 2013 taxes See also Unit-livestock-price method , later. File 2012 and 2013 taxes If you are in the business of breeding and raising chinchillas, mink, foxes, or other fur-bearing animals, these animals are livestock for inventory purposes. File 2012 and 2013 taxes Growing crops. File 2012 and 2013 taxes   Generally, growing crops are not required to be included in inventory. File 2012 and 2013 taxes However, if the crop has a preproductive period of more than 2 years, you may have to capitalize (or include in inventory) costs associated with the crop. File 2012 and 2013 taxes See Uniform capitalization rules below. File 2012 and 2013 taxes Also see Uniform Capitalization Rules in  chapter 6. File 2012 and 2013 taxes Items to include in inventory. File 2012 and 2013 taxes   Your inventory should include all items held for sale, or for use as feed, seed, etc. File 2012 and 2013 taxes , whether raised or purchased, that are unsold at the end of the year. File 2012 and 2013 taxes Uniform capitalization rules. File 2012 and 2013 taxes   The following applies if you are required to use an accrual method of accounting. File 2012 and 2013 taxes The uniform capitalization rules apply to all costs of raising a plant, even if the preproductive period of raising a plant is 2 years or less. File 2012 and 2013 taxes The costs of animals are subject to the uniform capitalization rules. File 2012 and 2013 taxes Inventory valuation methods. File 2012 and 2013 taxes   The following methods, described below, are those generally available for valuing inventory. File 2012 and 2013 taxes The method you use must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. File 2012 and 2013 taxes Cost. File 2012 and 2013 taxes Lower of cost or market. File 2012 and 2013 taxes Farm-price method. File 2012 and 2013 taxes Unit-livestock-price method. File 2012 and 2013 taxes Cost and lower of cost or market methods. File 2012 and 2013 taxes   See Publication 538 for information on these valuation methods. File 2012 and 2013 taxes If you value your livestock inventory at cost or the lower of cost or market, you do not need IRS approval to change to the unit-livestock-price method. File 2012 and 2013 taxes However, if you value your livestock inventory using the farm-price method, then you must obtain permission from the IRS to change to the unit-livestock-price method. File 2012 and 2013 taxes Farm-price method. File 2012 and 2013 taxes   Under this method, each item, whether raised or purchased, is valued at its market price less the direct cost of disposition. File 2012 and 2013 taxes Market price is the current price at the nearest market in the quantities you usually sell. File 2012 and 2013 taxes Cost of disposition includes broker's commissions, freight, hauling to market, and other marketing costs. File 2012 and 2013 taxes If you use this method, you must use it for your entire inventory, except that livestock can be inventoried under the unit-livestock-price method. File 2012 and 2013 taxes Unit-livestock-price method. File 2012 and 2013 taxes   This method recognizes the difficulty of establishing the exact costs of producing and raising each animal. File 2012 and 2013 taxes You group or classify livestock according to type and age and use a standard unit price for each animal within a class or group. File 2012 and 2013 taxes The unit price you assign should reasonably approximate the normal costs incurred in producing the animals in such classes. File 2012 and 2013 taxes Unit prices and classifications are subject to approval by the IRS on examination of your return. File 2012 and 2013 taxes You must annually reevaluate your unit livestock prices and adjust the prices upward or downward to reflect increases or decreases in the costs of raising livestock. File 2012 and 2013 taxes IRS approval is not required for these adjustments. File 2012 and 2013 taxes Any other changes in unit prices or classifications do require IRS approval. File 2012 and 2013 taxes   If you use this method, include all raised livestock in inventory, regardless of whether they are held for sale or for draft, breeding, sport, or dairy purposes. File 2012 and 2013 taxes This method accounts only for the increase in cost of raising an animal to maturity. File 2012 and 2013 taxes It does not provide for any decrease in the animal's market value after it reaches maturity. File 2012 and 2013 taxes Also, if you raise cattle, you are not required to inventory hay you grow to feed your herd. File 2012 and 2013 taxes   Do not include sold or lost animals in the year-end inventory. File 2012 and 2013 taxes If your records do not show which animals were sold or lost, treat the first animals acquired as sold or lost. File 2012 and 2013 taxes The animals on hand at the end of the year are considered those most recently acquired. File 2012 and 2013 taxes   You must include in inventory all livestock purchased primarily for sale. File 2012 and 2013 taxes You can choose either to include in inventory or depreciate livestock purchased for draft, breeding, sport or dairy purposes. File 2012 and 2013 taxes However, you must be consistent from year to year, regardless of the method you have chosen. File 2012 and 2013 taxes You cannot change your method without obtaining approval from the IRS. File 2012 and 2013 taxes   You must include in inventory animals purchased after maturity or capitalize them at their purchase price. File 2012 and 2013 taxes If the animals are not mature at purchase, increase the cost at the end of each tax year according to the established unit price. File 2012 and 2013 taxes However, in the year of purchase, do not increase the cost of any animal purchased during the last 6 months of the year. File 2012 and 2013 taxes This “no increase” rule does not apply to tax shelters which must make an adjustment for any animal purchased during the year. File 2012 and 2013 taxes It also does not apply to taxpayers that must make an adjustment to reasonably reflect the particular period in the year in which animals are purchased, if necessary to avoid significant distortions in income. File 2012 and 2013 taxes Uniform capitalization rules. File 2012 and 2013 taxes   A farmer can determine costs required to be allocated under the uniform capitalization rules by using the farm-price or unit-livestock-price inventory method. File 2012 and 2013 taxes This applies to any plant or animal, even if the farmer does not hold or treat the plant or animal as inventory property. File 2012 and 2013 taxes Cash Versus Accrual Method The following examples compare the cash and accrual methods of accounting. File 2012 and 2013 taxes Example 1. File 2012 and 2013 taxes You are a farmer who uses an accrual method of accounting. File 2012 and 2013 taxes You keep your books on the calendar year basis. File 2012 and 2013 taxes You sell grain in December 2013 but you are not paid until January 2014. File 2012 and 2013 taxes Because the accrual method was used and 2013 was the tax year in which the grain was sold, you must both include the sales proceeds and deduct the costs incurred in producing the grain on your 2013 tax return. File 2012 and 2013 taxes Example 2. File 2012 and 2013 taxes Assume the same facts as in Example 1 except that you use the cash method and there was no constructive receipt of the sales proceeds in 2013. File 2012 and 2013 taxes Under this method, you include the sales proceeds in income for 2014, the year you receive payment. File 2012 and 2013 taxes Deduct the costs of producing the grain in the year you pay for them. File 2012 and 2013 taxes Special Methods of Accounting There are special methods of accounting for certain items of income and expense. File 2012 and 2013 taxes Crop method. File 2012 and 2013 taxes   If you do not harvest and dispose of your crop in the same tax year that you plant it, you can, with IRS approval, use the crop method of accounting. File 2012 and 2013 taxes You cannot use the crop method for any tax return, including your first tax return, unless you receive approval from the IRS. File 2012 and 2013 taxes Under this method, you deduct the entire cost of producing the crop, including the expense of seed or young plants, in the year you realize income from the crop. File 2012 and 2013 taxes    See chapter 4 for details on deducting the costs of operating a farm. File 2012 and 2013 taxes Also see Regulations section 1. File 2012 and 2013 taxes 162-12. File 2012 and 2013 taxes Other special methods. File 2012 and 2013 taxes   Other special methods of accounting apply to the following items. File 2012 and 2013 taxes Amortization, see chapter 7. File 2012 and 2013 taxes Casualties, see chapter 11. File 2012 and 2013 taxes Condemnations, see chapter 11. File 2012 and 2013 taxes Depletion, see chapter 7. File 2012 and 2013 taxes Depreciation, see chapter 7. File 2012 and 2013 taxes Farm business expenses, see chapter 4. File 2012 and 2013 taxes Farm income, see chapter 3. File 2012 and 2013 taxes Installment sales, see chapter 10. File 2012 and 2013 taxes Soil and water conservation expenses, see chapter 5. File 2012 and 2013 taxes Thefts, see chapter 11. File 2012 and 2013 taxes Combination Method Generally, you can use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. File 2012 and 2013 taxes However, the following restrictions apply. File 2012 and 2013 taxes If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. File 2012 and 2013 taxes If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. File 2012 and 2013 taxes Changes in Methods of Accounting A change in your method of accounting includes a change in: Your overall method, such as from the cash method to an accrual method, and Your treatment of any material item, such as a change in your method of valuing inventory (for example, a change from the farm-price method to the unit-livestock-price method, discussed earlier). File 2012 and 2013 taxes Generally, once you have set up your accounting method, you must receive approval from the IRS before you can change to another method of accounting. File 2012 and 2013 taxes You may also have to pay a fee. File 2012 and 2013 taxes To obtain approval, you must generally file Form 3115. File 2012 and 2013 taxes There are instances when you can obtain automatic consent to change certain methods of accounting. File 2012 and 2013 taxes See the List of Automatic Accounting Method Changes located in the Instructions for Form 3115. File 2012 and 2013 taxes For more information on changes in methods of accounting, see Form 3115 and the Instructions for Form 3115. File 2012 and 2013 taxes Also see Publication 538. File 2012 and 2013 taxes Prev  Up  Next   Home   More Online Publications
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The File 2012 And 2013 Taxes

File 2012 and 2013 taxes 2. File 2012 and 2013 taxes   Filing Status Table of Contents What's New Introduction Useful Items - You may want to see: Marital StatusDivorced persons. File 2012 and 2013 taxes Divorce and remarriage. File 2012 and 2013 taxes Annulled marriages. File 2012 and 2013 taxes Head of household or qualifying widow(er) with dependent child. File 2012 and 2013 taxes Considered married. File 2012 and 2013 taxes Same-sex marriage. File 2012 and 2013 taxes Spouse died during the year. File 2012 and 2013 taxes Married persons living apart. File 2012 and 2013 taxes Single Married Filing JointlyFiling a Joint Return Married Filing SeparatelySpecial Rules Head of HouseholdConsidered Unmarried Keeping Up a Home Qualifying Person Qualifying Widow(er) With Dependent Child What's New Filing status for same-sex married couples. File 2012 and 2013 taxes  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. File 2012 and 2013 taxes See Same-sex marriage under Marital Status, later. File 2012 and 2013 taxes Introduction This chapter helps you determine which filing status to use. File 2012 and 2013 taxes There are five filing statuses. File 2012 and 2013 taxes Single. File 2012 and 2013 taxes Married Filing Jointly. File 2012 and 2013 taxes Married Filing Separately. File 2012 and 2013 taxes Head of Household. File 2012 and 2013 taxes Qualifying Widow(er) With Dependent Child. File 2012 and 2013 taxes If more than one filing status applies to you, choose the one that will give you the lowest tax. File 2012 and 2013 taxes You must determine your filing status before you can determine whether you must file a tax return (chapter 1), your standard deduction (chapter 20), and your tax (chapter 30). File 2012 and 2013 taxes You also use your filing status to determine whether you are eligible to claim certain deductions and credits. File 2012 and 2013 taxes Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 519 U. File 2012 and 2013 taxes S. File 2012 and 2013 taxes Tax Guide for Aliens 555 Community Property Marital Status In general, your filing status depends on whether you are considered unmarried or married. File 2012 and 2013 taxes Unmarried persons. File 2012 and 2013 taxes   You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree. File 2012 and 2013 taxes State law governs whether you are married or legally separated under a divorce or separate maintenance decree. File 2012 and 2013 taxes Divorced persons. File 2012 and 2013 taxes   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year. File 2012 and 2013 taxes Divorce and remarriage. File 2012 and 2013 taxes   If you obtain a divorce for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse must file as married individuals in both years. File 2012 and 2013 taxes Annulled marriages. File 2012 and 2013 taxes    If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried even if you filed joint returns for earlier years. File 2012 and 2013 taxes You must file Form 1040X, Amended U. File 2012 and 2013 taxes S. File 2012 and 2013 taxes Individual Income Tax Return, claiming single or head of household status for all tax years that are affected by the annulment and are not closed by the statute of limitations for filing a tax return. File 2012 and 2013 taxes Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. File 2012 and 2013 taxes If you filed your original return early (for example, March 1), your return is considered filed on the due date (generally April 15). File 2012 and 2013 taxes However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it on July 1, your return is considered filed on July 1. File 2012 and 2013 taxes Head of household or qualifying widow(er) with dependent child. File 2012 and 2013 taxes   If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er) with a dependent child. File 2012 and 2013 taxes See Head of Household and Qualifying Widow(er) With Dependent Child to see if you qualify. File 2012 and 2013 taxes Married persons. File 2012 and 2013 taxes   If you are considered married, you and your spouse can file a joint return or separate returns. File 2012 and 2013 taxes Considered married. File 2012 and 2013 taxes   You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests. File 2012 and 2013 taxes You are married and living together as a married couple. File 2012 and 2013 taxes You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began. File 2012 and 2013 taxes You are married and living apart, but not legally separated under a decree of divorce or separate maintenance. File 2012 and 2013 taxes You are separated under an interlocutory (not final) decree of divorce. File 2012 and 2013 taxes Same-sex marriage. File 2012 and 2013 taxes   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. File 2012 and 2013 taxes The term “spouse” includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. File 2012 and 2013 taxes However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. File 2012 and 2013 taxes For more details, see Publication 501. File 2012 and 2013 taxes Spouse died during the year. File 2012 and 2013 taxes   If your spouse died during the year, you are considered married for the whole year for filing status purposes. File 2012 and 2013 taxes   If you did not remarry before the end of the tax year, you can file a joint return for yourself and your deceased spouse. File 2012 and 2013 taxes For the next 2 years, you may be entitled to the special benefits described later under Qualifying Widow(er) With Dependent Child . File 2012 and 2013 taxes   If you remarried before the end of the tax year, you can file a joint return with your new spouse. File 2012 and 2013 taxes Your deceased spouse's filing status is married filing separately for that year. File 2012 and 2013 taxes Married persons living apart. File 2012 and 2013 taxes   If you live apart from your spouse and meet certain tests, you may be able to file as head of household even if you are not divorced or legally separated. File 2012 and 2013 taxes If you qualify to file as head of household instead of married filing separately, your standard deduction will be higher. File 2012 and 2013 taxes Also, your tax may be lower, and you may be able to claim the earned income credit. File 2012 and 2013 taxes See Head of Household , later. File 2012 and 2013 taxes Single Your filing status is single if you are considered unmarried and you do not qualify for another filing status. File 2012 and 2013 taxes To determine your marital status, see Marital Status , earlier. File 2012 and 2013 taxes Widow(er). File 2012 and 2013 taxes   Your filing status may be single if you were widowed before January 1, 2013, and did not remarry before the end of 2013. File 2012 and 2013 taxes You may, however, be able to use another filing status that will give you a lower tax. File 2012 and 2013 taxes See Head of Household and Qualifying Widow(er) With Dependent Child , later, to see if you qualify. File 2012 and 2013 taxes How to file. File 2012 and 2013 taxes   You can file Form 1040. File 2012 and 2013 taxes If you have taxable income of less than $100,000, you may be able to file Form 1040A. File 2012 and 2013 taxes If, in addition, you have no dependents, and are under 65 and not blind, and meet other requirements, you can file Form 1040EZ. File 2012 and 2013 taxes If you file Form 1040A or Form 1040, show your filing status as single by checking the box on line 1. File 2012 and 2013 taxes Use the Single column of the Tax Table or Section A of the Tax Computation Worksheet to figure your tax. File 2012 and 2013 taxes Married Filing Jointly You can choose married filing jointly as your filing status if you are considered married and both you and your spouse agree to file a joint return. File 2012 and 2013 taxes On a joint return, you and your spouse report your combined income and deduct your combined allowable expenses. File 2012 and 2013 taxes You can file a joint return even if one of you had no income or deductions. File 2012 and 2013 taxes If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. File 2012 and 2013 taxes Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to other filing statuses. File 2012 and 2013 taxes If you and your spouse each have income, you may want to figure your tax both on a joint return and on separate returns (using the filing status of married filing separately). File 2012 and 2013 taxes You can choose the method that gives the two of you the lower combined tax. File 2012 and 2013 taxes How to file. File 2012 and 2013 taxes   If you file as married filing jointly, you can use Form 1040. File 2012 and 2013 taxes If you and your spouse have taxable income of less than $100,000, you may be able to file Form 1040A. File 2012 and 2013 taxes If, in addition, you and your spouse have no dependents, are both under 65 and not blind, and meet other requirements, you can file Form 1040EZ. File 2012 and 2013 taxes If you file Form 1040 or Form 1040A, show this filing status by checking the box on line 2. File 2012 and 2013 taxes Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. File 2012 and 2013 taxes Spouse died. File 2012 and 2013 taxes   If your spouse died during the year, you are considered married for the whole year and can choose married filing jointly as your filing status. File 2012 and 2013 taxes See Spouse died during the year under Marital Status, earlier, for more information. File 2012 and 2013 taxes   If your spouse died in 2014 before filing a 2013 return, you can choose married filing jointly as your filing status on your 2013 return. File 2012 and 2013 taxes Divorced persons. File 2012 and 2013 taxes   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year and you cannot choose married filing jointly as your filing status. File 2012 and 2013 taxes Filing a Joint Return Both you and your spouse must include all of your income, exemptions, and deductions on your joint return. File 2012 and 2013 taxes Accounting period. File 2012 and 2013 taxes   Both of you must use the same accounting period, but you can use different accounting methods. File 2012 and 2013 taxes See Accounting Periods and Accounting Methods in chapter 1. File 2012 and 2013 taxes Joint responsibility. File 2012 and 2013 taxes   Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. File 2012 and 2013 taxes This means that if one spouse does not pay the tax due, the other may have to. File 2012 and 2013 taxes Or, if one spouse does not report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. File 2012 and 2013 taxes One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse. File 2012 and 2013 taxes You may want to file separately if: You believe your spouse is not reporting all of his or her income, or You do not want to be responsible for any taxes due if your spouse does not have enough tax withheld or does not pay enough estimated tax. File 2012 and 2013 taxes Divorced taxpayer. File 2012 and 2013 taxes   You may be held jointly and individually responsible for any tax, interest, and penalties due on a joint return filed before your divorce. File 2012 and 2013 taxes This responsibility may apply even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. File 2012 and 2013 taxes Relief from joint responsibility. File 2012 and 2013 taxes   In some cases, one spouse may be relieved of joint responsibility for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. File 2012 and 2013 taxes You can ask for relief no matter how small the liability. File 2012 and 2013 taxes   There are three types of relief available. File 2012 and 2013 taxes Innocent spouse relief. File 2012 and 2013 taxes Separation of liability (available only to joint filers who are divorced, widowed, legally separated, or have not lived together for the 12 months ending on the date the election for this relief is filed). File 2012 and 2013 taxes Equitable relief. File 2012 and 2013 taxes    You must file Form 8857, Request for Innocent Spouse Relief, to request relief from joint responsibility. File 2012 and 2013 taxes Publication 971, Innocent Spouse Relief, explains these kinds of relief and who may qualify for them. File 2012 and 2013 taxes Signing a joint return. File 2012 and 2013 taxes   For a return to be considered a joint return, both spouses generally must sign the return. File 2012 and 2013 taxes Spouse died before signing. File 2012 and 2013 taxes   If your spouse died before signing the return, the executor or administrator must sign the return for your spouse. File 2012 and 2013 taxes If neither you nor anyone else has yet been appointed as executor or administrator, you can sign the return for your spouse and enter “Filing as surviving spouse” in the area where you sign the return. File 2012 and 2013 taxes Spouse away from home. File 2012 and 2013 taxes   If your spouse is away from home, you should prepare the return, sign it, and send it to your spouse to sign so that it can be filed on time. File 2012 and 2013 taxes Injury or disease prevents signing. File 2012 and 2013 taxes   If your spouse cannot sign because of disease or injury and tells you to sign for him or her, you can sign your spouse's name in the proper space on the return followed by the words “By (your name), Husband (or Wife). File 2012 and 2013 taxes ” Be sure to also sign in the space provided for your signature. File 2012 and 2013 taxes Attach a dated statement, signed by you, to the return. File 2012 and 2013 taxes The statement should include the form number of the return you are filing, the tax year, and the reason your spouse cannot sign, and should state that your spouse has agreed to your signing for him or her. File 2012 and 2013 taxes Signing as guardian of spouse. File 2012 and 2013 taxes   If you are the guardian of your spouse who is mentally incompetent, you can sign the return for your spouse as guardian. File 2012 and 2013 taxes Spouse in combat zone. File 2012 and 2013 taxes   You can sign a joint return for your spouse if your spouse cannot sign because he or she is serving in a combat zone (such as the Persian Gulf Area, Serbia, Montenegro, Albania, or Afghanistan), even if you do not have a power of attorney or other statement. File 2012 and 2013 taxes Attach a signed statement to your return explaining that your spouse is serving in a combat zone. File 2012 and 2013 taxes For more information on special tax rules for persons who are serving in a combat zone, or who are in missing status as a result of serving in a combat zone, see Publication 3, Armed Forces' Tax Guide. File 2012 and 2013 taxes Other reasons spouse cannot sign. File 2012 and 2013 taxes    If your spouse cannot sign the joint return for any other reason, you can sign for your spouse only if you are given a valid power of attorney (a legal document giving you permission to act for your spouse). File 2012 and 2013 taxes Attach the power of attorney (or a copy of it) to your tax return. File 2012 and 2013 taxes You can use Form 2848, Power of Attorney and Declaration of Representative. File 2012 and 2013 taxes Nonresident alien or dual-status alien. File 2012 and 2013 taxes   Generally, a married couple cannot file a joint return if either one is a nonresident alien at any time during the tax year. File 2012 and 2013 taxes However, if one spouse was a nonresident alien or dual-status alien who was married to a U. File 2012 and 2013 taxes S. File 2012 and 2013 taxes citizen or resident alien at the end of the year, the spouses can choose to file a joint return. File 2012 and 2013 taxes If you do file a joint return, you and your spouse are both treated as U. File 2012 and 2013 taxes S. File 2012 and 2013 taxes residents for the entire tax year. File 2012 and 2013 taxes See chapter 1 of Publication 519. File 2012 and 2013 taxes Married Filing Separately You can choose married filing separately as your filing status if you are married. File 2012 and 2013 taxes This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax than filing a joint return. File 2012 and 2013 taxes If you and your spouse do not agree to file a joint return, you must use this filing status unless you qualify for head of household status, discussed later. File 2012 and 2013 taxes You may be able to choose head of household filing status if you are considered unmarried because you live apart from your spouse and meet certain tests (explained later, under Head of Household ). File 2012 and 2013 taxes This can apply to you even if you are not divorced or legally separated. File 2012 and 2013 taxes If you qualify to file as head of household, instead of as married filing separately, your tax may be lower, you may be able to claim the earned income credit and certain other credits, and your standard deduction will be higher. File 2012 and 2013 taxes The head of household filing status allows you to choose the standard deduction even if your spouse chooses to itemize deductions. File 2012 and 2013 taxes See Head of Household , later, for more information. File 2012 and 2013 taxes You will generally pay more combined tax on separate returns than you would on a joint return for the reasons listed under Special Rules, later. File 2012 and 2013 taxes However, unless you are required to file separately, you should figure your tax both ways (on a joint return and on separate returns). File 2012 and 2013 taxes This way you can make sure you are using the filing status that results in the lowest combined tax. File 2012 and 2013 taxes When figuring the combined tax of a married couple, you may want to consider state taxes as well as federal taxes. File 2012 and 2013 taxes How to file. File 2012 and 2013 taxes   If you file a separate return, you generally report only your own income, exemptions, credits, and deductions. File 2012 and 2013 taxes You can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another person. File 2012 and 2013 taxes You can file Form 1040. File 2012 and 2013 taxes If your taxable income is less than $100,000, you may be able to file Form 1040A. File 2012 and 2013 taxes Select this filing status by checking the box on line 3 of either form. File 2012 and 2013 taxes Enter your spouse's full name and SSN or ITIN in the spaces provided. File 2012 and 2013 taxes If your spouse does not have and is not required to have an SSN or ITIN, enter “NRA” in the space for your spouse's SSN. File 2012 and 2013 taxes Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax. File 2012 and 2013 taxes Special Rules If you choose married filing separately as your filing status, the following special rules apply. File 2012 and 2013 taxes Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for. File 2012 and 2013 taxes   Your tax rate generally is higher than on a joint return. File 2012 and 2013 taxes Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return. File 2012 and 2013 taxes You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000). File 2012 and 2013 taxes If you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. File 2012 and 2013 taxes For more information about these expenses, the credit, and the exclusion, see chapter 32. File 2012 and 2013 taxes You cannot take the earned income credit. File 2012 and 2013 taxes You cannot take the exclusion or credit for adoption expenses in most cases. File 2012 and 2013 taxes You cannot take the education credits (the American opportunity credit and lifetime learning credit), the deduction for student loan interest, or the tuition and fees deduction. File 2012 and 2013 taxes You cannot exclude any interest income from qualified U. File 2012 and 2013 taxes S. File 2012 and 2013 taxes savings bonds you used for higher education expenses. File 2012 and 2013 taxes If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received. File 2012 and 2013 taxes The following credits and deductions are reduced at income levels half those for a joint return: The child tax credit, The retirement savings contributions credit, The deduction for personal exemptions, and Itemized deductions. File 2012 and 2013 taxes Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). File 2012 and 2013 taxes If your spouse itemizes deductions, you cannot claim the standard deduction. File 2012 and 2013 taxes If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return. File 2012 and 2013 taxes Adjusted gross income (AGI) limits. File 2012 and 2013 taxes   If your AGI on a separate return is lower than it would have been on a joint return, you may be able to deduct a larger amount for certain deductions that are limited by AGI, such as medical expenses. File 2012 and 2013 taxes Individual retirement arrangements (IRAs). File 2012 and 2013 taxes   You may not be able to deduct all or part of your contributions to a traditional IRA if you or your spouse were covered by an employee retirement plan at work during the year. File 2012 and 2013 taxes Your deduction is reduced or eliminated if your income is more than a certain amount. File 2012 and 2013 taxes This amount is much lower for married individuals who file separately and lived together at any time during the year. File 2012 and 2013 taxes For more information, see How Much Can You Deduct in chapter 17. File 2012 and 2013 taxes Rental activity losses. File 2012 and 2013 taxes   If you actively participated in a passive rental real estate activity that produced a loss, you generally can deduct the loss from your nonpassive income, up to $25,000. File 2012 and 2013 taxes This is called a special allowance. File 2012 and 2013 taxes However, married persons filing separate returns who lived together at any time during the year cannot claim this special allowance. File 2012 and 2013 taxes Married persons filing separate returns who lived apart at all times during the year are each allowed a $12,500 maximum special allowance for losses from passive real estate activities. File 2012 and 2013 taxes See Limits on Rental Losses in chapter 9. File 2012 and 2013 taxes Community property states. File 2012 and 2013 taxes   If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file separately, your income may be considered separate income or community income for income tax purposes. File 2012 and 2013 taxes See Publication 555. File 2012 and 2013 taxes Joint Return After Separate Returns You can change your filing status from a separate return to a joint return by filing an amended return using Form 1040X. File 2012 and 2013 taxes You generally can change to a joint return any time within 3 years from the due date of the separate return or returns. File 2012 and 2013 taxes This does not include any extensions. File 2012 and 2013 taxes A separate return includes a return filed by you or your spouse claiming married filing separately, single, or head of household filing status. File 2012 and 2013 taxes Separate Returns After Joint Return Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. File 2012 and 2013 taxes Exception. File 2012 and 2013 taxes   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. File 2012 and 2013 taxes The personal representative has 1 year from the due date of the return (including extensions) to make the change. File 2012 and 2013 taxes See Publication 559, Survivors, Executors, and Administrators, for more information on filing a return for a decedent. File 2012 and 2013 taxes Head of Household You may be able to file as head of household if you meet all the following requirements. File 2012 and 2013 taxes You are unmarried or “considered unmarried” on the last day of the year. File 2012 and 2013 taxes See Marital Status , earlier, and Considered Unmarried , later. File 2012 and 2013 taxes You paid more than half the cost of keeping up a home for the year. File 2012 and 2013 taxes A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school). File 2012 and 2013 taxes However, if the qualifying person is your dependent parent, he or she does not have to live with you. File 2012 and 2013 taxes See Special rule for parent , later, under Qualifying Person. File 2012 and 2013 taxes If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. File 2012 and 2013 taxes You will also receive a higher standard deduction than if you file as single or married filing separately. File 2012 and 2013 taxes Kidnapped child. File 2012 and 2013 taxes   A child may qualify you to file as head of household even if the child has been kidnapped. File 2012 and 2013 taxes For more information, see Publication 501. File 2012 and 2013 taxes How to file. File 2012 and 2013 taxes   If you file as head of household, you can use Form 1040. File 2012 and 2013 taxes If your taxable income is less than $100,000, you may be able to file Form 1040A. File 2012 and 2013 taxes Indicate your choice of this filing status by checking the box on line 4 of either form. File 2012 and 2013 taxes Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax. File 2012 and 2013 taxes Considered Unmarried To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. File 2012 and 2013 taxes You are considered unmarried on the last day of the tax year if you meet all the following tests. File 2012 and 2013 taxes You file a separate return (defined earlier under Joint Return After Separate Returns ). File 2012 and 2013 taxes You paid more than half the cost of keeping up your home for the tax year. File 2012 and 2013 taxes Your spouse did not live in your home during the last 6 months of the tax year. File 2012 and 2013 taxes Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. File 2012 and 2013 taxes See Temporary absences , under Qualifying Person, later. File 2012 and 2013 taxes Your home was the main home of your child, stepchild, or foster child for more than half the year. File 2012 and 2013 taxes (See Home of qualifying person , under Qualifying Person, later, for rules applying to a child's birth, death, or temporary absence during the year. File 2012 and 2013 taxes ) You must be able to claim an exemption for the child. File 2012 and 2013 taxes However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described in Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3, or in Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) under Qualifying Relative in chapter 3. File 2012 and 2013 taxes The general rules for claiming an exemption for a dependent are explained under Exemptions for Dependents in chapter 3. File 2012 and 2013 taxes If you were considered married for part of the year and lived in a community property state (listed earlier under Married Filing Separately), special rules may apply in determining your income and expenses. File 2012 and 2013 taxes See Publication 555 for more information. File 2012 and 2013 taxes Nonresident alien spouse. File 2012 and 2013 taxes   You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. File 2012 and 2013 taxes However, your spouse is not a qualifying person for head of household purposes. File 2012 and 2013 taxes You must have another qualifying person and meet the other tests to be eligible to file as a head of household. File 2012 and 2013 taxes Choice to treat spouse as resident. File 2012 and 2013 taxes   You are considered married if you choose to treat your spouse as a resident alien. File 2012 and 2013 taxes See Publication 519. File 2012 and 2013 taxes Keeping Up a Home To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year. File 2012 and 2013 taxes You can determine whether you paid more than half of the cost of keeping up a home by using Worksheet 2–1. File 2012 and 2013 taxes Worksheet 2-1. File 2012 and 2013 taxes Cost of Keeping Up a Home   Amount You Paid Total Cost Property taxes $ $ Mortgage interest expense     Rent     Utility charges     Repairs/maintenance     Property insurance     Food consumed on the premises     Other household expenses     Totals $ $ Minus total amount you paid   () Amount others paid   $ If the total amount you paid is more than the amount others paid, you meet the requirement of paying more than half the cost of keeping up the home. File 2012 and 2013 taxes Costs you include. File 2012 and 2013 taxes   Include in the cost of keeping up a home expenses such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. File 2012 and 2013 taxes   If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. File 2012 and 2013 taxes However, you must include them in the total cost of keeping up your home to figure if you paid over half the cost. File 2012 and 2013 taxes Costs you do not include. File 2012 and 2013 taxes   Do not include the costs of clothing, education, medical treatment, vacations, life insurance, or transportation. File 2012 and 2013 taxes Also, do not include the rental value of a home you own or the value of your services or those of a member of your household. File 2012 and 2013 taxes Qualifying Person See Table 2-1 to see who is a qualifying person. File 2012 and 2013 taxes Any person not described in Table 2-1 is not a qualifying person. File 2012 and 2013 taxes Table 2-1. File 2012 and 2013 taxes Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. File 2012 and 2013 taxes See the text of this chapter for the other requirements you must meet to claim head of household filing status. File 2012 and 2013 taxes IF the person is your . File 2012 and 2013 taxes . File 2012 and 2013 taxes . File 2012 and 2013 taxes   AND . File 2012 and 2013 taxes . File 2012 and 2013 taxes . File 2012 and 2013 taxes   THEN that person is . File 2012 and 2013 taxes . File 2012 and 2013 taxes . File 2012 and 2013 taxes qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2   he or she is single   a qualifying person, whether or not you can claim an exemption for the person. File 2012 and 2013 taxes   he or she is married and you can claim an exemption for him or her   a qualifying person. File 2012 and 2013 taxes   he or she is married and you cannot claim an exemption for him or her   not a qualifying person. File 2012 and 2013 taxes 3 qualifying relative4 who is your father or mother   you can claim an exemption for him or her5   a qualifying person. File 2012 and 2013 taxes 6   you cannot claim an exemption for him or her   not a qualifying person. File 2012 and 2013 taxes qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests)   he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and you can claim an exemption for him or her5   a qualifying person. File 2012 and 2013 taxes   he or she did not live with you more than half the year   not a qualifying person. File 2012 and 2013 taxes   he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and is your qualifying relative only because he or she lived with you all year as a member of your household   not a qualifying person. File 2012 and 2013 taxes   you cannot claim an exemption for him or her   not a qualifying person. File 2012 and 2013 taxes 1A person cannot qualify more than one taxpayer to use the head of household filing status for the year. File 2012 and 2013 taxes 2The term “qualifying child” is defined in chapter 3. File 2012 and 2013 taxes Note. File 2012 and 2013 taxes If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3. File 2012 and 2013 taxes If you are the custodial parent and those rules apply, the child generally is your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. File 2012 and 2013 taxes 3This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. File 2012 and 2013 taxes 4The term “ qualifying relative ” is defined in chapter 3. File 2012 and 2013 taxes 5If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. File 2012 and 2013 taxes See Multiple Support Agreement in chapter 3. File 2012 and 2013 taxes 6See Special rule for parent . File 2012 and 2013 taxes Example 1—child. File 2012 and 2013 taxes Your unmarried son lived with you all year and was 18 years old at the end of the year. File 2012 and 2013 taxes He did not provide more than half of his own support and does not meet the tests to be a qualifying child of anyone else. File 2012 and 2013 taxes As a result, he is your qualifying child (see Qualifying Child in chapter 3) and, because he is single, your qualifying person for you to claim head of household filing status. File 2012 and 2013 taxes Example 2—child who is not qualifying person. File 2012 and 2013 taxes The facts are the same as in Example 1 except your son was 25 years old at the end of the year and his gross income was $5,000. File 2012 and 2013 taxes Because he does not meet the age test (explained under Qualifying Child in chapter 3), your son is not your qualifying child. File 2012 and 2013 taxes Because he does not meet the gross income test (explained later under Qualifying Relative in chapter 3), he is not your qualifying relative. File 2012 and 2013 taxes As a result, he is not your qualifying person for head of household purposes. File 2012 and 2013 taxes Example 3—girlfriend. File 2012 and 2013 taxes Your girlfriend lived with you all year. File 2012 and 2013 taxes Even though she may be your qualifying relative if the gross income and support tests (explained in chapter 3) are met, she is not your qualifying person for head of household purposes because she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3. File 2012 and 2013 taxes See Table 2-1. File 2012 and 2013 taxes Example 4—girlfriend's child. File 2012 and 2013 taxes The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. File 2012 and 2013 taxes He is not your qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see Not a Qualifying Child Test in chapter 3). File 2012 and 2013 taxes As a result, he is not your qualifying person for head of household purposes. File 2012 and 2013 taxes Home of qualifying person. File 2012 and 2013 taxes   Generally, the qualifying person must live with you for more than half of the year. File 2012 and 2013 taxes Special rule for parent. File 2012 and 2013 taxes   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. File 2012 and 2013 taxes However, you must be able to claim an exemption for your father or mother. File 2012 and 2013 taxes Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. File 2012 and 2013 taxes   You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. File 2012 and 2013 taxes Death or birth. File 2012 and 2013 taxes   You may be eligible to file as head of household even if the individual who qualifies you for this filing status is born or dies during the year. File 2012 and 2013 taxes If the individual is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. File 2012 and 2013 taxes If the individual is anyone else, see Publication 501. File 2012 and 2013 taxes Temporary absences. File 2012 and 2013 taxes   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. File 2012 and 2013 taxes It must be reasonable to assume the absent person will return to the home after the temporary absence. File 2012 and 2013 taxes You must continue to keep up the home during the absence. File 2012 and 2013 taxes Qualifying Widow(er) With Dependent Child If your spouse died in 2013, you can use married filing jointly as your filing status for 2013 if you otherwise qualify to use that status. File 2012 and 2013 taxes The year of death is the last year for which you can file jointly with your deceased spouse. File 2012 and 2013 taxes See Married Filing Jointly , earlier. File 2012 and 2013 taxes You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died. File 2012 and 2013 taxes For example, if your spouse died in 2012, and you have not remarried, you may be able to use this filing status for 2013 and 2014. File 2012 and 2013 taxes This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize deductions). File 2012 and 2013 taxes It does not entitle you to file a joint return. File 2012 and 2013 taxes How to file. File 2012 and 2013 taxes   If you file as qualifying widow(er) with dependent child, you can use Form 1040. File 2012 and 2013 taxes If you also have taxable income of less than $100,000 and meet certain other conditions, you may be able to file Form 1040A. File 2012 and 2013 taxes Check the box on line 5 of either form. File 2012 and 2013 taxes Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. File 2012 and 2013 taxes Eligibility rules. File 2012 and 2013 taxes   You are eligible to file your 2013 return as a qualifying widow(er) with dependent child if you meet all of the following tests. File 2012 and 2013 taxes You were entitled to file a joint return with your spouse for the year your spouse died. File 2012 and 2013 taxes It does not matter whether you actually filed a joint return. File 2012 and 2013 taxes Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. File 2012 and 2013 taxes You have a child or stepchild for whom you can claim an exemption. File 2012 and 2013 taxes This does not include a foster child. File 2012 and 2013 taxes This child lived in your home all year, except for temporary absences. File 2012 and 2013 taxes See Temporary absences , earlier, under Head of Household. File 2012 and 2013 taxes There are also exceptions, described later, for a child who was born or died during the year and for a kidnapped child. File 2012 and 2013 taxes You paid more than half the cost of keeping up a home for the year. File 2012 and 2013 taxes See Keeping Up a Home , earlier, under Head of Household. File 2012 and 2013 taxes Example. File 2012 and 2013 taxes John's wife died in 2011. File 2012 and 2013 taxes John has not remarried. File 2012 and 2013 taxes During 2012 and 2013, he continued to keep up a home for himself and his child, who lives with him and for whom he can claim an exemption. File 2012 and 2013 taxes For 2011 he was entitled to file a joint return for himself and his deceased wife. File 2012 and 2013 taxes For 2012 and 2013, he can file as qualifying widower with a dependent child. File 2012 and 2013 taxes After 2013 he can file as head of household if he qualifies. File 2012 and 2013 taxes Death or birth. File 2012 and 2013 taxes    You may be eligible to file as a qualifying widow(er) with dependent child if the child who qualifies you for this filing status is born or dies during the year. File 2012 and 2013 taxes You must have provided more than half of the cost of keeping up a home that was the child's main home during the entire part of the year he or she was alive. File 2012 and 2013 taxes Kidnapped child. File 2012 and 2013 taxes   A child may qualify you for qualifying widow(er) with dependent child, even if the child has been kidnapped. File 2012 and 2013 taxes See Publication 501. File 2012 and 2013 taxes    As mentioned earlier, this filing status is available for only 2 years following the year your spouse died. 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