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File taxes 2008 Publication 4492-A - Main Contents Table of Contents DefinitionsKansas Disaster Area Storms and Tornadoes Casualty and Theft Losses Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Recovery Assistance Distributions Repayment of Qualified Recovery Assistance Distributions How To Report Qualified Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Employee Retention Credit Demolition and Clean-up Costs Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). File taxes 2008 Definitions The following definitions are used throughout this publication. File taxes 2008 Kansas Disaster Area The Kansas disaster area covers the Kansas counties of Barton, Clay, Cloud, Comanche, Dickinson, Edwards, Ellsworth, Kiowa, Leavenworth, Lyon, McPherson, Osage, Osborne, Ottawa, Phillips, Pottawatomie, Pratt, Reno, Rice, Riley, Saline, Shawnee, Smith, and Stafford. File taxes 2008 Storms and Tornadoes The term “storms and tornadoes” as used in this publication, refers to the storms and tornadoes that began on May 4, 2007, and affected the Kansas disaster area (defined above). File taxes 2008 Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that occurred in the Kansas disaster area. File taxes 2008 Limits on personal casualty or theft losses in the Kansas disaster area. File taxes 2008   Losses of personal use property that arose in the Kansas disaster area after May 3, 2007, are not subject to the $100 or 10% of adjusted gross income limits. File taxes 2008 Qualifying losses include losses from casualties and thefts that arose in the disaster area and that were attributable to the storms and tornadoes. File taxes 2008 When to deduct the loss. File taxes 2008   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. File taxes 2008 However, the Kansas disaster area is a Presidentially declared disaster. File taxes 2008 Therefore, you could have elected to deduct losses from these storms and tornadoes on your tax return for the previous year. File taxes 2008 The deadline for making this election has expired. File taxes 2008   The following special instructions explain how to complete your forms if you deduct the loss in 2007 or elected to deduct the loss in 2006. File taxes 2008 Special instructions for individuals who file Form 4684 to claim a Kansas disaster area casualty or theft loss for 2007 or are amending their 2006 return. File taxes 2008   Individuals filing or amending their 2007 tax return or amending their 2006 tax return for casualty or theft losses that were attributable to the storms and tornadoes should enter “Kansas Disaster Area” at the top of Form 1040 or 1040X. File taxes 2008 They must also complete and attach the 2006 version of Form 4684 for either year and enter “Kansas Disaster Area” on the top and on the dotted line next to line 11 and enter -0- on line 11. File taxes 2008 Individuals filing or amending their 2007 tax return should cross out “2006” and enter “2007” at the top of Form 4684. File taxes 2008 They must also enter the amount from line 21 of that form on line 20 of Schedule A (Form 1040). File taxes 2008 Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. File taxes 2008 Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). File taxes 2008 However, for property that was involuntarily converted after May 3, 2007, as a result of the storms and tornadoes, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Kansas disaster area. File taxes 2008 For more information, see the Instructions for Form 4684. File taxes 2008 Net Operating Losses Qualified recovery assistance loss. File taxes 2008   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. File taxes 2008 However, the portion of an NOL that is a qualified recovery assistance loss can be carried back to the 5 tax years before the NOL year. File taxes 2008 In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. File taxes 2008   A qualified recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified recovery assistance casualty loss (as defined below), Moving expenses paid or incurred after May 3, 2007, and before January 1, 2010, for the employment of an individual whose main home was in the Kansas disaster area before May 4, 2007, who was unable to remain in that home because of the storms and tornadoes, and whose main job location (after the move) is in the Kansas disaster area, Temporary housing expenses paid or incurred after May 3, 2007, and before January 1, 2010, to house employees of the taxpayer whose main job location is in the Kansas disaster area, Depreciation or amortization allowable for any qualified recovery assistance property (even if you elected not to claim the special recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after May 3, 2007, and before January 1, 2010, for any damage from the storms and tornadoes to property located in the Kansas disaster area. File taxes 2008 Qualified recovery assistance casualty loss. File taxes 2008   A qualified recovery assistance casualty loss is any deductible section 1231 loss of property located in the Kansas disaster area if the loss was caused by the storms and tornadoes. File taxes 2008 For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the storms and tornadoes of property located in the Kansas disaster area. File taxes 2008 Any such loss taken into account in figuring your qualified recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. File taxes 2008 Amended return. File taxes 2008   If you have already filed your 2007 tax return and then carried your NOL back 2 years, you may file an amended return to carry back for 5 years your NOL attributable to a qualified recovery assistance loss. File taxes 2008 More information. File taxes 2008    For more information on NOLs, see Publication 536. File taxes 2008 IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for individuals who suffered economic losses as a result of the storms and tornadoes. File taxes 2008 Definitions Qualified recovery assistance distribution. File taxes 2008   Except as provided below, a qualified recovery assistance distribution is any distribution you received and designated as such from an eligible retirement plan if all of the following apply. File taxes 2008 The distribution was made after May 3, 2007, and before January 1, 2009. File taxes 2008 Your main home was located in the Kansas disaster area on May 4, 2007. File taxes 2008 You sustained an economic loss because of the storms and tornadoes. File taxes 2008 Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. File taxes 2008   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified recovery assistance distribution, regardless of whether the distribution was made on account of the storms and tornadoes. File taxes 2008 Qualified recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. File taxes 2008   The total of your qualified recovery assistance distributions from all plans is limited to $100,000. File taxes 2008 If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. File taxes 2008   A reduction or offset after May 3, 2007, of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified recovery assistance distribution. File taxes 2008 Eligible retirement plan. File taxes 2008   An eligible retirement plan can be any of the following. File taxes 2008 A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). File taxes 2008 A qualified annuity plan. File taxes 2008 A tax-sheltered annuity contract. File taxes 2008 A governmental section 457 deferred compensation plan. File taxes 2008 A traditional, SEP, SIMPLE, or Roth IRA. File taxes 2008 Main home. File taxes 2008   Generally, your main home is the home where you live most of the time. File taxes 2008 A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. File taxes 2008 Taxation of Qualified Recovery Assistance Distributions Qualified recovery assistance distributions are included in income in equal amounts over three years. File taxes 2008 However, if you elect, you can include the entire distribution in your income in the year it was received. File taxes 2008 Qualified recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). File taxes 2008 However, any distributions you receive in excess of the $100,000 qualified recovery assistance distribution limit may be subject to the additional tax on early distributions. File taxes 2008 For more information, see How To Report Qualified Recovery Assistance Distributions on page 4. File taxes 2008 Repayment of Qualified Recovery Assistance Distributions If you choose, you generally can repay any portion of a qualified recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. File taxes 2008 Also, you can repay a qualified recovery assistance distribution made on account of a hardship from a retirement plan. File taxes 2008 However, see Exceptions below for qualified recovery assistance distributions you cannot repay. File taxes 2008 You have three years from the day after the date you received the distribution to make a repayment. File taxes 2008 Amounts that are repaid are treated as a qualified rollover and are not included in income. File taxes 2008 Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. File taxes 2008 See Form 8915 for more information on how to report repayments. File taxes 2008 Exceptions. File taxes 2008   You cannot repay the following types of distributions. File taxes 2008 Qualified recovery assistance distributions received as a beneficiary (other than a surviving spouse). File taxes 2008 Required minimum distributions. File taxes 2008 Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. File taxes 2008 How To Report Qualified Recovery Assistance Distributions You will need the following information to correctly report any 2007 or 2008 qualified recovery assistance distributions. File taxes 2008 2007 Qualified Recovery Assistance Distributions If you received a distribution after May 3, 2007, from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. File taxes 2008 See Qualified recovery assistance distribution on page 3. File taxes 2008 If you have not filed your 2007 income tax return, see Form 8915 and Form 8606 on this page to see how to complete these forms for any qualified recovery assistance distributions. File taxes 2008 Be sure to attach Form 8915 and Form 8606 (if required) to your 2007 income tax return. File taxes 2008 If you have filed your 2007 income tax return, you will need to amend your return to designate any distributions as qualified recovery assistance distributions. File taxes 2008 You can amend your 2007 income tax return by using Form 1040X. File taxes 2008 You will need to complete and attach Form 8915 and Form 8606 (if required) to your amended income tax return for any qualified recovery assistance distributions. File taxes 2008 See Form 8915 and Form 8606 on this page. File taxes 2008 Form 8915. File taxes 2008   For a 2007 qualified recovery assistance distribution, complete the 2005 Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments. File taxes 2008 Before you complete the form, modify the form as follows. File taxes 2008 Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. File taxes 2008 ” To the right of the title, cross out “2005” and enter “2007. File taxes 2008 ” In Part I, at the top of column (a), cross out “2005” and enter “2007. File taxes 2008 ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. File taxes 2008 ” On lines 10 and 11, cross out “2005” and enter “2007. File taxes 2008 ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. File taxes 2008 ” On line 12, cross out “hurricane” and enter “recovery assistance. File taxes 2008 ” On lines 13 and 14, cross out “line 15b” and “line 25b. File taxes 2008 ” On lines 18 and 19, cross out “2005” and enter “2007. File taxes 2008 ”   You can now complete Form 8915. File taxes 2008 For the instructions, use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions. File taxes 2008 See Example 1 on page 5 to see how to complete Form 8915. File taxes 2008 Form 8606. File taxes 2008   For a 2007 qualified recovery assistance distribution, complete or amend the 2007 Form 8606, Nondeductible IRAs. File taxes 2008 Before you complete or amend the form, use the following additional instructions. File taxes 2008 Form 8606, Part I. File taxes 2008    On line 6, subtract any repayments of qualified recovery assistance distributions from the amount you would otherwise enter on line 6. File taxes 2008 Do not enter an amount less than -0-. File taxes 2008 Include on line 7 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. File taxes 2008 Complete line 15 as follows. File taxes 2008 If all of your distributions are qualified recovery assistance distributions, enter the amount from line 15 on Form 8915, line 13. File taxes 2008 Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. File taxes 2008 If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 15 by a fraction. File taxes 2008 The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 7. File taxes 2008 Enter the result in the white space in the bottom margin of the form under line 15. File taxes 2008 To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 13. File taxes 2008 Then, subtract this amount from the amount on line 15 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. File taxes 2008 Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. File taxes 2008 To the left of this amount, enter “Other distributions. File taxes 2008 ” Form 8606, Part III. File taxes 2008    Include on line 19 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. File taxes 2008 Complete line 25 as follows. File taxes 2008 If all of your distributions are qualified recovery assistance distributions, enter the amount from line 25 on Form 8915, line 14. File taxes 2008 Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. File taxes 2008 If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 25 by a fraction. File taxes 2008 The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 21. File taxes 2008 Enter the result in the white space in the bottom margin of the form under line 25. File taxes 2008 To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 14. File taxes 2008 Then, subtract this amount from the amount on line 25 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. File taxes 2008 Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. File taxes 2008 To the left of this amount, enter “Other distributions. File taxes 2008 ” Example 1. File taxes 2008   On May 4, 2007, Margaret Maple lost her home due to the tornadoes on that day. File taxes 2008 Her home was located in the Kansas disaster area. File taxes 2008 On July 31, 2007, Margaret took out $30,000 from her 401(k) plan and an additional $15,000 from her traditional IRA in order to rebuild her home. File taxes 2008 Margaret has not filed her 2007 return yet but would like to designate the $45,000 in distributions from her retirement plans as qualified recovery assistance distributions. File taxes 2008 Since the distributions occurred in 2007, Margaret would modify and complete the 2005 Form 8915 as discussed on page 4. File taxes 2008 Margaret would also need to complete Form 8606 since her distribution from her traditional IRA has nondeductible contributions from previous years. File taxes 2008   In addition to the $15,000 qualified recovery assistance distribution on July 31, 2007, Margaret received an additional distribution of $15,000 from her traditional IRA on October 31, 2007, that she did not designate as a qualified recovery assistance distribution. File taxes 2008 Because Margaret has a qualified recovery assistance distribution as well as a distribution not so designated, Margaret must allocate the amount on Form 8606, line 15 to both distributions, as discussed earlier. File taxes 2008 Margaret's qualified recovery assistance distributions are $13,125 ($26,250 × $15,000 ÷ $30,000). File taxes 2008 Margaret enters in the white space in the bottom margin of Form 8606, the following, “Qualified recovery assistance distributions $13,125. File taxes 2008 ” This amount is then reported on Form 8915, line 13. File taxes 2008 Below this entry, Margaret enters “Other distributions $13,125,” and includes this amount on Form 1040, line 15b. File taxes 2008 See Margaret's modified 2005 Form 8915 and 2007 Form 8606 shown on pages 6 through 8. File taxes 2008 This image is too large to be displayed in the current screen. File taxes 2008 Please click the link to view the image. File taxes 2008 2005 Form 8915, page 1, Illustrated Example 1. File taxes 2008 This image is too large to be displayed in the current screen. File taxes 2008 Please click the link to view the image. File taxes 2008 2005 Form 8915, page 2, Illustrated Example 1 This image is too large to be displayed in the current screen. File taxes 2008 Please click the link to view the image. File taxes 2008 Form 8606, page 1, Illustrated Example 1 2008 Qualified Recovery Assistance Distributions If you received a distribution in 2008 from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. File taxes 2008 See Qualified recovery assistance distribution on page 3. File taxes 2008 You will need to complete and attach Form 8915 and Form 8606 (if required) to your 2008 income tax return for any qualified recovery assistance distributions. File taxes 2008 See Form 8915 and Form 8606 below. File taxes 2008 Form 8915. File taxes 2008   For a 2008 qualified recovery assistance distribution, you will need to complete the 2006 Form 8915. File taxes 2008 Before you complete the form, modify the form as follows. File taxes 2008 Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. File taxes 2008 ” To the right of the title, cross out “2006” and enter “2008. File taxes 2008 ” In the first sentence of Part I and on line 1, cross out “hurricane” and enter “recovery assistance,” cross out “2006” and enter “2008,” and cross out “2005” and enter “2007. File taxes 2008 ” At the top of column (a) cross out “2006” and enter “2008. File taxes 2008 ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. File taxes 2008 ” On lines 12, 14, and 15, cross out “2005” and enter “2007. File taxes 2008 ” On lines 17 and 19, cross out “2006” and enter “2008. File taxes 2008 ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. File taxes 2008 ” On line 21, cross out “hurricane” and enter “recovery assistance. File taxes 2008 ” On lines 22 and 23, cross out “line 15b” and “line 25b. File taxes 2008 ” On lines 27, 29, and 30, cross out “2005” and enter “2007. File taxes 2008 ” On lines 32 and 34, cross out “2006” and enter “2008. File taxes 2008 ”   You can now complete Form 8915. File taxes 2008 For the instructions, use the applicable dates and terms in this publication instead of those used in the 2006 Form 8915 instructions. File taxes 2008 Example 2. File taxes 2008   On June 15, 2008, Margaret Maple, from the previous example, took out $15,000 from her 401(k) plan that she is designating as a qualified recovery assistance distribution. File taxes 2008 Since the distribution occurred in 2008, Margaret would modify and complete the 2006 Form 8915 as discussed above. File taxes 2008 Also, since Margaret is including her 2007 recovery assistance distributions in income over 3 years, she reports the applicable amount of those distributions on the modified 2006 Form 8915. File taxes 2008 See Margaret's modified 2006 Form 8915 shown on pages 9 and 10. File taxes 2008 This image is too large to be displayed in the current screen. File taxes 2008 Please click the link to view the image. File taxes 2008 2006 Form 8915, page 1, Illustrated Example 2 This image is too large to be displayed in the current screen. File taxes 2008 Please click the link to view the image. File taxes 2008 2006 Form 8915, page 2, Illustrated Example 2 Form 8606. File taxes 2008   For a 2008 qualified recovery assistance distribution, you may need to complete the 2008 Form 8606. File taxes 2008 Before you complete Form 8606, use the additional instructions outlined in Form 8606, Part I, on page 4 and Form 8606, Part III, on this page. File taxes 2008 Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Kansas disaster area, you can repay part or all of that distribution after May 3, 2007, but no later than October 22, 2008, to an eligible retirement plan. File taxes 2008 For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. File taxes 2008 To be a qualified distribution, the distribution must meet all of the following requirements. File taxes 2008 The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. File taxes 2008 The distribution was received after November 4, 2006, and before May 5, 2007. File taxes 2008 The distribution was to be used to purchase or construct a main home in the Kansas disaster area that was not purchased or constructed because of the storms and tornadoes. File taxes 2008 Amounts that are repaid before October 23, 2008, are treated as a qualified rollover and are not included in income. File taxes 2008 Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. File taxes 2008 A qualified distribution not repaid before October 23, 2008, may be taxable for 2006 or 2007 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. File taxes 2008 You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before October 23, 2008. File taxes 2008 See How to report, next, for information on completing Form 8915. File taxes 2008 How to report. File taxes 2008   To report the repayment of a qualified distribution for the purchase or construction of a main home that was not purchased or constructed due to the storms and tornadoes, use the 2005 Form 8915, Part IV. File taxes 2008 Before you complete the form, modify the form as follows. File taxes 2008 Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. File taxes 2008 ” To the right of the title, cross out “2005” and enter “2006” or “2007. File taxes 2008 ” Enter only the year the distribution was received. File taxes 2008 Cross out “Hurricane” in the title of Part IV and enter “Kansas. File taxes 2008 ” In the sentence below the title of Part IV, cross out “March 1, 2006” and enter “October 23, 2008. File taxes 2008 ” On line 24, cross out “March 1, 2006” and enter “October 23, 2008. File taxes 2008 ” You can now complete Part IV of Form 8915. File taxes 2008 Use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions to complete the form. File taxes 2008 Attach Form 8915 to your original or amended return for the year of the distribution. File taxes 2008 Amended return. File taxes 2008   If you repay part or all of a qualified distribution by October 22, 2008, you will need to file an amended return for that part of a distribution that was previously included in income. File taxes 2008 Loans From Qualified Plans The following benefits are available to qualified individuals. File taxes 2008 Increases to the limits for distributions treated as loans from employer plans. File taxes 2008 A 1-year suspension for payments due on plan loans. File taxes 2008 Qualified individual. File taxes 2008   You are a qualified individual if your main home on May 4, 2007, was located in the Kansas disaster area and you had an economic loss because of the storms and tornadoes. File taxes 2008 Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. File taxes 2008 Limits on plan loans. File taxes 2008   The $50,000 limit for distributions treated as plan loans is increased to $100,000. File taxes 2008 In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. File taxes 2008 If your home was located in the Kansas disaster area, the higher limits apply only to loans received during the period beginning on May 22, 2008, and ending on December 31, 2008. File taxes 2008 One-year suspension of loan payments. File taxes 2008   Payments on plan loans outstanding after May 3, 2007, may be suspended for 1 year by the plan administrator. File taxes 2008 To qualify for the suspension, the due date for any loan payment must occur during the period beginning on May 4, 2007, and ending on December 31, 2008. File taxes 2008 Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified recovery assistance property (as defined below) you acquire after May 4, 2007. File taxes 2008 The special allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). File taxes 2008 The special allowance applies only for the first year the property is placed in service. File taxes 2008 The special allowance is deductible for both the regular tax and the alternative minimum tax (AMT). File taxes 2008 There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. File taxes 2008 You can elect not to deduct the special allowance for qualified recovery assistance property. File taxes 2008 If you make this election for any property, it applies to all property in the same class placed in service during the year. File taxes 2008 Qualified recovery assistance property. File taxes 2008   Property that qualifies for the special allowance for qualified recovery assistance property includes the following. File taxes 2008 Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. File taxes 2008 Water utility property. File taxes 2008 Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. File taxes 2008 (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. File taxes 2008 ) Qualified leasehold improvement property. File taxes 2008 Nonresidential real property and residential rental property. File taxes 2008   For more information on this property, see Publication 946. File taxes 2008 Other tests to be met. File taxes 2008   To be qualified recovery assistance property, the property must also meet all of the following tests. File taxes 2008 You must have acquired the property, by purchase, after May 4, 2007, but only if no binding written contract for the acquisition was in effect before May 5, 2007. File taxes 2008 The property must be placed in service before 2009 (2010 in the case of nonresidential real property and residential rental property). File taxes 2008 Substantially all of the use of the property must be in the Kansas disaster area and in the active conduct of your trade or business in the Kansas disaster area. File taxes 2008 The original use of the property in the Kansas disaster area must begin with you after May 4, 2007. File taxes 2008 Used property can be qualified recovery assistance property if it has not previously been used within the Kansas disaster area. File taxes 2008 Also, additional capital expenditures you incurred after May 4, 2007, to recondition or rebuild your property meet the original use test if the original use of the property in the Kansas disaster area began with you. File taxes 2008 Excepted property. File taxes 2008   Qualified recovery assistance property does not include any of the following. File taxes 2008 Property required to be depreciated using the Alternative Depreciation System (ADS). File taxes 2008 Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. File taxes 2008 Property for which you are claiming a commercial revitalization deduction. File taxes 2008 Property in the same class as that for which you elected not to claim the special allowance for qualified recovery assistance property. File taxes 2008 Property placed in service and disposed of in the same tax year. File taxes 2008 Property converted from business use to personal use in the same tax year it is placed in service. File taxes 2008 Property converted from personal use to business use in the same or later tax year may be qualified recovery assistance property. File taxes 2008 Recapture of special allowance. File taxes 2008   If, in any year after the year you claim the special allowance, the property ceases to be qualified recovery assistance property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. File taxes 2008 Amended return. File taxes 2008   If you have already filed your tax return, you may have to amend that return to claim any special allowance. File taxes 2008 Additional guidance will be published on how you may claim, or elect not to claim, the special allowance if you have already filed your tax return. File taxes 2008 Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 recovery assistance property (as defined later) placed in service in the Kansas disaster area. File taxes 2008 Increased dollar limit. File taxes 2008   The limit on the section 179 deduction ($125,000 for 2007, $250,000 for 2008) is increased by the smaller of: $100,000, or The cost of qualified section 179 recovery assistance property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). File taxes 2008   The amount for which you can make the election is reduced if the cost of all section 179 property you placed in service during the year exceeds $500,000 for 2007 and $800,000 for 2008 increased by the smaller of: $600,000, or The cost of qualified section 179 recovery assistance property placed in service during the year. File taxes 2008 Qualified section 179 recovery assistance property. File taxes 2008   Qualified section 179 recovery assistance property is section 179 property that is qualified recovery assistance property (explained earlier under Special Depreciation Allowance). File taxes 2008 Section 179 property does not include nonresidential real property or residential rental property. File taxes 2008 For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. File taxes 2008 Amended return. File taxes 2008   If you have already filed your tax return, you may have to amend that return for any increased section 179 deduction. File taxes 2008 Employee Retention Credit An eligible employer who conducted an active trade or business in the Kansas disaster area can claim the employee retention credit. File taxes 2008 The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). File taxes 2008 Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). File taxes 2008 Use Form 5884-A to claim the credit. File taxes 2008 See Form 5884-A later. File taxes 2008 The following rules and definitions apply. File taxes 2008 Employers affected by the storms and tornadoes. File taxes 2008   The following definitions apply to employers affected by the storms and tornadoes. File taxes 2008 Eligible employer. File taxes 2008   For this purpose, an eligible employer is any employer who meets all of the following. File taxes 2008 Employed an average of not more than 200 employees on business days during the tax year before May 4, 2007. File taxes 2008 Conducted an active trade or business on May 4, 2007, in the Kansas disaster area. File taxes 2008 Whose trade or business was inoperable on any day after May 4, 2007, and before January 1, 2008, because of damage caused by the storms and tornadoes. File taxes 2008 Eligible employee. File taxes 2008   For this purpose, an eligible employee is an employee whose principal place of employment on May 4, 2007, with the eligible employer was in the Kansas disaster area. File taxes 2008 An employee is not an eligible employee for purposes of the storms and tornadoes if the employee is treated as an eligible employee for the work opportunity credit. File taxes 2008 Qualified wages. File taxes 2008   Qualified wages are wages you paid or incurred before January 1, 2008, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before May 4, 2007, and ending on the date your trade or business resumed significant operations at that place. File taxes 2008 In addition, the wages must have been paid or incurred after May 4, 2007. File taxes 2008    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. File taxes 2008    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). File taxes 2008 Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. File taxes 2008 Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. File taxes 2008   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. File taxes 2008 For a special rule that applies to railroad employees, see section 51(h)(1)(B). File taxes 2008   Qualified wages do not include the following. File taxes 2008 Wages paid to your dependent or a related individual. File taxes 2008 See section 51(i)(1). File taxes 2008 Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. File taxes 2008 Wages for services of replacement workers during a strike or lockout. File taxes 2008 Form 5884-A. File taxes 2008   Use Section A of Form 5884-A (Rev. File taxes 2008 October 2006) to claim the employer retention credit. File taxes 2008 Section B does not apply to the Kansas disaster area. File taxes 2008 Before you complete the form, modify the form as follows. File taxes 2008 Cross out “Hurricane Katrina, Rita, or Wilma” in the title at the top of the form and enter “Kansas Storms and Tornadoes. File taxes 2008 ” On line 1a cross out “Hurricane Katrina” and enter “Kansas Storms and Tornadoes,” cross out “August 28, 2005,” and enter “May 4, 2007,” and cross out “January 1, 2006,” and enter “January 1, 2008. File taxes 2008 ”   Complete the form as instructed. File taxes 2008 Lines 1b and 1c do not apply. File taxes 2008 Include the amount from Form 5884-A, line 4 in the amount entered on Form 3800, line 1x. File taxes 2008 On the dotted line to the left of line 1x, enter “5884-A. File taxes 2008 ” Use the applicable dates and terms in this publication instead of those used in the Form 5884-A instructions. File taxes 2008 Amended return. File taxes 2008   You may have to amend a previously filed return to claim the employee retention credit. File taxes 2008 Demolition and Clean-up Costs You can elect to deduct 50% of any qualified recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. File taxes 2008 Qualified recovery assistance clean-up costs are any amounts paid or incurred after May 3, 2007, and before January 1, 2010, for the removal of debris from, or the demolition of structures on, real property located in the Kansas disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. File taxes 2008 Amended return. File taxes 2008   If you have already filed your tax return, you may have to amend that return to claim the 50% of any qualified recovery assistance clean-up costs. File taxes 2008 Request for Copy or Transcript of Tax Return Request for copy of tax return. File taxes 2008   You can use Form 4506 to order a copy of your tax return. File taxes 2008 Generally, there is a $39. File taxes 2008 00 fee (subject to change) for requesting each copy of a tax return. File taxes 2008 If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Kansas Storms”) is written in red across the top of the form when filed. File taxes 2008 Request for transcript of tax return. File taxes 2008   You can use Form 4506-T to order a free transcript of your tax return. File taxes 2008 A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. File taxes 2008 You can also call 1-800-829-1040 to order a transcript. File taxes 2008 How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. File taxes 2008 By selecting the method that is best for you, you will have quick and easy access to tax help. File taxes 2008 Contacting your Taxpayer Advocate. File taxes 2008   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. File taxes 2008   You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. File taxes 2008 You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS. File taxes 2008 You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. File taxes 2008 For more information, go to www. File taxes 2008 irs. File taxes 2008 gov/advocate. File taxes 2008 Low Income Taxpayer Clinics (LITCs). File taxes 2008   LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. File taxes 2008 The clinics also provide tax education and outreach for taxpayers who speak English as a second language. File taxes 2008 Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. File taxes 2008 It is available at www. File taxes 2008 irs. File taxes 2008 gov or your local IRS office. File taxes 2008 Free tax services. File taxes 2008   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. File taxes 2008 It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. File taxes 2008 It also has an index of over 100 TeleTax topics, (recorded tax information) you can listen to on your telephone. File taxes 2008   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. File taxes 2008 Free help with your return. File taxes 2008   Free help in preparing your return is available nationwide from IRS-trained volunteers. File taxes 2008 The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. File taxes 2008 Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. File taxes 2008 To find a site near you, call 1-800-829-1040. File taxes 2008 Or to find the nearest AARP TaxAide site, visit AARP's website at www. File taxes 2008 aarp. File taxes 2008 org/taxaide or call 1-888-227-7669. File taxes 2008 For more information on these programs, go to www. File taxes 2008 irs. File taxes 2008 gov and enter keyword “VITA” in the upper right-hand corner. File taxes 2008 Internet. File taxes 2008 You can access the IRS website at www. File taxes 2008 irs. File taxes 2008 gov 24 hours a day, 7 days a week to: E-file your return. File taxes 2008 Find out about commercial tax preparation and e-file services available free to eligible taxpayers. File taxes 2008 Check the status of your refund. File taxes 2008 Click on Where's My Refund. File taxes 2008 Wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). File taxes 2008 Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. File taxes 2008 Download forms, instructions, and publications. File taxes 2008 Order IRS products online. File taxes 2008 Research your tax questions online. File taxes 2008 Search publications online by topic or keyword. File taxes 2008 View Internal Revenue Bulletins (IRBs) published in the last few years. File taxes 2008 Figure your withholding allowances using the withholding calculator online at www. File taxes 2008 irs. File taxes 2008 gov/individuals. File taxes 2008 Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant. File taxes 2008 Sign up to receive local and national tax news by email. File taxes 2008 Get information on starting and operating a small business. File taxes 2008 Phone. File taxes 2008 Many services are available by phone. File taxes 2008 Ordering forms, instructions, and publications. File taxes 2008 Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. File taxes 2008 You should receive your order within 10 days. File taxes 2008 Asking tax questions. File taxes 2008 Call the IRS with your tax questions at 1-800-829-1040. File taxes 2008 Solving problems. File taxes 2008 You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. File taxes 2008 An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. File taxes 2008 Call your local Taxpayer Assistance Center for an appointment. File taxes 2008 To find the number, go to www. File taxes 2008 irs. File taxes 2008 gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File taxes 2008 TTY/TDD equipment. File taxes 2008 If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. File taxes 2008 TeleTax topics. File taxes 2008 Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. File taxes 2008 Refund information. File taxes 2008 To check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. File taxes 2008 Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). File taxes 2008 Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. File taxes 2008 Evaluating the quality of our telephone services. File taxes 2008 To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. File taxes 2008 One method is for a second IRS representative to listen in on or record random telephone calls. File taxes 2008 Another is to ask some callers to complete a short survey at the end of the call. File taxes 2008 Walk-in. File taxes 2008 Many products and services are available on a walk-in basis. File taxes 2008 Products. File taxes 2008 You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. File taxes 2008 Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. File taxes 2008 Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. File taxes 2008 Services. File taxes 2008 You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. File taxes 2008 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. File taxes 2008 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. File taxes 2008 No appointment is necessary — just walk in. File taxes 2008 If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. File taxes 2008 A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. File taxes 2008 If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment may be requested. File taxes 2008 All other issues will be handled without an appointment. File taxes 2008 To find the number of your local office, go to www. File taxes 2008 irs. File taxes 2008 gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File taxes 2008 Mail. File taxes 2008 You can send your order for forms, instructions, and publications to the address below. File taxes 2008 You should receive a response within 10 days after your request is received. File taxes 2008 Internal Revenue Service 1201 N. File taxes 2008 Mitsubishi Motorway Bloomington, IL 61705-6613 CD/DVD for tax products. File taxes 2008 You can order Publication 1796, IRS Tax Products CD/DVD, and obtain: Current-year forms, instructions, and publications. File taxes 2008 Prior-year forms, instructions, and publications. File taxes 2008 Bonus: Historical Tax Products DVD - Ships with the final release. File taxes 2008 IRS Tax Map: an electronic research tool and finding aid. File taxes 2008 Tax law frequently asked questions (FAQ). File taxes 2008 Tax Topics from the IRS telephone response system. File taxes 2008 Fill-in, print, and save features for most tax forms. File taxes 2008 Internal Revenue Bulletins. File taxes 2008 Toll-free and email technical support. File taxes 2008 The CD/DVD is released twice during the year in January and March. File taxes 2008 Purchase the CD/DVD from National Technical Information Service (NTIS) at www. File taxes 2008 irs. File taxes 2008 gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5 handling fee). File taxes 2008 Price is subject to change. File taxes 2008 CD for small businesses. File taxes 2008 Publication 3207, The Small Business Resource Guide CD, is a must for every small business owner or any taxpayer about to start a business. File taxes 2008 This year's CD includes: Helpful information, such as how to prepare a business plan, find financing for your business, and much more. File taxes 2008 All the business tax forms, instructions, and publications needed to successfully manage a business. File taxes 2008 Tax law changes. File taxes 2008 Tax Map: an electronic research tool and finding aid. File taxes 2008 Web links to various government agencies, business associations, and IRS organizations. File taxes 2008 “Rate the Product” survey—your opportunity to suggest changes for future editions. File taxes 2008 A site map of the CD to help you navigate the pages of the CD with ease. File taxes 2008 An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes. File taxes 2008 An updated version of this CD is available each year in early April. File taxes 2008 You can get a free copy by calling 1-800-829-3676 or by visiting www. File taxes 2008 irs. File taxes 2008 gov/smallbiz. File taxes 2008 Prev  Up  Next   Home   More Online Publications
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Where to File Paper Tax Returns - With or Without a Payment

Taxpayers and Tax Professionals - Where to File Individual Tax Returns
Addresses by state for Forms 1040, 1040A, 1040EZ, 1040ES, 1040V, amended returns, and extensions (also addresses for taxpayers in foreign countries, U.S. possessions, or with other international filing characteristics)

Where to File - All Types of Tax Returns (By Form Number)
Mailing addresses for all types of returns: individual, corporation, partnership, and many others (search for address based on form number)

Where to File - Tax Exempt and Government Entities
Where to file addresses for tax exempt and government entities.

Where to Send Non-Return Forms (Applications and Payments)
Where to send certain payments and applications other than tax returns. This page provides a quick guide for where to send certain non-return forms, applications, and payments.

Where to File Certain Elections, Statements, Returns and Other Documents
This page provides up-to-date information on filing addresses for certain elections, statements, returns and other documents required by the Code of Federal Regulations (CFR) Title 26

Private Delivery Services (PDS)
Use these addresses ONLY IF you are using a private delivery service to send your returns to IRS. If you are not using a private delivery service, use the links above to find the correct mailing address to mail your return.

Page Last Reviewed or Updated: 28-Mar-2014

The File Taxes 2008

File taxes 2008 Publication 3 - Main Content Table of Contents Gross IncomeForeign Source Income Military Spouses Residency Relief Act (MSRRA) Community Property Form W-2 Codes Adjustments to IncomeArmed Forces Reservists Individual Retirement Arrangements Moving Expenses Combat Zone ExclusionCombat Zone Serving in a Combat Zone Amount of Exclusion Alien StatusResident Aliens Nonresident Aliens Dual-Status Aliens Sale of HomePeriod of suspension. File taxes 2008 Qualified official extended duty. File taxes 2008 ForeclosuresLump Sum Portion of Settlement Payment. File taxes 2008 Interest Payment on Lump Sum Portion of Settlement Payment. File taxes 2008 Lost Equity Portion of Settlement Payment. File taxes 2008 The rules that apply to a lost equity payment you received for the foreclosure of a property that was not your main home are different. File taxes 2008 Interest Payment on Lost Equity Portion of Settlement Payment. File taxes 2008 Itemized DeductionsEmployee Business Expenses Repayments CreditsFirst-Time Homebuyer Credit Child Tax Credit Earned Income Credit Credit for Excess Social Security Tax Withheld Forgiveness of Decedent's Tax LiabilityCombat Zone Related Forgiveness Terrorist or Military Action Related Forgiveness Claims for Tax Forgiveness Filing ReturnsSame-Sex Marriage Where To File When To File Signing Returns Extension of DeadlinesService That Qualifies for an Extension of Deadline Length of Extension Actions for Which Deadlines Are Extended Deferral of Payment Maximum Rate of Interest How To Get Tax HelpLow Income Taxpayer Clinics Gross Income Members of the Armed Forces receive many different types of pay and allowances. File taxes 2008 Some are included in gross income while others are excluded from gross income. File taxes 2008 Included items (Table 1) are subject to tax and must be reported on your tax return. File taxes 2008 Excluded items (Table 2) are not subject to tax, but may have to be shown on your tax return. File taxes 2008 For information on the exclusion of pay for service in a combat zone and other tax benefits for combat zone participants, see Combat Zone Exclusion and Extension of Deadlines , later. File taxes 2008 Table 1. File taxes 2008 Included Items These items are included in gross income, unless the pay is for service in a combat zone. File taxes 2008 Basic pay • Active duty   Bonus pay • Career status   • Attendance at a designated service school     • Enlistment  • Officer   • Back wages     • Overseas extension   • CONUS COLA       • Reenlistment   • Drills         • Reserve training         • Training duty   Other pay  • Accrued leave          • High deployment per diem Special • Aviation career incentives      • Personal money allowances paid to pay • Career sea     high-ranking officers   • Diving duty      • Student loan repayment from programs   • Foreign duty (outside the 48 contiguous     such as the Department of Defense   states and the District of Columbia)     Educational Loan Repayment Program   • Foreign language proficiency     when year's service (requirement) is not   • Hardship duty     attributable to a combat zone   • Hostile fire or imminent danger         • Medical and dental officers   Incentive pay  • Submarine   • Nuclear-qualified officers      • Flight   • Optometry      • Hazardous duty   • Pharmacy      • High altitude/Low Opening (HALO)   • Special compensation for assistance with activities of daily living (SCAADL)         • Special duty assignment pay         • Veterinarian         • Voluntary Separation Incentive       Basic allowance for housing (BAH). File taxes 2008   You can still deduct mortgage interest and real estate taxes on your home if you pay these expenses with your BAH. File taxes 2008 Table 2. File taxes 2008 Excluded Items The exclusion for certain items applies whether the item is furnished in kind or is a reimbursement or allowance. File taxes 2008 There is no exclusion for the personal use of a government-provided vehicle. File taxes 2008 Combat  zone pay • Compensation for active service while in a combat zone Note: Limited amount for officers     • Housing and cost-of-living allowances abroad paid by the U. File taxes 2008 S. File taxes 2008 Government or by a foreign government         • OHA (Overseas Housing Allowance)                     Other pay • Defense counseling         • Disability, including payments received for injuries incurred as a direct result of a terrorist or military action         • Group-term life insurance   Moving • Dislocation   • Professional education   allowances • Military base realignment and   • ROTC educational and subsistence     closure benefit    allowances     (the exclusion is limited as   • State bonus pay for service in a     described above)   combat zone     • Move-in housing   • Survivor and retirement protection     • Moving household and   plan premiums     personal items   • Uniform allowances     • Moving trailers or mobile homes   • Uniforms furnished to enlisted     • Storage   personnel     • Temporary lodging and         temporary lodging expenses                 Travel • Annual round trip for dependent Death • Burial services   allowances students allowances • Death gratuity payments to     • Leave between consecutive   eligible survivors     overseas tours   • Travel of dependents to burial site     • Reassignment in a dependent         restricted status Family • Certain educational expenses for     • Transportation for you or your allowances dependents     dependents during ship overhaul   • Emergencies     or inactivation   • Evacuation to a place of safety     • Per diem   • Separation             In-kind military • Dependent-care assistance program Living • BAH (Basic Allowance for Housing)   benefits • Legal assistance allowances • BAS (Basic Allowance for Subsistence)     • Medical/dental care         • Commissary/exchange discounts         • Space-available travel on government aircraft           Death gratuity. File taxes 2008   Any death gratuity paid to a survivor of a member of the Armed Forces is excluded from gross income. File taxes 2008 Differential wage payments. File taxes 2008   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and that represent all or a portion of the wages the individual would have received from the employer if the individual was performing services for the employer. File taxes 2008 These amounts are taxable and cannot be excluded as combat pay. File taxes 2008 Military base realignment and closure benefit. File taxes 2008   Payments made under the Homeowners Assistance Program (HAP) generally are excluded from income. File taxes 2008 However, the excludable amount cannot be more than the maximum amount described in subsection (c) of 42 USC 3374 as in effect on November 6, 2009. File taxes 2008 Any part of the payment that is more than this limit is included in gross income. File taxes 2008 For more information about the HAP, see http://hap. File taxes 2008 usace. File taxes 2008 army. File taxes 2008 mil/Overview. File taxes 2008 html. File taxes 2008 Qualified reservist distribution (QRD). File taxes 2008   A QRD is a distribution to an individual of all or part of the individual's balance in a cafeteria plan or health flexible spending arrangement if: The individual was a reservist who was ordered or called to active duty for more than 179 days or for an indefinite period, and The distribution is made no sooner than the date the reservist was ordered or called to active duty and no later than the last day reimbursements could otherwise be made under the arrangement for the plan year which includes the date of the order or the call to duty. File taxes 2008 A QRD is included in gross income and is subject to employment taxes. File taxes 2008 The employer must include the QRD (reduced by after-tax contributions to the health flexible spending arrangement) as wages on Form W-2, Wage and Tax Statement. File taxes 2008 Thrift Savings Plan (TSP) distributions. File taxes 2008   If you participate in the Uniformed Services TSP and receive a distribution from your account, the distribution is generally included in your taxable income. File taxes 2008   If your contributions included tax-exempt combat zone pay, the part of the distribution attributable to those contributions is tax exempt. File taxes 2008 However, the earnings on the tax-exempt portion of the distribution are taxable. File taxes 2008 The TSP will provide a statement showing the taxable and non-taxable portions of the distribution. File taxes 2008 Roth Thrift Savings Plan (TSP) balance. File taxes 2008   You may be able to contribute to a designated Roth Account through the TSP known as the Roth TSP. File taxes 2008 Roth TSP contributions are after-tax contributions, subject to the same contribution limits as the traditional TSP. File taxes 2008 Qualified distributions from a Roth TSP are not included in your income. File taxes 2008 For more details, see Thrift Savings Accounts in Part II of Publication 721, Tax Guide to U. File taxes 2008 S. File taxes 2008 Civil Service Retirement Benefits. File taxes 2008 State bonus payments. File taxes 2008   Bonus payments made by a state (or a political subdivision thereof) to a member or former member of the uniformed services of the United States or to a dependent of such member are considered combat pay (and therefore may not be taxable) if the payments are made only because of the member's service in a combat zone. File taxes 2008 See Combat Zone , later, for a list of designated combat zones. File taxes 2008 Foreign Source Income If you are a U. File taxes 2008 S. File taxes 2008 citizen with income from sources outside the United States (foreign income), you must report all of that income (except for amounts that U. File taxes 2008 S. File taxes 2008 law allows you to exclude) on your tax return. File taxes 2008 This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2 or a Form 1099. File taxes 2008 This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). File taxes 2008 Certain taxpayers can exclude income earned in foreign countries. File taxes 2008 For 2013, this exclusion amount can be as much as $97,600. File taxes 2008 However, the foreign earned income exclusion does not apply to the wages and salaries of military and civilian employees of the U. File taxes 2008 S. File taxes 2008 Government. File taxes 2008 Employees of the U. File taxes 2008 S. File taxes 2008 Government include those who work at United States Armed Forces exchanges, commissioned and noncommissioned officers' messes, Armed Forces motion picture services, and similar personnel. File taxes 2008 Other foreign income earned by military personnel or their spouses may be eligible for the foreign earned income exclusion. File taxes 2008 For more information on the exclusion, see Publication 54. File taxes 2008 Residents of American Samoa may be able to exclude income from American Samoa. File taxes 2008 This possession exclusion does not apply to wages and salaries of military and civilian employees of the U. File taxes 2008 S. File taxes 2008 Government. File taxes 2008 If you need information on the possession exclusion, see Publication 570, Tax Guide for Individuals With Income From U. File taxes 2008 S. File taxes 2008 Possessions. File taxes 2008 Military Spouses Residency Relief Act (MSRRA) If you are the civilian spouse of an active duty U. File taxes 2008 S. File taxes 2008 military servicemember and your domicile is the same as the servicemember's, you can choose to keep your prior residence or domicile for tax purposes when you accompany the servicemember spouse, who is relocating under military orders to a new duty station in one of the 50 states, the District of Columbia, or a U. File taxes 2008 S. File taxes 2008 possession. File taxes 2008 See Publication 570 for more information. File taxes 2008 Domicile. File taxes 2008   Your domicile is the permanent legal home you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. File taxes 2008 It is not always where you presently live. File taxes 2008 Community Property The pay you earn as a member of the Armed Forces may be subject to community property laws depending on your marital status, your domicile, and the nature of the payment. File taxes 2008 The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. File taxes 2008 Marital status. File taxes 2008   Community property rules apply to married persons whose domicile during the tax year was in a community property state. File taxes 2008 The rules may affect your tax liability if you file separate returns or are divorced during the year. File taxes 2008 Nevada, Washington, and California domestic partners. File taxes 2008   A registered domestic partner in Nevada, Washington, or California generally must report half the combined income of the individual and his or her domestic partner. File taxes 2008 See Form 8958 and Publication 555, Community Property. File taxes 2008 Nature of the payment. File taxes 2008   Active duty military pay is subject to community property laws. File taxes 2008 Armed Forces retired or retainer pay may be subject to community property laws. File taxes 2008   For more information on community property laws, see Publication 555. File taxes 2008 Form W-2 Codes Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. File taxes 2008 Form W-2 also shows other amounts that you may find important in box 12. File taxes 2008 The amounts shown in box 12 are generally preceded by a code. File taxes 2008 A list of codes used in box 12 is shown, next. File taxes 2008 Form W-2 Reference Guide for Box 12 Codes A Uncollected social security or RRTA J Nontaxable sick pay T Adoption benefits   tax on tips             K 20% excise tax on excess golden V Income from exercise of B Uncollected Medicare tax on tips   parachute payments   nonstatutory stock option(s)             C Taxable cost of group-term life L Substantiated employee business W Employer contributions (including   insurance over $50,000   expense reimbursements   employee contributions through a           cafeteria plan) to an employee's D Elective deferrals under a section M Uncollected social security or RRTA   health savings account (HSA)   401(k) cash or deferred arrangement   tax on taxable cost of group-term life       plan (including a SIMPLE 401(k)   insurance over $50,000 (former Y Deferrals under a section 409A   arrangement)   employees only)   nonqualified deferred           compensation plan E Elective deferrals under a section N Uncollected Medicare tax on taxable       403(b) salary reduction agreement   cost of group-term life insurance Z Income under section 409A on a       over $50,000 (former employees only)   nonqualified deferred F Elective deferrals under a section       compensation plan   408(k)(6) salary reduction SEP P Excludable moving expense           reimbursements paid directly to AA Designated Roth contributions G Elective deferrals and employer   employee   under a section 401(k) plan   contributions (including nonelective           deferrals) to a section 457(b) Q Nontaxable combat pay BB Designated Roth contributions   deferred compensation plan       under a section 403(b) plan     R Employer contributions to an Archer     H Elective deferrals to a section   MSA DD Cost of employer-sponsored   501(c)(18)(D) tax-exempt       health coverage   organization plan S Employee salary reduction contributions under a section 408(p) SIMPLE  EE  Designated Roth contributions under a governmental section 457(b) plan  Note. File taxes 2008 For more information on these codes, see your Form(s) W-2. File taxes 2008 Adjustments to Income Adjusted gross income is your total income minus certain adjustments. File taxes 2008 The following adjustments are of particular interest to members of the Armed Forces. File taxes 2008 Armed Forces Reservists If you are a member of a reserve component of the Armed Forces and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct your unreimbursed travel expenses as an adjustment to income on line 24 of Form 1040, U. File taxes 2008 S. File taxes 2008 Individual Income Tax Return, rather than as a miscellaneous itemized deduction. File taxes 2008 Include all unreimbursed expenses from the time you leave home until the time you return home. File taxes 2008 The deduction is limited to the amount the federal government generally reimburses its employees for travel expenses. File taxes 2008 For more information about this limit, see Per Diem and Car Allowances in chapter 6 of Publication 463. File taxes 2008 Member of a reserve component. File taxes 2008   You are a member of a reserve component of the Armed Forces if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. File taxes 2008 How to report. File taxes 2008   If you have reserve-related travel that takes you more than 100 miles from home, you should first complete Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses. File taxes 2008 Then enter on Form 1040, line 24, the part of your expenses, up to the federal rate, included on Form 2106, line 10, or Form 2106-EZ, line 6, that is for reserve-related travel more than 100 miles from your home. File taxes 2008 Subtract this amount from the total on Form 2106, line 10, or Form 2106-EZ, line 6, and deduct the balance as an itemized deduction on Schedule A (Form 1040), line 21. File taxes 2008 Example. File taxes 2008 Captain Harris, a member of the Army Reserve, traveled to a location 220 miles from his home to perform his work in the reserves in April 2013. File taxes 2008 He incurred $1,549 of unreimbursed expenses consisting of $249 for mileage (440 miles × 56. File taxes 2008 5 cents per mile), $300 for meals, and $1,000 for lodging. File taxes 2008 He also had other deductible mileage expenses of $110 for several trips to a location 20 miles from his home. File taxes 2008 Only 50% of his meal expenses are deductible. File taxes 2008 He shows his total deductible travel expenses of $1,509 ($249 + $150 (50% of $300) + $1,000 + $110) on Form 2106, line 10. File taxes 2008 He enters the $1,399 ($249 + $150 + $1,000) for travel over 100 miles from home on Form 1040, line 24. File taxes 2008 He then subtracts that $1,399 from the amount on Form 2106, $1,509, and enters $110 on Schedule A (Form 1040), line 21. File taxes 2008 Individual Retirement Arrangements Generally, you can deduct the lesser of the contributions to your traditional individual retirement arrangement (IRA) for the year or the general limit (or spousal IRA limit, if applicable). File taxes 2008 However, if you or your spouse was covered by an employer-maintained retirement plan at any time during the year for which contributions were made, you may not be able to deduct all of the contributions. File taxes 2008 The Form W-2 you or your spouse receives from an employer has a box used to indicate whether you were covered for the year. File taxes 2008 The “Retirement plan” box should have a mark in it if you were covered. File taxes 2008 For purposes of a deduction for contributions to a traditional IRA, Armed Forces members (including reservists on active duty for more than 90 days during the year) are considered covered by an employer-maintained retirement plan. File taxes 2008 Individuals serving in the U. File taxes 2008 S. File taxes 2008 Armed Forces or in support of the U. File taxes 2008 S. File taxes 2008 Armed Forces in designated combat zones have additional time to make a qualified retirement contribution to an IRA. File taxes 2008 For more information on this extension of deadline provision, see Extension of Deadlines , later. File taxes 2008 For more information on IRAs, see Publication 590. File taxes 2008 Combat Pay For IRA purposes, your compensation includes nontaxable combat pay. File taxes 2008 This means that even though you do not have to include the combat pay in your gross income, you do include it in your compensation when figuring the limits on contributions and deductions of contributions to IRAs. File taxes 2008 Qualified Reservist Distributions A qualified reservist distribution is defined below. File taxes 2008 It is not subject to the 10% additional tax on early distributions from certain retirement plans. File taxes 2008 Definition. File taxes 2008   A distribution you receive is a qualified reservist distribution if the following requirements are met. File taxes 2008 You were ordered or called to active duty after September 11, 2001. File taxes 2008 You were ordered or called to active duty for a period of more than 179 days or for an indefinite period because you are a member of a reserve component (see Member of a reserve component , earlier, under Armed Forces Reservists. File taxes 2008 ) The distribution is from an IRA or from amounts attributable to elective deferrals under a section 401(k) or 403(b) plan or a similar arrangement. File taxes 2008 The distribution was made no earlier than the date of the order or call to active duty and no later than the close of the active duty period. File taxes 2008 Qualified Reservist Repayments You may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined earlier) you received. File taxes 2008 You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. File taxes 2008 You make these repayment contributions to an IRA, even if you received the qualified reservist distribution from a section 401(k) or 403(b) plan or a similar arrangement. File taxes 2008 Limit. File taxes 2008   Your qualified reservist repayments cannot be more than your qualified reservist distributions. File taxes 2008 When repayment contributions can be made. File taxes 2008   You cannot make these repayment contributions after the date that is 2 years after your active duty period ends. File taxes 2008 No deduction. File taxes 2008   You cannot deduct qualified reservist repayments. File taxes 2008 Figuring your IRA deduction. File taxes 2008   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. File taxes 2008 Reporting the repayment. File taxes 2008   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606, Nondeductible IRAs. File taxes 2008 Moving Expenses To deduct moving expenses, you generally must meet certain time and distance tests. File taxes 2008 However, if you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet these tests. File taxes 2008 You can deduct your unreimbursed moving expenses on Form 3903. File taxes 2008 Permanent change of station. File taxes 2008   A permanent change of station includes: A move from your home to your first post of active duty, A move from one permanent post of duty to another, and A move from your last post of duty to your home or to a nearer point in the United States. File taxes 2008 The move must occur within 1 year of ending your active duty or within the period allowed under the Joint Federal Travel Regulations. File taxes 2008 Spouse and dependents. File taxes 2008   If you are the spouse or dependent of a member of the Armed Forces who deserts, is imprisoned, or dies, a permanent change of station for you includes a move to: The member's place of enlistment or induction, Your, or the member's, home of record, or A nearer point in the United States. File taxes 2008   If the military moves you to or from a different location than the member, the moves are treated as a single move to your new main job location. File taxes 2008 Services or reimbursements provided by the government. File taxes 2008   Do not include in your income the value of moving and storage services provided by the government because of a permanent change of station. File taxes 2008 Similarly, do not include in income amounts received as a dislocation allowance, temporary lodging expense, temporary lodging allowance, or move-in housing allowance. File taxes 2008   Generally, if the total reimbursements or allowances that you receive from the government because of the move are more than your actual moving expenses, the excess is included in your wages on Form W-2. File taxes 2008 However, if any reimbursements or allowances (other than dislocation, temporary lodging, temporary lodging expense, or move-in housing allowances) exceed the cost of moving and the excess is not included in your wages on Form W-2, the excess still must be included in gross income on Form 1040, line 7. File taxes 2008   Use Form 3903 to deduct qualified expenses that exceed your reimbursements and allowances (including dislocation, temporary lodging, temporary lodging expense, or move-in housing allowances that are excluded from gross income). File taxes 2008   If you must relocate and your spouse and dependents move to or from a different location, do not include in income reimbursements, allowances, or the value of moving and storage services provided by the government to move you and your spouse and dependents to and from the separate locations. File taxes 2008   Do not deduct any expenses for moving services that were provided by the government. File taxes 2008 Also, do not deduct any expenses that were reimbursed by an allowance you did not include in income. File taxes 2008 Deductible Moving Expenses If you move because of a permanent change of station, you can deduct the reasonable unreimbursed expenses of moving you and members of your household. File taxes 2008 You can deduct expenses (if not reimbursed or furnished in kind) for: Moving household goods and personal effects, and Travel. File taxes 2008 Moving household goods and personal effects. File taxes 2008   You can deduct the expenses of moving your household goods and personal effects, including expenses for hauling a trailer, packing, crating, in-transit storage, and insurance. File taxes 2008 You cannot deduct expenses for moving furniture or other goods you bought on the way from your old home to your new home. File taxes 2008 Storing and insuring household goods and personal effects. File taxes 2008   You can include only the cost of storing and insuring your household goods and personal effects within any period of 30 consecutive days after the day these goods and effects are moved from your former home and before they are delivered to your new home. File taxes 2008 Travel. File taxes 2008   You can deduct the expenses of traveling (including lodging but not meals) from your old home to your new home, including car expenses and air fare. File taxes 2008 You can deduct as car expenses either: Your actual out-of-pocket expenses such as gas and oil, or The standard mileage rate of 24 cents a mile. File taxes 2008   You can add parking fees and tolls to the amount claimed under either method. File taxes 2008 You cannot deduct any expenses for meals. File taxes 2008 You cannot deduct the cost of unnecessary side trips or lavish and extravagant lodging. File taxes 2008 Member of your household. File taxes 2008   A member of your household is anyone who has both your former home and your new home as his or her main home. File taxes 2008 It does not include a tenant or employee unless you can claim that person as a dependent. File taxes 2008 Foreign Moves A foreign move is a move from the United States or its possessions to a foreign country or from one foreign country to another foreign country. File taxes 2008 A move from a foreign country to the United States or its possessions is not a foreign move. File taxes 2008 For a foreign move, the deductible moving expenses described earlier are expanded to include the reasonable expenses of: Moving your household goods and personal effects to and from storage, and Storing these items for part or all of the time the new job location remains your main job location. File taxes 2008 The new job location must be outside the United States. File taxes 2008 Reporting Moving Expenses Figure moving expense deductions on Form 3903. File taxes 2008 Carry the deduction from Form 3903 to Form 1040, line 26. File taxes 2008 For more information, see Publication 521 and Form 3903. File taxes 2008 Combat Zone Exclusion If you are a member of the U. File taxes 2008 S. File taxes 2008 Armed Forces who serves in a combat zone (defined later), you can exclude certain pay from your income. File taxes 2008 This pay is generally referred to as “combat pay. File taxes 2008 ” You do not actually need to show the exclusion on your tax return because income that qualifies for the combat zone exclusion is not included in the wages reported on your Form W-2. File taxes 2008 (See Form W-2 , later. File taxes 2008 ) The month for which you receive the pay must be a month in which you either served in a combat zone or were hospitalized as a result of wounds, disease, or injury incurred while serving in the combat zone. File taxes 2008 You do not have to receive the excluded pay while you are in a combat zone, are hospitalized, or in the same year you served in a combat zone. File taxes 2008 If you are an enlisted member, warrant officer, or commissioned warrant officer, you can exclude the following amounts from your income. File taxes 2008 (Other officer personnel are discussed under Amount of Exclusion , later. File taxes 2008 ) Active duty pay earned in any month you served in a combat zone. File taxes 2008 Imminent danger/hostile fire pay. File taxes 2008 A reenlistment bonus if the voluntary extension or reenlistment occurs in a month you served in a combat zone. File taxes 2008 Pay for accrued leave earned in any month you served in a combat zone. File taxes 2008 The Department of Defense must determine that the unused leave was earned during that period. File taxes 2008 Pay received for duties as a member of the Armed Forces in clubs, messes, post and station theaters, and other nonappropriated fund activities. File taxes 2008 The pay must be earned in a month you served in a combat zone. File taxes 2008 Awards for suggestions, inventions, or scientific achievements you are entitled to because of a submission you made in a month you served in a combat zone. File taxes 2008 Student loan repayments. File taxes 2008 If the entire year of service required to earn the repayment was performed in a combat zone, the entire repayment made because of that year of service is excluded. File taxes 2008 If only part of that year of service was performed in a combat zone, only part of the repayment qualifies for exclusion. File taxes 2008 For example, if you served in a combat zone for 5 months, 5/12 of your repayment qualifies for exclusion. File taxes 2008 Retirement pay and pensions do not qualify for the combat zone exclusion. File taxes 2008 Partial (month) service. File taxes 2008   If you serve in a combat zone for any part of one or more days during a particular month, you are entitled to an exclusion for that entire month. File taxes 2008 Form W-2. File taxes 2008   The wages shown in box 1 of your 2013 Form W-2 should not include military pay excluded from your income under the combat zone exclusion provisions. File taxes 2008 If it does, you will need to get a corrected Form W-2 from your finance office. File taxes 2008   You cannot exclude as combat pay any wages shown in box 1 of Form W-2. File taxes 2008 Combat Zone A combat zone is any area the President of the United States designates by Executive Order as an area in which the U. File taxes 2008 S. File taxes 2008 Armed Forces are engaging or have engaged in combat. File taxes 2008 An area usually becomes a combat zone and ceases to be a combat zone on the dates the President designates by Executive Order. File taxes 2008 Afghanistan area. File taxes 2008   By Executive Order No. File taxes 2008 13239, Afghanistan (and airspace above) was designated as a combat zone beginning September 19, 2001. File taxes 2008 On December 14, 2001, the following countries were certified by the Department of Defense for combat zone tax benefits due to their direct support of military operations in the Afghanistan combat zone. File taxes 2008 Djibouti. File taxes 2008 Jordan. File taxes 2008 Kyrgyzstan. File taxes 2008 Pakistan. File taxes 2008 Somalia. File taxes 2008 Syria. File taxes 2008 Tajikistan. File taxes 2008 Uzbekistan. File taxes 2008 Yemen. File taxes 2008 The Philippines. File taxes 2008  Note. File taxes 2008 For the Philippines only, the personnel must be deployed in conjunction with Operation Enduring Freedom supporting military operations in the Afghanistan combat zone. File taxes 2008 The Kosovo area. File taxes 2008   By Executive Order No. File taxes 2008 13119, the following locations (including airspace above) were designated as a combat zone beginning March 24, 1999. File taxes 2008 Federal Republic of Yugoslavia (Serbia/Montenegro). File taxes 2008 Albania. File taxes 2008 Kosovo. File taxes 2008 The Adriatic Sea. File taxes 2008 The Ionian Sea—north of the 39th parallel. File taxes 2008 Note. File taxes 2008 The combat zone designation for Montenegro and Kosovo (previously a province within Serbia) under Executive Order 13119 remains in force even though Montenegro and Kosovo became independent nations since EO 13119 was signed. File taxes 2008 Arabian peninsula. File taxes 2008   By Executive Order No. File taxes 2008 12744, the following locations (and airspace above) were designated as a combat zone beginning January 17, 1991. File taxes 2008 The Persian Gulf. File taxes 2008 The Red Sea. File taxes 2008 The Gulf of Oman. File taxes 2008 The part of the Arabian Sea that is north of 10 degrees north latitude and west of 68 degrees east longitude. File taxes 2008 The Gulf of Aden. File taxes 2008 The total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates. File taxes 2008 Jordan which is in direct support of the Arabian Peninsula. File taxes 2008 Serving in a Combat Zone You are considered to be serving in a combat zone if you are either assigned on official temporary duty to a combat zone or you qualify for hostile fire/imminent danger pay while in a combat zone. File taxes 2008 Service in a combat zone includes any periods you are absent from duty because of sickness, wounds, or leave. File taxes 2008 If, as a result of serving in a combat zone, a person becomes a prisoner of war or is missing in action, that person is considered to be serving in the combat zone so long as he or she keeps that status for military pay purposes. File taxes 2008 Hospitalized While Serving in a Combat Zone If you are hospitalized while serving in a combat zone, the wound, disease, or injury causing the hospitalization will be presumed to have been incurred while serving in the combat zone unless there is clear evidence to the contrary. File taxes 2008 Example. File taxes 2008 You are hospitalized for a specific disease in a combat zone where you have been serving for 3 weeks, and the disease for which you are hospitalized has an incubation period of 2 to 4 weeks. File taxes 2008 The disease is presumed to have been incurred while you were serving in the combat zone. File taxes 2008 On the other hand, if the incubation period of the disease is 1 year, the disease would not have been incurred while you were serving in the combat zone. File taxes 2008 Hospitalized After Leaving a Combat Zone In some cases, the wound, disease, or injury may have been incurred while you were serving in the combat zone, even though you were not hospitalized until after you left. File taxes 2008 In that case, you can exclude military pay earned while you are hospitalized as a result of the wound, disease, or injury. File taxes 2008 Example. File taxes 2008 You were hospitalized for a specific disease 3 weeks after you left the combat zone. File taxes 2008 The incubation period of the disease is from 2 to 4 weeks. File taxes 2008 The disease is presumed to have been incurred while serving in the combat zone. File taxes 2008 Nonqualifying Presence in Combat Zone None of the following types of military service qualify as service in a combat zone. File taxes 2008 Presence in a combat zone while on leave from a duty station located outside the combat zone. File taxes 2008 Passage over or through a combat zone during a trip between two points that are outside a combat zone. File taxes 2008 Presence in a combat zone solely for your personal convenience. File taxes 2008 Service Outside Combat Zone Considered Service in Combat Zone Military service outside a combat zone is considered to be performed in a combat zone if: The Department of Defense designates that the service is in direct support of military operations in the combat zone, and The service qualifies you for special military pay for duty subject to hostile fire or imminent danger. File taxes 2008 Military pay received for this service will qualify for the combat zone exclusion if all of the requirements (other than service in a combat zone) are met and the pay is verifiable by reference to military pay records. File taxes 2008 Amount of Exclusion If you are an enlisted member, warrant officer, or commissioned warrant officer and you serve in a combat zone during any part of a month, you can exclude all of your military pay for that month. File taxes 2008 It should not be included in the wages reported on your Form W-2. File taxes 2008 You also can exclude military pay earned while you are hospitalized as a result of wounds, disease, or injury incurred in the combat zone. File taxes 2008 If you are hospitalized, you cannot exclude any military pay received for any month of service that begins more than 2 years after the end of combat activities in the combat zone. File taxes 2008 Your hospitalization does not have to be in the combat zone. File taxes 2008 If you are a commissioned officer (other than a commissioned warrant officer), you can exclude your pay according to the rules just discussed. File taxes 2008 However, the amount of your exclusion is limited to the highest rate of enlisted pay (plus imminent danger/hostile fire pay you received) for each month during any part of which you served in a combat zone or were hospitalized as a result of your service there. File taxes 2008 Alien Status For tax purposes, an alien is an individual who is not a U. File taxes 2008 S. File taxes 2008 citizen. File taxes 2008 An alien is in one of three categories: resident, nonresident, or dual-status. File taxes 2008 Placement in the correct category is crucial in determining what income to report and what forms to file. File taxes 2008 Under peacetime enlistment rules, you generally cannot enlist in the Armed Forces unless you are a citizen or have been legally admitted to the United States for permanent residence. File taxes 2008 If you are an alien enlistee in the Armed Forces, you are probably a resident alien. File taxes 2008 If, under an income tax treaty, you are considered a resident of a foreign country, see your base legal officer. File taxes 2008 Other aliens who are in the United States only because of military assignments and who have a home outside the United States are nonresident aliens. File taxes 2008 Guam and Puerto Rico have special rules. File taxes 2008 Residents of those areas should contact their taxing authority with their questions. File taxes 2008 Most members of the Armed Forces are U. File taxes 2008 S. File taxes 2008 citizens or resident aliens. File taxes 2008 However, if you have questions about your alien status or the alien status of your dependents or spouse, you should read the information in the following paragraphs and see Publication 519. File taxes 2008 Resident Aliens You are considered a resident alien of the United States for tax purposes if you meet either the “green card test” or the “substantial presence test” for the calendar year (January 1–December 31). File taxes 2008 If you meet the substantial presence test for 2014, you did not meet either the green card test or the substantial presence test for 2012 or 2013, and you did not choose to be treated as a resident for part of 2012, you may be able to choose to be treated as a U. File taxes 2008 S. File taxes 2008 resident for part of 2013. File taxes 2008 See First-Year Choice in Publication 519. File taxes 2008 These tests are explained in Publication 519. File taxes 2008 Generally, resident aliens are taxed on their worldwide income and file the same tax forms as U. File taxes 2008 S. File taxes 2008 citizens. File taxes 2008 Treating nonresident alien spouse as resident alien. File taxes 2008   A nonresident alien spouse can be treated as a resident alien if all the following conditions are met. File taxes 2008 One spouse is a U. File taxes 2008 S. File taxes 2008 citizen or resident alien at the end of the tax year. File taxes 2008 That spouse is married to the nonresident alien at the end of the tax year. File taxes 2008 You both choose to treat the nonresident alien spouse as a resident alien. File taxes 2008 Making the choice. File taxes 2008   Both you and your spouse must sign a statement and attach it to your joint return for the first tax year for which the choice applies. File taxes 2008 Include in the statement: A declaration that one spouse was a nonresident alien and the other was a U. File taxes 2008 S. File taxes 2008 citizen or resident alien on the last day of the year, A declaration that both spouses choose to be treated as U. File taxes 2008 S. File taxes 2008 residents for the entire tax year, and The name, address, and taxpayer identification number (social security number or individual taxpayer identification number) of each spouse. File taxes 2008 If the nonresident alien spouse is not eligible to get a social security number, he or she should file Form W-7, Application for IRS Individual Taxpayer Identification Number. File taxes 2008    Once you make this choice, the nonresident alien spouse's worldwide income is subject to U. File taxes 2008 S. File taxes 2008 tax. File taxes 2008 If the nonresident alien spouse has substantial foreign income, there may be no advantage to making this choice. File taxes 2008 Ending the choice. File taxes 2008   Once you make this choice, it applies to all later years unless one of the following situations occurs. File taxes 2008 You or your spouse revokes the choice. File taxes 2008 You or your spouse dies. File taxes 2008 You and your spouse become legally separated under a decree of divorce or separate maintenance. File taxes 2008 The Internal Revenue Service ends the choice because you or your spouse kept inadequate records. File taxes 2008 For specific details on these situations, see Publication 519. File taxes 2008   If the choice is ended for any of these reasons, neither spouse can make the choice for any later year. File taxes 2008 Choice not made. File taxes 2008   If you and your nonresident alien spouse do not make this choice: You cannot file a joint return. File taxes 2008 You can file as married filing separately, or head of household if you qualify. File taxes 2008 You can claim an exemption for your nonresident alien spouse if he or she has no gross income for U. File taxes 2008 S. File taxes 2008 tax purposes and is not another taxpayer's dependent. File taxes 2008 The nonresident alien spouse generally does not have to file a federal income tax return if he or she had no income from sources in the United States. File taxes 2008 If a return has to be filed, see the next discussion. File taxes 2008 The nonresident alien spouse is not eligible for the earned income credit if he or she has to file a return. File taxes 2008 Nonresident Aliens If you are an alien who does not meet the requirements discussed earlier to be a resident alien, you are a nonresident alien. File taxes 2008 If you are required to file a federal tax return, you must file either Form 1040NR, U. File taxes 2008 S. File taxes 2008 Nonresident Alien Income Tax Return, or Form 1040NR-EZ, U. File taxes 2008 S. File taxes 2008 Income Tax Return for Certain Nonresident Aliens With No Dependents. File taxes 2008 See the form instructions for information on who must file and filing status. File taxes 2008 If you are a nonresident alien, you generally must pay tax on income from sources in the United States. File taxes 2008 Your income from conducting a trade or business in the United States is taxed at graduated U. File taxes 2008 S. File taxes 2008 tax rates. File taxes 2008 Other income from U. File taxes 2008 S. File taxes 2008 sources is taxed at a flat 30% (or lower treaty) rate. File taxes 2008 For example, dividends from a U. File taxes 2008 S. File taxes 2008 corporation paid to a nonresident alien generally are subject to a 30% (or lower treaty) rate. File taxes 2008 Dual-Status Aliens You can be both a nonresident and resident alien during the same tax year. File taxes 2008 This usually occurs in the year you arrive in or depart from the United States. File taxes 2008 If you are a dual-status alien, you are taxed on income from all sources for the part of the year you are a resident alien. File taxes 2008 Generally, for the part of the year you are a nonresident alien, you are taxed only on income from sources in the United States. File taxes 2008 Sale of Home You may not have to pay tax on all or part of the gain from the sale of your main home. File taxes 2008 Usually, your main home is the one you live in most of the time. File taxes 2008 It can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. File taxes 2008 You generally can exclude up to $250,000 of gain ($500,000, in most cases, if married filing a joint return) realized on the sale or exchange of a main home in 2013. File taxes 2008 The exclusion is allowed each time you sell or exchange a main home, but generally not more than once every 2 years. File taxes 2008 To be eligible, during the 5-year period ending on the date of the sale, you must have owned the home for at least 2 years (the ownership test), and lived in the home as your main home for at least 2 years (the use test). File taxes 2008 Exception to ownership and use tests. File taxes 2008   You can exclude gain, but the maximum amount of gain you can exclude will be reduced if you do not meet the ownership and use tests due to a move to a new permanent duty station. File taxes 2008 5-year test period suspended. File taxes 2008   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty as a member of the Armed Forces. File taxes 2008 This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. File taxes 2008 Example. File taxes 2008 David bought and moved into a home in 2005. File taxes 2008 He lived in it as his main home for 2½ years. File taxes 2008 For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. File taxes 2008 He then sold the home at a gain in 2013. File taxes 2008 To meet the use test, David chooses to suspend the 5-year test period for the 6 years he was on qualifying official extended duty. File taxes 2008 This means he can disregard those 6 years. File taxes 2008 Therefore, David's 5-year test period consists of the 5 years before he went on qualifying official extended duty. File taxes 2008 He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. File taxes 2008 Period of suspension. File taxes 2008   The period of suspension cannot last more than 10 years. File taxes 2008 You cannot suspend the 5-year period for more than one property at a time. File taxes 2008 You can revoke your choice to suspend the 5-year period at any time. File taxes 2008 Qualified official extended duty. File taxes 2008   You are on qualified official extended duty if you serve on extended duty either: At a duty station at least 50 miles from your main home, or While you live in Government quarters under Government orders. File taxes 2008   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. File taxes 2008 Property used for rental or business. File taxes 2008   You may be able to exclude your gain from the sale of a home that you have used as a rental property or for business. File taxes 2008 However, you must meet the ownership and use tests discussed in Publication 523. File taxes 2008 Nonqualified use. File taxes 2008   If the sale of your main home results in a gain that is allocated to one or more period(s) of nonqualified use, you cannot exclude that gain from your income. File taxes 2008   Nonqualified use means any period after 2008 when neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions. File taxes 2008 For example, a period of nonqualified use does not include any period (not to exceed a total of 10 years) during which you or your spouse is serving on qualified official extended duty. File taxes 2008 Loss. File taxes 2008   You cannot deduct a loss from the sale of your main home. File taxes 2008 More information. File taxes 2008   For more information, see Publication 523. File taxes 2008 Foreclosures There may be tax consequences as a result of compensation payments for foreclosures. File taxes 2008 Payments made for violations of the Service Members Civil Relief Act (SCRA). File taxes 2008   All service members who received a settlement payment reported on a Form 1099 may need to report the amount on their tax return. File taxes 2008 Generally, you must include settlement payments in income. File taxes 2008 However, the tax treatment of settlement payments will depend on the facts and circumstances. File taxes 2008 Lump Sum Portion of Settlement Payment. File taxes 2008    Generally, you must include the lump sum payment in gross income. File taxes 2008 In limited circumstances you may be able to exclude part or all of the lump sum payment from gross income. File taxes 2008 For example, you may qualify to exclude part or all of the payment from gross income if you can show that the payment was made to reimburse specific nondeductible expenses (such as living expenses) you incurred because of the SCRA violation. File taxes 2008 Interest Payment on Lump Sum Portion of Settlement Payment. File taxes 2008    You must include any interest on the lump sum portion of your settlement payment in your income. File taxes 2008 Lost Equity Portion of Settlement Payment. File taxes 2008    If you lost your main home in foreclosure, you should treat the lost equity payment as an additional amount you received on the foreclosure of the home. File taxes 2008 You will have a gain on the foreclosure only if the sum of the lost equity payment and the value of the main home at foreclosure is more than what you paid for the home. File taxes 2008 In many cases, this gain may be excluded from income. File taxes 2008 For more information on the rules for excluding all or part of any gain from the sale (including a foreclosure) of a main home, see Pub. File taxes 2008 523, Selling Your Home. File taxes 2008 The rules that apply to a lost equity payment you received for the foreclosure of a property that was not your main home are different. File taxes 2008    To find rules for reporting gain or loss on the foreclosure of property that was not your main home, see Pub. File taxes 2008 544, Sales and Other Dispositions of Assets. File taxes 2008 Interest Payment on Lost Equity Portion of Settlement Payment. File taxes 2008    You must include any interest on the lost equity portion of your settlement payment in your income. File taxes 2008 Itemized Deductions To figure your taxable income, you must subtract either your standard deduction or your itemized deductions from adjusted gross income. File taxes 2008 For information on the standard deduction, see Publication 501. File taxes 2008 Itemized deductions are figured on Schedule A (Form 1040). File taxes 2008 This chapter discusses miscellaneous itemized deductions of particular interest to members of the Armed Forces. File taxes 2008 For information on other itemized deductions, see the publications listed below. File taxes 2008 Publication 502, Medical and Dental Expenses. File taxes 2008 Publication 526, Charitable Contributions. File taxes 2008 Publication 547, Casualties, Disasters, and Thefts. File taxes 2008 Publication 550, Investment Income and Expenses. File taxes 2008 You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. File taxes 2008 For information on deductions that are not subject to the 2% limit, see Publication 529. File taxes 2008 Employee Business Expenses Deductible employee business expenses generally are miscellaneous itemized deductions subject to the 2% limit. File taxes 2008 Certain employee business expenses are deductible as adjustments to income. File taxes 2008 For information on many employee business expenses, see Publication 463. File taxes 2008 Generally, you must file Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses, to claim these expenses. File taxes 2008 You do not have to file Form 2106 or Form 2106-EZ if you are claiming only unreimbursed expenses for uniforms, professional society dues, and work-related educational expenses (all discussed later). File taxes 2008 You can deduct these expenses directly on Schedule A (Form 1040). File taxes 2008 Reimbursement. File taxes 2008   Generally, to receive advances, reimbursements, or other allowances from the government, you must adequately account for your expenses and return any excess reimbursement. File taxes 2008 Your reimbursed expenses are not deductible. File taxes 2008   If your expenses are more than your reimbursement, the excess expenses are deductible (subject to the 2% limit) if you can prove them. File taxes 2008 You must file Form 2106 to report these expenses. File taxes 2008   You can use the shorter Form 2106-EZ if you meet all three of the following conditions. File taxes 2008 You are an employee deducting expenses related to your job. File taxes 2008 You were not reimbursed by your employer for your expenses. File taxes 2008 (Amounts included in box 1 of Form W-2 are not considered reimbursements. File taxes 2008 ) If you claim car expenses, you use the standard mileage rate. File taxes 2008    For 2013, the standard mileage rate is 56. File taxes 2008 5 cents a mile for all business miles driven. File taxes 2008 This rate is adjusted periodically. File taxes 2008 Travel Expenses You can deduct unreimbursed travel expenses only if they are incurred while you are traveling away from home. File taxes 2008 If you are a member of the U. File taxes 2008 S. File taxes 2008 Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. File taxes 2008 You cannot deduct your expenses for meals and lodging while at your permanent duty station. File taxes 2008 You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. File taxes 2008 A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a home aboard ship for travel expense purposes. File taxes 2008 To be deductible, your travel expenses must be work related. File taxes 2008 You cannot deduct any expenses for personal travel, such as visits to family while on furlough, leave, or liberty. File taxes 2008 Away from home. File taxes 2008   Home is your permanent duty station (which can be a ship or base), regardless of where you or your family live. File taxes 2008 You are away from home if you are away from your permanent duty station substantially longer than an ordinary day's work and you need to get sleep or rest to meet the demands of your work while away from home. File taxes 2008   Examples of deductible travel expenses include: Expenses for business-related meals (generally limited to 50% of your unreimbursed cost), lodging, taxicabs, business telephone calls, tips, laundry, and dry cleaning while you are away from home on temporary duty or temporary additional duty, and Expenses of carrying out official business while on “No Cost” orders. File taxes 2008    You cannot deduct any expenses for travel away from home if the temporary assignment in a single location is realistically expected to last (and does in fact last) for more than 1 year. File taxes 2008 This rule may not apply if you are participating in a federal crime investigation or prosecution. File taxes 2008 For more information, see Publication 463 and the Form 2106 instructions. File taxes 2008 Transportation Expenses These expenses include the ordinary and necessary costs of: Getting from one workplace to another when you are not away from home, Going to a business meeting away from your regular workplace, and Getting from your home to a temporary workplace when you have a regular place of work. File taxes 2008 These expenses include the costs of transportation by air, bus, rail, taxi, and driving and maintaining your car. File taxes 2008 Transportation expenses incurred while traveling away from home are included with your travel expenses, discussed earlier. File taxes 2008 However, if you use your car while traveling away from home overnight, see the rules in chapter 4 of Publication 463 to figure your car expense deduction. File taxes 2008 If you must go from one workplace to another while on duty (for example, as a courier or to attend meetings) without being away from home, your unreimbursed transportation expenses are deductible. File taxes 2008 However, the expenses of getting to and from your regular place of work (commuting) are not deductible. File taxes 2008 Temporary work location. File taxes 2008   If you have one or more regular places of business away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location. File taxes 2008   Generally, if your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary. File taxes 2008   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. File taxes 2008 If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. File taxes 2008    If you do not have a regular place of business, but you ordinarily work in the metropolitan area where you live, you can deduct daily transportation expenses between your home and a temporary work site outside your metropolitan area. File taxes 2008 However, you cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. File taxes 2008 These are nondeductible commuting costs. File taxes 2008 Armed Forces reservists. File taxes 2008   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. File taxes 2008 You can deduct the expense of getting from one workplace to the other. File taxes 2008 You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. File taxes 2008 In this case, your transportation generally is a nondeductible commuting expense. File taxes 2008 However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. File taxes 2008   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. File taxes 2008 If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. File taxes 2008 See Armed Forces Reservists under Adjustments to Income, earlier. File taxes 2008 Uniforms You usually cannot deduct the expenses for uniform cost and upkeep. File taxes 2008 Generally, you must wear uniforms when on duty and you are allowed to wear them when off duty. File taxes 2008 If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of the uniforms, but you must reduce your expenses by any allowance or reimbursement you receive. File taxes 2008 Unreimbursed expenses for the cost and upkeep of the following articles are deductible. File taxes 2008 Military battle dress uniforms and utility uniforms that you cannot wear when off duty. File taxes 2008 Articles not replacing regular clothing, including insignia of rank, corps devices, epaulets, aiguillettes, and swords. File taxes 2008 Reservists' uniforms if you can wear the uniform only while performing duties as a reservist. File taxes 2008 Professional Dues You can deduct unreimbursed dues paid to professional societies directly related to your military position. File taxes 2008 However, you cannot deduct amounts paid to an officers' club or a noncommissioned officers' club. File taxes 2008 Example. File taxes 2008 Lieutenant Margaret Allen, an electrical engineer at Maxwell Air Force Base, can deduct professional dues paid to the American Society of Electrical Engineers. File taxes 2008 Educational Expenses You can deduct the unreimbursed costs of qualifying work-related education. File taxes 2008 This is education that meets at least one of the following two tests. File taxes 2008 The education is required by your employer or the law to keep your present salary, status, or job. File taxes 2008 The required education must serve a bona fide business purpose of your employer. File taxes 2008 The education maintains or improves skills needed in your present work. File taxes 2008 However, even if the education meets one or both of the above tests, it is not qualifying education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. File taxes 2008 You can deduct the expenses for qualifying work-related education even if the education could lead to a degree. File taxes 2008 Example 1. File taxes 2008 Lieutenant Colonel Mason has a degree in financial management and is in charge of base finances at her post of duty. File taxes 2008 She took an advanced finance course. File taxes 2008 She already meets the minimum qualifications for her job. File taxes 2008 By taking the course, she is improving skills in her current position. File taxes 2008 The course does not qualify her for a new trade or business. File taxes 2008 She can deduct educational expenses that are more than the educational allowance she received. File taxes 2008 Example 2. File taxes 2008 Major Williams worked in the military base legal office as a legal intern. File taxes 2008 He was placed in excess leave status by his employer to attend law school. File taxes 2008 He paid all his educational expenses and was not reimbursed. File taxes 2008 After obtaining his law degree, he passed the state bar exam and worked as a judge advocate. File taxes 2008 His educational expenses are not deductible because the law degree qualified him for a new trade or business, even though the education maintained and improved his skills in his work. File taxes 2008 Travel to obtain education. File taxes 2008   If your work-related education qualifies, you can deduct the costs of travel, including meals (subject to the 50% limit), and lodging, if the main purpose of the trip is to obtain the education. File taxes 2008   You cannot deduct the cost of travel that is itself a form of education, even if it is directly related to your duties in your work or business. File taxes 2008 Transportation for education. File taxes 2008   If your work-related education qualifies for a deduction, you can deduct the costs of transportation to obtain that education. File taxes 2008 However, you cannot deduct the cost of services provided in kind, such as base-provided transportation to or from class. File taxes 2008 Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. File taxes 2008   If you need more information on educational expenses, see Publication 970. File taxes 2008 Repayments If you had to repay to your employer an amount that you included in your income in an earlier year, you may be able to deduct the repaid amount from your income for the year in which you repaid it. File taxes 2008 Repayment of $3,000 or less. File taxes 2008   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. File taxes 2008 If you reported it as wages, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. File taxes 2008 Repayment over $3,000. File taxes 2008   If the amount you repaid was more than $3,000, see Repayments in Publication 525. File taxes 2008 Credits After you have figured your taxable income and tax liability, you can determine if you are entitled to any tax credits. File taxes 2008 This publication discusses the first-time homebuyer credit, child tax credit, earned income credit, and credit for excess social security tax withheld. File taxes 2008 For information on other credits, see your tax form instructions. File taxes 2008 First-Time Homebuyer Credit The first-time homebuyer credit is not available for homes purchased after 2011. File taxes 2008 In 2011, this credit had already expired for most taxpayers, however, certain members of the uniformed services and Foreign Service and certain employees of the intelligence community could claim the credit for homes purchased in 2011. File taxes 2008 If you bought the home (and claimed the credit) after 2008, you generally must repay the credit if you dispose of the home or the home stops being your main home within the 36-month period beginning on the purchase date. File taxes 2008 If the home continues to be your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit. File taxes 2008 If you bought your home in 2008, you generally must repay the credit over a 15-year period in 15 equal installments. File taxes 2008 For more information, see Form 5405, Repayment of the First-Time Homebuyer Credit, and its instructions. File taxes 2008 Child Tax Credit The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children. File taxes 2008 The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child tax credit. File taxes 2008 The child tax credit is not the same as the credit for child and dependent care expenses. File taxes 2008 See Publication 503 for information on the credit for child and dependent care expenses. File taxes 2008 Qualifying Child A qualifying child for purposes of the child tax credit is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was under age 17 at the end of 2013, Did not provide over half of his or her own support for 2013, Lived with you for more than half of 2013 (see Exceptions to time lived with you, later), Is claimed as a dependent on your return, Does not file a joint return for the year (or files it only as a claim for refund), and Was a U. File taxes 2008 S. File taxes 2008 citizen, a U. File taxes 2008 S. File taxes 2008 national, or a U. File taxes 2008 S. File taxes 2008 resident alien. File taxes 2008 If the child was adopted, see Adopted child . File taxes 2008 For each qualifying child you must check the box on Form 1040 or Form 1040A, line 6c, column (4). File taxes 2008 Exceptions to time lived with you. File taxes 2008   A child is considered to have lived with you for all of 2013 if the child was born or died in 2013 and your home was this child's home for the entire time he or she was alive. File taxes 2008 Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you. File taxes 2008   There are also exceptions for kidnapped children and children of divorced or separated parents. File taxes 2008 For details, see Publication 501. File taxes 2008 Qualifying child of more than one person. File taxes 2008   A special rule applies if your qualifying child is the qualifying child of more than one person. File taxes 2008 For details, see Publication 501. File taxes 2008 Adopted child. File taxes 2008   An adopted child is always treated as your own child. File taxes 2008 An adopted child includes a child lawfully placed with you for legal adoption. File taxes 2008   If you are a U. File taxes 2008 S. File taxes 2008 citizen or U. File taxes 2008 S. File taxes 2008 national and your adopted child lived with you as a member of your household all year, that child meets condition (7) above to be a qualifying child for the child tax credit. File taxes 2008 Amount of Credit The maximum amount you can claim for the credit is $1,000 for each qualifying child. File taxes 2008 Limits on the credit. File taxes 2008   You must reduce your child tax credit if either (1) or (2), below, applies. File taxes 2008 The amount on Form 1040, line 46, or Form 1040A, line 28, is less than the credit. File taxes 2008 If the amount is zero, you cannot take this credit because there is no tax to reduce. File taxes 2008 However, you may be able to take the additional child tax credit. File taxes 2008 See Additional Child Tax Credit , later. File taxes 2008 Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status. File taxes 2008 Married filing jointly — $110,000. File taxes 2008 Single, head of household,  or qualifying widow(er) — $75,000. File taxes 2008 Married filing separately — $55,000. File taxes 2008 Modified AGI. File taxes 2008   For purposes of the child tax credit, your modified AGI is the amount on Form 1040, line 38, or Form 1040A, line 22, plus the following amounts that may apply to you. File taxes 2008 Any amount excluded from income because of the exclusion of income from Puerto Rico. File taxes 2008 Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income. File taxes 2008 Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion. File taxes 2008 Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa. File taxes 2008   If you do not have any of the above, your modified AGI is the same as your AGI. File taxes 2008 Claiming the Credit To claim the child tax credit, you must file Form 1040 or Form 1040A. File taxes 2008 For more information on the child tax credit, see the instructions for Form 1040 or Form 1040A. File taxes 2008 Also attach Schedule 8812, Child Tax Credit, if required. File taxes 2008 Additional Child Tax Credit This credit is for certain individuals who get less than the full amount of the child tax credit. File taxes 2008 The additional child tax credit may give you a refund even if you do not owe any tax. File taxes 2008 For more information, see the instructions for Form 1040 or Form 1040A, and Schedule 8812. File taxes 2008 Earned Income Credit The earned income credit (EIC) is a cr