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File taxes 12. File taxes   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. File taxes Free help with your tax return. File taxes   You can get free help preparing your return nationwide from IRS-certified volunteers. File taxes The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. File taxes The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. File taxes Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. File taxes In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. File taxes To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. File taxes gov, download the IRS2Go app, or call 1-800-906-9887. File taxes   As part of the TCE program, AARP offers the Tax-Aide counseling program. File taxes To find the nearest AARP Tax-Aide site, visit AARP's website at www. File taxes aarp. File taxes org/money/taxaide or call 1-888-227-7669. File taxes For more information on these programs, go to IRS. File taxes gov and enter “VITA” in the search box. File taxes Internet. File taxes    IRS. File taxes gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. File taxes Download the free IRS2Go app from the iTunes app store or from Google Play. File taxes Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. File taxes Check the status of your 2013 refund with the Where's My Refund? application on IRS. File taxes gov or download the IRS2Go app and select the Refund Status option. File taxes The IRS issues more than 9 out of 10 refunds in less than 21 days. File taxes Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. File taxes You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. File taxes The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. File taxes Use the Interactive Tax Assistant (ITA) to research your tax questions. File taxes No need to wait on the phone or stand in line. File taxes The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. File taxes When you reach the response screen, you can print the entire interview and the final response for your records. File taxes New subject areas are added on a regular basis. File taxes  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. File taxes gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. File taxes You can use the IRS Tax Map, to search publications and instructions by topic or keyword. File taxes The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. File taxes When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. File taxes Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. File taxes You can also ask the IRS to mail a return or an account transcript to you. File taxes Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. File taxes gov or by calling 1-800-908-9946. File taxes Tax return and tax account transcripts are generally available for the current year and the past three years. File taxes Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. File taxes Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. File taxes If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. File taxes Check the status of your amended return using Where's My Amended Return? Go to IRS. File taxes gov and enter Where's My Amended Return? in the search box. File taxes You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. File taxes It can take up to 3 weeks from the date you mailed it to show up in our system. File taxes Make a payment using one of several safe and convenient electronic payment options available on IRS. File taxes gov. File taxes Select the Payment tab on the front page of IRS. File taxes gov for more information. File taxes Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. File taxes Figure your income tax withholding with the IRS Withholding Calculator on IRS. File taxes gov. File taxes Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. File taxes Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. File taxes gov. File taxes Request an Electronic Filing PIN by going to IRS. File taxes gov and entering Electronic Filing PIN in the search box. File taxes Download forms, instructions and publications, including accessible versions for people with disabilities. File taxes Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. File taxes gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. File taxes An employee can answer questions about your tax account or help you set up a payment plan. File taxes Before you visit, check the Office Locator on IRS. File taxes gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. File taxes If you have a special need, such as a disability, you can request an appointment. File taxes Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. File taxes Apply for an Employer Identification Number (EIN). File taxes Go to IRS. File taxes gov and enter Apply for an EIN in the search box. File taxes Read the Internal Revenue Code, regulations, or other official guidance. File taxes Read Internal Revenue Bulletins. File taxes Sign up to receive local and national tax news and more by email. File taxes Just click on “subscriptions” above the search box on IRS. File taxes gov and choose from a variety of options. File taxes Phone. File taxes    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. File taxes Download the free IRS2Go app from the iTunes app store or from Google Play. File taxes Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. File taxes gov, or download the IRS2Go app. File taxes Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. File taxes The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. File taxes Most VITA and TCE sites offer free electronic filing. File taxes Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. File taxes Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. File taxes Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. File taxes If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. File taxes The IRS issues more than 9 out of 10 refunds in less than 21 days. File taxes Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. File taxes Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. File taxes The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. File taxes Note, the above information is for our automated hotline. File taxes Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. File taxes Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. File taxes You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. File taxes It can take up to 3 weeks from the date you mailed it to show up in our system. File taxes Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). File taxes You should receive your order within 10 business days. File taxes Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. File taxes If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. File taxes Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. File taxes The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. File taxes These individuals can also contact the IRS through relay services such as the Federal Relay Service. File taxes Walk-in. File taxes   You can find a selection of forms, publications and services — in-person. File taxes Products. File taxes You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. File taxes Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. File taxes Services. File taxes You can walk in to your local TAC for face-to-face tax help. File taxes An employee can answer questions about your tax account or help you set up a payment plan. File taxes Before visiting, use the Office Locator tool on IRS. File taxes gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. File taxes Mail. File taxes   You can send your order for forms, instructions, and publications to the address below. File taxes You should receive a response within 10 business days after your request is received. File taxes Internal Revenue Service 1201 N. File taxes Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. File taxes The Taxpayer Advocate Service (TAS) is your voice at the IRS. File taxes Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. File taxes   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. File taxes We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. File taxes You face (or your business is facing) an immediate threat of adverse action. File taxes You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. File taxes   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. File taxes Here's why we can help: TAS is an independent organization within the IRS. File taxes Our advocates know how to work with the IRS. File taxes Our services are free and tailored to meet your needs. File taxes We have offices in every state, the District of Columbia, and Puerto Rico. File taxes   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. File taxes irs. File taxes gov/Advocate, or call us toll-free at 1-877-777-4778. File taxes   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. File taxes If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. File taxes Low Income Taxpayer Clinics. File taxes   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. File taxes Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. File taxes Visit www. File taxes irs. File taxes gov/Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. File taxes Prev  Up  Next   Home   More Online Publications
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File taxes 5. File taxes   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. File taxes Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. File taxes When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. File taxes Otherwise, these are capital expenses that must be added to the basis of the land. File taxes (See chapter 6 for information on determining basis. File taxes ) Conservation expenses for land in a foreign country do not qualify for this special treatment. File taxes The deduction for conservation expenses cannot be more than 25% of your gross income from farming. File taxes See 25% Limit on Deduction , later. File taxes Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. File taxes These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. File taxes You must include in income most government payments for approved conservation practices. File taxes However, you can exclude some payments you receive under certain cost-sharing conservation programs. File taxes For more information, see Agricultural Program Payments in chapter 3. File taxes To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. File taxes Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. File taxes You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. File taxes You are not farming if you are engaged only in forestry or the growing of timber. File taxes Farm defined. File taxes   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. File taxes It also includes plantations, ranches, ranges, and orchards. File taxes A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. File taxes It does not include an area where they are merely caught or harvested. File taxes A plant nursery is a farm for purposes of deducting soil and water conservation expenses. File taxes Farm rental. File taxes   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. File taxes If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. File taxes   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. File taxes Example. File taxes You own a farm in Iowa and live in California. File taxes You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. File taxes You cannot deduct your soil conservation expenses for this farm. File taxes You must capitalize the expenses and add them to the basis of the land. File taxes     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. File taxes Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. File taxes If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. File taxes Keep a copy of the plan with your books and records to support your deductions. File taxes Conservation plan. File taxes   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. File taxes There are three types of approved plans. File taxes NRCS individual site plans. File taxes These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. File taxes NRCS county plans. File taxes These plans include a listing of farm conservation practices approved for the county where the farmland is located. File taxes You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. File taxes Comparable state agency plans. File taxes These plans are approved by state agencies and can be approved individual site plans or county plans. File taxes   A list of NRCS conservation programs is available at www. File taxes nrcs. File taxes usda. File taxes gov/programs. File taxes Individual site plans can be obtained from NRCS offices and the comparable state agencies. File taxes Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. File taxes These expenses include, but are not limited to, the following. File taxes The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. File taxes The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. File taxes The eradication of brush. File taxes The planting of windbreaks. File taxes You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. File taxes These expenses are added to the basis of the land. File taxes If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. File taxes See chapter 3 for information about payments eligible for the cost-sharing exclusion. File taxes New farm or farmland. File taxes   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. File taxes You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. File taxes The new farming activity does not have to be the same as the old farming activity. File taxes For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. File taxes Land not used for farming. File taxes   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. File taxes For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. File taxes You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. File taxes Depreciable conservation assets. File taxes   You generally cannot deduct your expenses for depreciable conservation assets. File taxes However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. File taxes See Assessment for Depreciable Property , later. File taxes   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. File taxes These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. File taxes You recover your capital investment through annual allowances for depreciation. File taxes   You can deduct soil and water conservation expenses for nondepreciable earthen items. File taxes Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. File taxes Water well. File taxes   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. File taxes It is a capital expense. File taxes You recover your cost through depreciation. File taxes You also must capitalize your cost for drilling a test hole. File taxes If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. File taxes You can recover the total cost through depreciation deductions. File taxes   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. File taxes Abandonment means that all economic benefits from the well are terminated. File taxes For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. File taxes Endangered species recovery expenses. File taxes   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. File taxes Otherwise, these are capital expenses that must be added to the basis of the land. File taxes   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. File taxes See Internal Revenue Code section 175 for more information. File taxes Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. File taxes You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. File taxes Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. File taxes This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. File taxes The depreciable property must be used in the district's soil and water conservation activities. File taxes However, the following limits apply to these assessments. File taxes The total assessment limit. File taxes The yearly assessment limit. File taxes After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. File taxes The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. File taxes See Table 5-1 for a brief summary of these limits. File taxes Table 5-1. File taxes Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. File taxes Your deductible share of the cost to the district for the property. File taxes Your gross income from farming. File taxes No one taxpayer can deduct more than 10% of the total assessment. File taxes Any amount over 10% is a capital expense and is added to the basis of your land. File taxes If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. File taxes If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. File taxes You can deduct the remainder in equal amounts over the next 9 tax years. File taxes Limit for all conservation expenses, including assessments for depreciable property. File taxes Amounts greater than 25% can be carried to the following year and added to that year's expenses. File taxes The total is then subject to the 25% of gross income from farming limit in that year. File taxes To ensure your deduction is within the deduction limits, keep records to show the following. File taxes The total assessment against all members of the district for the depreciable property. File taxes Your deductible share of the cost to the district for the depreciable property. File taxes Your gross income from farming. File taxes Total assessment limit. File taxes   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. File taxes This applies whether you pay the assessment in one payment or in installments. File taxes If your assessment is more than 10% of the total amount assessed, both the following rules apply. File taxes The amount over 10% is a capital expense and is added to the basis of your land. File taxes If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. File taxes Yearly assessment limit. File taxes   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. File taxes If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. File taxes If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. File taxes You can deduct the remainder in equal amounts over the next 9 tax years. File taxes Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. File taxes Example 1. File taxes This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. File taxes Of the assessment, $1,500 is for digging drainage ditches. File taxes You can deduct this part as a soil or conservation expense as if you had paid it directly. File taxes The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. File taxes The total amount assessed by the district against all its members for the depreciable equipment is $7,000. File taxes The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. File taxes The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. File taxes To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. File taxes Add $500 to the result for a total of $570. File taxes Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). File taxes You can deduct the balance at the rate of $70 a year over the next 9 years. File taxes You add $70 to the $1,500 portion of the assessment for drainage ditches. File taxes You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. File taxes Example 2. File taxes Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. File taxes The total amount assessed by the district against all its members for depreciable equipment is $5,500. File taxes The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. File taxes The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). File taxes Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. File taxes You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. File taxes Sale or other disposal of land during 9-year period. File taxes   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. File taxes Death of farmer during 9-year period. File taxes   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. File taxes 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. File taxes Gross income from farming. File taxes   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. File taxes Gains from sales of draft, breeding, or dairy livestock are included. File taxes Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. File taxes Carryover of deduction. File taxes   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. File taxes However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. File taxes Example. File taxes In 2012, you have gross income of $32,000 from two farms. File taxes During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. File taxes However, your deduction is limited to 25% of $32,000, or $8,000. File taxes The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. File taxes The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. File taxes Any expenses over the limit in that year are carried to 2014 and later years. File taxes Net operating loss. File taxes   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. File taxes If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. File taxes When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. File taxes If you do not choose to deduct the expenses, you must capitalize them. File taxes Change of method. File taxes   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. File taxes To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. File taxes You or your authorized representative must sign the request. File taxes   The request must include the following information. File taxes Your name and address. File taxes The first tax year the method or change of method is to apply. File taxes Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. File taxes If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. File taxes The total expenses you paid or incurred in the first tax year the method or change of method is to apply. File taxes A statement that you will account separately in your books for the expenses to which this method or change of method relates. File taxes Send your request to the following  address. File taxes  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. File taxes Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). File taxes However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. File taxes Gain on sale of farmland. File taxes   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. File taxes If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. File taxes See Section 1252 property under Other Gains in chapter 9. File taxes Prev  Up  Next   Home   More Online Publications