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Filing back taxes online free 4. Filing back taxes online free   Other Section 501(c) Organizations Table of Contents Introduction 501(c)(4) - Civic Leagues and Social Welfare OrganizationsSpecific Organizations 501(c)(5) - Labor, Agricultural and Horticultural OrganizationsLabor Organizations Agricultural and Horticultural Organizations 501(c)(6) - Business Leagues, etc. Filing back taxes online free Line of business. Filing back taxes online free Examples. Filing back taxes online free Improvement of business conditions. Filing back taxes online free Exception for local legislation. Filing back taxes online free De minimis exception. Filing back taxes online free Grass roots lobbying. Filing back taxes online free 501(c)(7) - Social and Recreation ClubsLimited membership. Filing back taxes online free Support. Filing back taxes online free Facilities open to public. Filing back taxes online free Gross receipts from nonmembership sources. Filing back taxes online free Gross receipts. Filing back taxes online free Nontraditional activities. Filing back taxes online free 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal SocietiesFraternal Beneficiary Societies (501(c)(8)) Domestic Fraternal Societies (501(c)(10)) 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' AssociationsLocal Employees' Associations (501(c)(4)) Voluntary Employees' Beneficiary Associations (501(c)(9)) Supplemental Unemployment Benefit Trusts (501(c)(17)) 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like OrganizationsMembership. Filing back taxes online free Losses and expenses. Filing back taxes online free Distributions of proceeds. Filing back taxes online free The 85% Requirement Local Life Insurance Associations Mutual or Cooperative Associations 501(c)(13) - Cemetery CompaniesBuying cemetery property. Filing back taxes online free Perpetual care organization. Filing back taxes online free Care of individual plots. Filing back taxes online free 501(c)(14) - Credit Unions and Other Mutual Financial OrganizationsState-Chartered Credit Unions Other Mutual Financial Organizations 501(c)(19) - Veterans' Organizations 501(c)(20) - Group Legal Services Plan Organizations 501(c)(21) - Black Lung Benefit TrustsExcise taxes. Filing back taxes online free 501(c)(2) - Title-Holding Corporations for Single Parent CorporationsExpenses. Filing back taxes online free Waiver of payment of income. Filing back taxes online free 501(c)(25) - Title-Holding Corporations or Trusts for Multiple Parent CorporationsUnrelated Business Income 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations 501(c)(29) - CO-OP Health Insurance Issuers New Guidance for IRC 501(c)(29) Qualified Nonprofit Health Insurance Issuers General Requirements for Exemption under 501(c)(29) and Annual Filing Requirement Additional Guidance for Prospective 501(c)(29) Organizations Introduction This chapter contains specific information for certain organizations described in section 501(c), other than those organizations that are described in section 501(c)(3). Filing back taxes online free Section 501(c)(3) organizations are covered in chapter 3 of this publication. Filing back taxes online free The Table of Contents at the beginning of this publication, as well as the Organization Reference Chart, may help you locate at a glance the type of organization discussed in this chapter. Filing back taxes online free 501(c)(4) - Civic Leagues and Social Welfare Organizations If your organization is not organized for profit and will be operated primarily to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). Filing back taxes online free The discussion that follows describes the information you must provide when applying. Filing back taxes online free For application procedures, see chapter 1. Filing back taxes online free To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted primarily to charitable, educational, or recreational purposes. Filing back taxes online free In addition, no part of the organization's net earnings can inure to the benefit of any private shareholder or individual. Filing back taxes online free If the organization provides an excess benefit to certain persons, an excise tax may be imposed. Filing back taxes online free See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax. Filing back taxes online free Examples. Filing back taxes online free   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies. Filing back taxes online free Nonprofit operation. Filing back taxes online free   You must submit evidence that your organization is organized and will be operated on a nonprofit basis. Filing back taxes online free However, such evidence, including the fact that your organization is organized under a state law relating to nonprofit corporations, will not in itself establish a social welfare purpose. Filing back taxes online free Social welfare. Filing back taxes online free   To establish that your organization is organized primarily to promote social welfare, you should submit evidence with your application showing that your organization will operate primarily to further (in some way) the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). Filing back taxes online free   An organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community. Filing back taxes online free It therefore does not qualify as a section 501(c)(4) organization. Filing back taxes online free Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, since its activities benefit the member-tenants and not all tenants in the community. Filing back taxes online free However, an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. Filing back taxes online free Political activity. Filing back taxes online free   Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. Filing back taxes online free However, if you submit proof that your organization is organized primarily to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office. Filing back taxes online free See the discussion in chapter 2 under Political Organization Income Tax Return . Filing back taxes online free Social or recreational activity. Filing back taxes online free   If social activities will be the primary purpose of your organization, you should not file an application for exemption as a social welfare organization but should file for exemption as a social club described in section 501(c)(7). Filing back taxes online free Retirement benefit program. Filing back taxes online free   An organization established by its members that has as its primary activity providing supplemental retirement benefits to its members or death benefits to their beneficiaries does not qualify as an exempt social welfare organization. Filing back taxes online free It may qualify under another paragraph of section 501(c) depending on all the facts. Filing back taxes online free   However, a nonprofit association that is established, maintained, and funded by a local government to provide the only retirement benefits to a class of employees may qualify as a social welfare organization under section 501(c)(4). Filing back taxes online free Tax treatment of donations. Filing back taxes online free   Donations to volunteer fire companies are deductible on the donor's federal income tax return, but only if made for exclusively public purposes. Filing back taxes online free Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. Filing back taxes online free They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business. Filing back taxes online free However, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Filing back taxes online free for more information. Filing back taxes online free For more information on social welfare organizations, see Life Cycle of a Social Welfare Organization at IRS. Filing back taxes online free gov. Filing back taxes online free Specific Organizations The following information should be contained in the application form and accompanying statements of certain types of civic leagues or social welfare organizations. Filing back taxes online free Volunteer fire companies. Filing back taxes online free   If your organization wishes to obtain exemption as a volunteer fire company or similar organization, you should submit evidence that its members are actively engaged in fire fighting and similar disaster assistance, whether it actually owns the fire fighting equipment, and whether it provides any assistance for its members, such as death and medical benefits in case of injury to them. Filing back taxes online free   If your organization does not have an independent social purpose, such as providing recreational facilities for members, it may be exempt under section 501(c)(3). Filing back taxes online free In this event, your organization should file Form 1023. Filing back taxes online free Homeowners' associations. Filing back taxes online free   A membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development should show that it is operated for the benefit of all the residents of the community. Filing back taxes online free The term community generally refers to a geographical unit recognizable as a governmental subdivision, unit, or district thereof. Filing back taxes online free Whether a particular association meets the requirement of benefiting a community depends on the facts and circumstances of each case. Filing back taxes online free Even if an area represented by an association is not a community, the association can still qualify for exemption if its activities benefit a community. Filing back taxes online free   The association should submit evidence that areas such as roadways and park land that it owns and maintains are open to the general public and not just its own members. Filing back taxes online free It also must show that it does not engage in exterior maintenance of private homes. Filing back taxes online free   A homeowners' association that is not exempt under section 501(c)(4) and that is a condominium management association, a residential real estate management association, or a timeshare association generally can elect under the provisions of section 528 to receive certain tax benefits that, in effect, permit it to exclude its exempt function income from its gross income. Filing back taxes online free Other organizations. Filing back taxes online free   Other nonprofit organizations that qualify as social welfare organizations include: An organization operating an airport that is on land owned by a local government, which supervises the airport's operation, and that serves the general public in an area with no other airport, A community association that works to improve public services, housing, and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs, and meetings; and contracts with a private security service to patrol the community, A community association devoted to preserving the community's traditions, architecture, and appearance by representing it before the local legislature and administrative agencies in zoning, traffic, and parking matters, An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area, and An organization that holds an annual festival of regional customs and traditions. Filing back taxes online free 501(c)(5) - Labor, Agricultural and Horticultural Organizations If you are a member of an organization that wants to obtain recognition of exemption from federal income tax as a labor, agricultural, or horticultural organization, you should submit an application on Form 1024. Filing back taxes online free You must indicate in your application for exemption and accompanying statements that no part of the organization's net earnings will inure to the benefit of any member. Filing back taxes online free In addition, you should follow the procedure for obtaining recognition of exempt status described in chapter 1. Filing back taxes online free Submit any additional information that may be required, as described in this section. Filing back taxes online free Tax treatment of donations. Filing back taxes online free   Contributions to labor, agricultural, and horticultural organizations are not deductible as charitable contributions on the donor's federal income tax return. Filing back taxes online free However, such payments may be deductible as business expenses if they are ordinary and necessary in the conduct of the taxpayer's trade or business. Filing back taxes online free For more information about certain limits affecting the deductibility of these business expenses, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Filing back taxes online free Labor Organizations A labor organization is an association of workers who have combined to protect and promote the interests of the members by bargaining collectively with their employers to secure better working conditions. Filing back taxes online free To show that your organization has the purpose of a labor organization, you should include in the articles of organization or accompanying statements (submitted with your exemption application) information establishing that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. Filing back taxes online free In addition, no net earnings of the organization can inure to the benefit of any member. Filing back taxes online free Composition of membership. Filing back taxes online free   While a labor organization generally is composed of employees or representatives of the employees (in the form of collective bargaining agents) and similar employee groups, evidence that an organization's membership consists mainly of workers does not in itself indicate an exempt purpose. Filing back taxes online free You must show in your application that your organization has the purposes described in the preceding paragraph. Filing back taxes online free These purposes can be accomplished by a single labor organization acting alone or by several organizations acting together through a separate organization. Filing back taxes online free Benefits to members. Filing back taxes online free   The payment by a labor organization of death, sick, accident, and similar benefits to its individual members with funds contributed by its members, if made under a plan to better the conditions of the members, does not preclude exemption as a labor organization. Filing back taxes online free However, an organization does not qualify for exemption as a labor organization if it has no authority to represent members in job-related matters, even if it provides weekly income to its members in the event of a lawful strike by the members' union, in return for an annual payment by the member. Filing back taxes online free   For more information on labor organizations, see Life Cycle of a Labor Organization at IRS. Filing back taxes online free gov. Filing back taxes online free Agricultural and Horticultural Organizations Agricultural and horticultural organizations are connected with raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits. Filing back taxes online free For the purpose of these provisions, aquatic resources include only animal or vegetable life, but not mineral resources. Filing back taxes online free The term harvesting, in this case, includes fishing and related pursuits. Filing back taxes online free Agricultural organizations can be quasi-public in character and are often designed to encourage the development of better agricultural and horticultural products through a system of awards, using income from entry fees, gate receipts, and donations to meet the necessary expenses of upkeep and operation. Filing back taxes online free When the activities are directed toward the improvement of marketing or other business conditions in one or more lines of business, rather than the improvement of production techniques or the betterment of the conditions of persons engaged in agriculture, the organization must qualify for exemption as a business league, board of trade, or other organization, as discussed next in the section on 501(c)(6) organizations. Filing back taxes online free The primary purpose of exempt agricultural and horticultural organizations must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. Filing back taxes online free The following list contains some examples of activities that show an agricultural or horticultural purpose. Filing back taxes online free Promoting various cooperative agricultural, horticultural, and civic activities among rural residents by a state, farm, or home bureau. Filing back taxes online free Exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture. Filing back taxes online free Testing soil for members and nonmembers of the farm bureau on a cost basis, the results of the tests and other recommendations being furnished to the community members to educate them in soil treatment. Filing back taxes online free Guarding the purity of a specific breed of livestock. Filing back taxes online free Encouraging improvements in the production of fish on privately owned fish farms. Filing back taxes online free Negotiating with processors for the price to be paid to members for their crops. Filing back taxes online free For more information on agricultural or horticultural organizations, see Life Cycle of an Agricultural or Horticultural Organization at IRS. Filing back taxes online free gov. Filing back taxes online free 501(c)(6) - Business Leagues, etc. Filing back taxes online free If your association wants to apply for recognition of exemption from federal income tax as a nonprofit business league, chamber of commerce, real estate board, or board of trade, it should file Form 1024. Filing back taxes online free For a discussion of the procedure to follow, see chapter 1. Filing back taxes online free Your organization must indicate in its application form and attached statements that no part of its net earnings will inure to the benefit of any private shareholder or individual and that it is not organized for profit or organized to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining). Filing back taxes online free In addition, your organization must be primarily engaged in activities or functions that are the basis for its exemption. Filing back taxes online free It must be primarily supported by membership dues and other income from activities substantially related to its exempt purpose. Filing back taxes online free A business league, in general, is an association of persons having some common business interest, the purpose of which is to promote that common interest and not to engage in a regular business of a kind ordinarily carried on for profit. Filing back taxes online free Trade associations and professional associations are considered business leagues. Filing back taxes online free Chamber of commerce. Filing back taxes online free   A chamber of commerce usually is composed of the merchants and traders of a city. Filing back taxes online free Board of trade. Filing back taxes online free   A board of trade often consists of persons engaged in similar lines of business. Filing back taxes online free For example, a nonprofit organization formed to regulate the sale of a specified agricultural commodity to assure equal treatment of producers, warehouse workers, and buyers is a board of trade. Filing back taxes online free   Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. Filing back taxes online free Real estate board. Filing back taxes online free   A real estate board consists of members interested in improving the business conditions in the real estate field. Filing back taxes online free It is not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. Filing back taxes online free Professional football leagues. Filing back taxes online free   The Internal Revenue Code specifically defines professional football leagues as exempt organizations under section 501(c)(6). Filing back taxes online free They are exempt whether or not they administer a pension fund for football players. Filing back taxes online free General purpose. Filing back taxes online free   You must indicate in the material submitted with your application that your organization will be devoted to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons. Filing back taxes online free It must be shown that the conditions of a particular trade or the interests of the community will be advanced. Filing back taxes online free Merely indicating the name of the organization or the object of the local statute under which it is created is not enough to demonstrate the required general purpose. Filing back taxes online free Line of business. Filing back taxes online free   This term generally refers either to an entire industry or to all components of an industry within a geographic area. Filing back taxes online free It does not include a group composed of businesses that market a particular brand within an industry. Filing back taxes online free Common business interest. Filing back taxes online free   A common business interest of all members of the organization must be established by the application documents. Filing back taxes online free Examples. Filing back taxes online free   Activities that would tend to illustrate a common business interest are: Promotion of higher business standards and better business methods and encouragement of uniformity and cooperation by a retail merchants association, Education of the public in the use of credit, Establishment of uniform casualty rates and compilation of statistical information by an insurance rating bureau operated by casualty insurance companies, Establishment and maintenance of the integrity of a local commercial market, Operation of a trade publication primarily intended to benefit an entire industry, and Encouragement of the use of goods and services of an entire industry (such as a lawyer referral service whose main purpose is to introduce individuals to the use of the legal profession in the hope that they will enter into lawyer-client relationships on a paying basis as a result). Filing back taxes online free Improvement of business conditions. Filing back taxes online free   Generally, this must be shown to be the purpose of the organization. Filing back taxes online free This is not established by evidence of particular services that provide a convenience or economy to individual members in their businesses, such as advertising that carries the name of members, interest-free loans, assigning exclusive franchise areas, operation of a real estate multiple listing system, or operation of a credit reporting agency. Filing back taxes online free Stock or commodity exchange. Filing back taxes online free   A stock or commodity exchange is not a business league, chamber of commerce, real estate board, or board of trade and is not exempt under section 501(c)(6). Filing back taxes online free Legislative activity. Filing back taxes online free   An organization that is exempt under section 501(c)(6) can work for the enactment of laws to advance the common business interests of the organization's members. Filing back taxes online free Deduction not allowed for dues used for political or legislative activities. Filing back taxes online free   A taxpayer cannot deduct the part of dues or other payments to a business league, trade association, labor union, or similar organization that is reported to the taxpayer by the organization as having been used for any of the following activities. Filing back taxes online free Influencing legislation. Filing back taxes online free Participating or intervening in a political campaign for, or against, any candidate for public office. Filing back taxes online free Trying to influence the general public, or part of the general public, with respect to elections, legislative matters, or referendums (also known as grass roots lobbying). Filing back taxes online free Communicating directly with certain executive branch officials to try to influence their official actions or positions. Filing back taxes online free See Dues Used for Lobbying or Political Activities under Required Disclosures in chapter 2 for more information. Filing back taxes online free Exception for local legislation. Filing back taxes online free   Members can deduct dues (or assessments) to an organization that are for expenses of: Appearing before, submitting statements to, or sending communications to members of a local council or similar governing body with respect to legislation or proposed legislation of direct interest to the member, or Communicating information between the member and the organization with respect to local legislation or proposed legislation of direct interest to the organization or the member. Filing back taxes online free Legislation or proposed legislation is of direct interest to a taxpayer if it will, or can reasonably be expected to, affect the taxpayer's trade or business. Filing back taxes online free De minimis exception. Filing back taxes online free   In-house expenditures of $2,000 or less for the year for activities (1) – (4) listed earlier will not prevent a deduction for dues if the dues meet all other tests to be deductible as a business expense. Filing back taxes online free Grass roots lobbying. Filing back taxes online free   A tax-exempt trade association, labor union, or similar organization is considered to be engaging in grass roots lobbying if it contacts prospective members or calls upon its own members to contact their employees and customers for the purpose of urging such persons to communicate with their elected state or Congressional representatives to support the promotion, defeat, or repeal of legislation that is of direct interest to the organization. Filing back taxes online free Any dues or assessments directly related to such activities are not deductible by the taxpayer, since the individuals being contacted, who are not members of the organization, are a segment of the general public. Filing back taxes online free Tax treatment of donations. Filing back taxes online free   Contributions to organizations described in this section are not deductible as charitable contributions on the donor's federal income tax return. Filing back taxes online free They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business. Filing back taxes online free   For more information on business leagues, see Life Cycle of a Business League (Trade Association) on IRS. Filing back taxes online free gov. Filing back taxes online free 501(c)(7) - Social and Recreation Clubs If your club is organized for pleasure, recreation, and other similar nonprofitable purposes and substantially all of its activities are for these purposes, it should file Form 1024 to apply for recognition of exemption from federal income tax. Filing back taxes online free In applying for recognition of exemption, you should submit the information described in this section. Filing back taxes online free Also see chapter 1 for the procedures to follow. Filing back taxes online free Typical organizations that should file for recognition of exemption as social clubs include: College alumni associations that are not described in chapter 3 under Alumni association , College fraternities or sororities operating chapter houses for students, Country clubs, Amateur hunting, fishing, tennis, swimming, and other sport clubs, Dinner clubs that provide a meeting place, library, and dining room for members, Hobby clubs, Garden clubs, and Variety clubs. Filing back taxes online free Discrimination prohibited. Filing back taxes online free   Your organization will not be recognized as tax exempt if its charter, bylaws, or other governing instrument, or any written policy statement provides for discrimination against any person on the basis of race, color, or religion. Filing back taxes online free   However, a club that in good faith limits its membership to the members of a particular religion to further the teachings or principles of that religion and not to exclude individuals of a particular race or color will not be considered as discriminating on the basis of religion. Filing back taxes online free Also, the restriction on religious discrimination does not apply to a club that is an auxiliary of a fraternal beneficiary society (discussed later) if that society is described in section 501(c)(8) and exempt from tax under section 501(a) and limits its membership to the members of a particular religion. Filing back taxes online free Private benefit prohibited. Filing back taxes online free   No part of the organization's net earnings can inure to the benefit of any person having a personal and private interest in the activities of the organization. Filing back taxes online free For purposes of this requirement, it is not necessary that net earnings be actually distributed. Filing back taxes online free Even undistributed earnings can benefit members. Filing back taxes online free Examples of this include a decrease in membership dues or an increase in the services the club provides to its members without a corresponding increase in dues or other fees paid for club support. Filing back taxes online free However, fixed-fee payments to members who bring new members into the club are not an inurement of the club's net earnings, if the payments are reasonable compensation for performance of a necessary administrative service. Filing back taxes online free Purposes. Filing back taxes online free   To show that your organization possesses the characteristics of a club within the meaning of the exemption law, you should submit evidence with your application that personal contact, commingling, and fellowship exist among members. Filing back taxes online free You must show that members are bound together by a common objective of pleasure, recreation, and other nonprofitable purposes. Filing back taxes online free   Fellowship need not be present between each member and every other member of a club if it is a material part in the life of the organization. Filing back taxes online free A statewide or nationwide organization that is made up of individual members, but is divided into local groups, satisfies this requirement if fellowship is a material part of the life of each local group. Filing back taxes online free   The term other nonprofitable purposes means other purposes similar to pleasure and recreation. Filing back taxes online free For example, a club that, in addition to its social activities, has a plan for the payment of sick and death benefits is not operating exclusively for pleasure, recreation, and other nonprofitable purposes. Filing back taxes online free Limited membership. Filing back taxes online free   The membership in a social club must be limited. Filing back taxes online free To show that your organization has a purpose that would characterize it as a club, you should submit evidence with your application that there are limits on admission to membership consistent with the character of the club. Filing back taxes online free   A social club that issues corporate membership is dealing with the general public in the form of the corporation's employees. Filing back taxes online free Corporate members of a club are not the kind of members contemplated by the law. Filing back taxes online free Gross receipts from these members would be a factor in determining whether the club qualifies as a social club. Filing back taxes online free See Gross receipts from nonmembership sources , later. Filing back taxes online free Bona fide individual memberships paid for by a corporation would not have an effect on the gross receipts source. Filing back taxes online free   The fact that a social club may have an associate (nonvoting) class of membership will not be, in and of itself, a cause for nonrecognition of exemption. Filing back taxes online free However, if one membership class pays substantially lower dues and fees than another membership class, although both classes enjoy the same rights and privileges in using the club facilities, there may be an inurement of income to the benefited class, resulting in a denial of the club's exemption. Filing back taxes online free Support. Filing back taxes online free   In general, your club should be supported solely by membership fees, dues, and assessments. Filing back taxes online free However, if otherwise entitled to exemption, your club will not be disqualified because it raises revenue from members through the use of club facilities or in connection with club activities. Filing back taxes online free Business activities. Filing back taxes online free   If your club will engage in business, such as selling real estate, timber, or other products or services, it generally will be denied exemption. Filing back taxes online free However, evidence submitted with your application form that your organization will provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests will not cause denial of exemption. Filing back taxes online free Facilities open to public. Filing back taxes online free   Evidence that your club's facilities will be open to the general public (persons other than members or their dependents or guests) may cause denial of exemption. Filing back taxes online free This does not mean, however, that any dealing with outsiders will automatically deprive a club of exemption. Filing back taxes online free Gross receipts from nonmembership sources. Filing back taxes online free   A section 501(c)(7) organization can receive up to 35% of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. Filing back taxes online free Income from nontraditional business activity with members is not exempt function income, and thus is included as income from sources outside of the membership. Filing back taxes online free Of the 35% gross receipts listed above, up to 15% of the gross receipts can be derived from the use of the club's facilities or services by the general public. Filing back taxes online free If an organization has outside income that is more than these limits, all the facts and circumstances will be taken into account in determining whether the organization qualifies for exempt status. Filing back taxes online free Gross receipts. Filing back taxes online free   Gross receipts, for this purpose, are receipts from the normal and usual (traditionally conducted) activities of the club. Filing back taxes online free These receipts include charges, admissions, membership fees, dues, assessments, investment income, and normal recurring capital gains on investments. Filing back taxes online free Receipts do not include initiation fees and capital contributions. Filing back taxes online free Unusual amounts of income, such as from the sale of a clubhouse or similar facility, are not included in gross receipts or in figuring the percentage limits. Filing back taxes online free Nontraditional activities. Filing back taxes online free   Activities conducted by a social club need to further its exempt purposes. Filing back taxes online free Traditional business activities are those that further a social club's exempt purposes. Filing back taxes online free Nontraditional business activities do not further the exempt purposes of a social club even if conducted solely on a membership basis. Filing back taxes online free Nontraditional business activities are prohibited (subject to an insubstantial, trivial, and nonrecurrent test) for businesses conducted with both members and nonmembers. Filing back taxes online free Examples of nontraditional business activities include sale of package liquor, take-out food, and long-term room rental. Filing back taxes online free Fraternity foundations. Filing back taxes online free   If your organization is a foundation formed for the exclusive purpose of acquiring and leasing a chapter house to a local fraternity chapter or sorority chapter maintained at an educational institution and does not engage in any social or recreational activities, it may be a title holding corporation (discussed later under section 501(c)(2) organizations and under section 501(c)(25) organizations) rather than a social club. Filing back taxes online free Tax treatment of donations. Filing back taxes online free   Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor's federal income tax return. Filing back taxes online free 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies This section describes the information to be provided upon application for recognition of exemption by two types of fraternal societies: beneficiary and domestic. Filing back taxes online free The major distinction is that fraternal beneficiary societies provide for the payment of life, sick, accident, or other benefits to their members or their dependents, while domestic fraternal societies do not provide these benefits but rather devote their earnings to fraternal, religious, charitable, etc. Filing back taxes online free , purposes. Filing back taxes online free The procedures to follow in applying for recognition of exemption are described in chapter 1. Filing back taxes online free If your organization is controlled by a central organization, you should check with your controlling organization to determine whether your unit has been included in a group exemption letter or can be added. Filing back taxes online free If so, your organization need not apply for individual recognition of exemption. Filing back taxes online free For more information, see Group Exemption Letter in chapter 1 of this publication. Filing back taxes online free Tax treatment of donations. Filing back taxes online free   Donations by an individual to a domestic fraternal beneficiary society or a domestic fraternal society operating under the lodge system are deductible as charitable contributions only if used exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. Filing back taxes online free Fraternal Beneficiary Societies (501(c)(8)) A fraternal beneficiary society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Filing back taxes online free The application and accompanying statements should establish that the organization: Is a fraternal organization, Operates under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system, and Provides for the payment of life, sick, accident, or other benefits to the members of the society, order, or association or their dependents. Filing back taxes online free Lodge system. Filing back taxes online free   Operating under the lodge system means carrying on activities under a form of organization that comprises local branches, chartered by a parent organization and largely self-governing, called lodges, chapters, or the like. Filing back taxes online free Payment of benefits. Filing back taxes online free   It is not essential that every member be covered by the society's program of sick, accident, or death benefits. Filing back taxes online free An organization can qualify for exemption if most of its members are eligible for benefits, and the benefits are paid from contributions or dues paid by those members. Filing back taxes online free   The benefits must be limited to members and their dependents. Filing back taxes online free If members will have the ability to confer benefits to other than themselves and their dependents, exemption will not be recognized. Filing back taxes online free Whole-life insurance. Filing back taxes online free   Whole-life insurance constitutes a life benefit under section 501(c)(8) even though the policy may contain investment features such as a cash surrender value or a policy loan. Filing back taxes online free Reinsurance pool. Filing back taxes online free   Payments by a fraternal beneficiary society into a state-sponsored reinsurance pool that protects participating insurers against excessive losses on major medical health and accident insurance will not preclude exemption as a fraternal beneficiary society. Filing back taxes online free Domestic Fraternal Societies (501(c)(10)) A domestic fraternal society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Filing back taxes online free The application and accompanying statements should establish that the organization: Is a domestic fraternal organization organized in the U. Filing back taxes online free S. Filing back taxes online free , Operates under the lodge system, Devotes its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes, and Does not provide for the payment of life, sick, accident, or other benefits to its members. Filing back taxes online free The organization can arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status. Filing back taxes online free 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' Associations This section describes the information to be provided upon application for recognition of exemption by the following types of employees' associations: A voluntary employees' beneficiary association (including federal employees' associations) organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries, if no part of the net earnings of the association inures to the benefit of any private shareholder or individual, and A supplemental unemployment benefit trust whose primary purpose is providing for payment of supplemental unemployment benefits. Filing back taxes online free Both the application form to file and the information to provide are discussed later under the section that describes your employee association. Filing back taxes online free Chapter 1 describes the procedures to follow in applying for exemption. Filing back taxes online free Tax treatment of donations. Filing back taxes online free   Donations to these organizations are not deductible as charitable contributions on the donor's federal income tax return. Filing back taxes online free Local Employees' Associations (501(c)(4)) A local association of employees whose membership is limited to employees of a designated person or persons in a particular municipality, and whose income will be devoted exclusively to charitable, educational, or recreational purposes. Filing back taxes online free A local employees' association must apply for recognition of exemption by filing Form 1024. Filing back taxes online free The organization must submit evidence that: It is of a purely local character, Its membership is limited to employees of a designated person or persons in a particular locality, and Its net earnings will be devoted exclusively to charitable, educational, or recreational purposes. Filing back taxes online free A local association of employees that has established a system of paying retirement or death benefits, or both, to its members will not qualify for exemption since the payment of these benefits is not considered as being for charitable, educational, or recreational purposes. Filing back taxes online free Similarly, a local association of employees that is operated primarily as a cooperative buying service for its members in order to obtain discount prices on merchandise, services, and activities does not qualify for exemption. Filing back taxes online free Voluntary Employees' Beneficiary Associations (501(c)(9)) An application for recognition of exemption as a voluntary employees' beneficiary association must be filed on Form 1024. Filing back taxes online free The material submitted with the application must show that your organization: Is a voluntary association of employees, Will provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose, and Will not allow any of its net earnings to inure to the benefit of any private individual or shareholder except in the form of scheduled benefit payments. Filing back taxes online free To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Filing back taxes online free Note. Filing back taxes online free Under section 4976, the reversion of funds from a section 501(c)(9) organization to the employer who created the beneficiary association may subject the employer to a 100% penalty excise tax on the amount of the reversion. Filing back taxes online free Notice requirement. Filing back taxes online free   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Filing back taxes online free The organization gives notice by filing Form 1024. Filing back taxes online free If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before notice is given. Filing back taxes online free An extension of time for filing the notice can be granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Filing back taxes online free Membership. Filing back taxes online free   Membership of a section 501(c)(9) organization must consist of individuals who are employees and have an employment-related common bond. Filing back taxes online free This common bond can be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. Filing back taxes online free   The membership of an association can include some individuals who are not employees, provided they have an employment-related bond with the employee-members. Filing back taxes online free For example, the owner of a business whose employees are members of the association can be a member. Filing back taxes online free An association will be considered composed of employees if 90% of its total membership on one day of each quarter of its tax year consists of employees. Filing back taxes online free Employees. Filing back taxes online free   Employees include individuals who became entitled to membership because they are or were employees. Filing back taxes online free For example, an individual will qualify as an employee even though the individual is on a leave of absence or has been terminated due to retirement, disability, or layoff. Filing back taxes online free   Generally, membership is voluntary if an affirmative act is required on the part of an employee to become a member. Filing back taxes online free Conversely, membership is involuntary if the designation as a member is due to employee status. Filing back taxes online free However, an association will be considered voluntary if employees are required to be members of the organization as a condition of their employment and they do not incur a detriment (such as a payroll deduction) as a result of their membership. Filing back taxes online free An employer has not imposed involuntary membership on the employee if membership is required as the result of a collective bargaining agreement or as an incident of membership in a labor organization. Filing back taxes online free Payment of benefits. Filing back taxes online free   The information submitted with your application must show that your organization will pay life, sick, accident, supplemental unemployment, or other similar benefits. Filing back taxes online free The benefits can be provided directly by your association or indirectly by your association through the payments of premiums to an insurance company (or fees to a medical clinic). Filing back taxes online free Benefits can be in the form of medical, clinical, or hospital services, transportation furnished for medical care, or money payments. Filing back taxes online free Nondiscrimination requirements. Filing back taxes online free   An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. Filing back taxes online free However, if the organization is part of a plan that is a collective bargaining agreement that was the subject of good faith bargaining between employee organizations and employers, the plan need not meet these requirements for the organization to qualify as tax exempt. Filing back taxes online free   A plan meets the nondiscrimination requirements only if both of the following statements are true. Filing back taxes online free Each class of benefits under the plan is provided under a classification of employees that is set forth in the plan and does not discriminate in favor of employees who are highly compensated individuals. Filing back taxes online free The benefits provided under each class of benefits do not discriminate in favor of highly compensated individuals. Filing back taxes online free A life insurance, disability, severance pay, or supplemental unemployment compensation benefit does not discriminate in favor of highly compensated individuals merely because the benefits available bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of employees covered by the plan. Filing back taxes online free   For purposes of determining whether a plan meets the nondiscrimination requirements, the employer can elect to exclude all disability or severance payments payable to individuals who are in pay status as of January 1, 1985. Filing back taxes online free This will not apply to any increase in such payment by any plan amendment adopted after June 22, 1984. Filing back taxes online free   If a plan provides a benefit for which there is a nondiscrimination provision provided under Chapter 1 of the Internal Revenue Code as a condition of that benefit being excluded from gross income, these nondiscrimination requirements do not apply. Filing back taxes online free The benefit will be considered nondiscriminatory only if it meets the nondiscrimination provision of the applicable Code section. Filing back taxes online free For example, benefits provided under a medical reimbursement plan would meet the nondiscrimination requirements for an association, if the benefits meet the nondiscrimination requirements of section 105(h)(3) and 105(h)(4). Filing back taxes online free Excluded employees. Filing back taxes online free   Certain employees who are not covered by a plan can be excluded from consideration in applying these requirements. Filing back taxes online free These include employees: Who have not completed 3 years of service, Who have not attained age 21, Who are seasonal or less than half-time employees, Who are not in the plan and who are included in a unit of employees covered by a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining, or Who are nonresident aliens and who receive no earned income from the employer that has United States source income. Filing back taxes online free Highly compensated individual. Filing back taxes online free   A highly compensated individual is one who: Owned 5 percent or more of the employer at any time during the current year or the preceding year, Received more than $115,000 in compensation from the employer for the preceding year (the amount is annualized for inflation. Filing back taxes online free Go to IRS. Filing back taxes online free gov, and search “Pension Plan Limitation” for the year), and Was among the top 20% of employees by compensation for the preceding year. Filing back taxes online free However, the employer can choose not to have (3) apply. Filing back taxes online free Aggregation rules. Filing back taxes online free   The employer can choose to treat two or more plans as one plan for purposes of meeting the nondiscrimination requirements. Filing back taxes online free Employees of controlled groups of corporations, trades, or businesses under common control, or members of an affiliated service group, are treated as employees of a single employer. Filing back taxes online free Leased employees are treated as employees of the recipient. Filing back taxes online free One employee. Filing back taxes online free   A trust created to provide benefits to one employee will not qualify as a voluntary employees' beneficiary association under section 501(c)(9). Filing back taxes online free Supplemental Unemployment Benefit Trusts (501(c)(17)) A trust or trusts forming part of a written plan (established and maintained by an employer, his or her employees, or both) providing solely for the payment of supplemental unemployment compensation benefits must file the application for recognition of exemption on Form 1024. Filing back taxes online free The trust must be a valid, existing trust under local law and must be evidenced by an executed document. Filing back taxes online free A conformed copy of the plan of which the trust is a part should be attached to the application. Filing back taxes online free To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Filing back taxes online free Note. Filing back taxes online free Under section 4976, the reversion of funds from a section 501(c)(17) organization to the employer who created the supplemental unemployment benefit trust may subject the employer to a 100% penalty excise tax on the amount of the reversion. Filing back taxes online free Notice requirement. Filing back taxes online free   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Filing back taxes online free The organization gives notice by filing Form 1024. Filing back taxes online free If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before such notice is given. Filing back taxes online free An extension of time for filing the notice is granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Filing back taxes online free Types of payments. Filing back taxes online free   You must show that the supplemental unemployment compensation benefits will be benefits paid to an employee because of the employee's involuntary separation from employment (whether or not the separation is temporary) resulting directly from a reduction-in-force, discontinuance of a plant or operation, or other similar conditions. Filing back taxes online free In addition, sickness and accident benefits (but not vacation, retirement, or death benefits) may be included in the plan if these are subordinate to the unemployment compensation benefits. Filing back taxes online free Diversion of funds. Filing back taxes online free   It must be impossible under the plan (at any time before the satisfaction of all liabilities with respect to employees under the plan) to use or to divert any of the corpus or income of the trust to any purpose other than the payment of supplemental unemployment compensation benefits (or sickness or accident benefits to the extent just explained). Filing back taxes online free Discrimination in benefits. Filing back taxes online free   Neither the terms of the plan nor the actual payment of benefits can be discriminatory in favor of the company's officers, stockholders, supervisors, or highly paid employees. Filing back taxes online free However, a plan is not discriminatory merely because benefits bear a uniform relationship to compensation or the rate of compensation. Filing back taxes online free Prohibited transactions and exemption. Filing back taxes online free   If your organization is a supplemental unemployment benefit trust and has received a denial of exemption because it engaged in a prohibited transaction, as defined by section 503(b), it can file a claim for exemption in any tax year following the tax year in which the notice of denial was issued. Filing back taxes online free It must file the claim on Form 1024. Filing back taxes online free The organization must include a written declaration that it will not knowingly again engage in a prohibited transaction. Filing back taxes online free An authorized principal officer of your organization must make this declaration under the penalties of perjury. Filing back taxes online free   If your organization has satisfied all requirements as a supplemental unemployment benefit trust described in section 501(c)(17), it will be notified in writing that it has been recognized as exempt. Filing back taxes online free However, the organization will be exempt only for those tax years after the tax year in which the claim for exemption (Form 1024) is filed. Filing back taxes online free Tax year in this case means the established annual accounting period of the organization or, if the organization has not established an annual accounting period, the calendar year. Filing back taxes online free For more information about the requirements for reestablishing an exemption previously denied, contact the IRS. Filing back taxes online free 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like Organizations Each of the following organizations apply for recognition of exemption from federal income tax by filing Form 1024. Filing back taxes online free Benevolent life insurance associations of a purely local character and like organizations. Filing back taxes online free Mutual ditch or irrigation companies and like organizations. Filing back taxes online free Mutual or cooperative telephone companies and like organizations. Filing back taxes online free A like organization is an organization that performs a service comparable to that performed by any one of the above organizations. Filing back taxes online free The information to be provided upon application by each of these organizations is described in this section. Filing back taxes online free For information as to the procedures to follow in applying for exemption, see chapter 1. Filing back taxes online free General requirements. Filing back taxes online free   These organizations must use their income solely to cover losses and expenses, with any excess being returned to members or retained to cover future losses and expenses. Filing back taxes online free They must collect at least 85% of their income from members for the sole purpose of meeting losses and expenses. Filing back taxes online free Mutual character. Filing back taxes online free   These organizations, other than benevolent life insurance associations, must be organized and operated on a mutual or cooperative basis. Filing back taxes online free They are associations of persons or organizations, or both, banded together to provide themselves a mutually desirable service approximately at cost and on a mutual basis. Filing back taxes online free To maintain the mutual characteristic of democratic ownership and control, they must be so organized and operated that their members have the right to choose the management, to receive services at cost, to receive a return of any excess of payments over losses and expenses, and to share in any assets upon dissolution. Filing back taxes online free   The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. Filing back taxes online free Upon dissolution, gains from the sale of appreciated assets must be distributed to all persons who were members during the period the assets were owned by the organization in proportion to the amount of business done during that period. Filing back taxes online free The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. Filing back taxes online free Membership. Filing back taxes online free   Membership of a mutual organization consists of those who join the organization to obtain its services, and have a voice in its management. Filing back taxes online free In a stock company, the stockholders are members. Filing back taxes online free However, a mutual life insurance organization cannot have policyholders other than its members. Filing back taxes online free Losses and expenses. Filing back taxes online free   In furnishing services substantially at cost, an organization must use its income solely for paying losses and expenses. Filing back taxes online free Any excess income not retained in reasonable reserves for future losses and expenses belongs to members in proportion to their patronage or business done with the organization. Filing back taxes online free If such patronage refunds are retained in reasonable amounts for purposes of expanding and improving facilities, retiring capital indebtedness, acquiring other assets, and unexpected expenses, the organization must maintain records sufficient to reflect the equity of each member in the assets acquired with the funds. Filing back taxes online free Distributions of proceeds. Filing back taxes online free   The cooperative may distribute the unexpended balance of collections or assessments remaining on hand at the end of the year to members or patrons prorated on the basis of their patronage or business done with the cooperative. Filing back taxes online free Such distribution represents a refund in the costs of services rendered to the member. Filing back taxes online free The 85% Requirement All of the organizations listed above must submit evidence with their application that they receive 85% or more of their gross income from their members for the sole purpose of meeting losses and expenses. Filing back taxes online free Nevertheless, certain items of income are excluded from the computation of the 85% requirement if the organization is a mutual or cooperative telephone or electric company. Filing back taxes online free Mutual or cooperative telephone company. Filing back taxes online free   A mutual or cooperative telephone company will exclude from the computation of the 85% requirement any income received or accrued from: A nonmember telephone company for the performance of communication services involving the completion of long distance calls to, from, or between members of the mutual or cooperative telephone company, Qualified pole rentals, The sale of display listings in a directory furnished to its members, or The prepayment of a loan created in 1987, 1988, or 1989, under section 306A, 306B, or 311 of the Rural Electrification Act of 1936. Filing back taxes online free Mutual or cooperative electric company. Filing back taxes online free   A mutual or cooperative electric company will exclude from the computation of the 85% requirement any income received or accrued from: Qualified pole rentals, Any provision or sale of electric energy transmission services or ancillary service if the services are provided on a nondiscriminatory open access basis under an open access transmission tariff approved or accepted by the Federal Energy Regulatory Commission (FERC) or under an independent transmission provider agreement approved or accepted by FERC (other than income received or accrued directly or indirectly from a member), The provision or sale of electric energy distribution services or ancillary services if the services are provided on a nondiscriminatory open-access basis to distribute electric energy not owned by the mutual or electric cooperative company: To end-users who are served by distribution facilities not owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), or Generated by a generation facility not owned or leased by the company or any of its members and which is directly connected to distribution facilities owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), Any nuclear decommissioning transaction, or Any asset exchange or conversion transaction. Filing back taxes online free   An electric cooperative's sale of excess fuel at cost in the year of purchase is not income for purposes of determining compliance with the 85% requirement. Filing back taxes online free Qualified pole rental. Filing back taxes online free   The term qualified pole rental means any rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that are used by the company in providing telephone or electric services to its members, and Pursuant to the rental to support one or more wires (in addition to wires described in (1)) for use in connection with the transmission by wire of electricity or of telephone or other communications. Filing back taxes online free   The term rental, for this purpose, includes any sale of the right to use the pole (or other structure). Filing back taxes online free The 85% requirement is applied on the basis of an annual accounting period. Filing back taxes online free Failure of an organization to meet the requirement in a particular year precludes exemption for that year, but has no effect upon exemption for years in which the 85% requirement is met. Filing back taxes online free Gain from the sale or conversion of the organization's property is not considered an amount received from members in determining whether the organization's income consists of amounts collected from members. Filing back taxes online free Because the 85% income test is based on gross income, capital losses cannot be used to reduce capital gains for purposes of this test. Filing back taxes online free Example. Filing back taxes online free   The books of an organization reflect the following for the calendar year. Filing back taxes online free Collections from members $2,400 Short-term capital gains 600 Short-term capital losses 400 Other income None Gross income ($2,400 + $600 =$3000) 100% Collected from members ($2,400) 80%   Since amounts collected from members do not constitute at least 85% of gross income, the organization is not entitled to exemption from federal income tax for the year. Filing back taxes online free   Voluntary contributions in the nature of gifts are not taken into account for purposes of the 85% computation. Filing back taxes online free   Other tax-exempt income besides gifts is considered as income received from other than members in applying the 85% test. Filing back taxes online free   If the 85% test is not met, your organization, if classifiable under this section, will not qualify for exemption as any other type of organization described in this publication. Filing back taxes online free Tax treatment of donations. Filing back taxes online free   Donations to an organization described in this section are not deductible as charitable contributions on the donor's federal income tax return. Filing back taxes online free Local Life Insurance Associations A benevolent life insurance association or an organization seeking recognition of exemption on grounds of similarity to a benevolent life insurance association must submit evidence upon applying for recognition of exemption that it will be of a purely local character, that its excess funds will be refunded to members or retained in reasonable reserves to meet future losses and expenses, and that it meets the 85% income requirement. Filing back taxes online free If an organization issues policies for stipulated cash premiums, or if it requires advance deposits to cover the cost of the insurance and maintains investments from which more than 15% of its income is derived, it will not be entitled to exemption. Filing back taxes online free To establish that your organization is of a purely local character, it should show that its activities will be confined to a particular community, place, or district irrespective of political subdivisions. Filing back taxes online free If the activities of an organization are limited only by the borders of a state, it cannot be purely local in character. Filing back taxes online free A benevolent life insurance association that does not terminate membership when a member moves from the local area in which the association operates will qualify for exemption if it meets the other requirements. Filing back taxes online free A copy of each type of policy issued by your organization should be included with the application for recognition of exemption. Filing back taxes online free Organizations similar to local benevolent life insurance companies. Filing back taxes online free   These organizations include those that in addition to paying death benefits also provide for the payment of sick, accident, or health benefits. Filing back taxes online free However, an organization that pays only sick, accident, or health benefits, but not life insurance benefits, is not an organization similar to a benevolent life insurance association and should not apply for recognition of exemption as described in this section. Filing back taxes online free Burial and funeral benefit insurance organization. Filing back taxes online free   This type of organization can apply for recognition of exemption as an organization similar to a benevolent life insurance company if it establishes that the benefits are paid in cash and if it is not engaged directly in the manufacture of funeral supplies or the performance of funeral services. Filing back taxes online free An organization that provides its benefits in the form of supplies and service is not a life insurance company. Filing back taxes online free Such an organization can seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life. Filing back taxes online free Mutual or Cooperative Associations Mutual ditch or irrigation companies, mutual or cooperative telephone companies, and like organizations need not establish that they are of a purely local character. Filing back taxes online free They can serve noncontiguous areas. Filing back taxes online free Like organization. Filing back taxes online free   A like organization is a cooperative or mutual organization that performs a service similar to mutual ditch, irrigation, telephone, or electric companies. Filing back taxes online free Examples include the following: cooperatives that provide protection of river banks to prevent erosion, water and sewer services, cable television, satellite, television, cellular phone services, two-way radio service, or natural gas services. Filing back taxes online free 501(c)(13) - Cemetery Companies If your organization wishes to obtain recognition of exemption from federal income tax as a cemetery company or a corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, it must file an application on Form 1024. Filing back taxes online free For the procedure to follow to file an application, see Application, Approval, and Appeal Procedures in chapter 1. Filing back taxes online free A nonprofit mutual cemetery company that seeks recognition of exemption should submit evidence with its application that it is owned and operated exclusively for the benefit of its lot owners who hold lots for bona fide burial purposes and not for purposes of resale. Filing back taxes online free A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. Filing back taxes online free The fact that a mutual cemetery company limits its membership to a particular class of individuals, such as members of a family, will not affect its status as mutual so long as all the other requirements of section 501(c)(13) are met. Filing back taxes online free If your organization is a nonprofit corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, you should show that it is not permitted by its charter to engage in any business not necessarily incident to that purpose. Filing back taxes online free Operating a mortuary is not permitted. Filing back taxes online free However, selling monuments, markers, vaults, and flowers solely for use in the cemetery is permitted if the profits from these sales are used to maintain the cemetery as a whole. Filing back taxes online free How income can be used. Filing back taxes online free   You should show that your organization's earnings are or will be used only in one or more of the following ways. Filing back taxes online free To pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium. Filing back taxes online free To buy cemetery property. Filing back taxes online free To create a fund that will provide a source of income for the perpetual care of the cemetery or a reasonable reserve for any ordinary or necessary purpose. Filing back taxes online free No part of the net earnings of your organization can inure to the benefit of any private shareholder or individual. Filing back taxes online free Ordinary and necessary expenses in connection with the operation, management, maintenance, and improvement of the cemetery are permitted, as are reasonable fees for the services of a manager. Filing back taxes online free Buying cemetery property. Filing back taxes online free   Payments can be made to amortize debt incurred to buy land, but cannot be in the nature of profit distributions. Filing back taxes online free You must show the method used to finance the purchase of the cemetery property and that the purchase price of the land at the time of its sale to the cemetery was not unreasonable. Filing back taxes online free   Except for holders of preferred stock (discussed later), no person can have any interest in the net earnings of a tax-exempt cemetery company or crematorium. Filing back taxes online free Therefore, if property is transferred to the organization in exchange for an interest in the organization's net earnings, the organization will not
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Bureau of Land Management (BLM)

The Bureau of Land Management manages outdoor recreation, livestock grazing, mineral development, and energy production on public lands.

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Website: Bureau of Land Management (BLM)

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The Filing Back Taxes Online Free

Filing back taxes online free 11. Filing back taxes online free   Social Security and Equivalent Railroad Retirement Benefits Table of Contents Introduction Useful Items - You may want to see: Are Any of Your Benefits Taxable? How To Report Your BenefitsHow Much Is Taxable? Examples Deductions Related to Your BenefitsRepayments More Than Gross Benefits Introduction This chapter explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Filing back taxes online free It explains the following topics. Filing back taxes online free How to figure whether your benefits are taxable. Filing back taxes online free How to use the social security benefits worksheet (with examples). Filing back taxes online free How to report your taxable benefits. Filing back taxes online free How to treat repayments that are more than the benefits you received during the year. Filing back taxes online free Social security benefits include monthly retirement, survivor, and disability benefits. Filing back taxes online free They do not include supplemental security income (SSI) payments, which are not taxable. Filing back taxes online free Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Filing back taxes online free They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Filing back taxes online free If you received these benefits during 2013, you should have received a Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Payments by the Railroad Retirement Board. Filing back taxes online free These forms show the amounts received and repaid, and taxes withheld for the year. Filing back taxes online free You may receive more than one of these forms for the same year. Filing back taxes online free You should add the amounts shown on all the Forms SSA-1099 and Forms RRB-1099 you receive for the year to determine the total amounts received and repaid, and taxes withheld for that year. Filing back taxes online free See the Appendix at the end of Publication 915 for more information. Filing back taxes online free Note. Filing back taxes online free When the term “benefits” is used in this chapter, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Filing back taxes online free What is not covered in this chapter. Filing back taxes online free   This chapter does not cover the tax rules for the following railroad retirement benefits. Filing back taxes online free Non-social security equivalent benefit (NSSEB) portion of tier 1 benefits. Filing back taxes online free Tier 2 benefits. Filing back taxes online free Vested dual benefits. Filing back taxes online free Supplemental annuity benefits. Filing back taxes online free For information on these benefits, see Publication 575, Pension and Annuity Income. Filing back taxes online free   This chapter does not cover the tax rules for social security benefits reported on Form SSA-1042S, Social Security Benefit Statement, or Form RRB-1042S, Statement for Nonresident Alien Recipients of: Payments by the Railroad Retirement Board. Filing back taxes online free For information about these benefits, see Publication 519, U. Filing back taxes online free S. Filing back taxes online free Tax Guide for Aliens, and Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Filing back taxes online free   This chapter also does not cover the tax rules for foreign social security benefits. Filing back taxes online free These benefits are taxable as annuities, unless they are exempt from U. Filing back taxes online free S. Filing back taxes online free tax or treated as a U. Filing back taxes online free S. Filing back taxes online free social security benefit under a tax treaty. Filing back taxes online free Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 915 Social Security and Equivalent Railroad Retirement Benefits Forms (and Instructions) 1040-ES Estimated Tax for Individuals SSA-1099 Social Security Benefit Statement RRB-1099 Payments by the Railroad Retirement Board W-4V Voluntary Withholding Request Are Any of Your Benefits Taxable? To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Filing back taxes online free When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Filing back taxes online free S. Filing back taxes online free savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned by bona fide residents of American Samoa or Puerto Rico. Filing back taxes online free Children's benefits. Filing back taxes online free   The rules in this chapter apply to benefits received by children. Filing back taxes online free See Who is taxed , later. Filing back taxes online free Figuring total income. Filing back taxes online free   To figure the total of one-half of your benefits plus your other income, use Worksheet 11-1 later in this discussion. Filing back taxes online free If the total is more than your base amount, part of your benefits may be taxable. Filing back taxes online free    If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Filing back taxes online free Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Filing back taxes online free    If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Filing back taxes online free If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Filing back taxes online free Base amount. Filing back taxes online free   Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. Filing back taxes online free Worksheet 11-1. Filing back taxes online free   You can use Worksheet 11-1 to figure the amount of income to compare with your base amount. Filing back taxes online free This is a quick way to check whether some of your benefits may be taxable. Filing back taxes online free Worksheet 11-1. Filing back taxes online free A Quick Way To Check if Your Benefits May Be Taxable A. Filing back taxes online free Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Filing back taxes online free Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Filing back taxes online free (If you received more than one form, combine the amounts from box 5 and enter the total. Filing back taxes online free ) A. Filing back taxes online free   Note. Filing back taxes online free If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Filing back taxes online free B. Filing back taxes online free Enter one-half of the amount on line A B. Filing back taxes online free   C. Filing back taxes online free Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Filing back taxes online free   D. Filing back taxes online free Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Filing back taxes online free   E. Filing back taxes online free Add lines B, C, and D E. Filing back taxes online free   Note. Filing back taxes online free Compare the amount on line E to your base amount for your filing status. Filing back taxes online free If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Filing back taxes online free If the amount on line E is more than your base amount, some of your benefits may be taxable. Filing back taxes online free You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). Filing back taxes online free If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits. Filing back taxes online free Example. Filing back taxes online free You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. Filing back taxes online free In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Filing back taxes online free Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. Filing back taxes online free You also received a taxable pension of $22,800 and interest income of $500. Filing back taxes online free You did not have any tax-exempt interest income. Filing back taxes online free Your benefits are not taxable for 2013 because your income, as figured in Worksheet 11-1, is not more than your base amount ($32,000) for married filing jointly. Filing back taxes online free Even though none of your benefits are taxable, you must file a return for 2013 because your taxable gross income ($23,300) exceeds the minimum filing requirement amount for your filing status. Filing back taxes online free Filled-in Worksheet 11-1. Filing back taxes online free A Quick Way To Check if Your Benefits May Be Taxable A. Filing back taxes online free Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Filing back taxes online free Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Filing back taxes online free (If you received more than one form, combine the amounts from box 5 and enter the total. Filing back taxes online free ) A. Filing back taxes online free $11,000 Note. Filing back taxes online free If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Filing back taxes online free B. Filing back taxes online free Enter one-half of the amount on line A B. Filing back taxes online free 5,500 C. Filing back taxes online free Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Filing back taxes online free 23,300 D. Filing back taxes online free Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Filing back taxes online free -0- E. Filing back taxes online free Add lines B, C, and D E. Filing back taxes online free $28,800 Note. Filing back taxes online free Compare the amount on line E to your base amount for your filing status. Filing back taxes online free If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Filing back taxes online free If the amount on line E is more than your base amount, some of your benefits may be taxable. Filing back taxes online free You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). Filing back taxes online free If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits. Filing back taxes online free Who is taxed. Filing back taxes online free   Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. Filing back taxes online free For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. Filing back taxes online free One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child. Filing back taxes online free Repayment of benefits. Filing back taxes online free   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Filing back taxes online free It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Filing back taxes online free If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Filing back taxes online free   Your gross benefits are shown in box 3 of Form SSA-1099 or RRB-1099. Filing back taxes online free Your repayments are shown in box 4. Filing back taxes online free The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Filing back taxes online free Use the amount in box 5 to figure whether any of your benefits are taxable. Filing back taxes online free Tax withholding and estimated tax. Filing back taxes online free   You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. Filing back taxes online free If you choose to do this, you must complete a Form W-4V. Filing back taxes online free   If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. Filing back taxes online free For details, see Publication 505 or the instructions for Form 1040-ES. Filing back taxes online free How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. Filing back taxes online free You cannot use Form 1040EZ. Filing back taxes online free Reporting on Form 1040. Filing back taxes online free   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 20a and the taxable part on line 20b. Filing back taxes online free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Filing back taxes online free Reporting on Form 1040A. Filing back taxes online free   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 14a and the taxable part on line 14b. Filing back taxes online free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Filing back taxes online free Benefits not taxable. Filing back taxes online free   If you are filing Form 1040EZ, do not report any benefits on your tax return. Filing back taxes online free If you are filing Form 1040 or Form 1040A, report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Filing back taxes online free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Filing back taxes online free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Filing back taxes online free How Much Is Taxable? If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Filing back taxes online free Generally, the higher that total amount, the greater the taxable part of your benefits. Filing back taxes online free Maximum taxable part. Filing back taxes online free   Generally, up to 50% of your benefits will be taxable. Filing back taxes online free However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Filing back taxes online free The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Filing back taxes online free You are married filing separately and lived with your spouse at any time during 2013. Filing back taxes online free Which worksheet to use. Filing back taxes online free   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or Form 1040A. Filing back taxes online free You can use either that worksheet or Worksheet 1 in Publication 915, unless any of the following situations applies to you. Filing back taxes online free You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. Filing back taxes online free In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Filing back taxes online free Situation (1) does not apply and you take an exclusion for interest from qualified U. Filing back taxes online free S. Filing back taxes online free savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Filing back taxes online free In this situation, you must use Worksheet 1 in Publication 915 to figure your taxable benefits. Filing back taxes online free You received a lump-sum payment for an earlier year. Filing back taxes online free In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. Filing back taxes online free See Lump-sum election next. Filing back taxes online free Lump-sum election. Filing back taxes online free   You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Filing back taxes online free    This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Filing back taxes online free No part of the lump-sum death benefit is subject to tax. Filing back taxes online free   Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Filing back taxes online free However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Filing back taxes online free You can elect this method if it lowers your taxable benefits. Filing back taxes online free Making the election. Filing back taxes online free   If you received a lump-sum benefit payment in 2013 that includes benefits for one or more earlier years, follow the instructions in Publication 915 under Lump-Sum Election to see whether making the election will lower your taxable benefits. Filing back taxes online free That discussion also explains how to make the election. Filing back taxes online free    Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. Filing back taxes online free Do not file an amended return for the earlier year. Filing back taxes online free Examples The following are a few examples you can use as a guide to figure the taxable part of your benefits. Filing back taxes online free Example 1. Filing back taxes online free George White is single and files Form 1040 for 2013. Filing back taxes online free He received the following income in 2013: Fully taxable pension $18,600 Wages from part-time job 9,400 Taxable interest income 990 Total $28,990 George also received social security benefits during 2013. Filing back taxes online free The Form SSA-1099 he received in January 2014 shows $5,980 in box 5. Filing back taxes online free To figure his taxable benefits, George completes the worksheet shown here. Filing back taxes online free Filled-in Worksheet 1. Filing back taxes online free Figuring Your Taxable Benefits 1. Filing back taxes online free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Filing back taxes online free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,980 2. Filing back taxes online free Enter one-half of line 1 2,990 3. Filing back taxes online free Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Filing back taxes online free     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 28,990 4. Filing back taxes online free Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Filing back taxes online free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Filing back taxes online free Combine lines 2, 3, 4, and 5 31,980 7. Filing back taxes online free Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Filing back taxes online free     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. Filing back taxes online free Is the amount on line 7 less than the amount on line 6?     No. Filing back taxes online free None of your social security benefits are taxable. Filing back taxes online free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Filing back taxes online free   Yes. Filing back taxes online free Subtract line 7 from line 6 31,980 9. Filing back taxes online free If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 25,000   Note. Filing back taxes online free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Filing back taxes online free 85) and enter the result on line 17. Filing back taxes online free Then go to line 18. Filing back taxes online free   10. Filing back taxes online free Is the amount on line 9 less than the amount on line 8?     No. Filing back taxes online free None of your benefits are taxable. Filing back taxes online free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Filing back taxes online free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Filing back taxes online free     Yes. Filing back taxes online free Subtract line 9 from line 8 6,980 11. Filing back taxes online free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 9,000 12. Filing back taxes online free Subtract line 11 from line 10. Filing back taxes online free If zero or less, enter -0- -0- 13. Filing back taxes online free Enter the smaller of line 10 or line 11 6,980 14. Filing back taxes online free Enter one-half of line 13 3,490 15. Filing back taxes online free Enter the smaller of line 2 or line 14 2,990 16. Filing back taxes online free Multiply line 12 by 85% (. Filing back taxes online free 85). Filing back taxes online free If line 12 is zero, enter -0- -0- 17. Filing back taxes online free Add lines 15 and 16 2,990 18. Filing back taxes online free Multiply line 1 by 85% (. Filing back taxes online free 85) 5,083 19. Filing back taxes online free Taxable benefits. Filing back taxes online free Enter the smaller of line 17 or line 18. Filing back taxes online free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $2,990 The amount on line 19 of George's worksheet shows that $2,990 of his social security benefits is taxable. Filing back taxes online free On line 20a of his Form 1040, George enters his net benefits of $5,980. Filing back taxes online free On line 20b, he enters his taxable benefits of $2,990. Filing back taxes online free Example 2. Filing back taxes online free Ray and Alice Hopkins file a joint return on Form 1040A for 2013. Filing back taxes online free Ray is retired and received a fully taxable pension of $15,500. Filing back taxes online free He also received social security benefits, and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. Filing back taxes online free Alice worked during the year and had wages of $14,000. Filing back taxes online free She made a deductible payment to her IRA account of $1,000. Filing back taxes online free Ray and Alice have two savings accounts with a total of $250 in taxable interest income. Filing back taxes online free They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. Filing back taxes online free They find none of Ray's social security benefits are taxable. Filing back taxes online free On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. Filing back taxes online free Filled-in Worksheet 1. Filing back taxes online free Figuring Your Taxable Benefits 1. Filing back taxes online free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Filing back taxes online free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,600 2. Filing back taxes online free Enter one-half of line 1 2,800 3. Filing back taxes online free Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Filing back taxes online free     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 29,750 4. Filing back taxes online free Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Filing back taxes online free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Filing back taxes online free Combine lines 2, 3, 4, and 5 32,550 7. Filing back taxes online free Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Filing back taxes online free     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 1,000 8. Filing back taxes online free Is the amount on line 7 less than the amount on line 6?     No. Filing back taxes online free None of your social security benefits are taxable. Filing back taxes online free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Filing back taxes online free   Yes. Filing back taxes online free Subtract line 7 from line 6 31,550 9. Filing back taxes online free If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 32,000   Note. Filing back taxes online free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Filing back taxes online free 85) and enter the result on line 17. Filing back taxes online free Then go to line 18. Filing back taxes online free   10. Filing back taxes online free Is the amount on line 9 less than the amount on line 8?     No. Filing back taxes online free None of your benefits are taxable. Filing back taxes online free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Filing back taxes online free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Filing back taxes online free     Yes. Filing back taxes online free Subtract line 9 from line 8   11. Filing back taxes online free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013   12. Filing back taxes online free Subtract line 11 from line 10. Filing back taxes online free If zero or less, enter -0-   13. Filing back taxes online free Enter the smaller of line 10 or line 11   14. Filing back taxes online free Enter one-half of line 13   15. Filing back taxes online free Enter the smaller of line 2 or line 14   16. Filing back taxes online free Multiply line 12 by 85% (. Filing back taxes online free 85). Filing back taxes online free If line 12 is zero, enter -0-   17. Filing back taxes online free Add lines 15 and 16   18. Filing back taxes online free Multiply line 1 by 85% (. Filing back taxes online free 85)   19. Filing back taxes online free Taxable benefits. Filing back taxes online free Enter the smaller of line 17 or line 18. Filing back taxes online free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b   Example 3. Filing back taxes online free Joe and Betty Johnson file a joint return on Form 1040 for 2013. Filing back taxes online free Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Filing back taxes online free Joe's Form RRB-1099 shows $10,000 in box 5. Filing back taxes online free Betty is a retired government worker and receives a fully taxable pension of $38,000. Filing back taxes online free They had $2,300 in taxable interest income plus interest of $200 on a qualified U. Filing back taxes online free S. Filing back taxes online free savings bond. Filing back taxes online free The savings bond interest qualified for the exclusion. Filing back taxes online free They figure their taxable benefits by completing Worksheet 1. Filing back taxes online free Because they have qualified U. Filing back taxes online free S. Filing back taxes online free savings bond interest, they follow the note at the beginning of the worksheet and use the amount from line 2 of their Schedule B (Form 1040A or 1040) on line 3 of the worksheet instead of the amount from line 8a of their Form 1040. Filing back taxes online free On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). Filing back taxes online free Filled-in Worksheet 1. Filing back taxes online free Figuring Your Taxable Benefits Before you begin: • If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Filing back taxes online free • Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Filing back taxes online free None of your benefits are taxable for 2013. Filing back taxes online free For more information, see Repayments More Than Gross Benefits. Filing back taxes online free • If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Filing back taxes online free S. Filing back taxes online free Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Filing back taxes online free Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Filing back taxes online free 1. Filing back taxes online free Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Filing back taxes online free Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $10,000 2. Filing back taxes online free Enter one-half of line 1 5,000 3. Filing back taxes online free Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Filing back taxes online free     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 40,500 4. Filing back taxes online free Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Filing back taxes online free Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Filing back taxes online free Combine lines 2, 3, 4, and 5 45,500 7. Filing back taxes online free Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Filing back taxes online free     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. Filing back taxes online free Is the amount on line 7 less than the amount on line 6?     No. Filing back taxes online free None of your social security benefits are taxable. Filing back taxes online free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Filing back taxes online free   Yes. Filing back taxes online free Subtract line 7 from line 6 45,500 9. Filing back taxes online free If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 32,000   Note. Filing back taxes online free If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Filing back taxes online free 85) and enter the result on line 17. Filing back taxes online free Then go to line 18. Filing back taxes online free   10. Filing back taxes online free Is the amount on line 9 less than the amount on line 8?     No. Filing back taxes online free None of your benefits are taxable. Filing back taxes online free Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Filing back taxes online free If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Filing back taxes online free     Yes. Filing back taxes online free Subtract line 9 from line 8 13,500 11. Filing back taxes online free Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 12,000 12. Filing back taxes online free Subtract line 11 from line 10. Filing back taxes online free If zero or less, enter -0- 1,500 13. Filing back taxes online free Enter the smaller of line 10 or line 11 12,000 14. Filing back taxes online free Enter one-half of line 13 6,000 15. Filing back taxes online free Enter the smaller of line 2 or line 14 5,000 16. Filing back taxes online free Multiply line 12 by 85% (. Filing back taxes online free 85). Filing back taxes online free If line 12 is zero, enter -0- 1,275 17. Filing back taxes online free Add lines 15 and 16 6,275 18. Filing back taxes online free Multiply line 1 by 85% (. Filing back taxes online free 85) 8,500 19. Filing back taxes online free Taxable benefits. Filing back taxes online free Enter the smaller of line 17 or line 18. Filing back taxes online free Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $6,275 More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Filing back taxes online free Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. Filing back taxes online free Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. Filing back taxes online free Disability payments. Filing back taxes online free   You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. Filing back taxes online free If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. Filing back taxes online free If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Filing back taxes online free Claim the deduction or credit in the same way explained under Repayments More Than Gross Benefits , later. Filing back taxes online free Legal expenses. Filing back taxes online free   You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax. Filing back taxes online free   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Filing back taxes online free Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Filing back taxes online free If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Filing back taxes online free Do not use a worksheet in this case. Filing back taxes online free If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Filing back taxes online free If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. Filing back taxes online free Joint return. Filing back taxes online free   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. Filing back taxes online free You do this to get your net benefits when figuring if your combined benefits are taxable. Filing back taxes online free Example. Filing back taxes online free John and Mary file a joint return for 2013. Filing back taxes online free John received Form SSA-1099 showing $3,000 in box 5. Filing back taxes online free Mary also received Form SSA-1099 and the amount in box 5 was ($500). Filing back taxes online free John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable. Filing back taxes online free Repayment of benefits received in an earlier year. Filing back taxes online free   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Filing back taxes online free Deduction $3,000 or less. Filing back taxes online free   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Filing back taxes online free Claim it on Schedule A (Form 1040), line 23. Filing back taxes online free Deduction more than $3,000. Filing back taxes online free    If this deduction is more than $3,000, you should figure your tax two ways: Figure your tax for 2013 with the itemized deduction included on Schedule A, line 28. Filing back taxes online free Figure your tax for 2013 in the following steps. Filing back taxes online free Figure the tax without the itemized deduction included on Schedule A, line 28. Filing back taxes online free For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Filing back taxes online free Then refigure the tax for that year. Filing back taxes online free Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. Filing back taxes online free Subtract the result in (c) from the result in (a). Filing back taxes online free Compare the tax figured in methods (1) and (2). Filing back taxes online free Your tax for 2013 is the smaller of the two amounts. Filing back taxes online free If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. Filing back taxes online free If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. Filing back taxes online free Check box d and enter “I. Filing back taxes online free R. Filing back taxes online free C. Filing back taxes online free 1341” in the space next to that box. Filing back taxes online free If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. Filing back taxes online free Prev  Up  Next   Home   More Online Publications