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Filing State Taxes

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Filing State Taxes

Filing state taxes 5. Filing state taxes   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. Filing state taxes Shared equity financing agreement. Filing state taxes Donation of use of the property. Filing state taxes Examples. Filing state taxes Days used for repairs and maintenance. Filing state taxes Days used as a main home before or after renting. Filing state taxes Reporting Income and DeductionsNot used as a home. Filing state taxes Used as a home but rented less than 15 days. Filing state taxes Used as a home and rented 15 days or more. Filing state taxes If you have any personal use of a dwelling unit (including a vacation home) that you rent, you must divide your expenses between rental use and personal use. Filing state taxes In general, your rental expenses will be no more than your total expenses multiplied by a fraction; the denominator of which is the total number of days the dwelling unit is used and the numerator of which is the total number of days actually rented at a fair rental price. Filing state taxes Only your rental expenses may deducted on Schedule E (Form 1040). Filing state taxes Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Filing state taxes You must also determine if the dwelling unit is considered a home. Filing state taxes The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Filing state taxes Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Filing state taxes There is a special rule if you used the dwelling unit as a home and you rented it for less than 15 days during the year. Filing state taxes Dwelling unit. Filing state taxes   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Filing state taxes It also includes all structures or other property belonging to the dwelling unit. Filing state taxes A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Filing state taxes   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. Filing state taxes Property is used solely as a hotel, motel, inn, or similar establishment if it is regularly available for occupancy by paying customers and is not used by an owner as a home during the year. Filing state taxes Example. Filing state taxes You rent a room in your home that is always available for short-term occupancy by paying customers. Filing state taxes You do not use the room yourself and you allow only paying customers to use the room. Filing state taxes This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Filing state taxes Dividing Expenses If you use a dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. Filing state taxes When dividing your expenses, follow these rules. Filing state taxes Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day. Filing state taxes (This rule does not apply when determining whether you used the unit as a home. Filing state taxes ) Any day that the unit is available for rent but not actually rented is not a day of rental use. Filing state taxes Fair rental price. Filing state taxes   A fair rental price for your property generally is the amount of rent that a person who is not related to you would be willing to pay. Filing state taxes The rent you charge is not a fair rental price if it is substantially less than the rents charged for other properties that are similar to your property in your area. Filing state taxes   Ask yourself the following questions when comparing another property with yours. Filing state taxes Is it used for the same purpose? Is it approximately the same size? Is it in approximately the same condition? Does it have similar furnishings? Is it in a similar location? If any of the answers are no, the properties probably are not similar. Filing state taxes Example. Filing state taxes Your beach cottage was available for rent from June 1 through August 31 (92 days). Filing state taxes Except for the first week in August (7 days), when you were unable to find a renter, you rented the cottage at a fair rental price during that time. Filing state taxes The person who rented the cottage for July allowed you to use it over the weekend (2 days) without any reduction in or refund of rent. Filing state taxes Your family also used the cottage during the last 2 weeks of May (14 days). Filing state taxes The cottage was not used at all before May 17 or after August 31. Filing state taxes You figure the part of the cottage expenses to treat as rental expenses as follows. Filing state taxes The cottage was used for rental a total of 85 days (92 − 7). Filing state taxes The days it was available for rent but not rented (7 days) are not days of rental use. Filing state taxes The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Filing state taxes You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Filing state taxes The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Filing state taxes Your rental expenses are 85/99 (86%) of the cottage expenses. Filing state taxes Note. Filing state taxes When determining whether you used the cottage as a home, the July weekend (2 days) you used it is considered personal use even though you received a fair rental price for the weekend. Filing state taxes Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Filing state taxes Because you used the cottage for personal purposes more than 14 days and more than 10% of the days of rental use (8 days), you used it as a home. Filing state taxes If you have a net loss, you may not be able to deduct all of the rental expenses. Filing state taxes See Dwelling Unit Used as a Home, next. Filing state taxes Dwelling Unit Used as a Home If you use a dwelling unit for both rental and personal purposes, the tax treatment of the rental expenses you figured earlier under Dividing Expenses and rental income depends on whether you are considered to be using the dwelling unit as a home. Filing state taxes You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price. Filing state taxes See What is a day of personal use , later. Filing state taxes If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price (discussed earlier), do not count that day as a day of rental use in applying (2) above. Filing state taxes Instead, count it as a day of personal use in applying both (1) and (2) above. Filing state taxes What is a day of personal use?   A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons. Filing state taxes You or any other person who owns an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). Filing state taxes However, see Days used as a main home before or after renting , later. Filing state taxes A member of your family or a member of the family of any other person who owns an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Filing state taxes Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Filing state taxes ), and lineal descendants (children, grandchildren, etc. Filing state taxes ). Filing state taxes Anyone under an arrangement that lets you use some other dwelling unit. Filing state taxes Anyone at less than a fair rental price. Filing state taxes Main home. Filing state taxes   If the other person or member of the family in (1) or (2) above has more than one home, his or her main home is ordinarily the one he or she lived in most of the time. Filing state taxes Shared equity financing agreement. Filing state taxes   This is an agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit, including the land, and one or more of the co-owners is entitled to occupy the unit as his or her main home upon payment of rent to the other co-owner or owners. Filing state taxes Donation of use of the property. Filing state taxes   You use a dwelling unit for personal purposes if: You donate the use of the unit to a charitable organization, The organization sells the use of the unit at a fund-raising event, and The “purchaser” uses the unit. Filing state taxes Examples. Filing state taxes   The following examples show how to determine if you have days of personal use. Filing state taxes Example 1. Filing state taxes You and your neighbor are co-owners of a condominium at the beach. Filing state taxes Last year, you rented the unit to vacationers whenever possible. Filing state taxes The unit was not used as a main home by anyone. Filing state taxes Your neighbor used the unit for 2 weeks last year; you did not use it at all. Filing state taxes Because your neighbor has an interest in the unit, both of you are considered to have used the unit for personal purposes during those 2 weeks. Filing state taxes Example 2. Filing state taxes You and your neighbors are co-owners of a house under a shared equity financing agreement. Filing state taxes Your neighbors live in the house and pay you a fair rental price. Filing state taxes Even though your neighbors have an interest in the house, the days your neighbors live there are not counted as days of personal use by you. Filing state taxes This is because your neighbors rent the house as their main home under a shared equity financing agreement. Filing state taxes Example 3. Filing state taxes You own a rental property that you rent to your son. Filing state taxes Your son does not own any interest in this property. Filing state taxes He uses it as his main home and pays you a fair rental price. Filing state taxes Your son's use of the property is not personal use by you because your son is using it as his main home, he owns no interest in the property, and he is paying you a fair rental price. Filing state taxes Example 4. Filing state taxes You rent your beach house to Rosa. Filing state taxes Rosa rents her cabin in the mountains to you. Filing state taxes You each pay a fair rental price. Filing state taxes You are using your beach house for personal purposes on the days that Rosa uses it because your house is used by Rosa under an arrangement that allows you to use her cabin. Filing state taxes Example 5. Filing state taxes You rent an apartment to your mother at less than a fair rental price. Filing state taxes You are using the apartment for personal purposes on the days that your mother rents it because you rent it for less than a fair rental price. Filing state taxes Days used for repairs and maintenance. Filing state taxes   Any day that you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. Filing state taxes Do not count such a day as a day of personal use even if family members use the property for recreational purposes on the same day. Filing state taxes Example. Filing state taxes Corey owns a cabin in the mountains that he rents for most of the year. Filing state taxes He spends a week at the cabin with family members. Filing state taxes Corey works on maintenance of the cabin 3 or 4 hours each day during the week and spends the rest of the time fishing, hiking, and relaxing. Filing state taxes Corey's family members, however, work substantially full time on the cabin each day during the week. Filing state taxes The main purpose of being at the cabin that week is to do maintenance work. Filing state taxes Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. Filing state taxes Days used as a main home before or after renting. Filing state taxes   For purposes of determining whether a dwelling unit was used as a home, you may not have to count days you used the property as your main home before or after renting it or offering it for rent as days of personal use. Filing state taxes Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Filing state taxes You rented or tried to rent the property for a period of less than 12 consecutive months and the period ended because you sold or exchanged the property. Filing state taxes However, this special rule does not apply when dividing expenses between rental and personal use. Filing state taxes See Property Changed to Rental Use in chapter 4. Filing state taxes Example 1. Filing state taxes On February 29, 2012, you moved out of the house you had lived in for 6 years because you accepted a job in another town. Filing state taxes You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). Filing state taxes On June 1, 2013, you moved back into your old house. Filing state taxes The days you used the house as your main home from January 1 to February 29, 2012, and from June 1 to December 31, 2013, are not counted as days of personal use. Filing state taxes Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. Filing state taxes Example 2. Filing state taxes On January 31, you moved out of the condominium where you had lived for 3 years. Filing state taxes You offered it for rent at a fair rental price beginning on February 1. Filing state taxes You were unable to rent it until April. Filing state taxes On September 15, you sold the condominium. Filing state taxes The days you used the condominium as your main home from January 1 to January 31 are not counted as days of personal use when determining whether you used it as a home. Filing state taxes Examples. Filing state taxes   The following examples show how to determine whether you used your rental property as a home. Filing state taxes Example 1. Filing state taxes You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Filing state taxes You rented the basement apartment at a fair rental price to college students during the regular school year. Filing state taxes You rented to them on a 9-month lease (273 days). Filing state taxes You figured 10% of the total days rented to others at a fair rental price is 27 days. Filing state taxes During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Filing state taxes Your basement apartment was used as a home because you used it for personal purposes for 30 days. Filing state taxes Rent-free use by your brothers is considered personal use. Filing state taxes Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Filing state taxes Example 2. Filing state taxes You rented the guest bedroom in your home at a fair rental price during the local college's homecoming, commencement, and football weekends (a total of 27 days). Filing state taxes Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Filing state taxes You figured 10% of the total days rented to others at a fair rental price is 3 days. Filing state taxes The room was used as a home because you used it for personal purposes for 21 days. Filing state taxes That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Filing state taxes Example 3. Filing state taxes You own a condominium apartment in a resort area. Filing state taxes You rented it at a fair rental price for a total of 170 days during the year. Filing state taxes For 12 of these days, the tenant was not able to use the apartment and allowed you to use it even though you did not refund any of the rent. Filing state taxes Your family actually used the apartment for 10 of those days. Filing state taxes Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. Filing state taxes You figured 10% of the total days rented to others at a fair rental price is 16 days. Filing state taxes Your family also used the apartment for 7 other days during the year. Filing state taxes You used the apartment as a home because you used it for personal purposes for 17 days. Filing state taxes That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Filing state taxes Minimal rental use. Filing state taxes   If you use the dwelling unit as a home and you rent it less than 15 days during the year, that period is not treated as rental activity. Filing state taxes See Used as a home but rented less than 15 days, later, for more information. Filing state taxes Limit on deductions. Filing state taxes   Renting a dwelling unit that is considered a home is not a passive activity. Filing state taxes Instead, if your rental expenses are more than your rental income, some or all of the excess expenses cannot be used to offset income from other sources. Filing state taxes The excess expenses that cannot be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. Filing state taxes Any expenses carried forward to the next year will be subject to any limits that apply for that year. Filing state taxes This limitation will apply to expenses carried forward to another year even if you do not use the property as your home for that subsequent year. Filing state taxes   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. Filing state taxes Reporting Income and Deductions Property not used for personal purposes. Filing state taxes   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. Filing state taxes Property used for personal purposes. Filing state taxes   If you do use a dwelling unit for personal purposes, then how you report your rental income and expenses depends on whether you used the dwelling unit as a home. Filing state taxes Not used as a home. Filing state taxes   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Filing state taxes Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . Filing state taxes The expenses for personal use are not deductible as rental expenses. Filing state taxes   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. Filing state taxes Used as a home but rented less than 15 days. Filing state taxes   If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental and it should not be reported on Schedule E (Form 1040). Filing state taxes You are not required to report the rental income and rental expenses from this activity. Filing state taxes The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Filing state taxes See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Filing state taxes Used as a home and rented 15 days or more. Filing state taxes   If you use a dwelling unit as a home and rent it 15 days or more during the year, include all your rental income in your income. Filing state taxes Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . Filing state taxes The expenses for personal use are not deductible as rental expenses. Filing state taxes   If you had a net profit from renting the dwelling unit for the year (that is, if your rental income is more than the total of your rental expenses, including depreciation), deduct all of your rental expenses. Filing state taxes You do not need to use Worksheet 5-1. Filing state taxes   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Filing state taxes To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. Filing state taxes Worksheet 5-1. Filing state taxes Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Use this worksheet only if you answer “yes” to all of the following questions. Filing state taxes Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Filing state taxes ) Did you rent the dwelling unit at a fair rental price 15 days or more this year? Is the total of your rental expenses and depreciation more than your rental income? PART I. Filing state taxes Rental Use Percentage A. Filing state taxes Total days available for rent at fair rental price A. Filing state taxes       B. Filing state taxes Total days available for rent (line A) but not rented B. Filing state taxes       C. Filing state taxes Total days of rental use. Filing state taxes Subtract line B from line A C. Filing state taxes       D. Filing state taxes Total days of personal use (including days rented at less than fair rental price) D. Filing state taxes       E. Filing state taxes Total days of rental and personal use. Filing state taxes Add lines C and D E. Filing state taxes       F. Filing state taxes Percentage of expenses allowed for rental. Filing state taxes Divide line C by line E     F. Filing state taxes . Filing state taxes PART II. Filing state taxes Allowable Rental Expenses 1. Filing state taxes Enter rents received 1. Filing state taxes   2a. Filing state taxes Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Filing state taxes       b. Filing state taxes Enter the rental portion of real estate taxes b. Filing state taxes       c. Filing state taxes Enter the rental portion of deductible casualty and theft losses (see instructions) c. Filing state taxes       d. Filing state taxes Enter direct rental expenses (see instructions) d. Filing state taxes       e. Filing state taxes Fully deductible rental expenses. Filing state taxes Add lines 2a–2d. Filing state taxes Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Filing state taxes   3. Filing state taxes Subtract line 2e from line 1. Filing state taxes If zero or less, enter -0- 3. Filing state taxes   4a. Filing state taxes Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Filing state taxes       b. Filing state taxes Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Filing state taxes       c. Filing state taxes Carryover of operating expenses from 2012 worksheet c. Filing state taxes       d. Filing state taxes Add lines 4a–4c d. Filing state taxes       e. Filing state taxes Allowable expenses. Filing state taxes Enter the smaller of line 3 or line 4d (see instructions) 4e. Filing state taxes   5. Filing state taxes Subtract line 4e from line 3. Filing state taxes If zero or less, enter -0- 5. Filing state taxes   6a. Filing state taxes Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Filing state taxes       b. Filing state taxes Enter the rental portion of depreciation of the dwelling unit b. Filing state taxes       c. Filing state taxes Carryover of excess casualty losses and depreciation from 2012 worksheet c. Filing state taxes       d. Filing state taxes Add lines 6a–6c d. Filing state taxes       e. Filing state taxes Allowable excess casualty and theft losses and depreciation. Filing state taxes Enter the smaller of  line 5 or line 6d (see instructions) 6e. Filing state taxes   PART III. Filing state taxes Carryover of Unallowed Expenses to Next Year 7a. Filing state taxes Operating expenses to be carried over to next year. Filing state taxes Subtract line 4e from line 4d 7a. Filing state taxes   b. Filing state taxes Excess casualty and theft losses and depreciation to be carried over to next year. Filing state taxes  Subtract line 6e from line 6d b. Filing state taxes   Worksheet 5-1 Instructions. Filing state taxes Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Filing state taxes Use the percentage determined in Part I, line F, to figure the rental portions to enter on lines 2a–2c, 4a–4b, and 6a–6b of  Part II. Filing state taxes Line 2a. Filing state taxes Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Filing state taxes Do not include interest on a loan that did not benefit the dwelling unit. Filing state taxes For example, do not include interest on a home equity loan used to pay off credit cards or other personal loans, buy a car, or pay college tuition. Filing state taxes Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Filing state taxes Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Filing state taxes   Figure the qualified mortgage insurance premiums on the dwelling unit that you could deduct on line 13 of Schedule A as if you had not rented the unit. Filing state taxes See the Schedule A instructions. Filing state taxes However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Filing state taxes See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Filing state taxes Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Filing state taxes   Note. Filing state taxes Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Filing state taxes Instead, figure the personal portion on a separate Schedule A. Filing state taxes If you have deducted mortgage interest or qualified mortgage insurance premiums on the dwelling unit on other forms, such as Schedule C or F, remember to reduce your Schedule A deduction by that amount. Filing state taxes           Line 2c. Filing state taxes Figure the casualty and theft losses related to the dwelling unit that you could deduct on Schedule A as if you had not rented the dwelling unit. Filing state taxes To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Filing state taxes If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Filing state taxes On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Filing state taxes Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Filing state taxes   Note. Filing state taxes Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Filing state taxes Instead, figure the personal portion on a separate Form 4684. Filing state taxes           Line 2d. Filing state taxes Enter the total of your rental expenses that are directly related only to the rental activity. Filing state taxes These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Filing state taxes Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Filing state taxes           Line 2e. Filing state taxes You can deduct the amounts on lines 2a, 2b, 2c, and 2d as rental expenses on Schedule E even if your rental expenses are more than your rental income. Filing state taxes Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Filing state taxes           Line 4b. Filing state taxes On line 2a, you entered the rental portion of the mortgage interest or qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. Filing state taxes If you had additional mortgage interest and qualified mortgage insurance premiums that would not be deductible on Schedule A because of limits imposed on them, enter on line 4b of this worksheet the rental portion of those excess amounts. Filing state taxes Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). Filing state taxes           Line 4e. Filing state taxes You can deduct the amounts on lines 4a, 4b, and 4c as rental expenses on Schedule E only to the extent they are not more than the amount on line 4e. Filing state taxes *           Line 6a. Filing state taxes To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Filing state taxes   A. Filing state taxes Enter the amount from Form 4684, line 10       B. Filing state taxes Enter the rental portion of line A       C. Filing state taxes Enter the amount from line 2c of this worksheet       D. Filing state taxes Subtract line C from line B. Filing state taxes Enter the result here and on line 6a of this worksheet               Line 6e. Filing state taxes You can deduct the amounts on lines 6a, 6b, and 6c as rental expenses on Schedule E only to the extent they are not more than the amount on line 6e. Filing state taxes * *Allocating the limited deduction. Filing state taxes If you cannot deduct all of the amount on line 4d or 6d this year, you can allocate the allowable deduction in any way you wish among the expenses included on line 4d or 6d. Filing state taxes Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Filing state taxes Prev  Up  Next   Home   More Online Publications
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Understanding your CP21I Notice

We made changes to your tax return for the tax year specified on the notice for Individual
Retirement Arrangement (IRA) taxes. You owe money on your taxes as a result
of these changes.

Tax publications you may find useful

How to get help

Calling the toll free number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully ― it will explain why you owe money on your taxes.
  • Pay the amount owed by the date on the notice's payment coupon.
  • Make payment arrangements if you can't pay the full amount you owe.
  • Contact us if you disagree with the change(s) we made.
  • Correct the copy of your tax return that you kept for your records.

You may want to...


Answers to Common Questions

What should I do if I disagree with the changes you made?
If you disagree, contact us at the toll-free number listed on the top right corner of your notice.

What happens if I can't pay the full amount I owe?
You can arrange to make a payment plan with us if you can't pay the full amount you owe.

Am I charged interest on the money I owe?
If you don't full pay the amount you owe by the date on the payment coupon, interest will accrue on the unpaid balance after that date.

Will I receive a penalty if I can't pay the full amount?
Yes, you'll receive a late payment penalty. You can contact us at the number listed on your notice if you’re unable to pay the full amount shown in your specific notice because of circumstances beyond your control. Contact us by the due date of your payment and, depending on your situation, we may be able to remove the penalty.

Can I set up a payment plan?
Yes. Call the toll-free number listed on the top right corner of your notice to discuss payment options or check out more information on payment options and how to make a payment arrangement.

There are other options, such as paying by credit card. Note: There may be a fee to pay by credit card.

What if I need to make another correction to my account?
You'll need to file Form 1040X, Amended U.S. Individual Income Tax Return.

What if I have tried to get answers and after contacting IRS several times have not been successful?
Call Taxpayer Advocate at 1-877-777-4778 or for TTY/TDD 1-800-829-4059.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 26-Feb-2014

The Filing State Taxes

Filing state taxes Index A Additional Medicare Tax, Reminders, Additional Medicare Tax withholding. Filing state taxes Adjustments, Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Agricultural labor, Deposits. Filing state taxes Aliens, nonresidents, Deposits. Filing state taxes Assistance (see Tax help) C Calendar, Calendar Comments on publication, Comments and suggestions. Filing state taxes Common-law employee, Employee status under common law. Filing state taxes Corrected wage and tax statement, Correcting Forms W-2AS, W-2CM, W-2GU, W-2VI, and Form W-3SS. Filing state taxes Crew leaders, Farm Crew Leaders Current period adjustments, Current Period Adjustments D Deposit How to deposit, How To Deposit Penalties, Deposit Penalties Period, Deposit Period Requirements, 8. Filing state taxes Depositing Taxes Rules $100,000 next-day deposit, $100,000 Next-Day Deposit Rule Accuracy of deposits, Accuracy of Deposits Rule Schedules Monthly, Monthly Deposit Schedule Semiweekly, Semiweekly Deposit Schedule When to deposit, When To Deposit E Electronic deposits, Electronic deposit requirement. Filing state taxes Electronic filing and payment, Reminders Employee, 2. Filing state taxes Who Are Employees? Employer identification number (EIN), 1. Filing state taxes Employer Identification Number (EIN) F Family employees, Deposits. Filing state taxes Farm crew leaders, Farm Crew Leaders Farmworkers, 6. Filing state taxes Social Security and Medicare Taxes for Farmworkers, Employers of farmworkers. Filing state taxes Federal employees, Deposits. Filing state taxes Fishing, Deposits. Filing state taxes Form, Calendar, Lookback period for employers of nonfarm workers. Filing state taxes 4070, 5. Filing state taxes Tips 4070A, 5. Filing state taxes Tips 8274, Deposits. Filing state taxes 940, Calendar 941-SS, Calendar, Current Period Adjustments 941-X, Adjustments to lookback period taxes. Filing state taxes 943, Calendar 943-X, Adjustments to lookback period taxes. Filing state taxes 944-X, Adjustments to lookback period taxes. Filing state taxes Schedule H (Form 1040), Household employers reporting social security and Medicare taxes. Filing state taxes SS-4, 1. Filing state taxes Employer Identification Number (EIN) SS-5, Reminders, Employee's social security card. Filing state taxes SS-8, IRS help. Filing state taxes W-2c, Employee's social security card. Filing state taxes , Correcting Forms W-2AS, W-2CM, W-2GU, W-2VI, and Form W-3SS. Filing state taxes Fringe benefits, Fringe Benefits, Deposits. Filing state taxes FUTA tax, 11. Filing state taxes Federal Unemployment (FUTA) Tax—U. Filing state taxes S. Filing state taxes Virgin Islands Employers Only G Government employees, nonfederal, Deposits. Filing state taxes Group-term life insurance, Deposits. Filing state taxes H Help (see Tax help) Hiring new employees, Reminders Homeworkers, Deposits. Filing state taxes Hospital interns, Deposits. Filing state taxes Household employers, Household employers reporting social security and Medicare taxes. Filing state taxes Household workers, Household employers reporting social security and Medicare taxes. Filing state taxes , Deposits. Filing state taxes How to deposit, How To Deposit I Insurance agents, Deposits. Filing state taxes IRS help (employee v. Filing state taxes subcontractor), IRS help. Filing state taxes L Lookback period Farmworkers, Lookback period for employers of farmworkers. Filing state taxes Nonfarm workers, Lookback period for employers of nonfarm workers. Filing state taxes M Meals and lodging, Deposits. Filing state taxes Ministers, Deposits. Filing state taxes Monthly deposit schedule, Monthly Deposit Schedule Moving expenses, Deposits. Filing state taxes N Newspaper delivery, Deposits. Filing state taxes Noncash payments, Deposits. Filing state taxes Nonprofit organizations, Deposits. Filing state taxes P Partners, Deposits. Filing state taxes Penalties, Deposit Penalties Pension plans, Deposits. Filing state taxes Prior period adjustments, Prior Period Adjustments Private delivery services, Reminders Publications (see Tax help) R Recordkeeping, Reminders Religious orders, Deposits. Filing state taxes Retirement and pension plans, Deposits. Filing state taxes S Salespersons, Deposits. Filing state taxes Scholarships and fellowships, Deposits. Filing state taxes Semiweekly deposit schedule, Semiweekly Deposit Schedule Severance pay, Deposits. Filing state taxes Sick pay, Sick pay. Filing state taxes , Sick pay payments. Filing state taxes , Deposits. Filing state taxes Social security number (SSN), 3. Filing state taxes Employee's Social Security Number (SSN) Statutory employee, Statutory employees. Filing state taxes Statutory nonemployee, Statutory nonemployees. Filing state taxes Students, Deposits. Filing state taxes Suggestions for publication, Comments and suggestions. Filing state taxes Supplemental unemployment compensation benefits, Deposits. Filing state taxes T Tax help, How To Get Tax Help Tax Help, Tax help. Filing state taxes Taxes paid by employer, Employee's portion of taxes paid by employer. Filing state taxes Tips, 5. Filing state taxes Tips, Deposits. Filing state taxes Travel and business expenses, Travel and business expenses. Filing state taxes Trust fund recovery penalty, Trust fund recovery penalty. Filing state taxes W Wage and Tax Statement, 10. Filing state taxes Wage and Tax Statements Prev  Up     Home   More Online Publications