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Filing Taxes 2014

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Filing Taxes 2014

Filing taxes 2014 Publication 536 - Main Content Table of Contents NOL Steps How To Figure an NOLNonbusiness deductions (line 6). Filing taxes 2014 Nonbusiness income (line 7). Filing taxes 2014 Nonbusiness capital losses. Filing taxes 2014 Business capital losses. Filing taxes 2014 Illustrated Form 1045, Schedule A When To Use an NOLExceptions to 2-Year Carryback Rule Waiving the Carryback Period How To Carry an NOL Back or Forward How To Claim an NOL DeductionDeducting a Carryback Deducting a Carryforward Change in Marital Status Change in Filing Status Illustrated Form 1045 How To Figure an NOL CarryoverIllustrated Form 1045, Schedule B NOL Carryover From 2013 to 2014Worksheet Instructions How To Get Tax HelpLow Income Taxpayer Clinics NOL Steps Follow Steps 1 through 5 to figure and use your NOL. Filing taxes 2014 Step 1. Filing taxes 2014   Complete your tax return for the year. Filing taxes 2014 You may have an NOL if a negative figure appears on the line below: Individuals — Form 1040, line 41, or Form 1040NR, line 39. Filing taxes 2014 Estates and trusts — Form 1041, line 22. Filing taxes 2014   If the amount on that line is not negative, stop here — you do not have an NOL. Filing taxes 2014 Step 2. Filing taxes 2014   Determine whether you have an NOL and its amount. Filing taxes 2014 See How To Figure an NOL , later. Filing taxes 2014 If you do not have an NOL, stop here. Filing taxes 2014 Step 3. Filing taxes 2014   Decide whether to carry the NOL back to a past year or to waive the carryback period and instead carry the NOL forward to a future year. Filing taxes 2014 See When To Use an NOL , later. Filing taxes 2014 Step 4. Filing taxes 2014   Deduct the NOL in the carryback or carryforward year. Filing taxes 2014 See How To Claim an NOL Deduction , later. Filing taxes 2014 If your NOL deduction is equal to or less than your taxable income without the deduction, stop here — you have used up your NOL. Filing taxes 2014 Step 5. Filing taxes 2014   Determine the amount of your unused NOL. Filing taxes 2014 See How To Figure an NOL Carryover , later. Filing taxes 2014 Carry over the unused NOL to the next carryback or carryforward year and begin again at Step 4. Filing taxes 2014 Note. Filing taxes 2014   If your NOL deduction includes more than one NOL amount, apply Step 5 separately to each NOL amount, starting with the amount from the earliest year. Filing taxes 2014 How To Figure an NOL If your deductions for the year are more than your income for the year, you may have an NOL. Filing taxes 2014 There are rules that limit what you can deduct when figuring an NOL. Filing taxes 2014 In general, the following items are not allowed when figuring an NOL. Filing taxes 2014 Any deduction for personal exemptions. Filing taxes 2014 Capital losses in excess of capital gains. Filing taxes 2014 The section 1202 exclusion of the gain from the sale or exchange of qualified small business stock. Filing taxes 2014 Nonbusiness deductions in excess of nonbusiness income. Filing taxes 2014 The net operating loss deduction. Filing taxes 2014 The domestic production activities deduction. Filing taxes 2014 Form 1045, Schedule A. Filing taxes 2014   Use Form 1045, Schedule A, to figure an NOL. Filing taxes 2014 The following discussion explains Schedule A and includes an illustrated example. Filing taxes 2014   First, complete Form 1045, Schedule A, line 1, using amounts from your return. Filing taxes 2014 If line 1 is a negative amount, you may have an NOL. Filing taxes 2014   Next, complete the rest of Form 1045, Schedule A, to figure your NOL. Filing taxes 2014 Nonbusiness deductions (line 6). Filing taxes 2014   Enter on line 6 deductions that are not connected to your trade or business or your employment. Filing taxes 2014 Examples of deductions not related to your trade or business are: Alimony paid, Deductions for contributions to an IRA or a self-employed retirement plan, Health savings account deduction, Archer medical savings account deduction, Most itemized deductions (except for casualty and theft losses, state income tax on trade and business income, and any employee business expenses), and The standard deduction. Filing taxes 2014   Do not include on line 6 the deduction for personal exemptions for you, your spouse, or your dependents. Filing taxes 2014   Do not enter business deductions on line 6. Filing taxes 2014 These are deductions that are connected to your trade or business. Filing taxes 2014 They include the following. Filing taxes 2014 State income tax on income attributable to trade or business (including wages, salary, and unemployment compensation). Filing taxes 2014 Moving expenses. Filing taxes 2014 Educator expenses. Filing taxes 2014 The deduction for the deductible part of self-employed health insurance. Filing taxes 2014 Domestic production activities deduction. Filing taxes 2014 Rental losses. Filing taxes 2014 Loss on the sale or exchange of business real estate or depreciable property. Filing taxes 2014 Your share of a business loss from a partnership or an S corporation. Filing taxes 2014 Ordinary loss on the sale or exchange of stock in a small business corporation or a small business investment company. Filing taxes 2014 If you itemize your deductions, casualty and theft losses (even if they involve nonbusiness property) and employee business expenses (such as union dues, uniforms, tools, education expenses, and travel and transportation expenses). Filing taxes 2014 Loss on the sale of accounts receivable (if you use an accrual method of accounting). Filing taxes 2014 Interest and litigation expenses on state and federal income taxes related to your business. Filing taxes 2014 Unrecovered investment in a pension or annuity claimed on a decedent's final return. Filing taxes 2014 Payment by a federal employee to buy back sick leave used in an earlier year. Filing taxes 2014 Nonbusiness income (line 7). Filing taxes 2014   Enter on line 7 only income that is not related to your trade or business or your employment. Filing taxes 2014 For example, enter your annuity income, dividends, and interest on investments. Filing taxes 2014 Also, include your share of nonbusiness income from partnerships and S corporations. Filing taxes 2014   Do not include on line 7 the income you receive from your trade or business or your employment. Filing taxes 2014 This includes salaries and wages, self-employment income, unemployment compensation included in your gross income, and your share of business income from partnerships and S corporations. Filing taxes 2014 Also, do not include rental income or ordinary gain from the sale or other disposition of business real estate or depreciable business property. Filing taxes 2014 Adjustment for section 1202 exclusion (line 17). Filing taxes 2014   Enter on line 17 any gain you excluded under section 1202 on the sale or exchange of qualified small business stock. Filing taxes 2014 Adjustments for capital losses (lines 19–22). Filing taxes 2014   The amount deductible for capital losses is limited based on whether the losses are business capital losses or nonbusiness capital losses. Filing taxes 2014 Nonbusiness capital losses. Filing taxes 2014   You can deduct your nonbusiness capital losses (line 2) only up to the amount of your nonbusiness capital gains without regard to any section 1202 exclusion (line 3). Filing taxes 2014 If your nonbusiness capital losses are more than your nonbusiness capital gains without regard to any section 1202 exclusion, you cannot deduct the excess. Filing taxes 2014 Business capital losses. Filing taxes 2014   You can deduct your business capital losses (line 11) only up to the total of: Your nonbusiness capital gains that are more than the total of your nonbusiness capital losses and excess nonbusiness deductions (line 10), and Your total business capital gains without regard to any section 1202 exclusion (line 12). Filing taxes 2014 Domestic production activities deduction (line 23). Filing taxes 2014   You cannot take the domestic production activities deduction when figuring your NOL. Filing taxes 2014 Enter on line 23 any domestic production activities deduction claimed on your return. Filing taxes 2014 NOLs from other years (line 24). Filing taxes 2014   You cannot deduct any NOL carryovers or carrybacks from other years. Filing taxes 2014 Enter the total amount of your NOL deduction for losses from other years. Filing taxes 2014 Illustrated Form 1045, Schedule A The following example illustrates how to figure an NOL. Filing taxes 2014 It includes filled-in pages 1 and 2 of Form 1040 and Form 1045, Schedule A. Filing taxes 2014 Example. Filing taxes 2014 Glenn Johnson is in the retail record business. Filing taxes 2014 He is single and has the following income and deductions on his Form 1040 for 2013. Filing taxes 2014 See the illustrated Form 1040 , later. Filing taxes 2014 INCOME   Wages from part-time job $1,225 Interest on savings 425 Net long-term capital gain on sale of real estate used in business 2,000 Glenn's total income $3,650 DEDUCTIONS   Net loss from business (gross income of $67,000 minus expenses of $72,000) $5,000 Net short-term capital loss on sale of stock 1,000 Standard deduction 6,100 Personal exemption 3,900 Glenn's total deductions $16,000 Glenn's deductions exceed his income by $12,350 ($16,000 − $3,650). Filing taxes 2014 However, to figure whether he has an NOL, certain deductions are not allowed. Filing taxes 2014 He uses Form 1045, Schedule A, to figure his NOL. Filing taxes 2014 See the Illustrated Form 1045, Schedule A , later. Filing taxes 2014 The following items are not allowed on Form 1045, Schedule A. Filing taxes 2014 Nonbusiness net short-term capital loss $1,000 Nonbusiness deductions (standard deduction, $6,100) minus nonbusiness income (interest, $425) 5,675 Deduction for personal exemption 3,900 Total adjustments to net loss $10,575     Therefore, Glenn's NOL for 2013 is figured as follows: Glenn's total 2013 income $3,650 Less:     Glenn's original 2013 total deductions $16,000   Reduced by the disallowed items − 10,575 − 5,425 Glenn's NOL for 2013 $1,775 This image is too large to be displayed in the current screen. Filing taxes 2014 Please click the link to view the image. Filing taxes 2014 Form 1040, page 1 This image is too large to be displayed in the current screen. Filing taxes 2014 Please click the link to view the image. Filing taxes 2014 Form 1040, page 2 This image is too large to be displayed in the current screen. Filing taxes 2014 Please click the link to view the image. Filing taxes 2014 Form 1045, page 2 When To Use an NOL Generally, if you have an NOL for a tax year ending in 2013, you must carry back the entire amount of the NOL to the 2 tax years before the NOL year (the carryback period), and then carry forward any remaining NOL for up to 20 years after the NOL year (the carryforward period). Filing taxes 2014 You can, however, choose not to carry back an NOL and only carry it forward. Filing taxes 2014 See Waiving the Carryback Period , later. Filing taxes 2014 You cannot deduct any part of the NOL remaining after the 20-year carryforward period. Filing taxes 2014 NOL year. Filing taxes 2014   This is the year in which the NOL occurred. Filing taxes 2014 Exceptions to 2-Year Carryback Rule Eligible losses, farming losses, qualified disaster losses, and specified liability losses, all defined next, qualify for longer carryback periods. Filing taxes 2014 Eligible loss. Filing taxes 2014   The carryback period for eligible losses is 3 years. Filing taxes 2014 Only the eligible loss portion of the NOL can be carried back 3 years. Filing taxes 2014 An eligible loss is any part of an NOL that: Is from a casualty or theft, or Is attributable to a federally declared disaster for a qualified small business or certain qualified farming businesses. Filing taxes 2014 Qualified small business. Filing taxes 2014   A qualified small business is a sole proprietorship or a partnership that has average annual gross receipts (reduced by returns and allowances) of $5 million or less during the 3-year period ending with the tax year of the NOL. Filing taxes 2014 If the business did not exist for this entire 3-year period, use the period the business was in existence. Filing taxes 2014   An eligible loss does not include a farming loss or a qualified disaster loss. Filing taxes 2014 Farming loss. Filing taxes 2014   The carryback period for a farming loss is 5 years. Filing taxes 2014 Only the farming loss portion of the NOL can be carried back 5 years. Filing taxes 2014 A farming loss is the smaller of: The amount that would be the NOL for the tax year if only income and deductions attributable to farming businesses were taken into account, or The NOL for the tax year. Filing taxes 2014 Farming business. Filing taxes 2014   A farming business is a trade or business involving cultivation of land or the raising or harvesting of any agricultural or horticultural commodity. Filing taxes 2014 A farming business can include operating a nursery or sod farm or raising or harvesting most ornamental trees or trees bearing fruit, nuts, or other crops. Filing taxes 2014 The raising, shearing, feeding, caring for, training, and management of animals is also considered a farming business. Filing taxes 2014   A farming business does not include contract harvesting of an agricultural or horticultural commodity grown or raised by someone else. Filing taxes 2014 It also does not include a business in which you merely buy or sell plants or animals grown or raised entirely by someone else. Filing taxes 2014 Waiving the 5-year carryback. Filing taxes 2014   You can choose to figure the carryback period for a farming loss without regard to the special 5-year carryback rule. Filing taxes 2014 To make this choice for 2013, attach to your 2013 income tax return filed by the due date (including extensions) a statement that you are choosing to treat any 2013 farming losses without regard to the special 5-year carryback rule. Filing taxes 2014 If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months after the due date of the return (excluding extensions). Filing taxes 2014 Attach an election statement to your amended return, and write “Filed pursuant to section 301. Filing taxes 2014 9100-2” at the top of the statement. Filing taxes 2014 Once made, this choice is irrevocable. Filing taxes 2014 Qualified disaster loss. Filing taxes 2014   The carryback period for a qualified disaster loss is 5 years. Filing taxes 2014 Only the qualified disaster loss portion of the NOL can be carried back 5 years. Filing taxes 2014 A qualified disaster loss is the smaller of: The sum of: Any losses attributable to a federally declared disaster and occurring before January 1, 2010, in the disaster area, plus Any allowable qualified disaster expenses (even if you did not choose to treat those expenses as deductions in the current year), or The NOL for the tax year. Filing taxes 2014 Qualified disaster expenses. Filing taxes 2014   A qualified disaster expense is any capital expense paid or incurred in connection with a trade or business or with business-related property which is: For the abatement or control of hazardous substances that were released as a result of a federally declared disaster occurring before January 1, 2010, For the removal of debris from, or the demolition of structures on, real property which is business-related property damaged or destroyed as a result of a federally declared disaster occurring before January 1, 2010, or For the repair of business-related property damaged as a result of a federally declared disaster occurring before January 1, 2010. Filing taxes 2014 Business-related property is property held for use in a trade or business, property held for the production of income, or inventory property. Filing taxes 2014 Note. Filing taxes 2014 Section 198A allows taxpayers to treat certain capital expenses (qualified disaster expenses) as deductions in the year the expenses were paid or incurred. Filing taxes 2014 Excluded losses. Filing taxes 2014   A qualified disaster loss does not include any losses from property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store for which the principal business is the sale of alcoholic beverages for consumption off premises. Filing taxes 2014   A qualified disaster loss also does not include any losses from any gambling or animal racing property. Filing taxes 2014 Gambling or animal racing property is any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and the portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. Filing taxes 2014 Specified liability loss. Filing taxes 2014   The carryback period for a specified liability loss is 10 years. Filing taxes 2014 Only the specified liability loss portion of the NOL can be carried back 10 years. Filing taxes 2014 Generally, a specified liability loss is a loss arising from: Product liability and expenses incurred in the investigation or settlement of, or opposition to, product liability claims, or An act (or failure to act) that occurred at least 3 years before the beginning of the loss year and resulted in a liability under a federal or state law requiring: Reclamation of land, Dismantling of a drilling platform, Remediation of environmental contamination, or Payment under any workers compensation act. Filing taxes 2014   Any loss from a liability arising from (1) through (4) above can be taken into account as a specified liability loss only if you used an accrual method of accounting throughout the period in which the act (or failure to act) occurred. Filing taxes 2014 For details, see section 172(f). Filing taxes 2014 Waiving the 10-year carryback. Filing taxes 2014   You can choose to figure the carryback period for a specified liability loss without regard to the special 10-year carryback rule. Filing taxes 2014 To make this choice for 2013 attach to your 2013 income tax return filed by the due date (including extensions) a statement that you are choosing to treat any 2013 specified liability losses without regard to the special 10-year carryback rule. Filing taxes 2014 If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months after the due date of the return (excluding extensions). Filing taxes 2014 Attach a statement to your amended return and write “Filed pursuant to section 301. Filing taxes 2014 9100-2” at the top of the statement. Filing taxes 2014 Once made, this choice is irrevocable. Filing taxes 2014 Waiving the Carryback Period You can choose not to carry back your NOL. Filing taxes 2014 If you make this choice, then you can use your NOL only in the 20-year carryforward period. Filing taxes 2014 (This choice means you also choose not to carry back any alternative tax NOL. Filing taxes 2014 ) To make this choice, attach a statement to your original return filed by the due date (including extensions) for the NOL year. Filing taxes 2014 This statement must show that you are choosing to waive the carryback period under section 172(b)(3). Filing taxes 2014 If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months of the due date of the return (excluding extensions). Filing taxes 2014 Attach a statement to your amended return, and write “Filed pursuant to section 301. Filing taxes 2014 9100-2” at the top of the statement. Filing taxes 2014 Once you choose to waive the carryback period, it generally is irrevocable. Filing taxes 2014 If you choose to waive the carryback period for more than one NOL, you must make a separate choice and attach a separate statement for each NOL year. Filing taxes 2014 If you do not file this statement on time, you cannot waive the carryback period. Filing taxes 2014 How To Carry an NOL Back or Forward If you choose to carry back the NOL, you must first carry the entire NOL to the earliest carryback year. Filing taxes 2014 If your NOL is not used up, you can carry the rest to the next earliest carryback year, and so on. Filing taxes 2014 If you waive the carryback period or do not use up the NOL in the carryback period, carry forward what remains of the NOL to the 20 tax years following the NOL year. Filing taxes 2014 Start by carrying it to the first tax year after the NOL year. Filing taxes 2014 If you do not use it up, carry the unused part to the next year. Filing taxes 2014 Continue to carry any unused part of the NOL forward until the NOL is used up or you complete the 20-year carryforward period. Filing taxes 2014 Example 1. Filing taxes 2014 You started your business as a sole proprietor in 2013 and had a $42,000 NOL for the year. Filing taxes 2014 No part of the NOL qualifies for the 3-year, 5-year, or 10-year carryback. Filing taxes 2014 You begin using your NOL in 2011, the second year before the NOL year, as shown in the following chart. Filing taxes 2014 Year   Carryback/  Carryover Unused  Loss 2011 $42,000 $40,000 2012 40,000 37,000 2013 (NOL year)     2014 37,000 31,500 2015 31,500 22,500 2016 22,500 12,700 2017 12,700 4,000 2018 4,000 -0- If your loss were larger, you could carry it forward until the year 2033. Filing taxes 2014 If you still had an unused 2013 carryforward after the year 2033, you would not be allowed to deduct it. Filing taxes 2014 Example 2. Filing taxes 2014 Assume the same facts as in Example 1 , except that $4,000 of the NOL is attributable to a casualty loss and this loss qualifies for a 3-year carryback period. Filing taxes 2014 You begin using the $4,000 in 2010. Filing taxes 2014 As shown in the following chart, $3,000 of this NOL is used in 2010. Filing taxes 2014 The remaining $1,000 is carried to 2011 with the $38,000 NOL that you must begin using in 2011. Filing taxes 2014 Year   Carryback/  Carryover Unused  Loss 2010 $4,000 $1,000 2011 39,000 37,000 2012 37,000 34,000 2013 (NOL year)     2014 34,000 28,500 2015 28,500 19,500 2016 19,500 9,700 2017 9,700 1,000 2018 1,000 -0- How To Claim an NOL Deduction If you have not already carried the NOL to an earlier year, your NOL deduction is the total NOL. Filing taxes 2014 If you carried the NOL to an earlier year, your NOL deduction is the carried over NOL minus the NOL amount you used in the earlier year or years. Filing taxes 2014 If you carry more than one NOL to the same year, your NOL deduction is the total of these carrybacks and carryovers. Filing taxes 2014 NOL resulting in no taxable income. Filing taxes 2014   If your NOL is more than the taxable income of the year you carry it to (figured before deducting the NOL), you generally will have an NOL carryover to the next year. Filing taxes 2014 See How To Figure an NOL Carryover , later, to determine how much NOL you have used and how much you carry to the next year. Filing taxes 2014 Deducting a Carryback If you carry back your NOL, you can use either Form 1045 or Form 1040X. Filing taxes 2014 You can get your refund faster by using Form 1045, but you have a shorter time to file it. Filing taxes 2014 You can use Form 1045 to apply an NOL to all carryback years. Filing taxes 2014 If you use Form 1040X, you must use a separate Form 1040X for each carryback year to which you apply the NOL. Filing taxes 2014 Estates and trusts that do not file Form 1045 must file an amended Form 1041 (instead of Form 1040X) for each carryback year to which NOLs are applied. Filing taxes 2014 Use a copy of the appropriate year's Form 1041, check the “Amended return” box, and follow the Form 1041 instructions for amended returns. Filing taxes 2014 Include the NOL deduction with other deductions not subject to the 2% limit (line 15a). Filing taxes 2014 Also, see the special procedures for filing an amended return due to an NOL carryback, explained under Form 1040X , later. Filing taxes 2014 Form 1045. Filing taxes 2014   You can apply for a quick refund by filing Form 1045. Filing taxes 2014 This form results in a tentative adjustment of tax in the carryback year. Filing taxes 2014 See the Illustrated Form 1045 . Filing taxes 2014 at the end of this discussion. Filing taxes 2014   If the IRS refunds or credits an amount to you from Form 1045 and later determines that the refund or credit is too much, the IRS may assess and collect the excess immediately. Filing taxes 2014   Generally, you must file Form 1045 on or after the date you file your tax return for the NOL year, but not later than one year after the end of the NOL year. Filing taxes 2014 If the last day of the NOL year falls on a Saturday, Sunday, or holiday, the form will be considered timely if postmarked on the next business day. Filing taxes 2014 For example, if you are a calendar year taxpayer with a carryback from 2013 to 2011, you must file Form 1045 on or after the date you file your tax return for 2013, but no later than December 31, 2014. Filing taxes 2014 Form 1040X. Filing taxes 2014   If you do not file Form 1045, you can file Form 1040X to get a refund of tax because of an NOL carryback. Filing taxes 2014 File Form 1040X within 3 years after the due date, including extensions, for filing the return for the NOL year. Filing taxes 2014 For example, if you are a calendar year taxpayer and filed your 2011 return by the April 15, 2012, due date, you must file a claim for refund of 2008 tax because of an NOL carryback from 2011 by April 15, 2015. Filing taxes 2014   Attach a computation of your NOL using Form 1045, Schedule A, and, if it applies, your NOL carryover using Form 1045, Schedule B, discussed later . Filing taxes 2014 Refiguring your tax. Filing taxes 2014   To refigure your total tax liability for a carryback year, first refigure your adjusted gross income for that year. Filing taxes 2014 (On Form 1045, use lines 10 and 11 and the “After carryback” column for the applicable carryback year. Filing taxes 2014 ) Use your adjusted gross income after applying the NOL deduction to refigure income or deduction items that are based on, or limited to, a percentage of your adjusted gross income. Filing taxes 2014 Refigure the following items. Filing taxes 2014 The special allowance for passive activity losses from rental real estate activities. Filing taxes 2014 Taxable social security and tier 1 railroad retirement benefits. Filing taxes 2014 IRA deductions. Filing taxes 2014 Excludable savings bond interest. Filing taxes 2014 Excludable employer-provided adoption benefits. Filing taxes 2014 The student loan interest deduction. Filing taxes 2014 The tuition and fees deduction. Filing taxes 2014   If more than one of these items apply, refigure them in the order listed above, using your adjusted gross income after applying the NOL deduction and any previous item. Filing taxes 2014 (Enter your NOL deduction on Form 1045, line 10. Filing taxes 2014 On line 11, using the “After carryback” column, enter your adjusted gross income refigured after applying the NOL deduction and after refiguring any above items. Filing taxes 2014 )   Next, refigure your taxable income. Filing taxes 2014 (On Form 1045, use lines 12 through 15 and the “After carryback” column. Filing taxes 2014 ) Use your refigured adjusted gross income (Form 1045, line 11, using the “After carryback” column) to refigure certain deductions and other items that are based on or limited to a percentage of your adjusted gross income. Filing taxes 2014 Refigure the following items. Filing taxes 2014 The itemized deduction for medical expenses. Filing taxes 2014 The itemized deduction for qualified mortgage insurance premiums. Filing taxes 2014 The itemized deduction for casualty losses. Filing taxes 2014 Miscellaneous itemized deductions subject to the 2% limit. Filing taxes 2014 The overall limit on itemized deductions (do not apply to carryback years beginning after December 31, 2009). Filing taxes 2014 The phaseout of the deduction for exemptions (do not apply to carryback years beginning after December 31, 2009). Filing taxes 2014 Qualified motor vehicle tax (do not apply to carryback years beginning after December 31, 2009). Filing taxes 2014    Do not refigure the itemized deduction for charitable contributions. Filing taxes 2014   Finally, use your refigured taxable income (Form 1045, line 15, using the “After carryback” column) to refigure your total tax liability. Filing taxes 2014 Refigure your income tax, your alternative minimum tax, and any credits that are based on or limited by your adjusted gross income (AGI), modified adjusted gross income (MAGI), or tax liability. Filing taxes 2014 (On Form 1045, use lines 16 through 25, and the “After carryback” column. Filing taxes 2014 ) The earned income credit, for example, may be affected by changes to adjusted gross income or the amount of tax (or both) and, therefore, must be recomputed. Filing taxes 2014 If you become eligible for a credit because of the carryback, complete the form for that specific credit (such as the EIC Worksheet) for that year. Filing taxes 2014   While it is necessary to refigure your income tax, alternative minimum tax, and credits, do not refigure your self-employment tax. Filing taxes 2014 Deducting a Carryforward If you carry forward your NOL to a tax year after the NOL year, list your NOL deduction as a negative figure on the “Other income” line of Form 1040 or Form 1040NR (line 21 for 2013). Filing taxes 2014 Estates and trusts include an NOL deduction on Form 1041 with other deductions not subject to the 2% limit (line 15a for 2013). Filing taxes 2014 You must attach a statement that shows all the important facts about the NOL. Filing taxes 2014 Your statement should include a computation showing how you figured the NOL deduction. Filing taxes 2014 If you deduct more than one NOL in the same year, your statement must cover each of them. Filing taxes 2014 Change in Marital Status If you and your spouse were not married to each other in all years involved in figuring NOL carrybacks and carryovers, only the spouse who had the loss can take the NOL deduction. Filing taxes 2014 If you file a joint return, the NOL deduction is limited to the income of that spouse. Filing taxes 2014 For example, if your marital status changes because of death or divorce, and in a later year you have an NOL, you can carry back that loss only to the part of the income reported on the joint return (filed with your former spouse) that was related to your taxable income. Filing taxes 2014 After you deduct the NOL in the carryback year, the joint rates apply to the resulting taxable income. Filing taxes 2014 Refund limit. Filing taxes 2014   If you are not married in the NOL year (or are married to a different spouse), and in the carryback year you were married and filed a joint return, your refund for the overpaid joint tax may be limited. Filing taxes 2014 You can claim a refund for the difference between your share of the refigured tax and your contribution toward the tax paid on the joint return. Filing taxes 2014 The refund cannot be more than the joint overpayment. Filing taxes 2014 Attach a statement showing how you figured your refund. Filing taxes 2014 Figuring your share of a joint tax liability. Filing taxes 2014   There are five steps for figuring your share of the refigured joint tax liability. Filing taxes 2014 Figure your total tax as though you had filed as married filing separately. Filing taxes 2014 Figure your spouse's total tax as though your spouse had also filed as married filing separately. Filing taxes 2014 Add the amounts in (1) and (2). Filing taxes 2014 Divide the amount in (1) by the amount in (3). Filing taxes 2014 Multiply the refigured tax on your joint return by the amount figured in (4). Filing taxes 2014 This is your share of the joint tax liability. Filing taxes 2014 Figuring your contribution toward tax paid. Filing taxes 2014   Unless you have an agreement or clear evidence of each spouse's contributions toward the payment of the joint tax liability, figure your contribution by adding the tax withheld on your wages and your share of joint estimated tax payments or tax paid with the return. Filing taxes 2014 If the original return for the carryback year resulted in an overpayment, reduce your contribution by your share of the tax refund. Filing taxes 2014 Figure your share of a joint payment or refund by the same method used in figuring your share of the joint tax liability. Filing taxes 2014 Use your taxable income as originally reported on the joint return in steps (1) and (2) above, and substitute the joint payment or refund for the refigured joint tax in step (5). Filing taxes 2014 Change in Filing Status If you and your spouse were married and filed a joint return for each year involved in figuring NOL carrybacks and carryovers, figure the NOL deduction on a joint return as you would for an individual. Filing taxes 2014 However, treat the NOL deduction as a joint NOL. Filing taxes 2014 If you and your spouse were married and filed separate returns for each year involved in figuring NOL carrybacks and carryovers, the spouse who sustained the loss may take the NOL deduction on a separate return. Filing taxes 2014 Special rules apply for figuring the NOL carrybacks and carryovers of married people whose filing status changes for any tax year involved in figuring an NOL carryback or carryover. Filing taxes 2014 Separate to joint return. Filing taxes 2014   If you and your spouse file a joint return for a carryback or carryforward year, and were married but filed separate returns for any of the tax years involved in figuring the NOL carryback or carryover, treat the separate carryback or carryover as a joint carryback or carryover. Filing taxes 2014 Joint to separate returns. Filing taxes 2014   If you and your spouse file separate returns for a carryback or carryforward year, but filed a joint return for any or all of the tax years involved in figuring the NOL carryover, figure each of your carryovers separately. Filing taxes 2014 Joint return in NOL year. Filing taxes 2014   Figure each spouse's share of the joint NOL through the following steps. Filing taxes 2014 Figure each spouse's NOL as if he or she filed a separate return. Filing taxes 2014 See How To Figure an NOL , earlier. Filing taxes 2014 If only one spouse has an NOL, stop here. Filing taxes 2014 All of the joint NOL is that spouse's NOL. Filing taxes 2014 If both spouses have an NOL, multiply the joint NOL by a fraction, the numerator of which is spouse A's NOL figured in (1) and the denominator of which is the total of the spouses' NOLs figured in (1). Filing taxes 2014 The result is spouse A's share of the joint NOL. Filing taxes 2014 The rest of the joint NOL is spouse B's share. Filing taxes 2014 Example 1. Filing taxes 2014 Mark and Nancy are married and file a joint return for 2013. Filing taxes 2014 They have an NOL of $5,000. Filing taxes 2014 They carry the NOL back to 2011, a year in which Mark and Nancy filed separate returns. Filing taxes 2014 Figured separately, Nancy's 2013 deductions were more than her income, and Mark's income was more than his deductions. Filing taxes 2014 Mark does not have any NOL to carry back. Filing taxes 2014 Nancy can carry back the entire $5,000 NOL to her 2011 separate return. Filing taxes 2014 Example 2. Filing taxes 2014 Assume the same facts as in Example 1 , except that both Mark and Nancy had deductions in 2013 that were more than their income. Filing taxes 2014 Figured separately, his NOL is $1,800 and her NOL is $3,000. Filing taxes 2014 The sum of their separate NOLs ($4,800) is less than their $5,000 joint NOL because his deductions included a $200 net capital loss that is not allowed in figuring his separate NOL. Filing taxes 2014 The loss is allowed in figuring their joint NOL because it was offset by Nancy's capital gains. Filing taxes 2014 Mark's share of their $5,000 joint NOL is $1,875 ($5,000 × $1,800/$4,800) and Nancy's is $3,125 ($5,000 − $1,875). Filing taxes 2014 Joint return in previous carryback or carryforward year. Filing taxes 2014   If only one spouse had an NOL deduction on the previous year's joint return, all of the joint carryover is that spouse's carryover. Filing taxes 2014 If both spouses had an NOL deduction (including separate carryovers of a joint NOL, figured as explained in the previous discussion ), figure each spouse's share of the joint carryover through the following steps. Filing taxes 2014 Figure each spouse's modified taxable income as if he or she filed a separate return. Filing taxes 2014 See Modified taxable income under How To Figure an NOL Carryover , later. Filing taxes 2014 Multiply the joint modified taxable income you used to figure the joint carryover by a fraction, the numerator of which is spouse A's modified taxable income figured in (1) and the denominator of which is the total of the spouses' modified taxable incomes figured in (1). Filing taxes 2014 This is spouse A's share of the joint modified taxable income. Filing taxes 2014 Subtract the amount figured in (2) from the joint modified taxable income. Filing taxes 2014 This is spouse B's share of the joint modified taxable income. Filing taxes 2014 Reduce the amount figured in (3), but not below zero, by spouse B's NOL deduction. Filing taxes 2014 Add the amounts figured in (2) and (4). Filing taxes 2014 Subtract the amount figured in (5) from spouse A's NOL deduction. Filing taxes 2014 This is spouse A's share of the joint carryover. Filing taxes 2014 The rest of the joint carryover is spouse B's share. Filing taxes 2014 Example. Filing taxes 2014 Sam and Wanda filed a joint return for 2011 and separate returns for 2012 and 2013. Filing taxes 2014 In 2013, Sam had an NOL of $18,000 and Wanda had an NOL of $2,000. Filing taxes 2014 They choose to carry back both NOLs 2 years to their 2011 joint return and claim a $20,000 NOL deduction. Filing taxes 2014 Their joint modified taxable income (MTI) for 2011 is $15,000, and their joint NOL carryover to 2012 is $5,000 ($20,000 – $15,000). Filing taxes 2014 Sam and Wanda each figure their separate MTI for 2011 as if they had filed separate returns. Filing taxes 2014 Then they figure their shares of the $5,000 carryover as follows. Filing taxes 2014 Step 1. Filing taxes 2014   Sam's separate MTI $9,000 Wanda's separate MTI + 3,000 Total MTI $12,000 Step 2. Filing taxes 2014   Joint MTI $15,000 Sam's MTI ÷ total MTI ($9,000 ÷ $12,000) × . Filing taxes 2014 75 Sam's share of joint MTI $11,250 Step 3. Filing taxes 2014   Joint MTI $15,000 Sam's share of joint MTI − 11,250 Wanda's share of joint MTI $3,750 Step 4. Filing taxes 2014   Wanda's share of joint MTI $3,750 Wanda's NOL deduction − 2,000 Wanda's remaining share $1,750 Step 5. Filing taxes 2014   Sam's share of joint MTI $11,250 Wanda's remaining share + 1,750 Joint MTI to be offset $13,000 Step 6. Filing taxes 2014   Sam's NOL deduction $18,000 Joint MTI to be offset − 13,000 Sam's carryover to 2012 $5,000 Joint carryover to 2012 $5,000 Sam's carryover − 5,000 Wanda's carryover to 2012 $-0- Wanda's $2,000 NOL deduction offsets $2,000 of her $3,750 share of the joint modified taxable income and is completely used up. Filing taxes 2014 She has no carryover to 2012. Filing taxes 2014 Sam's $18,000 NOL deduction offsets all of his $11,250 share of joint modified taxable income and the remaining $1,750 of Wanda's share. Filing taxes 2014 His carryover to 2012 is $5,000. Filing taxes 2014 Illustrated Form 1045 The following example illustrates how to use Form 1045 to claim an NOL deduction in a carryback year. Filing taxes 2014 It includes a filled-in page 1 of Form 1045. Filing taxes 2014 Example. Filing taxes 2014 Martha Sanders is a self-employed contractor. Filing taxes 2014 Martha's 2013 deductions are more than her 2013 income because of a business loss. Filing taxes 2014 She uses Form 1045 to carry back her NOL 2 years and claim an NOL deduction in 2011. Filing taxes 2014 Her filing status in both years was single. Filing taxes 2014 See the filled-in Form 1045 later. Filing taxes 2014 Martha figures her 2013 NOL on Form 1045, Schedule A (not shown). Filing taxes 2014 (For an example using Form 1045, Schedule A, see Illustrated Form 1045, Schedule A under How To Figure an NOL , earlier. Filing taxes 2014 ) She enters the $10,000 NOL from Form 1045, Schedule A, line 25, on Form 1045, line 1a. Filing taxes 2014 Martha completes lines 10 through 25, using the “Before carryback” column under the column for the second preceding tax year ended 12/31/11 on page 1 of Form 1045 using the following amounts from her 2011 return. Filing taxes 2014 2011 Adjusted gross income $50,000 Itemized deductions:     Medical expenses [$6,000 − ($50,000 × 7. Filing taxes 2014 5%)] $2,250   State income tax + 2,000   Real estate tax + 4,000   Home mortgage interest + 5,000   Total itemized deductions $13,250 Exemption $3,700 Income tax $4,550 Self-employment tax $6,120   Martha refigures her taxable income for 2011 after carrying back her 2013 NOL as follows: 2011 Adjusted gross income $50,000 Less:     NOL from 2013 −10,000 2011 Adjusted gross income after carryback $40,000 Less:     Itemized deductions:     Medical expenses [$6,000 − ($40,000 × 7. Filing taxes 2014 5%)] $3,000   State income tax + 2,000   Real estate tax + 4,000   Home mortgage interest + 5,000   Total itemized deductions −14,000 Less:     Exemption − 3,700 2011 Taxable income after carryback $22,300 Martha then completes lines 10 through 25, using the “After carryback” column under the column for the second preceding tax year ended 12/31/11. Filing taxes 2014 On line 10, Martha enters her $10,000 NOL deduction. Filing taxes 2014 Her new adjusted gross income on line 11 is $40,000 ($50,000 − $10,000). Filing taxes 2014 To complete line 12, she must refigure her medical expense deduction using her new adjusted gross income. Filing taxes 2014 Her refigured medical expense deduction is $3,000 [$6,000 − ($40,000 × 7. Filing taxes 2014 5%)]. Filing taxes 2014 This increases her total itemized deductions to $14,000 [$13,250 + ($3,000 − $2,250)]. Filing taxes 2014 Martha uses her refigured taxable income ($22,300) from line 15, and the tax tables in her 2011 Form 1040 instructions to find her income tax. Filing taxes 2014 She enters the new amount, $2,924, on line 16, and her new total tax liability, $9,044, on line 25. Filing taxes 2014 Martha used up her $10,000 NOL in 2011 so she does not complete a column for the first preceding tax year ended 12/31/2012. Filing taxes 2014 The decrease in tax because of her NOL deduction (line 27) is $1,612. Filing taxes 2014 Martha files Form 1045 after filing her 2013 return, but no later than December 31, 2014. Filing taxes 2014 She mails it to the Internal Revenue Service Center for the place where she lives as shown in the 2013 instructions for Form 1040 and attaches a copy of her 2013 return (including the applicable forms and schedules). Filing taxes 2014 This image is too large to be displayed in the current screen. Filing taxes 2014 Please click the link to view the image. Filing taxes 2014 Form 1045, page 1 How To Figure an NOL Carryover If your NOL is more than your taxable income for the year to which you carry it (figured before deducting the NOL), you may have an NOL carryover. Filing taxes 2014 You must make certain modifications to your taxable income to determine how much NOL you will use up in that year and how much you can carry over to the next tax year. Filing taxes 2014 Your carryover is the excess of your NOL deduction over your modified taxable income for the carryback or carryforward year. Filing taxes 2014 If your NOL deduction includes more than one NOL, apply the NOLs against your modified taxable income in the same order in which you incurred them, starting with the earliest. Filing taxes 2014 Modified taxable income. Filing taxes 2014   Your modified taxable income is your taxable income figured with the following changes. Filing taxes 2014 You cannot claim an NOL deduction for the NOL carryover you are figuring or for any later NOL. Filing taxes 2014 You cannot claim a deduction for capital losses in excess of your capital gains. Filing taxes 2014 Also, you must increase your taxable income by the amount of any section 1202 exclusion. Filing taxes 2014 You cannot claim the domestic production activities deduction. Filing taxes 2014 You cannot claim a deduction for your exemptions for yourself, your spouse, or dependents. Filing taxes 2014 You must figure any item affected by the amount of your adjusted gross income after making the changes in (1), (2), and (3), above, and certain other changes to your adjusted gross income that result from (1), (2), and (3). Filing taxes 2014 This includes income and deduction items used to figure adjusted gross income (for example, IRA deductions), as well as certain itemized deductions. Filing taxes 2014 To figure a charitable contribution deduction, do not include deductions for NOL carrybacks in the change in (1) but do include deductions for NOL carryforwards from tax years before the NOL year. Filing taxes 2014   Your taxable income as modified cannot be less than zero. Filing taxes 2014 Form 1045, Schedule B. Filing taxes 2014   You can use Form 1045, Schedule B, to figure your modified taxable income for carryback years and your carryover from each of those years. Filing taxes 2014 Do not use Form 1045, Schedule B, for a carryforward year. Filing taxes 2014 If your 2013 return includes an NOL deduction from an NOL year before 2013 that reduced your taxable income to zero (to less than zero, if an estate or trust), see NOL Carryover From 2013 to 2014 , later. Filing taxes 2014 Illustrated Form 1045, Schedule B The following example illustrates how to figure an NOL carryover from a carryback year. Filing taxes 2014 It includes a filled-in Form 1045, Schedule B. Filing taxes 2014 Example. Filing taxes 2014 Ida Brown runs a small clothing shop. Filing taxes 2014 In 2013, she has an NOL of $36,000 that she carries back to 2011. Filing taxes 2014 She has no other carrybacks or carryforwards to 2011. Filing taxes 2014 Ida's adjusted gross income in 2011 was $35,000, consisting of her salary of $36,000 minus a $1,000 capital loss deduction. Filing taxes 2014 She is single and claimed only one personal exemption of $3,700. Filing taxes 2014 During that year, she gave $1,450 in charitable contributions. Filing taxes 2014 Her medical expenses were $3,000. Filing taxes 2014 She also deducted $1,650 in taxes and $3,125 in home mortgage interest. Filing taxes 2014 Her deduction for charitable contributions was not limited because her contributions, $1,450, were less than 50% of her adjusted gross income. Filing taxes 2014 The deduction for medical expenses was limited to expenses over 7. Filing taxes 2014 5% of adjusted gross income (. Filing taxes 2014 075 × $35,000 = $2,625; $3,000 − $2,625 = $375). Filing taxes 2014 The deductions for taxes and home mortgage interest were not subject to any limits. Filing taxes 2014 She was able to claim $6,600 ($1,450 + $375 + $1,650 + $3,125) in itemized deductions and a personal exemption deduction of $3,700 for 2011. Filing taxes 2014 She had no other deductions in 2011 (except the NOL deduction). Filing taxes 2014 Her taxable income (figured without the NOL deduction) for the year was $24,700. Filing taxes 2014 Ida's adjusted gross income in 2012 was $9,325, consisting of net business income from the clothing shop of $12,325 and a net capital loss of $3,000. Filing taxes 2014 She did not itemize her deductions in 2012. Filing taxes 2014 She deducted the standard deduction of $5,950 and the personal exemption deduction of $3,800. Filing taxes 2014 She had no other deductions in 2012 (other than the NOL deduction). Filing taxes 2014 Her taxable income, therefore, was ($425). Filing taxes 2014 Ida's $36,000 carryback will result in her having 2011 taxable income of zero. Filing taxes 2014 She then completes the column for the second preceding tax year ended 12/31/11 on Form 1045, Schedule B, to figure how much of her NOL she uses up in 2011 and how much she can carry over to 2012. Filing taxes 2014 She completes the column for the first preceding tax year ended 12/31/12. Filing taxes 2014 See the illustrated Form 1045, Schedule B , shown later. Filing taxes 2014 Column 1, line 1. Filing taxes 2014 Ida enters $36,000, her 2013 net operating loss, on line 1. Filing taxes 2014 Column 1, line 2. Filing taxes 2014 She enters $24,700, her 2011 taxable income (figured without the NOL deduction), on line 2. Filing taxes 2014 Column 1, line 3. Filing taxes 2014 Ida enters her net capital loss deduction of $1,000 on line 3. Filing taxes 2014 Column 1, lines 4 and 5. Filing taxes 2014 Ida had no section 1202 exclusion or domestic production activities deduction in 2011. Filing taxes 2014 She enters zero on lines 4 and 5. Filing taxes 2014 Column 1, line 6. Filing taxes 2014 Although Ida's entry on line 3 modifies her adjusted gross income, that does not affect any other items included in her adjusted gross income. Filing taxes 2014 Ida enters zero on line 6. Filing taxes 2014 Column 1, line 7. Filing taxes 2014 Ida had itemized deductions and entered $1,000 on line 3, so she completes lines 11 through 38 to figure her adjustment to itemized deductions. Filing taxes 2014 On line 7, she enters the total adjustment from line 38. Filing taxes 2014 Column 1, line 8. Filing taxes 2014 Ida enters the deduction for her personal exemption of $3,700 for 2011. Filing taxes 2014 Column 1, line 9. Filing taxes 2014 After combining lines 2 through 8, Ida's modified taxable income is $29,475. Filing taxes 2014 Column 1, line 10. Filing taxes 2014 Ida figures her carryover to 2012 by subtracting her modified taxable income (line 9) from her NOL deduction (line 1). Filing taxes 2014 She enters the $6,525 carryover on line 10. Filing taxes 2014 She also enters the $6,525 as her NOL deduction for 2012 on Form 1045, page 1, line 10, in the “After carryback” column under the column for the first preceding tax year ended 12/31/12. Filing taxes 2014 (For an illustrated example of page 1 of Form 1045, see Illustrated Form 1045 under How To Claim an NOL Deduction , earlier. Filing taxes 2014 ) Next, Ida completes column 2 for the first preceding tax year ended 12/31/12. Filing taxes 2014 Column 1, line 11. Filing taxes 2014 Ida's adjusted gross income for 2011 was $35,000. Filing taxes 2014 Column 1, line 12. Filing taxes 2014 She adds lines 3 through 6 and enters $1,000 on line 12. Filing taxes 2014 (This is her net capital loss deduction added back, which modifies her adjusted gross income. Filing taxes 2014 ) Column 1, line 13. Filing taxes 2014 Her modified adjusted gross income for 2011 is now $36,000. Filing taxes 2014 Column 1, line 14. Filing taxes 2014 On her 2011 tax return, she deducted $375 as medical expenses. Filing taxes 2014 Column 1, line 15. Filing taxes 2014 Her actual medical expenses were $3,000. Filing taxes 2014 Column 1, line 16. Filing taxes 2014 She multiplies her modified adjusted gross income, $36,000, by . Filing taxes 2014 075. Filing taxes 2014 She enters $2,700 on line 16. Filing taxes 2014 Column 1, line 17. Filing taxes 2014 She substracts $2,700 from her actual medical expenses, $3,000. Filing taxes 2014 She enters $300 on line 17. Filing taxes 2014 This is her modified medical deduction. Filing taxes 2014 Column 1, line 18. Filing taxes 2014 The difference between her medical deduction and her modified medical deduction is $75. Filing taxes 2014 She enters this on line 18. Filing taxes 2014 Column 1, lines 19 through 21. Filing taxes 2014 Ida had no deduction for qualified mortgage insurance premiums in 2011. Filing taxes 2014 She skips lines 19 and 20 and enters zero on line 21. Filing taxes 2014 Column 1, line 22. Filing taxes 2014 She enters her modified adjusted gross income of $36,000 on line 22. Filing taxes 2014 Column 1, line 23. Filing taxes 2014 She had no other carrybacks to 2011 and enters zero on line 23. Filing taxes 2014 Column 1, line 24. Filing taxes 2014 Her modified adjusted gross income remains $36,000. Filing taxes 2014 Column 1, line 25. Filing taxes 2014 Her actual contributions for 2011 were $1,450, which she enters on line 25. Filing taxes 2014 Column 1, line 26. Filing taxes 2014 She now refigures her charitable contributions based on her modified adjusted gross income. Filing taxes 2014 Her contributions are well below the 50% limit, so she enters $1,450 on line 26. Filing taxes 2014 Column 1, line 27. Filing taxes 2014 The difference is zero. Filing taxes 2014 Column 1, lines 28 through 37. Filing taxes 2014 Ida had no casualty losses or deductions for miscellaneous items in 2011. Filing taxes 2014 She skips lines 28 through 31 and lines 33 through 36. Filing taxes 2014 Ida enters zero on lines 32 and 37. Filing taxes 2014 Column 1, line 38. Filing taxes 2014 She combines lines 18, 21, 27, 32, and 37 and enters $75 on line 38. Filing taxes 2014 She carries this figure to line 7. Filing taxes 2014 Column 2, line 1. Filing taxes 2014 Ida enters $6,525, the carryback of her 2013 NOL to 2012, from column 1, line 10, on line 1. Filing taxes 2014 Column 2, line 2. Filing taxes 2014 She enters ($425), her 2012 taxable income, on line 2. Filing taxes 2014 Column 2, line 3. Filing taxes 2014 Ida enters her net capital loss deduction of $3,000 on line 3. Filing taxes 2014 Column 2, lines 4 and 5. Filing taxes 2014 Ida had no section 1202 exclusion or domestic production activities deduction in 2012. Filing taxes 2014 She enters zero on lines 4 and 5. Filing taxes 2014 Column 2, line 6. Filing taxes 2014 Although Ida's entry on line 3 modifies her adjusted gross income, that does not affect any other items included in her adjusted gross income. Filing taxes 2014 Ida enters zero on line 6. Filing taxes 2014 Column 2, line 7. Filing taxes 2014 Because Ida did not itemize deductions on her 2012 tax return, she enters zero on line 7. Filing taxes 2014 Column 2, line 8. Filing taxes 2014 Ida enters the deduction for her personal exemption of $3,800 for 2012. Filing taxes 2014 Column 2, line 9. Filing taxes 2014 After combining lines 2 through 8, Ida's modified taxable income is $6,375. Filing taxes 2014 Column 2, line 10. Filing taxes 2014 Ida figures her carryforward to 2014 by subtracting her modified taxable income (line 9) from her NOL deduction (line 1). Filing taxes 2014 She enters the $150 carryover on line 10. Filing taxes 2014 This image is too large to be displayed in the current screen. Filing taxes 2014 Please click the link to view the image. Filing taxes 2014 Form 1045, page 3 This image is too large to be displayed in the current screen. Filing taxes 2014 Please click the link to view the image. Filing taxes 2014 Form 1045, page 4 NOL Carryover From 2013 to 2014 If you had an NOL deduction carried forward from a year prior to 2013 that resulted in your having taxable income on your 2013 return of zero (of less than zero, if an estate or trust), complete Table 1 , Worksheet for NOL Carryover From 2013 to 2014, on the following pages. Filing taxes 2014 It will help you figure your NOL to carry to 2014. Filing taxes 2014 Keep the worksheet for your records. Filing taxes 2014 Worksheet Instructions At the top of the worksheet, enter the NOL year for which you are figuring the carryover. Filing taxes 2014 More than one NOL. Filing taxes 2014   If your 2013 NOL deduction includes amounts for more than one loss year, complete this worksheet only for one loss year. Filing taxes 2014 To determine which year, start with your earliest NOL and subtract each NOL separately from your taxable income figured without the NOL deduction. Filing taxes 2014 Complete this worksheet for the earliest NOL that results in your having taxable income below zero. Filing taxes 2014 Your NOL carryover to 2014 is the total of the amount on line 10 of the worksheet and all later NOL amounts. Filing taxes 2014 Example. Filing taxes 2014 Your taxable income for 2013 is $5,000 without your $9,000 NOL deduction. Filing taxes 2014 Your NOL deduction includes a $2,000 carryover from 2011 and a $7,000 carryover from 2012. Filing taxes 2014 Subtract your 2011 NOL of $2,000 from $5,000. Filing taxes 2014 This gives you taxable income of $3,000. Filing taxes 2014 Your 2011 NOL is now completely used up. Filing taxes 2014 Subtract your $7,000 2012 NOL from $3,000. Filing taxes 2014 This gives you taxable income of ($4,000). Filing taxes 2014 You now complete the worksheet for your 2012 NOL. Filing taxes 2014 Your NOL carryover to 2014 is the unused part of your 2012 NOL from line 10 of the worksheet. Filing taxes 2014 Line 2. Filing taxes 2014   Treat your NOL deduction for the NOL year entered at the top of the worksheet and later years as a positive amount. Filing taxes 2014 Add it to your negative taxable income (figured without the NOL deduction). Filing taxes 2014 Enter the result on line 2. Filing taxes 2014 Line 6. Filing taxes 2014   You must refigure the following income and deductions based on adjusted gross income. Filing taxes 2014 The special allowance for passive activity losses from rental real estate activities. Filing taxes 2014 Taxable social security and tier 1 railroad retirement benefits. Filing taxes 2014 IRA deductions. Filing taxes 2014 Excludable savings bond interest. Filing taxes 2014 Excludable employer-provided adoption benefits. Filing taxes 2014 The student loan interest deduction. Filing taxes 2014 The tuition and fees deduction. Filing taxes 2014   If none of these items apply to you, enter zero on line 6. Filing taxes 2014 Otherwise, increase your adjusted gross income by the total of lines 3 through 5 and your NOL deduction for the NOL year entered at the top of the worksheet and later years. Filing taxes 2014 Using this increased adjusted gross income, refigure the items that apply, in the order listed above. Filing taxes 2014 Your adjustment for each item is the difference between the refigured amount and the amount included on your return. Filing taxes 2014 Combine the adjustments for previous items with your adjusted gross income before refiguring the next item. Filing taxes 2014 Keep a record of your computations. Filing taxes 2014   Enter your total adjustments for the above items on line 6. Filing taxes 2014 Line 7. Filing taxes 2014   Enter zero if you claimed the standard deduction or the amounts on lines 3 through 5 are zero. Filing taxes 2014 Otherwise, use lines 11 through 33 of the worksheet to figure the amount to enter on this line. Filing taxes 2014 Complete only those sections that apply to you. Filing taxes 2014 Estates and trusts. Filing taxes 2014   Enter zero on line 7 if you did not claim any miscellaneous deductions on Form 1041, line 15c, or a casualty or theft loss. Filing taxes 2014 Otherwise, refigure these deductions by substituting modified adjusted gross income (see below ) for adjusted gross income. Filing taxes 2014 Subtract the recomputed deductions from those claimed on the return. Filing taxes 2014 Enter the result on line 7. Filing taxes 2014 Modified adjusted gross income. Filing taxes 2014   To refigure miscellaneous itemized deductions of an estate or trust (Form 1041, line 15c), modified adjusted gross income is the total of the following amounts. Filing taxes 2014 The adjusted gross income on the return. Filing taxes 2014 The amounts from lines 3 through 5 of the worksheet. Filing taxes 2014 The exemption amount from Form 1041, line 20. Filing taxes 2014 The NOL deduction for the NOL year entered at the top of the worksheet and for later years. Filing taxes 2014   To refigure the casualty and theft loss deduction of an estate or trust, modified adjusted gross income is the total of the following amounts. Filing taxes 2014 The adjusted gross income amount you used to figure the deduction claimed on the return. Filing taxes 2014 The amounts from lines 3 through 5 of the worksheet. Filing taxes 2014 The NOL deduction for the NOL year entered at the top of the worksheet and for later years. Filing taxes 2014 Line 11. Filing taxes 2014   Treat your NOL deduction for the NOL year entered at the top of the worksheet and for later years as a positive amount. Filing taxes 2014 Add it to your adjusted gross income. Filing taxes 2014 Enter the result on line 11. Filing taxes 2014 Line 20. Filing taxes 2014   Is your modified adjusted gross income from line 13 of this worksheet more than $100,000 ($50,000 if married filing separately)?   □ Yes. Filing taxes 2014 Your deduction is limited. Filing taxes 2014 Refigure your deduction using the Mortgage Insurance Premiums Deduction Worksheet in the 2013 Instructions for Form 1045. Filing taxes 2014 On line 2 of the Mortgage Insurance Premiums Deduction Worksheet, enter the amount from line 13 of this worksheet. Filing taxes 2014   □ No. Filing taxes 2014 Your deduction is not limited. Filing taxes 2014 Enter the amount from line 19 on line 20 and enter -0- on line 21. Filing taxes 2014 Line 23. Filing taxes 2014   If you had a contributions carryover from 2012 to 2013 and your NOL deduction includes an amount from an NOL year before 2012, you may have to reduce your contributions carryover. Filing taxes 2014 Reduce the contributions carryover by the amount of any adjustment you made to your 2012 charitable contributions deduction when figuring your NOL carryover to 2013. Filing taxes 2014 Use the reduced contributions carryover to figure the amount to enter on line 23. Filing taxes 2014 Please click here for the text description of the image. Filing taxes 2014 Worksheet for NOL Carryover Worksheet for NOL Carryover (Continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Filing taxes 2014 Free help with your tax return. Filing taxes 2014   You can get free help preparing your return nationwide from IRS-certified volunteers. Filing taxes 2014 The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Filing taxes 2014 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Filing taxes 2014 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Filing taxes 2014 In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Filing taxes 2014 To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Filing taxes 2014 gov, download the IRS2Go app, or call 1-800-906-9887. Filing taxes 2014   As part of the TCE program, AARP offers the Tax-Aide counseling program. Filing taxes 2014 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Filing taxes 2014 aarp. Filing taxes 2014 org/money/taxaide or call 1-888-227-7669. Filing taxes 2014 For more information on these programs, go to IRS. Filing taxes 2014 gov and enter “VITA” in the search box. Filing taxes 2014 Internet. Filing taxes 2014    IRS. Filing taxes 2014 gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Filing taxes 2014 Download the free IRS2Go app from the iTunes app store or from Google Play. Filing taxes 2014 Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Filing taxes 2014 Check the status of your 2013 refund with the Where's My Refund? application on IRS. Filing taxes 2014 gov or download the IRS2Go app and select the Refund Status option. Filing taxes 2014 The IRS issues more than 9 out of 10 refunds in less than 21 days. Filing taxes 2014 Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Filing taxes 2014 You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Filing taxes 2014 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Filing taxes 2014 Use the Interactive Tax Assistant (ITA) to research your tax questions. Filing taxes 2014 No need to wait on the phone or stand in line. Filing taxes 2014 The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Filing taxes 2014 When you reach the response screen, you can print the entire interview and the final response for your records. Filing taxes 2014 New subject areas are added on a regular basis. Filing taxes 2014  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Filing taxes 2014 gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Filing taxes 2014 You can use the IRS Tax Map to search publications and instructions by topic or keyword. Filing taxes 2014 The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Filing taxes 2014 When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Filing taxes 2014 Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Filing taxes 2014 You can also ask the IRS to mail a return or an account transcript to you. Filing taxes 2014 Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Filing taxes 2014 gov or by calling 1-800-908-9946. Filing taxes 2014 Tax return and tax account transcripts are generally available for the current year and the past three years. Filing taxes 2014 Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Filing taxes 2014 Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Filing taxes 2014 If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Filing taxes 2014 Check the status of your amended return using Where's My Amended Return? Go to IRS. Filing taxes 2014 gov and enter Where's My Amended Return? in the search box. Filing taxes 2014 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Filing taxes 2014 It can take up to 3 weeks from the date you mailed it to show up in our system. Filing taxes 2014 Make a payment using one of several safe and convenient electronic payment options available on IRS. Filing taxes 2014 gov. Filing taxes 2014 Select the Payment tab on the front page of IRS. Filing taxes 2014 gov for more information. Filing taxes 2014 Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Filing taxes 2014 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Filing taxes 2014 gov. Filing taxes 2014 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Filing taxes 2014 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Filing taxes 2014 gov. Filing taxes 2014 Request an Electronic Filing PIN by going to IRS. Filing taxes 2014 gov and entering Electronic Filing PIN in the search box. Filing taxes 2014 Download forms, instructions and publications, including accessible versions for people with disabilities. Filing taxes 2014 Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Filing taxes 2014 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Filing taxes 2014 An employee can answer questions about your tax account or help you set up a payment plan. Filing taxes 2014 Before you visit, check the Office Locator on IRS. Filing taxes 2014 gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Filing taxes 2014 If you have a special need, such as a disability, you can request an appointment. Filing taxes 2014 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Filing taxes 2014 Apply for an Employer Identification Number (EIN). Filing taxes 2014 Go to IRS. Filing taxes 2014 gov and enter Apply for an EIN in the search box. Filing taxes 2014 Read the Internal Revenue Code, regulations, or other official guidance. Filing taxes 2014 Read Internal Revenue Bulletins. Filing taxes 2014 Sign up to receive local and national tax news and more by email. Filing taxes 2014 Just click on “subscriptions” above the search box on IRS. Filing taxes 2014 gov and choose from a variety of options. Filing taxes 2014 Phone. Filing taxes 2014    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Filing taxes 2014 Download the free IRS2Go app from the iTunes app store or from Google Play. Filing taxes 2014 Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Filing taxes 2014 gov, or download the IRS2Go app. Filing taxes 2014 Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Filing taxes 2014 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Filing taxes 2014 Most VITA and TCE sites offer free electronic filing. Filing taxes 2014 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Filing taxes 2014 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Filing taxes 2014 Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Filing taxes 2014 If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Filing taxes 2014 The IRS issues more than 9 out of 10 refunds in less than 21 days. Filing taxes 2014 Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Filing taxes 2014 Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Filing taxes 2014 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Filing taxes 2014 Note, the above information is for our automated hotline. Filing taxes 2014 Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Filing taxes 2014 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Filing taxes 2014 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Filing taxes 2014 It can take up to 3 weeks from the date you mailed it to show up in our system. Filing taxes 2014 Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Filing taxes 2014 You should receive your order within 10 business days. Filing taxes 2014 Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Filing taxes 2014 If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Filing taxes 2014 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Filing taxes 2014 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Filing taxes 2014 These individuals can also contact the IRS through relay services such as the Federal Relay Service. Filing taxes 2014 Walk-in. Filing taxes 2014   You can find a selection of forms, publications and services — in person. Filing taxes 2014 Products. Filing taxes 2014 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Filing taxes 2014 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Filing taxes 2014 Services. Filing taxes 2014 You can walk in to your local TAC for face-to-face tax help. Filing taxes 2014 An employee can answer questions about your tax account or help you set up a payment plan. Filing taxes 2014 Before visiting, use the Office Locator tool on IRS. Filing taxes 2014 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Filing taxes 2014 Mail. Filing taxes 2014   You can send your order for forms, instructions, and publications to the address below. Filing taxes 2014 You should receive a response within 10 business days after your request is received. Filing taxes 2014 Internal Revenue Service 1201 N. Filing taxes 2014 Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Filing taxes 2014 The Taxpayer Advocate Service (TAS) is your voice at the IRS. Filing taxes 2014 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Filing taxes 2014   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Filing taxes 2014 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Filing taxes 2014 You face (or your business is facing) an immediate threat of adverse action. Filing taxes 2014 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Filing taxes 2014   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Filing taxes 2014 Here's why we can help: TAS is an independent organization within the IRS. Filing taxes 2014 Our advocates know how to work with the IRS. Filing taxes 2014 Our services are free and tailored to meet your needs. Filing taxes 2014 We have offices in every state, the District of Columbia, and Puerto Rico. Filing taxes 2014   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Filing taxes 2014   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Filing taxes 2014 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Filing taxes 2014 Low Income Taxpayer Clinics Low Income
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The Filing Taxes 2014

Filing taxes 2014 4. Filing taxes 2014   Deductions Table of Contents Standard DeductionStandard Deduction for Dependents Itemized DeductionsMedical and Dental Expenses Most taxpayers have a choice of taking a standard deduction or itemizing their deductions. Filing taxes 2014 You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. Filing taxes 2014 If you have a choice, you should use the method that gives you the lower tax. Filing taxes 2014 Standard Deduction The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer. Filing taxes 2014 Generally, the standard deduction amounts are adjusted each year for inflation. Filing taxes 2014 In most cases, you can use Worksheet 4-1 to figure your standard deduction amount. Filing taxes 2014 Persons not eligible for the standard deduction. Filing taxes 2014   Your standard deduction is zero and you should itemize any deductions you have if: You are married and filing a separate return, and your spouse itemizes deductions, You are filing a tax return for a short tax year because of a change in your annual accounting period, or You are a nonresident or dual-status alien during the year. Filing taxes 2014 You are considered a dual-status alien if you were both a nonresident alien and a resident alien during the year. Filing taxes 2014   If you are a nonresident alien who is married to a U. Filing taxes 2014 S. Filing taxes 2014 citizen or resident alien at the end of the year, you can choose to be treated as a U. Filing taxes 2014 S. Filing taxes 2014 resident. Filing taxes 2014 See Publication 519, U. Filing taxes 2014 S. Filing taxes 2014 Tax Guide for Aliens. Filing taxes 2014 If you make this choice, you can take the standard deduction. Filing taxes 2014 Decedent's final return. Filing taxes 2014   The amount of the standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. Filing taxes 2014 However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. Filing taxes 2014 Higher standard deduction for age (65 or older). Filing taxes 2014   If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. Filing taxes 2014 You are considered age 65 on the day before your 65th birthday. Filing taxes 2014 Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. Filing taxes 2014 Higher standard deduction for blindness. Filing taxes 2014   If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. Filing taxes 2014 You qualify for this benefit if you are totally or partly blind. Filing taxes 2014 Not totally blind. Filing taxes 2014   If you are not totally blind, you must get a certified statement from an eye doctor (ophthalmologist or optometrist) that: You cannot see better than 20/200 in the better eye with glasses or contact lenses, or Your field of vision is not more than 20 degrees. Filing taxes 2014   If your eye condition will never improve beyond these limits, the statement should include this fact. Filing taxes 2014 You must keep the statement in your records. Filing taxes 2014   If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify. Filing taxes 2014 Spouse 65 or older or blind. Filing taxes 2014   You can take the higher standard deduction if your spouse is age 65 or older or blind and: You file a joint return, or You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and an exemption for your spouse could not be claimed by another taxpayer. Filing taxes 2014    You cannot claim the higher standard deduction for an individual other than yourself and your spouse. Filing taxes 2014 Example. Filing taxes 2014 This example illustrates how to determine your standard deduction using Worksheet 4-1. Filing taxes 2014 Bill and Lisa are filing a joint return for 2013. Filing taxes 2014 Both are over age 65. Filing taxes 2014 Neither is blind, and neither can be claimed as a dependent. Filing taxes 2014 They do not itemize deductions, so they use Worksheet 4-1. Filing taxes 2014 Because they are married filing jointly, they enter $12,200 on line 1. Filing taxes 2014 They check the “No” box on line 2, so they also enter $12,200 on line 4. Filing taxes 2014 Because they are both over age 65, they enter $2,400 ($1,200 × 2) on line 5. Filing taxes 2014 They enter $14,600 ($12,200 + $2,400) on line 6, so their standard deduction is $14,600. Filing taxes 2014 Standard Deduction for Dependents The standard deduction for an individual for whom an exemption can be claimed on another person's tax return is generally limited to the greater of: $1,000, or The individual's earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,100). Filing taxes 2014 However, the standard deduction may be higher if the individual is 65 or older or blind. Filing taxes 2014 If an exemption for you (or your spouse if you are filing jointly) can be claimed on someone else's return, use Worksheet 4-1, if applicable, to determine your standard deduction. Filing taxes 2014 Worksheet 4-1. Filing taxes 2014 2013 Standard Deduction Worksheet Caution. Filing taxes 2014 If you are married filing separately and your spouse itemizes deductions, or if you are a dual-status alien, do not complete this worksheet. Filing taxes 2014 If you were born before January 2, 1949, and/or blind, check the correct number of boxes below. Filing taxes 2014 Put the total number of boxes checked in box c and go to line 1. Filing taxes 2014 a. Filing taxes 2014 You   Born before  January 2, 1949     Blind b. Filing taxes 2014 Your spouse, if claiming  spouse's exemption   Born before January 2, 1949     Blind c. Filing taxes 2014 Total boxes checked             1. Filing taxes 2014 Enter the amount shown below for your filing status. Filing taxes 2014               Single or married filing separately — $6,100 Married filing jointly or Qualifying widow(er) — $12,200 Head of household — $8,950   1. Filing taxes 2014           2. Filing taxes 2014 Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?  No. Filing taxes 2014 Skip line 3; enter the amount from line 1 on line 4. Filing taxes 2014   Yes. Filing taxes 2014 Go to line 3. Filing taxes 2014         3. Filing taxes 2014 Is your earned income* more than $650?               Yes. Filing taxes 2014 Add $350 to your earned income. Filing taxes 2014 Enter the total   3. Filing taxes 2014         No. Filing taxes 2014 Enter $1,000 4. Filing taxes 2014 Enter the smaller of line 1 or line 3 4. Filing taxes 2014   5. Filing taxes 2014 If born before January 2, 1949, or blind, multiply the number in box c by $1,200 ($1,500 if single or head of household). Filing taxes 2014 Enter the result here. Filing taxes 2014 Otherwise, enter -0- 5. Filing taxes 2014   6. Filing taxes 2014 Add lines 4 and 5. Filing taxes 2014 This is your standard deduction for 2013. Filing taxes 2014 6. Filing taxes 2014   * Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Filing taxes 2014 It also includes any amount received as a scholarship that you must include in your income. Filing taxes 2014 Generally, your earned income is the total of the amount(s) you reported on Form 1040, lines 7, 12, and 18, minus the amount, if any, on line 27 (or the amount you reported on Form 1040A, line 7). Filing taxes 2014 Itemized Deductions Some individuals should itemize their deductions because it will save them money. Filing taxes 2014 Others should itemize because they do not qualify for the standard deduction. Filing taxes 2014 See the discussion under Standard Deduction , earlier, to decide if it would be to your advantage to itemize deductions. Filing taxes 2014 You may be subject to a limit on some of your itemized deductions if your adjusted gross income is more than $150,000. Filing taxes 2014 For more information, see Overall limitation, later. Filing taxes 2014 Medical and dental expenses, some taxes, certain interest expenses, charitable contributions, casualty and theft losses, and certain other miscellaneous expenses may be itemized as deductions on Schedule A (Form 1040). Filing taxes 2014 You may benefit from itemizing your deductions on Schedule A (Form 1040) if you: Cannot take the standard deduction, Had uninsured medical or dental expenses that are more than 10% of your adjusted gross income (or more than 7. Filing taxes 2014 5% of your adjusted gross income if either you or your spouse is age 65 or older), Paid interest on your home, Paid real estate or personal property taxes, Paid mortgage insurance premiums, Paid state and local income or general sales taxes, Had large unreimbursed employee business expenses or other miscellaneous deductions, Had large uninsured casualty or theft losses, Made large contributions to qualified charities (see Publication 526, Charitable Contributions), or Have total itemized deductions that are more than the standard deduction that applies to you. Filing taxes 2014 See the Schedule A (Form 1040) instructions for more information. Filing taxes 2014 Overall limitation. Filing taxes 2014   You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than: $150,000, if married filing separately, $250,000, if single, $275,000, if head of household, or $300,000, if married filing jointly or qualifying widow(er). Filing taxes 2014  If your adjusted gross income exceeds the applicable amount, you will use the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040) to figure your total itemized deductions. Filing taxes 2014 Medical and Dental Expenses You can deduct certain medical and dental expenses you paid for yourself, your spouse, and your dependent(s) if you itemize your deductions on Schedule A (Form 1040). Filing taxes 2014 Table 4-1 shows some common items that you can or cannot include in figuring your medical expense deduction. Filing taxes 2014 For more information, see the following discussions of selected items, which are presented in alphabetical order. Filing taxes 2014 A more extensive list of items and further details can be found in Publication 502, Medical and Dental Expenses. Filing taxes 2014 Table 4-1. Filing taxes 2014 Medical and Dental Expenses Checklist You can include: You cannot include: Bandages Capital expenses for equipment or improvements to your home needed for medical care (see Publication 502) Certain weight-loss expenses for obesity Diagnostic devices Expenses of an organ donor Eye surgery—to promote the correct function of the eye Guide dogs or other animals aiding the blind, deaf, and disabled Hospital services fees (lab work, therapy, nursing services, surgery, etc. Filing taxes 2014 ) Lead-based paint removal (see Publication 502) Long-term care contracts, qualified (see Publication 502) Meals and lodging provided by a hospital during medical treatment Medical and hospital insurance premiums Medical services fees (from doctors, dentists, surgeons, specialists, and other medical practitioners) Medicare Part D premiums Oxygen equipment and oxygen Part of life-care fee paid to retirement home designated for medical care Prescription medicines (prescribed by a doctor) and insulin Psychiatric and psychological treatment Social security tax, Medicare tax, FUTA, and state employment tax for worker providing medical care (see Publication 502) Special items (artificial limbs, false teeth, eyeglasses, contact lenses, hearing aids, crutches, wheelchair, etc. Filing taxes 2014 ) Special education for mentally or physically disabled persons (see Publication 502) Stop-smoking programs Transportation for needed medical care Treatment at a drug or alcohol center (includes meals and lodging provided by the center) Wages for nursing services (see Publication 502) Contributions to Archer MSAs (see Publication 969) Bottled water Diaper service Expenses for your general health (even if following your doctor's advice) such as: —Health club dues —Household help (even if recommended by a doctor) —Social activities, such as dancing or swimming lessons —Trip for general health improvement Flexible spending account reimbursements for medical expenses (if contributions were on a pretax basis) (see Publication 502) Funeral, burial, or cremation expenses Health savings account payments for medical expenses (see Publication 502) Illegal operation or treatment Life insurance or income protection policies, or policies providing payment for loss of life, limb, sight, etc. Filing taxes 2014 Medical insurance included in a car insurance policy covering all persons injured in or by your car Medicine you buy without a prescription Nursing care for a healthy baby Prescription drugs you brought in (or ordered shipped) from another country, in most cases (see Publication 502) Surgery for purely cosmetic reasons (see Publication 502) Toothpaste, toiletries, cosmetics, etc. Filing taxes 2014 Teeth whitening Weight-loss expenses not for the treatment of obesity or other disease You can deduct only the amount of your medical and dental expenses that is more than 10% of your adjusted gross income (or that is more than 7. Filing taxes 2014 5% of your adjusted gross income if you or your spouse is age 65 or older). Filing taxes 2014 What to include. Filing taxes 2014   Generally, you can include only the medical and dental expenses you paid this year, regardless of when the services were provided. Filing taxes 2014 If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. Filing taxes 2014 If you use a pay-by-phone or online account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. Filing taxes 2014 You can include medical expenses you charge to your credit card in the year the charge is made. Filing taxes 2014 It does not matter when you actually pay the amount charged. Filing taxes 2014 Home Improvements You can include in medical expenses amounts you pay for home improvements if their main purpose is medical care for you, your spouse, or your dependent. Filing taxes 2014 Only reasonable costs to accommodate a home to your disabled condition (or that of your spouse or your dependent(s) who live with you) are considered medical care. Filing taxes 2014 Additional costs for personal motives, such as for architectural or aesthetic reasons, are not medical expenses. Filing taxes 2014 Publication 502 contains additional information and examples, including a capital expense worksheet, to assist you in figuring the amount of the capital expense that you can include in your medical expenses. Filing taxes 2014 Also, see Publication 502 for information about deductible operating and upkeep expenses related to such capital expense items, and for information about improvements, for medical reasons, to property rented by a person with disabilities. Filing taxes 2014 Household Help You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. Filing taxes 2014 This is a personal expense that is not deductible. Filing taxes 2014 However, you may be able to include certain expenses paid to a person providing nursing-type services. Filing taxes 2014 For more information, see Nursing Services , later. Filing taxes 2014 Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Filing taxes 2014 For more information, see Qualified long-term care services under Long-Term Care, later. Filing taxes 2014 Hospital Services You can include in medical expenses amounts you pay for the cost of inpatient care at a hospital or similar institution if a principal reason for being there is to receive medical care. Filing taxes 2014 This includes amounts paid for meals and lodging. Filing taxes 2014 Also, see Meals and Lodging , later. Filing taxes 2014 Long-Term Care You can include in medical expenses amounts paid for qualified long-term care services and premiums paid for qualified long-term care insurance contracts. Filing taxes 2014 Qualified long-term care services. Filing taxes 2014   Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are: Required by a chronically ill individual, and Provided under a plan of care prescribed by a licensed health care practitioner. Filing taxes 2014 Chronically ill individual. Filing taxes 2014    An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions. Filing taxes 2014 He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Filing taxes 2014 Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Filing taxes 2014 He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Filing taxes 2014 Maintenance and personal care services. Filing taxes 2014    Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment). Filing taxes 2014 Qualified long-term care insurance contracts. Filing taxes 2014   A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. Filing taxes 2014 The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses. Filing taxes 2014   The amount of qualified long-term care premiums you can include is limited. Filing taxes 2014 You can include the following as medical expenses on Schedule A (Form 1040). Filing taxes 2014 Qualified long-term care premiums up to the following amounts. Filing taxes 2014 Age 40 or under – $360. Filing taxes 2014 Age 41 to 50 – $680. Filing taxes 2014 Age 51 to 60 – $1,360. Filing taxes 2014 Age 61 to 70 – $3,640. Filing taxes 2014 Age 71 or over – $4,550. Filing taxes 2014 Unreimbursed expenses for qualified long-term care services. Filing taxes 2014 Note. Filing taxes 2014 The limit on premiums is for each person. Filing taxes 2014 Meals and Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if your main reason for being there is to receive medical care. Filing taxes 2014 You may be able to include in medical expenses the cost of lodging (but not meals) not provided in a hospital or similar institution. Filing taxes 2014 You can include the cost of such lodging while away from home if all of the following requirements are met. Filing taxes 2014 The lodging is primarily for, and essential to, medical care. Filing taxes 2014 The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. Filing taxes 2014 The lodging is not lavish or extravagant under the circumstances. Filing taxes 2014 There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. Filing taxes 2014 The amount you include in medical expenses for lodging cannot be more than $50 per night for each person. Filing taxes 2014 You can include lodging for a person traveling with the person receiving the medical care. Filing taxes 2014 For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Filing taxes 2014 (Meals are not included. Filing taxes 2014 ) Nursing home. Filing taxes 2014   You can include in medical expenses the cost of medical care in a nursing home or a home for the aged for yourself, your spouse, or your dependent(s). Filing taxes 2014 This includes the cost of meals and lodging in the home if a main reason for being there is to get medical care. Filing taxes 2014   Do not include the cost of meals and lodging if the reason for being in the home is personal. Filing taxes 2014 However, you can include in medical expenses the part of the cost that is for medical or nursing care. Filing taxes 2014 Medical Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. Filing taxes 2014 Policies can provide payment for: Hospitalization, surgical fees, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Qualified long-term care insurance contracts (subject to the additional limits included in the discussion on qualified long-term care insurance contracts under Long-Term Care , earlier). Filing taxes 2014 If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. Filing taxes 2014 The cost of the medical portion must be separately stated in the insurance contract or given to you in a separate statement. Filing taxes 2014 Medicare Part A. Filing taxes 2014   If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare Part A. Filing taxes 2014 The payroll tax paid for Medicare Part A is not a medical expense. Filing taxes 2014 If you are not covered under social security (or were not a government employee who paid Medicare tax), you can enroll voluntarily in Medicare Part A. Filing taxes 2014 In this situation you can include the premiums you paid for Medicare Part A as a medical expense. Filing taxes 2014 Medicare Part B. Filing taxes 2014   Medicare Part B is a supplemental medical insurance. Filing taxes 2014 Premiums you pay for Medicare Part B are a medical expense. Filing taxes 2014 If you applied for it at age 65 or after you became disabled, you can include in medical expenses the monthly premiums you paid. Filing taxes 2014 If you were over age 65 or disabled when you first enrolled, check with your local Social Security Administration office, or go to their website at www. Filing taxes 2014 SSA. Filing taxes 2014 gov, to find out your premium. Filing taxes 2014 Medicare Part D. Filing taxes 2014   Medicare Part D is a voluntary prescription drug insurance program for persons with Medicare Part A or Part B. Filing taxes 2014 You can include as a medical expense premiums you pay for Medicare Part D. Filing taxes 2014 Prepaid insurance premiums. Filing taxes 2014   Insurance premiums you pay before you are age 65 for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments, or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). Filing taxes 2014 Medicines You can include in medical expenses amounts you pay for prescribed medicines and drugs. Filing taxes 2014 A prescribed drug is one that requires a prescription by a doctor for its use by an individual. Filing taxes 2014 You can also include amounts you pay for insulin. Filing taxes 2014 Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. Filing taxes 2014 Imported medicines and drugs. Filing taxes 2014   If you import medicines or drugs from other countries, see Medicines and Drugs From Other Countries, under What Expenses Are Not Includible, in Publication 502. Filing taxes 2014 Nursing Services You can include in medical expenses wages and other amounts you pay for nursing services. Filing taxes 2014 The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. Filing taxes 2014 This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. Filing taxes 2014 These services can be provided in your home or another care facility. Filing taxes 2014 Generally, only the amount spent for nursing services is a medical expense. Filing taxes 2014 If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services. Filing taxes 2014 However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Filing taxes 2014 See Maintenance and personal care services under Qualified long-term care services, earlier. Filing taxes 2014 Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. Filing taxes 2014 See Child and Dependent Care Credit , later, and Publication 503, Child and Dependent Care Expenses. Filing taxes 2014 You can also include in medical expenses part of the amount you pay for that attendant's meals. Filing taxes 2014 Divide the food expense among the household members to find the cost of the attendant's food. Filing taxes 2014 Then divide that cost in the same manner as in the preceding paragraph. Filing taxes 2014 If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. Filing taxes 2014 This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant. Filing taxes 2014 Employment taxes. Filing taxes 2014   You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay for a nurse, attendant, or other person who provides medical care. Filing taxes 2014 If the attendant also provides personal and household services, you can include as a medical expense only the amount of employment taxes paid for medical services as explained earlier under Nursing Services. Filing taxes 2014 For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide. Filing taxes 2014 Transportation You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. Filing taxes 2014 Car expenses. Filing taxes 2014    You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. Filing taxes 2014 You cannot include depreciation, insurance, general repair, or maintenance expenses. Filing taxes 2014   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents a mile. Filing taxes 2014   You can also include parking fees and tolls. Filing taxes 2014 You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate. Filing taxes 2014 You can also include:    Bus, taxi, train, or plane fares or ambulance service, and Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone. Filing taxes 2014 Do not include transportation expenses if, for purely personal reasons, you choose to travel to another city for an operation or other medical care prescribed by your doctor. Filing taxes 2014 Prev  Up  Next   Home   More Online Publications