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Filing taxes online Publication 526 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. Filing taxes online Tax questions. Filing taxes online Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 526 (such as legislation enacted after we release it), go to www. Filing taxes online irs. Filing taxes online gov/pub526. Filing taxes online What's New Limit on itemized deductions. Filing taxes online  For 2013, you may have to reduce the total amount of certain itemized deductions, including charitable contributions, 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 online For more information and a worksheet, see the instructions for Schedule A (Form 1040). Filing taxes online Reminders Disaster relief. Filing taxes online  You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization (defined under Organizations That Qualify To Receive Deductible Contributions ). Filing taxes online However, you cannot deduct contributions earmarked for relief of a particular individual or family. Filing taxes online Publication 3833, Disaster Relief: Providing Assistance through Charitable Organizations, has more information about disaster relief, including how to establish a new charitable organization. Filing taxes online You can also find more information on IRS. Filing taxes online gov. Filing taxes online Enter “disaster relief” in the search box. Filing taxes online Photographs of missing children. Filing taxes online  The IRS is a proud partner with the National Center for Missing and Exploited Children. Filing taxes online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Filing taxes online You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Filing taxes online Introduction This publication explains how to claim a deduction for your charitable contributions. Filing taxes online It discusses the types of organizations to which you can make deductible charitable contributions and the types of contributions you can deduct. Filing taxes online It also discusses how much you can deduct, what records you must keep, and how to report charitable contributions. Filing taxes online A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Filing taxes online It is voluntary and is made without getting, or expecting to get, anything of equal value. Filing taxes online Qualified organizations. Filing taxes online   Qualified organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals. Filing taxes online You will find descriptions of these organizations under Organizations That Qualify To Receive Deductible Contributions . Filing taxes online Form 1040 required. Filing taxes online   To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A (Form 1040). Filing taxes online The amount of your deduction may be limited if certain rules and limits explained in this publication apply to you. Filing taxes online Comments and suggestions. Filing taxes online   We welcome your comments about this publication and your suggestions for future editions. Filing taxes online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Filing taxes online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Filing taxes online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Filing taxes online   You can send your comments from www. Filing taxes online irs. Filing taxes online gov/formspubs/. Filing taxes online Click on “More Information” and then on “Comment on Tax Forms and Publications. Filing taxes online ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Filing taxes online Ordering forms and publications. Filing taxes online   Visit www. Filing taxes online irs. Filing taxes online gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Filing taxes online Internal Revenue Service 1201 N. Filing taxes online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Filing taxes online   If you have a tax question, check the information available on IRS. Filing taxes online gov or call 1-800-829-1040. Filing taxes online We cannot answer tax questions sent to either of the above addresses. Filing taxes online Useful Items - You may want to see: Publication 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions  See How To Get Tax Help near the end of this publication for information about getting these publications and forms. Filing taxes online Table 1. Filing taxes online Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. Filing taxes online See the rest of this publication for more information and additional rules and limits that may apply. Filing taxes online Deductible As Charitable Contributions Not Deductible As Charitable Contributions Money or property you give to: Money or property you give to: Churches, synagogues, temples, mosques, and other religious organizations  Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park)  Nonprofit schools and hospitals  The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. Filing taxes online   War veterans' groups    Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Civic leagues, social and sports clubs, labor unions, and chambers of commerce  Foreign organizations (except certain Canadian, Israeli, and Mexican charities)  Groups that are run for personal profit  Groups whose purpose is to lobby for law changes  Homeowners' associations  Individuals  Political groups or candidates for public office    Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank   Prev  Up  Next   Home   More Online Publications
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Filing taxes online 7. Filing taxes online   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. Filing taxes online Costs not included. Filing taxes online Intangible Drilling Costs Exploration CostsPartnerships and S corporations. Filing taxes online Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. Filing taxes online Film and Television Production Costs What's New Film and television productions costs. Filing taxes online  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. Filing taxes online See Film and Television Production Costs , later. Filing taxes online Introduction This chapter discusses costs you can elect to deduct or capitalize. Filing taxes online You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. Filing taxes online If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. Filing taxes online When you capitalize a cost, you add it to the basis of property to which it relates. Filing taxes online A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. Filing taxes online Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. Filing taxes online You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. Filing taxes online For more information on the alternative minimum tax, see the instructions for the following forms. Filing taxes online Form 6251, Alternative Minimum Tax—Individuals. Filing taxes online Form 4626, Alternative Minimum Tax—Corporations. Filing taxes online Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. Filing taxes online Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. Filing taxes online Certain carrying charges must be capitalized under the uniform capitalization rules. Filing taxes online (For information on capitalization of interest, see chapter 4 . Filing taxes online ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. Filing taxes online You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. Filing taxes online For unimproved and unproductive real property, your election is good for only 1 year. Filing taxes online You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. Filing taxes online For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. Filing taxes online For personal property, your election is effective until the date you install or first use it, whichever is later. Filing taxes online How to make the election. Filing taxes online   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. Filing taxes online However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Filing taxes online Attach the statement to the amended return and write “Filed pursuant to section 301. Filing taxes online 9100-2” on the statement. Filing taxes online File the amended return at the same address you filed the original return. Filing taxes online Research and Experimental Costs The costs of research and experimentation are generally capital expenses. Filing taxes online However, you can elect to deduct these costs as a current business expense. Filing taxes online Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. Filing taxes online If you meet certain requirements, you may elect to defer and amortize research and experimental costs. Filing taxes online For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. Filing taxes online Research and experimental costs defined. Filing taxes online   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. Filing taxes online Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. Filing taxes online Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. Filing taxes online      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. Filing taxes online However, costs paid or incurred to obtain another's patent are not research and experimental costs. Filing taxes online Product. Filing taxes online   The term “product” includes any of the following items. Filing taxes online Formula. Filing taxes online Invention. Filing taxes online Patent. Filing taxes online Pilot model. Filing taxes online Process. Filing taxes online Technique. Filing taxes online Property similar to the items listed above. Filing taxes online It also includes products used by you in your trade or business or held for sale, lease, or license. Filing taxes online Costs not included. Filing taxes online   Research and experimental costs do not include expenses for any of the following activities. Filing taxes online Advertising or promotions. Filing taxes online Consumer surveys. Filing taxes online Efficiency surveys. Filing taxes online Management studies. Filing taxes online Quality control testing. Filing taxes online Research in connection with literary, historical, or similar projects. Filing taxes online The acquisition of another's patent, model, production, or process. Filing taxes online When and how to elect. Filing taxes online   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. Filing taxes online If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. Filing taxes online Deducting or Amortizing Research and Experimentation Costs IF you . Filing taxes online . Filing taxes online . Filing taxes online THEN . Filing taxes online . Filing taxes online . Filing taxes online Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. Filing taxes online Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. Filing taxes online See Research and Experimental Costs in chapter 8. Filing taxes online Research credit. Filing taxes online   If you pay or incur qualified research expenses, you may be able to take the research credit. Filing taxes online For more information see Form 6765, Credit for Increasing Research Activities and its instructions. Filing taxes online Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. Filing taxes online You can usually recover them through depreciation or depletion. Filing taxes online However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. Filing taxes online These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. Filing taxes online You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. Filing taxes online You can elect to deduct only the costs of items with no salvage value. Filing taxes online These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. Filing taxes online Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. Filing taxes online However, see Amounts paid to contractor that must be capitalized , later. Filing taxes online You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. Filing taxes online It does not matter whether there is any intent to produce hydrocarbons. Filing taxes online If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. Filing taxes online Amounts paid to contractor that must be capitalized. Filing taxes online   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. Filing taxes online How to make the election. Filing taxes online   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. Filing taxes online No formal statement is required. Filing taxes online If you file Schedule C (Form 1040), enter these costs under “Other expenses. Filing taxes online ”   For oil and gas wells, your election is binding for the year it is made and for all later years. Filing taxes online For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. Filing taxes online You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. Filing taxes online Energy credit for costs of geothermal wells. Filing taxes online   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. Filing taxes online See the Instructions for Form 3468 for more information. Filing taxes online Nonproductive well. Filing taxes online   If you capitalize your IDCs, you have another option if the well is nonproductive. Filing taxes online You can deduct the IDCs of the nonproductive well as an ordinary loss. Filing taxes online You must indicate and clearly state your election on your tax return for the year the well is completed. Filing taxes online Once made, the election for oil and gas wells is binding for all later years. Filing taxes online You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. Filing taxes online Costs incurred outside the United States. Filing taxes online   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. Filing taxes online However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. Filing taxes online If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. Filing taxes online These rules do not apply to a nonproductive well. Filing taxes online Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. Filing taxes online You recover these costs through depletion as the mineral is removed from the ground. Filing taxes online However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). Filing taxes online How to make the election. Filing taxes online   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. Filing taxes online Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. Filing taxes online The election applies to the tax year you make this election and all later tax years. Filing taxes online Partnerships and S corporations. Filing taxes online   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. Filing taxes online Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. Filing taxes online Reduced corporate deductions for exploration costs. Filing taxes online   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. Filing taxes online It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. Filing taxes online A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. Filing taxes online For more information on this method of amortization, see Internal Revenue Code section 59(e). Filing taxes online   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. Filing taxes online However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. Filing taxes online See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. Filing taxes online   These rules also apply to the deduction of development costs by corporations. Filing taxes online See Development Costs , later. Filing taxes online Recapture of exploration expenses. Filing taxes online   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. Filing taxes online Use either of the following methods. Filing taxes online Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. Filing taxes online Your election must be clearly indicated on the return. Filing taxes online Increase your adjusted basis in the mine by the amount included in income. Filing taxes online Generally, you must elect this recapture method by the due date (including extensions) of your return. Filing taxes online However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Filing taxes online Make the election on your amended return and write “Filed pursuant to section 301. Filing taxes online 9100-2” on the form where you are including the income. Filing taxes online File the amended return at the same address you filed the original return. Filing taxes online Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Filing taxes online   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. Filing taxes online Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Filing taxes online   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. Filing taxes online Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. Filing taxes online If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. Filing taxes online Foreign exploration costs. Filing taxes online   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. Filing taxes online You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. Filing taxes online (Cost depletion is discussed in chapter 9 . Filing taxes online ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. Filing taxes online These rules also apply to foreign development costs. Filing taxes online Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. Filing taxes online These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. Filing taxes online Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. Filing taxes online Development costs do not include the costs for the acquisition or improvement of depreciable property. Filing taxes online Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. Filing taxes online This election applies each tax year to expenses paid or incurred in that year. Filing taxes online Once made, the election is binding for the year and cannot be revoked for any reason. Filing taxes online How to make the election. Filing taxes online   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. Filing taxes online Generally, you must make the election by the due date of the return (including extensions). Filing taxes online However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Filing taxes online Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Filing taxes online 9100-2. Filing taxes online ” File the amended return at the same address you filed the original return. Filing taxes online Foreign development costs. Filing taxes online   The rules discussed earlier for foreign exploration costs apply to foreign development costs. Filing taxes online Reduced corporate deductions for development costs. Filing taxes online   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. Filing taxes online Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. Filing taxes online For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. Filing taxes online Circulation costs are deductible even if they normally would be capitalized. Filing taxes online This rule does not apply to the following costs that must be capitalized. Filing taxes online The purchase of land or depreciable property. Filing taxes online The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. Filing taxes online Other treatment of circulation costs. Filing taxes online   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. Filing taxes online Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). Filing taxes online Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. Filing taxes online How to make the election. Filing taxes online   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. Filing taxes online Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. Filing taxes online Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. Filing taxes online However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. Filing taxes online The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Filing taxes online Any remaining costs must be amortized. Filing taxes online For information about amortizing start-up and organizational costs, see chapter 8 . Filing taxes online Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Filing taxes online Organizational costs include the costs of creating a corporation. Filing taxes online For more information on start-up and organizational costs, see chapter 8 . Filing taxes online How to make the election. Filing taxes online   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. Filing taxes online However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Filing taxes online Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Filing taxes online 9100-2. Filing taxes online ” File the amended return at the same address you filed the original return. Filing taxes online The election applies when computing taxable income for the current tax year and all subsequent years. Filing taxes online Reforestation Costs Reforestation costs are generally capital expenditures. Filing taxes online However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. Filing taxes online The remaining costs can be amortized over an 84-month period. Filing taxes online For information about amortizing reforestation costs, see chapter 8 . Filing taxes online Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Filing taxes online Qualified timber property is property that contains trees in significant commercial quantities. Filing taxes online See chapter 8 for more information on qualifying reforestation costs and qualified timber property. Filing taxes online If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. Filing taxes online Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. Filing taxes online How to make the election. Filing taxes online   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. Filing taxes online If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. Filing taxes online If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. Filing taxes online The unique stand identification numbers. Filing taxes online The total number of acres reforested during the tax year. Filing taxes online The nature of the reforestation treatments. Filing taxes online The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. Filing taxes online   If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Filing taxes online Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Filing taxes online 9100-2. Filing taxes online ” File the amended return at the same address you filed the original return. Filing taxes online The election applies when computing taxable income for the current tax year and all subsequent years. Filing taxes online   For additional information on reforestation costs, see chapter 8 . Filing taxes online Recapture. Filing taxes online   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. Filing taxes online For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. Filing taxes online Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. Filing taxes online However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. Filing taxes online Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. Filing taxes online However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. Filing taxes online You must own or lease the facility or vehicle for use in connection with your trade or business. Filing taxes online A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. Filing taxes online A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). Filing taxes online You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. Filing taxes online Deduction limit. Filing taxes online   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. Filing taxes online However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. Filing taxes online Partners and partnerships. Filing taxes online   The $15,000 limit applies to a partnership and also to each partner in the partnership. Filing taxes online A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. Filing taxes online If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. Filing taxes online   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). Filing taxes online If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. Filing taxes online Example. Filing taxes online Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. Filing taxes online Emilio had $12,000 of similar expenses in his sole proprietorship. Filing taxes online He elected to deduct $7,000 of them. Filing taxes online Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. Filing taxes online Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. Filing taxes online Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. Filing taxes online Qualification standards. Filing taxes online   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. Filing taxes online You can view the Americans with Disabilities Act at www. Filing taxes online ada. Filing taxes online gov/pubs/ada. Filing taxes online htm. Filing taxes online   The following is a list of some architectural barrier removal costs that can be deducted. Filing taxes online Ground and floor surfaces. Filing taxes online Walks. Filing taxes online Parking lots. Filing taxes online Ramps. Filing taxes online Entrances. Filing taxes online Doors and doorways. Filing taxes online Stairs. Filing taxes online Floors. Filing taxes online Toilet rooms. Filing taxes online Water fountains. Filing taxes online Public telephones. Filing taxes online Elevators. Filing taxes online Controls. Filing taxes online Signage. Filing taxes online Alarms. Filing taxes online Protruding objects. Filing taxes online Symbols of accessibility. Filing taxes online You can find the ADA guidelines and requirements for architectural barrier removal at www. Filing taxes online usdoj. Filing taxes online gov/crt/ada/reg3a. Filing taxes online html. Filing taxes online   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. Filing taxes online You can find the guidelines and requirements for transportation barrier removal at www. Filing taxes online fta. Filing taxes online dot. Filing taxes online gov. Filing taxes online   Also, you can access the ADA website at www. Filing taxes online ada. Filing taxes online gov for additional information. Filing taxes online Other barrier removals. Filing taxes online   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. Filing taxes online The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. Filing taxes online The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). Filing taxes online The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. Filing taxes online How to make the election. Filing taxes online   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. Filing taxes online Identify the deduction as a separate item. Filing taxes online The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. Filing taxes online If you make this election, you must maintain adequate records to support your deduction. Filing taxes online   For your election to be valid, you generally must file your return by its due date, including extensions. Filing taxes online However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Filing taxes online Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Filing taxes online 9100-2. Filing taxes online ” File the amended return at the same address you filed the original return. Filing taxes online Your election is irrevocable after the due date, including extensions, of your return. Filing taxes online Disabled access credit. Filing taxes online   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. Filing taxes online If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. Filing taxes online   For more information, see Form 8826, Disabled Access Credit. Filing taxes online Film and Television Production Costs Film and television production costs are generally capital expenses. Filing taxes online However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. Filing taxes online For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. Filing taxes online Prev  Up  Next   Home   More Online Publications