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Free Federal 1040ez Efile

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Free Federal 1040ez Efile

Free federal 1040ez efile Publication 559 - Main Content Table of Contents Personal RepresentativeDuties Fees Received by Personal Representatives Final Income Tax Return for Decedent—Form 1040Name, Address, and Signature When and Where To File Filing Requirements Income To Include Exemptions and Deductions Credits, Other Taxes, and Payments Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Filing Reminders Other Tax InformationTax Benefits for Survivors Income in Respect of a Decedent Deductions in Respect of a Decedent Estate Tax Deduction Gifts, Insurance, and Inheritances Other Items of Income Income Tax Return of an Estate— Form 1041Filing Requirements Income To Include Exemption and Deductions Credits, Tax, and Payments Name, Address, and Signature When and Where To File Distributions to BeneficiariesIncome That Must Be Distributed Currently Other Amounts Distributed Discharge of a Legal Obligation Character of Distributions How and When To Report Bequest Termination of Estate Estate and Gift TaxesApplicable Credit Amount Gift Tax Estate Tax Generation-Skipping Transfer Tax Comprehensive ExampleFinal Return for Decedent—Form 1040 Income Tax Return of an Estate—Form 1041 How To Get Tax HelpLow Income Taxpayer Clinics Personal Representative A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Free federal 1040ez efile Generally, an executor (or executrix) is named in a decedent's will to administer the estate and distribute properties as the decedent has directed. Free federal 1040ez efile An administrator (or administratrix) is usually appointed by the court if no will exists, if no executor was named in the will, or if the named executor cannot or will not serve. Free federal 1040ez efile In general, an executor and an administrator perform the same duties and have the same responsibilities. Free federal 1040ez efile For estate tax purposes, if there is no executor or administrator appointed, qualified, and acting within the United States, the term “executor” includes anyone in actual or constructive possession of any property of the decedent. Free federal 1040ez efile It includes, among others, the decedent's agents and representatives; safe-deposit companies, warehouse companies, and other custodians of property in this country; brokers holding securities of the decedent as collateral; and the debtors of the decedent who are in this country. Free federal 1040ez efile Duties The primary duties of a personal representative are to collect all the decedent's assets, pay his or her creditors, and distribute the remaining assets to the heirs or other beneficiaries. Free federal 1040ez efile The personal representative also must perform the following duties. Free federal 1040ez efile Apply for an employer identification number (EIN) for the estate. Free federal 1040ez efile File all tax returns, including income, estate and gift tax returns, when due. Free federal 1040ez efile Pay the tax determined up to the date of discharge from duties. Free federal 1040ez efile Other duties of the personal representative in federal tax matters are discussed in other sections of this publication. Free federal 1040ez efile If any beneficiary is a nonresident alien, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for information on the personal representative's duties as a withholding agent. Free federal 1040ez efile Penalty. Free federal 1040ez efile   There is a penalty for failure to file a tax return when due unless the failure is due to reasonable cause. Free federal 1040ez efile Reliance on an agent (attorney, accountant, etc. Free federal 1040ez efile ) is not reasonable cause for late filing. Free federal 1040ez efile It is the personal representative's duty to file the returns for the decedent and the estate when due. Free federal 1040ez efile Identification number. Free federal 1040ez efile   The first action you should take if you are the personal representative for the decedent is to apply for an EIN for the estate. Free federal 1040ez efile You should apply for this number as soon as possible because you need to enter it on returns, statements, and other documents you file concerning the estate. Free federal 1040ez efile You also must give the number to payers of interest and dividends and other payers who must file a return concerning the estate. Free federal 1040ez efile   You can get an EIN by applying online at www. Free federal 1040ez efile irs. Free federal 1040ez efile gov (click on "Apply for an EIN Online" under the Tools heading). Free federal 1040ez efile Generally, if you apply online, you will receive your EIN immediately upon completing the application. Free federal 1040ez efile You can also apply using Form SS-4, Application for Employer Identification Number. Free federal 1040ez efile Generally, if you apply by mail, it takes about 4 weeks to get your EIN. Free federal 1040ez efile See the form instructions for other ways to apply. Free federal 1040ez efile   Payers of interest and dividends report amounts on Forms 1099 using the identification number of the person to whom the account is payable. Free federal 1040ez efile After a decedent's death, Forms 1099 must reflect the identification number of the estate or beneficiary to whom the amounts are payable. Free federal 1040ez efile As the personal representative handling the estate, you must furnish this identification number to the payer. Free federal 1040ez efile For example, if interest is payable to the estate, the estate's EIN must be provided to the payer and used to report the interest on Form 1099-INT, Interest Income. Free federal 1040ez efile If the interest is payable to a surviving joint owner, the survivor's identification number, such as an SSN or ITIN, must be provided to the payer and used to report the interest. Free federal 1040ez efile   If the estate or a survivor may receive interest or dividends after you inform the payer of the decedent's death, the payer should give you (or the survivor) a Form W-9, Request for Taxpayer Identification Number and Certification (or a similar substitute form). Free federal 1040ez efile Complete this form to inform the payer of the estate's (or if completed by the survivor, the survivor's) identification number and return it to the payer. Free federal 1040ez efile    Do not use the deceased individual's identifying number to file an individual income tax return after the decedent's final tax return. Free federal 1040ez efile Also do not use it to make estimated tax payments for a tax year after the year of death. Free federal 1040ez efile Penalty. Free federal 1040ez efile   If you do not include the EIN or the taxpayer identification number of another person where it is required on a return, statement, or other document, you are liable for a penalty for each failure, unless you can show reasonable cause. Free federal 1040ez efile You also are liable for a penalty if you do not give the taxpayer identification number of another person when required on a return, statement, or other document. Free federal 1040ez efile Notice of fiduciary relationship. Free federal 1040ez efile   The term fiduciary means any person acting for another person. Free federal 1040ez efile It applies to persons who have positions of trust on behalf of others. Free federal 1040ez efile A personal representative for a decedent's estate is a fiduciary. Free federal 1040ez efile Form 56. Free federal 1040ez efile   If you are appointed to act in a fiduciary capacity for another, you must file a written notice with the IRS stating this. Free federal 1040ez efile Form 56, Notice Concerning Fiduciary Relationship, is used for this purpose. Free federal 1040ez efile See the Instructions for Form 56 for filing requirements and other information. Free federal 1040ez efile   File Form 56 as soon as all the necessary information (including the EIN) is available. Free federal 1040ez efile It notifies the IRS that you, as the fiduciary, are assuming the powers, rights, duties, and privileges of the decedent. Free federal 1040ez efile The notice remains in effect until you notify the IRS (by filing another Form 56) that your fiduciary relationship with the estate has terminated. Free federal 1040ez efile Termination of fiduciary relationship. Free federal 1040ez efile   Form 56 should also be filed to notify the IRS if your fiduciary relationship is terminated or when a successor fiduciary is appointed if the estate has not been terminated. Free federal 1040ez efile See Form 56 and its instructions for more information. Free federal 1040ez efile   At the time of termination of the fiduciary relationship, you may want to file Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), and Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905, to wind up your duties as fiduciary. Free federal 1040ez efile See below for a discussion of these forms. Free federal 1040ez efile Request for prompt assessment (charge) of tax. Free federal 1040ez efile   The IRS ordinarily has 3 years from the date an income tax return is filed, or its due date, whichever is later, to charge any additional tax due. Free federal 1040ez efile However, as a personal representative, you may request a prompt assessment of tax after the return has been filed. Free federal 1040ez efile This reduces the time for making the assessment to 18 months from the date the written request for prompt assessment was received. Free federal 1040ez efile This request can be made for any tax return (except the estate tax return) of the decedent or the decedent's estate. Free federal 1040ez efile This may permit a quicker settlement of the tax liability of the estate and an earlier final distribution of the assets to the beneficiaries. Free federal 1040ez efile Form 4810. Free federal 1040ez efile   Form 4810 can be used for making this request. Free federal 1040ez efile It must be filed separately from any other document. Free federal 1040ez efile   As the personal representative for the decedent's estate, you are responsible for any additional taxes that may be due. Free federal 1040ez efile You can request prompt assessment of any of the decedent's taxes (other than federal estate taxes) for any years for which the statutory period for assessment is open. Free federal 1040ez efile This applies even though the returns were filed before the decedent's death. Free federal 1040ez efile Failure to report income. Free federal 1040ez efile   If you or the decedent failed to report substantial amounts of gross income (more than 25% of the gross income reported on the return) or filed a false or fraudulent return, your request for prompt assessment will not shorten the period during which the IRS may assess the additional tax. Free federal 1040ez efile However, such a request may relieve you of personal liability for the tax if you did not have knowledge of the unpaid tax. Free federal 1040ez efile Request for discharge from personal liability for tax. Free federal 1040ez efile   An executor can make a request for discharge from personal liability for a decedent's income, gift, and estate taxes. Free federal 1040ez efile The request must be made after the returns for those taxes are filed. Free federal 1040ez efile To make the request, file Form 5495. Free federal 1040ez efile For this purpose, an executor is an executor or administrator that is appointed, qualified, and acting within the United States. Free federal 1040ez efile   Within 9 months after receipt of the request, the IRS will notify the executor of the amount of taxes due. Free federal 1040ez efile If this amount is paid, the executor will be discharged from personal liability for any future deficiencies. Free federal 1040ez efile If the IRS has not notified the executor, he or she will be discharged from personal liability at the end of the 9-month period. Free federal 1040ez efile    Even if the executor is discharged from personal liability, the IRS will still be able to assess tax deficiencies against the executor to the extent he or she still has any of the decedent's property. Free federal 1040ez efile Insolvent estate. Free federal 1040ez efile   Generally, if a decedent's estate is insufficient to pay all the decedent's debts, the debts due to the United States must be paid first. Free federal 1040ez efile Both the decedent's federal income tax liabilities at the time of death and the estate's income tax liability are debts due to the United States. Free federal 1040ez efile The personal representative of an insolvent estate is personally responsible for any tax liability of the decedent or of the estate if he or she had notice of such tax obligations or failed to exercise due care in determining if such obligations existed before distribution of the estate's assets and before being discharged from duties. Free federal 1040ez efile The extent of such personal responsibility is the amount of any other payments made before paying the debts due to the United States, except where such other debt paid has priority over the debts due to the United States. Free federal 1040ez efile Income tax liabilities need not be formally assessed for the personal representative to be liable if he or she was aware or should have been aware of their existence. Free federal 1040ez efile Fees Received by Personal Representatives All personal representatives must include fees paid to them from an estate in their gross income. Free federal 1040ez efile If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Form 1040, line 21. Free federal 1040ez efile If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C or Schedule C-EZ of your Form 1040. Free federal 1040ez efile If the estate operates a trade or business and you, as executor, actively participate in the trade or business while fulfilling your duties, any fees you receive related to the operation of the trade or business must be reported as self-employment income on Schedule C (or Schedule C-EZ) of your Form 1040. Free federal 1040ez efile Final Income Tax Return for Decedent—Form 1040 The personal representative (defined earlier) must file the final income tax return (Form 1040) of the decedent for the year of death and any returns not filed for preceding years. Free federal 1040ez efile A surviving spouse, under certain circumstances, may have to file the returns for the decedent. Free federal 1040ez efile See Joint Return, later. Free federal 1040ez efile Return for preceding year. Free federal 1040ez efile   If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed will not be the final return. Free federal 1040ez efile The return for that year will be a regular return and the personal representative must file it. Free federal 1040ez efile Example. Free federal 1040ez efile Samantha Smith died on March 21, 2013, before filing her 2012 tax return. Free federal 1040ez efile Her personal representative must file her 2012 return by April 15, 2013. Free federal 1040ez efile Her final tax return covering the period from January 1, 2013, to March 20, 2013, is due April 15, 2014. Free federal 1040ez efile Name, Address, and Signature Write the word “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Free federal 1040ez efile If filing a joint return, write the name and address of the decedent and the surviving spouse in the name and address fields. Free federal 1040ez efile If a joint return is not being filed, write the decedent's name in the name field and the personal representative's name and address in the address field. Free federal 1040ez efile Third party designee. Free federal 1040ez efile   You can check the “Yes” box in the Third Party Designee area on page 2 of the return to authorize the IRS to discuss the return with a friend, family member, or any other person you choose. Free federal 1040ez efile This allows the IRS to call the person you identified as the designee to answer any questions that may arise during the processing of the return. Free federal 1040ez efile It also allows the designee to perform certain actions. Free federal 1040ez efile See the Instructions for Form 1040 for details. Free federal 1040ez efile Signature. Free federal 1040ez efile   If a personal representative has been appointed, that person must sign the return. Free federal 1040ez efile If it is a joint return, the surviving spouse must also sign it. Free federal 1040ez efile If no personal representative has been appointed, the surviving spouse (on a joint return) signs the return and writes in the signature area “Filing as surviving spouse. Free federal 1040ez efile ” If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Free federal 1040ez efile ” Paid preparer. Free federal 1040ez efile   If you pay someone to prepare, assist in preparing, or review the tax return, that person must sign the return and fill in the other blanks in the Paid Preparer Use Only area of the return. Free federal 1040ez efile See the Form 1040 instructions for details. Free federal 1040ez efile When and Where To File The final income tax return is due at the same time the decedent's return would have been due had death not occurred. Free federal 1040ez efile A final return for a decedent who was a calendar year taxpayer is generally due on April 15 following the year of death, regardless of when during that year death occurred. Free federal 1040ez efile However, when the due date falls on a Saturday, Sunday, or legal holiday, the return is filed timely if filed by the next business day. Free federal 1040ez efile The tax return must be prepared for the year of death regardless of when during the year death occurred. Free federal 1040ez efile Generally, you must file the final income tax return of the decedent with the Internal Revenue Service Center for the place where you live. Free federal 1040ez efile A tax return for a decedent can be electronically filed. Free federal 1040ez efile A personal representative may also obtain an income tax filing extension on behalf of a decedent. Free federal 1040ez efile Filing Requirements The gross income, age, and filing status of a decedent generally determine whether a return must be filed. Free federal 1040ez efile Gross income is all income received by an individual from any source in the form of money, goods, property, and services that is not tax-exempt. Free federal 1040ez efile It includes gross receipts from self-employment, but if the business involves manufacturing, merchandising, or mining, subtract any cost of goods sold. Free federal 1040ez efile In general, filing status depends on whether the decedent was considered single or married at the time of death. Free federal 1040ez efile See the income tax return instructions or Publication 501, Exemptions, Standard Deduction, and Filing Information. Free federal 1040ez efile Refund A return must be filed to obtain a refund if tax was withheld from salaries, wages, pensions, or annuities, or if estimated tax was paid, even if a return is not otherwise required to be filed. Free federal 1040ez efile Also, the decedent may be entitled to other credits that result in a refund. Free federal 1040ez efile These advance payments of tax and credits are discussed later under Credits, Other Taxes, and Payments. Free federal 1040ez efile Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Free federal 1040ez efile   Form 1310 does not have to be filed if you are claiming a refund and you are: A surviving spouse filing an original or amended joint return with the decedent, or A court-appointed or certified personal representative filing the decedent’s original return and a copy of the court certificate showing your appointment is attached to the return. Free federal 1040ez efile   If the personal representative is filing a claim for refund on Form 1040X, Amended U. Free federal 1040ez efile S. Free federal 1040ez efile Individual Income Tax Return, or Form 843, Claim for Refund and Request for Abatement, and the court certificate has already been filed with the IRS, attach Form 1310 and write “Certificate Previously Filed” at the bottom of the form. Free federal 1040ez efile Example. Free federal 1040ez efile Edward Green died before filing his tax return. Free federal 1040ez efile You were appointed the personal representative for Edward's estate, and you file his Form 1040 showing a refund due. Free federal 1040ez efile You do not need Form 1310 to claim the refund if you attach a copy of the court certificate showing you were appointed the personal representative. Free federal 1040ez efile    If you are a surviving spouse and you receive a tax refund check in both your name and your deceased spouse's name, you can have the check reissued in your name alone. Free federal 1040ez efile Return the joint-name check marked “VOID” to your local IRS office or the service center where you mailed your return, along with a written request for reissuance of the refund check. Free federal 1040ez efile A new check will be issued in your name and mailed to you. Free federal 1040ez efile Death certificate. Free federal 1040ez efile   When filing the decedent's final income tax return, do not attach the death certificate or other proof of death to the final return. Free federal 1040ez efile Instead, keep it for your records and provide it if requested. Free federal 1040ez efile Nonresident Alien If the decedent was a nonresident alien who would have had to file Form 1040NR, U. Free federal 1040ez efile S. Free federal 1040ez efile Nonresident Alien Income Tax Return, you must file that form for the decedent's final tax year. Free federal 1040ez efile See the Instructions for Form 1040NR for the filing requirements, due date, and where to file. Free federal 1040ez efile Joint Return Generally, the personal representative and the surviving spouse can file a joint return for the decedent and the surviving spouse. Free federal 1040ez efile However, the surviving spouse alone can file the joint return if no personal representative has been appointed before the due date for filing the final joint return for the year of death. Free federal 1040ez efile This also applies to the return for the preceding year if the decedent died after the close of the preceding tax year and before filing the return for that year. Free federal 1040ez efile The income of the decedent that was includible on his or her return for the year up to the date of death (see Income To Include, later) and the income of the surviving spouse for the entire year must be included in the final joint return. Free federal 1040ez efile A final joint return with the decedent cannot be filed if the surviving spouse remarried before the end of the year of the decedent's death. Free federal 1040ez efile The filing status of the decedent in this instance is married filing a separate return. Free federal 1040ez efile For information about tax benefits to which a surviving spouse may be entitled, see Tax Benefits for Survivors, later, under Other Tax Information. Free federal 1040ez efile Personal representative may revoke joint return election. Free federal 1040ez efile   A court-appointed personal representative may revoke an election to file a joint return previously made by the surviving spouse alone. Free federal 1040ez efile This is done by filing a separate return for the decedent within one year from the due date of the return (including any extensions). Free federal 1040ez efile The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability. Free federal 1040ez efile Relief from joint liability. Free federal 1040ez efile   In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. Free federal 1040ez efile If the decedent qualified for this relief while alive, the personal representative can pursue an existing request, or file a request, for relief from joint liability. Free federal 1040ez efile For information on requesting this relief, see Publication 971, Innocent Spouse Relief. Free federal 1040ez efile Income To Include The decedent's income includible on the final return is generally determined as if the person were still alive except that the taxable period is usually shorter because it ends on the date of death. Free federal 1040ez efile The method of accounting regularly used by the decedent before death also determines the income includible on the final return. Free federal 1040ez efile This section explains how some types of income are reported on the final return. Free federal 1040ez efile For more information about accounting methods, see Publication 538, Accounting Periods and Methods. Free federal 1040ez efile Cash Method If the decedent accounted for income under the cash method, only those items actually or constructively received before death are included on the final return. Free federal 1040ez efile Constructive receipt of income. Free federal 1040ez efile   Interest from coupons on the decedent's bonds is constructively received by the decedent if the coupons matured in the decedent's final tax year, but had not been cashed. Free federal 1040ez efile Include the interest income on the final return. Free federal 1040ez efile   Generally, a dividend is considered constructively received if it was available for use by the decedent without restriction. Free federal 1040ez efile If the corporation customarily mailed its dividend checks, the dividend was includible when received. Free federal 1040ez efile If the individual died between the time the dividend was declared and the time it was received in the mail, the decedent did not constructively receive it before death. Free federal 1040ez efile Do not include the dividend in the final return. Free federal 1040ez efile Accrual Method Generally, under an accrual method of accounting, income is reported when earned. Free federal 1040ez efile If the decedent used an accrual method, only the income items normally accrued before death are included on the final return. Free federal 1040ez efile Interest and Dividend Income (Forms 1099) Form(s) 1099 reporting interest and dividends earned by the decedent before death should be received and the amounts included on the decedent's final return. Free federal 1040ez efile A separate Form 1099 should show the interest and dividends earned after the date of the decedent's death and paid to the estate or other recipient that must include those amounts on its return. Free federal 1040ez efile You can request corrected Forms 1099 if these forms do not properly reflect the right recipient or amounts. Free federal 1040ez efile For example, a Form 1099-INT, reporting interest payable to the decedent, may include income that should be reported on the final income tax return of the decedent, as well as income that the estate or other recipient should report, either as income earned after death or as income in respect of the decedent (discussed later). Free federal 1040ez efile For income earned after death, you should ask the payer for a Form 1099 that properly identifies the recipient (by name and identification number) and the proper amount. Free federal 1040ez efile If that is not possible, or if the form includes an amount that represents income in respect of the decedent, report the interest as shown next under How to report. Free federal 1040ez efile See U. Free federal 1040ez efile S. Free federal 1040ez efile savings bonds acquired from decedent under Income in Respect of a Decedent, later, for information on savings bond interest that may have to be reported on the final return. Free federal 1040ez efile How to report. Free federal 1040ez efile   If you are preparing the decedent's final return and you have received a Form 1099-INT for the decedent that includes amounts belonging to the decedent and to another recipient (the decedent's estate or another beneficiary), report the total interest shown on Form 1099-INT on Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. Free federal 1040ez efile Next, enter a subtotal of the interest shown on Forms 1099, and the interest reportable from other sources for which you did not receive Forms 1099. Free federal 1040ez efile Then, show any interest (including any interest you receive as a nominee) belonging to another recipient separately and subtract it from the subtotal. Free federal 1040ez efile Identify the amount of this adjustment as “Nominee Distribution” or other appropriate designation. Free federal 1040ez efile   Report dividend income for which you received a Form 1099-DIV, Dividends and Distributions, on the appropriate schedule using the same procedure. Free federal 1040ez efile    Note. Free federal 1040ez efile If the decedent received amounts as a nominee, you must give the actual owner a Form 1099, unless the owner is the decedent's spouse. Free federal 1040ez efile See General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) for more information on filing Forms 1099. Free federal 1040ez efile Partnership Income The death of a partner closes the partnership's tax year for that partner. Free federal 1040ez efile Generally, it does not close the partnership's tax year for the remaining partners. Free federal 1040ez efile The decedent's distributive share of partnership items must be figured as if the partnership's tax year ended on the date the partner died. Free federal 1040ez efile To avoid an interim closing of the partnership books, the partners can agree to estimate the decedent's distributive share by prorating the amounts the partner would have included for the entire partnership tax year. Free federal 1040ez efile On the decedent's final return, include the decedent's distributive share of partnership items for the following periods. Free federal 1040ez efile The partnership's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Free federal 1040ez efile The period, if any, from the end of the partnership's tax year in (1) to the decedent's date of death. Free federal 1040ez efile Example. Free federal 1040ez efile Mary Smith was a partner in XYZ partnership and reported her income on a tax year ending December 31. Free federal 1040ez efile The partnership uses a tax year ending June 30. Free federal 1040ez efile Mary died August 31, 2013, and her estate established its tax year through August 31. Free federal 1040ez efile The distributive share of partnership items based on the decedent's partnership interest is reported as follows. Free federal 1040ez efile Final Return for the Decedent—January 1 through August 31, 2013, includes XYZ partnership items from (a) the partnership tax year ending June 30, 2013, and (b) the partnership tax year beginning July 1, 2013, and ending August 31, 2013 (the date of death). Free federal 1040ez efile Income Tax Return of the Estate—September 1, 2013, through August 31, 2014, includes XYZ partnership items for the period September 1, 2013, through June 30, 2014. Free federal 1040ez efile S Corporation Income If the decedent was a shareholder in an S corporation, include on the final return the decedent's share of the S corporation's items of income, loss, deduction, and credit for the following periods. Free federal 1040ez efile The corporation's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Free federal 1040ez efile The period, if any, from the end of the corporation's tax year in (1) to the decedent's date of death. Free federal 1040ez efile Self-Employment Income Include self-employment income actually or constructively received or accrued, depending on the decedent's accounting method. Free federal 1040ez efile For self-employment tax purposes only, the decedent's self-employment income will include the decedent's distributive share of a partnership's income or loss through the end of the month in which death occurred. Free federal 1040ez efile For this purpose, the partnership's income or loss is considered to be earned ratably over the partnership's tax year. Free federal 1040ez efile Community Income If the decedent was married and domiciled in a community property state, half of the income received and half of the expenses paid during the decedent's tax year by either the decedent or spouse may be considered to be the income and expenses of the other. Free federal 1040ez efile For more information, see Publication 555, Community Property. Free federal 1040ez efile HSA, Archer MSA, or Medicare Advantage MSA The treatment of an HSA (health savings account), an Archer MSA (medical savings account), or a Medicare Advantage MSA at the death of the account holder, depends on who acquires the interest in the account. Free federal 1040ez efile If the decedent's estate acquires the interest, the fair market value (FMV) of the assets in the account on the date of death is included in income on the decedent's final return. Free federal 1040ez efile The estate tax deduction, discussed later, does not apply to this amount. Free federal 1040ez efile If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Free federal 1040ez efile For other information on HSAs, Archer MSAs, or Medicare Advantage MSAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Free federal 1040ez efile Coverdell Education Savings Account (ESA) Generally, the balance in a Coverdell ESA must be distributed within 30 days after the individual for whom the account was established reaches age 30, or dies, whichever is earlier. Free federal 1040ez efile The treatment of the Coverdell ESA at the death of an individual under age 30 depends on who acquires the interest in the account. Free federal 1040ez efile If the decedent's estate acquires the interest, the earnings on the account must be included on the final income tax return of the decedent. Free federal 1040ez efile The estate tax deduction, discussed later, does not apply to this amount. Free federal 1040ez efile If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Free federal 1040ez efile The age 30 limitation does not apply if the individual for whom the account was established or the beneficiary that acquires the account is an individual with special needs. Free federal 1040ez efile This includes an individual who, because of a physical, mental, or emotional condition (including a learning disability), requires additional time to complete his or her education. Free federal 1040ez efile For more information on Coverdell ESAs, see Publication 970, Tax Benefits for Education. Free federal 1040ez efile Accelerated Death Benefits Accelerated death benefits are amounts received under a life insurance contract before the death of the insured individual. Free federal 1040ez efile These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. Free federal 1040ez efile Generally, if the decedent received accelerated death benefits on the life of a terminally or chronically ill individual, whether on his or her own life or on the life of another person, those benefits are not included in the decedent's income. Free federal 1040ez efile For more information, see the discussion under Gifts, Insurance, and Inheritances under Other Tax Information, later. Free federal 1040ez efile Exemptions and Deductions Generally, the rules for exemptions and deductions allowed to an individual also apply to the decedent's final income tax return. Free federal 1040ez efile Show on the final return deductible items the decedent paid (or accrued, if the decedent reported deductions on an accrual method) before death. Free federal 1040ez efile This section contains a detailed discussion of medical expenses because the tax treatment of the decedent's medical expenses can be different. Free federal 1040ez efile See Medical Expenses, later. Free federal 1040ez efile Exemptions You can claim the decedent's personal exemption on the final income tax return. Free federal 1040ez efile If the decedent was another person's dependent (for example, a parent's), you cannot claim the personal exemption on the decedent's final return. Free federal 1040ez efile Standard Deduction If you do not itemize deductions on the final return, the full amount of the appropriate standard deduction is allowed regardless of the date of death. Free federal 1040ez efile For information on the appropriate standard deduction, see the Form 1040 income tax return instructions or Publication 501. Free federal 1040ez efile Medical Expenses Medical expenses paid before death by the decedent are deductible, subject to limits, on the final income tax return if deductions are itemized. Free federal 1040ez efile This includes expenses for the decedent, as well as for the decedent's spouse and dependents. Free federal 1040ez efile Beginning in 2013, medical expenses exceeding 10% of adjusted gross income (AGI) may be deducted, unless the decedent or their spouse is age 65 or older. Free federal 1040ez efile In that case medical expenses exceeding 7. Free federal 1040ez efile 5% of AGI may be deducted. Free federal 1040ez efile Qualified medical expenses are not deductible if paid with a tax-free distribution from an HSA or an Archer MSA. Free federal 1040ez efile Election for decedent's expenses. Free federal 1040ez efile   Medical expenses not paid before death are liabilities of the estate and are shown on the federal estate tax return (Form 706). Free federal 1040ez efile However, if medical expenses for the decedent are paid out of the estate during the 1-year period beginning with the day after death, you can elect to treat all or part of the expenses as paid by the decedent at the time they were incurred. Free federal 1040ez efile   If you make the election, you can claim all or part of the expenses on the decedent's income tax return (if deductions are itemized) rather than on the federal estate tax return (Form 706). Free federal 1040ez efile You can deduct expenses incurred in the year of death on the final income tax return. Free federal 1040ez efile You should file an amended return (Form 1040X) for medical expenses incurred in an earlier year, unless the statutory period for filing a claim for that year has expired. Free federal 1040ez efile   The amount you can deduct on the income tax return is the amount above 10% of adjusted gross income (or 7. Free federal 1040ez efile 5% of adjusted gross income if the decedent or the decedent's spouse was born before January 2, 1949). Free federal 1040ez efile Amounts not deductible because of this percentage cannot be claimed on the federal estate tax return. Free federal 1040ez efile Making the election. Free federal 1040ez efile   You make the election by attaching a statement, in duplicate, to the decedent's income tax return or amended return. Free federal 1040ez efile The statement must state that you have not claimed the amount as an estate tax deduction, and that the estate waives the right to claim the amount as a deduction. Free federal 1040ez efile This election applies only to expenses incurred for the decedent, not to expenses incurred to provide medical care for dependents. Free federal 1040ez efile Example. Free federal 1040ez efile Richard Brown used the cash method of accounting and filed his income tax return on a calendar year basis. Free federal 1040ez efile Richard died on June 1, 2013, at the age of 78, after incurring $800 in medical expenses. Free federal 1040ez efile Of that amount, $500 was incurred in 2012 and $300 was incurred in 2013. Free federal 1040ez efile Richard itemized his deductions when he filed his 2012 income tax return. Free federal 1040ez efile The personal representative of the estate paid the entire $800 liability in August 2013. Free federal 1040ez efile The personal representative may file an amended return (Form 1040X) for 2012 claiming the $500 medical expense as a deduction, subject to the 7. Free federal 1040ez efile 5% limit. Free federal 1040ez efile The $300 of expenses incurred in 2013 can be deducted on the final income tax return if deductions are itemized, subject to the 7. Free federal 1040ez efile 5% limit. Free federal 1040ez efile The personal representative must file a statement in duplicate with each return stating that these amounts have not been claimed on the federal estate tax return (Form 706), and waiving the right to claim such a deduction on Form 706 in the future. Free federal 1040ez efile Medical expenses not paid by estate. Free federal 1040ez efile   If you paid medical expenses for your deceased spouse or dependent, claim the expenses on your tax return for the year in which you paid them, whether they are paid before or after the decedent's death. Free federal 1040ez efile If the decedent was a child of divorced or separated parents, the medical expenses can usually be claimed by both the custodial and noncustodial parent to the extent paid by that parent during the year. Free federal 1040ez efile Insurance reimbursements. Free federal 1040ez efile   Insurance reimbursements of previously deducted medical expenses due a decedent at the time of death and later received by the decedent's estate are includible in the income tax return of the estate (Form 1041) for the year the reimbursements are received. Free federal 1040ez efile The reimbursements are also includible in the decedent's gross estate. Free federal 1040ez efile No deduction for funeral expenses can be taken on the final Form 1040 of a decedent. Free federal 1040ez efile These expenses may be deductible for estate tax purposes on Form 706. Free federal 1040ez efile Deduction for Losses A decedent's net operating loss deduction from a prior year and any capital losses (including capital loss carryovers) can be deducted only on the decedent's final income tax return. Free federal 1040ez efile A net operating loss on the decedent's final income tax return can be carried back to prior years. Free federal 1040ez efile (See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Free federal 1040ez efile ) You cannot deduct any unused net operating loss or capital loss on the estate's income tax return. Free federal 1040ez efile At-risk loss limits. Free federal 1040ez efile   Special at-risk rules apply to most activities that are engaged in as a trade or business or for the production of income. Free federal 1040ez efile   These rules limit the deductible loss to the amount which the individual was considered at-risk in the activity. Free federal 1040ez efile An individual generally will be considered at-risk to the extent of the money and the adjusted basis of property that he or she contributed to the activity and certain amounts the individual borrowed for use in the activity. Free federal 1040ez efile An individual will be considered at-risk for amounts borrowed only if he or she was personally liable for the repayment or if the amounts borrowed were secured by property other than that used in the activity. Free federal 1040ez efile The individual is not considered at-risk for borrowed amounts if the lender has an interest in the activity or if the lender is related to a person who has an interest in the activity. Free federal 1040ez efile For more information, see Publication 925, Passive Activity and At-Risk Rules. Free federal 1040ez efile Passive activity rules. Free federal 1040ez efile   A passive activity is any trade or business activity in which the taxpayer does not materially participate. Free federal 1040ez efile To determine material participation, see Publication 925. Free federal 1040ez efile Rental activities are passive activities regardless of the taxpayer's participation, unless the taxpayer meets certain eligibility requirements. Free federal 1040ez efile   Individuals, estates, and trusts can offset passive activity losses only against passive activity income. Free federal 1040ez efile Passive activity losses or credits not allowed in one tax year can be carried forward to the next year. Free federal 1040ez efile   If a passive activity interest is transferred because a taxpayer dies, the accumulated unused passive activity losses are allowed as a deduction against the decedent's income in the year of death. Free federal 1040ez efile Losses are allowed only to the extent they are greater than the excess of the transferee's (recipient of the interest transferred) basis in the property over the decedent's adjusted basis in the property immediately before death. Free federal 1040ez efile The part of the accumulated losses equal to the excess is not allowed as a deduction for any tax year. Free federal 1040ez efile   Use Form 8582, Passive Activity Loss Limitations, to summarize losses and income from passive activities and to figure the amounts allowed. Free federal 1040ez efile For more information, see Publication 925. Free federal 1040ez efile Credits, Other Taxes, and Payments Discussed below are some of the tax credits, types of taxes that may be owed, income tax withheld, and estimated tax payments reported on the final return of a decedent. Free federal 1040ez efile Credits On the final income tax return, you can claim any tax credits that applied to the decedent before death. Free federal 1040ez efile Some of these credits are discussed next. Free federal 1040ez efile Earned income credit. Free federal 1040ez efile   If the decedent was an eligible individual, you can claim the earned income credit on the decedent's final return even though the return covers less than 12 months. Free federal 1040ez efile If the allowable credit is more than the tax liability for the year, the excess is refunded. Free federal 1040ez efile   For more information, see Publication 596, Earned Income Credit (EIC). Free federal 1040ez efile Credit for the elderly or the disabled. Free federal 1040ez efile   This credit is allowable on a decedent's final income tax return if the decedent met both of the following requirements in the year of death. Free federal 1040ez efile The decedent: Was a “qualified individual,” and Had income (adjusted gross income (AGI) and nontaxable social security and pensions) less than certain limits. Free federal 1040ez efile   For details on qualifying for or figuring the credit, see Publication 524, Credit for the Elderly or the Disabled. Free federal 1040ez efile Child tax credit. Free federal 1040ez efile   If the decedent had a qualifying child, you may be able to claim the child tax credit on the decedent's final return even though the return covers less than 12 months. Free federal 1040ez efile You may be able to claim the additional child tax credit and get a refund if the credit is more than the decedent's liability. Free federal 1040ez efile For more information, see the Instructions for Form 1040. Free federal 1040ez efile Adoption credit. Free federal 1040ez efile   Depending upon when the adoption was finalized, this credit may be taken on a decedent's final income tax return if the decedent: Adopted an eligible child and paid qualified adoption expenses, or Has a carryforward of an adoption credit from a prior year. Free federal 1040ez efile   Also, if the decedent is survived by a spouse who meets the filing status of qualifying widow(er), unused adoption credit may be carried forward and used following the death of the decedent. Free federal 1040ez efile See Form 8839, Qualified Adoption Expenses, and its instructions for more details. Free federal 1040ez efile General business tax credit. Free federal 1040ez efile   The general business credit available to a taxpayer is limited. Free federal 1040ez efile Any credit arising in a tax year beginning before 1998 that has not been used up can be carried forward for up to 15 years. Free federal 1040ez efile Any unused credit arising in a tax year beginning after 1997 has a 1-year carryback and a 20-year carryforward period. Free federal 1040ez efile   After the carryforward period, a deduction may be allowed for any unused business credit. Free federal 1040ez efile If the taxpayer dies before the end of the carryforward period, the deduction generally is allowed in the year of death. Free federal 1040ez efile   For more information on the general business credit, see Publication 334, Tax Guide for Small Business. Free federal 1040ez efile Other Taxes Taxes other than income tax that may be owed on the final return of a decedent include self-employment tax and alternative minimum tax, which are reported on Form 1040. Free federal 1040ez efile Self-employment tax. Free federal 1040ez efile   Self-employment tax may be owed on the final return if either of the following applied to the decedent in the year of death: Net earnings from self-employment (excluding income described in (2)) were $400 or more; or Wages from services performed as a church employee were $108. Free federal 1040ez efile 28 or more. Free federal 1040ez efile Alternative minimum tax (AMT). Free federal 1040ez efile   The tax laws give special treatment to certain types of income and allow special deductions and credits for certain types of expenses. Free federal 1040ez efile The alternative minimum tax (AMT) was enacted so taxpayers who benefit from these laws still pay at least a minimum amount of tax. Free federal 1040ez efile In general, the AMT is the excess of the tentative minimum tax over the regular tax shown on the return. Free federal 1040ez efile Form 6251. Free federal 1040ez efile    Use Form 6251, Alternative Minimum Tax—Individuals, to determine if this tax applies to the decedent. Free federal 1040ez efile See the form instructions for information on when you must attach Form 6251 to Form 1040. Free federal 1040ez efile Form 8801. Free federal 1040ez efile   If the decedent paid AMT in a previous year or had a credit carryforward, the decedent may be eligible for a minimum tax credit. Free federal 1040ez efile See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts. Free federal 1040ez efile Payments of Tax The income tax withheld from the decedent's salary, wages, pensions, or annuities, and the amount paid as estimated tax are credits (advance payments of tax) that must be claimed on the final return. Free federal 1040ez efile Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Income tax liability may be forgiven for a decedent who dies due to service in a combat zone, due to military or terrorist actions, as a result of a terrorist attack, or while serving in the line of duty as an astronaut. Free federal 1040ez efile Combat Zone If a member of the Armed Forces of the United States dies while in active service in a combat zone or from wounds, disease, or injury incurred in a combat zone, the decedent's income tax liability is abated (forgiven) for the entire year in which death occurred and for any prior tax year ending on or after the first day the person served in a combat zone in active service. Free federal 1040ez efile For this purpose, a qualified hazardous duty area is treated as a combat zone. Free federal 1040ez efile If the tax (including interest, additions to the tax, and additional amounts) for these years has been assessed, the assessment will be forgiven. Free federal 1040ez efile If the tax has been collected (regardless of the date of collection), that tax will be credited or refunded. Free federal 1040ez efile Any of the decedent's income tax for tax years before those mentioned above that remains unpaid as of the actual (or presumptive) date of death will not be assessed. Free federal 1040ez efile If any unpaid tax (including interest, additions to the tax, and additional amounts) has been assessed, this assessment will be forgiven. Free federal 1040ez efile Also, if any tax was collected after the date of death, that amount will be credited or refunded. Free federal 1040ez efile The date of death of a member of the Armed Forces reported as missing in action or as a prisoner of war is the date his or her name is removed from missing status for military pay purposes. Free federal 1040ez efile This is true even if death actually occurred earlier. Free federal 1040ez efile For other tax information for members of the Armed Forces, see Publication 3, Armed Forces' Tax Guide. Free federal 1040ez efile Military or Terrorist Actions The decedent's income tax liability is forgiven if, at death, he or she was a military or civilian employee of the United States who died because of wounds or injury incurred: While a U. Free federal 1040ez efile S. Free federal 1040ez efile employee, and In a military or terrorist action. Free federal 1040ez efile The forgiveness applies to the tax year in which death occurred and for any earlier tax year, beginning with the year before the year in which the wounds or injury occurred. Free federal 1040ez efile Example. Free federal 1040ez efile The income tax liability of a civilian employee of the United States who died in 2013 because of wounds incurred while a U. Free federal 1040ez efile S. Free federal 1040ez efile employee in a terrorist attack that occurred in 2008 will be forgiven for 2013 and for all prior tax years in the period 2007 through 2012. Free federal 1040ez efile Refunds are allowed for the tax years for which the period for filing a claim for refund has not ended, as discussed later. Free federal 1040ez efile Military or terrorist action defined. Free federal 1040ez efile   A military or terrorist action means the following. Free federal 1040ez efile Any terrorist activity that most of the evidence indicates was directed against the United States or any of its allies. Free federal 1040ez efile Any military action involving the U. Free federal 1040ez efile S. Free federal 1040ez efile Armed Forces and resulting from violence or aggression against the United States or any of its allies, or the threat of such violence or aggression. Free federal 1040ez efile   Terrorist activity includes criminal offenses intended to coerce, intimidate, or retaliate against the government or civilian population. Free federal 1040ez efile Military action does not include training exercises. Free federal 1040ez efile Any multinational force in which the United States is participating is treated as an ally of the United States. Free federal 1040ez efile Determining if a terrorist activity or military action has occurred. Free federal 1040ez efile   You may rely on published guidance from the IRS to determine if a particular event is considered a terrorist activity or military action. Free federal 1040ez efile Specified Terrorist Victim The Victims of Terrorism Tax Relief Act of 2001 (the Act) provides tax relief for those injured or killed as a result of terrorist attacks, certain survivors of those killed as a result of terrorist attacks, and others who were affected by terrorist attacks. Free federal 1040ez efile Under the Act, the federal income tax liability of those killed in the following attacks (specified terrorist victim) is forgiven for certain tax years. Free federal 1040ez efile The April 19, 1995, terrorist attack on the Alfred P. Free federal 1040ez efile Murrah Federal Building (Oklahoma City). Free federal 1040ez efile The September 11, 2001, terrorist attacks. Free federal 1040ez efile The terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002. Free federal 1040ez efile The Act also exempts from federal income tax the following types of income. Free federal 1040ez efile Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Free federal 1040ez efile Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Free federal 1040ez efile Certain death benefits paid by an employer to the survivor of an employee because the employee died as a result of a terrorist attack. Free federal 1040ez efile Payments from the September 11th Victim Compensation Fund 2001. Free federal 1040ez efile The Act also reduces the estate tax of individuals who die as a result of a terrorist attack. Free federal 1040ez efile See Publication 3920, Tax Relief for Victims of Terrorist Attacks, for more information. Free federal 1040ez efile Astronauts Legislation extended the tax relief available under the Victims of Terrorism Tax Relief Act of 2001 (the Act) to astronauts who died in the line of duty after December 31, 2002. Free federal 1040ez efile The decedent's income tax liability is forgiven for the tax year in which death occurs, and for the tax year prior to death. Free federal 1040ez efile For information on death benefit payments and the reduction of federal estate taxes, see Publication 3920. Free federal 1040ez efile However, the discussions in that publication under Death Benefits and Estate Tax Reduction should be modified for astronauts (for example, by using the date of death of the astronaut instead of September 11, 2001). Free federal 1040ez efile For more information on the Act, see Publication 3920. Free federal 1040ez efile Claim for Credit or Refund If any of these tax-forgiveness situations applies to a prior year tax, any tax paid for which the period for filing a claim has not ended will be credited or refunded. Free federal 1040ez efile If any tax is still due, it will be canceled. Free federal 1040ez efile The normal period for filing a claim for credit or refund is 3 years after the return was filed or 2 years after the tax was paid, whichever is later. Free federal 1040ez efile If death occurred in a combat zone or from wounds, disease, or injury incurred in a combat zone, the period for filing the claim is extended by: The amount of time served in the combat zone (including any period in which the individual was in missing status), plus The period of continuous qualified hospitalization for injury from service in the combat zone, if any, plus The next 180 days. Free federal 1040ez efile Qualified hospitalization means any hospitalization outside the United States and any hospitalization in the United States of not more than 5 years. Free federal 1040ez efile This extended period for filing the claim also applies to a member of the Armed Forces who was deployed outside the United States in a designated contingency operation. Free federal 1040ez efile Filing a claim. Free federal 1040ez efile   Use the following procedures to file a claim. Free federal 1040ez efile If a U. Free federal 1040ez efile S. Free federal 1040ez efile individual income tax return (Form 1040, 1040A, or 1040EZ) has not been filed, you should make a claim for refund of any withheld income tax or estimated tax payments by filing Form 1040. Free federal 1040ez efile Form W-2, Wage and Tax Statement, must accompany all returns. Free federal 1040ez efile If a U. Free federal 1040ez efile S. Free federal 1040ez efile individual income tax return has been filed, you should make a claim for refund by filing Form 1040X. Free federal 1040ez efile You must file a separate Form 1040X for each year in question. Free federal 1040ez efile   You must file these returns and claims at the following address for regular mail (U. Free federal 1040ez efile S. Free federal 1040ez efile Postal Service). Free federal 1040ez efile    Internal Revenue Service 333 W. Free federal 1040ez efile Pershing, P5–6503 Kansas City, MO 64108   Identify all returns and claims for refund by writing “Iraq—KIA,” “Enduring Freedom—KIA,” “Kosovo Operation—KIA,” “Desert Storm—KIA,” or “Former Yugoslavia—KIA” in bold letters on the top of page 1 of the return or claim. Free federal 1040ez efile On the applicable return, write the same phrase on the line for total tax. Free federal 1040ez efile If the individual was killed in a terrorist or military action, put “KITA” on the front of the return and on the line for total tax. Free federal 1040ez efile   Include an attachment showing the computation of the decedent's tax liability and a computation of the amount to be forgiven. Free federal 1040ez efile On joint returns, make an allocation of the tax as described below under Joint returns. Free federal 1040ez efile If you cannot make a proper allocation, attach a statement of all income and deductions allocable to each spouse and the IRS will make the proper allocation. Free federal 1040ez efile   You must attach Form 1310 to all returns and claims for refund. Free federal 1040ez efile However, for exceptions to filing Form 1310, see Form 1310. Free federal 1040ez efile Statement of Person Claiming Refund Due a Deceased Taxpayer, under Refund, earlier. Free federal 1040ez efile   You must also attach proof of death that includes a statement that the individual was a U. Free federal 1040ez efile S. Free federal 1040ez efile employee on the date of injury and on the date of death and died as the result of a military or terrorist action. Free federal 1040ez efile For military and civilian employees of the Department of Defense, attach DD Form 1300, Report of Casualty. Free federal 1040ez efile For other U. Free federal 1040ez efile S. Free federal 1040ez efile civilian employees killed in the United States, attach a death certificate and a certification (letter) from the federal employer. Free federal 1040ez efile For other U. Free federal 1040ez efile S. Free federal 1040ez efile civilian employees killed overseas, attach a certification from the Department of State. Free federal 1040ez efile   If you do not have enough tax information to file a timely claim for refund, you can suspend the period for filing a claim by filing Form 1040X. Free federal 1040ez efile Attach Form 1310, any required documentation currently available, and a statement that you will file an amended claim as soon as you have the required tax information. Free federal 1040ez efile Joint returns. Free federal 1040ez efile   If a joint return was filed, only the decedent's part of the income tax liability is eligible for forgiveness. Free federal 1040ez efile Determine the decedent's tax liability as follows. Free federal 1040ez efile Figure the income tax for which the decedent would have been liable if a separate return had been filed. Free federal 1040ez efile Figure the income tax for which the spouse would have been liable if a separate return had been filed. Free federal 1040ez efile Multiply the joint tax liability by a fraction. Free federal 1040ez efile The numerator of the fraction is the amount in (1), above. Free federal 1040ez efile The denominator of the fraction is the total of (1) and (2). Free federal 1040ez efile   The resulting amount from (3) above is the decedent's tax liability eligible for forgiveness. Free federal 1040ez efile Filing Reminders To minimize the time needed to process the decedent's final return and issue any refund, be sure to follow these procedures. Free federal 1040ez efile Write “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Free federal 1040ez efile If a personal representative has been appointed, the personal representative must sign the return. Free federal 1040ez efile If it is a joint return, the surviving spouse must also sign it. Free federal 1040ez efile If you are the decedent's spouse filing a joint return with the decedent and no personal representative has been appointed, write “Filing as surviving spouse” in the area where you sign the return. Free federal 1040ez efile If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Free federal 1040ez efile ” To claim a refund for the decedent, do the following. Free federal 1040ez efile If you are the decedent's spouse filing a joint return with the decedent, file only the tax return to claim the refund. Free federal 1040ez efile If you are the personal representative and the return is not a joint return filed with the decedent's surviving spouse, file the return and attach a copy of the certificate that shows your appointment by the court. Free federal 1040ez efile (A power of attorney or a copy of the decedent's will is not acceptable evidence of your appointment as the personal representative. Free federal 1040ez efile ) If you are filing an amended return, attach Form 1310 and a copy of the certificate of appointment (or, if you have already sent the certificate of appointment to IRS, write “Certificate Previously Filed” at the bottom of Form 1310). Free federal 1040ez efile If you are not filing a joint return as the surviving spouse and a personal representative has not been appointed, file the return and attach Form 1310. Free federal 1040ez efile Other Tax Information Discussed below is information about the effect of an individual's death on the income tax liability of the survivors (including widows and widowers), the beneficiaries, and the estate. Free federal 1040ez efile Tax Benefits for Survivors Survivors can qualify for certain benefits when filing their own income tax returns. Free federal 1040ez efile Joint return by surviving spouse. Free federal 1040ez efile   A surviving spouse can file a joint return for the year of death and may qualify for special tax rates for the following 2 years, as explained under Qualifying widows and widowers, later. Free federal 1040ez efile Decedent as your dependent. Free federal 1040ez efile   If the decedent qualified as your dependent for a part of the year before death, you can claim the exemption for the dependent on your tax return, regardless of when death occurred during the year. Free federal 1040ez efile   If the decedent was your qualifying child, you may be able to claim the child tax credit or the earned income credit. Free federal 1040ez efile To determine if you qualify for the child tax credit, see the instructions for Form 1040, line 51; Form 1040A, line 33; or Form 1040NR, line 48. Free federal 1040ez efile To determine if you qualify for the earned income credit, see the instructions for Form 1040, lines 64a and 64b or Form 1040A, lines 38a and 38b. Free federal 1040ez efile Qualifying widows and widowers. Free federal 1040ez efile   If your spouse died within the 2 tax years preceding the year for which your return is being filed, you may be eligible to claim the filing status of qualifying widow(er) with dependent child and qualify to use the married-filing-jointly tax rates. Free federal 1040ez efile Requirements. Free federal 1040ez efile   Generally, you qualify for this special benefit if you meet all of the following requirements. Free federal 1040ez efile You were entitled to file a joint return with your spouse for the year of death—whether or not you actually filed jointly. Free federal 1040ez efile You did not remarry before the end of the current tax year. Free federal 1040ez efile You have a child, stepchild, or foster child who qualifies as your dependent for the tax year. Free federal 1040ez efile You provide more than half the cost of maintaining your home, which is the principal residence of that child for the entire year except for temporary absences. Free federal 1040ez efile Example. Free federal 1040ez efile William Burns' wife died in 2010. Free federal 1040ez efile William has not remarried and continued throughout 2011 and 2012 to maintain a home for himself and his dependent child. Free federal 1040ez efile For 2010, he was entitled to file a joint return for himself and his deceased wife. Free federal 1040ez efile For 2011 and 2012, he qualifies to file as a qualifying widower with dependent child. Free federal 1040ez efile For later years, he may qualify to file as a head of household. Free federal 1040ez efile Figuring your tax. Free federal 1040ez efile   Check the box on line 5 (Form 1040 or 1040A) under Filing Status on your tax return. Free federal 1040ez efile Use the Tax Rate Schedule or the column in the Tax Table for Married filing jointly, which gives you the split-income benefits. Free federal 1040ez efile   The last year you can file jointly with, or claim an exemption for, your deceased spouse is the year of death. Free federal 1040ez efile Joint return filing rules. Free federal 1040ez efile   If you are the surviving spouse and a personal representative is handling the estate for the decedent, you should coordinate filing your return for the year of death with this personal representative. Free federal 1040ez efile See Joint Return under Final Income Tax Return for Decedent—Form 1040, earlier. Free federal 1040ez efile Income in Respect of a Decedent All income the decedent would have received had death not occurred that was not properly includible on the final return, discussed earlier, is income in respect of a decedent. Free federal 1040ez efile If the decedent is a specified terrorist victim (see Specified Terrorist Victim, earlier), income received after the date of death and before the end of the decedent's tax year (determined without regard to death) is excluded from the recipient's gross income. Free federal 1040ez efile This exclusion does not apply to certain income. Free federal 1040ez efile For more information, see Publication 3920. Free federal 1040ez efile How To Report Income in respect of a decedent must be included in the income of one of the following. Free federal 1040ez efile The decedent's estate, if the estate receives it. Free federal 1040ez efile The beneficiary, if the right to income is passed directly to the beneficiary and the beneficiary receives it. Free federal 1040ez efile Any person to whom the estate properly distributes the right to receive it. Free federal 1040ez efile If you have to include income in respect of a decedent in your gross income and an estate tax return (Form 706) was filed for the decedent, you may be able to claim a deduction for the estate tax paid on that income. Free federal 1040ez efile See Estate Tax Deduction, later. Free federal 1040ez efile Example 1. Free federal 1040ez efile Frank Johnson owned and operated an apple orchard. Free federal 1040ez efile He used the cash method of accounting. Free federal 1040ez efile He sold and delivered 1,000 bushels of apples to a canning factory for $2,000, but did not receive payment before his death. Free federal 1040ez efile The proceeds from the sale are income in respect of a decedent. Free federal 1040ez efile When the estate was settled, payment had not been made and the estate transferred the right to the payment to his widow. Free federal 1040ez efile When Frank's widow collects the $2,000, she must include that amount in her return. Free federal 1040ez efile It is not reported on the final return of the decedent or on the return of the estate. Free federal 1040ez efile Example 2. Free federal 1040ez efile Assume the same facts as in Example 1, except that Frank used the accrual method of accounting. Free federal 1040ez efile The amount accrued from the sale of the apples would be included on his final return. Free federal 1040ez efile Neither the estate nor the widow would realize income in respect of a decedent when the money is later paid. Free federal 1040ez efile Example 3. Free federal 1040ez efile On February 1, George High, a cash method taxpayer, sold his tractor for $3,000, payable March 1 of the same year. Free federal 1040ez efile His adjusted basis in the tractor was $2,000. Free federal 1040ez efile George died on February 15, before receiving payment. Free federal 1040ez efile The gain to be reported as income in respect of a decedent is the $1,000 difference between the decedent's basis in the property and the sale proceeds. Free federal 1040ez efile In other words, the income in respect of a decedent is the gain the decedent would have realized had he lived. Free federal 1040ez efile Example 4. Free federal 1040ez efile Cathy O'Neil was entitled to a large salary payment at the date of her death. Free federal 1040ez efile The amount was to be paid in five annual installments. Free federal 1040ez efile The estate, after collecting two installments, distributed the right to the remaining installments to you, the beneficiary. Free federal 1040ez efile The payments are income in respect of a decedent. Free federal 1040ez efile None of the payments were includible on Cathy's final return. Free federal 1040ez efile The estate must include in its income the two installments it received, and you must include in your income each of the three installments as you receive them. Free federal 1040ez efile Example 5. Free federal 1040ez efile You inherited the right to receive renewal commissions on life insurance sold by your father before his death. Free federal 1040ez efile You inherited the right from your mother, who acquired it by bequest from your father. Free federal 1040ez efile Your mother died before she received all the commissions she had the right to receive, so you received the rest. Free federal 1040ez efile The commissions are income in respect of a decedent. Free federal 1040ez efile None of these commissions were includible in your father's final return. Free federal 1040ez efile The commissions received by your mother were included in her income. Free federal 1040ez efile The commissions you received are not includible in your mother's income, even on her final return. Free federal 1040ez efile You must include them in your income. Free federal 1040ez efile Character of income. Free federal 1040ez efile   The character of the income you receive in respect of a decedent remains the same as it would have been to the decedent if he or she were alive. Free federal 1040ez efile If the income would have been a capital gain to the decedent, it will be a capital gain to you. Free federal 1040ez efile Transfer of right to income. Free federal 1040ez efile   If you transfer your right to income in respect of a decedent, you must include in your income the greater of: The amount you receive for the right, or The fair market value of the right you transfer. Free federal 1040ez efile   If you make a gift of such a right, you must include in your income the fair market value of the right at the time of the gift. Free federal 1040ez efile   If the right to income from an installment obligation is transferred, the amount you must include in income is reduced by the basis of the obligation. Free federal 1040ez efile See Installment obligations, later. Free federal 1040ez efile Transfer defined. Free federal 1040ez efile   A transfer for this purpose includes a sale, exchange, or other disposition, the satisfaction of an installment obligation at other than face value, or the cancellation of an installment obligation. Free federal 1040ez efile Installment obligations. Free federal 1040ez efile   If the decedent sold property using the installment method and you are collecting payments on an installment obligation acquired from the decedent, use the same gross profit percentage the decedent used to figure the part of each payment that represents profit. Free federal 1040ez efile Include in your income the same profit the decedent would have included had death not occurred. Free federal 1040ez efile For more information, see Publication 537, Installment Sales. Free federal 1040ez efile   If you dispose of an installment obligation acquired from a decedent (other than by transfer to the obligor), the rules explained in Publication 537 for figuring gain or loss on the disposition apply to you. Free federal 1040ez efile Transfer to obligor. Free federal 1040ez efile   A transfer of a right to income, discussed earlier, has occurred if the decedent (seller) sold property using the installment method and the installment obligation was transferred to the obligor (buyer or person legally obligated to pay the installments). Free federal 1040ez efile A transfer also occurs if the obligation was canceled either at death or by the estate or person receiving the obligation from the decedent. Free federal 1040ez efile An obligation that becomes unenforceable is treated as having been canceled. Free federal 1040ez efile   If such a transfer occurs, the amount included in the income of the transferor (the estate or beneficiary) is the greater of the amount received or the fair market value of the installment obligation at the time of transfer, reduced by the basis of the obligation. Free federal 1040ez efile The basis of the obligation is the decedent's basis, adjusted for all installment payments received after the decedent's death and before the transfer. Free federal 1040ez efile   If the decedent and obligor were related persons, the fair market value of the obligation cannot be less than its face value. Free federal 1040ez efile Specific Types of Income in Respect of a Decedent This section explains and provides examples of some specific types of income in respect of a decedent. Free federal 1040ez efile Wages. Free federal 1040ez efile   The entire amount of wages or other employee compensation earned by the decedent but unpaid at the time of death is income in respect of a decedent. Free federal 1040ez efile The income is not reduced by any amounts withheld by the employer. Free federal 1040ez efile If the income is $600 or more, the employer should report it in box 3 of Form 1099-MISC, Miscellaneous Income, and give the recipient a copy of the form or a similar statement. Free federal 1040ez efile   Wages paid as income in respect of a decedent are not subject to federal income tax withholding. Free federal 1040ez efile However, if paid during the calendar year of death, they are subject to withholding for social security and Medicare taxes. Free federal 1040ez efile These taxes should be included on the decedent's Form W-2 along with the taxes withheld before death. Free federal 1040ez efile These wages are not included in box 1 of Form W-2. Free federal 1040ez efile   Wages paid as income in respect of a decedent after the year of death generally are not subject to withholding for any federal taxe

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The Free Federal 1040ez Efile

Free federal 1040ez efile 4. Free federal 1040ez efile   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. Free federal 1040ez efile You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. Free federal 1040ez efile If you have a choice, you should use the method that gives you the lower tax. Free federal 1040ez efile 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. Free federal 1040ez efile Generally, the standard deduction amounts are adjusted each year for inflation. Free federal 1040ez efile In most cases, you can use Worksheet 4-1 to figure your standard deduction amount. Free federal 1040ez efile Persons not eligible for the standard deduction. Free federal 1040ez efile   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. Free federal 1040ez efile You are considered a dual-status alien if you were both a nonresident alien and a resident alien during the year. Free federal 1040ez efile   If you are a nonresident alien who is married to a U. Free federal 1040ez efile S. Free federal 1040ez efile citizen or resident alien at the end of the year, you can choose to be treated as a U. Free federal 1040ez efile S. Free federal 1040ez efile resident. Free federal 1040ez efile See Publication 519, U. Free federal 1040ez efile S. Free federal 1040ez efile Tax Guide for Aliens. Free federal 1040ez efile If you make this choice, you can take the standard deduction. Free federal 1040ez efile Decedent's final return. Free federal 1040ez efile   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. Free federal 1040ez efile However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. Free federal 1040ez efile Higher standard deduction for age (65 or older). Free federal 1040ez efile   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. Free federal 1040ez efile You are considered age 65 on the day before your 65th birthday. Free federal 1040ez efile Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. Free federal 1040ez efile Higher standard deduction for blindness. Free federal 1040ez efile   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. Free federal 1040ez efile You qualify for this benefit if you are totally or partly blind. Free federal 1040ez efile Not totally blind. Free federal 1040ez efile   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. Free federal 1040ez efile   If your eye condition will never improve beyond these limits, the statement should include this fact. Free federal 1040ez efile You must keep the statement in your records. Free federal 1040ez efile   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. Free federal 1040ez efile Spouse 65 or older or blind. Free federal 1040ez efile   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. Free federal 1040ez efile    You cannot claim the higher standard deduction for an individual other than yourself and your spouse. Free federal 1040ez efile Example. Free federal 1040ez efile This example illustrates how to determine your standard deduction using Worksheet 4-1. Free federal 1040ez efile Bill and Lisa are filing a joint return for 2013. Free federal 1040ez efile Both are over age 65. Free federal 1040ez efile Neither is blind, and neither can be claimed as a dependent. Free federal 1040ez efile They do not itemize deductions, so they use Worksheet 4-1. Free federal 1040ez efile Because they are married filing jointly, they enter $12,200 on line 1. Free federal 1040ez efile They check the “No” box on line 2, so they also enter $12,200 on line 4. Free federal 1040ez efile Because they are both over age 65, they enter $2,400 ($1,200 × 2) on line 5. Free federal 1040ez efile They enter $14,600 ($12,200 + $2,400) on line 6, so their standard deduction is $14,600. Free federal 1040ez efile 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). Free federal 1040ez efile However, the standard deduction may be higher if the individual is 65 or older or blind. Free federal 1040ez efile 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. Free federal 1040ez efile Worksheet 4-1. Free federal 1040ez efile 2013 Standard Deduction Worksheet Caution. Free federal 1040ez efile If you are married filing separately and your spouse itemizes deductions, or if you are a dual-status alien, do not complete this worksheet. Free federal 1040ez efile If you were born before January 2, 1949, and/or blind, check the correct number of boxes below. Free federal 1040ez efile Put the total number of boxes checked in box c and go to line 1. Free federal 1040ez efile a. Free federal 1040ez efile You   Born before  January 2, 1949     Blind b. Free federal 1040ez efile Your spouse, if claiming  spouse's exemption   Born before January 2, 1949     Blind c. Free federal 1040ez efile Total boxes checked             1. Free federal 1040ez efile Enter the amount shown below for your filing status. Free federal 1040ez efile               Single or married filing separately — $6,100 Married filing jointly or Qualifying widow(er) — $12,200 Head of household — $8,950   1. Free federal 1040ez efile           2. Free federal 1040ez efile Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?  No. Free federal 1040ez efile Skip line 3; enter the amount from line 1 on line 4. Free federal 1040ez efile   Yes. Free federal 1040ez efile Go to line 3. Free federal 1040ez efile         3. Free federal 1040ez efile Is your earned income* more than $650?               Yes. Free federal 1040ez efile Add $350 to your earned income. Free federal 1040ez efile Enter the total   3. Free federal 1040ez efile         No. Free federal 1040ez efile Enter $1,000 4. Free federal 1040ez efile Enter the smaller of line 1 or line 3 4. Free federal 1040ez efile   5. Free federal 1040ez efile 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). Free federal 1040ez efile Enter the result here. Free federal 1040ez efile Otherwise, enter -0- 5. Free federal 1040ez efile   6. Free federal 1040ez efile Add lines 4 and 5. Free federal 1040ez efile This is your standard deduction for 2013. Free federal 1040ez efile 6. Free federal 1040ez efile   * Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Free federal 1040ez efile It also includes any amount received as a scholarship that you must include in your income. Free federal 1040ez efile 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). Free federal 1040ez efile Itemized Deductions Some individuals should itemize their deductions because it will save them money. Free federal 1040ez efile Others should itemize because they do not qualify for the standard deduction. Free federal 1040ez efile See the discussion under Standard Deduction , earlier, to decide if it would be to your advantage to itemize deductions. Free federal 1040ez efile You may be subject to a limit on some of your itemized deductions if your adjusted gross income is more than $150,000. Free federal 1040ez efile For more information, see Overall limitation, later. Free federal 1040ez efile 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). Free federal 1040ez efile 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. Free federal 1040ez efile 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. Free federal 1040ez efile See the Schedule A (Form 1040) instructions for more information. Free federal 1040ez efile Overall limitation. Free federal 1040ez efile   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). Free federal 1040ez efile  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. Free federal 1040ez efile 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). Free federal 1040ez efile Table 4-1 shows some common items that you can or cannot include in figuring your medical expense deduction. Free federal 1040ez efile For more information, see the following discussions of selected items, which are presented in alphabetical order. Free federal 1040ez efile A more extensive list of items and further details can be found in Publication 502, Medical and Dental Expenses. Free federal 1040ez efile Table 4-1. Free federal 1040ez efile 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. Free federal 1040ez efile ) 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. Free federal 1040ez efile ) 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. Free federal 1040ez efile 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. Free federal 1040ez efile 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. Free federal 1040ez efile 5% of your adjusted gross income if you or your spouse is age 65 or older). Free federal 1040ez efile What to include. Free federal 1040ez efile   Generally, you can include only the medical and dental expenses you paid this year, regardless of when the services were provided. Free federal 1040ez efile If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. Free federal 1040ez efile 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. Free federal 1040ez efile You can include medical expenses you charge to your credit card in the year the charge is made. Free federal 1040ez efile It does not matter when you actually pay the amount charged. Free federal 1040ez efile 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. Free federal 1040ez efile 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. Free federal 1040ez efile Additional costs for personal motives, such as for architectural or aesthetic reasons, are not medical expenses. Free federal 1040ez efile 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. Free federal 1040ez efile 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. Free federal 1040ez efile Household Help You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. Free federal 1040ez efile This is a personal expense that is not deductible. Free federal 1040ez efile However, you may be able to include certain expenses paid to a person providing nursing-type services. Free federal 1040ez efile For more information, see Nursing Services , later. Free federal 1040ez efile Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Free federal 1040ez efile For more information, see Qualified long-term care services under Long-Term Care, later. Free federal 1040ez efile 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. Free federal 1040ez efile This includes amounts paid for meals and lodging. Free federal 1040ez efile Also, see Meals and Lodging , later. Free federal 1040ez efile 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. Free federal 1040ez efile Qualified long-term care services. Free federal 1040ez efile   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. Free federal 1040ez efile Chronically ill individual. Free federal 1040ez efile    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. Free federal 1040ez efile 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. Free federal 1040ez efile Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Free federal 1040ez efile He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Free federal 1040ez efile Maintenance and personal care services. Free federal 1040ez efile    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). Free federal 1040ez efile Qualified long-term care insurance contracts. Free federal 1040ez efile   A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. Free federal 1040ez efile 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. Free federal 1040ez efile   The amount of qualified long-term care premiums you can include is limited. Free federal 1040ez efile You can include the following as medical expenses on Schedule A (Form 1040). Free federal 1040ez efile Qualified long-term care premiums up to the following amounts. Free federal 1040ez efile Age 40 or under – $360. Free federal 1040ez efile Age 41 to 50 – $680. Free federal 1040ez efile Age 51 to 60 – $1,360. Free federal 1040ez efile Age 61 to 70 – $3,640. Free federal 1040ez efile Age 71 or over – $4,550. Free federal 1040ez efile Unreimbursed expenses for qualified long-term care services. Free federal 1040ez efile Note. Free federal 1040ez efile The limit on premiums is for each person. Free federal 1040ez efile 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. Free federal 1040ez efile You may be able to include in medical expenses the cost of lodging (but not meals) not provided in a hospital or similar institution. Free federal 1040ez efile You can include the cost of such lodging while away from home if all of the following requirements are met. Free federal 1040ez efile The lodging is primarily for, and essential to, medical care. Free federal 1040ez efile 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. Free federal 1040ez efile The lodging is not lavish or extravagant under the circumstances. Free federal 1040ez efile There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. Free federal 1040ez efile The amount you include in medical expenses for lodging cannot be more than $50 per night for each person. Free federal 1040ez efile You can include lodging for a person traveling with the person receiving the medical care. Free federal 1040ez efile 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. Free federal 1040ez efile (Meals are not included. Free federal 1040ez efile ) Nursing home. Free federal 1040ez efile   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). Free federal 1040ez efile This includes the cost of meals and lodging in the home if a main reason for being there is to get medical care. Free federal 1040ez efile   Do not include the cost of meals and lodging if the reason for being in the home is personal. Free federal 1040ez efile However, you can include in medical expenses the part of the cost that is for medical or nursing care. Free federal 1040ez efile Medical Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. Free federal 1040ez efile 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). Free federal 1040ez efile 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. Free federal 1040ez efile The cost of the medical portion must be separately stated in the insurance contract or given to you in a separate statement. Free federal 1040ez efile Medicare Part A. Free federal 1040ez efile   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. Free federal 1040ez efile The payroll tax paid for Medicare Part A is not a medical expense. Free federal 1040ez efile 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. Free federal 1040ez efile In this situation you can include the premiums you paid for Medicare Part A as a medical expense. Free federal 1040ez efile Medicare Part B. Free federal 1040ez efile   Medicare Part B is a supplemental medical insurance. Free federal 1040ez efile Premiums you pay for Medicare Part B are a medical expense. Free federal 1040ez efile If you applied for it at age 65 or after you became disabled, you can include in medical expenses the monthly premiums you paid. Free federal 1040ez efile 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. Free federal 1040ez efile SSA. Free federal 1040ez efile gov, to find out your premium. Free federal 1040ez efile Medicare Part D. Free federal 1040ez efile   Medicare Part D is a voluntary prescription drug insurance program for persons with Medicare Part A or Part B. Free federal 1040ez efile You can include as a medical expense premiums you pay for Medicare Part D. Free federal 1040ez efile Prepaid insurance premiums. Free federal 1040ez efile   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). Free federal 1040ez efile Medicines You can include in medical expenses amounts you pay for prescribed medicines and drugs. Free federal 1040ez efile A prescribed drug is one that requires a prescription by a doctor for its use by an individual. Free federal 1040ez efile You can also include amounts you pay for insulin. Free federal 1040ez efile Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. Free federal 1040ez efile Imported medicines and drugs. Free federal 1040ez efile   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. Free federal 1040ez efile Nursing Services You can include in medical expenses wages and other amounts you pay for nursing services. Free federal 1040ez efile The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. Free federal 1040ez efile 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. Free federal 1040ez efile These services can be provided in your home or another care facility. Free federal 1040ez efile Generally, only the amount spent for nursing services is a medical expense. Free federal 1040ez efile 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. Free federal 1040ez efile However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Free federal 1040ez efile See Maintenance and personal care services under Qualified long-term care services, earlier. Free federal 1040ez efile 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. Free federal 1040ez efile See Child and Dependent Care Credit , later, and Publication 503, Child and Dependent Care Expenses. Free federal 1040ez efile You can also include in medical expenses part of the amount you pay for that attendant's meals. Free federal 1040ez efile Divide the food expense among the household members to find the cost of the attendant's food. Free federal 1040ez efile Then divide that cost in the same manner as in the preceding paragraph. Free federal 1040ez efile If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. Free federal 1040ez efile This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant. Free federal 1040ez efile Employment taxes. Free federal 1040ez efile   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. Free federal 1040ez efile 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. Free federal 1040ez efile For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide. Free federal 1040ez efile Transportation You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. Free federal 1040ez efile Car expenses. Free federal 1040ez efile    You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. Free federal 1040ez efile You cannot include depreciation, insurance, general repair, or maintenance expenses. Free federal 1040ez efile   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. Free federal 1040ez efile   You can also include parking fees and tolls. Free federal 1040ez efile You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate. Free federal 1040ez efile 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. Free federal 1040ez efile 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. 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