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Free h and r block online Index A Acontecimientos futuros, Acontecimientos futuros Administración del Seguro Social (SSA) Ayuda para radicar documentos ante la SSA , Ayuda para radicar documentos ante la SSA. Free h and r block online Ajustes a los Formularios 941-PR, 944(SP) o 943-PR Ajustes del período en curso, Ajustes del período en curso. Free h and r block online Ajustes de períodos anteriores a los Formularios 941-PR, 944(SP) o 943-PR, Ajustes de períodos anteriores Cambio en el proceso para hacer ajustes libres de intereses, Antecedentes. Free h and r block online Excepciones a las correcciones de las contribuciones sobre la nómina libres de intereses , Excepciones a las correcciones de las contribuciones sobre la nómina libres de intereses. Free h and r block online Planillas para ajustes en períodos anteriores, Planillas para ajustes en períodos anteriores. Free h and r block online Proceso para hacer ajustes a las contribuciones sobre la nómina, Proceso para hacer ajustes a las contribuciones sobre la nómina. Free h and r block online Recaudando las contribuciones retenidas de menos de los empleados, Recaudando las contribuciones retenidas de menos de los empleados. Free h and r block online Reintegro de cantidades incorrectamente retenidas de los empleados, Reintegro de cantidades incorrectamente retenidas de los empleados. Free h and r block online Ayuda contributiva, Cómo obtener ayuda relacionada con las contribuciones Ayuda provista por el IRS , Ayuda provista por el IRS. Free h and r block online Ayuda relacionada con las contribuciones, Ayuda relacionada con las contribuciones. Free h and r block online B Beneficios marginales, Retención y declaración de la contribución sobre beneficios marginales proporcionados a los empleados Cuándo se tratan los beneficios marginales como pagados al empleado, Cuándo se tratan los beneficios marginales como pagados al empleado. Free h and r block online Depósito de la contribución sobre los beneficios marginales, Depósito de la contribución sobre los beneficios marginales. Free h and r block online Regla especial en el caso de beneficios marginales proporcionados en noviembre y diciembre, Regla especial en el caso de beneficios marginales proporcionados en noviembre y diciembre. Free h and r block online Retención de las contribuciones al Seguro Social y al seguro Medicare sobre los beneficios marginales, Retención de las contribuciones al Seguro Social y al seguro Medicare sobre los beneficios marginales. Free h and r block online Valorización de vehículos proporcionados a los empleados, Valorización de vehículos proporcionados a los empleados. Free h and r block online C Cálculo de las contribuciones al Seguro Social, al seguro Medicare y al FUTA , 9. Free h and r block online Cálculo de las contribuciones al Seguro Social, al seguro Medicare y al FUTA Compensación por enfermedad, Pagos de compensación por enfermedad. Free h and r block online Contribución Adicional al Medicare , Retención de la Contribución Adicional al Medicare. Free h and r block online Contribuciones al Seguro Social y al Medicare , Contribuciones al Seguro Social y al Medicare. Free h and r block online Contribuciones pagadas por el patrono, Contribución pagada por el patrono correspondiente al empleado. Free h and r block online Deducción de la contribución, Deducción de la contribución. Free h and r block online Patronos domésticos y agrícolas, Patronos domésticos y agrícolas. Free h and r block online Calendario, Calendario Formulario 499R-2/W-2PR, Calendario Formulario 940-PR, Calendario Formulario 943-PR, Calendario Formulario 944(SP), Calendario Formulario 944-PR, Calendario Para el 28 de febrero, Calendario Para el 30 de abril, Calendario Para el 31 de enero, Calendario Para el 31 de julio, Calendario Para el 31 de marzo, Calendario Para el 31 de octubre, Calendario Clasificación errónea de empleados, Clasificación errónea de empleados. Free h and r block online COBRA Crédito de asistencia para las primas COBRA , Recordatorios, Crédito de asistencia para las primas de COBRA. Free h and r block online Comentarios y sugerencias, Recordatorios Compañías subsidarias calificadas conforme al subcapítulo S QSubs, Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). Free h and r block online Compensación por enfermedad, Compensación por enfermedad Patronos Compensación por enfermedad procedentes de una compañía de seguros o de algún otro tercero pagador, Patronos. Free h and r block online Terceros pagadores, Terceros pagadores. Free h and r block online Contratación de nuevos empleados, Recordatorios Contratistas independientes, Contratistas independientes. Free h and r block online Contribución Adicional al Medicare Retención de la Contribución Adicional al Medicare , Recordatorios Contribución Adicional al Medicare, ajustes a la retención, Ajustes a la retención de la Contribución Adicional al Medicare. Free h and r block online Contribución al Seguro Social y al seguro Medicare por trabajo agrícola, 7. Free h and r block online Contribución al Seguro Social y al seguro Medicare por trabajo agrícola El requisito de los $150 o $2,500, El requisito de los $150 o $2,500. Free h and r block online Excepciones al requisito de los $150 o $2,500, Excepciones. Free h and r block online Contribución al Seguro Social y al seguro Medicare por trabajo doméstico, 8. Free h and r block online Contribución al Seguro Social y al seguro Medicare por trabajo doméstico Contribución FUTA , Contribución federal para el desempleo (contribución FUTA). Free h and r block online Contribución sobre los ingresos de Puerto Rico, Contribuciones sobre los ingresos de Puerto Rico. Free h and r block online Contribuciones al Seguro Social y al Medicare para 2014, Contribuciones al Seguro Social y al Medicare para 2014. Free h and r block online Crédito contributivo por oportunidad de trabajo, Recordatorios D Defensor del Contribuyente, Servicio del Defensor del Contribuyente. Free h and r block online Depósito de las contribuciones al Seguro Social y al seguro  Medicare, requisitos de Ajustes a las contribuciones del período retroactivo , Ajustes a las contribuciones del período retroactivo. Free h and r block online Aplicación de los itinerarios mensuales y bisemanales, Aplicación de los itinerarios mensuales y bisemanales. Free h and r block online Cuándo se tienen que hacer los depósitos, Cuándo se tienen que hacer los depósitos. Free h and r block online Depósitos en días laborables solamente, Depósitos en días laborables solamente. Free h and r block online Depósitos, cuándo se hacen, 11. Free h and r block online Depósito de las contribuciones al Seguro Social y al seguro  Medicare Días feriados oficiales, Días feriados oficiales. Free h and r block online Ejemplo de itinerario bisemanal, Ejemplo de itinerario bisemanal. Free h and r block online Ejemplo de itinerario mensual, Ejemplo de itinerario mensual. Free h and r block online Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados agrícolas, Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados agrícolas. Free h and r block online Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados no agrícolas, Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados no agrícolas. Free h and r block online Fecha compensatoria para una cantidad depositada de menos, Fecha compensatoria para una cantidad depositada de menos: Formularios 941-X (PR), 944-X (PR), 944-X (SP), 943-X (PR), Ajustes a las contribuciones del período retroactivo. Free h and r block online Patronos de empleados agrícolas nuevos, Patronos de empleados agrícolas nuevos. Free h and r block online Patronos nuevos, Patronos nuevos. Free h and r block online Patronos que tienen empleados tanto agrícolas como no agrícolas, Patronos que tienen empleados tanto agrícolas como no agrícolas. Free h and r block online Período de depósito, Período de depósito. Free h and r block online Período de depósito de itinerario bisemanal que abarca 2 trimestres, Período de depósito de itinerario bisemanal que abarca 2 trimestres. Free h and r block online Período retroactivo para patronos de empleados agrícolas, Período retroactivo para patronos de empleados agrícolas. Free h and r block online Período retroactivo para patronos de empleados no agrícolas, Período retroactivo para patronos de empleados no agrícolas. Free h and r block online Regla de depositar $100,000 el próximo día, Regla de depositar $100,000 el próximo día. Free h and r block online Regla de depósito de itinerario mensual, Regla de depósito de itinerario mensual. Free h and r block online Regla de la exactitud de los depósitos, Regla de la exactitud de los depósitos. Free h and r block online Reglas para los depositantes de itinerario bisemanal, Reglas para los depositantes de itinerario bisemanal. Free h and r block online Requisito de los $2,500, Requisito de los $2,500. Free h and r block online Depósito electrónico Contribución federal, Recordatorios Depósitos de la contribución al Seguro Social y al seguro  Medicare, cómo se hacen, Cómo hacer los depósitos Cuando usted recibe su EIN , Cuando usted recibe su EIN. Free h and r block online Depósitos hechos a tiempo, Depósitos hechos a tiempo. Free h and r block online Opción de pago el mismo día, Opción de pago el mismo día. Free h and r block online Reclamación de créditos por pagos en exceso, Reclamación de créditos por pagos en exceso. Free h and r block online Registro de depósitos, Registro de depósitos. Free h and r block online Requisito de depósito electrónico, Requisito de depósito electrónico. Free h and r block online Dirección Cambio de dirección, Recordatorios Discrepancias entre los Formularios 941-PR or 944-PR y los Formularios 499R-2/W-2PR, Recordatorios E Elegibilidad para empleo, Elegibilidad para empleo. Free h and r block online Empleado Definición, 2. Free h and r block online ¿Quiénes son empleados? Estatutarios, Empleados estatutarios. Free h and r block online Según el derecho común, Definición de empleado según el derecho común. Free h and r block online Empleado doméstico Requisito de $1,900, Requisito de $1,900. Free h and r block online Empleados Clasificación errónea de empleados, Clasificación errónea de empleados. Free h and r block online Empleados arrendados, Empleados arrendados. Free h and r block online Entidades no consideradas como separadas de sus dueños, Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). Free h and r block online Exención, disposiciones de, Disposiciones de exención. Free h and r block online Especialista en servicios técnicos, Especialista en servicios técnicos. Free h and r block online F Formulario 499R-2/W-2PR, 13. Free h and r block online Los Formularios 499R-2/W-2PR y W-3PR SS-5-SP, Recordatorios, Tarjeta de Seguro Social del empleado. Free h and r block online SS-8PR, Ayuda provista por el IRS. Free h and r block online W-3PR, 13. Free h and r block online Los Formularios 499R-2/W-2PR y W-3PR Formulario 944-PR descontinuado, Recordatorios Fotografías de niños desaparecidos, Recordatorios FUTA Ley Federal de Contribución para el Desempleo (FUTA). Free h and r block online , Ley Federal de Contribución para el Desempleo (FUTA). Free h and r block online Reducción en el crédito contra la contribución FUTA , Estados o territorios con reducción en el crédito. Free h and r block online G Gastos de viaje y de representación, Gastos de viaje y de representación. Free h and r block online I Individuos que no son empleados estatutarios, Individuos que no son empleados estatutarios. Free h and r block online Agentes de bienes inmuebles autorizados, Agentes de bienes inmuebles autorizados. Free h and r block online Personas a quienes se les paga por acompañar y posiblemente cuidar a otras, Personas a quienes se les paga por acompañar y posiblemente cuidar a otras. Free h and r block online Vendedores directos, Vendedores directos. Free h and r block online Introducción, Introduction L Líder de cuadrilla agrícola, Líder de cuadrilla agrícola. Free h and r block online Los Formularios 499R-2/W-2PR y W-3PR, 13. Free h and r block online Los Formularios 499R-2/W-2PR y W-3PR Problemas con la radicación electrónica, Problemas con la radicación electrónica. Free h and r block online Radicación de Formularios 499R-2/W-2PR ante el Departamento de Hacienda, Radicación de Formularios 499R-2/W-2PR ante el Departamento de Hacienda. Free h and r block online Solicitud de exención de radicación de declaraciones informativas por medios electrónicos, Solicitud de exención de radicación de declaraciones informativas por medios electrónicos. Free h and r block online M Mantenimiento de récords, Recordatorios Matrimonio Matrimonio entre personas del mismo sexo. Free h and r block online , Qué hay de nuevo Medicare Retención de la Contribución Adicional al Medicare , Retención de la Contribución Adicional al Medicare. Free h and r block online Medios electrónicos, pago y radicación por, Recordatorios Multas relacionadas con los depósitos de la contribución al Seguro Social y al seguro  Medicare , Multas relacionadas con los depósitos. Free h and r block online Agentes de reportación, Agentes de reportación. Free h and r block online Multa por recuperación del fondo fiduciario, Multa por recuperación del fondo fiduciario. Free h and r block online Multa promediada por no depositar, Multa promediada por no depositar. Free h and r block online Orden en que se aplican los depósitos, Orden en que se aplican los depósitos. Free h and r block online Regla especial para los que radicaron el Formulario 944(SP) anteriormente, Regla especial para los que radicaron el Formulario 944(SP) anteriormente. Free h and r block online N Negocio perteneciente y administrado por cónyuges, Negocio que pertenece y es administrado por los cónyuges Excepción: Negocio en participación calificado, Excepción: Negocio en participación calificado. Free h and r block online Nómina Externalización de las obligaciones de la nómina, Recordatorios Outsourcing payroll duties , Recordatorios Número de identificación de contribuyente individual (ITIN), Número de identificación personal del contribuyente (ITIN) del IRS para extranjeros. Free h and r block online Número de identificación patronal (EIN), 3. Free h and r block online Número de identificación patronal (EIN) Número de identificación patronal en linea (EIN), solicitud de un, Recordatorios Número de Seguro Social Dónde se obtienen los formularios , Dónde se obtienen los formularios para solicitar un Número de Seguro Social. Free h and r block online Número de Seguro Social (SSN) , 4. Free h and r block online Número de Seguro Social (SSN), Tarjeta de Seguro Social del empleado. Free h and r block online Escriba correctamente el nombre y número de Seguro Social del empleado, Escriba correctamente el nombre y número de Seguro Social del empleado. Free h and r block online Tarjeta de Seguro Social del empleado, Tarjeta de Seguro Social del empleado. Free h and r block online Verificación de los números de Seguro Social, Verificación de los números de Seguro Social. Free h and r block online P Pago por medios electrónicos, Recordatorios Pagos con tarjeta de crédito o débito, Recordatorios Pagos que no se consideran salarios Empleado doméstico, Pagos que no se consideran salarios. Free h and r block online Transportación (beneficios de transporte), Transportación (beneficios de transporte). Free h and r block online Pagos rechazados, Recordatorios Pagos y depósitos de la contribución FUTA , 10. Free h and r block online Pagos y depósitos de la contribución federal para el desempleo (la contribución FUTA) Depósitos, Depósitos. Free h and r block online Empleados domésticos, Empleados domésticos. Free h and r block online Formulario 940-PR, Formulario 940-PR. Free h and r block online Tasa de la contribución, Tasa de la contribución FUTA. Free h and r block online Trabajadores agrícolas, Trabajadores agrícolas. Free h and r block online Parte responsable Cambio de parte responsable, Qué hay de nuevo Patrono, definición, 1. Free h and r block online ¿Quién es patrono? Planillas para patronos Formulario 944(SP), Formulario 944(SP). Free h and r block online Multas por no radicar y por no pagar, Multas o penalidades. Free h and r block online Patrono sucesor, Patrono sucesor. Free h and r block online Patrono sucesor, crédito especial, Crédito especial para un patrono sucesor. Free h and r block online Patronos de empleados domésticos que declaran las contribuciones al Seguro Social y al Medicare , Patronos de empleados domésticos que declaran las contribuciones al Seguro Social y al Medicare. Free h and r block online Patronos de trabajadores agrícolas, Patronos de trabajadores agrícolas. Free h and r block online Patronos que no son patronos agrícolas, Patronos que no son patronos agrícolas. Free h and r block online Planilla anual y pago de la contribución federal para el desempleo (contribución  FUTA), Planilla anual y pago de la contribución federal para el desempleo (contribución FUTA). Free h and r block online Programa de acuerdo voluntario para la clasificación de trabajadores (VCSP), Programa para el acuerdo de clasificación voluntaria de trabajadores (VCSP, por sus siglas en inglés). Free h and r block online Propinas, 6. Free h and r block online Propinas Formulario 4070-PR, 6. Free h and r block online Propinas Formulario 4070A-PR, 6. Free h and r block online Propinas Informe de propinas, Informe de propinas. Free h and r block online Recaudación de las contribuciones sobre las propinas, Recaudación de las contribuciones sobre las propinas. Free h and r block online Regla de disposición, Regla de disposición. Free h and r block online Q Qué hay de nuevo Contribuciones al Medicare para 2014, Qué hay de nuevo Contribuciones al Seguro Social para 2014, Qué hay de nuevo R Radicación por medios electrónicos, Recordatorios Radicar el Formulario 944(SP) en vez del Formulario 941-PR, Recordatorios Recordatorios, Recordatorios Récords, Recordatorios Reglas especiales para varias clases de servicios y de pagos, 15. Free h and r block online Reglas especiales para varias clases de servicios y de pagos Retención de la contribución federal sobre ingresos, 14. Free h and r block online Retención de la contribución federal sobre ingresos S Salarios sujetos a la contribución Compensaciones sujetos a la contribución, 5. Free h and r block online Salarios y otra compensación Servicio del Defensor del Contribuyente, Servicio del Defensor del Contribuyente. Free h and r block online Servicios de entrega privados, Recordatorios T Tarjetas de crédito o débito, pagos con, Recordatorios TAS , Servicio del Defensor del Contribuyente. Free h and r block online Trabajo doméstico, Trabajo doméstico. Free h and r block online V Veteranos calificados, contratación, Recordatorios Visa H-2A, Trabajadores agrícolas. Free h and r block online Remuneración pagada a trabajadores agrícolas con visa H-2A, Recordatorios Prev  Up     Home   More Online Publications
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Contact My Local Office in Kansas

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

 City Street Address  Days/Hours of Service  Telephone* 
Overland Park  6717 Shawnee Mission Pkwy
Overland Park, KS 66202 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(816) 966-2840 
Topeka  120 S.E. Sixth Ave.
Topeka, KS 66603 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(785) 235-3053 
Wichita  555 N. Woodlawn
Building 4
Wichita, KS 67208 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(316) 352-7401 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (316) 651-2100 in Wichita or 1-877-777-4778 elsewhere, or see  Publication 1546 , The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
271 W. 3rd St N.
Wichita, KS 67202

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Free H And R Block Online

Free h and r block online 5. Free h and r block online   Business Income Table of Contents Introduction Kinds of IncomeBartering for Property or Services Real Estate Rents Personal Property Rents Interest and Dividend Income Canceled Debt Other Income Items That Are Not IncomeAmount you can exclude. Free h and r block online Short-term lease. Free h and r block online Retail space. Free h and r block online Qualified long-term real property. Free h and r block online Guidelines for Selected Occupations Accounting for Your Income Introduction This chapter primarily explains business income and how to account for it on your tax return, what items are not considered income, and gives guidelines for selected occupations. Free h and r block online If there is a connection between any income you receive and your business, the income is business income. Free h and r block online A connection exists if it is clear that the payment of income would not have been made if you did not have the business. Free h and r block online You can have business income even if you are not involved in the activity on a regular full-time basis. Free h and r block online Income from work you do on the side in addition to your regular job can be business income. Free h and r block online You report most business income, such as income from selling your products or services, on Schedule C or C-EZ. Free h and r block online But you report the income from the sale of business assets, such as land and office buildings, on other forms instead of Schedule C or C-EZ. Free h and r block online For information on selling business assets, see chapter 3. Free h and r block online Nonemployee compensation. Free h and r block online Business income includes amounts you received in your business that were properly shown on Forms 1099-MISC. 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Free h and r block online law. Free h and r block online If you live outside the United States, you may be able to exclude part or all of your foreign-source business income. Free h and r block online For details, see Publication 54, Tax Guide for U. Free h and r block online S. Free h and r block online Citizens and Resident Aliens Abroad. Free h and r block online Bartering for Property or Services Bartering is an exchange of property or services. Free h and r block online You must include in your gross receipts, at the time received, the fair market value of property or services you receive in exchange for something else. Free h and r block online If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as the fair market value unless the value can be shown to be otherwise. Free h and r block online Example 1. Free h and r block online You are a self-employed lawyer. Free h and r block online You perform legal services for a client, a small corporation. Free h and r block online In payment for your services, you receive shares of stock in the corporation. Free h and r block online You must include the fair market value of the shares in income. Free h and r block online Example 2. Free h and r block online You are an artist and create a work of art to compensate your landlord for the rent-free use of your apartment. Free h and r block online You must include the fair rental value of the apartment in your gross receipts. Free h and r block online Your landlord must include the fair market value of the work of art in his or her rental income. Free h and r block online Example 3. Free h and r block online You are a self-employed accountant. Free h and r block online Both you and a house painter are members of a barter club, an organization that each year gives its members a directory of members and the services each member provides. Free h and r block online Members get in touch with other members directly and bargain for the value of the services to be performed. Free h and r block online In return for accounting services you provided for the house painter's business, the house painter painted your home. Free h and r block online You must include in gross receipts the fair market value of the services you received from the house painter. Free h and r block online The house painter must include the fair market value of your accounting services in his or her gross receipts. Free h and r block online Example 4. Free h and r block online You are a member of a barter club that uses credit units to credit or debit members' accounts for goods or services provided or received. Free h and r block online As soon as units are credited to your account, you can use them to buy goods or services or sell or transfer the units to other members. Free h and r block online You must include the value of credit units you received in your gross receipts for the tax year in which the units are credited to your account. Free h and r block online The dollar value of units received for services by an employee of the club, who can use the units in the same manner as other members, must be included in the employee's gross income for the tax year in which received. Free h and r block online It is wages subject to social security and Medicare taxes (FICA), federal unemployment taxes (FUTA), and income tax withholding. Free h and r block online See Publication 15 (Circular E), Employer's Tax Guide. Free h and r block online Example 5. Free h and r block online You operate a plumbing business and use the cash method of accounting. Free h and r block online You join a barter club and agree to provide plumbing services to any member for a specified number of hours. Free h and r block online Each member has access to a directory that lists the members of the club and the services available. Free h and r block online Members contact each other directly and request services to be performed. Free h and r block online You are not required to provide services unless requested by another member, but you can use as many of the offered services as you wish without paying a fee. Free h and r block online You must include the fair market value of any services you receive from club members in your gross receipts when you receive them even if you have not provided any services to club members. Free h and r block online Information returns. Free h and r block online   If you are involved in a bartering transaction, you may have to file either of the following forms. Free h and r block online Form 1099-B, Proceeds From Broker and Barter Exchange Transactions. Free h and r block online Form 1099-MISC, Miscellaneous Income. Free h and r block online For information about these forms, see the General Instructions for Certain Information Returns. Free h and r block online Real Estate Rents If you are a real estate dealer who receives income from renting real property or an owner of a hotel, motel, etc. Free h and r block online , who provides services (maid services, etc. Free h and r block online ) for guests, report the rental income and expenses on Schedule C or C-EZ. Free h and r block online If you are not a real estate dealer or the kind of owner described in the preceding sentence, report the rental income and expenses on Schedule E. Free h and r block online For more information, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes). Free h and r block online Real estate dealer. Free h and r block online   You are a real estate dealer if you are engaged in the business of selling real estate to customers with the purpose of making a profit from those sales. Free h and r block online Rent you receive from real estate held for sale to customers is subject to SE tax. Free h and r block online However, rent you receive from real estate held for speculation or investment is not subject to SE tax. Free h and r block online Trailer park owner. Free h and r block online   Rental income from a trailer park is subject to SE tax if you are a self-employed trailer park owner who provides trailer lots and facilities and substantial services for the convenience of your tenants. Free h and r block online    You generally are considered to provide substantial services for tenants if they are primarily for the tenants' convenience and normally are not provided to maintain the lots in a condition for occupancy. Free h and r block online Services are substantial if the compensation for the services makes up a material part of the tenants' rental payments. Free h and r block online   Examples of services that are not normally provided for the tenants' convenience include supervising and maintaining a recreational hall provided by the park, distributing a monthly newsletter to tenants, operating a laundry facility, and helping tenants buy or sell their trailers. Free h and r block online   Examples of services that are normally provided to maintain the lots in a condition for tenant occupancy include city sewerage, electrical connections, and roadways. Free h and r block online Hotels, boarding houses, and apartments. Free h and r block online   Rental income you receive for the use or occupancy of hotels, boarding houses, or apartment houses is subject to SE tax if you provide services for the occupants. Free h and r block online   Generally, you are considered to provide services for the occupants if the services are primarily for their convenience and are not services normally provided with the rental of rooms for occupancy only. Free h and r block online An example of a service that is not normally provided for the convenience of the occupants is maid service. Free h and r block online However, providing heat and light, cleaning stairways and lobbies, and collecting trash are services normally provided for the occupants' convenience. Free h and r block online Prepaid rent. Free h and r block online   Advance payments received under a lease that does not put any restriction on their use or enjoyment are income in the year you receive them. Free h and r block online This is true no matter what accounting method or period you use. Free h and r block online Lease bonus. Free h and r block online   A bonus you receive from a lessee for granting a lease is an addition to the rent. Free h and r block online Include it in your gross receipts in the year received. Free h and r block online Lease cancellation payments. Free h and r block online   Report payments you receive from your lessee for canceling a lease in your gross receipts in the year received. Free h and r block online Payments to third parties. Free h and r block online   If your lessee makes payments to someone else under an agreement to pay your debts or obligations, include the payments in your gross receipts when the lessee makes the payments. Free h and r block online A common example of this kind of income is a lessee's payment of your property taxes on leased real property. Free h and r block online Settlement payments. Free h and r block online   Payments you receive in settlement of a lessee's obligation to restore the leased property to its original condition are income in the amount that the payments exceed the adjusted basis of the leasehold improvements destroyed, damaged, removed, or disconnected by the lessee. Free h and r block online Personal Property Rents If you are in the business of renting personal property (equipment, vehicles, formal wear, etc. Free h and r block online ), include the rental amount you receive in your gross receipts on Schedule C or C-EZ. Free h and r block online Prepaid rent and other payments described in the preceding Real Estate Rents discussion can also be received for renting personal property. Free h and r block online If you receive any of those payments, include them in your gross receipts as explained in that discussion. Free h and r block online Interest and Dividend Income Interest and dividends may be considered business income. Free h and r block online Interest. Free h and r block online   Interest received on notes receivable that you have accepted in the ordinary course of business is business income. Free h and r block online Interest received on loans is business income if you are in the business of lending money. Free h and r block online Uncollectible loans. Free h and r block online   If a loan payable to you becomes uncollectible during the tax year and you use an accrual method of accounting, you must include in gross income interest accrued up to the time the loan became uncollectible. Free h and r block online If the accrued interest later becomes uncollectible, you may be able to take a bad debt deduction. Free h and r block online See Bad Debts in chapter 8. Free h and r block online Unstated interest. Free h and r block online   If little or no interest is charged on an installment sale, you may have to treat a part of each payment as unstated interest. Free h and r block online See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. Free h and r block online Dividends. Free h and r block online   Generally, dividends are business income to dealers in securities. Free h and r block online For most sole proprietors and statutory employees, however, dividends are nonbusiness income. Free h and r block online If you hold stock as a personal investment separately from your business activity, the dividends from the stock are nonbusiness income. Free h and r block online   If you receive dividends from business insurance premiums you deducted in an earlier year, you must report all or part of the dividend as business income on your return. Free h and r block online To find out how much you have to report, see   Recovery of items previously deducted under Other Income, later. Free h and r block online Canceled Debt The following explains the general rule for including canceled debt in income and the exceptions to the general rule. Free h and r block online General Rule Generally, if your debt is canceled or forgiven, other than as a gift or bequest to you, you must include the canceled amount in your gross income for tax purposes. Free h and r block online Report the canceled amount on line 6 of Schedule C if you incurred the debt in your business. Free h and r block online If the debt is a nonbusiness debt, report the canceled amount on line 21 of Form 1040. Free h and r block online Exceptions The following discussion covers some exceptions to the general rule for canceled debt. Free h and r block online Price reduced after purchase. Free h and r block online   If you owe a debt to the seller for property you bought and the seller reduces the amount you owe, you generally do not have income from the reduction. Free h and r block online Unless you are bankrupt or insolvent, treat the amount of the reduction as a purchase price adjustment and reduce your basis in the property. Free h and r block online Deductible debt. Free h and r block online   You do not realize income from a canceled debt to the extent the payment of the debt would have led to a deduction. Free h and r block online Example. Free h and r block online You get accounting services for your business on credit. Free h and r block online Later, you have trouble paying your business debts, but you are not bankrupt or insolvent. Free h and r block online Your accountant forgives part of the amount you owe for the accounting services. Free h and r block online How you treat the canceled debt depends on your method of accounting. Free h and r block online Cash method — You do not include the canceled debt in income because payment of the debt would have been deductible as a business expense. Free h and r block online Accrual method — You include the canceled debt in income because the expense was deductible when you incurred the debt. Free h and r block online   For information on the cash and accrual methods of accounting, see chapter 2. Free h and r block online Exclusions Do not include canceled debt in income in the following situations. Free h and r block online However, you may be required to file Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. Free h and r block online For more information, see Form 982. Free h and r block online The cancellation takes place in a bankruptcy case under title 11 of the U. Free h and r block online S. Free h and r block online Code (relating to bankruptcy). Free h and r block online See Publication 908, Bankruptcy Tax Guide. Free h and r block online The cancellation takes place when you are insolvent. Free h and r block online You can exclude the canceled debt to the extent you are insolvent. Free h and r block online See Publication 908. Free h and r block online The canceled debt is a qualified farm debt owed to a qualified person. Free h and r block online See chapter 3 in Publication 225, Farmer's Tax Guide. Free h and r block online The canceled debt is a qualified real property business debt. Free h and r block online This situation is explained later. Free h and r block online The canceled debt is qualified principal residence indebtedness which is discharged after 2006. Free h and r block online See Form 982. Free h and r block online If a canceled debt is excluded from income because it takes place in a bankruptcy case, the exclusions in situations 2 through 5 do not apply. Free h and r block online If it takes place when you are insolvent, the exclusions in situations 3 and 4 do not apply to the extent you are insolvent. Free h and r block online Debt. Free h and r block online   For purposes of this discussion, debt includes any debt for which you are liable or which attaches to property you hold. Free h and r block online Qualified real property business debt. Free h and r block online   You can elect to exclude (up to certain limits) the cancellation of qualified real property business debt. Free h and r block online If you make the election, you must reduce the basis of your depreciable real property by the amount excluded. Free h and r block online Make this reduction at the beginning of your tax year following the tax year in which the cancellation occurs. Free h and r block online However, if you dispose of the property before that time, you must reduce its basis immediately before the disposition. Free h and r block online Cancellation of qualified real property business debt. Free h and r block online   Qualified real property business debt is debt (other than qualified farm debt) that meets all the following conditions. Free h and r block online It was incurred or assumed in connection with real property used in a trade or business. Free h and r block online It was secured by such real property. Free h and r block online It was incurred or assumed at either of the following times. Free h and r block online Before January 1, 1993. Free h and r block online After December 31, 1992, if incurred or assumed to acquire, construct, or substantially improve the real property. Free h and r block online It is debt to which you choose to apply these rules. Free h and r block online   Qualified real property business debt includes refinancing of debt described in (3) earlier, but only to the extent it does not exceed the debt being refinanced. Free h and r block online   You cannot exclude more than either of the following amounts. Free h and r block online The excess (if any) of: The outstanding principal of qualified real property business debt (immediately before the cancellation), over The fair market value (immediately before the cancellation) of the business real property that is security for the debt, reduced by the outstanding principal amount of any other qualified real property business debt secured by this property immediately before the cancellation. Free h and r block online The total adjusted bases of depreciable real property held by you immediately before the cancellation. Free h and r block online These adjusted bases are determined after any basis reduction due to a cancellation in bankruptcy, insolvency, or of qualified farm debt. Free h and r block online Do not take into account depreciable real property acquired in contemplation of the cancellation. Free h and r block online Election. Free h and r block online   To make this election, complete Form 982 and attach it to your income tax return for the tax year in which the cancellation occurs. Free h and r block online You must file your return by the due date (including extensions). Free h and r block online If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Free h and r block online For more information, see When To File in the form instructions. Free h and r block online Other Income The following discussion explains how to treat other types of business income you may receive. Free h and r block online Restricted property. Free h and r block online   Restricted property is property that has certain restrictions that affect its value. Free h and r block online If you receive restricted stock or other property for services performed, the fair market value of the property in excess of your cost is included in your income on Schedule C or C-EZ when the restriction is lifted. Free h and r block online However, you can choose to be taxed in the year you receive the property. Free h and r block online For more information on including restricted property in income, see Publication 525, Taxable and Nontaxable Income. Free h and r block online Gains and losses. Free h and r block online   Do not report on Schedule C or C-EZ a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. Free h and r block online Instead, you must report these gains and losses on other forms. Free h and r block online For more information, see chapter 3. Free h and r block online Promissory notes. Free h and r block online   Report promissory notes and other evidences of debt issued to you in a sale or exchange of property that is stock in trade or held primarily for sale to customers on Schedule C or C-EZ. Free h and r block online In general, you report them at their stated principal amount (minus any unstated interest) when you receive them. Free h and r block online Lost income payments. Free h and r block online   If you reduce or stop your business activities, report on Schedule C or C-EZ any payment you receive for the lost income of your business from insurance or other sources. Free h and r block online Report it on Schedule C or C-EZ even if your business is inactive when you receive the payment. Free h and r block online Damages. Free h and r block online   You must include in gross income compensation you receive during the tax year as a result of any of the following injuries connected with your business. Free h and r block online Patent infringement. Free h and r block online Breach of contract or fiduciary duty. Free h and r block online Antitrust injury. Free h and r block online Economic injury. Free h and r block online   You may be entitled to a deduction against the income if it compensates you for actual economic injury. Free h and r block online Your deduction is the smaller of the following amounts. Free h and r block online The amount you receive or accrue for damages in the tax year reduced by the amount you pay or incur in the tax year to recover that amount. Free h and r block online Your loss from the injury that you have not yet deducted. Free h and r block online Punitive damages. Free h and r block online   You must also include punitive damages in income. Free h and r block online Kickbacks. Free h and r block online   If you receive any kickbacks, include them in your income on Schedule C or C-EZ. Free h and r block online However, do not include them if you properly treat them as a reduction of a related expense item, a capital expenditure, or cost of goods sold. Free h and r block online Recovery of items previously deducted. Free h and r block online   If you recover a bad debt or any other item deducted in a previous year, include the recovery in income on Schedule C or C-EZ. Free h and r block online However, if all or part of the deduction in earlier years did not reduce your tax, you can exclude the part that did not reduce your tax. Free h and r block online If you exclude part of the recovery from income, you must include with your return a computation showing how you figured the exclusion. Free h and r block online Example. Free h and r block online Joe Smith, a sole proprietor, had gross income of $8,000, a bad debt deduction of $300, and other allowable deductions of $7,700. Free h and r block online He also had 2 personal exemptions for a total of $7,800. Free h and r block online He would not pay income tax even if he did not deduct the bad debt. Free h and r block online Therefore, he will not report as income any part of the $300 he may recover in any future year. Free h and r block online Exception for depreciation. Free h and r block online   This rule does not apply to depreciation. Free h and r block online You recover depreciation using the rules explained next. Free h and r block online Recapture of depreciation. Free h and r block online   In the following situations, you have to recapture the depreciation deduction. Free h and r block online This means you include in income part or all of the depreciation you deducted in previous years. Free h and r block online Listed property. Free h and r block online   If your business use of listed property (explained in chapter 8 under Depreciation ) falls to 50% or less in a tax year after the tax year you placed the property in service, you may have to recapture part of the depreciation deduction. Free h and r block online You do this by including in income on Schedule C part of the depreciation you deducted in previous years. Free h and r block online Use Part IV of Form 4797, Sales of Business Property, to figure the amount to include on Schedule C. Free h and r block online For more information, see What is the Business-Use Requirement? in chapter 5 of Publication 946, How To Depreciate Property. Free h and r block online That chapter explains how to determine whether property is used more than 50% in your business. Free h and r block online Section 179 property. Free h and r block online   If you take a section 179 deduction (explained in chapter 8 under Depreciation ) for an asset and before the end of the asset's recovery period the percentage of business use drops to 50% or less, you must recapture part of the section 179 deduction. Free h and r block online You do this by including in income on Schedule C part of the deduction you took. Free h and r block online Use Part IV of Form 4797 to figure the amount to include on Schedule C. Free h and r block online See chapter 2 in Publication 946 to find out when you recapture the deduction. Free h and r block online Sale or exchange of depreciable property. Free h and r block online   If you sell or exchange depreciable property at a gain, you may have to treat all or part of the gain due to depreciation as ordinary income. Free h and r block online You figure the income due to depreciation recapture in Part III of Form 4797. Free h and r block online For more information, see chapter 4 in Publication 544, Sales and Other Dispositions of Assets. Free h and r block online Items That Are Not Income In some cases the property or money you receive is not income. Free h and r block online Appreciation. Free h and r block online   Increases in value of your property are not income until you realize the increases through a sale or other taxable disposition. Free h and r block online Consignments. Free h and r block online   Consignments of merchandise to others to sell for you are not sales. Free h and r block online The title of merchandise remains with you, the consignor, even after the consignee possesses the merchandise. Free h and r block online Therefore, if you ship goods on consignment, you have no profit or loss until the consignee sells the merchandise. Free h and r block online Merchandise you have shipped out on consignment is included in your inventory until it is sold. Free h and r block online   Do not include merchandise you receive on consignment in your inventory. Free h and r block online Include your profit or commission on merchandise consigned to you in your income when you sell the merchandise or when you receive your profit or commission, depending upon the method of accounting you use. Free h and r block online Construction allowances. Free h and r block online   If you enter into a lease after August 5, 1997, you can exclude from income the construction allowance you receive (in cash or as a rent reduction) from your landlord if you receive it under both the following conditions. Free h and r block online Under a short-term lease of retail space. Free h and r block online For the purpose of constructing or improving qualified long-term real property for use in your business at that retail space. Free h and r block online Amount you can exclude. Free h and r block online   You can exclude the construction allowance to the extent it does not exceed the amount you spent for construction or improvements. Free h and r block online Short-term lease. Free h and r block online   A short-term lease is a lease (or other agreement for occupancy or use) of retail space for 15 years or less. Free h and r block online The following rules apply in determining whether the lease is for 15 years or less. Free h and r block online Take into account options to renew when figuring whether the lease is for 15 years or less. Free h and r block online But do not take into account any option to renew at fair market value determined at the time of renewal. Free h and r block online Two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar retail space are treated as one lease. Free h and r block online Retail space. Free h and r block online   Retail space is real property leased, occupied, or otherwise used by you as a tenant in your business of selling tangible personal property or services to the general public. Free h and r block online Qualified long-term real property. Free h and r block online   Qualified long-term real property is nonresidential real property that is part of, or otherwise present at, your retail space and that reverts to the landlord when the lease ends. Free h and r block online Exchange of like-kind property. Free h and r block online   If you exchange your business property or property you hold for investment solely for property of a like kind to be used in your business or to be held for investment, no gain or loss is recognized. Free h and r block online This means that the gain is not taxable and the loss is not deductible. Free h and r block online A common type of nontaxable exchange is the trade-in of a business automobile for another business automobile. Free h and r block online For more information, see Form 8824. Free h and r block online Leasehold improvements. Free h and r block online   If a tenant erects buildings or makes improvements to your property, the increase in the value of the property due to the improvements is not income to you. Free h and r block online However, if the facts indicate that the improvements are a payment of rent to you, then the increase in value would be income. Free h and r block online Loans. Free h and r block online   Money borrowed through a bona fide loan is not income. Free h and r block online Sales tax. Free h and r block online   State and local sales taxes imposed on the buyer, which you were required to collect and pay over to state or local governments, are not income. Free h and r block online Guidelines for Selected Occupations This section provides information to determine whether your earnings should be reported on Schedule C (Form 1040) or C-EZ (Form 1040). Free h and r block online Direct seller. Free h and r block online   You must report all income you receive as a direct seller on Schedule C or C-EZ. Free h and r block online This includes any of the following. Free h and r block online Income from sales—payments you receive from customers for products they buy from you. Free h and r block online Commissions, bonuses, or percentages you receive for sales and the sales of others who work under you. Free h and r block online Prizes, awards, and gifts you receive from your selling business. Free h and r block online You must report this income regardless of whether it is reported to you on an information return. Free h and r block online   You are a direct seller if you meet all the following conditions. Free h and r block online You are engaged in one of the following trades or businesses. Free h and r block online Selling or soliciting the sale of consumer products either in a home or other place that is not a permanent retail establishment, or to any buyer on a buy-sell basis or a deposit-commission basis for resale in a home or other place of business that is not a permanent retail establishment. Free h and r block online Delivering or distributing newspapers or shopping news (including any services directly related to that trade or business). Free h and r block online Substantially all your pay (whether paid in cash or not) for services described above is directly related to sales or other output (including performance of services) rather than to the number of hours worked. Free h and r block online Your services are performed under a written contract between you and the person for whom you perform the services, and the contract provides that you will not be treated as an employee for federal tax purposes. Free h and r block online Executor or administrator. Free h and r block online   If you administer a deceased person's estate, your fees are reported on Schedule C or C-EZ if you are one of the following: A professional fiduciary. Free h and r block online A nonprofessional fiduciary (personal representative) and both of the following apply. Free h and r block online The estate includes an active trade or business in which you actively participate. Free h and r block online Your fees are related to the operation of that trade or business. Free h and r block online A nonprofessional fiduciary of a single estate that requires extensive managerial activities on your part for a long period of time, provided these activities are enough to be considered a trade or business. Free h and r block online    If the fees do not meet the above requirements, report them on line 21 of Form 1040. Free h and r block online Fishing crew member. Free h and r block online    If you are a member of the crew that catches fish or other water life, your earnings are reported on Schedule C or C-EZ if you meet all the requirements shown in chapter 10 under Fishing crew member . Free h and r block online Insurance agent, former. Free h and r block online   Termination payments you receive as a former self-employed insurance agent from an insurance company because of services you performed for that company are not reported on Schedule C or C-EZ if all the following conditions are met. Free h and r block online You received payments after your agreement to perform services for the company ended. Free h and r block online You did not perform any services for the company after your service agreement ended and before the end of the year in which you received the payment. Free h and r block online You entered into a covenant not to compete against the company for at least a 1-year period beginning on the date your service agreement ended. Free h and r block online The amount of the payments depended primarily on policies sold by you or credited to your account during the last year of your service agreement or the extent to which those policies remain in force for some period after your service agreement ended, or both. Free h and r block online The amount of the payment did not depend to any extent on length of service or overall earnings from services performed for the company (regardless of whether eligibility for the payments depended on length of service). Free h and r block online Insurance agent, retired. Free h and r block online   Income paid by an insurance company to a retired self-employed insurance agent based on a percentage of commissions received before retirement is reported on Schedule C or C-EZ. Free h and r block online Also, renewal commissions and deferred commissions for sales made before retirement are generally reported on Schedule C or C-EZ. Free h and r block online   However, renewal commissions paid to the survivor of an insurance agent are not reported on Schedule C or C-EZ. Free h and r block online Newspaper carrier or distributor. Free h and r block online   You are a direct seller and your earnings are reported on Schedule C or C-EZ if all the following conditions apply. Free h and r block online You are in the business of delivering or distributing newspapers or shopping news (including directly related services such as soliciting customers and collecting receipts). Free h and r block online Substantially all your pay for these services directly relates to your sales or other output rather than to the number of hours you work. Free h and r block online You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes. Free h and r block online   This rule applies whether or not you hire others to help you make deliveries. Free h and r block online It also applies whether you buy the papers from the publisher or are paid based on the number of papers you deliver. Free h and r block online Newspaper or magazine vendor. Free h and r block online   If you are 18 or older and you sell newspapers or magazines, your earnings are reported on Schedule C or C-EZ if all the following conditions apply. Free h and r block online You sell newspapers or magazines to ultimate consumers. Free h and r block online You sell them at a fixed price. Free h and r block online Your earnings are based on the difference between the sales price and your cost of goods sold. Free h and r block online   This rule applies whether or not you are guaranteed a minimum amount of earnings. Free h and r block online It also applies whether or not you receive credit for unsold newspapers or magazines you return to your supplier. Free h and r block online Notary public. Free h and r block online   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ. Free h and r block online These payments are not subject to self-employment tax (see the instructions for Schedule SE (Form 1040)). Free h and r block online Public official. Free h and r block online   Public officials generally do not report what they earn for serving in public office on Schedule C or C-EZ. Free h and r block online This rule applies to payments received by an elected tax collector from state funds on the basis of a fixed percentage of the taxes collected. Free h and r block online Public office includes any elective or appointive office of the United States or its possessions, the District of Columbia, a state or its political subdivisions, or a wholly owned instrumentality of any of these. Free h and r block online   Public officials of state or local governments report their fees on Schedule C or C-EZ if they are paid solely on a fee basis and if their services are eligible for, but not covered by, social security under a federal-state agreement. Free h and r block online Real estate agent or direct seller. Free h and r block online   If you are a licensed real estate agent or a direct seller, your earnings are reported on Schedule C or C-EZ if both the following apply. Free h and r block online Substantially all your pay for services as a real estate agent or direct seller directly relates to your sales or other output rather than to the number of hours you work. Free h and r block online You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes. Free h and r block online Securities dealer. Free h and r block online   If you are a dealer in options or commodities, your gains and losses from dealing or trading in section 1256 contracts (regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options, and dealer securities futures contracts) or property related to those contracts (such as stock used to hedge options) are reported on Schedule C or C-EZ. Free h and r block online For more information, see sections 1256 and 1402(i). Free h and r block online Securities trader. Free h and r block online   You are a trader in securities if you are engaged in the business of buying and selling securities for your own account. Free h and r block online As a trader in securities, your gain or loss from the disposition of securities is not reported on Schedule C or C-EZ. Free h and r block online However, see Securities dealer , earlier, for an exception that applies to section 1256 contracts. Free h and r block online For more information about securities traders, see Publication 550, Investment Income and Expenses. Free h and r block online Accounting for Your Income Accounting for your income for income tax purposes differs at times from accounting for financial purposes. Free h and r block online This section discusses some of the more common differences that may affect business transactions. Free h and r block online Figure your business income on the basis of a tax year and according to your regular method of accounting (see chapter 2). Free h and r block online If the sale of a product is an income-producing factor in your business, you usually have to use inventories to clearly show your income. Free h and r block online Dealers in real estate are not allowed to use inventories. Free h and r block online For more information on inventories, see chapter 2. Free h and r block online Income paid to a third party. Free h and r block online   All income you earn is taxable to you. Free h and r block online You cannot avoid tax by having the income paid to a third party. Free h and r block online Example. Free h and r block online You rent out your property and the rental agreement directs the lessee to pay the rent to your son. Free h and r block online The amount paid to your son is gross income to you. Free h and r block online Cash discounts. Free h and r block online   These are amounts the seller permits you to deduct from the invoice price for prompt payment. Free h and r block online For income tax purposes, you can use either of the following two methods to account for cash discounts. Free h and r block online Deduct the cash discount from purchases (see Line 36, Purchases Less Cost of Items Withdrawn for Personal Use in chapter 6). Free h and r block online Credit the cash discount to a discount income account. Free h and r block online You must use the chosen method every year for all your purchase discounts. Free h and r block online   If you use the second method, the credit balance in the account at the end of your tax year is business income. Free h and r block online Under this method, you do not reduce the cost of goods sold by the cash discounts you received. Free h and r block online When valuing your closing inventory, you cannot reduce the invoice price of merchandise on hand at the close of the tax year by the average or estimated discounts received on the merchandise. Free h and r block online Trade discounts. Free h and r block online   These are reductions from list or catalog prices and usually are not written into the invoice or charged to the customer. Free h and r block online Do not enter these discounts on your books of account. Free h and r block online Instead, use only the net amount as the cost of the merchandise purchased. Free h and r block online For more information, see Trade discounts in chapter 6. Free h and r block online Payment placed in escrow. Free h and r block online   If the buyer of your property places part or all of the purchase price in escrow, you do not include any part of it in gross sales until you actually or constructively receive it. Free h and r block online However, upon completion of the terms of the contract and the escrow agreement, you will have taxable income, even if you do not accept the money until the next year. Free h and r block online Sales returns and allowances. Free h and r block online   Credits you allow customers for returned merchandise and any other allowances you make on sales are deductions from gross sales in figuring net sales. Free h and r block online Advance payments. Free h and r block online   Special rules dealing with an accrual method of accounting for payments received in advance are discussed in chapter 2 under Accrual Method. Free h and r block online Insurance proceeds. Free h and r block online   If you receive insurance or another type of reimbursement for a casualty or theft loss, you must subtract it from the loss when you figure your deduction. Free h and r block online You cannot deduct the reimbursed part of a casualty or theft loss. Free h and r block online   For information on casualty or theft losses, see Publication 547, Casualties, Disasters, and Thefts. Free h and r block online Prev  Up  Next   Home   More Online Publications